Chapter 09

Strategic Management and Business Policy, 15e (Wheelen et al.
)
Chapter 9 Strategy Implementation: Global Strategy
1) An MNC uses which international strategy for entering a foreign market by simply shipping
goods produced in the company's home country to other countries for marketing to minimize risk
and to experiment with a specific product?
A) licensing
B) joint ventures
C) exporting
D) production sharing
E) acquisitions
Answer: C
Difficulty: Moderate
Learning Obj.: 9.1: Describe the means of entry by which an organization can do business in
another country
AACSB: Analytical thinking
2) An MNC uses which international strategy for entering a foreign market by associating itself
with a firm in the host country or a government agency in that country to combine resources and
expertise needed for the development of a new product or technologies?
A) licensing
B) joint ventures
C) production sharing
D) exporting
E) acquisitions
Answer: B
another country
3) One benefit of a U.S. company entering a joint venture with an international firm is that it
A) reduces the risks of expropriation by host country officials.
B) enhances the policy of the host country's takeover of the firm.
C) promotes skepticism among other countries not involved in the merger.
D) encourages competitors to work with the company.
E) increases revenues by 20%.
Answer: A
another country
1
Copyright © 2018 Pearson Education, Inc.
4) To obtain a solid position in the profitable North American beer market, InBev of Belgium
purchased Anheuser-Busch. This was an example of which means of international entry?
A) joint venture
B) acquisition
C) green-field development
E) BOT
Answer: B
Difficulty: Easy
another country
5) Which means of international entry is a variation of the turnkey operation?

A) joint venture
B) acquisition
E) BOT
Answer: E
another country
AACSB: Application of knowledge
6) Which means of international entry is often called outsourcing?

A) joint venture
B) acquisition
E) BOT
Answer: D
another country
2
7) When a host government expropriates part or all of a foreign-owned company's holdings in its
country, which means of international entry is common for firms to use?
A) joint venture
B) acquisition
C) management contracts
E) BOT
Answer: C
Difficulty: Difficult
another country
8) An MNC uses which international strategy for entering a foreign market by purchasing
another company already operating in the area developing synergistic benefits gained from
acquiring strong complementary product lines and a good distribution network?
A) licensing
B) joint ventures
D) exporting
E) acquisitions
Answer: E
another country
9) In international dealings, green-field development is

A) a way in which an MNC may contract with a foreign government or local firm to trade raw
materials for certain resources belonging to the MNC.
B) a way in which an MNC can take total control of operations by acquiring a firm already
established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom to design
the plant, choose suppliers, and hire its workforce.
D) when an MNC has a large amount of management talent available and chooses to use its
personnel to assist a firm in a host country for a specified fee and period of time.
E) contracting for construction of operating facilities in exchange for a fee.
Answer: C
another country
3
10) An MNC uses which international strategy for entering a foreign market by combining the
higher labor skills and technology available in the developed countries with the lower cost labor
available in the developing countries?
A) licensing
B) joint ventures
D) exporting
E) acquisitions
Answer: C
another country
11) In international dealings, turnkey operations are

A) a way in which an MNC may contract with a foreign government or local firm to trade raw
B) a way in which an MNC can take total control of operations by either starting a business from
scratch or acquiring a firm already established in the host country.
the plant, choose suppliers, and hire a workforce.
E) contracting for construction of operating facilities in exchange for a fee.
Answer: E
another country
12) Management contracts are used in international dealings

A) as a way in which an MNC may contract with a foreign government or local firm to trade raw
B) as a way in which an MNC can take total control of operations by either starting a business
from scratch or acquiring a firm already established in the host country.
the plant, choose suppliers, and hire a workforce.
E) when an MNC typically contracts for construction of operating facilities in exchange for a fee.
Answer: D
another country
4
13) Research indicates that growing internationally is positively associated with firm
profitability.
Answer: TRUE
another country
14) Licensing grants rights to another company to open a retail store using the franchiser's name
and operating system.
Answer: FALSE
Difficulty: Easy
another country
15) Exporting is popular for small businesses because of the Internet and rapid advance of
overnight express services.
Answer: TRUE
another country
16) Licensing is an especially useful strategy if the brand name is well known but the firm does
not have the funds to finance its entering the country directly.
Answer: TRUE
another country
17) A joint venture reduces the risks of expropriation and harassment by host country officials.
Answer: TRUE
another country
18) Forming a joint venture between a foreign corporation and a domestic company is the most
popular strategy used to enter a new country.
Answer: TRUE
another country
5
19) Research suggests that joint ventures are more successful in international undertakings than
are wholly owned subsidiaries.
Answer: FALSE
another country
20) A relatively quick way to move into an international area is through green-field
development.
Answer: FALSE
another country
21) Government restrictions on ownership can discourage acquisitions.

