EXAM 2018

1- There are three tools for achieving global competitive advantage. The are national
differences, economies of scale and:
a- differential advantages
b- economies of scope
c- efficiency
d- learning

2- Characteristics of global industries may not include

a- cross-subsidization of markets
b- optimal location value chain choice
c- country-specific headquarters
d diverse types of advantages in multiple markets

3- Generally speaking, we can state that

a- a multi-domestic approach to the formulation of an international strategy usually emphasizes
greater decentralization in the international decision-making
b- the more global the company’s strategy the less external operations will be centralized
c- the centralization of international decision-making in the hands of the head office and multi-
domestic strategies are two sides of the same coi
d- in principle, there does not appear to be any type of explicit or defined relationship between
the level of centralization/decentralization of decision-making and the global/multidomestic
focus of the international strategy of a company

4- Firm globalization is not visible through

a- some local value chain activity
b- an increased need for local responsiveness
c- majority of sales coming from cross-border activities
d- all the above

5- Global competition features include

a- a selected position in a major emerging markets
b- an increased number of basic products
c- significant interaction between managers from many countries
d- none of the above

6- Which of the following statements is false?

a- direct investment requires less capital, management effort and resources than any other
alternative energy method
b- direct investment gives the company a local brand image
c- direct investment allows a company to fully exploit its competitive advantages
d- direct investment requires a larger amount of prior information
7- Which of the following describes an agreement between two businesses in which they share
technology, market connections, or some other advantage that one has the other lacks?
a- direct ownership
b- venture capital
c- strategic alliance
d- economic reunion

8- Primary motives for going international include

a- localization opportunities
b- offshore strategies
c- both a and b
d- neither a nor b

9- Which of the following is not a good reason for collaborating between potential competitors?
a- to carve up the market between competitors to maximize prices
b- to increase buying power
c- to increase selling power by offering a complete package of product and service
d- to increase barriers to entry by joint investment in R&D or marketing

10- M. Porter’s diamond framework does not include

a- supply conditions
b- demand conditions
c- related and supporting industries
d- firm strategy, structure and rivalry

11- The following condition for the Aggregation Approach is false

a- relatively low trade barriers
b- a favourable bulk-to-value (or weight-to-value) equation to ensure that logistics costs are not
uneconomical
c- product and services that are built on core technologies that demonstrate significant benefits
associated with large-scale production
d- a customer that demands a high degree of customization

12- Factors influencing strategy configuration choices do not include

a- competitive behaviour with competitors
b- transfer pricing and taxation considerations
c- regulatory and trade constraints that help or hinder the free flow of goods and services
d- firm-specific sources of competitive advantage

13- Which of the following elements is not a correct statement on the purpose of the MNE’s
strategic architecture?
a- it guides the corporation in building and acquiring core competencies
b- it makes it easier to grade the different subsidiaries of the MNE
c- it is the road map of the future that identifies which core competences to build
d- it is necessary to overcome the challenges of decentralized SBUs acting in their own self-
interest

14- The difference between an agent and an importer is that

a- an importer will usually have territorial exclusivity while the agent will not
b- the agent will not take possession of the products while an importer will
c- the importer will maintain a long-term relationship with the company but an agent will not
d- none of the above

15- When crossing its home country border to create value in a host country the MNE is
a- at an advantage as compared to local firms because it possesses knowledge that is not
available to these local firms
b- at an advantage as compared to local firms because the MNE hardly incurs any additional
cost when entering an additional market and can therefore compete effectively with these local
firms
c- at a disadvantage as compared to local firms because these firms possess a knowledge base
that is more appropriately matched to local stakeholder requirements
d- at a disadvantage compared to local firms because the MNE not only has to compete with
these local firms, but will be faced with competition from other MNEs that are already
established in that host country

16- Globalization and international competition does not mean that

a- MNEs compete in more complex and competitive environments than do domestic firms
b- the integration of corporate activities is achieved across borders
c- transactions between buyers and seller become progressively more dependent on
geographic distance
d- global companies must understand customers from the perspective of both domestic and
international standards

17- An international competitiveness model

a- includes factors about the country, the sector in which the company works and internal
factors concerning the company itself
b- does not cover internal corporate factors
c- considers factors concerning the country and sector in which the company acts
d- only considers factors about the destination country

