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WorksheetsFINAL IMM
Total questions: 90
Worksheet time: 45mins
Strategic management can be defined as:
a process of setting written long-term profit plans for the organization.
a process of measuring performance of the organization.
a process of operational planning.
a process of setting long-term direction for the organization.
A global - as opposed to international - strategy involves:
a wide variety of business strategies across countries.
a single strategy for a subsidiary of a multinational firm.
a single strategy for the entire global network of subsidiaries and partners.
a wide variety of subsidiary strategies within the global network of subsidiaries.
Which of the following is NOT an example of a global strategy?
The British subsidiary of global insurance group Aviva develops a new product for the UK market.
IKEA sells standardized, Swedish designed, self-assembly furniture products at low price.
LVMH sells luxury goods made in France.
Walmart withdraws from Germany in order to avoid changing its global strategy of selling low-priced products.
Alan Rugman said that:
Trade between nations is conducted at global and local levels.
Most multinational firms have a global strategy.
Most multinational firms have a local strategy.
Most economic activity is regional - not global.
Which of the following is NOT a dimension of global strategy?
Localization
Coordination and configuration
Standardization
Integration
What three broad factors determine global strategy of multinational firms?
Local globalizing drivers, industry globalizing drivers, internal globalizing drivers
Cultural globalizing drivers, industry globalizing drivers, global orientation
Industry globalizing drivers, internal globalizing drivers, global orientation
Macro globalizing drivers, industry globalizing drivers, internal globalizing drivers
What are the four industry globalizing drivers?
Market drivers, cost drivers, government drivers, and localization drivers
Market drivers, cost drivers, government drivers, and competitive drivers
Market drivers, cost drivers, competitive drivers, bargaining drivers
Market drivers, cost drivers, competitive drivers, regionalization drivers
A global consumer culture means that:
cultural traditions and values are converging around the world.
consumers are becoming very similar around the world.
there is a world-wide demand for the same global brands.
national cultures are disappearing around the world.
Global economies of scale arise when:
a product or a process can be globally performed using cheap labour.
a product or a process can be performed more cheaply thanks to alliances with multinational firms in other sectors.
a product or a process can be performed more cheaply at greater volume than at lesser volume.
a product or a process can be performed more cheaply thanks to globally performed cross-business cost-saving activities.
Governments can encourage globalization of industries by:
increasing tariffs and regulations
creating common international technical standards
subsidising domestic firms that expand internationally
subsidising foreign firms that invest in their country
Strategic fit can be defined as:
developing strategies based on opportunities and threats in the external environment.
forecasting opportunities and threats in the external environment.
reacting to strategic opportunities and threats in the external environment.
matching the resources and activities of a firm to the external environment.
PEST analysis is:
a broad framework to help managers understand the environment in which their business operates.
a checklist to ask how political, economic, strategic or technological developments can influence an industry and a company.
a checklist for forecasting political, economic, strategic or technological factors.
a framework for strategic analysis of internal and external environment.
Which of the following is NOT an example of a political risk?
Government regulations
Cost of production
War
Civil unrest
Multinational firms engaged in corruption:
are normally more successful than those that are not engaged in corruption.
are likely to become less innovative.
can expand faster in global markets.
Are always small- and medium-sized enterprises.
Technology scanning refers to:
strategies of multinational firms based on technologies.
locating a firm's research centres in countries or regions where relevant cutting-edge research is pursued.
a framework for strategic planning in the knowledge economy.
the process of identifying technologies in the external business environment.
Michael Porter has argued that:
the logic of old economy strategies remains the same for internet-based companies.
the internet did not bring new types of products/services or large efficiency gains.
the internet does not matter to global competition.
the internet does not help to improve company operations.
Multinational firms must develop global strategies based only on home demand conditions.
True
False
The Diamond Model suggests that four factors determine a firm's competitive advantage:
1) home demand conditions; 2) home supply conditions; 3) firm strategy and structure; 4) supporting industries.
1) home demand and factor conditions; 2) firm strategy, structure and rivalry; 3) related industries; 4) supporting industries.
1) home demand conditions; 2) home factor conditions; 3) firm strategy, structure and rivalry; 4) related and supporting industries.
1) home demand conditions; 2) home supply; 3) firm strategy; 4) related and supporting industries.
The idea of a Double Diamond suggests that managers of a multinational firm based in a small country should:
no longer pay attention to home demand and factor conditions.
develop corporate strategies around global products and services targeted at niche markets.
assess the conditions of competitiveness in both their home country and the large neighbouring country when developing corporate strategies.
move their corporate headquarters from their home country to the large neighbouring country.
What is the purpose of the CAGE framework?
The CAGE framework investigates to what extent home demand, home factor conditions and domestic rivalry are important to multinational firms.
