Chapter 1

Question 1

multinational enterprise (MNE)

Answer 1

a firm that engages in foreign direct investment (FDI) by directly controlling and managing value-adding activities in other countries

Question 2

foreign direct investment (FDI)

Answer 2

a firm’s direct investment in production and/or service activities abroad

Question 3

business model

Answer 3

a firm’s way of doing business and creating and capturing value

Question 4

strategic management

Answer 4

a way of managing the firm from a strategic, “big picture” perspective

Question 5

strategy

Answer 5

an organization’s theory about how to compete successfully

Question 6

strategy as plan

Answer 6

a perspective that suggests that strategy is most fundamentally embodied in explicit, rigorous formal planning as in the military

Question 7

strategy as action

Answer 7

a perspective that suggests that strategy is most fundamentally reflected by firms’ pattern of actions

Question 8

intended strategy

Answer 8

a strategy that is deliberately planned for

Question 9

emergent strategy

Answer 9

a strategy based on the outcome of a stream of smaller decisions from the “bottom up”

Question 10

strategy as integration

Answer 10

a perspective that suggests that strategy is neither solely about plan nor action and that strategy integrates elements of both schools of thought

Question 11

strategy formulation

Answer 11

the crafting of a firm’s strategy

Question 12

strategy implementation

Answer 12

the actions undertaken to carry out a firm’s strategy

Question 13

SWOT analysis

Answer 13

a strategic analysis of a firm’s

internal environment
strengths (S)
weaknesses (W)

external environment
opportunities (O)
threats (T)

Question 14

replication

Answer 14

repeated testing of theory under a variety of conditions to establish its applicable boundaries

Question 15

vision

Answer 15

articulation of a firm’s envisioned future

Question 16

mission

Answer 16

statement of a firm’s purpose

Question 17

top management team (TMT)

Answer 17

the team consisting of the highest level of executives of a firm led by the CEO

Question 18

Chief Executive Officer (CEO)

Answer 18

the top executive in charge of the strategy and operations of a firm

Question 19

leadership

Answer 19

transforming organizations from what they are to what the leaders would have them become

Question 20

strategic leadership

Answer 20

How to most effectively manage organizations’ strategy formulation and implementation processes to create competitive advantage

Question 21

microfoundation

Answer 21

Proximate causes of a given strategy phenomenon at a level of analysis lower than that of the phenomenon itself

Question 22

strategy tripod

Answer 22

a framework that suggests that strategy as a discipline has three “legs” or key perspectives:
- industry-based
- resource-based
- institution-based views

Question 23

competitive advantage

Answer 23

Performance superiority over rivals

Question 24

stakeholder

Answer 24

any group or individual who can affect or is affected by the achievement of the organization’s objectives

Question 25

triple bottom line

Answer 25

a performance yardstick consisting of
- economic
- social
- environmental dimensions

Question 26

balanced scorecard

Answer 26

a performance evaluation method from the
- customer
- internal
- innovation & learning
- financial perspectives

Question 27

information overload

Answer 27

too much information to process

Question 28

global strategy

Answer 28

(1) strategy of firms around the globe
(2) a particular form of international strategy, characterized by the production and distribution of standardized products and services on a worldwide basis

Question 29

globalization

Answer 29

the close integration of countries and peoples of the world

Question 30

emerging economy (emerging market)

Answer 30

a label that describes fast-growing developing economies since the 1990s

Question 31

base of the pyramid (BoP)

Answer 31

the vast majority of humanity, about five billion people, who make less than U.S. $2,000 a year

Question 32

reverse innovation (frugal innovation)

Answer 32

low-cost innovation from emerging economies that has potential in developed economies

Question 33

risk management

Answer 33

the identification and assessment of risks and the preparation to minimize the impact of high-risk, unfortunate events

Question 34

black swan event

Answer 34

an unpredictable event that is beyond what is normally expected and that has severe consequences

Question 35

scenario planning

Answer 35

a technique to prepare and plan for multiple scenarios (either high or low risk)

Question 36

semiglobalization

Answer 36

a perspective that suggests that barriers to market integration at borders are high but not high enough to completely insulate countries from each other

Question 37

global value chain

Answer 37

Chain of geographically dispersed and coordinated activities involved in the production of a good or service and its supply and distribution activities

Question 38

organizational slack

Answer 38

a cushion of resources that allow an organization to adapt successfully to pressures

Question 39

The title of Chapter 1

Answer 39

Strategizing Around the Globe