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International Business Exam 3 Review

Which of the following is incorrect about scenario analyses?
A. The objective of the process is to force executives to question their assumptions about the environment.
B. The process attempts to incorporate the uncertainty and potential changes that might impact strategic and operational performance.
C. Managers develop scenarios and use them for discussion.
D. All of the above are incorrect.
E. None of A, B, or C is incorrect.
E. None of A, B, or C is incorrect.
Which of the following is correct about scenario analyses?
A. The objective of the process is to forecast the future.
B. The process extrapolates from past data to build scenarios for guiding decision making.
C. Managers develop best-case, worst-case, and most likely scenarios to guide decision making.
D. All of the above are correct.
E. None of A, B, or C is correct.
E. None of A, B, or C is correct.
International strategy:
A. needs to be consistent among the various functions, products, and regional units of the company.
B. needs to be consistent with the demands of the international competitive environment.
C. is concerned with the way firms make fundamental choices about developing and deploying scarce resources internationally.
D. has a goal of achieving and maintaining competitive advantage.
E. all of the above.
E. all of the above.
To create a competitive advantage that is sustainable over time, the international company should try to develop competencies that:
A. create value for customers and for which they are willing to pay.
B. are easy to imitate or substitute for.
C. are expensive to develop and maintain.
D. all of the above.
E. two of A, B, and C.
A. create value for customers and for which they are willing to pay.
According to a survey by Bain & Company, the management tool with the highest level of satisfaction among global executives is:
A. value chain analysis.
B. industry and competitor analysis.
C. strategic planning.
D. environmental analysis.
E. none of the above.
C. strategic planning.
According to the text, the strategic planning process provides a formal structure in which managers will:
A. analyze the company’s external and internal environments.
B. define the company’s business and mission.
C. formulate scenarios.
D. all of the above.
E. two of A, B, and C.
E. two of A, B, and C.
An assessment conducted on the chain of interlinked activities of an organization or set of interconnected organizations and intended to determine where and to what extent value is added to the final product or service is known as:
A. economic value added.
B. internal analysis.
C. value chain analysis.
D. SWOT analysis.
E. none of the above.
C. value chain analysis.
A broad statement that defines the organization’s purpose and scope is known as a:
A. strategic plan.
B. mission statement.
C. vision statement.
D. values statement.
E. none of the above.
B. mission statement.
A description of the company’s desired future position if it can acquire the necessary competencies and successfully implement its strategy is known as a:
A. strategic plan.
B. mission statement.
C. vision statement.
D. values statement.
E. none of the above.
C. vision statement.
Action plans to enable organizations to reach their objectives are known as:
A. strategic plans.
B. competitive strategies.
C. policies.
D. procedures.
E. none of the above.
B. competitive strategies.
When a company faces relatively weak pressures for local responsiveness and cost reductions, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
E. home replication strategy.
When there is strong pressure for a company to adapt its products or services for local markets, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. regional strategy.
D. differentiation strategy.
E. home replication strategy.
B. multidomestic strategy.
When a company faces strong pressures for reducing costs and limited pressure to adapt products for local markets, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
A. global strategy.
When a company faces strong pressures for both reducing costs and adapting products for local markets, it should tend to use a:
A. global strategy.
B. multidomestic strategy.
C. transnational strategy.
D. differentiation strategy.
E. home replication strategy.
C. transnational strategy.
30. Historically, more aspects of ______________ have been standardized and coordinated worldwide by companies than has been the case for other value chain activities such as __________.
A. research and development; manufacturing
B. marketing; manufacturing
C. manufacturing; marketing
D. marketing; research and development
E. none of the above
C. manufacturing; marketing
Scenarios:
