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
3
, 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.)
4
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
3
, 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.)
4