Answer: TRUE
another country
22) Turnkey operations are typically contracts for the construction of operating facilities in
exchange for a fee.
Answer: TRUE
another country
23) Acquisitions are usually a far more complicated and expensive operation than green-field
development.
Answer: FALSE
another country
24) The term production sharing was coined by Alfred Chandler.

Answer: FALSE
Difficulty: Easy
another country
6
25) Production sharing is often called outsourcing.
Answer: TRUE
another country
26) Management contracts are common when a host government expropriates part or all of a
foreign-owned company's holdings in its country.
Answer: TRUE
another country
27) The BOT concept stands for Build, Operate, Transfer.

Answer: TRUE
another country
7
28) What are the more popular options for international entry?
Answer: There are several popular options for international entry. Exporting is a good way to
minimize risk and experiment with a specific product. Exporting involves shipping goods
produced in the company's home country to other countries for marketing. Under a licensing
agreement, the licensing firm grants rights to another firm in the host country to produce and/or
sell a product. The licensee pays compensation to the licensing firm in return for technical
expertise. Under a franchising agreement, the franchiser grants rights to another company to
open a retail store using the franchiser's name and operating system. In exchange, the franchisee
pays the franchiser a percentage of its sales as a royalty. Forming a joint venture between a
foreign corporation and a domestic company is the most popular strategy used to enter a new
country. Companies often form joint ventures to combine the resources and expertise needed to
develop new products or technologies. A relatively quick way to move into an international area
is through acquisitions—purchasing another company already operating in that area. If a
company doesn't want to purchase another company's problems along with its assets, it may
choose green-field development— building its manufacturing plant and distribution system.
Production sharing is the process of combining the higher labor skills and technology available
in the developed countries with the lower-cost labor available in developing countries. Turnkey
operations are typically contracts for the construction of operating facilities in exchange for a
fee. The BOT (Build, Operate, Transfer) concept is a variation of the turnkey operation. Instead
of turning the facility over to the host country when completed, the company operates the facility
for a fixed period during which it earns back its investment, plus a profit. Management contracts
offer a means through which a corporation may use some of its personnel to assist a firm in a
host country for a specified fee and period of time.
another country
29) A highly developed international company with a deep involvement throughout the world,
plus a worldwide perspective in its management and decision-making is called a(n)
A) international corporation.
B) multi-domestic corporation.
C) multi-national corporation.
D) global corporation.
E) Stage IV corporation.
Answer: C
Learning Obj.: 9.2: Explain the elements of International Strategic Alliances
8
30) A multi-national corporation
A) is synonymous with an international corporation.
B) has limited involvement through the world.
C) has a worldwide perspective in its decision-making.
D) has limited perspective in its management.
E) manages worldwide operations as if they were independent.
Answer: C
31) Which of the following is not identified as a key driver for strategic fit between alliance
partners?
A) The alliance must be important to both partners.
B) Joint activities must have added value for customers and the partners.
C) The alliance must be accepted by key stakeholders.
D) Partners contribute key strengths, but protect core competencies.
E) Partners must independently achieve their goals.
Answer: E
32) The global MNC faces the dual challenge of achieving scale economies through
standardization while at the same time responding to
A) increased competition.
B) local customer differences.
C) higher prices.
D) global economics.
E) increased shipping expenses.
Answer: B
33) What is the key to the successful implementation of strategic alliances?

A) the selection of an appropriate country
B) the timing of the entry
C) the selection of the local partner
D) the size of the local partner firm
E) the political environment of the country
Answer: C
9
34) A prior relationship with an alliance partner helps to develop
A) a level of trust.
B) a larger profit.
C) a stronger contractual agreement.
D) less need on negotiations.
E) fewer personnel.
Answer: A
35) What type of partner is favored by firms when forming new alliances?
A) entrepreneurial firms
B) firms in alliances with multiple other firms
C) small organizations
D) past partners
E) large organizations
Answer: D
Difficulty: Easy
36) Which of the following is not true of the drivers for strategic fit between alliance partners?
A) The alliance must be important to both partners.
B) Partners must be mutually dependent for achieving clear and realistic objectives.
C) The alliance need not be accepted by key stakeholders.
D) Partners contribute key strengths.
E) Partners protect core competencies.
Answer: C
37) An international company is a highly developed company with a deep involvement

