Deck 4: The Multinational Enterprise

Question 1

What is the nature of FDI by SMIEs?

A) emphasis on developed markets
B) selective globalization
C) strategy
D) all of the above.

Answer 1

D

Question 2

Companies engaged in international business activities with substantial FDI presence are

A) Mickey Mouse.
B) multinational enterprises.
C) developing multinational enterprises.
D) small and mid-sized international enterprises.

Answer 2

D

Question 3

Groups of Multinational Enterprises from developing and emerging economies are known as

A) DMNEs.
B) MNEs.
C) FDIs.
D) SMIEs.

Answer 3

A

Question 4

Firms engaged in trade activities without substantial FDI are

A) multinational enterprises.
B) international firms.
C) developing multinational enterprises.
D) global.

Question 5

An enterprise that engages in FDI and owns or controls "value-adding activities" in more than one country is considered

A) MNE.
B) corporation.
C) multinational.
D) global.

Question 6

The ___________ firm consists of closely integrated international subsidiaries controlled and coordinated from central headquarters.

A) transnational.
B) small business.
C) transnational
D) global

Question 7

A __________firm is an enterprise with multiple international subsidiaries that are relatively independent from headquarters.

A) multidomestic
B) global
C) transnational
D) incorporated

Question 8

A firm with foreign sales and possibly a representative office, but has no ownership in a foreign production site is a

A) global company.
B) multidomestic.
C) internationally leaning.
D) corporation.

Question 9

A firm with at least one majority owned plant or joint venture abroad in one of the three regions of the world is considered to be a

A) global company.
B) internationally committed.
C) multidomestic.
D) small business firm.

Question 10

Obstacles to Small and Medium Sized International Enterprises (SMIE)'s internationalization include:

A) scale and transaction constraints.
B) access to capital.
C) lack of knowledge.
D) all of the above.

Question 11

The image of MNEs varies by time, country, and industry.

Question 12

Despite a heightened tendency toward borderless activities and a growing contribution from foreign production and sales, most MNEs do not retain their home country roots and characteristics.

Question 13

The transnational firm consists of subsidiaries that fulfill varying roles, with some subsidiaries playing a strategic role that in the global firm is reserved for headquarters.

Question 14

The growth of MNE's in the service industry can be attributed to which of the following reasons

A) economic transformation.
B) globalization and liberalization of regulatory systems.
C) communications advances.
D) all of the above.

Question 15

To compensate for resource shortages, DMNEs rely on other firms for

A) alliance partners.
B) export partners.
C) export intermediaries
D) all of the above.

Question 16

Which of the choices listed below describe the following statement: a "business organization that from inception seeks to derive significant competitive advantages from the use of resources and sale of output in multiple countries."

A) born international
B) globalization
C) internationalization
D) none of the above

Question 17

Which of the following strategies is NOT a characteristic of those mentioned by Craig and Douglas?

A) low cost commodity
B) flexibility
C) component manufacturing
D) low-cost leader

Question 18

________________ is the capacity to generate ideas and acquire new knowledge.

A) Learning capability
B) Adaptability capability
C) Knowledge capability
D) None of the above

Question 19

Strategic capabilities include technological assets such as

A) patents and trade secrets.
B) proprietary designs.
C) product development and process innovation.
D) all of the above.

Question 20

Mary was required to prepare a report, collecting the following information: foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment. This type of report is called

A) Transnationality Index (TNI)
B) Internationlization Index.
C) UNCTAD.
D) none of the above.

Question 21

According to OECD (Organization for Economic Co-operation and Development), a multinational firm or MNE is

A) an enterprise that engages in joint venture and owns or controls value-adding activities in more than one country.
B) an enterprise that engages in partnership and owns or controls value-adding activities in more than one country.
C) an enterprise that engages in FDI and owns or controls value-adding activities in more than one country.
D) none of the above.

Question 22

The ___________ firm consists of subsidiaries that fulfill varying roles, with some subsidiaries playing a strategic role that in the global firm is reserved for headquarters.

