Test Bank For Global Business - 4th - 2017 All Chapters - 9780357670835

ChapterL1LExpandi
ngLabroad:
Motivations,Lmeans,LandLmentalities

True/False

1. TheLlargestLMNEsLareLequivalentLinLtheirLeconomicLimportanceLtoLlessLdevelopedLeconomies
suchLasLNigeria,LMoldova,LorLJamaica.
L




ANS:FalseL(SalesLofLtheLlargestLMNEsLexceedLtheLGDPsLofLlessLdevelopedLcountries.)L
Difficulty:LModerate
Pg:L16LandLTableL1.3L(16)
Subject:LMNELinfluenceLinLtheLglobalLeconomy


2. TheLprocessLofLinternationalizationLfollowedLbyLmostLfirmsLisLusuallyLwell-
thoughtLoutLinLadvanceLandLtypicallyLbuildsLonLaLcombinationLofLrationalLanalysis,Lplanni
ngLandLimplementation.

ANS:FalseL(ItLisLmoreLlikelyLaLcombinationLofLrationalLanalysis,Lopportunism,LandLluck.LInLre
gardsLtoLopportunism,LseveralLstudiesLhaveLfoundLthatLmostLfirmsLbeginLexportingLdueLtoLanLu
nsolicitedLexportLorder.)
Difficulty:LModerateL
Pg:L22-23
Subject:LTheLProcessLofLInternationalization


3. AllLcompaniesLinternationalizeLinLanLincrementalLmanner.LFirst,LtheyLmakeLanLinitialLcom
mitmentLofLresourcesLtoLtheLforeignLmarketLinLorderLtoLsecureLlocalLmarketLknowledge.LBui
ldingLonLthisLknowledge,LtheyLmakeLsubsequentLresourceLcommitments,LeventuallyLleadin
gLtoLhigherLlevelsLofLinvestmentLinLtheLforeignLmarket.

ANS:FalseL(ThereLareLmanyLexceptionsLtoLtheLincrementalLapproach.LSomeLfirmsLareL“bornL
globals”.LOtherLfirmsLretainLtheLsameLmode,LincludingLlevelLofLsubsidiaryLinvolvement,LinLallL
foreignLmarkets.)
Difficulty:LModerateL
Pg:L23
Subject:LTheLProcessLofLInternationalization


4. ALjointLventureLisLaLcontractualLmodeLofLforeignLentryLinvolvingLaLhighLlevelLofLresource
commitmentLbyLallLpartners.
L




ANS:FalseL(ALJVLwillLnotLtypicallyLrequireLasLhighLaLresourceLcommitmentLasLweLwouldLseeLi
nLwhollyLownedLsubsidiaries.LInLaddition,LthereLisLsignificantLvariabilityLinLtheLlevelLofLresource
sLcontributedLbyLpartners.)


1

,Difficulty:L ModerateLPg:
24L(FigureL1.2)LSubject:
ForeignLentryLmode


5. EmergingLmotivationsLforLinternationalizationLincludeLtheLdesireLtoLenhanceLtheLfirm’
sLcompetitiveLpositionLandLtheLdesireLtoLdevelopLglobalLscanningLcapabilities.

ANS:TrueL
Difficulty:
ModeratePg:
19-20
Subject:LEmergingLMotivations


6. ForLanLMNELtoLexist,LfirstLforeignLcountriesLmustLprovideLlocation-
specificLadvantagesLtoLattractLtheLcompanyLtoLinvestLthere,LsecondLtheLcompanyLmustLhaveLo
wnership-
specificLadvantagesLthatLcounteractLitsLliabilityLofLforeignness,LthirdLtheLcompanyLmustLhaveL
theLorganizationalLcapabilityLtoLleverageLitsLstrategicLadvantagesLmoreLeffectivelyLinternallyLt
hanLexternally.

ANS:TrueLDifficult
y:LModerateLPg:L22
Subject:LPrerequisitesLforLinternationalization


7. AnLMNELwithLanL‘internationalLmentality’LwillLtypicallyLbeLmanagedLasLaLcoordinated
federation.
L




ANS:TrueLDifficult
y:LModerateLPg:L26
Subject:LTheLevolvingLmentality:LinternationalLtoLtransnational


8. AnLMNELwithLaL‘multinationalLmentality’LwillLtypicallyLbeLmanagedLasLaLcoordinated
federation.
L




ANS:FalseL(ItLwillLtypicallyLbeLmanagedLasLaLdecentralizedLfederation.)Difficulty:L
Moderate
Pg:L26-27
Subject:LTheLevolvingLmentality:LinternationalLtoLtransnational


9. AnLMNELwithLaL‘globalLmentality’LwillLtypicallyLmanageLitsLoperationsLcentrally.



2

,ANS:TrueLDifficult
y:LModerateLPg:L27
Subject:LTheLevolvingLmentality:LinternationalLtoLtransnational


10. AnLMNELwithLaL‘transnationalLmentality’LwillLtypicallyLbeLmanagedLasLanLintegratedLnetwork.

ANS:TrueLDifficult
y:LModerateLPg:L27
Subject:LTheLevolvingLmentality:LinternationalLtoLtransnational


11. TheLcoreLadvantageLmultinationalLmentalityLhasLoverLglobalLmentalityLisLmoreLefficient
manufacturing.
L




ANS:FalseL(itLisLtheLotherLwayLaround)Difficulty:
ModerateL
Pg:L26-27
Subject:LTheLevolvingLmentality:LinternationalLtoLtransnational

12. RaymondLVernon’sLarticleL“GoneLareLtheLcashLcowsLofLyesteryear”LhighlightsLaLcompany’sL
globalLscanningLandLlearningLcapability.

