22 Oct A criticism often leveled against SOEs is their lack of accountability.

A criticism often leveled against SOEs is their lack of accountability.

 

 True

 

 False

 

QUESTION 2Your firm has sought to be a responsible part of the community and has sought out ways to implement CSR within your capabilities. However, a news organization that has been trying to boost its ratings has done a series on your organization that suggests that your product is harming consumers and the community’s environment. You believe the reports are totally false but protests have recently been directed toward your facilities and a politician who seeking an issue has been loudly condemning your organization? Some of your shareholders are suggesting that the company takes its losses on the product by discontinuing it rather than risk further damage to the company and its reputation. What should you do?

 

QUESTION 3Industrial-products firms tend to adopt geographic area divisions, and consumer-goods companies often rely on global product divisions.

 

 True

 

False

 

QUESTION 4According to game theory, two competitors who have agreed to cooperate no longer have incentive to cheat.

 

 True

 

False

 

QUESTION 5If the attacked market is of marginal value, managers may decide not to counterattack.

 

True

 

 False

 

QUESTION 6Corporate scope is shaped by:

 

                a.            Industry conditions.

 

                b.            Firm capabilities.

 

                c.             Institutional constraints.

 

                d.            All of the above.

 

QUESTION 7Knowledge management not only depends on IT, but also on informal social relationships within the MNE.

 

True

 

 False

 

QUESTION 8The likelihood of the same managers, managing the same assets, performing more effectively and reducing the level of principal-agent conflicts, is greater when:

 

                a.            Based on CEO duality.

 

                b.            Operating under the market for corporate control.

 

                c.             Private equity is involved.

 

                d.            Informal rules are taken out of the mix.

 

QUESTION 9No one argues that knowledge management is the defining feature of MNEs.

 

 True

 

False

 

QUESTION 10Firm A produces soccer equipment and softball/baseball equipment, as does Firm B. Firm A discontinued its softball/baseball line to focus entirely on its soccer line. This move is known as a:

 

                a.            Gambit.

 

                b.            Feint.

 

                c.             Collusion.

 

                d.            Thrust.

 

QUESTION 11A comprehensive model of global competitive dynamics involves:

 

                a.            All of the above.

 

                b.            Resource-based considerations.

 

                c.             Institution-based considerations.

 

                d.            Industry-based considerations.

 

QUESTION 12Anticompetitive actions can easily be distinguished from competitive actions.

 

True

 

 False

 

QUESTION 13Within a given industry, as competitors increasingly match each other in cost efficiencies and local responsiveness

 

                a.            Their rivalry naturally focuses on learning and innovation.

 

                b.            They will be less affected by the bargaining power of suppliers.

 

                c.             R&D activities and innovation become less and less important.

 

                d.            A geographic area division structure will become the most effective structure.

 

QUESTION 14The three drivers of counterattacks do not include:

 

                a.            Awareness.

 

                b.            Capability.

 

                c.             Motivation.

 

                d.            Vengeance.

 

QUESTION 15Why might it be better to have a majority or minority position in a joint venture?

 

Many benefits are associated with having the majority or minority position in a joint venture. Having the majority position in a joint venture implies that as a shareholder, you can make most of the decisions concerning the way forwards for the company. Additionally, being the majority shareholder in a company means that you can easily transfer a business and assets to a Joint venture (Piaskowska et al., 2019). Being in the minority position in the joint venture implies that you have few risks that you face in the organization. As a minority shareholder, such a person can transfer the license concerning what is being transferred in the business by the majority shareholder in the organization. The two play a great role in the process of determining the success of the organization.

 

QUESTION 16Knowledge management uses “centers of excellence” in which type of MNE?

 

                a.            Home replication.

 

                b.            Local (multidomestic).

 

                c.             Global.

 

                d.            All of the above.

 

QUESTION 17Managers from a controlling family who divert resources from the firm for family or personal use have engaged in:

 

                a.            CEO duality.

 

                b.            Expropriation.

 

                c.             Stewardship.

 

                d.            Cross-listing.

 

QUESTION 18When faced with the complexity and cost of value-added customer-focused dimensions, the textbook suggests that you:

 

                a.            Simplify.

 

                b.            Create new formal structures.

 

                c.             Find temporary solutions.

 

                d.            None of the above.

 

QUESTION 19Which of the following is true of mergers?

 

                a.            A new legal entity is established.

 

                b.            Control of assets is turned over from one firm to its partner.

 

                c.             Mergers are much more common than acquisitions.

 

                d.            A target firm becomes a unit of the acquiring firm.

 

QUESTION 20Strong ties between alliance partners are:

 

                a.            The initial foundation of many strategic alliances.

 

                b.            Better for exploring new opportunities.

 

                c.             Less costly to maintain than weak ties.

 

                d.            Needed for greater flexibility.

 

QUESTION 21The market for corporate control is another term for the stock market.

 

 True

 

False

 

QUESTION 22A local firm has built a successful business but acknowledges it would be difficult to continue to compete with a large MNE. The MNE makes an offer to buy the local firm’s interests, and the local firm accepts the offer. It is following the:

 

                a.            Defender strategy.

 

                b.            Contender strategy.

 

                c.             Dodger strategy.

 

                d.            Extender strategy.

 

QUESTION 23CSR-related resources are valuable because they are almost always rare.

 

True

 

 False

 

QUESTION 24In comparing M&As with alliances and networks, which of the following is NOT correct?