throughout the world, plus a worldwide perspective in its management and decision-making.
Answer: FALSE
Difficulty: Easy
38) For a multi-national corporation (MNC) to be considered global, it must manage its
worldwide operations as if they were totally interconnected.
Answer: TRUE
10
39) The global multi-national corporation faces the dual challenge of achieving scale economies
through standardization while at the same time responding to local customer differences.
Answer: TRUE
40) A key driver for strategic fit between international alliance partners is that the alliance must
be important to both partners.
Answer: TRUE
Difficulty: Easy
41) A key driver for strategic fit between international alliance partners is that both partners must
contribute core competencies.
Answer: FALSE
42) Discuss the key drivers for strategic fit between international alliance partners.
Answer: Key drivers for strategic fit between international alliance partners include the
following. Partners must agree on fundamental values and have a shared vision about the
potential for joint value creation. Alliance strategy must be derived from business, corporate and
functional strategy. The alliance must be important to both partners. And these partners must be
mutually dependent for achieving clear and realistic objectives. Joint activities must have added
value for customers and the partners. Key stakeholders must also accept the alliance. And
partners must contribute key strengths to the alliance but protect core competencies.
43) What is the activity that occurs in the last stage of international development?
A) The company invests in production facilities in key countries.
B) The company exports, but trade is minor and handled by an export department.
C) The company establishes its own export division with sales offices in other countries.
D) The company operates in a global industry and establishes worldwide human resources,
R&D, and financing strategies thereby denationalizing its operations.
E) The company establishes local operating divisions in host countries to better serve individual
country markets.
Answer: D
Learning Obj.: 9.3: Discuss the stages of International Development
11
44) What is the activity that occurs in Stage 1 of international development?
A) The company invests in production facilities in key countries.
B) The company exports, but trade is minor and handled by an export department.
C) The company establishes its own export division with sales offices in other countries.
D) The company operates in a global industry and establishes worldwide human resources,
R&D, and financing strategies.
E) The company establishes local operating divisions in host countries to better serve individual
country markets.
Answer: B
45) The establishment of its own sales company with offices in other countries to eliminate the
middlemen and to better control marketing occurs in which stage of international development?
A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5
Answer: B
46) The impact on the firm's structure is minimal in which stage of international development?
A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5
Answer: A
Difficulty: Easy
47) An export division is established to oversee foreign sales offices in which stage of
international development?
A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5
Answer: B
12
48) The firm becomes a full-fledged MNC in which stage of international development?
A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5
Answer: D
49) Global considerations dominate organizational design in which stage of international

development?
A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5
Answer: E
50) Which of the following is not true of the stages of international development?
A) Corporations operating internationally tend to evolve through five common stages.
B) Stage 1 of international development is the domestic company.
C) In Stage 4 of international development, the company adds an international division with
responsibility for most of the business functions conducted in other countries.
D) In Stage 2 of international development, the firm is a domestic company with an export
division.
E) In Stage 5 of international development, all managers are responsible for dealing with
international as well as domestic issues.
Answer: C
13
51) The research findings on the stages of international development suggest
A) some support for the stages of international development, but not necessarily the sequence of
stages.
B) no support for the stages of international development.
C) widespread support for the sequence of stages.
D) firms cannot skip stages of the development sequence.
E) all divisions of a corporation must be at the same stage of development at the same time.
Answer: A
52) The first stage of international development is the domestic company.

