Deck 2: Understanding the international context: Responding to conflicting environmental forces

Question 1

Which global integration and coordination forces would MNEs,such as Mercedes-Benz,encounter?

A) Economies of scale, increasingly liberalized trade environments and government demands
B) Economies of scope, factor costs and increasingly liberalized trade environments
C) Economies of scale, expanding spiral of globalization and local competitors
D) Economies of scale, economies of scope and government demands

Answer 1

B
a,c,and d are incorrect because government demands and local competitors are part of 'forces for local differentiation and responsiveness'.

Question 2

In 2016,attitudes toward free trade in some countries swung in the direction of greater protectionism.

Answer 2

True

Question 3

A firm's decision with respect to whether it should adopt a global,multinational or international strategy should be made without any consideration of the industry in which the firm operates.

Answer 3

False
(An industry's (a) economic forces of globalization, (b) national, cultural, social, and political forces of localization, and (c) technological and diffusion forces of innovation are central determinants for whether to adopt a global, multinational or international strategy.)
Difficulty: Moderate

Question 4

Local responsiveness forces encountered by MNEs include cultural differences,government demands and economies of scope.

Question 5

Philips,a multinational electronics corporation based in the Netherlands and diversified in the consumer electronics,domestic appliance,lighting,medical systems and medical technology industries would encounter the following forces of local responsiveness:

A) Cultural differences, government demands, and economies of scope
B) Cultural differences, government demands and factor costs
C) Cultural differences, government demands, and local competitors
D) Cultural differences, government demands, and increasingly liberalized trade environments

Question 6

The pressures that drive book publishers such as Cambridge University Press to integrate and coordinate their activities across national boundaries are primarily _________.

A) Economic
B) political
C) social
D) organizational

Question 7

A transnational industry is characterized by moderate national responsiveness and moderate global integration.

Question 8

Global integration and coordination forces encountered by MNEs include economies of scale,government demands,and the expanding spiral of globalization.

Question 9

What were the original four dimensions of Hofstede's research?

A) Power distance, uncertainty avoidance, long-term orientation, and "masculinity"
B) Power distance, uncertainty avoidance, individualism, and "masculinity"
C) Power distance, long-term orientation, indulgence, and uncertainty avoidance
D) Indulgence, uncertainty avoidance, individualism and "masculinity"

Question 10

Globalization is a phenomenon that took most industries by surprise.

Question 11

Ricardo's free trade theory of competitive advantage states: if each country specializes in areas of advantage,and trades with other countries for the products/services in which they specialize,there is an overall loss for each country.

Question 12

An international industry is characterized by low national responsiveness and moderate global integration.

Question 13

A global industry is characterized by low national responsiveness and high global integration.

Question 14

The three conflicting environmental forces that MNEs encounter are cross-market integration,national responsiveness,and worldwide innovation and learning.

Question 15

A multinational industry is characterized by low national responsiveness and high global integration.

Question 16

Worldwide innovation and learning forces that are encountered by MNEs are driven by factor costs.

Question 17

In the emerging international environment,most industries can be categorized as multinational,global or international.

Question 18

MNEs from emerging markets seem to be more poorly equipped to compete in other emerging markets when compared to their counterparts from developed markets.

Question 19

The search for global competitiveness is a major source of conflict between MNEs and host governments.

Question 20

The GLOBE study demonstrates how distinct cultural differences across countries result in wide variations in social norms and individual behavior and is reflected in the effectiveness of different organizational forms and management systems.

Question 21

In a transnational industry,MNEs are expected to

A) collaborate with their competitors to increase the prices of their products.
B) build the capability to learn from the many environments in which they operate.
C) acquire their competitors to increase their pool of resources.
D) decentralize decisions to better respond to local demands.

Question 22

A multinational industry is characterized by ____________.

A) low national responsiveness and low global integration
B) low national responsiveness and high global integration
C) high national responsiveness and low global integration
D) high national responsiveness and high global integration

Question 23

Explain (1)what is meant by 'global chess' and (2)why companies that are adept at playing global chess have an advantage over their competitors.

Question 24

An industry that is characterized by moderate national responsiveness and moderate global integration is a(n)

A) international industry.
B) global industry.
C) transnational industry.
D) multinational industry.

Question 25

What are the main forces that motivate MNEs such as Dell Computers to disaggregate their operations and activities to respond to national,regional and local needs and demands?

A) Social and economic forces.
B) Social and political forces.
C) Political and economic forces.
D) Economic and psychological forces.

