Deck 2: Understanding the International Context: Responding to Conflicting Environmental Forces

Question 1

Worldwide innovation and learning forces that are encountered by MNEs are driven by factor costs.

Answer 1

False
(It is mainly driven by the simultaneity of the globalizing and localizing forces, in general, and the increasing cost of R&D coupled with shortening life cycles of technologies and the products they spawn, in particular.)

Question 2

A firm's decision with respect to whether it should adopt a global, multinational or international strategy should be made without any consideration of the industry in which the firm operates.

Answer 2

False
(An industry's (a) economic forces of globalization, (b) national, cultural, social, and political forces of localization, and (c) technological and diffusion forces of innovation are central determinants for whether to adopt a global, multinational or international strategy.)

Question 3

What are the main forces that drive MNEs such as Nokia, the mobile communications company, to innovate and learn on a global scale?

A) Economic and political forces.
B) Political and social forces.
C) Social and informational forces.
D) Technological and informational forces.

Answer 3

D
(a, b, and c are incorrect because political forces and social forces are forces for local differentiation and responsiveness.)

Question 4

A global industry is characterized by low national responsiveness and high global integration.

Question 5

Globalization is a phenomenon that took most industries by surprise.

Question 6

Local responsiveness forces encountered by MNEs include cultural differences, government demands and economies of scope.

Question 7

An industry that is characterized by low national responsiveness and high global integration is a(n)

A) multinational industry.
B) global industry.
C) international industry.
D) transnational industry.

Question 8

A transnational industry is characterized by moderate national responsiveness and moderate global integration.

Question 9

Philips, a multinational electronics corporation based in the Netherlands and diversified in the consumer electronics, domestic appliance, lighting, medical systems and medical technology industries would encounter the following forces of local responsiveness:

A) Cultural differences, government demands, and economies of scope
B) Cultural differences, government demands and factor costs
C) Cultural differences, government demands, and local competitors
D) Cultural differences, government demands, and increasingly liberalized trade environments

Question 10

An international industry is characterized by low national responsiveness and moderate global integration.

Question 11

A multinational industry is characterized by low national responsiveness and high global integration.

Question 12

The pressures that drive book publishers such as McGraw-Hill to integrate and coordinate their activities across national boundaries are primarily _________.

A) Economic
B) political
C) social
D) organizational

Question 13

Global integration and coordination forces encountered by MNEs include economies of scale, government demands, and the expanding spiral of globalization.

Question 14

The three conflicting environmental forces that MNEs encounter are cross-border integration and coordination, national differentiation and responsiveness, and worldwide innovation and learning.

Question 15

A multinational industry is characterized by ____________.

A) low national responsiveness and low global integration
B) low national responsiveness and high global integration
C) high national responsiveness and low global integration
D) high national responsiveness and high global integration

Question 16

What are the main forces that motivate MNEs such as Dell Computers to disaggregate their operations and activities to respond to national, regional and local needs and demands?

A) Social and economic forces.
B) Social and political forces.
C) Political and economic forces.
D) Economic and psychological forces.

Question 17

MNEs from emerging markets seem to be more poorly equipped to compete in other emerging markets when compared to their counterparts from developed markets.

Question 18

The search for global competitiveness is a major source of conflict between MNEs and host governments.

Question 19

Which global integration and coordination forces would MNEs, such as Mercedes-Benz, encounter?

A) Economies of scale, increasingly liberalized trade environments and government demands
B) Economies of scope, factor costs and increasingly liberalized trade environments
C) Economies of scale, expanding spiral of globalization and local competitors
D) Economies of scale, economies of scope and government demands

Question 20

In the emerging international environment, most industries can be categorized as multinational, global or international.

Question 21

Explain (1) what is meant by 'global chess' and (2) why companies that are adept at playing global chess have an advantage over their competitors.

Question 22

Briefly describe the global integration and coordination forces encountered by MNEs.

Question 23

In a transnational industry, MNEs are expected to

A) collaborate with their competitors to increase the prices of their products.
B) build the capability to learn from the many environments in which they operate.
C) acquire their competitors to increase their pool of resources.
D) decentralize decisions to better respond to local demands.

Question 24

Apple is a U.S. MNE. Briefly describe three conflicting sets of external demands that its international operations might face.

Question 25

An industry that is characterized by moderate national responsiveness and moderate global integration is a(n)

A) international industry.
B) global industry.
C) transnational industry.
D) multinational industry.

Question 26

Interactions between host governments and MNEs have been sometimes compared to love-hate relationships. Could you please explain both parts of this equation and how host governments and MNEs relationships have evolved in the 2010s?

Question 27

Kentucky Fried Chicken (KFC) suffered a major chicken sales decrease in Hong Kong immediately after running the Chinese version of their successful worldwide advertising campaign "Finger lickin' good" that supposedly highlights the tastiness of their chicken. This is most likely an issue of:

A) Cultural differences and localization pressures
B) Government demands and factor costs
C) Localization pressures and economies of scale
D) Cultural differences and global competition

Question 28

Briefly describe the worldwide innovation and learning force that Microsoft encounters.

Question 29

Briefly discuss whether the type of industry a company belongs to affects that company's decision to adopt an international, multinational, or global strategy. Explain why you believe that industry type affects/does not affect strategy choice.

Question 30

A transnational industry is characterized by _____________.

A) low national responsiveness and low global integration
B) low national responsiveness and high global integration
C) high national responsiveness and low global integration
D) high national responsiveness and high global integration

Question 31

Briefly describe the local differentiation and responsiveness forces encountered by Samsung, a multinational electronics and home appliances manufacturer and retailer.