Question 1

Which of the following is LEAST likely to trigger the breakup of a joint venture?
A) The partners place a different degree of importance on the joint venture.
B) The partners develop different capabilities to contribute to the joint venture.
C) The partners come from different industries.
D) Objectives evolve differently over time.

Accepted Answer

Partners from different industries can bring different perspectives and complementary skills to a joint venture. This can actually enhance the success of the venture. However, if partners have different views on the importance of the joint venture, different capabilities to contribute, or if objectives evolve differently over time, these factors can create tensions and conflicts that may lead to the breakup of the venture.

Question 2

What problem most likely arises when a company wishes to sell techniques/technology that it has either not yet fully developed or used commercially?
A) A buyer is reluctant to buy what it has not seen, and a seller risks divulging secretive information.
B) Most governments want to see contract details, which companies feel are proprietary.
C) It is difficult to develop a rapport between negotiating parties in this type of situation.
D) Parties can seldom agree on the desired level of quality control.

Accepted Answer

When a company wishes to sell techniques/technology that it has not fully developed or used commercially, the buyer may be hesitant to purchase something that they have not seen in action. At the same time, the seller risks divulging confidential information about their technology. This makes it difficult to negotiate and reach an agreement between the parties involved. It is important to establish trust and develop a rapport to ensure a successful transaction.

Question 3

Why do turnkey operators often require a feasibility study as part of the contract?
A) By adding to the cost, they earn more money.
B) This lessens the risk of contract cancellation when political leadership changes.
C) This lowers their risk of foreign exchange losses.
D) This helps to define what constitutes "satisfactory completion" of the project.

Accepted Answer

Providing a feasibility study helps to define the project's scope and objectives, which helps clarify what constitutes satisfactory completion of the project. This reduces the likelihood of disagreements between the turnkey operator and the client about the project's goals, which can lead to contract cancellations or legal disputes.

Question 4

Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.

Accepted Answer

Exporting tends to be more feasible and cost-effective when transportation costs are low in relation to production costs, as high transportation costs can significantly increase the overall cost of goods sold abroad, making exports less competitive.

Question 5

All of the following are important when establishing and managing a collaborative agreement EXCEPT ________.
A) setting up mutual goals and expectations
B) avoiding interference about how the partner handles its duties in the operation
C) determining whether the agreement is reaching its goals
D) assessing periodically whether a different operational form would be preferable

Accepted Answer

Avoiding interference about how the partner handles its duties in the operation may actually lead to miscommunication and misunderstanding, making it important to establish clear roles and responsibilities for each partner. The other options (setting mutual goals and expectations, determining whether the agreement is reaching its goals, and assessing periodically whether a different operational form would be preferable) are all important considerations when establishing and managing a collaborative agreement.

Question 6

What is an international consortium?
A) the ownership of a company by a government and a foreign company
B) an agreement signed by most governments to protect intellectual property rights
C) an international joint venture owned by at least three organizations
D) an agreement between two or more governments to provide for reciprocal foreign investment protection

Accepted Answer

An international consortium is an agreement or partnership between at least three organizations, usually from different countries, to work together on a specific project or goal. It is often set up as a joint venture, in which the ownership and profits are shared among the consortium members.

Question 7

Companies typically use various international operating forms simultaneously for all the following reasons EXCEPT which one?
A) They may be at different stages of commitment for different products.
B) They may be at different stages of commitment for different countries.
C) They may need to balance foreign revenues among their operating divisions.
D) Differences in countries' characteristics may necessitate diverse operational forms.

Accepted Answer

The answer of Companies typically use various international operating forms...

Question 8

Large companies that have resources to go it alone may have advantages in product development over small companies that do not because ________.
A) evidence suggests that collaborative arrangements slow the speed of innovation
B) large companies can dictate their terms of operations abroad
C) small companies are disadvantaged in legal settlements
D) large companies need not adapt to national differences

Accepted Answer

Evidence suggests that collaborative arrangements can slow down the speed of innovation, and as large companies have the resources to go it alone, they may choose to avoid collaboration and pursue innovation on their own.

