Question 1

External resource analysis helps the firm to evaluate its current financial strengths and weaknesses.

Accepted Answer

Internal resource analysis helps the firm to evaluate its current managerial, technical, material, and financial resources and capabilities to better assess its strengths and weaknesses.

Question 2

There is definitive evidence that strategic planning in the international arena always results in higher profitability.

Accepted Answer

Despite some obvious benefits, there is no definitive evidence that strategic planning in the international arena always results in higher profitability, especially when MNCs try to use home strategies across different cultures (see Chapter 6). Most studies that report favorable results were conducted at least a decade ago.

Question 3

Many MNCs are convinced that strategic planning is critical to their success and these efforts are being conducted both at the home office and in the subsidiaries.

Accepted Answer

Many MNCs are convinced that strategic planning is critical to their success, and these efforts are being conducted both at the home office and in the subsidiaries.

Question 4

To a growing extent, the customers of MNCs have heterogeneous tastes and this has helped to spread international consumerism.

Accepted Answer

To a growing extent, the customers of MNCs have homogenized tastes, and this has helped to spread international consumerism. For example, throughout North America, the EU, and Japan, there has been a growing acceptance of standardized, yet increasingly personally, customized goods such as automobiles and computers.

Question 5

TQM covers the full gamut, from strategy formulation to implementation.

Accepted Answer

TQM covers the full gamut, from strategy formulation to implementation. TQM can be summarized as follows:
1. Quality is operationalized by meeting or exceeding customer expectations. Customers include not only the buyer or external user of the product or service but also the support personnel both inside and outside the organization who are associated with the good or service.
2. The quality strategy is formulated at the top management level and is diffused throughout the organization. From top executives to hourly employees, everyone operates under a TQM strategy of delivering quality products or services to internal and external customers. Middle managers.
3. TQM techniques range from traditional inspection and statistical quality control to cutting-edge human resource management techniques, such as self-managing teams and empowerment. will better understand and implement these strategies if they are a part of the process.

Question 6

National responsiveness is the need to understand different consumer tastes in segmented regional markets and respond to different national standards and regulations imposed by autonomous agencies.

Accepted Answer

National responsiveness is the need to understand the different consumer tastes in segmented regional markets and respond to different national standards and regulations imposed by autonomous governments and agencies.

Question 7

When the home office interferes with a subsidiary in another country, profitability suffers, but morale is unaffected and the investment eventually produces high returns.

Accepted Answer

For example, one study found that when decisions were made mainly at the home office and close coordination between the subsidiary and home office was required, return on investment was negatively affected. Simply put, the home office ends up interfering with the subsidiary, and profitability suffers.

Question 8

When the need for national responsiveness is low and the need for global integration is high, a global strategy is appropriate.

Accepted Answer

In quadrant 1, the need for integration is high and awareness of differentiation is low. In terms of economies of scale, this situation leads to global strategies based on price competition.

Question 9

In emerging economies undergoing rapid changes such as privatization, governments have generally been apprehensive and uncooperative with MNCs.

Accepted Answer

In emerging economies that are undergoing rapid changes such as privatization and market liberalization, there may be a narrow window of time within which these opportunities can be best exploited.

Question 10

An economic imperative approach to strategic planning is used when a product is regarded as a generic good and therefore does not have to be sold based on name brand.

Accepted Answer

The strategy is also used when the product is regarded as a generic good and therefore does not have to be sold based on name brand or support service.

Question 11

Citibank is an example of a company the finds operating in China to be too risky.

Accepted Answer

A good example is provided by Citibank (a unit of Citicorp.), which opened offices in China in 1902 and continued to do business there until 1949, when communists took power. However, in 1984 Citibank quietly returned, and over the last two decades the firm has been slowly increasing its presence in China.

Question 12

Firms that have done well domestically with a product usually have done so because the competition is effective.

Accepted Answer

In addition, a firm that has done well domestically with a product or service usually has done so because the competition is minimal or ineffective.

Question 13

In selecting a geographic location to operate, Japanese firms favor heavily unionized areas.

