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Management
Q:
Is foreignness a liability or an asset? What causes it to be one or the other?
Q:
According to the textbook, what is most necessary to overcome the liability of foreignness?
a. Grasping the dynamism underlying the industry.
b. Developing overwhelming resources and capabilities.
c. Understanding the rules of the game.
d. Matching market entry efforts with strategic goals.
e. Creating good relationships with key stakeholders.
Q:
Emerging MNEs do not always fit into the traditional framework of successful multinationals, but are falling under a new theory called the LLL advantage. Which of the following is NOT part of that theory?
a. Location.
b. Leverage.
c. Linking.
d. Learning.
Q:
The liability of foreignness sometimes has a positive effect on customers perception and their desire for products from a certain country. This concept is known as:
a. Strategic hedging.
b. Country-of-origin effect.
c. OLI advantage.
d. Co-marketing.
Q:
Greenfield operations refer to:
a. Wholly owned subsidiaries.
b. Turnkey projects.
c. R&D contracts.
d. Co-marketing.
Q:
Which is NOT true of joint ventures?
a. They are jointly owned by two or more parent companies.
b. They share risks with local partners.
c. They gain access to the local partners knowledge about the host country.
d. They are politically less acceptable than wholly owned subsidiaries.
Q:
Selling the rights to intellectual property for a royalty fee happens with:
a. Licensing/franchising.
b. Turnkey projects.
c. R&D contracts.
d. Co-marketing.
Q:
All of the follow are true of direct exports EXCEPT:
a. Most basic mode of entry.
b. Capitalizes on economies of scale in production concentrated in the home country.
c. Affords better control over distribution.
d. The agendas and objectives of the intermediaries and exporters are the same.
Q:
Non-equity modes of entry typically involve:
a. Exports and contractual agreements.
b. Larger, harder-to-reverse commitments.
c. Establishing independent organizations overseas.
d. Joint ventures (JVs).
Q:
Small-scale entries normally benefit by their:
a. Unlimited upside risk.
b. Emphasis on learning by doing.
c. Strong strategic commitment.
d. First mover advantages.
Q:
Large-scale entries do which of the following?
a. Benefit from a strategic commitment.
b. Assure local customers and suppliers.
c. Deter potential entrants.
d. None of the above.
Q:
One of the factors that explains why exporters choose intermediaries primarily is:
a. The development of proprietary, technological leadership.
b. Information asymmetries concerning foreign markets.
c. Intermediaries share the same objectives as exporters.
d. Indirect exports provide more information about product performance overseas.
Q:
The ________ strategy treats foreign demand as an extension of domestic demand.
a. Turnkey operations.
b. Direct exporting.
c. Greenfield operations.
d. Joint venture.
Q:
Which of the following would NOT be considered an advantage of MNEs?
a. Ownership.
b. Internalization.
c. Barriers.
d. Location.
Q:
A key dimension in foreign entry decisions is the amount of resources committed to entering the foreign market, referred to as:
a. Scale of entry.
b. Regulatory risk.
c. Regulatory risk.
d. Local content requirement.
Q:
Which of the following would NOT be considered a drawback of small-scale entry into a foreign market?
a. Lack of strong commitment.
b. Learning by doing.
c. Difficulties in building market share.
d. Inability to capture first-mover advantage.
Q:
First-mover preemptive investments would include:
a. Avoiding scarce resources.
b. Finding free-ride opportunities.
c. Waiting for market uncertainties to be resolved.
d. Cherry picking leading local suppliers and distributors.
Q:
The first-mover advantage of a company such as Amazon is:
a. Developing proprietary, technological leadership.
b. Opportunity for a free ride.
c. Resolution of market uncertainties.
d. Lowering the barriers to market entry.
Q:
Late-mover advantages do not include:
a. Taking a free ride on first movers investments.
b. Joining the game with massive firepower when some of the uncertainties are removed.
c. Preempting scarce assets.
d. Taking advantage of first movers inflexibility by leapfrogging over them.
Q:
What were the four implications for action by the savvy entrepreneur listed in the text? Which is the most important for the entrepreneur? Which is the easiest and fastest for that person to implement?