Question 9

Tom,a manager at an MNE,has been given the task of identifying a pool of companies with which the firm might form collaborative arrangements. Which of the following activities would be LEAST useful for Tom?
A) attending technical conferences
B) monitoring industry journals
C) attending trade fairs
D) constructing turnkey facilities

Accepted Answer

Constructing turnkey facilities is unrelated to identifying potential collaboration partners. Attending technical conferences, monitoring industry journals, and attending trade fairs are all useful in identifying potential collaboration partners and staying up to date on industry trends and developments.

Question 10

All of the following are differences that need to be overcome for international collaborative arrangements to be effective EXCEPT ________.
A) national disparities in governmental policies
B) company variances in strategic directions and objectives
C) governmental differences in export restrictions
D) company diversity in management styles and structures

Accepted Answer

The answer of All of the following are differences that...

Question 11

All of the following would be examples of international joint ventures EXCEPT ________.
A) two Japanese companies sharing ownership of a company in Canada
B) a Danish company sharing ownership with a South African company in South Africa
C) a government-owned company from China sharing ownership with an Australian company in Panama
D) two Venezuelan companies sharing ownership of a company in Venezuela

Accepted Answer

The question asks for an example of an international joint venture, which involves two or more companies from different countries forming a partnership to operate a business together. Options A, B, and C all involve companies from different countries forming joint ventures in a foreign location. Option D, however, involves two companies from the same country forming a joint venture within their home country, which is not an international joint venture.

Question 12

What is an equity alliance?
A) a collaborative arrangement in which at least one collaborating company takes an ownership position in the other
B) a collaboration in which each contributor receives an equitable return based on relative contribution
C) a collaboration in which partners agree to share technology with each other
D) a wholly owned acquisition to prevent appropriation of intellectual property

Accepted Answer

An equity alliance is a collaborative arrangement in which at least one collaborating company takes an ownership position in the other. This means that they have a financial stake in each other's success, and are likely to collaborate closely to achieve common goals. This type of alliance is common in industries where intellectual property, technology, or other assets are critical to success, and can be a way to share risk, resources, and expertise.

Question 13

Turnkey projects generally differ from other forms of international business in that ________.
A) they tend to be smaller
B) customers are more likely private companies
C) they are more often located in remote areas
D) they depend almost entirely on acquisitions rather than greenfield operations

Accepted Answer

The answer of Turnkey projects generally differ from other forms...

Question 14

Billions of investment dollars are needed to develop many new products. This trend toward higher development costs is likely to have which of the following effects on future modes of operations?
A) Collaborative arrangements are likely to decrease because a company making a breakthrough will be leery of partners' appropriation of knowledge.
B) Collaborative arrangements are likely to increase because of the huge investments needed for development.
C) Exporting will become more important relative to other operating modes because of the large scale production facilities necessary for economic efficiency.
D) Cross-licensing will gain in importance because companies will be forced to specialize more in different technologies.

Accepted Answer

The trend towards higher development costs is likely to lead to an increase in collaborative arrangements because companies will want to share the risk and cost of development. This will allow companies to pool resources and expertise to develop new products without bearing the full costs of development on their own.

Question 15

Without a proven track record in collaborative arrangements,a company will most likely need to ________.
A) have its home country government approve licensing contracts
B) delegate fewer responsibilities to partners at the company
C) negotiate harder with and make more concessions to a partner
D) depend more on trust as a control mechanism

Accepted Answer

Without a proven track record, a company will likely need to negotiate harder and make more concessions to an established partner in order to build trust and establish a successful collaborative arrangement. This may involve giving up more control or making compromises in order to gain the partner's trust and commitment to the partnership.