A) international leaning
B) multidomestic
C) global
D) transnational

Question 23

The___________________ firm is an enterprise with multiple international subsidiaries that are relatively independent from headquarters.

A) internationally committed
B) international leaning
C) multidomestic
D) global

Question 24

The __________________ company is a firm with at least one majority-owned plant or a joint venture abroad but which lacks representation in all major regions of the world such as Asia, Europe, and the Americas.

A) internationally committed
B) international leaning
C) multidomestic
D) global

Question 25

The _________________ firm is one with foreign sales and possibly a representative office and/or a licensing agreement, but no ownership of foreign production sites.

A) international leaning
B) multidomestic
C) global
D) transnational

Question 26

When engaging in FDI, SMIE's are more likely to invest in developed markets due to

A) economic stability of developed market.
B) economic instability of developed market.
C) host country red tape.
D) piggybacking.

Question 27

Obstacles to SMIE's internationalization include

A) scale and transaction constraints.
B) access to capital.
C) lack of knowledge.
D) all of the above.

Question 28

The evolution of a DIVINE starting with labor-intensive production and gradually moving into technology is an example of

A) governance.
B) industry domain.
C) bargaining power.
D) strategy.

Question 29

DMNEs are mostly publicly traded on the open market.

Question 30

Government support of a DMNE can hinder the growth of the firm.

Question 31

DMNEs have the advantage of flexibility over MNEs.

Question 32

The degree of internationality can be determined by calculating a firm's transnationality index.

Question 33

Major players in the international arena include large MNEs from developed countries.

Question 34

Internationally committed companies have at least one majority owned plant or joint venture abroad in one of the three regions of the world.

Question 35

Critical resources for SMEs entering foreign markets are raw materials.

Question 36

Small and medium-sized International Enterprise (SMIE) firms based in the US represent 99.7 percent of all employers.

Question 37

Transnational firms have subsidiaries that play strategic roles.

Question 38

Developing multinational enterprise firms (DMNEs) fall into this category if they have moderate foreign direct investment (FDI) and are continuing FDI growth.

Question 39

Multinational Enterprises (MNEs) must develop "dynamic capabilities" to sustain a competitive advantage.

Question 40

Firms considered International Firms engage in trade activities without substantial foreign direct investment (FDI)

Question 41

Multinational enterprises (MNEs) are considered firms with a minimal to no foreign direct investment (FDI)

Question 42

Global firms control closely integrated international subsidiaries from a central headquarters.

Question 43

A multi-domestic firm controls multiple international subsidiaries from a central headquarters.

Question 44

Multinational Enterprises are a fairly new phenomenon, established after World War 2.

Question 45

The term MNE refers to a company with moderate FDI.

Question 46

The difference between a MNE and an international firm is the degree in which the firm engages in FDI.

Question 47

Dynamic capabilities are critical to the success of the MNE.

Question 48

It is easier for a MNE to transfer material resources than to transfer strategic capabilities.

Question 49

Effective knowledge transfer is the most important capability for the development of a MNE.

Question 50

DMNEs are unable to be global competitors due to a lack of resources.

Question 51

Modularization can protect a company's key competitive technology and at the same time be detrimental to the effectiveness of the venture.

Question 52

Multinational Enterprises are a fairly new phenomenon, established in the twentieth century.

Question 53

The Transnationality Index is used to determine the level of internationalization.

Question 54

MNEs have many advantages over local firms mainly due to unlimited resources.

Question 55

The image of MNEs suffered due to perceived threats to national sovereignty.

Question 56

The US trade surplus in services is offset by a much larger merchandise trade deficit.

Question 57

MNEs have become prevalent in recent years partly due to advancements in host country preferences.

Question 58

With few exceptions, the largest MNEs are based in the three regions of the world with annual revenues larger than many countries.

Question 59

"Traditional" MNEs are considered to be large firms based in developed nations and are present in the three regions of the world.

Question 60

Firms considered International Firms engage in trade activities without foreign direct investment (FDI)