Deck 8: Global Strategy

Question 1

Which of the following is not a potential economic benefit from locating in a particular geographical region?

A) technological spillovers
B) labor pooling
C) economies of scale
D) specialized local suppliers

Answer 1

economies of scale

Question 2

A horizontally integrated industry is one in which:

A) country specific advantage and firm specific advantage are both high
B) country specific advantage is low and firm specific advantage is high
C) country specific advantage is low and firm specific advantage is low
D) none of the above

Answer 2

country specific advantage is low and firm specific advantage is high

Question 3

Which of the following promotes technological spillovers within a region?

A) informal communication among managers from different firms
B) labor pooling
C) employee mobility
D) all of the above

Answer 3

all of the above

Question 4

Which of the following factors is not part of Porter's diamond model?

A) related and supporting markets
B) cultural constraints
C) rivalry conditions
D) demand conditions

Question 5

Which of the following are attributes of countries with emerging markets?

A) higher poverty than the developed world
B) low to middle average income
C) weak industrialization
D) all of the above

Question 6

Which of the following factors support the openness of a country's macro environment?

A) low barriers to FDI
B) strength of nongovernmental organizations
C) media independence
D) all of the above

Question 7

Which of the following is a reason firms in the same industry differ in their global configurations?

A) network ties
B) rivalry conditions
C) country of origin
D) industry regulations

Question 8

Industries remain nationally segmented because:

A) no country has developed or discovered resources that are superior to other countries
B) no firm has a competitive advantage over firms in other countries
C) both of the above
D) neither of the above

Question 9

Which of the following best captures the definition of a successful global firm?

A) building a worldwide marketing operation
B) transferring resources between units in different countries
C) finding key resources to exploit in other countries
D) achieving economic performance that is higher than indigenous competitors in local markets

Question 10

Which of the following reduces the threat of appropriation associated with political risk?

A) the entrant is large and well connected within the host country and internationally
B) powerful entrepreneurs in the country benefit from trade liberalization
C) the firm's investment is not associated with a notable redistribution of wealth
D) all of the above

Question 11

Which of the following is generally not an option in organizing globally in the single business firm?

A) forming an international division
B) placing all activities within functional divisions
C) placing functional activities within global divisions
D) none of the above

Question 12

The standard explanation of regional advantage is based on the equal geographical distribution of resources.

Question 13

Product innovations diffuse more quickly across regions whereas process innovations diffuse more quickly within regions.

Question 14

It is uncommon to find economically weak countries that are rich in natural resources.

Question 15

Centralizing some functions globally and decentralizing others by region is one way to organize globally in the single business firm.

Question 16

Trade policy is typically designed to help domestic firms compete.

Question 17

Locating where a labor pool already exists adds value to a firm when the firm faces some uncertainty in its employee needs.

Question 18

Multidomestic firms have interdependent assets and resources across countries.

Question 19

Comparative advantage is associated with the benefits due to a firm's home country.

Question 20

The number of industries that exhibit both vertical and horizontal integration across countries is large.

Question 21

Firms integrate activities across countries to lower costs through economies of scale or scope.

Question 22

Why do firms in many industries tend to cluster together in a geographical region?

Question 23

How might price regulation affect a firm's international expansion?

Question 24

Why does Porter's Diamond include "related and supporting industries"? Give an example to support your answer.