CHP 4

1. Multinational companies must use significantly different strategies from domestic

corporations.

a. True

b. False

2. Companies use a differentiation strategy to provide superior value to customers by

which of the following methods?

a. Exceptional product quality.

b. Unique product features.

c. Rapid innovation.

d. All of the above.

3. Low cost strategies maintain product quality and delivery standards by making cost
savings by which of the following?

a. Avoiding taxation whenever possible.

b. Reducing quality.

c. Using lowest cost components.

d. Employing lower cost labor.

4. Low cost competitors make less profit than the average competitor.

a. True

b. False
5. Which of the following is not a component a company’s value-chain?

a. Product design.

b. Share price.

c. Current ratio.

d. Shareholders’ equity and returned earnings.

6. Price cutting, adding new features, comparison advertising, and targeting

neglected/poorly served market segments are elements of a (an) ___________ strategy.

a. preemptive competitive

b. direct attack

c. defensive competitive

d. acquisition

7. A defensive competitive strategy might require a multinational company to counter-

parry by attacking a competitor in another country.

a. True

b. False

8. Innovative technology, broad product line, effective distribution channels, and financial
assets are possible ___________ for a company.

a. unique selling propositions (USPs)

 b. resources required (to enter international business)

c. KSFs

d. corporate planning goals

9. SWOT analysis is a decision framework for strategic planners. A primary step is to scan
the business environment.

a. True

b. False

10. Which of the following is not a component of the opportunities and threats to be
considered by a multinational company?

a. Exchange and inflation rates in various countries.

b. Host country taxation and policy on repatriation of earnings.

c. Infrastructure condition and development in various countries.

d. All of the above.

11. The BCG growth/share matrix is a useful strategy method used to

a. raise capital for global expansion.

b. allocate corporate resources.

c. evaluate product group or country management performance.

d. estimating market size.

12. National context affects organizational design.

a. True

b. False

13. Which best describes how national context affects organizational strategy?

a. Isomorphic forces do not encourage copying successful firms.

b. Resource base limits strategic options available to a nation’s firms.

c. There is no particular advantage to accessing home country resources.

d. Strategies anticipate only minor variation in national context.

CHP 5

1. To guarantee success, multinational companies tend to favor a global integration

solution to reduce costs by using standardized products, promotional strategies, and
distribution channels in every country.

a. True

b. False

2. A multidomestic strategy in many respects is a form of a strategy?

a. low cost

b. differentiation

c. broad competitive scope

d. preemptive competitive
3. A global platform is a country location where a company can best perform which of the
following types of functions?

a. Accessing financial markets.

b. Value-chain.

c. Research and development.

d. All of the above.

4. A comparative advantage has no influence on competitive advantage.

a. True

b. False

5. Which of the following is not a content of the four basic multinational strategies
(transnational, international, multidomestic, regional)?

a. Worldwide markets.

b. Location of separate value-chain activities.

c. Accounting standards.

d. Global competitive moves.

6. Transnational and international strategies need not adjust for key differences in national
or regional needs.

a. True

b. False
7. Which of the following is considered to be the easiest method of exporting?

a. Active exporting.

b. Passive exporting.

c. Licensing.

d. Indirect exporting.

8. Which of the following is not a responsibility of a turnkey operation supplier?

a. Design and construction of the project.

b. Training local employees to operate the project.

c. Sourcing equipment and materials needed for construction and operation of the project.

d. Project finance.

9. International strategic alliances do not include which of the following activities?

a. Any value-chain activity.

b. Equity participation.

c. Equal ownership by the participating companies.

d. All of the above.

10. Foreign Direct Investment (FDI) is

 a. any IJV.

b. a Greenfield investment.

c. the highest stage of internationalization.

d. seldom used for exporting.

11. Which of the following is not true about export strategies?

a. Exporting is not a means to test new markets.

b. Ceases when a company commences FDI.

c. Requires careful management analysis to select an appropriate participation method.

d. Licensing is not used as a form of export participation.

