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Site Title: International Management: Managing
Across Borders and Cultures, 8/e
Book Title: International Management: Managing
Across Borders and Cultures, 8/e
Book Author: Deresky
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Chapter 6 > Chapter Quiz
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May 20, 2013 at 3:46 AM (UTC/GMT)
Summary of Results
40% Correct of 30 Scored items:
12 Correct: 40%
18 Incorrect: 60%
3 questions not scored. 30 scored questions.
More information about scoring
1.
A company's choice of business or businesses in which to operate and the ways in
which it differentiates itself from its competitors is its ________.
Your Answer: vision
Correct Answer: strategy
2.
What is a reactive reason for going international?
Your Answer: economies of scale
Correct Answer: trade barriers
3.
What is a proactive reason for going international?
Your Answer: globalization of competitors
Correct Answer: incentives
4.
Which reason would a company be exploiting if it wants to go international in order
to increase volume and to make the fullest use of its capital intensive
manufacturing equipment?
Your Answer: regulations and restrictions
Correct Answer: economies of scale
5.
What is the first step of a strategic management process?
Your Answer: Plans are made based on a strategic choice.
Correct Answer: The company establishes its mission.
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1 of 7 5/19/2013 11:46 PM
6.
Which element of the strategic management process would be considered part of
the implementation process?
Your Answer: choosing the strategy
Correct Answer: setting up controls and evaluation systems
7.
Which element defines the function the company performs in society or its raison
d'etre?
Your Answer: objectives
Correct Answer: mission
8.
Which of the following is a national risk with regard to strategic environmental
scanning?
Your Answer: nationalism
9.
Which level of environmental analysis provides a broad assessment of significant
worldwide trends?
Your Answer: national
Correct Answer: multinational
10.
When conducting environmental scanning, which step should immediately follow the
decision to enter global markets?
Your Answer: Select countries for entry.
Correct Answer: Select geographic regions to evaluate.
11.
After the environmental assessment, the second major step in weighing
international strategic options is called the ________.
Your Answer: environmental assessment
Correct Answer: internal analysis
12.
In which stage of strategic formulation is a SWOT analysis most likely to be
included?
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Your Answer: competitive analysis
13.
Which approach to world markets refers to the establishment of worldwide
operations and the development of standardized products and marketing?
Your Answer: globalization
14.
What is perceived as the greatest benefit to using e-business as a way of expanding
into global business?
Your Answer: rapid entrance into new geographic markets
Correct Answer: expanded sales channels
15.
Which entry strategy involves a company designing and constructing a facility
abroad and then relinquishing control to local management for a fee?
Your Answer: franchising
Correct Answer: turnkey operation
16.
Strategic planning is the process by which a firm's managers evaluate the future
prospects of the firm and decide on appropriate strategies to achieve long-term
objectives.
Your Answer: True
17.
Growth opportunities are a proactive reason for going international where
companies in mature markets in developed countries look for new opportunities in
emerging markets.
Your Answer: False
Correct Answer: True
18.
The first step in the strategic management process involves defining and clarifying a
firm's mission and objectives.
Your Answer: True
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19.
A company's overall objectives flow from the mission and guide the formulation of
international corporate strategy.
Your Answer: True
20.
Financial objectives, on the global level, must take into account differing tax
regulations in various countries and how to minimize overall losses from exchange
rate fluctuations.
Your Answer: False
Correct Answer: True
21.
An environmental assessment determines which areas of the firm's operations
represent strengths or weaknesses.
Your Answer: True
Correct Answer: False
22.
A resource-based view of the firm considers the unique capabilities of the firm
relative to those opportunities or threats for the target location.
Your Answer: True
23.
A globalization approach to world markets is one where local markets are linked
together within a region allowing more local responsiveness and specialization.
Your Answer: False
24.
Due to startup costs, using e-business for global expansion is usually limited to
MNCs.
Your Answer: False
25.
Licensing is an entry strategy a company may use to test out an overseas market.
Your Answer: True
Correct Answer: False
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26.
Contract manufacturing is usually undertaken when there is a cheaper source of
manufacturing overseas and involves contracting for the production of finished
goods or component parts.
Your Answer: True
27.
Joint ventures involve an agreement by two or more companies to produce a
product or service together.
Your Answer: False
Correct Answer: True
28.
Distance from supplier countries is a critical environmental factor when a company
is exporting.
Your Answer: True
29.
An international franchising agreement grants the rights to a firm in the host
country to either produce or sell a product, or both.
Your Answer: True
Correct Answer: False
30.
Based on the research conducted by using more than 10,000 foreign entry activities
into China, researchers Pan and Tse concluded that managers tend to follow a
hierarchy of decision sequence in choosing an entry mode.
Your Answer: True
31.
Explain the reactive and proactive reasons why a firm may look to expand
internationally.
Your Answer:
bl

