Question 1

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 cooperative agreement between two or more firms, which includes sharing costs as well as resources and capabilities, to achieve a common objective such as developing new products or building production facilities. Franchising agreements involve a company (the franchisor) granting the right to use its brand and operating system to another company (the franchisee) in exchange for a fee or royalty. Foreign subsidiaries are independent legal entities established by a multinational corporation in a foreign country. Brokering agreements involve a company acting as an intermediary to arrange deals between two or more parties. Transnational ventures involve a combination of resources and capabilities from two or more firms from different countries to achieve a common goal.

Question 2

Which approach to going global involves making products at home and selling them overseas?

Accepted Answer

Exporting involves making products domestically and selling them overseas, which is the approach mentioned in the question. The other options involve some form of collaboration or partnership with foreign entities.

Question 3

John and Sylvie recently opened a high-tech firm.From its inception the co-founders committed significant resources to the pursuit of business in various countries.John and Sylvie have created a company that can best be classified as a ________ company.

Accepted Answer

The fact that John and Sylvie committed significant resources to pursue business in various countries from the inception of the company indicates that they had a global mindset from the beginning. This aligns with the characteristics of a born global company, which is a young firm that from its inception operates in an international context and rapidly engages in cross-border business. Greenfield franchise implies a company that establishes its own new operation in a foreign country. Venture capitalist refers to a form of financing, while strategic international alliance and joint alliance indicate partnerships between multiple companies.

Question 4

Many organizations,especially small businesses,start doing business globally by ________.

Accepted Answer

Exporting and importing is often the easiest and most cost-effective way for small businesses to start doing business globally. It involves selling their products in foreign markets or purchasing materials and products from foreign suppliers. Licensing and franchising, hiring foreign brokers and forming joint ventures may be more complex and time-consuming processes, while establishing foreign subsidiaries requires significant financial resources and legal expertise.

Question 5

Which choice constitutes the typical first step for an organization that is "going global"?

Accepted Answer

The answer of Which choice constitutes the typical first step...

Question 6

Which of the following definitions best describes a transnational corporation?

Accepted Answer

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

Question 7

IBM is the world's largest information technology company with over 300 000 employees in 170 countries.It used to have a country-based structure,but now it is organized into industry groups to compete more effectively in the global marketplace.IBM is best described as a ________ organization.

Accepted Answer

IBM's shift to industry groups to compete in the global marketplace indicates a transnational organization, as it operates beyond national boundaries and seeks to integrate and coordinate operations globally.

Question 8

Which of the following best characterizes a transnational corporation?

Accepted Answer

A transnational corporation integrates its operations across multiple countries to achieve common goals, balancing global efficiency with local responsiveness.

Question 9

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 they are extensions of a parent company based in the United States.

Question 10

XYZ is an international corporation that has recently changed its philosophy.It has decentralized management and decision making to the local countries in which it operates.XYZ is pursuing a ________ approach.

Accepted Answer

The scenario suggests that XYZ corporation has decentralized management and decision-making to local countries, indicating that it is following a multidomestic approach. In this approach, companies tailor their products, services, and marketing strategies to meet the needs and preferences of local markets.

Question 11

Which of the following strategies for going global involves a higher level of risk and investment than strategic alliances?

Accepted Answer

The strategy of foreign subsidiary involves establishing a new entity in the foreign market which requires a higher level of investment and also carries a higher level of risk compared to strategic alliances. Exporting, foreign contracting, franchising, and licensing are relatively less risky strategies with lower levels of investment involved.

Question 12

Which of the following definitions is most accurate for a multinational corporation?

Accepted Answer

A multinational corporation is a company that operates in multiple countries, but is managed from a base in its home country. Option A is very similar, but it is not a requirement for a multinational corporation to have significant operations in multiple countries; it only needs to operate in more than one country. Option C is incorrect because a multinational corporation usually has one primary home base. Option D is incorrect because a multinational corporation may or may not decentralize its management, depending on the company's structure. Option E is incorrect because organizing by industry has nothing to do with being a multinational corporation.

Question 13

A multinational corporation (MNC)________.

Accepted Answer

A multinational corporation is any organization that maintains operations in more than one country. This includes companies based in any country, not just the United States, and does not require the company to export goods overseas. The term "home base" also does not necessarily apply as MNCs can have multiple headquarters or no specific headquarters.

Question 14

Which of the following strategies for going global involves the lowest level of risk and investment?

Accepted Answer

Exporting involves the least amount of risk and investment as it only involves sending goods and services to other countries without establishing a presence there. It requires minimal investment in marketing, distribution, and infrastructure compared to other strategies such as foreign subsidiary or strategic alliances.

Question 15

When an organization drops its structure based on countries and reorganizes according to industries,it is pursuing a global business approach known as ________.

Accepted Answer

A transnational organization organizes its structure based on industries rather than countries to pursue a more global approach to business operations. A polycentric organization is still based on country-specific structures, a multicultural organization may prioritize diversity and inclusion but does not necessarily restructure according to industries, a multinational organization operates in multiple countries but may still have country-based structures, and a transactional organization prioritizes short-term, one-time transactions rather than long-term relationships.

Question 16

What could a Canadian manufacturer do to ensure a successful partnership with a foreign distributor?

Accepted Answer

Creating contract safeguards is the best choice to ensure a successful partnership with a foreign distributor. This includes clear and detailed agreements that outline roles, responsibilities, and expectations for both parties, as well as legal protection in case of any disputes or breaches of contract. While using the same model in all countries or setting up a subsidiary may be options to consider, they may not always be feasible or necessary. Purchasing materials and labor from around the world may not necessarily contribute to a successful partnership, as it depends on the specific product and industry.

Question 17

A joint venture is a specific type of ________.

Accepted Answer

A joint venture is a strategic alliance in which two or more organizations create a separate legal entity to pursue a mutually beneficial objective while retaining their separate identities. Licensing agreements involve a company giving permission to another company to use its intellectual property for a fee, while franchises involve a company granting another company the right to use its business model and trademark in exchange for an initial fee and ongoing royalties. Foreign subsidiaries involve a company setting up a subsidiary in a foreign country, while foreign contracting arrangements involve a company hiring a foreign contractor to provide goods or services.

Question 18

Which of the following strategies for going global involves the highest level of risk and investment?

Accepted Answer

A foreign subsidiary involves the highest level of risk and investment as it requires establishing a new business entity in a foreign country, which involves significant investment of time and resources. The subsidiary operates as an independent entity and may require navigating complex legal, regulatory, and cultural differences. In contrast, exporting, foreign contracting, licensing, franchising, and strategic alliances typically involve lower levels of investment and risk.

Question 19

In a society with high ________,you would expect members of a corporation to have a strong identification with the corporation.

Accepted Answer

In-group collectivism refers to the degree to which individuals identify with and are committed to their organization or group. Therefore, in a society with high in-group collectivism, members of a corporation are likely to strongly identify with and feel committed to the corporation.

Question 20

Which approach to going global did McDonald's Canada use when it opened restaurants in Russia?

Accepted Answer

McDonald's Canada used franchising to enter the Russian market. They partnered with local entrepreneurs who invested in the business and operated the restaurants under the McDonald's brand name, following the company's operational and quality standards. This approach allowed McDonald's to expand quickly in Russia while also minimizing the risks and costs associated with operating the business directly.

Quiz 2: Environmental Contraints on Managers