Deck 2: Theories of the International Firm

Question 1

Globalisation of production generally provides opportunities for firms to _______

A) access lower cost resources
B) improve product quality
C) reduce lead times to markets
D) Both a and b

Answer 1

D
Explanation: With globalisation firm are likely to enjoy both access to lower cost resources and improved quality (access to specialist suppliers). Times to market could increase if more distant or remote locations are used.

Question 2

A firm invests in the experience of its management by involving them in cross-national project teams. Internal research shows that this increases productivity and employee retention. As a result the firm has created _______

A) a country specific advantage
B) a firm-specific advantage
C) a transaction specific advantage
D) a location specific advantage

Answer 2

B
Explanation: Investment by the firm in a proprietary advantage (unique to that single firm) creates a firm-specific advantage.

Question 3

Outsourcing means _______

A) Subcontracting to independent manufacturers
B) Going international
C) Export to a third country
D) Distribute company' products

Answer 3

A
Explanation: Outsourcing means externalise production via subcontracting to independent manufacturers

Question 4

MNEs exploits an internally transferable intangible public good such as knowledge

Question 5

Global factory's main strategy is characterised by _______

A) Focus on regionalisation
B) Focus on export
C) Focus on quality production
D) Focus on intangible assets and decreased emphasis on productive capacity

Question 6

Global factory adopts a balance of global and local strategy

Question 7

Firm-, or ownership specific advantages _______

A) are always based on natural resources
B) can also be present within competitor firms
C) are always a proprietary capability of the firm
D) are always the result of government favouritism

Question 8

By utilising an international pool of suppliers, multinational enterprises can lower production costs.

Question 9

Intellectual property is property that is the product of intellectual activity.

Question 10

GVCs thinking conceptualises global production as a set of inter country agreements to regulate the system of production

Question 11

Global factory and GVC are two different frameworks describing the same phenomenon from different perspectives.

Question 12

Flexibility is a competitive advantage of the global factory

Question 13

Resilience refers to the ability to avoid external shocks

Question 14

A global factory will pursue internalization where market inefficiencies result in unacceptably high transactions costs.

Question 15

The main effect of liberalisation is that the 'ripple' effects of shocks travel farther and wider than before.

Question 16

Coordination and control include fine-slice activities

Question 17

A global value chain comprises the interrelated organizations, resources, and processes that create and deliver products and services to end customers.

Question 18

Knowledge spillovers are considered externalities

Question 19

The main challenge of VUCA world is that it brings random and unanticipated effects into deterministic models