Q:
How many people have you known who established an SME because he/she wanted to be his/her own boss? How many of them actually worked more hours and had less vacation time than if they worked for someone else? How many had to make sacrifices for at least the first few years in terms of income and time with their family as compared to what their situation would likely have been otherwise? What appears to have motivated them? If you have not known anyone like that, what do you think would drive otherwise rational people to become their own boss?
Q:
Describe the strategies of internationalization based on the stage model and the born-global model.
Q:
How do firms looking to go global make use of franchising and licensing? What advantages and disadvantages might these firms encounter?
Q:
Suppose you are convinced that you have a product/service that has a huge overseas potential but your funds are limited and you do not wish to seek partners, investors, or creditors to exploit the opportunity. What can you do?
Q:
Suppose you have formed a company that is pursuing a product or service that is the current hot fad among investors and it appears that you could quickly enhance your personal wealth as well as quickly provide funds for your company through an IPO. It seems like an awesome opportunity. However, why might you wish to turn it down?
Q:
One of the obstacles start-up firms often face is liability of newness. In what way might a network strategy be used to overcome liability of newness and other challenges?
Q:
Provide two examples, one of a firm in a developed country and one of a firm in a poor country, of how institution-based considerations affect entrepreneurship.
Q:
Describe how the industry-based, resource-based, and institutional-based views of strategy contribute to a comprehensive model of entrepreneurship.
Q:
Innovation is at the heart of an entrepreneurial mindset and important to success. However, what if a person does not tend to be creative? Should that person not consider forming an SME? What approaches can follow that will likely enable such a person to be more innovative than would otherwise have been the case?
Q:
Which of the following traits would tend to prevent entrepreneurs from establishing new firms?
a. Strong desire for achievement.
b. Strong locus of control.
c. Willingness to take risks and tolerate ambiguity.
d. None of the above.
Q:
In the process of internationalization, which model states that firms must enter culturally and institutionally close markets first, spend enough time there to accumulate overseas experience, and then gradually move from exports to more sophisticated strategies?
a. The stage model.
b. The born-global model.
c. The experiential model.
d. The leveraged model.
Q:
As government policies in China became more friendly toward entrepreneurship:
a. Social norms still restrict most entrepreneurial activity.
b. Institutional transitions have encouraged more entrepreneurship.
c. The risk avoidance culture has completely altered.
d. None of the above.
Q:
An individuals characteristics and actions of entrepreneurship are based:
a. Almost entirely on personal traits.
b. Almost entirely on situational factors.
c. On a relatively universal standard psychological and personality profile.
d. On both factors of nurture and nature.
Q:
Which normally provides the most control over technology and brand?
a. Direct investment.
b. Licensing.
c. Franchising.
d. There is no difference in any of the above.
Q:
Which of the following involves the most complexity?
a. Direct exporting.
b. Franchising.
c. Direct investment.
d. Licensing.
Q:
Which of the following is TRUE about the influence of micro institutions in entrepreneurial activity?
a. Family background and educational attainment do not correlate with entrepreneurship.
b. Entrepreneurship is primarily the result of nurture rather than nature.
c. Children of wealthy parents are less likely to start their own firms.
d. The informal norms of an individuals socioeconomic group affect that persons entrepreneurial propensity.
Q:
Which of the following best describes Foreign Direct Investment (FDI)?
a. Avoiding the use of financial intermediaries such as brokers.
b. Firm invests directly in production or service activities in another country.
c. Traveling to a country to invest instead of using the Internet.
d. The use of cash instead of credit.
Q:
The sale of products made by entrepreneurial firms in their home country to customers in other countries is best described as:
a. Direct exporting.
b. Indirect exporting.
c. Franchising.
d. None of the above.
Q:
In a manufacturing setting, the purchase of the right to use another firms proprietary technology is referred to as:
a. Direct exporting.
b. Licensing.
c. Franchising.
d. Importing
Q:
Suppose you are an SME with limited financial resources. In view of that, your best choice for entering foreign markets would be:
a. Foreign direct investment.
b. Licensing or franchising.
c. Direct exporting.
d. None of the above.
Q:
Which of the following is TRUE regarding internationalizing firms?
a. Only large MNEs are able to internationalize successfully.
b. SMEs do not operate solely in domestic markets.
c. Opportunism is easy to detect and remedy in international markets.
d. Transaction costs do not prevent large firms from internationalizing.