A. all of B, C, and D.
B. have an objective of envisioning possible futures that might lie outside their traditional frame of reference.
C. are based on stories about possible futures that are presented to line managers by the strategic planners.
D. extrapolate from past data to make predictions.
E. two of B, C, and D.
B. have an objective of envisioning possible futures that might lie outside their traditional frame of reference.
32. Tactical plans:
A. are fairly broad compared to strategic plans.
B. spell out in detail how objectives will be reached.
C. are broad guidelines to assist in handling recurring problems.
D. are less specific than strategic plans.
E. two of the above.
B. spell out in detail how objectives will be reached.
33. An itemized projection of revenues and expenses for a future time period is a:
A. sales forecast.
B. budget.
C. marketing plan.
D. strategic plan.
E. none of the above.
B. budget.
34. Performance measures are done to:
A. all of B, C, and D.
B. measure the time the company takes to acculturate new employees.
C. determine if the strategy and its implementation are proceeding successfully.
D. assess assumptions about how the strategic lists affect the business.
E. two of B, C, and D.
C. determine if the strategy and its implementation are proceeding successfully.
35. The planning method that is becoming more popular is:
A. top down.
B. bottom up.
C. sequential.
D. a combination of top down and bottom up.
E. centralized planning.
D. a combination of top down and bottom up.
According to the text, changes in the way corporate planning is done:
A. include greater attention being paid to sociopolitical developments.
B. include the use of advanced computing techniques to make detailed five-year forecasts.
C. include heavy emphasis on the use of variables that can be quantified.
D. all of the above are correct.
E. two of A, B, and C.
A. include greater attention being paid to sociopolitical developments.
59. To facilitate Kraft’s goal of enhancing growth prospects within developing-country markets, the company:
A. moved an increasing proportion of decisions to the company’s Illinois headquarters.
B. gave full profit-and-loss accountability to the business units.
C. expanded core product categories into large developing countries.
D. all of the above.
E. two of A, B, and C.
E. two of A, B, and C.
60. Organizational structure:
A. refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these organizational components.
B. helps to determine where formal power and authority will be located within the organization.
C. is primarily created and evolved by senior management.
D. all of the above.
E. two of A, B, and C.
D. all of the above.
61. In designing the organizational structure, management knows two concerns, __________ and __________, run counter to each other.
A. finding the most effective way to departmentalize; coordinating activities
B. earning profits; paying taxes
C. hiring employees; reducing labor costs
D. sales growth; research and design expenditures
E. none of the above.
A. finding the most effective way to departmentalize; coordinating activities
The primary dimensions that need to be considered when designing the structure of an international company are:
A. product and technical expertise, geographic expertise, and functional expertise.
B. product and technical expertise, customer expertise, and functional expertise.
C. geographic expertise, functional expertise, and customer expertise.
D. all of the above
E. two of A, B, and C.
D. all of the above
Regarding the way international companies are structured and integrated:
A. no single structure is best for all companies and contexts.
B. managers must consider the nature of their company’s international operating environment and their competitors’ strategies when deciding when and how to modify the company’s organizational structure.
C. gains from increased specialization will be nullified by increased costs of coordination, requiring managers to choose between the two.
D. all of the above
E. two of A, B, and C.
A. no single structure is best for all companies and contexts.
According to the text, which of the following dimensions provide(s) the basis for organizational subdivisions at the secondary, tertiary, and still lower levels?
A. Two of B, C, and D
B. National subsidiary
C. Domestic or international
D. Function
E. All of B, C, and D
E. All of B, C, and D
As their overseas operations have increased in importance, companies have felt the need to:
A. eliminate the international division.
B. establish worldwide organizations based on product, function, region, or customer classes at the top level.
C. lower production costs by setting up in-bond plants.
D. two of the above.
E. all of A, B, and C.
D. two of the above
The international structural stages model suggests that a typical evolutional path for an international company’s structure would be:
A. from international division to geographic area division to worldwide product division.
B. from international division to worldwide product division to geographic area division.
C. from geographic area division to worldwide product division to global matrix.
D. from functional division to horizontal company to virtual corporation.
E. from international division to worldwide product division to global matrix.
E. from international division to worldwide product division to global matrix.
The regionalized organization seems to be popular with companies that:
A. operate in many diverse foreign regions.
B. favor licensing as a form of market entry.
C. manufacture products with a low technological content requiring strong marketing ability.
D. manufacture products incorporating high technology in industrialized regions.
E. two of the above.
C. manufacture products with a low technological content requiring strong marketing ability.
68. Disadvantages of the regionalized organization structure include:
A. the increased complexity of directing worldwide operations.
B. its inappropriateness for use in global companies.
C. its duplication of area and product specialists.
D. none of the above.
E. all of A, B, and C.
D. none of the above.
The common characteristic of multinationals that are organized by function at the upper level is a narrow:
A. and highly integrated product mix.
B. and highly integrated customer list.
C. variation of prices in the product mix.
D. research and development effort.
E. none of the above
A. and highly integrated product mix.
An organization in which top-level divisions are required to heed input from a staff composed of experts of another organizational dimension in an attempt to avoid the double-reporting difficulty of a matrix organization but still mesh two or more dimensions is known as a:
A. hybrid organization.
B. matrix organization.
C. matrix overlay.
D. network corporation.
E. virtual corporation.
C. matrix overlay.
A structure organized by more than one dimension at the top level is known as a:
A. hybrid organization.
B. matrix organization.
C. matrix overlay.
D. network corporation.
E. virtual corporation.
A. hybrid organization.
A hybrid organization may result from:
A. the firm’s acquiring a company with distinct products and distribution channels.
B. management’s attempt to mesh product and regional expertise.
C. management’s problems with a matrix organization.
D. a firm’s use of SBUs.
E. none of the above.
A. the firm’s acquiring a company with distinct products and distribution channels.
Problems with the matrix structure include that:
A. two or more managers must agree on decisions, which can lead to slow decision making.
B. special divisions often must be established to serve heterogeneous customer segments.
C. global branding and production coordination are hindered.
D. all of the above.
E. two of A, B, and C.
A. two or more managers must agree on decisions, which can lead to slow decision making.
__________ are organizational forms in which product divisions are defined as though they were independent businesses.
A. Free-form management units
B. Strategic business companies
C. Strategic business units
D. Matrix overlays
E. Virtual corporations
C. Strategic business units
Reengineering is:
A. the redesign of the company’s products to improve the quality.
B. the significant reduction of middle management.
C. the empowerment of employees.
D. two of the above.
E. all of A, B, and C.
D. two of the above.
The potential benefits of the virtual corporation concept include that:
A. it permits greater flexibility than is associated with more typical corporate structures.
B. virtual corporations form a network of static relationships that allow them to take advantage of the competencies of other organizations.
C. this form of organization increases management’s control over the corporation’s activities.
D. all of the above.
E. two of A, B, and C.
A. it permits greater flexibility than is associated with more typical corporate structures.
The horizontal corporation:
A. often draws teams from different departments to solve a problem or deliver a product.
B. has been characterized as “antiorganization.”
C. puts greater decision-making responsibility in the hands of middle managers.
D. all of the above.
E. two of A, B, and C.
C. puts greater decision-making responsibility in the hands of middle managers.
Control activities:
A. are the efforts to develop strategic plans for an organization.
B. are needed more by domestic companies than international companies.
C. should be linked to evaluation and reward systems.
D. none of the above.
E. two of A, B, and C.
C. should be linked to evaluation and reward systems.
Where are decisions made?
A. IC headquarters
B. Subsidiary headquarters
C. Cooperatively by IC and subsidiary
D. All of the above
E. Two of A, B, and C
D. All of the above
Decisions to standardize product and equipment with which to make it and to tailor it to fit each national market are most likely to be made by:
A. IC headquarters.
B. subsidiary headquarters.
C. LDC government officials.
D. none of the above.
E. two of A, B, and C.
A. IC headquarters.
In larger, older organizations:
A. more decisions are delegated to the subsidiary headquarters.
B. decisions are delegated to empowered, decentralized subsidiary managers.
C. more decisions are made at headquarters of the parent company.
D. all of the above.
E. two of A, B, and C.
C. more decisions are made at headquarters of the parent company.
A decision to move production factors from one country to another would be:
A. affected by currency and political stability.
B. made cooperatively by subsidiary managers.
C. based on tax, labor supply, and market conditions.
D. all of the above.
E. two of A, B, and C.
E. two of A, B, and C.
According to the text, the types of information an IC needs to have reported by subsidiaries include:
A. financial.
B. organizational structure and systems.
C. political.
D. all of the above.
E. two of A, B, and C.
E. two of A, B, and C.
A pioneering firm stands the best chance for long-term success in market-share leadership and profitability when:
A. there are high entry barriers for competitors.
B. it has strong patent protection.
C. there are substantial investment requirements.
D. all of the above.
E. two of A, B, and C.
D. all of the above.
A pioneering firm stands the best chance for long-term success in market-share leadership and profitability when:
A. there are few cultural barriers to entry.
B. the firm has sufficient size, resources, and competencies.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
B. the firm has sufficient size, resources, and competencies.
In many cases, a firm entering international markets becomes a follower because:
A. barriers are high for new entrants.
B. strong patent protection exists.
C. quicker competition beats it.
D. all of the above.
E. two of A, B and C.
C. quicker competition beats it.
A follower firm stands the best chance for success in market-share leadership when:
A. there are high barriers to entry.
B. the firm has small size.
C. there is high potential for imitation.
D. all of the above.
E. two of A, B, and C.
C. there is high potential for imitation.
Which of the following are reasons that many firms engage in exporting?
A. Exports enable the firm to serve markets where it has sufficient production facilities.
B. Exports can offset cyclical sales in the firm’s domestic market.
C. Exports eliminate the risk of losing the firm’s technology to potential competitors.
D. All of the above.
E. Two of A, B, and C.
B. Exports can offset cyclical sales in the firm’s domestic market.
Which of the following are reasons that many firms engage in exporting?