12. What are the reasons companies seek international alliances?

a. Local partner’s knowledge of the market.

b. Government requirements.

c. Sharing risks, technology.

d. All of the above.

13. A disadvantage of FDI is

a. less control of marketing strategy.

b. greater exposure of investment to political risks.

c. lower return on investment.

 d. exposure to import quotas and restrictions on raw materials or finished goods.

14. A company seeks location in a country for any value-chain activity.

a. multidomestic

b. regional

c. international

d. transnational

CHP 7

1. Why do organizations choose a functional structure?

a. Only small businesses use a functional structure.

b. A functional structure is simple to plan and implement.

c. A functional structure is effective when the company has many products and markets.

d. Efficiencies arising from economies of scale.

2. Basic product and geographic organizational structures provide which of the following
advantages?

a. Functional efficiencies arising from economies of scale.

b. Requires fewer managers and other employees.

c. Permits better ability to serve customer needs.

d. May work well in conjunction with an organizations’ international division.

3. Organizations use either a functional or product/geographic structure.

a. True

b. False

4. Which of the following initial international participation strategies requires

organizational change?

a. Passive exporting.

b. Use of EMCs and ETCs.

c. Licensing.

d. When exports become significant.

5. An export department implies which of the following?

a. Top management commitment to international opportunities.

b. A focus on all international customers for all products.

c. The existence of an overseas sales force.

d. All of the above.

6. The international division of an organization is similar to the export department in that it

a. performs the same functions only on a larger scale.

b. manages the overseas sales office.

c. may procure raw materials and produce products overseas.

 d. located overseas.

7. What is the principal reason an organization implements a worldwide geographic or

product structure?

a. To implement a multidomestic or regional strategy.

b. Regional sales offices become too large.

c. To divide global and local value chain activities.

d. To better pursue both local and global strategies at the same time.

8. Under what conditions will a worldwide matrix structure be successful?

a. When either product or geographic demands become dominant.

b. When managers are unable to agree on priorities between product and geography.

c. When no basic form seems to merit consideration.

d. When the demands of product and geography are near equal.

9. The transnational network structure combines functional, product and geographic

subunits and has no basic form.

a. True

b. False

10. Multinational companies’ control and coordination systems consist of which of the
following?
 a. Procedures used to focus subunits’ support of corporate goals and objectives.

b. Link the organization horizontally.

c. Monitor performance of subunits.

d. All of the above.

11. The purpose of output control systems is to

a. provide processes to achieve goals.

b. develop new technologies.

c. supply high-quality raw materials.

d. assess performance of a unit based on results.

12. Which of the following characterizes decision-making control systems?

a. Lower-level management makes few decisions.

b. Lower-level managers make the major decisions.

c. Higher-level managers control the functional and strategic decisions in worldwide product
structures.

d. Focus on managing organizational processes through budgets, statistical reports, and

standard operational procedures.

13. Which of the following is not an element of a bureaucratic control system?

a. Budgets.

b. Statistical reports.
 c. Modifying goals to be appropriate with local conditions.

d. Standard operating procedures.

14. All of the following are basic horizontal coordination systems except

a. email.

b. satellite video teleconferencing.

c. corporate Intranet posting.

d. task force consisting of corporate accountants conducting and internal audit of headquarter
accounting practices.

15. Task forces and teams are weaker forms of coordination mechanisms.

a. True

b. False

CHP 8

. Why do companies combine the same value chain activities in strategic alliances?

a. To gain efficient scales of operation.

b. To merge compatible talents.

c. To share risks.

d. All of the above.

2. Which of the following is not a criterion for choosing a strategic alliance partner?
 a. Survival.

b. Complementary skills.

c. Compatible management styles.

d. Greatly unequal sizes of the parties.

3. IJVs and formal ICAs are significantly different with regard to

a. degree of involvement.

b. ease of dissolution.

c. visibility to competitors.

d. formality of agreement.

