1.6 Multinational companies (IB BM)

Identify the most appropriate description of multinational companies (MNCs).

• Companies that have customers in many countries around the world

• Companies that export to more than one country

• Companies that have operations in more than one country

• Companies that are listed on the New York Stock Exchange (NYSE)

Identify the unlikely benefit to a host country due to the arrival of an MNC.

• Jobs and gross domestic product

• Knowledge facilitation and transfers of technology

• Social responsibility and ethical production

• Competition and consumer choice

Identify the statement that best describes globalization.

• Businesses entering new international markets

• Designing a product that meets the needs of a worldwide consumer base

• The individual and unique customs, norms, and traditions of groups of people around the world

• The spread of knowledge, resources, and goods as international borders are reduced

Identify the reason(s) for the growth of MNCs.

• Avoidance of protectionist policies

• Cheaper production costs

• Economies of scale

• All of the above

Identify the challenge(s) to host countries following investment by MNCs.

• i + iii + iv

• i + iv

• ii + iii

• ii + iii + iv

Identify the challenge faced by MNCs when expanding globally.

• Change in size of the customer base

• Economies of scale

• First mover advantage

• Variations in legal requirements

Identify the term given to an alliance between national governments to remove protectionism and to liberalise trade.

• Strategic alliance

• Trading bloc

• Trade diversion

• World Trade Organization (WTO)

Identify the difference between a multinational company and a transnational corporation.

• Multinationals are publicly held companies, whereas transnationals are privately held companies

• Multinationals maintain a centralised office for global coordination, whereas transnationals operate individually within each country

• Multinationals operate in two countries, whereas transnationals operate in ten or more countries

• Multinationals operate in both developed and developing countries, whereas transnationals operate in developed countries only

Identify the 5 countries, known as BRICS, with emerging yet powerful economies, thereby creating many business opportunities for multinational companies.

• Bangladesh, Russia, India, Chile, Saudi Arabia

• Bangladesh, Rwanda, Indonesia, Colombia, South Africa

• Belarus, Russia, Indonesia, Cuba, Singapore

• Brazil, Russia, India, China, South Africa

Identify the country that is home to most of the world’s largest multinational companies.

• China

• Japan

• United Kingdom

• United States of America