Question 1

A joint venture is a specific type of __________.

Accepted Answer

A joint venture is a business arrangement in which two or more companies come together to form a new entity to pursue a specific project or objective. This new entity is usually owned and operated by the contributing companies in a shared manner, but may also involve outside investors. A joint venture is a type of strategic alliance, which refers to any cooperative relationship between two or more firms that involves sharing resources, capabilities and/or risks. Unlike other forms of alliances, however, a joint venture involves the creation of a separate legal entity that is jointly owned by the participating companies.

Question 2

Which of the following definitions best describes a transnational organization?

Accepted Answer

The answer of Which of the following definitions best describes...

Question 3

From a legal-political standpoint, some large corporations have postponed doing business with China and other Asian countries due to __________.

Accepted Answer

Political interference can create uncertainty and instability for corporations doing business in a country. This can include government regulations, changes in policies, and political tensions that may affect trade relations. As a result, some corporations may choose to delay or avoid doing business with countries where political interference and instability is a concern.

Question 4

IBM is the world's largest information technology company with more than 300,000 employees in 170 countries. It once had a country-based structure but reorganized into industry groups to compete more effectively in the global marketplace. IBM is best described as a __________ organization.

Accepted Answer

IBM's presence in 170 countries and its shift from a country-based structure to industry groups indicate that it operates as a transnational organization. This means that IBM has a global orientation and operates in multiple countries while also adapting its products and operations to local markets.

Question 5

Canada's economy is best described as __________.

Accepted Answer

Canada has a predominantly market economy, where the forces of supply and demand determine the prices of goods and services. However, the government plays a significant role in regulating certain industries and implementing policies to support economic growth and stability, such as through taxation and spending, trade agreements, and monetary policy. Therefore, Canada's economy can be described as a market economy with some government control.

Question 6

When Montreal-based Bell Canada contracted with Sitel India and two other Indian companies to provide technical support to Canadian customers, they were using which international strategy?

Accepted Answer

Bell Canada is using global sourcing by contracting with companies in India to provide technical support to Canadian customers. Global sourcing involves seeking resources from around the world, often to take advantage of lower costs or specialized expertise.

Question 7

A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities would be called a __________.

Accepted Answer

A strategic alliance is a type of partnership between two companies where they agree to share resources and costs for a specific project or objective. This can include joint product development or building production facilities, as well as other types of collaborations. Option A, franchising agreement, typically involves one company licensing its brand and business model to another company, while option C, foreign subsidiary, refers to a company setting up a separate entity in another country. Option D, brokering agreement, may involve a company acting as an intermediary between buyers and sellers, but does not necessarily involve sharing costs for development or production. Option E, transnational venture, is a broader term that encompasses different types of international partnerships and collaborations, but does not specifically refer to cost-sharing between companies.

Question 8

Adam has been hired by an organization that has a partnership with a foreign company. Both the partners share resources and knowledge while developing new products. Adam's organization has formed a(n) ________.

Accepted Answer

A strategic alliance is a partnership between two or more companies that share resources, expertise, technology, and other assets in order to achieve a common goal. In this case, Adam's organization has formed a strategic alliance with a foreign company to develop new products by sharing resources and knowledge. Therefore, option C is the correct answer. The other options do not apply to the given scenario.  A licensing company grants licenses to other companies to use its products or services. A franchising company grants franchises to entrepreneurs to use its business model, brand, and support systems. Foreign subsidiary refers to a company that is fully owned by a foreign parent company. An import/export company simply buys and sells goods and services internationally.

Question 9

Which international expansion strategy did McDonald's Canada use when it opened restaurants in Russia?

Accepted Answer

McDonald's Canada used franchising strategy when opening restaurants in Russia. This involves granting the right to use McDonald's intellectual property (brand, products, systems) to a local franchisee who operates the restaurant under McDonald's guidance and standards.

Question 10

Three economic issues that a global manager might need to understand include __________.

Accepted Answer

A global manager needs to be aware of currency exchange rates as they directly impact international trade and business interactions, inflation rates as they can affect the availability and affordability of goods and services, and tax policies as they can determine the cost and feasibility of doing business in different countries. Employment laws and cultural differences are also important, but they are typically more specific to individual countries rather than broad economic issues. Political stability can also have an impact, but it is often intertwined with other economic factors such as currency exchange rates and inflation rates.

Question 11

McDonald's Canada, GM Canada, and IBM Canada are all examples of U.S. __________ operating in Canada.

Accepted Answer

These companies are examples of U.S. subsidiaries operating in Canada, meaning that they are legally distinct entities from their parent companies in the U.S. but are still majority-owned by them. Joint ventures involve two or more companies collaborating to create a separate entity, while strategic alliances involve a partnership between companies for a specific project or purpose. Transnational ventures refer to companies that operate in multiple countries with a decentralized structure, and franchises involve licensing a business model and brand name to independent operators.

Question 12

Which of the following international expansion strategies involves the lowest level of risk and investment?

Accepted Answer

Exporting involves the lowest level of risk and investment, as it simply entails sending products or services to another country without establishing a physical presence there. This option also allows companies to test the waters in a new market before committing to larger investments like establishing a foreign subsidiary or entering a strategic alliance.

Question 13

The primary reason it is difficult to gather information about a country's cultural differences is because __________.

Accepted Answer

The answer of The primary reason it is difficult to...

Question 14

________ is a specific type of strategic alliance in which the partners form a separate, independent organization for some business purpose.

Accepted Answer

A joint venture is a specific type of strategic alliance in which the partners create a separate entity to pursue a specific business purpose. This entity operates as its own independent organization with shared ownership and control between the partners. Therefore, option B is the correct answer.

Question 15

Which of the following international strategies involves the highest level of risk and investment?

Accepted Answer

Foreign subsidiary involves the highest level of risk and investment as it requires setting up a new business entity in a foreign country, which involves significant financial and legal resources. It also involves a higher level of control and commitment to the foreign market compared to other international strategies.

Question 16

From a cultural standpoint, research indicates that __________ has a greater effect on employees than __________.

Accepted Answer

Research suggests that national culture, which includes society's values, beliefs, and attitudes, has a greater impact on employees than organizational culture, which represents the values and norms of the specific organization. National culture provides the broader context within which organizations operate and influences how individuals perceive and approach work. Organizational culture, while important, is a subset of national culture and may be somewhat influenced by it.

Question 17

The cultural dimension of __________ measures the degree to which a society relies on social norms and procedures to alleviate the unpredictability of future events.

Accepted Answer

The cultural dimension of uncertainty avoidance measures how much a society prefers to avoid uncertainty and ambiguity by relying on social norms, rules, and procedures. This dimension can also reflect a society's level of anxiety and how it approaches risk-taking.

Question 18

People in societies that are high in __________ tend to look after their own interests and those of their immediate family.

Accepted Answer

Individualism refers to a cultural orientation that emphasizes individual autonomy, independence, and self-expression. In such societies, people prioritize their personal goals and interests rather than those of their group or community. This is different from collectivism, which emphasizes the importance of group harmony, cooperation, and interconnectedness above individuality. Therefore, societies that are high in individualism tend to look after their own interests and those of their immediate family.

Question 19

An organization decides to go international. Which of the following steps should it take to do so with a minimal investment?

Accepted Answer

The answer of An organization decides to go international. Which...

Question 20

Joint ventures are a type of ________.

Accepted Answer

Joint ventures are a partnership between two or more companies to pursue a specific project or goal. It is a type of strategic alliance where the parties involved share resources, expertise, and risks to achieve a mutual benefit.

Quiz 3: Managing in a Global Environment