4. Which of the following questions apply primarily to IJVs?

a. What products or services does the alliance produce?

b. What are the equity contributions of each party?

c. How will senior management be assigned?

d. How will royalties or profits be divided?

5. Which of the following are considerations in selecting a strategic alliance management

structure?

a. Partners with similar know-how and who can contribute equally.

b. Partners with different know-how and who can contribute equally.

 c. The greater the strategic importance to a partner, the more likely the venture will evolve a
dominant management structure.

d. All of the above.

6. HRM functions in international strategic alliances have critical problems and issues
including recruiting and staffing. Which of the following is not a critical issue?

a. HRM planning.

b. Staffing the alliance workforce.

c. Performance assessment.

d. Setting the venture’s strategic goals.

7. Commitment and trust in alliance management are vital for the venture’s success.

a. True

b. False

8. Building and sustaining trust and commitment requires

a. decisive and prompt solution to alliance problems.

b. pursuit of the venture’s goals even if the other party might be harmed as a result.

c. use of modern information technology as a primary means to overcome the problems of

time and distance between alliance parties.

d. careful selection of alliance partner(s).

9. What is distinctive about IJV and ICA performance criteria?

a. Financial performance measures.

b. Indirect strategic benefits.

c. Short-term goals.

d. The venture parties’ individual goals are not important.

10. If an alliance fails to achieve strategic intent, managers’ only option is to terminate the
venture.

a. True

b. False

11. is a non-binding legal agreement between two or more companies from different
countries.

a. An international joint venture (IJV)

b. A formal international cooperative agreement (ICA)

c. An informal international cooperative agreement (ICA)

d. All of the above.

12. Management structures of IJVs and ICAs are complex and unique to each situation.

a. True

b. False

CHP10

1. Human resource management (HRM) functions consist of recruitment, selection,

training and development, performance appraisal, compensation, and trade union
relations.

a. True

b. False

2. Expatriate employees include each of the following types except

a. home-country nationals.

b. third-country nationals.

c. host-country nationals.

d. inpartiate.

3. International HRM (IHRM) is different in that the functions may have to be localized to
meet host country regulations and practices. Modifications to home-country HRM
practices may include

a. recruitment methods.

b. training methods.

c. hiring, compensation, and firing decisions.

d. All of the above.

4. Staffing for a managerial position in a transnational strategy company probably would

favor all types of expatiates except a manager?

a. host-country national

b. home-country national
 c. third-country national

d. All of the above.

5. Based on the U.S. State Department’s cost of living index, which is the most expensive
location for U.S. expatriate employees?

a. New York.

b. Bangkok, Thailand.

c. Beijing, China.

d. Naples, Italy.

6. The reason that expatriate assignments fail is inadequate preparation.

a. True

b. False

7. International assignments have many benefits for multinational corporations except

a. relatively low cost.

b. acquisition of managerial skills needed to develop global strategies.

c. providing strategic Information.

d. providing in-depth knowledge of local markets.

8. KSFs for expatriate assignments include

 a. a good sense of humor.

b. ability to modify own behavior and attitudes.

c. motivation for international experience.

d. All of the above.

9. The most frequently used selection method to determine an expatriate assignment

candidate’s probability of success is

a. use of standardized tests.

b. work samples.

c. biographical data.

d. interviews.

10. The length of the assignment is not a priority consideration in expatriate assignment
candidate selection.

a. True

b. False

11. Training rigor refers to extent of effort required by both the trainee and trainer to
prepare the employee for the expatriate assignment. High rigor training has which of the
following characteristics?

a. Provides background information on the host country business and national cultures via
lectures, videos, and background reading material.

b. Provides general and specific knowledge of host country culture in order to reduce
ethnocentrism.
 c. None of the above.

d. All of the above.

