Implementing Strategy Exam Questions Chapter 7

International Management, 10e, (Deresky/Miller)

Chapter 7 Implementing Strategy

1) ________ are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources as well as their existing distinctive competitive advantages.

A) Greenfield investments

B) Strategic alliances

C) Foreign subsidiaries

D) Turnkey operations

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

2) Company X and Company Z have established a business arrangement whereby the two firms will cooperate for their mutual benefit. Which of the following has most likely been established?

A) competitive advantage

B) licensing agreement

C) franchising arrangement

D) strategic alliance

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

3) Alliances are also known as ________.

A) competitive strategies

B) cooperative agreements

C) relational strategies

D) virtual strategies

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

4) ________ are transition mechanisms that propel the partners' strategies forward in a turbulent environment faster than would be possible for each company alone.

A) Cooperative agreements

B) Entry strategies

C) Options strategies

D) Competitive strategies

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

5) Nestle and General Mills created Cereal Partners Worldwide to compete effectively in the European market. Cereal Partners Worldwide is owned equally by the two firms, so CPW is an example of a(n) ________.

A) franchising arrangement

B) acquisition strategy

C) joint venture

D) FDI

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

6) A ________ is a special type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents.

A) joint venture

B) licensing agreement

C) franchising arrangement

D) greenfield strategy

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

7) All of the following would be examples of international joint ventures EXCEPT ________.

A) two Japanese companies sharing ownership of a company in Canada

B) a Danish company sharing ownership with a South African company in South Africa

C) a government-owned company from China sharing ownership with an Australian company in Panama

D) two Venezuelan companies sharing ownership of a company in Venezuela

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Analytical thinking

8) A(n) ________ refers to a JV among companies in different countries.

A) international joint venture

B) equity joint venture

C) global joint venture

D) transnational joint venture

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

9) Which of the following is the most beneficial aspect of an international joint venture?

A) the international partner receives the entire profit

B) the responsibility of risks is solely taken by the international partner

C) the partner's local contacts and markets will be utilized

D) the entire cost of production will be borne by the local partner

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

10) Trout Corp., Kirgo Ltd., and Sturgeon Inc., three of the leading construction companies in the United States, have decided to join hands and create a new cement manufacturing company. According to their agreement, Trout Corp. will have 20 percent equity, Kirgo Ltd. will have 30 percent equity, and Sturgeon Inc. will have 50 percent equity. In this given scenario, Sturgeon Inc. is referred to as a ________.

A) minority JV partner

B) majority JV partner

C) sole proprietor

D) franchisor

Difficulty: 2: Moderate

Chapter: 7

Skill: Application

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Analytical thinking

11) What is an equity alliance?

A) a collaborative arrangement in which at least one collaborating company takes an ownership position in the other

B) a collaboration in which each contributor receives an equitable return based on relative contribution

C) a collaboration in which partners agree to share technology with each other

D) a wholly owned acquisition to prevent appropriation of intellectual property

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

12) France's Thomson Electronics combined with China's TCL to form TCL-Thomson Electronics. Thomson owns 60% and TCL owns the remaining 40% of TCL-Thomson Electronics. This is best described as a(n) ________.

A) turnkey operation

B) acquisition

C) international licensing agreement

D) equity strategic alliance

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Analytical thinking

13) Alliances that are carried out through contract rather than ownership sharing are called ________.

A) cultural strategic alliances

B) equity strategic alliances

C) non-equity strategic alliances

D) transmodal strategic alliances

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

14) Runnerz Inc., a leading manufacturing and retail company that designs and develops footwear and apparel, has signed a contract with a particular courier service for managing the delivery process. The courier service is required to deliver goods from the factory to the warehouse, to customers, and also to collect customer payments for the goods. This is a typical example of a(n) ________.

A) non-equity strategic alliance

B) turnkey operation

C) greenfield investment

D) international licensing agreement

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Analytical thinking

15) ________ refers to value achieved through the combination of market entry, risk sharing, and learning potential that is greater than what the firm could have done alone.