 

                a.            M&As are costly.

 

                b.            M&As have significant transaction costs.

 

                c.             Many M&As end up destroying value.

 

                d.            Alliances and networks preclude future upgrading into possible M&As.

 

QUESTION 25Which are NOTamong the aspects of globalization?

 

                a.            The focus on governance has been replaced by a focus on shareholder value.

 

                b.            FPI investors demand more protection.

 

                c.             Contact with different governance norms.

 

                d.            The global diffusion of “best practices.”

 

QUESTION 26Firms that have a high degree of resource similarity are likely to have similar strengths and weaknesses.

 

 True

 

False

 

QUESTION 27Describe how a firm goes from a single product to conglomeration and what the primary issues on that journey might be.

 

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QUESTION 28Not all product-related diversifiers outperform product-unrelated diversifiers.

 

True

 

 False

 

QUESTION 29Strategic networks work against other groups, but not against traditional single firms

 

 True

 

False

 

QUESTION 30Expanding overseas often comes at the expense of domestic employees and communities, who are primary stakeholders.

 

True

 

False

 

QUESTION 31Which of the following is a customer-focused dimension?

 

                a.            Knowledge leakage.

 

                b.            Out-of-the-box packaged solutions.

 

                c.             Solutions-based structure.

 

                d.            None of the above.

 

QUESTION 32To improve the odds for success with its acquisitions, a firm should:

 

                a.            Engage its rivals in a bidding war.

 

                b.            Only acquire after participating in an alliance first.

 

                c.             Conduct due diligence concerning strategic and organizational fit.

 

                d.            Look for potential firms with high acquisition premiums.

 

QUESTION 33In some industries where pressures for globalization are relatively low, local firms may possess some skills and assets that are transferable overseas, thus leading to a(n) _____ strategy.

 

                a.            Defender

 

                b.            Dodger

 

                c.             Contender

 

                d.            Extender

 

QUESTION 34The “strategy as action” perspective highlights the power of creative destruction.

 

True

 

 False

 

QUESTION 35The capability to attack in multiple markets throws the firm off balance leaving it vulnerable to rivals and thus reducing value.

 

 True

 

False

 

QUESTION 36Institution-based considerations in governance include all of the following EXCEPT:

 

                a.            Lack of legal protection and its impact regarding large shareholders in emerging economies.

 

                b.            International experience of senior executives.

 

                c.             Formal institutional framework.

 

                d.            Impact of informal norms and values.

 

QUESTION 37In light of industry-based considerations, governances practices need to:

 

                a.            Move toward CEO duality in slow-growth stable industries.

 

                b.            Create a fit with the nature of the firm’s industry.

 

                c.             Increase the number of outside directors for firms in high-growth turbulent industries.

 

                d.            Follow universal best practices.

 

QUESTION 38Why is the concept of “learning by doing” so important to forming alliances?

 

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QUESTION 39A main advantage of a global standardization strategy is that it:

 

                a.            Engages in global learning and diffusion of innovations.

 

                b.            Maximizes local responsiveness.

 

                c.             Leverages low-cost advantages.

 

                d.            Provides for significant local autonomy.

 

QUESTION 40Because knowledge is undoubtedly a resource for any firm, describe the resource-based considerations that go into knowledge management.

 

QUESTION 41The text points out that modern ideas of strategy, pioneered by Michael Porter, have turned IO economics “on its head.” Although IO economics attempts to prevent any firm from gaining sustained competitive advantage, the very purpose of strategy is to gain a sustainable advantage. Is that good or bad?

 

QUESTION 42Milton Friedman, a University of Chicago economist and Nobel laureate, suggested: “The business of business is business.”

 

True

 

 False

 

QUESTION 43According to the textbook, a key goal for CSR is:

 

                a.            community involvement.

 

                b.            global sustainability.

 

                c.             customer support.

 

                d.            profitability.

 

QUESTION 44The driving forces of the CSR school are the widening of the gap between the haves and have-nots and the astonishing speed of technological development.

 

True

 

 False

 

QUESTION 45A main advantage of a global standardization strategy is that it leverages low-cost advantages.

 

True

 

 False

 

QUESTION 46Traits such as goals, experiences, and behaviors of a target firm that complement those of the acquiring firm lead to good organizational fit.

 

 True

 

 False

 

QUESTION 47When a company’s rivals all move toward a global standardization strategy, the strategy:

 

                a.            Makes the rivals more innovative.

 

                b.            Allows for easier imitation of informal structures.

 

                c.             No longer satisfies the resource-based consideration of rarity.

 

                d.            Provides a source of differentiation.

 

QUESTION 48The extraterritoriality aspects of U.S. competition/antitrust policy have:

 

                a.            Benefited U.S. firms much more than foreign firms.

 

                b.            Been primarily directed at the EU.

 

                c.             Significantly curtailed strategic alliances since the 1980s.

 

                d.            Generally become more permissive since the 1980s.

 

QUESTION 49In countries that have weak formal legal and regulatory institutions, concentrated ownership and control:

 

                a.            Mostly benefits minority shareholders.

 

                b.            Are likely to become more diffuse.

 

                c.             Minimizes the occurrence of principal-principal conflicts.

 

                d.            Minimizes the occurrence of principal-agent conflicts.

 

QUESTION 50A non-JV, equity-based alliance can be regarded as two firms “getting married,” but not having “children.”

 

True

 

 False

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