12. Which of the following are used to improve the difficult process of evaluating
expatriate performance?

a. A detailed performance evaluation from the expatriate’s immediate reporting senior is the
exclusive indicator of performance.

b. An annual review by several sources including a self-evaluation, subordinates and the on-
site reporting senior.

c. Indispensable control mechanisms such as profit, performance against budget, and other
statistical measures.

d. All of the Above.

13. Expatriate compensation issues are simplified by the use of the balance-sheet method.
The balance sheet is intended to leave the expatriate “whole” in terms purchasing power.
To do this, multinational companies include the following considerations:

a. Allowance for temporary living costs at the beginning and end of the assignment.

b. Foreign service premium.

c. Home leave on an annual or bi-annual basis for the expatriate and family.

d. Equalization of income tax differential between home- and host-country for the portion of
salary received in the host-country.

14. The expatriate faces which of the following problems when being repatriated (reverse
culture shock)?

a. The expatriate must adapt to the new work environment and culture in the home office.

b. The expatriate must relearn how to communicate with friends and coworkers in the home
and organizational culture.

c. Repatriated home-country employees and their families requires time to adapt to such as
school, food, weather, and other basic living conditions.

d. All of the above.

15. Women are successful in international business assignments because they

a. are less visible and, therefore, less likely offend local sensibilities about women.

b. are more likely to excel at relational skills.

c. are at much lower positions than male counterparts when receiving their first international
assignments.

d. have not had to balance professional and family responsibilities.

CHP 1

1. Companies can no longer assume that success in the domestic market equates to long-
term profitability.

a. True

b. False

2. Successful multinational management requires which of the following?

a. Formulation of strategies and management systems to take advantage of international

opportunities and respond to international threats.

b. Executives with motivation and international experience.

c. Understanding of national differences.

d. All of the above.

3. A multinational company is

a. not a small company.

b. for the most part engaged in international sales.

c. a multinational corporation (MNC), publicly owned.

d. engaged in international business.

4. In 2002, the 30 largest companies ranked by revenues had which of the following
characteristics?

a. Included companies from all major developed countries.

b. Came from just a small number of industry classifications.

c. The list is dominated by US, German and Japanese MNCs.

d. The top tier MNCs had roughly equal revenues, market value and profitability.

5. Globalization is driven by all of the following processes except

a. financial markets that limit investment in risky international business.

b. trade barriers.

c. standards of quality and production.

d. protectionism.

6. A developed country by definition has a mature economy with substantial per capita
GDP. Which of the following countries is not a developed country?
 a. China

b. Switzerland

c. Belgium

d. Ireland

7. A developing country is characterized by

a. locations in the Asia-Pacific region.

b. UN classification as a transition economy.

c. countries such as Bolivia, Tanzania and Vietnam.

d. economies that have grown extensively but have struggled recently with major economic
crises, or have transition economies, or fit an yet another category.

8. GATT and WTO perform similar functions.

a. True

b. False

9. Major regional trade agreements include all of the following except

a. Pacific Salmon Treaty negotiations.

b. NAFTA.

c. APEC.

d. EU.
10. Foreign Direct Investment occurs when which of the following occurs?

a. MNCs deposit funds outside their headquarter country.

b. A company leases a sales representative office in Hanoi.

c. The company invests in a joint venture with a foreign company in a third country.

d. The company invests in a joint venture in its home country with a foreign multinational.

11. Two types of risk are faced by multinational businesses – economic and political.
Based on these factors, South Korea and the Czech Republic are high-risk countries.

a. True

b. False

12. Which of the following organizations develop global product standards?

a. WTO

b. ISO

c. EU

d. ASEAN

13. Multinational managers need to have a global mindset, cultural sensitivity and
awareness, and___________in order to meet the challenges of the rapid pace of
globalization.

a. language fluency in at least two foreign languages

b. comprehensive knowledge of international finance.

 c. an advanced business degree with a concentration in international business.

d. ability to manage change, create systems for learning, proficient negotiating skills and
willingness to seek overseas assignments.