A) Shared risk

B) Shared knowledge

C) Synergy

D) Scale economy

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

16) When Toyota and GM created a joint venture because Toyota wanted to learn about how to deal with labor and parts suppliers in the U.S. market while GM wanted to observe Japanese management practices. What benefit of strategic alliances were Toyota and GM primarily seeking?

A) ease of market entry

B) shared risk

C) shared knowledge

D) synergy

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

17) Which of the following types of alliances can be formed between a company and a foreign government?

A) international joint venture

B) equity strategic alliance

C) non-equity strategic alliance

D) global strategic alliance

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

18) Which of the following is NOT a typical reason for forming cross-border alliances?

A) to avoid import barriers

B) to share R&D costs and risks

C) to gain access to specific markets

D) to test marketing campaigns overseas

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

19) Which of the following motivates a company to form cross-border alliances?

A) to regulate and favor domestic companies

B) to gain rapid entry into a new and consolidating market

C) to remove exporting barriers for domestic companies

D) to allow local companies to gain access to international products and services

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

20) Globe Cars, a leading automobile ancillary firm in China, has decided to form a global alliance with Fulda, a German tire manufacturing company. Which of the following is a primary challenge that Globe Cars is most likely to face in this alliance?

A) existing competitors

B) risk of investment

C) extreme trade barriers in China

D) differences in national cultures

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Analytical thinking

21) Which of the following is a pitfall of cross-border alliances?

A) increase in the number of existing competitors

B) disputes over management

C) convincing expatriates

D) finding local skilled employees

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

22) Which of the following factors greatly influences the success of multinational firm alliances?

A) form of governance chosen

B) introduction of new competition

C) differing national cultures

D) cumulative learning of partner

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

23) Joint ventures are often the chosen form of multinational firm alliances because they ________.

A) provide greater control of proprietary technology

B) increase the level of competition between partner firms

C) enhance the specific skills of the personnel

D) enhance the rewards of the firm

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

24) IMAX, the entertainment firm, enters into a joint venture with Wanda Cinema Line, a Chinese theater chain. What is IMAX primarily seeking by forming this arrangement?

A) easing entry into the Chinese market

B) acquiring technology from the Chinese firm

C) reducing economies of scale in China

D) obtaining a growing, niche Chinese market

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

25) According to researcher David Lei, the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that ________.

A) good venture partners are hard to find

B) technologies change very rapidly

C) partners can become competitors

D) governments can be fickle

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

26) Cross-border allies often have difficulty collaborating effectively, especially in competitively sensitive areas. This generally leads to ________.

A) mistrust and secrecy

B) limitation of investment

C) short-term corporate restructuring

D) lowering of exit barriers

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

27) The initial challenge in implementing strategies in emerging markets is likely to be how to ________.

A) compete with other emerging markets

B) allocate responsibilities between the partners

C) set up new policies and regulations

D) navigate poor infrastructures

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

28) The dual role of strategic alliance refers to the ________.

A) constant requirement of resources and markets

B) process of finding skilled personnel and training them to work efficiently

C) conflict between cooperation and competition

D) differences between home and host governments

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

29) All of the following are cooperative aspects of strategic alliances, EXCEPT ________.

A) creating economies of scale in tangible assets

B) forming upstream–downstream divisions of labor

C) limiting investment risks through shared resources

D) learning new intangible skills from alliance partners

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

30) Which of the following is a competitive aspect of strategic alliances?

A) sharing resources to limit investment risk when entering new markets or uncertain technological fields

B) lowering exit barriers in mature industries, therefore, assisting short-term corporate restructurings

C) accelerating diffusion of industry standards and new technologies to create barriers to entry

D) creating a critical mass to develop new technologies to protect domestic, strategic industries

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

31) Which of the following is a cooperative aspect of strategic alliances?

A) creating economies of scale in tangible assets

B) accelerating diffusion of industry standards to erect barriers to entry

C) learning new intangible skills from alliance partners

D) denying technological and learning initiative to partners

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

32) Parent companies use the IJV control process in order to ensure that the management of the joint venture conforms to ________.

A) international accounting standards

B) qualitative standards

C) its own interests

D) industry standards

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

33) ________ is the overall pattern of structural components and configurations used to manage the total organization.

