TEST 3

• Korean MNCs usually fill their key management positions with Korean managers. What type of staffing
approach do they use?
→ Ethnocentric
• Which HRM strategy best facilitates global integration and local responsiveness?
→ Geocentric
• What type of training that LEAST effective for expatriate managers?
→ technical training
• A plant manager organizes a plant by separating engineering accounting, manufacturing, personnel and
purchasing into departments. The plant is departmentalized on the basis of…
→ Function
• Procter and Gamble has separate departments for Tide, Pampers, Charmin and Pringles. This is an example
of organizational structure?
→ Worldwide Product Divisional Structure
• Which response is INCORRECT on the benefits of centralization?
→ Centralization gives top management time to focus on critical issues by delegating more routine
issues to lower-level managers
• The need for coordination is (1)...in firms pursuing a localization strategy, is (2)...in international
companies, (3)... still in global companies, and (4)...of all in transnational companies.
→ (1) lowest, (2) higher, (3) higher, (4) highest
• Performance appraisal in HRM is important for:
→ Evaluating employee performance
• Look at the picture, which country has the highest expatriate failure rate?
→ The United State
• What is the main challenge for expatriate managers in new cultural environment?
→ Adapting to different management styles
• Centralization and decentralization differ because:
→ Centralization ensures that decisions are consistent with organizational objectives, while
decentralization can result in decisions at variance with organizational goals.
• Linda has been transferred to an office in Cambodia for a year. In the first few weeks, she started to feel
confused and rejected as well as a sort of mourning for home. Linda is experiencing…
 → culture shock
• In a…, individual managers belong to two hierarchies (a divisional hierarchy and an area hierarchy) and
have two bosses (a divisional boss and an area boss).
→ Classic matrix structure
• What is a disadvantage of using host country nationals to manage foreign operations?
→ Unfamiliarity with firm’s practices
• … control is a type of control that tends to be most widely used in small firms.
→ personal
• In the context of expatriate management, a “failure” typically refers to:
→ the inability to complete the assignment successfully
• A firm’s…determines where in its hierarchy the decision-making power is concentrated
→ vertical differentiation
• The primary risk associated with expatriate assignments is:
→ Failure to adapt
• Which response is INCORRECT on the benefits of decentralization?
→ Decentralization can avoid the duplication of activities that occurs when similar activities are
carried on by various subunits within the organization.
• When the volume of contacts between subunits increase, coordination can be improved by giving a person
in each subunit responsibility for coordinating with another subunit on a regular basis. This is an
explanation of…
→ Liaison