The CAGE framework analyses bilateral differences and commonalities between two countries.
The CAGE framework is a broad framework to help managers understand the environment in which their business operates.
The CAGE framework a checklist for forecasting political, economic, strategic or technological factors.
Strategic group analysis refers to:
identifying similarities and differences between groups of people who buy and use your firm's goods and services.
identifying strategies for groups of multinational firms.
identifying strategies for similar groups of firms.
identifying firms with similar strategies or competing on similar bases.
Mobility barriers are:
barriers which prevent other firms entering the strategic group and threatening the existing members.
barriers which constrain the mobility of multinational firms in foreign markets.
barriers related to the human tendency to reject unfamiliar or negative information.
barriers between countries that prevent multinational firms from crossing borders.
Michael Porter has argued that the most important determinant of a firm's profitability is/are:
Conditions in the home diamond
Industry attractiveness
Economies of scale
Bargaining power
The Five Forces Model can be used to:
plan a firm's global strategy based on internal firm resources
understand a firm's strategic internal assets in global markets or regional markets
analyse a firm's competitive position in a specific market segment or similar market segments.
explain why industry change may force firms to relocate parts of their business to other countries
Obstacles which potential newcomers would encounter when entering a market are called:
Economies of scale
Mobility barriers
Buyer switching costs
Barriers to entry
Which of the following is NOT an example of barriers to entry?
Buyer switching costs
Economies of scale
Product differentiation
Expected retaliation
The concept of the International Product Life Cycle suggests that:
Every basic product evolves through a cycle of roughly four stages-introduction, growth, maturity, and decline-which correspond to the rate of growth of industry sales.
The shelve life of a product depends on international product competition.
International products are first designed by innovative developing countries and then are exported to developed country markets.
Products go through an international life cycle, during which a developed country is initially an exporter, then loses its export markets, and finally could become an importer of the product from developing countries.
The International Product Life Cycle does not apply to non-standard industrial products such as:
Ship-building
Luxury products
Televisions
DVD players
Forecasts are:
complex exercises to understand the causes of and interrelationships among new trends.
mental pictures of future scenarios.
educated assumptions about future trends and events.
hypothetical sequences of events constructed for the purpose of focusing attention on causal processes and decision points.
Which multinational firm pioneered the use of scenarios?
British Airways
Shell
Hewlett Packard
Sony
Google.com is an example of a firm that:
adapted well to the business environment within its industry.
changed the business environment within its industry.
applied the VRIO framework in global strategic planning.
applied the SWOT Analysis in global strategic planning.
The resource-based perspective suggests that unique firm resources should be the starting point for developing successful strategies.
the business opportunity should be the starting point for developing successful strategies
unique firm resources should be the starting point for developing successful strategies.
both business opportunity and unique firm resources should be the starting point for developing successful strategies.
neither business opportunity nor unique firm resources should be the starting point for developing successful strategies.
SWOT is an abbreviation for:
Internal Strengths (S), Internal Weaknesses (W), External Opportunities (O), External Threats (T).
Integrated Strategies (S), Integrated Weaknesses (W), External Opportunities (O), External Threats (T).
External Strengths (S), External Weaknesses (W), Internal Opportunities (O), Internal Threats (T).
External Strengths (S), Internal Weaknesses (W), External Opportunities (O), Internal Threats (T).
The concept of core competencies was originally devised by:
Michael E. Porter
John Dunning and John Child
C. K. Prahalad and Gary Hamel
Jay B. Barney
The VRIO framework can be used to identify:
a firm's resources and external opportunities.
the organizational structure of multinational firms.
a firm's technical resources.
a firm's core competencies.
Dynamic capabilities refer to:
the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.
the link between subsidiary resource and multinational firm's competitive advantage in global markets.
the firm's dynamic capability to find resources that are valuable, rare, difficult to imitate and can be exploited by the organization.
the combination of individual technologies and production skills that underlie a company's multiple production lines and critically underpin the firm's competitive advantage.
Value added is:
the cost saving through production and marketing efforts within the firm.
the value that a firm adds through the development of dynamic capabilities.
the value that a firm adds to bought-in materials and services through outsourcing.
the difference between the cost of inputs and the market value of outputs.
Global value systems are sometimes referred to as:
Global value added
Global resource systems
Global value chains
Global capability linkages
The systematic collection of information about rivals in order to assist the development of firm strategies is called:
Competitor intelligence
Internal benchmarking
Benchmarking
Functional benchmarking
Functional benchmarking involves:
benchmarking your competitors.
benchmarking global competitors in your industry.
benchmarking organizations with regards to specific business activities or processes.
benchmarking other multinational firms with similar corporate strategies or similar customers.