A) Organizational design

B) Functional design

C) Management

D) Strategy

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

34) Organizational design as a mechanism for factoring international joint venture control refers to the ________.

A) human resource plans and policies of the joint venture

B) market share and profitability ratios of the organization

C) geographic location of the joint venture's facilities

D) amount of decision-making power that the joint venture holds

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

35) ________ refers to the processes that management puts in place in order to direct the success of the joint venture's goals.

A) IJV control

B) Knowledge management

C) Turnkey operations

D) Offshoring

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

36) The most important single factor determining IJV success or failure is the ________.

A) percentage of equity share held by each partner

B) choice of a partner

C) proprietary technologies held by a partner

D) amount of decision-making control given to each firm

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

37) International joint ventures are like a marriage because ________.

A) the firms cannot be separated into single entities after the merging

B) each firm will have access to all of the others' proprietary technologies and competitively sensitive information

C) the more issues that can be settled before the merger, the less likely it will be to break up

D) each firm will have equal decision-making powers

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

38) International joint ventures are less likely to break up when ________.

A) issues are settled before the merger

B) new policies are created after the merger

C) one partner has all the decision-making autonomy and the other has none

D) each firm explicitly states its actions and requirements after the merger

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

39) Which of the following human resource problems can be simplified by increasing the autonomy of the IJV?

A) workplace deviance

B) employment discrimination

C) staffing friction

D) employee silence

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

40) In spite of the potential problems with local partners, many firms rush the process of partner selection because ________.

A) they want to reduce the amount spent on establishing subsidiaries abroad

B) they want to take advantage of the local partner's technological innovations

C) they mostly aim at increasing the number of equity shares within a short period of time

D) they are anxious to get into an attractive market

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

41) With regard to less-developed countries, most problems with international joint ventures involve ________.

A) the parent corporation

B) the local partner

C) differences in accounting standards between nations

D) differences in control system information management between nations

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

42) Where ownership is divided among several partners, the parent organizations are more likely to delegate the operational running of the IJV to ________.

A) local IJV management

B) parent company management

C) middle managers at the parent company level

D) management teams from the largest company in the joint venture

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

43) All of the following are examples of IJV control mechanisms used by parent firms EXCEPT ________.

A) staffing policies

B) legal contracts

C) regional authorities

D) organizational design

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

44) Which of the following primarily determines the extent of control exercised over an IJV by its parent company?

A) staffing choices for top IJV positions

B) policies of the smaller firm

C) cultural background

D) IJV industry

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

45) MNCs often partner with local SMEs in order to ________.

A) capture new innovations and ideas

B) reduce the potential risks of the company

C) ensure international expansion

D) maximize the autonomy of the partners

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

46) According to researcher Dovev Lavie, which of the following is a value-creation strategy?

A) setting organizational buffers between competing partners

B) allying with multiple partners in one industry to limit power

C) assimilating network resources to acquire new skills and capabilities

D) aligning organizational units to create coherent interfaces

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

47) According to researcher Dovev Lavie, which of the following is a caution given to global companies by value capture strategies?

A) Set organizational and technological buffers between competing partners.

B) Avoid partners that compete in your industry if they enjoy superior bargaining power.

C) Learn and assimilate network resources in order to develop new skills and capabilities.

D) Align organizational units and create a coherent interface with each partner in the alliance.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

48) In order to minimize potential problems in alliances, companies should most likely choose partners with ________.

A) competitively sensitive technology

B) complementary products and skills

C) significant control of the target market

D) superior bargaining power in the same industry

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

49) Which of the following is NOT a characteristic of strategic implementation of the McDonald's corporation?

A) minimizing autonomy

B) hiring locals whenever possible

C) forming paradigm-busting arrangements with suppliers

D) making minor changes to the standard menu based on location

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

50) Which of the following is an implementation strategy used by McDonald's?

A) keeping prices low to build market share

B) altering menu items significantly to match cultural norms

C) using American managers to run international franchises

D) forming joint ventures with foreign restaurants to enter new markets

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

51) Which of the following most likely provides a strategic advantage during the implementation of a global alliance?

