Module 6

Question 1

Define the strategies organizations use to compete in the global marketplace.

Answer 1

-Global
-International
-Transnational
-Multinational

Question 2

Global

Answer 2

Multinational

Question 3

International

Answer 3

Uses existing capabilities to expand into foreign markets

Question 4

Transnational

Answer 4

specializes permit local responsiveness mechanisms provide global integration

Question 5

Multinational

Answer 5

several subsidiaries operating as stand-alone business units in multiple countries

Question 6

What are the various entry modes organizations use to enter overseas markets.

Answer 6

-Exporting
-Licensing
-Franchising
-Joint Venture
-Wholly-owned subsidiary

Question 7

Exporting

Answer 7

-Advantages: scale sconomic, consistent with pure global strategy
-Disadvantage: No low cost sites, high transportation costs, tariff barriers

Question 8

Licensing

Answer 8

-Advantages: lower development cost, lower political risk
-disadvantage: loss of control over technology

Question 9

Franchising

Answer 9

-advantage: lower development costs, lower political risk
-disadvantage: loss of control over quality

Question 10

Joint Venture

Answer 10

-advantages: access to local knowledge, shared costs and risk may be the only option
-Disadvantage: loss of control over technology and conflict between partners

Question 11

Wholly-owned subsidiary

Answer 11

-advantage: maintain control over technology, maintains control over operation
-disadvantage: high cost and high risk

Question 12

Explain how companies can staff overseas operations.

Answer 12

-Expatriates
-Host-company nationals
-Third-country nationals

Question 13

Expatriates

Answer 13

individuals from the parent company

Question 14

Host-company nationals

Answer 14

native of the host country

Question 15

Third-country nationals

Answer 15

citizens of a country other than the home country or the host country

Question 16

Summarize the skills and knowledge managers need to manage globally.

Answer 16

-sensitive to cultural differences and culturally adventurous
-business knowledge
-courage to take a stand
-brings out the best in people
-acts with integrity
-insightful
-committed to success
-takes risks
-uses and seeks feedback
-seeks opportunities to learn
-open to criticism
-flexible

Question 17

Identify ways in which cultural differences between countries influence management.

Answer 17

-Managers must consider different attitudes about work and the workplace
-Culture shock
-Ethical challenges

Question 18

When Kumquat, a contemporary sportswear company, tries to open its clothing stores in a new country, it learns that local rules require a certain percentage of its products be manufactured locally. This example fits into which category of pressures for local responsiveness?

Answer 18

Economic and political demands of host-country government.

Question 19

LEAP Communications Technology has subsidiaries in each country in which it does business. As the parent company, LEAP runs its research and development department from its home country. As a result, each foreign subsidiary remains dependent on it for new products, processes, and ideas. This illustrates the ________ model for global strategy.

Answer 19

International

Question 20

High Tech Electronics, a manufacturing company, is based in Texas. The company operates a subsidiary in Ireland, marketing products that are customized to appeal to the European Union countries. In this case, High Tech Electronics is following the ________ model.

Answer 20

Multinational

Question 21

The two strategic models that have relatively high manufacturing costs are

Answer 21

Multinational and international

Question 22

Isabella Ruiz, Vice President of International Operations for Worldwide Products Corporation, was working with her subordinate, Jake Harris, to plan his upcoming 18-month overseas assignment to the firm’s new office in Athens, Greece. Based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Isabella’s plan for Jake was to

Answer 22

Develop measure to ensure that communication between the headquarters and the Athens office remains effective.

Question 23

Wendy Pearson, Vice President of Marketing for New York’s Finest Apparel, Incorporated, is traveling on business in a foreign country. She is negotiating a large contract with the ministry of trade, and the minister’s deputy is asking for a “facilitation fee” of $1,000 USD to relax certain contractual requirements. At this point, Wendy should

Answer 23

Abide by her firm’s standards for ethical behavior and not pay the fee

Question 24

Yolanda is a consultant for four companies with international operations. Each of them has selected a different global strategy. Acme Gaskets uses its established skills in producing gaskets that it will sell in foreign markets. Krunchers Chips produces locally targeted snacks for which it has built specialized plants in each local region. It customizes its snacks according to the tastes and preferences of the local consumers. Harman Motors offers a standardized economy automobile and has a single worldwide corporate headquarters from which it centrally manages the entire company’s operations. Finally, Gold Medal Industries is located in Tajikistan where wages are quite low. The company produces machine housings that are fairly easy to manufacture and require little employee skill. These pieces are then sent to its locations abroad to be finished by a more skilled workforce, taking into account the customs and benefits desired by each of those particular populations.