Reactive reasons: Globalization of competitors- if left unchallenged, competitors
may get entrenched in foreign markets.
Trade barriers- some countries' restrictive barriers make exports to foreign markets
too expensive.
Regulations and restrictions- some companies will seek out less restrictive foreign
operating environments than their home countries.
Customer demands- response to customer demands or a solution to logistic
problems.
Proactive reasons:
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Economies of scale- achieving world-scale volume.
Growth opportunities- looking for growth opportunities in emerging markets
Resource access and cost savings- availability of raw materials, labor costs, etc.
Incentives- governments sometimes provide tax exemptions, tax holidays, loans
etc.
32.
Describe the various steps involved in the strategic management process. List the
steps involved in the strategic planning process and the strategic implementation
process.
Your Answer:
bl

Steps in the strategic management process: It consists of two phases- the planning
phase and the implementation phase.
Planning phase involves the following steps:
(1) Define/clarify mission and objectives.
(2) Assess environment for threats, opportunities.
(3) Assess internal strengths and weaknesses.
(4) Consider alternative strategies using competitive analysis.
(5) Choose Strategy
Implementation phase involves the following steps:
(1) Implement strategy through complementary structure, systems, and
operational processes.
(2) Set up controls and evaluation systems to ensure success, feedback to
planning.
33.
Analyze different strategies and recommend the advantages and disadvantages of
each strategy for a company that decides to explore international markets.
Your Answer:
bl

Entry Strategy Alternatives:
(1) Exporting:
Advantages: low risk; no long-term assets; easy market access.
Disadvantages: depends on distributor.
(2) Licensing:
Advantages: no asset ownership risk; fast market access; avoids regs and tariffs.
Disadvantages: quality of licensee, appropriability of technology.
(3) Franchising:
Advantage: little investment risk
Disadvantage: quality control
(4) Contract manufacturing/offshoring:
Advantages: limited cost and risk; short-term commitment.
Disadvantages: reliability and quality of local contractor; operational control, human
rights.
(5) Service sector outsourcing:
Advantages: lower employment costs.
Disadvantages: quality control
(6) Turnkey operations:
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Advantages: access to high skills and markets; revenue from skills and technology.
Disadvantages: domestic client acceptance; reliable infrastructure.
(7) Management contracts:
Advantage: low risk access.
Disadvantage: opportunity to gain long-term position.
(8) International joint ventures:
Advantages: insider access to market; share costs and risks; leverage partner's skill
base, etc.
Disadvantages: Strategic fit and complementarity of partner; ability to protect
technology; ability to share control; cultural adaptability of partners.
(9) Wholly owned subsidiaries:
Advantages: realize all revenues and control; global economies of scale; strategic
coordination; protect technology.
Disadvantages: Ability to get local acceptance; repatriation of profits.
(10) E-business:
Advantages: Rapid entry into new markets; relatively low risk.
Disadvantages: differences in business models, culture language and laws?)
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