MANA 4322 Exam 2 Questions With
Correct Answers
globalization - ANSWER a term that has two meanings: (1) the increase in
international exchange, including trade in goods and services as well as money,
ideas, and information; (2) the growing similarity of laws, rules, norms, values,
and ideas across countries
diamond of national advantage - ANSWER a framework for explaining why
countries foster successful multinational corporations; consists of four factors --
factor endowments, demand conditions, related and supporting industries, and
firm strategy, structure, and rivalry
factor endowments (national advantage) - ANSWER a nation's position in factors
of production
demand conditions (national advantage) - ANSWER the nature of home-market
demand for the industry's product or service
related and supporting industries (national advantage) - ANSWER the presence,
absence, and quality in the nation of supplier industries and other related
industries that supply services, support, or technology to firms in the industry
value chain
firm strategy, structure, and rivalry (national advantage) - ANSWER the
conditions in the nation governing how companies are created, organized, and
managed, as well as the nature of domestic rivalry
multinational firms - ANSWER firms that manage operation in more than one
country
arbitrage opportunities - ANSWER an opportunity to profit by buying and selling
the same good in different markets
reverse innovation - ANSWER new products developed by developed-country
multinational firms for emerging markets that have adequate functionality at a
low cost
political risk - ANSWER potential threat to a firm's operations in a country due to
ineffectiveness of the domestic political system
rule of law - ANSWER a characteristic of legal systems where by behavior is
governed by rules that are uniformly enforced
, economic risk - ANSWER potential threat to a firm's operations in a country due
to economic policies and conditions, including property rights laws and
enforcement of those laws
counterfeiting - ANSWER selling of trademarked goods without the consent of
the trademark holder
currency risk - ANSWER potential threat to a firm's operations due to
fluctuations in the local currency's exchange rate
management risk - ANSWER potential threat to a firm's operations in a country
due to the problems that managers have making decisions in the context of
foreign markets
outsourcing - ANSWER using other firms to perform value-creating activities
that were previously performed in-house
offshoring - ANSWER shifting a value-creating activity from a domestic location
to a foreign location
international strategy - ANSWER a strategy based on firms' diffusion and
adaptation of the parent companies' knowledge and expertise to foreign
markets; used in industries where the pressures for both local adaptation and
lowering costs are low
global strategy - ANSWER a strategy based on firms' centralization and control
by the corporate office, with the primary emphasis on controlling costs; used in
industries where the pressure for local adaptation is low and the pressure for
lowering costs is high
multidomestic strategy - ANSWER a strategy based on firms' differentiating their
products and services to adapt to local markets; used in industries where the
pressure for local adaptation is high and the pressure for lowering costs is low
transnational strategy - ANSWER a strategy based on firms' optimizing the
trade-offs associated with efficiency, local adaptation, and learning; used in
industries where the pressures for both local adaptation and lowering costs are
high
regionalization - ANSWER increasing international exchange of goods, services,
money, people, ideas, and information; and the increasing similarity of culture,
laws, rules, and norms within a region such as Europe, North America, or Asia
trading blocs - ANSWER groups of countries agreeing to increase trade
between them by lowering trade barriers
Correct Answers
globalization - ANSWER a term that has two meanings: (1) the increase in
international exchange, including trade in goods and services as well as money,
ideas, and information; (2) the growing similarity of laws, rules, norms, values,
and ideas across countries
diamond of national advantage - ANSWER a framework for explaining why
countries foster successful multinational corporations; consists of four factors --
factor endowments, demand conditions, related and supporting industries, and
firm strategy, structure, and rivalry
factor endowments (national advantage) - ANSWER a nation's position in factors
of production
demand conditions (national advantage) - ANSWER the nature of home-market
demand for the industry's product or service
related and supporting industries (national advantage) - ANSWER the presence,
absence, and quality in the nation of supplier industries and other related
industries that supply services, support, or technology to firms in the industry
value chain
firm strategy, structure, and rivalry (national advantage) - ANSWER the
conditions in the nation governing how companies are created, organized, and
managed, as well as the nature of domestic rivalry
multinational firms - ANSWER firms that manage operation in more than one
country
arbitrage opportunities - ANSWER an opportunity to profit by buying and selling
the same good in different markets
reverse innovation - ANSWER new products developed by developed-country
multinational firms for emerging markets that have adequate functionality at a
low cost
political risk - ANSWER potential threat to a firm's operations in a country due to
ineffectiveness of the domestic political system
rule of law - ANSWER a characteristic of legal systems where by behavior is
governed by rules that are uniformly enforced
, economic risk - ANSWER potential threat to a firm's operations in a country due
to economic policies and conditions, including property rights laws and
enforcement of those laws
counterfeiting - ANSWER selling of trademarked goods without the consent of
the trademark holder
currency risk - ANSWER potential threat to a firm's operations due to
fluctuations in the local currency's exchange rate
management risk - ANSWER potential threat to a firm's operations in a country
due to the problems that managers have making decisions in the context of
foreign markets
outsourcing - ANSWER using other firms to perform value-creating activities
that were previously performed in-house
offshoring - ANSWER shifting a value-creating activity from a domestic location
to a foreign location
international strategy - ANSWER a strategy based on firms' diffusion and
adaptation of the parent companies' knowledge and expertise to foreign
markets; used in industries where the pressures for both local adaptation and
lowering costs are low
global strategy - ANSWER a strategy based on firms' centralization and control
by the corporate office, with the primary emphasis on controlling costs; used in
industries where the pressure for local adaptation is low and the pressure for
lowering costs is high
multidomestic strategy - ANSWER a strategy based on firms' differentiating their
products and services to adapt to local markets; used in industries where the
pressure for local adaptation is high and the pressure for lowering costs is low
transnational strategy - ANSWER a strategy based on firms' optimizing the
trade-offs associated with efficiency, local adaptation, and learning; used in
industries where the pressures for both local adaptation and lowering costs are
high
regionalization - ANSWER increasing international exchange of goods, services,
money, people, ideas, and information; and the increasing similarity of culture,
laws, rules, and norms within a region such as Europe, North America, or Asia
trading blocs - ANSWER groups of countries agreeing to increase trade
between them by lowering trade barriers