4. THE EFFECTS OF GLOBALIZATION

Benefits - enhancement of Technological innovation - an increase of foreign direct investment - advantages
of economies of scale
Risks - Interdependence - Threat to sovereignty - Inequitable distribution
5. GLOBALIZATION DEBATE
Supporters: believe that increased trade and cross-border investment mean: - Lower prices for goods and
service, - Greater economic growth - Higher consumer income, and more jobs
Critics: worry that globalization may cause - Job losses - Environmental degradation - The cultural
imperialism of global media and MNEs
 Bổ sung
Chapter 4: Foreign Direct Investments
1. Coca-Cola collaborates extensively abroad, but it refuses collaboration that might imperil control of its core
competency. Which of the following is NOT one of its international collaborative forms?
A) Sharing ownership in the production of its secret formula concentrate
2. Appropriability theory refers to ________.
A) Denying rivals access to competitive resources such as management know-how
3. A company that makes a foreign investment largely to acquire knowledge is most likely to use ________ as
a means of expansion.
C) An acquisition
4. A U.S. firm owns 100% of its production facility in Brazil; thus it is most likely using a(n) ________
strategy.
D) Internalization
5. Why can a company more easily pursue a global strategy when it owns 100 percent of foreign operations?
D) The company can sub-optimize results in one country in order to optimize results globally.
6. A greenfield investment is another name for a company's decision to ________.
C) Construct a new facility in a foreign market
7. A U.S. firm is acquiring an existing company in Germany rather than starting up a new foreign operation.
Which of the following statements best supports this decision?
D) The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own.
8. A U.S. firm plans to shift from exporting to production in China to serve the Chinese market. Which of the
following statements would best explain this decision?
B) The firm is nearing capacity utilization in its U.S. plant.
9. Executives at a U.S. firm are debating whether to start a new operation in Russia or acquire an existing one.
Which of the following factors best supports a decision to start up a new operation in Russia?
B) Labor relations at existing Russian firms are poor and difficult to change.
10. A U.S. firm with a production facility in Brazil uses its own personnel to handle almost all activities
because their outsourcing would be too costly and inefficient. Its internalization will most likely lead to
cost savings because the firm can avoid ________.
C) The costs of enforcing an agreement
11. Small economies are sometimes less successful than large countries in attracting FDI by raising import
restrictions. What is the most likely reason for this?
D) Small economies frequently lack sufficient markets for large-scale production.
Chapter 5: International Business Strategies
1. A ________ is a special outlook, skill, capability, or technology that runs through the firm's operations,
weaving together all value activities into an integrated value chain.
A) Core competency
2. _______ is the framework that managers apply to determine the competitive moves and business
approaches that run the company.
C) Strategy
3. Political, legal, economic, monetary, and institutional forces comprise the ________ of international
business and influence managers' actions.
A) Environment
4. Which of the following has the greatest potential to transform an industry's structure?
D) The exit of a competitor from the industry
5. Phillip is an international business manager with Corbin Manufacturing. Which of the following serves as
an external influence on the business decisions that Phillip makes?
B) Host country monetary policy
6. Which of the following is the most important constraint on the explanatory power of the IO paradigm?
A) Many industries are imperfectly competitive.
7. Rather than an inspirational statement, a(n) ________ statement is meant to motivate people to act and
specify the objectives that the firm needs to attain.
A) Mission
8. A(n) ________ outlines a firm's ultimate goal and its guiding values in broad terms.
C) Vision
9. Which of the following refers to the means by which management applies the systems that link a company's
value activities, whether those activities are performed in one or in many countries?
C) Coordination
10. The industry organization (IO) paradigm assumes which of the following?
C) Perfect competition
11. Which force in Toyota's immediate environment would most likely have the greatest impact on its strategy?
D) Actions taken by Honda and Mercedes Benz
12. The industry organization (IO) paradigm reports that, on average, the BEST predictor of firm strategy is the
________.
D) Structure of the industry in which it competes
13. Improving explanatory power of the IO paradigm can be done by considering the potential for ________ to
lead to a company's sustained competitive advantage.
A) Bright, motivated managers
14. The goal of most firms is to choose a strategy that ________________.
A) Maximizes the value of the firm for its shareholders
15. __________ is a ratio or rate of return concept.
A) Profitability
16. Two basic conditions determine a firm's profits are ________________.
B) The amount of value customers place on the firm's goods and services and the firm's costs of
production
17. The percentage increase in net profits over time is ______________.
D) Profit growth
18. A strategy that focuses on lowering production costs is referred to as a(n) ___________________.
C) Low cost strategy
19. A consumer surplus can be thought of as _____________.
A) What the consumer has “left-over” after a purchase
20. In the context of value chain analysis, the primary activities of a firm include:
D) R&D, production, marketing & sales, and service
21. Global expansion allows firms to achieve all of the following except _______________________.
A) Minimize returns by failing to capture skills developed in foreign countries
22. Companies that are successful at global expansion are successful at transferring their
C) Core competencies
23. Economies that arise from performing a value creation activity in the optimal location for that activity are
referred to as _________________.
C) Location economies
24. When individuals learn the most efficient ways to perform particular tasks, there are____________.
D) Learning effects
25. Economies of scale arise from all of the following sources EXCEPT _______________________.
A) Locating production in the optimal location
26. When a firm needs to minimize its unit costs, the firm is facing __________________.
A) Pressure for cost reduction
27. Responding to _______________ requires that a firm differentiate its product offering and marketing
strategy from country to country in an effort to respond to differences in consumers tastes and preferences,
business practices, distribution channels, competitive conditions, and government policies.
D) Pressure to be locally responsive
28. A firm that is positioned in the upper left-hand corner of the cost reductions/local responsiveness grid is
facing
A) High pressure for local responsiveness and high pressure for cost reductions
29. All of the following add to the pressure to be locally responsive except _____________.
C) Consumers with low switching costs
30. Firms such as Intel or Texas Instruments that produce products serving universal needs follow a _______
strategy.
A) Global standardization
31. Apple Inc. suit with strategy ____________
B) Global standardization
32. Which of the following best describes the concept of economies of scale?
A) Reducing production costs by increasing output
33. In a global market, firms often face the challenge of balancing cost reduction with ________________.
A) Product differentiation
34. What is the primary advantage of a transnational strategy for firms operating in multiple countries?
B) It enables firms to be responsive to local markets while achieving cost efficiencies
35. What is a potential reason for the failure of Joint Ventures (JVs) as a form of Global Strategic Alliances
(GSAs)?
A) Loss of autonomy and conflict between partners
36. What is a key feature of Foreign Direct Investment (FDI) entry modes?
B) They include market-related, production-related, resource-related, and control of strategic assets
What is a characteristic of Global Strategic Alliances (GSAs) in the context of international business?
A) They are cross-border partnerships between firms from different countries to improve
competitive advantagew