Q:
A firm becomes a supplier to a foreign firm that enters the domestic market, which is an example of:
a. Direct exports.
b. Internationalizing in the domestic market.
c. Franchising.
d. Harvesting.
Q:
When it comes to entering foreign markets, most SMEs will:
a. Only be able to internationalize through franchising.
b. Not struggle with either the domestic market or the foreign markets.
c. Be unable to do so.
d. Aggressively seek to go abroad.
Q:
SMEs can enter foreign markets through:
a. Direct exports.
b. Licensing and franchising.
c. Foreign direct investment.
d. All of the above.
Q:
When considering domestic transactions costs:
a. Born global firms are the most effective form of entrepreneurialism.
b. Entrepreneurship is the exclusive domain of small, young firms.
c. International costs are qualitatively higher.
d. Costs related to opportunism are not relevant.
Q:
Born global firms are:
a. Not generally subject to transaction costs.
b. Generators of much of the worlds employment.
c. Firms that attempt to do business aboard from their inception.
d. Firms that have great difficulty internationalizing.
Q:
With growth as an entrepreneurial strategy, a firm can:
a. Leverage its vision and drive in order to grow.
b. Generally rely on its plentiful tangible financial resources.
c. Eliminate overused resources and capabilities.
d. Focus primarily on an industry-based view of strategy.
Q:
The number of corporate bankruptcies during the Great Recession of that began in 2008:
a. Has been limited to very small firms.
b. Has been limited mostly to very large firms.
c. Is only noticeably high in less developed countries.
d. Has climbed to new heights.
Q:
A potential benefit of an initial public offering (IPO) is that it:
a. Can increase firms financialSTAbility.
b. Focuses on short-term results.
c. Leads to increased scrutiny by stakeholder groups.
d. Increases an entrepreneurs freedom of action.
Q:
Which of the following is NOT an example of one of the five entrepreneurial strategies?
a. Use speed and stealth to disrupt and pre-empt competitors.
b. Emphasize analysis over action.
c. Less novel, but substantially new ways of doing business can also be innovative.
d. Centrally located network positions are most helpful.
Q:
Following an IPO, an entrepreneur:
a. Has more control of their firm.
b. No longer faces the demands of periodic reporting.
c. Is forced to focus on the long term.
d. Is subject to new fiduciary responsibilities to shareholders.
Q:
Which of the following would NOT be considered a route of entrepreneurial harvest and exit?
a. Declaring bankruptcy.
b. Engaging a venture capitalist.
c. Merging with another firm.
d. Considering an initial public offering.
Q:
Loans in small amounts of US$50US$300 that made with the intention of helping lift entrepreneurs out of poverty are called:
a. Equity stake.
b. Microloans.
c. Venture capital.
d. Initial public offering.
Q:
One of the best ways for an entrepreneurial firm to overcome the liability of newness is:
a. Take the firm through an initial public offering (IPO).
b. Draw on entrepreneurs social networks.
c. Follow a specialized form of differentiation strategy.
d. Use currently underutilized resources and capabilities better.
Q:
Of the five entrepreneurial strategies, which one addresses the liability of newness?
a. Growth.
b. Innovation.
c. Network.
d. Harvest.
Q:
One general conclusion that we can reach regarding entrepreneurship is that:
a. Regulatory burdens on newSTArt-ups are much easier in poorer countries.
b. The less entrepreneur-friendly a countrys formal institutional requirements are the more likely entrepreneurship will contribute to economic development.
c. Collectivistic societies may result in relatively higher levels of entrepreneurship.
d. Individualistic and low uncertainty-avoidance societies tend to foster relatively more entrepreneurship.
Q:
An SME would be the least likely to enhance its credibility through:
a. Specializing in standardized commodities such as books and airline tickets.
b. Using e-commerce sites.
c. Dealing in products in which quality is an issue with consumers.
d. Forming strategic alliances with larger firms.
Q:
To achieve success, entrepreneurial resources must be:
a. Of low value so as to reduce cost.
b. Common.
c. Non-core competencies that are hard to imitate.
d. Organizationally embedded.
