Test 2 Ch 7,8,9,10,11,12

Question 1

34. (p. 241) A major trend in international developments includes
    A. greater international trade and operations.
    B. a growing recognition of an international managerial perspective.
    C. a large increase in international investment.
    D. all of these.

Answer 1

D. all of these

Question 2

34. (p. 241) A major trend in international developments includes
    A. greater international trade and operations.
    B. a growing recognition of an international managerial perspective.
    C. a large increase in international investment.
    D. all of these.

Answer 2

D. all of these

Question 3

35. (p. 241) The reasons that explain why some governments make better use of the inflows from foreign investment and know-how than others include all of the following EXCEPT
    A. governmental practices that are business-friendly.
    B. local entrepreneurs that can train workers and invest in modern technology.
    C. high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions.
    D. sound management of broader economic factors such as interest rates and inflation.

Answer 3

C. high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions.

Question 4

35. (p. 241) The reasons that explain why some governments make better use of the inflows from foreign investment and know-how than others include all of the following EXCEPT
    A. governmental practices that are business-friendly.
    B. local entrepreneurs that can train workers and invest in modern technology.
    C. high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions.
    D. sound management of broader economic factors such as interest rates and inflation.

Answer 4

C. high tariffs and taxes on foreign investors and multinational corporations provide income to improve living conditions.

Question 5

36. (p. 242) Michael Porter’s framework all of the following factors affect a nation’s competitiveness EXCEPT
    A. factor conditions.
    B. demand characteristics.
    C. related and supported industries.
    D. policies that protect the nation’s domestic competitors.

Answer 5

D. policies that protect the nation’s domestic competitors.

Question 6

37. (p. 244) Rivalry is intense in nations with conditions of \_\_\_\_\_\_\_\_\_\_ consumer demand, \_\_\_\_\_\_\_\_\_\_ supplier bases, and \_\_\_\_\_\_\_\_\_\_ new entrant potential from related industries. 
A. weak; weak; high
B. strong; strong; low
C. strong; strong; high
D. weak; weak; low

Answer 6

C. strong; strong; high

Question 7

38. (p. 244) According to Michael Porter, firms that have experienced intense domestic competition are
    A. unlikely to have the time or resources to compete abroad.
    B. most likely to design strategies aimed primarily at the domestic market.
    C. more likely to design strategies and structures that allow them to successfully compete abroad.
    D. more likely to demand protection from their governments.

Answer 7

C. more likely to design strategies and structures that allow them to successfully compete abroad.

Question 8

39. (p. 245) All of the factors below have made India’s software services industry extremely competitive on a global scale EXCEPT
    A. large pool of skilled workers.
    B. large network of public and private educational institutions.
    C. tax and antitrust legislation that protect the dominant players in the industry.
    D. large, growing market and sophisticated customers.

Answer 8

C. tax and antitrust legislation that protect the dominant players in the industry.

Question 9

40. (p. 249) All of the following would be viewed as advantages of global diversification EXCEPT
    A. fewer social and political risks than domestic operations.
    B. a firm not being solely dependent on the domestic market.
    C. a firm with large margins at home helping subsidize its operations in other nations.
    D. the potential to lower costs of operation even if the primary market is at home.

Answer 9

A. fewer social and political risks than domestic operations.

Question 10

41. (p. 248) Optimizing the location of every activity in the value chain can yield all of the following strategic advantages EXCEPT
    A. performance enhancement.
    B. cost reduction.
    C. extending the life cycle of the product of service.
    D. risk reduction.

Answer 10

C. extending the life cycle of the product of service.

Question 11

42. (p. 248) Microsoft decided to establish a corporate research laboratory in Cambridge, England
    A. because England is an ally of the United States.
    B. to access the outstanding technical and professional talent available there so that they can attain world-class excellence in selected value-creating activities.
    C. because the local language is English.
    D. because the company views the United States as a risky place to expand due to the actions of the U.S. Department of Justice.

Answer 11

B. to access the outstanding technical and professional talent available there so that they can attain world-class excellence in selected value-creating activities.

Question 12

43. (p. 247) The sale of Boeing’s commercial aircraft and Microsoft’s operating systems in many countries enable these companies to benefit from
    A. higher prices in their domestic markets.
    B. economies of scale.
    C. optimizing the location for many activities in their value chain.
    D. reducing their exposure to currency risks.

Answer 12

B. economies of scale.

Question 13

44. (p. 248) Many U.S. multinational companies set up maquiladora operations south of the U.S.-Mexico border primarily
    A. to sell products into the growing Mexican market.
    B. as part of US government-initiated measures to discourage illegal immigration.
    C. to take advantage of the lower tax rates in Mexico.
    D. to take advantage of the low cost of labor.

