MULTIPLE CHOICE
1.Which are the two primary pressures MNEs confront?
a.Ethics and governance
b.Cost reductions and local responsiveness
c.Liability of foreignness and investment risk
d.Local and foreign government
2.Which is an economic result when an MNE acts locally responsive?
a.The local government is unhappy.
b.Regulations are loosened.
c.Innovations are limited.
d.Costs are increased.
3.The prediction that people around the world would be drinking Coke, wearing Levi jeans, and watching MTV on their Sony TVs was based on which idea?
a.Worldwide increase in GDP
b.Worldwide increase in money used for luxuries
c.Worldwide convergence of consumer tastes
d.Worldwide connectivity with communication technology
4.Which of the following is NOT one of the four strategic choices for MNEs?
a.Localization
b.Global standardization
c.Home replication
d.Asset allocation
5.Which is one of the disadvantages of the home replication strategy?
a.It focuses too much on the home country.
b.It is organizationally complex and difficult to implement.
c.It focuses too much on the foreign country.
d.It has higher costs due to duplication efforts in multiple countries.
6.Which strategy for MNEs is best for environments where there are clear differences between the home and foreign markets and there is a low pressure for cost reduction?
a.Home replication strategyc.Global standardization
b.Localization strategyd.Asset allocation
7.Which strategy for MNEs entering foreign markets is best described as the development and distribution of standardized products worldwide to reap maximum benefits from low cost advantages?
a.Asset allocationc.Home replication strategy
b.Localization strategyd.Global standardization
8.Which strategy is most difficult to implement and is the most organizationally complex?
a.Localization strategyc.Home replication strategy
b.Transnational strategyd.Global standardization
9.Which of the following is a leading problem with the international division organizational structure?
a.It encourages the fragmentation of the MNE into fiefdoms.
b.Foreign subsidiary managers are not given sufficient voice relative to domestic division managers.
c.It is too locally responsive.
d.The management team is duplicated, creating organizational confusion.
10.Which of the following best describes how the transnational strategy uniquely differs in regard to its communication relationship between home country and foreign market?
a.The home country has one-way communication with the foreign market, providing innovation and direction to it.
b.The subsidiaries in the home country and foreign country do not communicate.
c.It seeks to eventually allow the foreign subsidiary to be autonomous, so communication is one-sided.
d.Innovations not only flow from the home country to host countries, but also flow from host countries to the home country and flow among subsidiaries in multiple host countries.
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