Q:
New entrepreneurial firms:
a. Benefit from greater bargaining power of suppliers.
b. Are not noticeably affected by a societys informal institutions.
c. Tend to cluster around low-entry-barrier industries.
d. View interfirm rivalry in an industry as a motivating factor in entering an industry.
Q:
Which would tend to result in a greater level of entrepreneurship?
a. Fewer numbers of incumbents.
b. Capital-intensive industries.
c. Weak bargaining power of suppliers.
d. Ability to reduce the bargaining power of buyers.
Q:
According to the institution-based view
a. It is relatively easy to establish a start-up in any country.
b. Both formal and informal institutional constraints affect entrepreneurship.
c. Governments in less developed countries tend to impose fewer procedures, resulting in lower total cost.
d. Flourishing entrepreneurship is unrelated to the level of development in a country.
Q:
When an industry is conducive for entry:
a. Entrepreneurs need not understand the nature of the industry prior to entry.
b. Entrepreneurial success is almost guaranteed.
c. Firm-specific resources and capabilities are important.
d. Product rarity and inimitability are not important.
Q:
Which of the following situations would offer the greatest opportunity for entrepreneurs?
a. Substitute products that redefine the game.
b. Products that increase the bargaining power of buyers.
c. A product that is easily imitated.
d. High uncertainty avoidance
Q:
Among the resource-based considerations of entrepreneurship is:
a. The industrys entry and exit barriers.
b. The bargaining power of suppliers and buyers.
c. The cultural values and norms of a society.
d. The aspects of value and rarity.
Q:
The comprehensive model of entrepreneurship involves which of the following perspectives?
a. Transaction costbased.
b. MNE-based.
c. Institution-based.
d. Accounting-based.
Q:
Entrepreneurship involves which of the following?
a. The sources of opportunities.
b. The processes of discovery, evaluation, and exploitation of opportunities.
c. The set of individuals who discover, evaluate, and exploit those opportunities.
d. All of the above.
Q:
SMEs are;:
a. Rarely entrepreneurial.
b. The exclusive domain of entrepreneurship.
c. On average, more entrepreneurial than large firms.
d. Reclassified as MNEs within 25 years.
Q:
Which of the following is NOT true in regards to small and medium-sized enterprises (SMEs).
a. They create approximately 50% of total value added in the world.
b. They generate 6090% of employment, depending on where they are located.
c. Each year 46% of the adult working population in North America, Western Europe, Central and Eastern Europe attempt to start a new venture.
d. Around the world, a majority of entrepreneurial firms (including 60% of start-ups in the United States) succeed within 6 years.
Q:
Which of the following best describes entrepreneurs?
a. Those who identify and exploit imitable opportunities.
b. Founders and owners of new businesses.
c. Managers of large existing firms (i.e. those with more than 500 employees).
d. Individuals with proactive, risk-avoiding behaviors.
Q:
Behavior of entrepreneurs differs from non-entrepreneurs.
a. True
b. False
Q:
Personal traits of entrepreneurs are no different from those of non-entrepreneurs.
a. True
b. False
Q:
Entrepreneurs and their firms are engines of the creative destruction process.
a. True
b. False
Q:
The industry-based view argues that institutional frameworks explain the differences in entrepreneurial and economic development around the world.
a. True
b. False
Q:
Institutionally, it makes sense to design entrepreneur-friendly bankruptcy policies that encourage failed entrepreneurs toward future entrepreneurial ventures.
a. True
b. False
Q:
Without exception, it is better for entrepreneurs to start the internationalization process as soon after founding as possible to avoid the inertia of domestic orientation.
a. True
b. False
Q:
The percentage of Europeans is high and due primarily to their risk-taking entrepreneurial culture.
a. True
b. False
Q:
Harsh bankruptcy laws become exit barriers but not significant barriers to entry.
a. True
b. False
Q:
One problem for failed entrepreneurs is that many will not acknowledge failure and thus avoid exiting the business despite escalating losses.
a. True
b. False
Q:
It is much easier for entrepreneurs to walk away from debts incurred in failed/bankrupt ventures in Germany and Japan than in the United States.
a. True
b. False
Q:
There are no hard and fast rules on whether entrepreneurial firms should internationalize rapidly or slowly.
a. True
b. False