A. Exports can allow the firm to serve markets where it has no or limited production facilities.
B. Exports can offset cyclical sales in the firm’s domestic market.
C. Exports can test foreign markets and foreign competition inexpensively.
D. All of the above.
E. Two of A, B, and C.
E. Two of A, B, and C.
Companies wishing to export must first choose between:
A. exporting directly and using sales companies.
B. exporting indirectly and using joint ventures.
C. exporting directly and exporting indirectly.
D. exporting directly and licensing.
E. none of the above.
C. exporting directly and exporting indirectly.
__________ permits a firm to set up an export program with a minimum of cash outlay and little special expertise.
A. A joint venture
B. Direct exporting
C. Franchising
D. Indirect exporting
E. Licensing
D. Indirect exporting
A company can engage in indirect exporting by using which of the following companies in its own country?
A. Import merchants
B. Sales companies
C. Export commission agents
D. Overseas merchants
E. Two of the above
C. Export commission agents
The disadvantages of indirect exporting include:
A. firms gain little experience from the transaction.
B. commissions have to be paid to agents.
C. firms are dependent on the agents.
D. all of the above.
E. two of A, B, and C.
D. all of the above.
A business established for the purpose of marketing goods and services, not producing them, is:
A. a franchisee.
B. a direct exporter.
C. a sales company.
D. a joint venture.
E. two of the above.
C. a sales company.
A turnkey project includes all of the following except:
A. plan design.
B. technology supply.
C. supply of raw material.
D. personnel training.
E. none of the above. (All four are included.)
E. none of the above. (All four are included.)
By means of a licensing agreement:
A. an international firm receives permission from a foreign government to set up a subsidiary in that country.
B. one firm grants to another the right to use stipulated parts of its expertise.
C. a foreign company receives products made for it by another company.
D. one firm grants to another the right to use all of its expertise.
E. two of the above.
D. one firm grants to another the right to use all of its expertise.
Licensing provides income for:
A. fashion designers.
B. computer manufacturers.
C. magazine publishers.
D. all of the above.
E. two of A, B, and C.
D. all of the above.
The principal ingredient(s) that a franchiser exports is:
A. a brand name.
B. marketing strategy.
C. a set of proven procedures.
D. two of the above.
E. all of A, B, and C.
E. all of A, B, and C.
McDonald’s, Kentucky Fried Chicken, and Subway are examples of:
A. joint ventures.
B. licensing.
C. franchising.
D. strategic alliances.
E. none of the above.
C. franchising.
An arrangement by which one firm provides management in all or specific areas to another firm is:
A. a license.
B. a franchise.
C. a management contract.
D. all of the above.
E. two of A, B, and C.
C. a management contract.
Hilton and Delta provide assistance to other international companies. That is an example of:
A. a joint venture.
B. a management contract.
C. a strategic alliance.
D. contract manufacturing.
E. licensing.
B. a management contract.
International firms employ contract manufacturing:
A. as a means of entering a foreign market without investing in plant facilities.
B. to subcontract assembly work or the production of parts to independent companies overseas.
C. A and B.
D. as a means of direct foreign investment.
C. A and B.
Foreign direct investment (FDI) includes all of the following except:
A. wholly owned subsidiary.
B. joint venture.
C. management contract.
D. strategic alliance.
E. none of the above.
C. management contract.
According to the text, a company that wishes to own a foreign subsidiary outright may:
A. make a greenfield investment.
B. purchase its distributor.
C. acquire part of a going concern.
D. all of the above.
E. two of A, B, and C.
E. two of A, B, and C.
A joint venture may be:
A. a corporate entity formed between an international firm and local owners.
B. a corporate entity formed between two or more international firms.
C. a corporate undertaking between two or more firms of a limited-duration project.
D. two of the above.
E. all of A, B, and C.
E. all of A, B, and C.
Benefits of joint ventures may include:
A. the ability to respond to strong nationalistic sentiment in the host nation.
B. access to expertise that the company lacks.
C. differing strategies and cultures of the partners.
D. two of the above.
E. all of A, B, and C.
D. two of the above.
Partnerships between or among competitors, customers, or suppliers that may take one or more of various forms, both equity and nonequity, are known as:
A. licenses.
B. joint ventures.
C. wholly owned subsidiaries.
D. strategic alliances.
E. management contracts.
D. strategic alliances.
Although there are many forms of strategic alliances or competitive alliances, the alliances are often between:
A. customers.
B. competitors.
C. suppliers.
D. all of the above.
E. two of A, B, and C.
D. all of the above.
________ alliances are driven by similarity and integration.
A. Strategic
B. Trading
C. Pooling
D. Equity-based
E. None of the above
C. Pooling
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