Question 1

Which of the following is not one of the cultural dimensions identified by Hofstede?

Accepted Answer

Hofstede identified four cultural dimensions- power distance, uncertainty avoidance, individualism/collectivism, and long-term/short-term orientation. Aggressiveness is not one of his identified dimensions.

Question 2

When Mary has difficulty adjusting to her new assignment in Shanghai after living and working in New York all her life, she is likely to be experiencing

Accepted Answer

The answer of When Mary has difficulty adjusting to her...

Question 3

A manufacturing firm might be expected to begin globalization by which entry mode?

Accepted Answer

Exporting is typically the easiest and least risky entry mode for a manufacturing firm looking to begin globalizing. This involves selling products made in the home country to customers in foreign markets. It allows the firm to test the waters and gain insight into international markets without making a significant investment. Other entry modes like turnkey projects, franchising, and wholly owned subsidiaries involve more significant investments and greater risk, making them less likely choices for a firm just starting to globalize.

Question 4

In the international razor blade market, Gillette was considered

Accepted Answer

Gillette was a first-mover in the international razor blade market, introducing its first safety razor in 1901 and expanding globally throughout the 20th century. Other companies, such as Schick, entered the market later as competitors.

Question 5

Which of the following is not considered a mode of entry to foreign markets?

Accepted Answer

Pioneering is not considered a mode of entry to foreign markets. The other options, exporting, turnkey projects, and strategic alliances are all commonly used modes of entry.

Question 6

Scale of involvement is

Accepted Answer

The scale of involvement is lowest when the firm exports its products to the foreign country because exporting requires the least amount of investment and involvement in the foreign market compared to other modes of entry such as owning a subsidiary or franchising.

Question 7

Late entrants to a market

Accepted Answer

Late entrants to a market may learn from the experience of first movers, allowing them to avoid costly mistakes and potentially improve upon existing products or services. Therefore, they have an advantage in terms of learning from the mistakes of others.

Question 8

According to Hofstede, countries whose employees believe they should attend to their own interests are high in which culture dimension?

Accepted Answer

According to Hofstede's cultural dimensions theory, individualism is the degree to which individuals in a society are integrated into groups or are expected to take care of themselves and their immediate family only. Countries with high individualism scores generally prioritize individual goals and autonomy over collective goals and relationships.

Question 9

Which mode of international entry is Prestwick House using if it handles the design, construction, start-up operations and workforce training of a foreign plant?

Accepted Answer

Prestwick House is using the turnkey project mode of international entry. In this mode, the firm is responsible for handling the design, construction, start-up operations, and workforce training of a foreign plant, and then handing over the fully functional plant to the foreign client.

Question 10

When deciding what country in which to sell products when going global, the decision should be based on

Accepted Answer

The primary factor for deciding what country to sell products in when going global should be based on long-term profit potential. This encompasses evaluating market size, growth prospects, competitive landscape, and the regulatory environment, among other factors, to ensure sustainable profitability.

Question 11

In giving advice to employees of an American firm entering a joint venture with a company in another country, which of the following would you recommend?

Accepted Answer

It is important to be prepared to work with others who may have different cultural backgrounds and communication styles. This can help ease communication and cultural barriers that may arise during the joint venture. Choosing option A or D may lead to misunderstandings and conflict, while option C does not take into account the importance of building relationships and rapport with business partners.

Question 12

Starbucks' decision to enter the Chinese market was based on

Accepted Answer

The given information suggests that Starbucks' decision to enter the Chinese market was based on the large size of the market. There is no mention of the present wealth of consumers, business climate, or readily available resources.

Question 13

When choosing which foreign country to enter, a country will be less appealing when

Accepted Answer

Political risk is a major factor that can affect a country's attractiveness to foreign investors. High political risk can lead to instability, which can make it difficult for businesses to operate and can also lead to losses of investment.

Question 14

When an international HR manager from an American multinational firm researches the cultural dimensions of a country in which they are establishing new operations, what advice would most likely lead to success for the operation?

Accepted Answer

Ensuring management practices conform to prevailing societal norms is crucial for success when establishing new operations in a foreign country. Failure to do so can lead to misunderstandings, miscommunications, and ultimately failed operations. It is important to understand and respect the cultural dimensions of the host country to establish successful operations. Disregarding how other countries' cultural values mesh with the new location's values (option B) can lead to cultural clashes and misunderstandings. While individualism (option C) and uncertainty avoidance (option D) are important cultural dimensions to consider, they are not the only factors to consider in ensuring successful operations in a foreign country.

Question 15

What is considered a major advantage of exporting?

Accepted Answer

Exporting allows firms to realize economies of scale, as they can produce goods in larger quantities, reducing per-unit costs. This can lead to higher profits for the exporting firm. The other choices (A, B, and D) are not generally considered major advantages of exporting.

Question 16

A first-mover advantage

Accepted Answer

A first-mover advantage can potentially preempt rivals, capture demand by establishing a strong brand name, and make it difficult for later entrants to win business. Therefore, all of the given options - A, B, and C - are applicable.

Question 17

Employees from a culture that is high in individualism would likely value which of the following?

Accepted Answer

Employees from a culture that is high in individualism would likely value personal accomplishment, as they place importance on their own achievements and self-reliance rather than collective efforts or sacrificing for others. Team accomplishment and sacrifice for others are more valued in cultures that are high in collectivism, while belief in the hand of fate may not necessarily be a value tied to individualism or collectivism.

Question 18

Which mode of international entry is Prestwick House using if they decide to transfer the rights to produce and sell their products overseas to a foreign firm in return for a royalty?

Accepted Answer

Prestwick House is using licensing as the mode of international entry. In this mode, a foreign firm is given the right to produce and sell the products of the company in return for a royalty fee. This allows the company to enter a foreign market without investing in start-up costs or taking on the risks of direct investment.

Question 19

A mode of international entry frequently used by McDonald's whereby the cooking methods, ingredients, and physical appearance of their restaurants comply with McDonald's standards is known as

Accepted Answer

The mode of international entry described is franchising, where a company grants the right to use its brand and operating system to another party, in exchange for a fee and a share of profits. The franchisee is expected to follow the guidelines and standards set by the franchisor, including cooking methods and restaurant appearance. Strategic alliances involve cooperation between two or more companies to achieve shared objectives, exporting involves selling products from one country to another, and turnkey projects involve a company designing, constructing, and equipping a facility for another party.

Question 20

Turnkey projects

Accepted Answer

Turnkey projects involve a company providing a foreign firm with a complete package of services and expertise to set up and run a new business or project. It is considered a specialized type of exporting since it involves the transfer of knowledge and expertise rather than just goods and products. Option A is incorrect as it describes licensing, not turnkey projects. Option B is incorrect as it describes joint ventures, not turnkey projects. Option D is incorrect as it is a general term that can describe many different types of business arrangements.

Quiz 2: The Culture of Management