International Business Multinational Strategies and Structures

Question 1

Concerning the Integration Responsiveness framework, what are the 2 main factors that need to be nicely balanced?

Answer 1

Global Integration and Local Responsiveness

Question 2

What are the 4 factors that are considered in the integration-responsiveness framework?

Answer 2

i) Cost Reduction
ii) Organisational Culture and Identity
iii) Local Demand
iv) Consumer preferences

Question 3

What is the key differences between centralization and decentralization?

Answer 3

Corporate control vs subsidiary initiatives

Question 4

What are the 4 multinational strategic choices for MNCs?

Answer 4

i) Home Replication
ii) Localisation (Multi-domestic)
iii) Global Standardisation
iv) Transnational

Question 5

What are the 4 organisational structures?

Answer 5

i) International Division (Yun Nan Bai Yao)
ii) Geographical Area (Based on regions all over the country)
iii) Global Product Division
iv) Global Matrix

Question 6

What are the 3 types of international staffing approaches?

Answer 6

i) Ethnocentic Staffing (Home countries - Expatriates manage operations abroad)
ii) Polycentric Staffing ( individuals from host country)
iii) Geocentric Staffing (best individuals regardless of nationality)

Question 7

What are the 3 types of international Compensation?

Answer 7

i) Ad Hov Compensation Method (Short Term)
ii) Localization method
iii) Balance Sheet method

Question 8

What is the difference between strategic alliances and acquisitions?

Answer 8

SA are voluntary agreements between firms

Alliances fall into 2 categories; contractual (non-equity) and equity-based

while

Acquisition is equity-based foreign direct investment in which an investor acquires 100% equity of the target

Question 9

What is a joint venture?

Answer 9

2 or more firms create a legally independent company to share resources and capailities to develop a competitive advantage

Question 10

What are the 4 factors to consider in a strategic alliance?

Answer 10

i) Partner
ii) Entry Mode
iii) Location
iv) Scope of work

Question 11

What is a merger?

Answer 11

2 firms agree to integrate their operations on a relatively co-equal basis

There are few TRUE mergers because one firm usually dominates in terms of market share, size, or asset value

Question 12

What is a competitive action?

Answer 12

a strategic or tactical action that the company takes to build or defend its competitive advantage

Question 13

What is a competitive response

Answer 13

a strategic or tactical action that the company takes in response to counter the effects of competitors’ action in the market

Question 14

What is competitive rivalry?

Answer 14

The ongoing sets of competitive responses an actions that firms take to have a competitive advantage in the market

Question 15

What is competitive dynamics?

Answer 15

The total set of competitive actions and responses taken by firms in a market

Question 16

What is the AMA model?

Answer 16

Awareness (degree of their
mutual interdependence that results from market commonality &
resource similarity

• Motivation
  It concerns the firm’s incentive to take action or to respond to a
  competitor’s attack.

Ability
-Without available resources the firm lacks the ability to attack a
competitor or to respond to the competitor’s actions

Question 17

What is market commonality?

Answer 17

The number of markets with which a firm and a competitor
are jointly involved

The degree of importance of the individual markets to each
competitor

Question 18

What is cooptetition

Answer 18

Firms, like militaries, often compete aggressively
 Militaries fight over geography, firms compete in
markets
 Military principles cannot be completely applied in
business
 If fighting to death destroys the pie, there will be nothing left
 In business, it is possible to compete and win without having to
kill the opposition.