Answer: TRUE
Difficulty: Easy
53) The most successful MNCs move into a fifth stage of international development in which
they have worldwide human resources, R&D, and financing strategies.
Answer: TRUE
54) To be successful with a global emphasis, firms may not skip across stages of development.
Answer: FALSE
14
55) Discuss the five stages of international development.
Answer: The five stages of international development are as follows:
Stage 1 (Domestic Company): The primarily domestic company exports some of its products
through local dealers and distributors in the foreign countries.
Stage 2 (Domestic Company with Export Division): Success in Stage I leads the company to
establish its sales company with offices in other countries to eliminate the middlemen and to
better control marketing. Because exports have now become more important, the company
establishes an export division to oversee foreign sales offices.
Stage 3 (Primarily Domestic Company with International Division): The company now adds an
international division with responsibilities for most of the business functions conducted in other
countries.
Stage 4 (Multi-national Corporation with Multi-domestic Emphasis): Now a full-fledged multi-
national corporation, the company increases its investments in other countries. The company
establishes a local operating division or company in the host country. The product line is
expanded, and local manufacturing capacity is established. Managerial functions are organized
locally. Over time, the parent company acquires other related businesses, broadening the base of
the local operating division.
Stage 5 (Multi-national Corporation with Global Emphasis): The most successful multi-national
corporations move into a fifth stage in which they have worldwide personnel, R&D, and
financing strategies. Global considerations now dominate organizational design.
56) One of the big common mistakes by corporations sending executives on global assignments
is
A) not raising their salaries.
B) not educating executives about customs and values in other countries.
C) not providing training for the regulatory environment.
D) not providing excellent health care.
E) not giving executives the opportunity to visit home.
Answer: B
Difficulty: Easy
Learning Obj.: 9.4: Explain how companies can improve their staffing efforts as they expand
beyond their home country
15
57) Which one of the following is not one of the dangers of using primarily foreign nationals to
staff managerial positions in subsidiaries?
A) the increased likelihood of suboptimization
B) difficulty for the MNC to meet long-term, worldwide objectives
C) the ability for communication and coordination becomes increasingly difficult
D) promotes anger and jealousy within the nationalistic host government
E) problems in coordinating activities of several international subsidiaries leads to problems in
operating in a global industry
Answer: D
58) The percentage of U.S.-based expatriate managers who fail to adjust to a host country's
social and business environment is
A) 6% or less.
B) between 20% and 45%.
C) between 50% and 70%.
D) between 60% and 75%.
E) greater than 90%.
Answer: B
59) Of those expatriate managers who completed an assignment, what percent left their company
within one year of returning home?
A) 6% or less
B) 25%
C) 50%
D) 75%
E) greater than 90%
Answer: B
16
60) What percent of midsize and larger companies send some of their employees abroad?
A) 10%
B) 25%
C) 40%
D) 60%
E) 80%
Answer: E
61) Employees who are sent on international assignments by their firms are known as
A) commuters.
B) expatriates.
C) stealth employees.
D) telecommuters.
E) executives.
Answer: B
62) The reasons cited for a large percent of expats sent abroad who return home early are
A) failure to learn the language and difficult job responsibilities.
B) difficulties adjusting to the culture and the language.
C) job dissatisfaction or difficulties adjusting to a foreign country.
D) job dissatisfaction and lack of technical skills.
E) lack of technical skills and inability to fulfill job responsibilities.
Answer: C
63) Within a year of returning home, 25% of expats

A) leave the company to join a competitor.
B) get promoted.
C) take a headquarters position.
D) take another international assignment.
E) mentor other expats.
Answer: A
17
64) Only ________ of human resource managers have ever worked abroad, so most have little
understanding of a global assignment's unique personal and professional challenges and thus fail
to develop the training necessary for such an assignment.
A) 11%
B) 21%
C) 51%
D) 41%
E) 31%
Answer: A
65) Most human resource managers fail to develop the training necessary for international
assignments because
A) most have not worked abroad themselves and have little understanding of the unique
challenges of these positions.
B) most think this training is unnecessary.
C) the financial resources are not available.
D) the time is too limited for extensive training to be delivered before the assignment.
E) cultural training resources and experts are not available to the firm.
Answer: A
66) The vast majority of companies select employees for an international assignment based on
their
A) language skills.
B) ability to adapt.
C) cultural sensitivity.
D) technical expertise.
E) position in the organization.
Answer: D
18
67) Which of the following is not true of global MNCs?
A) Global MNCs emphasize international experience.
B) Global MNCs have a greater number of senior managers who have been expatriates.
C) Global MNCs have a strong focus on leadership development through the expat experience.
D) To improve organizational learning, many MNCs are providing expats with five year
assignments.
E) Less emphasis is being placed on intercultural training for managers being sent on overseas
assignments.
Answer: E
68) The likelihood that an expat will return home early is increased by
A) the perceived lack of organizational support for international assignments.
B) the emphasis on cultural training.
C) an inability to speak the language.
D) interpersonal conflicts with host country employees.
E) a lack of fit with the technical skills of the job.
Answer: A
69) Which of the following is not a recommendation to improve the entire expat process?
A) Keep reasons for international assignments broad.
B) Assign mentors in both the home country and the host country.
C) Develop a means of maintaining open, frequent communication throughout the process.
D) Design a plan for repatriation.
E) Develop an approach for sharing the international experience within the company.
Answer: A
19
70) When should an organization begin communication to discuss the repatriation process?
A) when the expat accepts the assignment
B) 6 months prior to the end of the assignment
C) when the expat returns home
D) 6 months after the expat returns home
E) when the expat arrives at the foreign assignment
Answer: B
71) When designing a plan for repatriation,