A) non-collaboration in competitively sensitive areas

B) unified technology infrastructure

C) centralized decision making by one partner

D) high levels of competition between the partners

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

52) Which of the following factors most significantly affects all other variables necessary for the successful implementation of a global alliance?

A) organizational policies

B) organizational structure

C) employee leadership

D) product performance

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

53) Which of the following terms suggests that global sourcing can produce gains in efficiency, productivity, quality, and profitability by fully leveraging talent around the world?

A) transformational outsourcing

B) business process reengineering

C) inverted sourcing

D) lean integration

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

54) Barton & Green is an MNC based in the United States that provides a wide range of software development products. Executives at the firm are considering the idea of outsourcing the company's IT infrastructure. Which of the following best supports the argument that Barton & Green should outsource its IT infrastructure to TMC Enterprises, one of the best IT infrastructure maintenance firms in India?

A) The main competitor of Barton & Green outsources all IT functions.

B) Outsourcing will enhance Barton & Green's competitiveness.

C) Barton & Green's employees frequently need IT support, so it is best to outsource the IT infrastructure.

D) Barton & Green has proprietary technology and processes.

Difficulty: 3: Challenging

Chapter: 7

Skill: Critical Thinking

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Reflective thinking

55) Barton & Green is an MNC based in the U.S. that makes a wide range of software development products. Executives at the firm are considering the idea of outsourcing the company's IT infrastructure. Which of the following questions is the most relevant to Barton & Green's decision to outsource its IT infrastructure to TMC Enterprises, a firm in India?

A) Which type of operating system is primarily used by TMC Enterprises?

B) What is the attitude of U.S. consumers about TMC Enterprises?

C) What is the financial health of TMC Enterprises?

D) Which other firms have outsourced their processes to TMC Enterprises?

Difficulty: 3: Challenging

Chapter: 7

Skill: Critical Thinking

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Reflective thinking

56) Opening its own subsidiaries in the host country may be better than contracting with an outside firm in the host country, if it is crucial for the firm to ________.

A) produce gains in efficiency, productivity, and quality

B) keep control of proprietary technology and processes

C) minimize job losses in the home country

D) market its products in the host country

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

57) The need for knowledge management in IJVs primarily stems from ________.

A) employee concerns regarding job security and benefits

B) cultural and system differences between partners

C) local government regulations and restrictions

D) proprietary information legalities

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

58) Which of the following terms refers to the process by which the firm integrates and benefits from the experiences and skills learned by its employees?

A) knowledge management

B) employee value proposition

C) employee retention

D) business process outsourcing

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

59) ________ is the conscious and active management of creating, disseminating, evolving, and applying facts, information, or skills acquired through experience or education, to strategic ends.

A) Business continuity management

B) Employee value proposition

C) Knowledge management

D) Employee retention

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

60) According to Berdrow and Lane, the process of transfer can be defined as ________.

A) managing the flow of existing knowledge between parents and from the parents to the IJV

B) managing the transformation and creation of knowledge within the IJV through its independent activities

C) managing the flow of transformed and newly created knowledge from the IJV back to the parents

D) capturing and keeping knowledge confidential that exists among the local partners

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

61) According to Berdrow and Lane, the process of harvest can be defined as ________.

A) managing the flow of existing knowledge between parents and from the parents to the IJV

B) managing the flow of transformed and newly created knowledge from the IJV back to the parents

C) capturing knowledge of local partners and keeping it confidential

D) managing the transformation and creation of knowledge within the IJV through its independent activities

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

62) According to Berdrow and Lane, the process of transformation can be defined as ________.

A) transforming the existing knowledge of parents and managing the flow of this transformed knowledge between parents

B) managing the transformation and creation of knowledge within the IJV through its independent activities

C) capturing and keeping knowledge that exists within the local partners confidential

D) managing the flow of transformed and newly created knowledge from the IJV back to the parents

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

63) Which of the following is NOT a knowledge management process?