18- When negotiating with or contacting agents from other cultures, it is important that
international managers
a- visit the other country without finding out about the culture there so as not to be affected by
it
b- prioritize spoken language in countries in which the culture has high levels of contextual
content, such as Japan
c- reject ethnocentrism on their part and tolerate ambiguity better
d- avoid any type of exposure to culture shock and limit contact with everyday situations as far
as possible

19- Which strategic alliance type entitles ownership but not the creation of a new entity
a- consortiums
b- export consortiums
c- share swaps
d- cross licensing

20- Disadvantages of Parent Company Nationals do not include

a- salary costs
b- expatriation costs
c- polycentric attitude of PCN’s
d- demotivating for local staff

21- Which of the following describes an arrangement in which a company that produces goods
in one country contracts with a distribution organization in another country for marketing in
the second country?
a- exporting
b- trading company
c- piggyback distribution
d- localization arrangement

22- Intangible assets of new multinationals do not include

a- technology adaptation
b- early adoption of innovative technology
c- reverse innovation
d- global branding

23- A geocentric approach to HR means

a- embracing ethnocentrism
b- designed to respond consequently to first globalization then localising pressures
c- the nationality of the expatriate is important
d- the basic mechanism of coordination in these organization is socialisation

24- Successful expat candidate abilities may not have

a- multicultural team leadership abilities
b- fluency in foreign languages
c- strong motivation
d- affinity to ethnocentrism

25- Disadvantages of direct exporting does not mean

a- less flexibility
b- all marketing efforts will be focused on the manufacturer's product line
c- learning legal and logistical operation procedures
d- greater investment risks than indirect exporting

26- The Assertiveness Dimension means:

a- more value on quality of life
b- good working environment
c- attaches value to power
d- none of the above

27- Production of a good or service in a foreign market is desirable in the presence of

a- protectionist barriers
b- low transportation costs
c- favourable currency exchange rate shifts
d- requirements for global adaptation to the peculiarities of global demand

28- Which archetype of administrative heritage uses the firm’s foreign subsidiaries as clones of
the home operations?
a- centralized exporter
b- international projector
c- international coordinator
d- multi-cantered MNE

29- X distance corresponds with x inter-country trade levels, implying x probability of foreign
MNE success
a- higher-lower-lower
b- lower-lower-higher
c- higher-higher-lower
d- lower-higher-lower

30- Internal conditions affecting FDI initiation include

a- competition structure
b- pre and post-sales service
c- a and b
d- none of the above
31- A strong resource base of the MNE subsidiary, combined with a low strategic importance of
the local market where this subsidiary is located, is typical for a:
a- black hole
b- implementer
c- strategic leader
d- contributor

32- Intermediary types in indirect exporting include all but the following
a- foreign supplier
b- trader
c- broker
d- agent

33- Which statement does not apply as a definition for the intermediaries of direct exporting
a- importer
b- agent
c- distributor
d- none of the above

34- Ethnocentric orientation is a predisposition towards

a- regionalism
b- geographically proximate regions
c- the home country
d- the global economy

35- An international organization does not have one of the following features
a- importers and exporters, has no investment outside of its home country
b- has its assets centralized at its headquarters
c- subsidiary units are expected to leverage their local capabilities
d- emphasis on volume, cost management and efficiency

36- IKEA’s expansion from its base in Scandinavia into markets in Western Europe and North
America is an example of which motive for an MNE to move abroad?
a- efficiency seeking
b- market seeking
c- strategic resource seeking
d- natural resource seeking

37- Which of the following is a misconception that people have about the world of international
business and the multinational enterprises (MNEs)?
a- MNE’s produce homogeneous products for the world market
b- MNE’s are globally monolithic and excessively powerful in political terms
c- MNE’s have far-flung operations or earn most of their revenues overseas
d- all the above
38- The transnational approach is characterized by
a- duplicated, distributed operation of the multinational architecture
b- maximization of responsiveness to local demands
c- decentralization of assets across subsidiaries
d- headquarters-centralized approach

39- Which of the following describes payments to a government to bring products into a
country?
a- taxes
b- tariffs
c- non-tariff barriers
d- quotas

40- Which of the following describes a bartering arrangement that provides for the exchange of
goods for other goods, or the exchange of goods for other obligations that do not require direct
payment?
a- countertrading
b- joint venture
c- franchising
d- exporting