MNE Exam Bank Questions and Answers Already Passed

MNE Exam Bank Questions and Answers Already Passed Which of the following correctly describes the sequential evolution in management thinking with respect to the strategic role of foreign operations in emerging MNEs? - Answers international mentality, multinational mentality, global mentality, transnational mentality. The largest MNEs are equivalent in their economic importance to less developed economies such as Cameroon, Paraguay, or Barbados. - Answers False The process of internationalization followed by most firms is usually well-thought out in advance and typically builds on a combination of rational analysis, planning and implementation. - Answers False All companies internationalize in an incremental manner. First, they make an initial commitment of resources to the foreign market in order to secure local market knowledge. Building on this knowledge, they make subsequent resource commitments, eventually leading to higher levels of investment in the foreign market. - Answers False A joint venture is a contractual mode of foreign entry involving a high level of resource commitment by all partners. - Answers False Emerging motivations for internationalization include the desire to enhance the firm's competitive position and the desire to develop global scanning capabilities. - Answers True For an MNE to exist, first foreign countries must provide location-specific advantages to attract the company to invest there, second the company must have ownership-specific advantages that counteract its liability of foreignness, third the company must have the organizational capability to leverage its strategic advantages more effectively internally than externally. - Answers True An MNE with an 'international mentality' will typically be managed as a coordinated federation. - Answers True An MNE with a 'multinational mentality' will typically be managed as a coordinated federation. - Answers False An MNE with a 'global mentality' will typically manage its operations centrally. - Answers True An MNE with a 'transnational mentality' will typically be managed as an integrated network. - Answers True The main advantage multinational mentality has over global mentality is more efficient manufacturing. - Answers False An MNE is a(n): - Answers company that actively manages substantial foreign direct investment. Three prerequisites that must be satisfied before a national firm can transform itself into a multinational firm include: - Answers location-specific advantages, ownership-specific advantages, and organizational capabilities. Which of the following correctly describes the sequential evolution in management thinking with respect to the strategic role of foreign operations in emerging MNEs? - Answers international mentality, multinational mentality, global mentality, transnational mentality. A franchise, such as McDonald's, is a _________ mode of foreign entry. - Answers low commitment, moderate control A joint venture is a _________ mode of foreign entry. - Answers moderate commitment, moderate control HomeAppliances Co. is a new manufacturer of home appliances. HomeAppliances wants to go international. Some of its traditional motivations for pursuing internationalization include: - Answers securing key supplies, seeking new markets and accessing low-cost factors of production One motivation behind internationalization is to sustain the firm's competitive position. To pursue a - Answers match competitors, capture global scale, and preempt markets suggests that in the first stage innovations are produced in the home developed country; in the second stage they are exported to other similarly developed countries; in the third stage, they start being produced in these developed countries; in the fourth stage they start being produced in low-wage developing countries. - Answers Vernon's product cycle theory Which of the following constitutes a list of foreign entry modes that involve the MNE to make a foreign investment - Answers Wholly owned, joint venture OfficeWare Corp. is an MNE that produces and sells office equipment. If the company's CEO employs a 'global mentality' toward the strategic role of the company's foreign operations, then we would expect that OfficeWare: - Answers regards the world as a single unit of analysis. The demand for the Italy-based Sparkly Fashion Manufacturing's unisex pants has been continually increasing. Sparkos, the CEO of the company, intends to take his company international by producing these unisex pants mainly in Italy and selling them in the same way all over the world. Sparkos is operating with a(n): - Answers global mentality MNEs from emerging markets seem to be more poorly equipped to compete in other emerging markets when compared to their counterparts from developed markets. - Answers F The three conflicting environmental forces that MNEs encounter are cross-border integration and coordination, national differentiation and responsiveness, and worldwide innovation and learning. - Answers T Global integration and coordination forces encountered by MNEs include economies of scale, government demands, and the expanding spiral of globalization. - Answers F Local responsiveness forces encountered by MNEs include cultural differences, government demands and economies of scope. - Answers F Worldwide innovation and learning forces that are encountered by MNEs are driven by factor costs. - Answers F A global industry is characterized by low national responsiveness and high global integration. - Answers T A multinational industry is characterized by low national responsiveness and high global integration. - Answers F An international industry is characterized by low national responsiveness and moderate global integration. - Answers F A transnational industry is characterized by moderate national responsiveness and moderate global integration. - Answers F