Chapter 06

Question 1

consortia

Answer 1

Groups of firms that venture into new products and technologies (p. 212)

Question 2

domestic stage

Answer 2

The first stage of international development in which a company is domestically oriented while managers are aware of the global environment (p. 210)

Question 3

economies of scale

Answer 3

Achieving lower costs through large volume production; often made possible by global expansion (p. 208)

Question 4

economies of scope

Answer 4

Achieving economies by having a presence in many product lines, technologies, or geographic areas (p. 208)

Question 5

factors of production

Answer 5

Supplies necessary for production, such as land, raw materials, and labour (p. 209)

Question 6

global company

Answer 6

A company that no longer thinks of itself as having a home country (p. 211)

Question 7

global geographical structure

Answer 7

A form in which an organization divides its operations into world regions, each of which reports to the CEO (p. 217)

Question 8

global matrix structure

Answer 8

A form of horizontal linkage in an international organization in which both product and geographical structures are implemented simultaneously to achieve a balance between standardization and globalization (p. 219)

Question 9

global product structure

Answer 9

A form in which product divisions take responsibility for global operations in their specific product areas (p. 216)

Question 10

global stage

Answer 10

The stage of international development in which the company transcends any one country (p. 211)

Question 11

global teams

Answer 11

Work groups comprising multinational members whose activities span multiple countries; also called transnational teams (p. 224)

Question 12

globalization strategy

Answer 12

The standardization of product design and advertising strategy throughout the world (p. 213)

Question 13

international division

Answer 13

A division that is equal in status to other major departments within a company and has its own hierarchy to handle business in various countries (p. 215)

Question 14

international stage

Answer 14

The second stage of international development, in which the company takes exports seriously and begins to think multidomestically (p. 210)

Question 15

joint venture

Answer 15

A separate entity for sharing development and production costs and penetrating new markets that is created with two or more active firms as sponsors (p. 211)

Question 16

multidomestic

Answer 16

Company that deals with competitive issues in each country independent of other countries (p. 210)

Question 17

multidomestic strategy

Answer 17

Competition in each country is handled independently of competition in other countries (p. 214)

Question 18

multinational stage

Answer 18

The stage of international development in which a company has marketing and production facilities in many countries and more than one-third of its sales outside its home country (p. 210)

Question 19

power distance

Answer 19

The level of inequality people are willing to accept within an organization (p. 226)

Question 20

standardization

Answer 20

A policy that ensures all branches of the company at all locations operate in the same way (p. 213)