C211 Study Guide questions with correct
answers.
Strategic goal = Market-seeking - ANSWER-Location specific advantage = Abundance
of strong market demand and customers willing to pay
Strategic goal = Efficiency-seeking - ANSWER-Location specific advantage =
Economies of scale and abundance of low-cost factors
Strategic goal = Innovation-seeking - ANSWER-Location specific advantage =
Abundance of innovative individuals, firms, and universities
Views of globalization (Chp 1.4) - ANSWER-1. It's a new phenomenom, starting in the
late 20th century.
2. It's a long term part of human history.
3. Neither recent nor one directional, it's a pendulum that swings back and forth.
Strategic goal = Natural resource—seeking - ANSWER-Location specific advantage =
Possession of natural resources and related transport and communication infrastructure
Name first mover advantages: (Chp 10.3) - ANSWER-1. Proprietary, technological
leadership
2. Pre-emption of scarce resources
3. Establishment of entry barriers for late entrants
4. Avoidance of clash with dominant firms at home
5. Relationships with key stakeholders such as governments
Name late mover advantages: (Chp 10.3) - ANSWER-1. Opportunity to free ride on first-
mover investments
2. Resolution of technological and market uncertainty
3. First mover's difficulty to adapt to market changes
Name strategic goals supported by location specific advantages (Chp 10.2) - ANSWER-
1. Natural resources
2. Market
3. Efficiency
4. Innovation
Proposition (1) underpinning an institution based view of global business. - ANSWER-
Managers and firms rationally pursue their interests and make choices within the formal
and informal constraints in a given institutional framework
Proposition (2) underpinning an institution based view of global business. - ANSWER-
While formal and informal institutions combine to govern firm behavior, in situations
, where formal constraints are unclear or fail, informal constraints will play a larger role in
reducing uncertainty and providing constancy to managers and firms
Market economy - ANSWER-An economy that is characterized by the "invisible hand" of
market forces.
Command economy - ANSWER-An economy that is characterized by government
ownership and control of factors of production.
Mixed economy - ANSWER-An economy that has elements of both a market economy
and a command economy.
Property rights - ANSWER-The legal rights to use an economic property (resource) and
to derive income and benefits from it.
Purpose of property rights - ANSWER-The formal protection of property rights helps to
facilitate economic growth.
Civil Law - ANSWER-A legal tradition that uses comprehensive statutes and codes as a
primary means to form legal judgments.
Common Law - ANSWER-A legal tradition that is shaped by precedents and traditions
from previous judicial decisions.
Theocratic Law - ANSWER-A legal system based on religious teachings.
Democracy - ANSWER-Right to freedom of expression and organization.
Totalitarianism - ANSWER-One person or party exercises absolute control.
How do institutions reduce uncertainty? (Chp 2-2) - ANSWER-By signaling which
conduct is legitimate and which is not they constrain the range of acceptable actions.
Comprehensive model of foreign market entries - ANSWER-1. How to enter depends on
the scale of entry: large-scale versus small-scale entries.
2. First focuses on the equity (ownership) issue.
3. Second step focuses on making the actual selection, such as exports, contractual
agreements, joint ventures and wholly owned subsidiaries.
Political realities governing international trade. - ANSWER-The net impact of various
tariffs and nontariff barriers is that the whole nation is worse off while certain special
interest groups (such as certain industries, firms, and regions) benefit.
Economic arguments against free trade: - ANSWER-1. protectionism
2. infant industries
answers.
Strategic goal = Market-seeking - ANSWER-Location specific advantage = Abundance
of strong market demand and customers willing to pay
Strategic goal = Efficiency-seeking - ANSWER-Location specific advantage =
Economies of scale and abundance of low-cost factors
Strategic goal = Innovation-seeking - ANSWER-Location specific advantage =
Abundance of innovative individuals, firms, and universities
Views of globalization (Chp 1.4) - ANSWER-1. It's a new phenomenom, starting in the
late 20th century.
2. It's a long term part of human history.
3. Neither recent nor one directional, it's a pendulum that swings back and forth.
Strategic goal = Natural resource—seeking - ANSWER-Location specific advantage =
Possession of natural resources and related transport and communication infrastructure
Name first mover advantages: (Chp 10.3) - ANSWER-1. Proprietary, technological
leadership
2. Pre-emption of scarce resources
3. Establishment of entry barriers for late entrants
4. Avoidance of clash with dominant firms at home
5. Relationships with key stakeholders such as governments
Name late mover advantages: (Chp 10.3) - ANSWER-1. Opportunity to free ride on first-
mover investments
2. Resolution of technological and market uncertainty
3. First mover's difficulty to adapt to market changes
Name strategic goals supported by location specific advantages (Chp 10.2) - ANSWER-
1. Natural resources
2. Market
3. Efficiency
4. Innovation
Proposition (1) underpinning an institution based view of global business. - ANSWER-
Managers and firms rationally pursue their interests and make choices within the formal
and informal constraints in a given institutional framework
Proposition (2) underpinning an institution based view of global business. - ANSWER-
While formal and informal institutions combine to govern firm behavior, in situations
, where formal constraints are unclear or fail, informal constraints will play a larger role in
reducing uncertainty and providing constancy to managers and firms
Market economy - ANSWER-An economy that is characterized by the "invisible hand" of
market forces.
Command economy - ANSWER-An economy that is characterized by government
ownership and control of factors of production.
Mixed economy - ANSWER-An economy that has elements of both a market economy
and a command economy.
Property rights - ANSWER-The legal rights to use an economic property (resource) and
to derive income and benefits from it.
Purpose of property rights - ANSWER-The formal protection of property rights helps to
facilitate economic growth.
Civil Law - ANSWER-A legal tradition that uses comprehensive statutes and codes as a
primary means to form legal judgments.
Common Law - ANSWER-A legal tradition that is shaped by precedents and traditions
from previous judicial decisions.
Theocratic Law - ANSWER-A legal system based on religious teachings.
Democracy - ANSWER-Right to freedom of expression and organization.
Totalitarianism - ANSWER-One person or party exercises absolute control.
How do institutions reduce uncertainty? (Chp 2-2) - ANSWER-By signaling which
conduct is legitimate and which is not they constrain the range of acceptable actions.
Comprehensive model of foreign market entries - ANSWER-1. How to enter depends on
the scale of entry: large-scale versus small-scale entries.
2. First focuses on the equity (ownership) issue.
3. Second step focuses on making the actual selection, such as exports, contractual
agreements, joint ventures and wholly owned subsidiaries.
Political realities governing international trade. - ANSWER-The net impact of various
tariffs and nontariff barriers is that the whole nation is worse off while certain special
interest groups (such as certain industries, firms, and regions) benefit.
Economic arguments against free trade: - ANSWER-1. protectionism
2. infant industries