A) communication should begin as soon as the manager returns home.
B) it should always include details of the next international assignment.
C) the employee should be involved in how he or she would like to incorporate the skills learned
at the home office.
D) little of the experience should be shared during the assignment.
E) the plan should be generic enough to apply to all expatriates.
Answer: C
72) Nationalistic governments tend to be placated by organizations that choose to hire

A) general managers with local experience.
B) home country managers.
C) managers with general international experience, but not from the host country.
D) fewer local managers.
E) parent company managers.
Answer: A
20
73) Suboptimization in the MNC refers to
A) the local subsidiary ignoring the needs of the larger parent company.
B) the parent company ignoring the needs of the local subsidiary.
C) the parent company failing to hire local managers.
D) the local subsidiary being staffed by all expatriates.
E) the ease of the MNC in meeting its worldwide objectives.
Answer: A
74) Using third-country nationals

A) eliminates misunderstandings with local employees.
B) eliminates conflicts with the host country's government.
C) is a widespread practice among European firms.
D) decreases the opportunities for promotion.
E) is the transfer of parent company managers to an international assignment.
Answer: C
75) Executive recruiters have reported that more major corporations are
A) now requiring candidates to have international experience.
B) eliminating international assignments.
C) de-emphasizing the need for international experience.
D) eliminating stealth expatriate positions.
E) replacing executives with accidental expats.
Answer: A
76) To improve organizational learning, many multi-national corporations are providing their
managers with international assignments as long as five years.
Answer: TRUE
Difficulty: Easy
21
77) Research indicates that corporations using cross-national teams, whose members have
international experience and communicate frequently with overseas managers, have greater
product development capabilities.
Answer: TRUE
78) Cross border commuters are known as stealth expatriates.

Answer: TRUE
79) The danger in using primarily foreign nationals to staff managerial positions in subsidiaries
is the increased likelihood of suboptimization.
Answer: TRUE
80) To improve organizational learning, many multi-national corporations are providing their
managers with international assignments as long as five years.
Answer: TRUE
Difficulty: Easy
81) Research indicates that a multi-national corporation performs at a higher level when its CEO
has international experience.
Answer: TRUE
82) European multi-national corporations seldom use people with an international orientation to
staff their management positions.
Answer: FALSE
Difficulty: Easy
22
83) Discuss some of the recommendations to improve the entire expatriation process.
Answer: Some of the recommendations to improve the entire expatriation process include the
following. Have a compelling reason for sending an employee to a new country. That is, a
business case should be made for each assignment. Choose individuals who are open to the
assignment and committed to adapting to the new environment. Assign sponsors and/or mentors
in the home country and the host country. Develop an open, frequent means of communication
throughout the assignment. Design a plan for repatriation. Craft an approach for sharing the
experiences and lessons learned within the company.
84) A limitation of ROI as a measure of international performance is that