Answer 13

D. to take advantage of the low cost of labor.

Question 14

45. (p. 252) Appreciation of the U.S. dollar will have the following impact on McDonald’s:
    A. lower sales abroad because foreign customers cannot afford McDonalds’ products.
    B. more transfer of ingredients from the U.S. to branches abroad to take advantage of the higher dollar.
    C. lower profits, because foreign profits will be reduced when measured in dollars.
    D. no impact at all.

Answer 14

C. lower profits, because foreign profits will be reduced when measured in dollars.

Question 15

46. (p. 254) \_\_\_\_\_\_\_\_\_\_ occurs when a firm decides to utilize other firms to perform value-creating activities that were previously performed in-house. 
A. Offshoring
B. A global strategy
C. Outsourcing
D. A transnational strategy

Answer 15

C. Outsourcing

Question 16

47. (p. 255-256) Which one of the following is one of Theodore Levitt’s assumptions supporting a pure global strategy?
    A. Consumers are willing to pay more for specific product features.
    B. Customer needs and interests are becoming more dissimilar.
    C. If the world markets are treated as heterogeneous, substantial economies of scale are easily achieved.
    D. MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers.

Answer 16

D. MNCs can compete with aggressive pricing on low cost products that meet the common needs of global consumers.

Question 17

48. (p. 250) Pressures to “reduce costs” require that
    A. a company should not trade idiosyncratic preferences in product features for higher economic returns.
    B. a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects.
    C. the manager should follow a multidomestic strategy to maximize the economic benefits to the company.
    D. the company needs to supplement the local foreign economy in a manner specified by the local government.

Answer 17

B. a company must pursue what is economically beneficial to the company including maximizing economies of scale and learning curve effects.

Question 18

49. (p. 257-258) Low pressure for local adaptation combined with low pressure for lower costs would suggest what type of strategy? 
A. international
B. global
C. multidomestic
D. transnational

Answer 18

A. international

Question 19

50. (p. 258, 260) High pressure for local adaptation combined with low pressure for lower costs would suggest what type of international strategy? 
A. Global
B. Multidomestic
C. Transnational
D. Overall cost leadership

Answer 19

B. Multidomestic

Question 20

51. (p. 264) Software Tech, Inc., a company in the computer software industry, invests heavily in R&D and product design. Thus, most of its value is added 
A. upstream.
B. in its infrastructure.
C. downstream.
D. midstream.

Answer 20

A. upstream.

Question 21

51. (p. 264) Software Tech, Inc., a company in the computer software industry, invests heavily in R&D and product design. Thus, most of its value is added 
A. upstream.
B. in its infrastructure.
C. downstream.
D. midstream.

Answer 21

A. upstream.

Question 22

52. (p. 264) Industries in which proportionally more value is added in \_\_\_\_\_\_\_\_\_\_ activities are more likely to benefit from a \_\_\_\_\_\_\_\_\_\_ strategy. 
A. downstream; global
B. upstream; multidomestic
C. upstream; global
D. manufacturing; multidomestic

Answer 22

C. upstream; global

Question 23

53. (p. 264) Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?
    A. Firms that compete in industries in which consumer preferences vary substantially in each country.
    B. Firms in industries that are expanding very rapidly.
    C. Firms in industries that have value added by sales and marketing departments.
    D. Firms in industries that have much value added in research and design or manufacturing.

Answer 23

D. Firms in industries that have much value added in research and design or manufacturing.

Question 24

53. (p. 264) Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multidomestic strategy?
    A. Firms that compete in industries in which consumer preferences vary substantially in each country.
    B. Firms in industries that are expanding very rapidly.
    C. Firms in industries that have value added by sales and marketing departments.
    D. Firms in industries that have much value added in research and design or manufacturing.

Answer 24

D. Firms in industries that have much value added in research and design or manufacturing.

Question 25

54. (p. 260) Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following EXCEPT
    A. customers’ needs, interests, and tastes are becoming increasingly homogenized or similar.
    B. consumers around the world are increasingly willing to tradeoff idiosyncratic preferences in product features for lower price.
    C. flexible manufacturing trends have allowed a decline in the minimum volume required to reach acceptable levels of production efficiency.
    D. fluctuating exchange rates.

Answer 25

A. customers’ needs, interests, and tastes are becoming increasingly homogenized or similar.

Question 26

54. (p. 260) Recent trends that might lead managers of multinational corporations (MNCs) to adopt a more decentralized strategy for their operations would include all of the following EXCEPT
    A. customers’ needs, interests, and tastes are becoming increasingly homogenized or similar.
    B. consumers around the world are increasingly willing to tradeoff idiosyncratic preferences in product features for lower price.
    C. flexible manufacturing trends have allowed a decline in the minimum volume required to reach acceptable levels of production efficiency.
    D. fluctuating exchange rates.

Answer 26

A. customers’ needs, interests, and tastes are becoming increasingly homogenized or similar.