A) transferring existing knowledge

B) transforming and creating of knowledge

C) harvesting knowledge from the IJV to the parents

D) distributing knowledge to clients and media outlets

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

64) Which of the following represents government influence on IJVs?

A) copyright protection

B) partnership of firm

C) organization structure

D) negotiation practice

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

65) Which of the following is an area where the host government influences the strategic choices and implementations of foreign firms?

A) level of taxation

B) equity share in joint venture

C) knowledge management

D) partnership of target firms

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

66) Which of the following variables is frequently overlooked when deciding on entry strategies and alliances, particularly when the target country is perceived to be similar to the home country?

A) political stability

B) culture

C) currency stability

D) competition

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

67) Overlooking cultural differences in cross-border alliances can create a negative impact when ________.

A) target country has similar views on organizational formality

B) target country and host country equally participate in decision making

C) target country is technologically superior to the host country

D) target country has conflicting practices and systems

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

68) In a cross-border alliance, cultural differences can be overlooked when ________.

A) the target country is similar to the home country

B) when there is a considerable difference in practices of the target country

C) the target country has a high number of domestic mergers

D) the target country insists on participating in the decision-making processes

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

69) Which of the following is a cultural difference that can significantly affect cross-border alliances?

A) use of e-commerce enablers

B) emergence of market firms in the host country

C) organizational formality

D) protectionist legislation

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

70) Which of the following terms refers to a bond between specially connected firms that generates preferential treatment to members of the network?

A) kanban

B) kaizen

C) guanxihu

D) guanxi

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

71) Which of the following terms refers to company specialists who provide other companies with services such as Web site translation?

A) e-commerce enablers

B) virtual global teams

C) e-businesses

D) born globals

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Information technology

72) Which of the following best describes the role of e-commerce enablers?

A) They facilitate multinational companies to collaborate with medium-sized organizations.

B) They allow innovative transnational companies to gain entry into foreign markets.

C) They help small- and medium-sized companies to go global without the internal capabilities to carry out global activities.

D) They reduce the risks involved in joint venture and other forms of alliances.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Information technology

73) Which of the following is a typical task performed by e-commerce enablers?

A) evaluating skill sets of personnel

B) conducting performance appraisals

C) establishing criteria for partnership

D) screening orders

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Information technology

74) NextLinx Corporation provides a wide range of strategic implementation services for small- and medium-sized organizations. It allows all trading partners to collaborate in a single online location, using the same information and processes. Therefore, NextLinx is an example of a(n) ________.

A) e-commerce enabler

B) knowledge management firm

C) IJV controller

D) outsourcing company

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Information technology

75) Cross-border alliances necessitate acquiring a local partner to counteract political risk factors and to take advantage of local knowledge and contacts.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

76) A major advantage of global and cross-border alliances is that they share the cost and risk of research and development of new products.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

77) Cross-border alliances seldom necessitate acquiring a local partner to counteract political risk factors and to take advantage of local knowledge and contacts.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

78) Alliances can be formed for various purposes, e.g., sharing technology, marketing, or production joint ventures.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

79) An alliance is a transition mechanism that propels the partner's strategies forward in a turbulent environment faster than would be possible for each company alone.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

80) A joint venture is a new independent entity jointly created and owned by two or more parent companies.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

81) The JV agreement for a firm requires that each firm maintain a 50 percent equity in the operation.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

82) An international joint venture (IJV)is a joint venture among two or more companies in same country.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

83) The JV agreement for a firm may comprise a majority JV (in which the firm has more than 50 percent equity), a minority JV (less than 50 percent equity), or a 60-40 JV (when two firms have equal equity).