Question 26

What are the main forces that drive MNEs such as Eli Lilly,the pharmaceutical company,to innovate and learn on a global scale?

A) Economic and political forces.
B) Political and social forces.
C) Social and informational forces.
D) Technological and informational forces.

Question 27

Briefly describe the local differentiation and responsiveness forces encountered by Samsung,a multinational electronics and home appliances manufacturer and retailer.

Question 28

A transnational industry is characterized by _____________.

A) low national responsiveness and low global integration
B) low national responsiveness and high global integration
C) high national responsiveness and low global integration
D) high national responsiveness and high global integration

Question 29

Kentucky Fried Chicken (KFC)suffered a major chicken sales decrease in Hong Kong immediately after running the Chinese version of their successful worldwide advertising campaign "Finger lickin' good" that supposedly highlights the tastiness of their chicken.This is most likely an issue of:

A) Cultural differences and localization pressures
B) Government demands and factor costs
C) Localization pressures and economies of scale
D) Cultural differences and global competition

Question 30

Briefly discuss whether the type of industry a company belongs to affects that company's decision to adopt an international,multinational,or global strategy.Explain why you believe that industry type affects/does not affect strategy choice.
The industry a company belongs to affects that company's decision to adopt an international,multinational,or global strategy,because different industries encounter different forces and different forces lead to the adoption of different strategies.For instance,in some businesses the economic forces of globalization were historically strong and dominated other environmental demands.Such industries are designated as global industries.Businesses in such industries perform best when they follow a global strategy.In other businesses,the localizing forces of national,cultural,social,and political differences dominate the development of industry characteristics.Such industries are designated as multinational industries.Businesses in such industries perform best when they follow a multinational strategy.In some other industries technological forces are central and the need to develop and diffuse innovations is the dominant source of competitive advantage.Such industries are designated as international industries.Businesses in such industries perform best when they follow an international strategy.In recent years many industries are experiencing the above 3 sets of forces simultaneously.Such industries are designated as transnational industries.Businesses in such industries perform best when they follow a transnational strategy.

Question 31

Free Trade agreements have become a topic of discussion recently.How would you approach a discussion with your next door neighbor who thinks that Free Trade agreements are the reason for job losses?

Question 32

Discuss how cultural differences can have an effect on the consumption of tea worldwide.

Question 33

Interactions between host governments and MNEs have been sometimes compared to love-hate relationships.Could you please explain both parts of this equation and how host governments and MNEs relationships have evolved in the 2010s?
The "love" of this equation was built on the benefits that each could bring to the other.To the host government,the MNE represented an important source of taxation revenue,technology,and expertise that could help further national priorities,such as regional development,employment,import substitution,and export promotion.To the MNE,the host government represented the key to local market or resource access,which provided new opportunities for profit,growth,and improvement of its competitive position.
The "hate" side of the relationship - more often emerging as frustration rather than outright antagonism - arose from the differences in the motivations and objectives of the two partners.To be effective global competitors,MNEs sought three important operating objectives: unrestricted access to resources and markets throughout the world; the freedom to integrate manufacturing and other operations across national boundaries; and the unimpeded right to coordinate and control all aspects of the company on a worldwide basis.The host government,in contrast,sought to develop an economy that could survive and prosper in a competitive international environment.At times,this objective led to the designation of another company - perhaps a "national champion"-as its standard bearer in the specific industry,bringing it into direct conflict with the MNE.
A new trend is emerging that is set to alter the MNE-government relationship during the 2010s.Cash-rich governments and their nationally owned corporations in emerging markets,particularly China,are looking to invest in foreign resources,with such investments often packaged as part of a government-to-government diplomatic relationship.Not only are the government investors looking to earn returns on investment,but perhaps more importantly,they are securing the natural resources to ensure the future economic security of their own countries.This policy-based partnership of governments and national corporations engaging in the global business arena via such mechanisms as sovereign wealth funds is significantly different from the "national champion" strategy of an earlier era,and it is certain to have important global competitive implications over the next decades.

Question 34

Briefly describe the worldwide innovation and learning force that Microsoft encounters.

Question 35

Apple is a U.S.MNE.Briefly describe three conflicting sets of external demands that its international operations might face.

Question 36

Briefly describe the global integration and coordination forces encountered by MNEs.

Question 37

An industry that is characterized by low national responsiveness and high global integration is a(n)

A) multinational industry.
B) global industry.
C) international industry.
D) transnational industry.