Question 1

The primary advantage of transnational vertical integration is to exploit spatial variations in ___________________ costs.

Accepted Answer

The primary advantage of transnational vertical integration is to exploit spatial variations in production costs, allowing companies to lower costs by locating different stages of production in countries where it is most efficient or cheapest to produce.

Question 2

Major car makers continue to organize their transnational production networks with a great deal of:

Accepted Answer

Major car makers often organize their transnational production networks with a significant degree of vertical integration, which means they control multiple stages of production, from sourcing raw materials to manufacturing and assembling parts, to streamline operations and reduce costs.

Question 3

Most TNCs are simultaneously controlling their own intra-firm networks of foreign subsidiaries and affiliates at the same time as managing a dense web of __________________ networks.

Accepted Answer

TNCs (Transnational Corporations) manage both their internal networks (intra-firm) and external relationships with other firms (inter-firm), which includes partnerships, collaborations, and other forms of business relationships beyond their own corporate boundaries.

Question 4

An example of an inter-firm relationship is:

Accepted Answer

All the options listed (subcontracting, joint ventures, strategic alliances, franchising, and cooperative agreements) are examples of inter-firm relationships, where businesses collaborate or enter into agreements to achieve specific objectives.

Question 5

Subcontracting is also commonly referred to as:

Accepted Answer

Subcontracting is commonly referred to as outsourcing, where a company hires another company to perform tasks, handle operations, or provide services that are either difficult to manage or are outside the company's expertise.

Question 6

Subcontracting involves engaging ________________ firms to produce goods specifically for the principal firm.

Accepted Answer

Subcontracting typically involves engaging independent firms to produce goods or perform services specifically for the principal firm, allowing the principal firm to focus on core activities or manage capacity issues.

Question 7

This occurs when the principal firm (the buyer) subcontracts most, if not the entire, production to another firm (the supplier) in another country.

Accepted Answer

Commercial subcontracting is the correct term for when a principal firm outsources most or all of its production to another firm in a different country. This is a common practice in global trade to leverage cost advantages, expertise, or resources that are more readily available or affordable overseas.

Question 8

This mode of international subcontracting is most common in today's electronics industry, particularly the manufacturing of personal computers, consumer electronics, and household appliances.

Accepted Answer

The answer of This mode of international subcontracting is most...

Question 9

Buyers who subcontract their manufacturing may supply product specifications in what is called ____________________________ so that the finished products are exactly the same as if the buyer had produced them.

Accepted Answer

Original Equipment Manufacturing (OEM) refers to the practice where buyers provide their product specifications to a manufacturer, who then produces the items on their behalf, ensuring the products match the buyer's specifications exactly as if they had manufactured them themselves.

Question 10

Industrial subcontractors do not engage in _____________________________ and final distribution on behalf of their customers.

Accepted Answer

The answer of Industrial subcontractors do not engage in _____________________________...

Question 11

Industrial subcontracting takes place when the suppliers only carry out:

Accepted Answer

Industrial subcontracting typically involves the outsourcing of manufacturing processes to external suppliers, rather than design, research, and development activities.

Question 12

International subcontracting has led to the development of enclaves of ____________________ production in developing countries.

Accepted Answer

International subcontracting often results in the creation of export-oriented production enclaves in developing countries, as these arrangements typically involve producing goods for foreign markets.

Question 13

Enclaves host ______________________ activity that forms an integral part of the global production networks of most TNCs.

Accepted Answer

The answer of Enclaves host ______________________ activity that forms an...

Question 14

Enclaves are also commonly referred to as:

Accepted Answer

The answer of Enclaves are also commonly referred to as:
...

Question 15

Firms participating in strategic alliances or joint ventures do not experience ____________________ and thus remain independent of the alliance or joint venture partner.

Accepted Answer

Firms participating in strategic alliances or joint ventures typically do not experience ownership change as a direct result of the alliance or joint venture, allowing them to maintain their independence.

Question 16

Firms in very ________________ industries tend to engage in inter-firm collaborations such as strategic alliances.

Accepted Answer

Firms in very competitive industries often engage in inter-firm collaborations to gain advantages such as sharing resources, reducing costs, and enhancing innovation to better compete in the market.

Question 17

__________________ refers to an organizational form in which the TNC owner of a registered trademark or intellectual property rights agrees to let a franchisee (often outside the home country) use that trademark or rights.

Accepted Answer

Franchising is the correct term for this organizational form, where the owner of a trademark or intellectual property rights allows a franchisee to use those rights, often for business operations in a different country.

Question 18

"Co-opetition" refers to:

Accepted Answer

The answer of "Co-opetition" refers to:
...

Question 19

Strategic alliances are common in industries that exhibit:

Accepted Answer

Strategic alliances are often formed in industries characterized by intense competition, high costs of research and development (R&D), and rapid technological changes. These alliances allow companies to share resources, spread costs, and adapt more quickly to market or technological shifts.

Question 20

A(n) _______________ relationship is established between the franchisor (a TNC) and the franchisee (a local firm).

Accepted Answer

An inter-firm relationship is established between the franchisor and the franchisee, where the franchisor is a transnational corporation (TNC) and the franchisee is a local firm, indicating a business arrangement across different firms.

Quiz 10: The Transnational Corporationhow Does the Global Firm Keep It All Together