INB 300 Exam 3 Questions with Verified Solutions Graded A+
(Chapter 10) - Answers (Definition)
_____ is the location-specific advantage that arises from the clustering of economic activities in
certain locations. - Answers Agglomeration
In the context of modes of entry, _____ refers to efforts among a number of firms to jointly
market their products and services. - Answers co-marketing
Which of the following is a formal barrier to trade when foreign firms enter new markets? -
Answers Currency risk
A liability of foreignness refers to the inherent disadvantage that foreign firms experience in
host countries because of their nonnative status. - Answers True
Which of the following modes of entry call for the establishment of independent organizations
overseas? - Answers An equity mode
Which of the following statements is true of greenfield operations? - Answers They suffer from
a slow entry speed of at least one to several years.
If a firm decides to engage in crude oil and petroleum business abroad, which of the following
countries will provide location-specific advantage to the firm? - Answers Russia
To overcome cultural and institutional differences, it is more important to consider strategic
goals such as market and efficiency rather than culture and institutions. - Answers True
Which of the following statements is true of scale of entry? - Answers Large-scale entries
demonstrate a strategic commitment to certain markets.
A joint venture is defined as a subsidiary located in a foreign country that is entirely owned by
the parent multinational. - Answers False
In the context of entering into foreign business, firms with a strategic goal to seek market
should select economies of scale and abundance of low-cost factors. - Answers False
_____ is defined as a project in which clients pay contractors to design and construct new
facilities and train personnel. - Answers A turnkey project
_____ is a non-equity mode of entry into a foreign market. - Answers Turnkey project
_____ is a type of wholly owned subsidiary. - Answers A greenfield project
Which of the following is true of location-specific advantages? - Answers They decline when
companies overcrowd or when taxes are raised.
(Chapter 11) - Answers (Definition)
, Informal institutions affect the formation of alliances and acquisitions by: - Answers centering
on collective norms, supported by a normative pillar.
According to an institution-based view, which of the following is true of synergistic motives that
drive acquisitions? - Answers They are a response to formal institutional constraints and
transitions.
Ocan Foods Inc., a food and beverage retailer, invests ten percent of its annual revenue in Bright
Diaries Inc., a diary manufacturer. Bright Diaries, on the other hand, invests 15 percent of its
annual revenue in Ocan Foods. Which of the following equity-based alliances is shown in the
given scenario? - Answers Cross-shareholding
In the three-stage model of alliance formation, which of the following is the first stage? -
Answers Taking a decision on the mode of growth
Inadequate screening is a problem which occurs during the pre-acquisition phase of the merger
and acquisitions (M&A) process. - Answers True
In the context of real options, which of the following is a disadvantage of entering into alliances?
- Answers Firms are most likely to choose the wrong partners.
In the context of an institution-based view, which of the following is true of managerial motives
that drive acquisitions? - Answers They do not benefit a company overall in the long run.
In the context of organizing acquisitions, strategic fit refers to the effective matching of
complementary strategic capabilities. - Answers True
An acquisition is the combination of operations and management of two firms to establish a
new legal entity. - Answers False
Equity, learning and experience, relational capabilities, and organization are the four factors that
may influence alliance performance. - Answers False
A(n) _____ is a transfer of the control of operations and management from one firm to another. -
Answers acquisition
The second phase in the dissolution of alliances is going public. - Answers True
_____ are associations between firms that are based on contracts and do not involve the sharing
of ownership. - Answers Non-equity-based alliances
In the context of organizing acquisitions, _____ is the similarity in culture, systems, and
structures between two or more firms. - Answers organizational fit
In the pre-acquisition phase, which of the following must be avoided by an acquirer to reduce
the possibility of acquisition failure? - Answers Giving importance to executive hubris
(Chapter 10) - Answers (Definition)
_____ is the location-specific advantage that arises from the clustering of economic activities in
certain locations. - Answers Agglomeration
In the context of modes of entry, _____ refers to efforts among a number of firms to jointly
market their products and services. - Answers co-marketing
Which of the following is a formal barrier to trade when foreign firms enter new markets? -
Answers Currency risk
A liability of foreignness refers to the inherent disadvantage that foreign firms experience in
host countries because of their nonnative status. - Answers True
Which of the following modes of entry call for the establishment of independent organizations
overseas? - Answers An equity mode
Which of the following statements is true of greenfield operations? - Answers They suffer from
a slow entry speed of at least one to several years.
If a firm decides to engage in crude oil and petroleum business abroad, which of the following
countries will provide location-specific advantage to the firm? - Answers Russia
To overcome cultural and institutional differences, it is more important to consider strategic
goals such as market and efficiency rather than culture and institutions. - Answers True
Which of the following statements is true of scale of entry? - Answers Large-scale entries
demonstrate a strategic commitment to certain markets.
A joint venture is defined as a subsidiary located in a foreign country that is entirely owned by
the parent multinational. - Answers False
In the context of entering into foreign business, firms with a strategic goal to seek market
should select economies of scale and abundance of low-cost factors. - Answers False
_____ is defined as a project in which clients pay contractors to design and construct new
facilities and train personnel. - Answers A turnkey project
_____ is a non-equity mode of entry into a foreign market. - Answers Turnkey project
_____ is a type of wholly owned subsidiary. - Answers A greenfield project
Which of the following is true of location-specific advantages? - Answers They decline when
companies overcrowd or when taxes are raised.
(Chapter 11) - Answers (Definition)
, Informal institutions affect the formation of alliances and acquisitions by: - Answers centering
on collective norms, supported by a normative pillar.
According to an institution-based view, which of the following is true of synergistic motives that
drive acquisitions? - Answers They are a response to formal institutional constraints and
transitions.
Ocan Foods Inc., a food and beverage retailer, invests ten percent of its annual revenue in Bright
Diaries Inc., a diary manufacturer. Bright Diaries, on the other hand, invests 15 percent of its
annual revenue in Ocan Foods. Which of the following equity-based alliances is shown in the
given scenario? - Answers Cross-shareholding
In the three-stage model of alliance formation, which of the following is the first stage? -
Answers Taking a decision on the mode of growth
Inadequate screening is a problem which occurs during the pre-acquisition phase of the merger
and acquisitions (M&A) process. - Answers True
In the context of real options, which of the following is a disadvantage of entering into alliances?
- Answers Firms are most likely to choose the wrong partners.
In the context of an institution-based view, which of the following is true of managerial motives
that drive acquisitions? - Answers They do not benefit a company overall in the long run.
In the context of organizing acquisitions, strategic fit refers to the effective matching of
complementary strategic capabilities. - Answers True
An acquisition is the combination of operations and management of two firms to establish a
new legal entity. - Answers False
Equity, learning and experience, relational capabilities, and organization are the four factors that
may influence alliance performance. - Answers False
A(n) _____ is a transfer of the control of operations and management from one firm to another. -
Answers acquisition
The second phase in the dissolution of alliances is going public. - Answers True
_____ are associations between firms that are based on contracts and do not involve the sharing
of ownership. - Answers Non-equity-based alliances
In the context of organizing acquisitions, _____ is the similarity in culture, systems, and
structures between two or more firms. - Answers organizational fit
In the pre-acquisition phase, which of the following must be avoided by an acquirer to reduce
the possibility of acquisition failure? - Answers Giving importance to executive hubris