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

84) Strategic alliances are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

85) Wholly owned operations abroad inhibit a company's ability to pursue a global strategy.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

86) A firm shares the profits, costs, and risks with a local partner (or a global partner) and benefits from the local partner's local contacts and markets in an International Joint Venture.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

87) Most global manufacturers have equity alliances with suppliers, sub-assemblers, and distributors.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

88) Two or more partners have identical ownership shares (equity percentages) in the new venture in an equity strategic alliance.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

89) Working partnerships between two or more companies across national boundaries and increasingly across industries are referred to as global strategic alliances.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

90) In a highly competitive environment, alliances are a slow and risky route to globalization, and therefore, are likely to be avoided.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

91) Cross-border allies usually collaborate effectively, and are most often associated with long lasting trust and loyalty.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

92) When Russian firms form an alliance with a foreign firm, they expect assistance with market entry through forming the alliance and that they need assistance in solving bribes, kickbacks, and other under-the-table transactions.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

93) The initial challenge in implementing strategies in emerging markets is likely to be the navigation of poor infrastructures, supply chains, and distribution networks.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

94) A major benefit of cross-border alliances is that they facilitate the access to specific markets where regulations favor domestic companies.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

95) Cross-border alliances are used to gain rapid entry into a new or consolidating industry and to take advantage of synergies.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

96) One major advantage of cross-border alliances is that there is a potential loss of a company's technology and knowledge.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

97) The least important single factor determining International Joint Venture success or failure is the choice of a partner.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

98) The term "International Joint Venture" (IJV) control refers to the processes that management puts in place so as to direct the success of the firm's goals.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

99) The profitability of firms that set up operations abroad is greatly influenced, for example, by the level of taxation in the host country, but not by any restrictions on profit repatriation.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

100) Risk-taking firms are likely to pursue aggressive strategies and deal well with change, whereas risk-averse companies are likely to tread more carefully and employ incremental strategies.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

101) Americans see themselves as the world's leading country, and it's not easy for them to accept having a European in charge.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

102) The horizon of Americans often goes only as far as the U.S. border. As a result, Americans always give equal importance to a foreign customer. If a foreign customer has a special need, the response is sometimes: It works here, why do they need it to be different?

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

103) E-commerce enablers help small and medium-sized companies to go global without the internal capabilities to carry out global e-commerce functions.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Information technology

104) Guanxihu refers to a bond between specially connected firms that generates preferential treatment for members of the network.

Difficulty: 1: Easy

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

105) MNCs often partner with local small enterprises to capture new ideas and innovations.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

106) Transformational outsourcing refers to the view that global sourcing can produce gains in efficiency and profitability by fully leveraging talent around the world.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

107) Discuss the reasons that companies embark on cross-border strategic alliances. What other motivations may prompt such alliances?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

108) What are the primary motivation and benefits behind global and cross-border alliances?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-1: To become familiar with the types of strategic alliances for international business, the challenges in implementing them, and guidelines for success in alliances

AACSB: Application of knowledge

109) Why should a company seek a global alliance over other forms of market entry?

Difficulty: 3: Challenging

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

110) What are some of the strategies available for small businesses (SME) venturing abroad for the first time?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

111) What motivates a company to develop a cross-border alliance?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

112) What are some of the challenges in implementing global alliances?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

113) What is the "dual nature" of strategic alliances?

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

114) How can firms increase the likelihood of forming a successful global alliance?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

115) What is international joint venture control? Why is it important?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

116) Why is an international joint venture referred to as a marriage between venture partners?

Difficulty: 3: Challenging

Chapter: 7

Skill: Application

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

117) What are some of the complexities of managing and implementing a global alliance? How can e-commerce enablers assist the process?

Difficulty: 3: Challenging

Chapter: 7

Skill: Synthesis

LO: 7-2: To understand what is involved in implementing strategies, including those for small businesses and those involved in emerging economies

AACSB: Application of knowledge

118) Describe the process of knowledge management in international joint ventures.

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

119) Assume that your company plans to establish a joint venture in Argentina. What factors need to be considered — prior to forming the IJV — so that it performs well?

Difficulty: 2: Moderate

Chapter: 7

Skill: Application

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

120) What are e-commerce enablers, and what is their role?

Difficulty: 2: Moderate

Chapter: 7

Skill: Application

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge

121) What are the benefits of outsourcing abroad? What should firms do when implementing a global sourcing strategy?

Difficulty: 2: Moderate

Chapter: 7

Skill: Concept

LO: 7-3: To consider how to manage the firm's performance in international joint ventures, with attention to knowledge management, government and cultural influence, and the role of e-commerce

AACSB: Application of knowledge