Internationalization stimuli refer to:
internal motives for foreign investment.
internal organizational factors arising from within the organization that influence a firm's decision to initiate, develop, and sustain international business activities.
a multinational firm's motives for establishing an investment in a foreign location.
internal and external factors that influence a firm's decision to initiate, develop, and sustain international business activities.
First mover advantage suggests that:
pioneering businesses are able to obtain higher profits and other benefits as the consequence of early market entry.
first mover firms expand more rapidly in international markets than late movers in international markets.
competing multinational firms enter an important market when a market is growing very fast.
multinational firms with first mover advantages have greater strategic incentives for investing in technical innovations than late movers.
The difficulties as a result of the different norms and rules that constrain human behaviour are called:
Liability of expansion
Liability of foreignness
Liability of smallness
Liability of newness
High psychic distance can:
encourage the firm's international expansion into a given country.
encourage the firm's foreign investments in new international markets.
discourage the firm's use of strategic alliances.
discourage the firm's international expansion into a given country.
The Uppsala Model can help to understand:
a firm's initial choice of international location and its mode of entry into foreign markets.
a firm's level of psychic distance and its ability to invest in distant foreign markets.
the role of psychic distance and internationalization stimuli in the international expansion of firms.
a firm's ability to overcome the liability of foreigness in its international expansion.
A Born Global firm is a firm that:
develops international new ventures from its birth by using outsourcing from foreign locations in multiple countries.
overcomes psychic distance and the liability of foreigness by investing in foreign locations in multiple countries.
ignores the challenges of psychic distance and the liability of foreigness when planning its expansion to foreign locations in multiple countries.
from its birth seeks competitive advantage by using resources from different countries and by selling its products in multiple countries.
Which of the following is NOT a mode of entry into foreign markets?
Export
Internationalization
International joint venture
Franchising
Franchising involves:
the transfer of patented information and trademarks, information and know-how as well as information needed to sell a product or service.
the use of franchising for licensing new technologies in global markets.
the transfer of a business concept, with corresponding operational
Horizontal and Vertical are types of:
Greenfield strategy
Licensing and franchising
Mergers and acquisitions
Greenfield investments
De-internationalization can be the result of two different processes:
Strategic decision-making and operational decision-making
Company failure and strategic decision-making
A forced process and a semi-forced process
A voluntary process and strategic decision-making
Which of the following is NOT a strategic alliance?
Joint marketing campaign
Cooperative product development
Joint venture
Merger
What is the most frequent internal motive for a strategic alliance?
Resource need
Risk limitation
Cost minimization
Current poor performance
A partnership between companies in different lines of business, is called:
Vertical integration alliance
Diversification alliance
Shared supply alliance
International expansion alliance
An alliance between a supplier and a buyer that agree to use and share skills and capabilities in the supply chain, is called:
Diversification alliance
Shared supply alliance
Complementary alliance
Vertical integration alliance
What is the most important criterion for selecting an alliance partner?
Alliance partner must help the company towards a competitive advantage.
Alliance partner must be a multinational firm with a global market presence.
Alliance partner must come from the same culture.
Alliance partner must have similar assets.
An optimal business partner in a successful international strategic alliance should have two key qualities:
Corporate culture fit and national culture fit
Partner-related criteria and task-related criteria
Cultural fit and trust
Strategic fit and cultural fit
Why do alliances between a large Western multinational firm and an emerging economy firm often fail?
The cultural gap between partners is too large.
The partner objectives are very divergent.
The company size of partners is very different.
The organizational cultures of partners are different.
What is 'strategic control'?
Control over the production process within an organization, in the sense of determining how the employees of an organization perform their work.
The process by which one entity influences, to varying degrees, the behaviour and output of another entity through informal mechanisms.
Control over the means and methods on which the whole conduct of an organization depends.
Control over the production process within an organization, in the sense of determining how informal practices are performed.
The average life span for a strategic alliance is about:
10 years
3 years
7 years
5 years
What advantage comes from trust between alliance partners?
Trust enables partners to enter into detailed formal contracts.
Trust makes partners more willing to share information.
Trust increases relational risks.
Trust causes partners to cheat on each other.
What are the two types of change management?
Real change and superficial change
Incremental change and circular change
Radical change and transformational change
Incremental change and transformational change
In high collectivist cultures, leaders need to emphasize:
Long-tem implications of the change on the wider community
Short- tem implications of the change on the wider community
Material implications of the change on the wider community
Personal implications of the change on the wider community
In high power distance cultures:
change tends to be implemented top down.
change tends to be implemented bottom up.
leaders must consult lower level employees.
change tends to be implemented horizontally.
A change agent is the individual who:
supports change.
opposes change.
initiates change.
helps implement change.
In feminine cultures leaders need to emphasize:
the impact of change on quality of life.
the impact of change on power distribution.
the impact of change on disposable income.
the impact of change on personal relationships.
