SOM 354 - FINAL EXAM questions with
complete solutions graded A+
Small and medium sized enterprise SME - correct answer ✔✔Firm with fewer than 500
employees in the United states or with fewer than 250 employees in the European Union
Entrepreneurship - correct answer ✔✔Identification and exploitation of previously unexplored
opportunities
Entrepreneur - correct answer ✔✔Founder and owners of new business or managers of existing
firms who identify and exploit new opportunities
International entrepreneurship - correct answer ✔✔Combination of inmovative, proactive, and
risk-seeking behavior that crosses national borders and is intended to create wealth in
organizations
Microfinance - correct answer ✔✔Lending small sums ($50-$300) used to start small businesses
with the intention of ultimately lifting the entrepreneurs out of poverty
Born global firm (international new venture) - correct answer ✔✔A start-up company that
attempts to do business abroad from inception
Direct export - correct answer ✔✔Sale of products made by firms in their home country to
customers on other countries
Sporadic (passive) exporting - correct answer ✔✔Sale of products prompted by unsolicited
inquires from abroad
, Letter of credit (l/c) - correct answer ✔✔Finacial contract that states that the importer's bank
will pay a specific sum of money to the exporter upon delivery of the merchandise
Licensing - correct answer ✔✔Firm A's agreement to give firm B the rights to use A's proprietary
technology (such as patent) or trademark (such as a corporate logo) for a royalty fee paid to A
by B. This is typically done in manufacturing industries.
Franchising - correct answer ✔✔Firm A's agreement to give firm B the right's to use A's
proprietary assets for a royalty fee paid to A by B. This is typically done in service industries.
Stage model - correct answer ✔✔Model of internationalization that involves a slow step by step
(stage by stage) process a firm must go through to internationalize its business
Indirect export - correct answer ✔✔A way for SMEs to reach overseas customers by exporting
through domestic-based export intermediaries
Export intermediary - correct answer ✔✔Firm that acts as a middleman by linking domestic and
foreign buyers that otherwise would not have been connected
Location specific advantage - correct answer ✔✔Benefit a firm reaps from the features specific
to a place
Cultural distance - correct answer ✔✔Difference between two cultures along identifiable dimes
ions such as individualism
Institutional distance - correct answer ✔✔Extent of similarity or dissimilarity between the
regulatory, normative, and cognitive institutions of two countries
First mover advantage - correct answer ✔✔Benefit that accrues to firms that enter the market
first and that later entrants do not enjoy
complete solutions graded A+
Small and medium sized enterprise SME - correct answer ✔✔Firm with fewer than 500
employees in the United states or with fewer than 250 employees in the European Union
Entrepreneurship - correct answer ✔✔Identification and exploitation of previously unexplored
opportunities
Entrepreneur - correct answer ✔✔Founder and owners of new business or managers of existing
firms who identify and exploit new opportunities
International entrepreneurship - correct answer ✔✔Combination of inmovative, proactive, and
risk-seeking behavior that crosses national borders and is intended to create wealth in
organizations
Microfinance - correct answer ✔✔Lending small sums ($50-$300) used to start small businesses
with the intention of ultimately lifting the entrepreneurs out of poverty
Born global firm (international new venture) - correct answer ✔✔A start-up company that
attempts to do business abroad from inception
Direct export - correct answer ✔✔Sale of products made by firms in their home country to
customers on other countries
Sporadic (passive) exporting - correct answer ✔✔Sale of products prompted by unsolicited
inquires from abroad
, Letter of credit (l/c) - correct answer ✔✔Finacial contract that states that the importer's bank
will pay a specific sum of money to the exporter upon delivery of the merchandise
Licensing - correct answer ✔✔Firm A's agreement to give firm B the rights to use A's proprietary
technology (such as patent) or trademark (such as a corporate logo) for a royalty fee paid to A
by B. This is typically done in manufacturing industries.
Franchising - correct answer ✔✔Firm A's agreement to give firm B the right's to use A's
proprietary assets for a royalty fee paid to A by B. This is typically done in service industries.
Stage model - correct answer ✔✔Model of internationalization that involves a slow step by step
(stage by stage) process a firm must go through to internationalize its business
Indirect export - correct answer ✔✔A way for SMEs to reach overseas customers by exporting
through domestic-based export intermediaries
Export intermediary - correct answer ✔✔Firm that acts as a middleman by linking domestic and
foreign buyers that otherwise would not have been connected
Location specific advantage - correct answer ✔✔Benefit a firm reaps from the features specific
to a place
Cultural distance - correct answer ✔✔Difference between two cultures along identifiable dimes
ions such as individualism
Institutional distance - correct answer ✔✔Extent of similarity or dissimilarity between the
regulatory, normative, and cognitive institutions of two countries
First mover advantage - correct answer ✔✔Benefit that accrues to firms that enter the market
first and that later entrants do not enjoy