ANS:TrueLDiffi
culty:LHard
PgL19L(footnoteL10)
Subject:LEmergingLMotivations

13. OnlyLoneLarticleLfurtherLdevelopsLtheLideaLthatL“theLprocessLofLdevelopingLtheseLstrategicLand
organizationalLattributesLliesLatLtheLheartLofLtheLinternationalizationLprocessLthroughLwhichLa
L

LcompanyLbuildsLitsLpositionLinLworldLmarkets.




ANS:FalseL(2LarticlesLfurtherLdevelopLtheLidea:LA.LJonssonLandLN.LJ.LFoss,L“InternationalLex
pansionLthroughLflexibleLreplication:LlearningLfromLtheLinternationalizationLexperienceLofLIK
EA,”LJournalLofL InternationalLBusinessLStudies,L42:9L(2011),
1079–
1102LandLJ.LW.LLuLandLP.LW.LBeamish,L“InternationalLdiversificationLandLfirmLperformance:LtheL
S-curveLhypothesis,”LAcademyLofLManagementLJournal,L47:4L(2004),L598–609.)LDifficulty:LHard
Pg:L22-23L(footnoteL15)
Subject:LProcessLofLInternationalization




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, MultipleLChoice

14. AnLMNELisLa(n):
a. import-exportLcompanyLthatLactivelyLtradesLinLforeignLmarkets.
b. companyLthatLpassivelyLmanagesLitsLsubstantialLforeignLdirectLinvestment.
c. import-exportLcompanyLthatLactivelyLmanagesLitsLforeignLinvestmentLportfolio.
d. companyLthatLactivelyLmanagesLsubstantialLforeignLdirectLinvestment.

ANS:dL(ALtrueLMNELisLaLcompanyLthatLhasLsubstantialLdirectLinvestmentLinLforeignLcountries
,LandLthatLactivelyLmanagesLandLregardsLitsLforeignLoperationsLasLintegralLpartsLofLtheLcompan
y,LbothLstrategicallyLandLorganizationally.LCompaniesLthatLeitherLdoLnotLholdLequityLpositionsL
orLholdLminorLequityLpositionsLinLoverseasLventuresLwithoutLorLwithLveryLlowLmanagement
involvementLmayLbeLviewedLasL“international”LcompaniesLbutLwouldLnotLbeLregardedLasLmultination
alLenterprises.)
Difficulty:LModerateL
Pg:L12
Subject:LMNELdefinition


15. ThreeLprerequisitesLthatLmustLbeLsatisfiedLbeforeLaLnationalLfirmLcanLtransformLitselfLintoL
aLmultinationalLfirmLinclude:
a. scale-basedLadvantages,Lownership-specificLadvantages,LandLcontractualLcapabilities.
b. location-specificLadvantages,Lownership-specificLadvantages,LandLorganizationalLcapabilities.
c. scale-basedLadvantages,Lownership-specificLadvantages,LandLorganizationalLcapabilities.
d. location-specificLadvantages,LknowledgeLadvantages,LandLorganizationalLcapabilities.

ANS:bL(a,Lc,LandLdLareLincorrectLsinceLscale-basedLadvantages,Lknowledge-
basedLadvantages,LandLcontractualLcapabilitiesLare,LbyLthemselves,LinsufficientLtoLjustifyLtheLin
ternationalizationLofLoperations.LWithLmuchLlessLeffortLaLcompanyLoftenLcanLsellLorLlicenseLitst
echnologyLtoLforeignLproducers,LfranchiseLitsLbrandLnameLinternationally,LorLsellLitsLproductsLa
broadLthroughLlocalLdistributors,LwithoutLhavingLtoLsetLupLitsLownLoffshoreLoperations.)LDifficu
lty:LModerateLtoLhard
Pg:L22
Subject:LPrerequisitesLforLinternationalization


16. WhichLofLtheLfollowingLcorrectlyLdescribesLtheLsequentialLevolutionLinLmanagementLthinking
withLrespectLtoLtheLstrategicLroleLofLforeignLoperationsLinLemergingLMNEs?
L

a. globalLmentality,LmultinationalLmentality,LinternationalLmentality,LtransnationalLmentality.
b. internationalLmentality,LglobalLmentality,LtransnationalLmentality,LmultinationalLmentality.
c. multinationalLmentality,LglobalLmentality,LinternationalLmentality,LtransnationalLmentality.
d. internationalLmentality,LmultinationalLmentality,LglobalLmentality,LtransnationalLmentality.

ANS:dL(a,Lb,LandLcLareLincorrectLsince,LalthoughLtheyLdescribeLtheLdifferentLwaysLofLmanagementL
thinkingLregardingLtheLstrategicLroleLofLforeignLoperationsLinLemergingLMNEs,LtheydoLnotLdescri
beLtheLevolutionLofLthisLthinkingLinLtheLcorrectLsequence.)


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