Accepted Answer

Japanese firms in particular tend to avoid heavily unionized areas.

Question 14

An example of the political imperative at work is a retail manufacturer who emphasizes flexibility, response time, small production runs, small minimum-order quantities, and the ability to shift direction as the trends move.

Accepted Answer

An example of the economic imperative at work is a retail manufacturer who emphasizes flexibility, response time, small production runs, small minimum-order quantities, and the ability to shift direction as the trends move.

Question 15

International strategies are characterized by increased international standardization of products and services.

Accepted Answer

Typical strategies in quadrant 2 are characterized by increased international standardization of products and services. This mixed approach is often referred to as international strategy.

Question 16

A growing number of MNCs are finding that they must continually revise their strategies and make renewed commitment to the quality imperative because they are being bested by emerging market forces.

Accepted Answer

A growing number of MNCs are finding that they must continually revise their strategies and make renewed commitment to the quality imperative because they are being bested by emerging market forces.

Question 17

Profitability and marketing goals almost always dominate the strategic plans of today's multinational corporations.

Accepted Answer

Profitability and marketing goals almost always dominate the strategic plans of today's MNCs. Profitability, as shown in Table 8-1, is so important because MNCs generally need higher profitability from their overseas operations than they do from their domestic operations.

Question 18

In choosing a location, today's MNC has two primary considerations: the country and the specific locale within the chosen country.

Accepted Answer

In choosing a location, today's MNC has two primary considerations: the country and the specific locale within the chosen country. Quite often, the first choice is easier than the second, because there are many more alternatives from which to choose a specific locale.

Question 19

Strategic management is required to keep track of increasingly diversified operations in a continuously changing international environment.

Accepted Answer

One of the primary reasons that MNCs such as Citibank need strategic management is to keep track of their increasingly diversified operations in a continuously changing international environment.

Question 20

Statistics reveal that foreign direct investment (FDI) has grown ten times faster than trade and twice as fast as the world gross domestic product.

Accepted Answer

Statistics reveal that FDI has grown three times faster than trade and four times faster than world gross domestic product (GDP).

Quiz 8: Strategy Formulation and Implementation

External resource analysis helps the firm to evaluate its current financial strengths and weaknesses.

There is definitive evidence that strategic planning in the international arena always results in higher profitability.

Many MNCs are convinced that strategic planning is critical to their success and these efforts are being conducted both at the home office and in the subsidiaries.

To a growing extent, the customers of MNCs have heterogeneous tastes and this has helped to spread international consumerism.

TQM covers the full gamut, from strategy formulation to implementation.

National responsiveness is the need to understand different consumer tastes in segmented regional markets and respond to different national standards and regulations imposed by autonomous agencies.

When the home office interferes with a subsidiary in another country, profitability suffers, but morale is unaffected and the investment eventually produces high returns.

When the need for national responsiveness is low and the need for global integration is high, a global strategy is appropriate.

In emerging economies undergoing rapid changes such as privatization, governments have generally been apprehensive and uncooperative with MNCs.

An economic imperative approach to strategic planning is used when a product is regarded as a generic good and therefore does not have to be sold based on name brand.

Citibank is an example of a company the finds operating in China to be too risky.

Firms that have done well domestically with a product usually have done so because the competition is effective.

In selecting a geographic location to operate, Japanese firms favor heavily unionized areas.

An example of the political imperative at work is a retail manufacturer who emphasizes flexibility, response time, small production runs, small minimum-order quantities, and the ability to shift direction as the trends move.

International strategies are characterized by increased international standardization of products and services.

A growing number of MNCs are finding that they must continually revise their strategies and make renewed commitment to the quality imperative because they are being bested by emerging market forces.

Profitability and marketing goals almost always dominate the strategic plans of today's multinational corporations.

In choosing a location, today's MNC has two primary considerations: the country and the specific locale within the chosen country.

Strategic management is required to keep track of increasingly diversified operations in a continuously changing international environment.

Statistics reveal that foreign direct investment (FDI) has grown ten times faster than trade and twice as fast as the world gross domestic product.