COB 300 MANAGEMENT EXAM 3 FINAL
QUESTIONS AND ANSWERS
Exporting - Answer-- Selling domestically made products to foreign markets
Advantages:
- Makes company less dependent on domestic sales
Disadvantages:
- Goods subject to trade barriers
Transportation costs
Licensing - Answer-- A domestic company, the licensor, receives royalty payments for
allowing another company, the licensee, to produce a product, sell its service, or use its
brand name in a particular foreign market.
Advantages:
- Companies earn money without investing more money
Companies can avoid trade barriers
Disadvantages
- Licensees can become competitors
Licensor gives up control over product quality
Franchise - Answer-- A collection of networked firms in which the manufacturer or
marketer of a product or service, the franchisor, licenses the entire business to another
person or organization, the franchise.
Advantages:
- Fast way to enter a foreign market
- Gives franchisor additional cash flow
Disadvantages:
- Loss of control
- Culture-bound
Strategic Alliances - Answer-- When companies combine key resources, costs, risks,
technology, and people. The most common form is a joint venture
Advantages:
- Companies avoid trade barriers
- Companies only bear part of the costs
Partners can learn from each other
Disadvantages:
- Profits have to be shared
- Merging of cultures
- You may be teaching your partner how to compete with you in the future
Global Consistency - Answer-When a multinational company markets the same and has
offices, manufacturing plants, and distribution facilities in different countries and runs
them all using the same rules, guidelines, policies, and procedures
, Local Adaption - Answer-- When a multinational company modifies its marketing, rules,
guidelines, policies, and procedures to adapt to differences in foreign customers,
governments, and regulatory agencies
Choosing markets and finding a location - Answer-Most important factor = easy access
to growing markets
- Choosing a location:
Qualitative factors:
- Workforce quality
- Company strategy
Qualitative factors:
- Kind of facility being built
- Trade barriers
- Exchange rates
- Transportation and labor costs
Ethnocentric Managers: - Answer-- "We know the best"
- Believe their native country, culture, language, and behavior are superior
Polycentric managers - Answer-- "They know the best"
- They believe managers in the foreign offices best understand a native culture, staff,
and practices should be left alone by the home office.
Geocentric Managers - Answer-"What is best is what's effective, regardless of origin"
Six Dimensions of Culture - Answer-- Power Distance
- Individualism
- Masculinity
- Uncertainty avoidance
- Indulgence
- Long-term orientation
Power Distance - Answer-(unequal power ok?) Russia, China ok,// U.S., Germany, the
Netherlands not ok with unequal power)
Individualism - Answer-(individualism or loyalty to Co?) U.S., Netherlands, France
high,// China, Indonesia low
Masculinity - Answer-(confrontational & competitive or inclusive & nurturing?) Japan,
U.S.: masculine// Netherlands, Sweden: feminine
QUESTIONS AND ANSWERS
Exporting - Answer-- Selling domestically made products to foreign markets
Advantages:
- Makes company less dependent on domestic sales
Disadvantages:
- Goods subject to trade barriers
Transportation costs
Licensing - Answer-- A domestic company, the licensor, receives royalty payments for
allowing another company, the licensee, to produce a product, sell its service, or use its
brand name in a particular foreign market.
Advantages:
- Companies earn money without investing more money
Companies can avoid trade barriers
Disadvantages
- Licensees can become competitors
Licensor gives up control over product quality
Franchise - Answer-- A collection of networked firms in which the manufacturer or
marketer of a product or service, the franchisor, licenses the entire business to another
person or organization, the franchise.
Advantages:
- Fast way to enter a foreign market
- Gives franchisor additional cash flow
Disadvantages:
- Loss of control
- Culture-bound
Strategic Alliances - Answer-- When companies combine key resources, costs, risks,
technology, and people. The most common form is a joint venture
Advantages:
- Companies avoid trade barriers
- Companies only bear part of the costs
Partners can learn from each other
Disadvantages:
- Profits have to be shared
- Merging of cultures
- You may be teaching your partner how to compete with you in the future
Global Consistency - Answer-When a multinational company markets the same and has
offices, manufacturing plants, and distribution facilities in different countries and runs
them all using the same rules, guidelines, policies, and procedures
, Local Adaption - Answer-- When a multinational company modifies its marketing, rules,
guidelines, policies, and procedures to adapt to differences in foreign customers,
governments, and regulatory agencies
Choosing markets and finding a location - Answer-Most important factor = easy access
to growing markets
- Choosing a location:
Qualitative factors:
- Workforce quality
- Company strategy
Qualitative factors:
- Kind of facility being built
- Trade barriers
- Exchange rates
- Transportation and labor costs
Ethnocentric Managers: - Answer-- "We know the best"
- Believe their native country, culture, language, and behavior are superior
Polycentric managers - Answer-- "They know the best"
- They believe managers in the foreign offices best understand a native culture, staff,
and practices should be left alone by the home office.
Geocentric Managers - Answer-"What is best is what's effective, regardless of origin"
Six Dimensions of Culture - Answer-- Power Distance
- Individualism
- Masculinity
- Uncertainty avoidance
- Indulgence
- Long-term orientation
Power Distance - Answer-(unequal power ok?) Russia, China ok,// U.S., Germany, the
Netherlands not ok with unequal power)
Individualism - Answer-(individualism or loyalty to Co?) U.S., Netherlands, France
high,// China, Indonesia low
Masculinity - Answer-(confrontational & competitive or inclusive & nurturing?) Japan,
U.S.: masculine// Netherlands, Sweden: feminine