Which global strategy is Acme Gaskets using?

Answer 24

International

Question 25

Yolanda is a consultant for four companies with international operations. Each of them has selected a different global strategy. Acme Gaskets uses its established skills in producing gaskets that it will sell in foreign markets. Krunchers Chips produces locally targeted snacks for which it has built specialized plants in each local region. It customizes its snacks according to the tastes and preferences of the local consumers. Harman Motors offers a standardized economy automobile and has a single worldwide corporate headquarters from which it centrally manages the entire company’s operations. Finally, Gold Medal Industries is located in Tajikistan where wages are quite low. The company produces machine housings that are fairly easy to manufacture and require little employee skill. These pieces are then sent to its locations abroad to be finished by a more skilled workforce, taking into account the customs and benefits desired by each of those particular populations.

Krunchers Chips in using the ___ model of international competition.

Answer 25

Multinational

Question 26

Yolanda is a consultant for four companies with international operations. Each of them has selected a different global strategy. Acme Gaskets uses its established skills in producing gaskets that it will sell in foreign markets. Krunchers Chips produces locally targeted snacks for which it has built specialized plants in each local region. It customizes its snacks according to the tastes and preferences of the local consumers. Harman Motors offers a standardized economy automobile and has a single worldwide corporate headquarters from which it centrally manages the entire company’s operations. Finally, Gold Medal Industries is located in Tajikistan where wages are quite low. The company produces machine housings that are fairly easy to manufacture and require little employee skill. These pieces are then sent to its locations abroad to be finished by a more skilled workforce, taking into account the customs and benefits desired by each of those particular populations.

Which global strategy is Gold Medal Industries using?

Answer 26

Transnational

Question 27

Yolanda is a consultant for four companies with international operations. Each of them has selected a different global strategy. Acme Gaskets uses its established skills in producing gaskets that it will sell in foreign markets. Krunchers Chips produces locally targeted snacks for which it has built specialized plants in each local region. It customizes its snacks according to the tastes and preferences of the local consumers. Harman Motors offers a standardized economy automobile and has a single worldwide corporate headquarters from which it centrally manages the entire company’s operations. Finally, Gold Medal Industries is located in Tajikistan where wages are quite low. The company produces machine housings that are fairly easy to manufacture and require little employee skill. These pieces are then sent to its locations abroad to be finished by a more skilled workforce, taking into account the customs and benefits desired by each of those particular populations.

Harman Motors is using the ________ model of international competition.

Answer 27

Global

Question 28

Myer Products, Incorporated, headquartered in Chicago, was enjoying unparalleled success in its Paris, France, branch office. At the annual corporate management meeting in Chicago, Jules Moreau, European Division Manager, modestly cited several reasons for this success. He said, “Our decision to hire Mila Keller to manage our Paris office turned out to be a wise one. Mila is a native of Basel, Switzerland. As a result of her knowledge of business in her home country, she has opened doors to many new clients in Switzerland. This has resulted in a business volume beyond what we had envisioned.” In this instance, Mila is a(n)

Answer 28

Third-country national

Question 29

Lillian Probst, Vice President of International Operations, told her staff, “I have lived and worked in 11 countries in four continents. Although I have encountered many, many cultural differences, I have found that most people embrace the same core values:

Answer 29

compassion, fairness, honesty, responsibility, and respect for others.

Question 30

Sophie was very excited to be on a one-month project in Japan. While at work, Sophie’s Japanese coworkers rarely tell their boss what they are thinking. Because she thinks the actions of her coworkers are not making the company as efficient as it would be back in Germany, Sophie is exhibiting

Answer 30

Ethnocentrism

Question 31

Ethnocentrism

Answer 31

the tendency to judge others by the standards of one’s group or culture, which are seen as superior.

Question 32

While Plast-a-Ware was planning how it was going to open a plant in the Philippines, it brought in Danilo, a native of the country, to teach the development team about the country’s culture and economy. Danilo is an example of a(n)

Answer 32

inpatriate