A) it is a single comprehensive figure examining only one facet of the firm.
B) it provides disincentive to use existing assets efficiently.
C) it provides an incentive to acquire new assets.
D) it is very sensitive to depreciation policy.
E) it does not provide the basis for common comparison.
Answer: E
Learning Obj.: 9.5: Discuss the unique issues related to measuring organizational performance
that are presented with the administration of a truly international company
85) A study of 79 MNCs revealed that international transfer pricing from one country unit to
another is primarily used to
A) evaluate performance.
B) minimize taxes.
C) control imports.
D) improve communication.
E) move corporate headquarters.
Answer: B
23
86) Transferring profits from a foreign subsidiary to the parent corporation through dividends,
royalties, or management fees is called
A) technology transfer.
B) activity-based costing.
C) transfer pricing.
D) repatriation of profits.
E) transnational funding.
Answer: D
Difficulty: Easy
87) A multi-domestic MNC should use what type of controls on its foreign units?
A) Management should be given considerable latitude, but be required to meet some
predetermined performance targets.
B) Management should use a matrix structure allowing some limited autonomy of the foreign
unit.
C) Management needs to exert tight controls over its many units using a centralized strategic
operational decision-making format.
D) Management should use a functional approach assigning distinct and separate responsibilities
to each department throughout the MNC.
E) Management should use a divisional approach assigning goals and targets for each product-
group throughout the MNC.
Answer: A
88) A global MNC should use what type of controls over its foreign units?
A) Management should be given considerable latitude, but be required to meet some
predetermined performance targets.
B) Management should use a matrix structure allowing some limited autonomy of the foreign
unit.
C) Management needs to exert tight controls over its many units using a centralized strategic
operational decision-making format.
D) Management should use a functional approach assigning distinct and separate responsibilities
to each department throughout the MNC.
E) Management should use a divisional approach assigning goals and targets for each product-
group on all its foreign units collectively.
Answer: C
24
89) Which measure was cited as the most important measure for international performance
evaluation?
A) rate of return
B) ROI
C) budget analysis
D) ROE
E) stock price
Answer: A
90) The three most widely used techniques for international performance evaluation are
A) ROI, budget analysis, and historical comparisons.
B) ROI, ROE, and stock price.
C) ROE, stock price, and rate of return.
D) rate of return, ROE, and budget analysis.
E) ROE, ROI, and interest rate.
Answer: A
91) What percent of corporate officers report using the same evaluation techniques for foreign
and domestic operations?
A) 95%
B) 80%
C) 65%
D) 50%
E) 25%
Answer: A
25
92) The London-based International Accounting Standards Board developed International
Financial Reporting Standards (IFRS) to
A) harmonize international accounting practices.
B) address transfer pricing.
C) replace GAAP.
D) enforce FASB standards.
E) standardize worldwide expatriate assignments.
Answer: A
93) Which country has been the location of choice for MNCs to move their operations and/or
headquarters due to its 12.5% corporate tax rate?
A) Ireland
B) Japan
C) India
D) Mexico
E) South Korea
Answer: A
94) Which of the following is not one of the ways MNCs can reduce taxes and capture profits
from a subsidiary?
A) dividends
B) royalties
C) management fees
D) transfer pricing
E) exporting
Answer: E
95) In one study, 95% of the corporate officers interviewed stated that they use different
evaluation techniques for foreign and domestic operations.
Answer: FALSE
26
96) A study of 79 MNCs revealed that international transfer pricing from one country unit to
another is primarily used not to evaluate performance but to minimize taxes.
Answer: TRUE
97) Among the most important barriers to international trade are the different standards for
products and services.
Answer: TRUE
Difficulty: Easy
98) An MNC should use loose controls on its foreign units, but a global MNC needs tight
controls over its many units.
Answer: TRUE
99) Corporate tax rates tend to be relatively stable from country to country.
Answer: FALSE
Difficulty: Easy
100) Foreign units of MNCs are evaluated more as investment or profit centers.
Answer: FALSE
101) Stage 4 of international development is a multi-national corporation with global emphasis.

Answer: FALSE
27
102) Which types of controls are recommended for a global MNC versus a multi-domestic
MNC?
Answer: It is recommended that the control systems used by a global MNC be different from
those used by a multi-domestic MNC. An MNC should use loose controls on its foreign units.
The management of each geographic unit should be given considerable operational latitude, but
it should be expected to meet some performance targets. It is recommended that top management
emphasize budgets and non-financial measures of performance. Multiple measures should be
used to differentiate between the worth of the subsidiary and the performance of its management.
A global MNC needs tight controls over its many units. Its key operational decisions must be
centralized. Foreign units are evaluated more as cost centers, revenue centers, or expense centers
than as investment or profit centers.
28

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Strategic Management and Business Policy, 15e (Wheelen et al.

5) Which means of international entry is a variation of the turnkey operation?

6) Which means of international entry is often called outsourcing?

9) In international dealings, green-field development is

11) In international dealings, turnkey operations are

12) Management contracts are used in international dealings

21) Government restrictions on ownership can discourage acquisitions.

24) The term production sharing was coined by Alfred Chandler.

27) The BOT concept stands for Build, Operate, Transfer.

33) What is the key to the successful implementation of strategic alliances?

37) An international company is a highly developed company with a deep involvement

49) Global considerations dominate organizational design in which stage of international

52) The first stage of international development is the domestic company.

63) Within a year of returning home, 25% of expats

71) When designing a plan for repatriation,

72) Nationalistic governments tend to be placated by organizations that choose to hire

74) Using third-country nationals

78) Cross border commuters are known as stealth expatriates.

84) A limitation of ROI as a measure of international performance is that

101) Stage 4 of international development is a multi-national corporation with global emphasis.

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