Question 16

Which of the following would most likely trigger internal tensions as a firm's modes of foreign operations change?
A) losing or gaining responsibilities
B) reluctance to learn about a culture
C) traveling for business purposes
D) geographic diversity

Accepted Answer

Losing or gaining responsibilities can cause a shift in power dynamics within the firm, leading to internal tensions among employees. This is especially true when it comes to foreign operations, as employees may feel their input and expertise is no longer valued or that they are being forced into unfamiliar roles. Reluctance to learn about a culture, traveling for business purposes, and geographic diversity may also cause some internal tensions, but they are less likely to result in major power struggles within the firm.

Question 17

What is an international joint venture?
A) an international agreement between two or more companies to have access to each other's patents
B) the ownership of a company by two or more companies, of which at least one is a foreign company where the venture is located
C) an international agreement between two or more firms for the use of a trademark
D) an agreement between two or more organizations to share management expertise

Accepted Answer

An international joint venture is a business agreement where two or more companies, at least one of which is foreign, jointly own a new business entity formed to operate within a foreign country. It involves shared ownership, decision-making, and sharing of risks and profits.

Question 18

When no single company has control over a collaborative arrangement,________.
A) the operation may lack direction
B) none of the partners is responsible for legal violations
C) differences in corporate culture are likely to grow
D) one partner's interests are likely to be put ahead of the other partner's interests

Accepted Answer

Without a central controlling entity, the collaboration may lack direction and a clear path forward. Each partner may have their own priorities and objectives, which can lead to confusion and conflicting decision-making within the collaborative arrangement.

Question 19

When a large company and a small company enter a collaborative arrangement,________.
A) the large company is expected to contribute more to the arrangement
B) the large company is likely to be more active in the venture
C) the small company is more likely to view the collaboration's expansion as competition to itself
D) the small company is likely to be disadvantaged if legal action is necessary to solve a dispute

Accepted Answer

The answer of When a large company and a small...

Question 20

When a company's primary motive for entering a collaborative arrangement is to learn from its partner,it is likely to ________.
A) leave control to its partner
B) "go it alone" after it has learned what it needs to know
C) have disagreements with the partner over quality issues
D) prefer the arrangement to be a licensing agreement

Accepted Answer

If a company's primary motive for entering a collaborative arrangement is to learn from its partner, it is likely that once it has learned what it needs to know, it will "go it alone." This means that the company will likely end the collaborative arrangement and move forward independently with the knowledge and skills it has gained.

Quiz 14: Direct Investment and Collaborative Strategies

Which of the following is LEAST likely to trigger the breakup of a joint venture?

What problem most likely arises when a company wishes to sell techniques/technology that it has either not yet fully developed or used commercially?

Why do turnkey operators often require a feasibility study as part of the contract?

Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.

All of the following are important when establishing and managing a collaborative agreement EXCEPT ________.

What is an international consortium?

Companies typically use various international operating forms simultaneously for all the following reasons EXCEPT which one?

Large companies that have resources to go it alone may have advantages in product development over small companies that do not because ________.

Tom,a manager at an MNE,has been given the task of identifying a pool of companies with which the firm might form collaborative arrangements. Which of the following activities would be LEAST useful for Tom?

All of the following are differences that need to be overcome for international collaborative arrangements to be effective EXCEPT ________.

All of the following would be examples of international joint ventures EXCEPT ________.

What is an equity alliance?

Turnkey projects generally differ from other forms of international business in that ________.

Billions of investment dollars are needed to develop many new products. This trend toward higher development costs is likely to have which of the following effects on future modes of operations?

Without a proven track record in collaborative arrangements,a company will most likely need to ________.

Which of the following would most likely trigger internal tensions as a firm's modes of foreign operations change?

What is an international joint venture?

When no single company has control over a collaborative arrangement,________.

When a large company and a small company enter a collaborative arrangement,________.

When a company's primary motive for entering a collaborative arrangement is to learn from its partner,it is likely to ________.