The three stages of the change process are:
unfreezing, adjustment, and refreezing.
adjustment, unfreezing, and refreezing.
adjustment, unfreezing, and re-adjustment.
adjustment, re-adjustment, and unfreezing.
The five stages of the coping cycle are (in order):
Denial, defence, discarding, adaptation, internalization
Defence, denial, discarding, adaptation, internalization
Denial, resistance, discarding, adaptation, internalization
Denial, defence, resistance, adaptation, internalization
Dunphy and Stace (1993) identified:
Three styles of change management
Two styles of change management
Four styles of change management
Five styles of change management
What is NOT one of the five stages of the negotiation process?
Preparation,
"Getting to know you"
Persuasion
Communication
Transformational change is often carried out:
by middle managers.
top down.
bottom up.
after extensive consultation.
Transformational change is often carried out:
by middle managers.
top down.
bottom up.
after extensive consultation.
Innovation is defined as:
the commercialization of a new product or process.
the invention of a new product or process.
a new product or process idea.
the implementation of a new production method.
Process innovation refers to:
the development of a new service.
the development of a new product.
the implementation of a new or improved production method.
the development of new products or services.
Innovation can help to provide a temporary competitive advantage when:
barriers to entry are high.
barriers to imitation are low and intellectual property rights are difficult to enforce.
there are few other competitors.
barriers to entry are low.
Following establishment of a dominant design in the product life cycle, what would you expect to happen?
Emphasis on product innovation rather than process innovation.
Emphasis on process innovation rather than product innovation.
Competition to increase as new firms enter the industry.
Competition to decrease as more firms exit than enter the industry.
Established firms relative to new firms are better at:
all types of innovation.
innovation which is competence-enhancing.
innovation which is competence-destroying.
Innovation which is disruptive.
In which markets are network effects likely?
Markets subject to increasing returns
'Tippy' markets
Hi-tech product markets
All of the above
Which of the following are valuable in a standards war?
Competitive advantage
Late mover advantage
Early mover advantage
Technological advantage
The fundamental challenge of knowledge transfer in multinational firms is:
transferring explicit knowledge across borders.
transferring tacit knowledge across borders.
creating tacit knowledge in overseas subsidiaries.
transferring tacit and explicit knowledge across borders.
What potential advantages can be gained from involving overseas subsidiaries in R&D activities?
Local subsidiaries offer financial advantages such as lower land and labour costs.
Local subsidiaries offer access to local companies.
Local subsidiaries offer access to technical knowledge and skills.
Local subsidiaries offer financial advantages as well as access to local markets, technical knowledge and skills.
Outsourcing of innovation globally is more likely where:
Innovations are autonomous
Innovations are systemic
Innovations are systemic or autonomous
Innovations are made by service sector firms
All definitions of Corporate Social Responsibility recognize that:
companies have a responsibility for their impact on society and environment.
the natural environment should be the main focus of CSR activities.
business ethics is a complex issue.
companies must pay equal attention to business ethics and sustainability.
Who said that the 'only one social responsibility of business is to increase profits'?
Edward Freeman
Milton Friedman
Michael Porter
Michael Freeman
What is the main characteristic of the stakeholder approach?
The idea that many different groups have a legitimate interest in the corporation
It is a critical perspective on corporations and business.
A focus on social and environmental responsibilities of a corporation.
The assumption that shareholders are not the main stakeholders in the corporation.
What are the four generic strategies of social responsiveness?
Proaction, Defensive, Reinvestment, Reaction
Reaction, Defence, Reinvestment, Proaction
Reaction, Defence, Investment, Withdrawal
Reaction, Defence, Accommodation, Proaction
Michael Porter and Mark Kramer said that:
Social responsibility does not matter for firm strategies.
Socially responsible firms act against the interests of shareholders.
Social responsibility can help firms to discover future business opportunities.
Social responsibility is a long-term investment in a company's advertising and public relations.
Which of the following is NOT an example of a genuine business innovation?
Development of less polluting fuel
Investment in alternative energy sources
New product targeted at low-income customers
Charitable donation to an ecological organization
Opportunities for social innovation are greatest when:
CSR is aligned with a firm's core skills and capabilities.
CSR spending of a firm is larger than that of its competitors.
CSR is pursued by a firm to improve its reputation.
CSR is pursued by a firm to enhance human capital.
What are the three levels of innovation?
New product creation, new market creation, leadership
In-market innovation, new market creation, leadership
New product creation, new market creation, new reputation
New product creation, new market creation, pioneering
Which of the following is an example of new market creation?
Development of a low-emission fuel for motorbikes by an oil company.
Development of a cheaper drug by a pharmaceutical company.
Design of an environmentally friendly building by a construction company.
Creation of microfinance services to poor creditors by a bank.
