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Q:
Most scholars now agree that entrepreneurship is a result of both nature and nurture.
a. True
b. False
Q:
Children from wealthy families are less likely to start new businesses.
a. True
b. False
Q:
The personal traits of entrepreneurs have been the primary motivating force in China and Southeast Asia, not the environments that set formal and informal rules.
a. True
b. False
Q:
Franchising is seen more often in manufacturing industries than in servicing industries.
a. True
b. False
Q:
Entrepreneurial firms cannot actually internationalize without entering foreign markets.
a. True
b. False
Q:
One of the ways an SME can internationalize to is through becoming a supplier to a foreign firm that is entering a domestic market.
a. True
b. False
Q:
For start-ups, being acquired by foreign entrants to the market may help preserve the business in the long run.
a. True
b. False
Q:
Indirect exporting can be achieved through export intermediaries.
a. True
b. False
Q:
FDI lowers firm performance more than other forms of entry (over the long term).
a. True
b. False
Q:
As a general rule, entrepreneurs without previous international experience should not pursue rapid internationalization.
a. True
b. False
Q:
One downside to licensing/franchising is that the licensor/franchisor may lose control over how their technology and brand are used.
a. True
b. False
Q:
Direct exporting involves selling products made in domestic market to customers in foreign markets.
a. True
b. False
Q:
For both large and small firms, the decision against internationalization is based primarily on high transactions costs.
a. True
b. False
Q:
The numerous differences in formal institutions and informal cultures/norms are not barriers to internationalization.
a. True
b. False
Q:
Transaction costs are qualitatively higher in international markets.
a. True
b. False
Q:
When working with venture capitalists, entrepreneurs may consider ceding a portion of their ownership in a start-up firm in order to obtain larger-scale financing.
a. True
b. False
Q:
When entrepreneurs are private owners of small firms, their personal networks are unlikely to have much impact on firm performance.
a. True
b. False
Q:
Start-ups sometimes lack legitimacy, but this intangible resource can be transferred through association with alliance partners, sponsors, or customers.
a. True
b. False
Q:
Innovators at large firms are more likely to personally profit from their innovations.
a. True
b. False
Q:
In entrepreneurial firms, an innovation strategy is a specialized form of differentiation strategy.
a. True
b. False
Q:
Selling out can be a viable exit strategy.
a. True
b. False
Q:
Most successful entrepreneurial ventures are based on resources that are easily imitated.
a. True
b. False
Q:
Capital-intensive industries hinder the chances of entrepreneurial success.
a. True
b. False
Q:
Compared to underdeveloped countries, governments in developed economies impose more procedures and a higher total cost for new start-ups.
a. True
b. False
Q:
Around the world, there are striking differences in government regulations concerning start-ups.
a. True
b. False
Q:
Development of entrepreneurship around the world depends on avoiding the impact of formal institutions that govern how entrepreneurs start up new ventures.
a. True
b. False
Q:
The age and size of a firm are the defining characteristics of its level of entrepreneurship.
a. True
b. False
Q:
Innovative, proactive and risk-seeking behavior crosses national borders.
a. True
b. False
Q:
Entrepreneurship is not the exclusive domain of small, young firms.
a. True
b. False
Q:
What is opportunism? Is it good or bad? How does the cultural dimension of individualism/collectivism provide clues in understanding opportunism?
Q:
At its core, the institution-based view focuses on how certain strategic choices are diffused from a few firms to many. Such forces of institutionalization are driven by a combination of regulatory, normative, and cognitive pillars. Think of an example of how a firm has strategically responded to an ethical challenge. Describe that challenge and indicate which of the four strategic choices given in the text you think the firm used to address that challenge. Explain why it used that type of response.
Q:
What is ethical in one country may be unethical or illegal in other countries and vice versa. Nevertheless, ethical imperialism (absolute belief that there is only one set of Ethics, and we have it!) is alive and well. You may be able to identify some values that seem to be almost universally accepted. However, such is not the case with all values. As a result, doesnt a global company need to pick sides in ethical controversies and thus be an ethical imperialist?
Q:
More than goods and services are moving across borders: as technology enables ideas and lifestyles to be observed by a variety of people around, cultures are undergoing modification, Hofstedes dimensions of culture were based on surveys of IBM employees from 1968-1972. Much has changed in the past forty years. Nevertheless, his dimensions do provide a starting point for better understanding and relating to people from around the world. Give some examples of people you have known who have come to this country from a somewhat different culture. To what extent have they retained their cultural identity versus undergone cultural change? Have these changes created any problems for them?
Q:
Describe the purpose of Hofstedes five dimensions of culture and list those five dimensions. Also, indicate why Hofstedes dimensions are valuable.
Q:
Why is it not true that relying on informal connections is a strategy only relevant to firms in emerging economies and that firms in developed economies only pursue market-based strategies?
Q:
How is the problem of counterfeiting related to ethics and how institutions matter?
Q:
What are the basic factors in Porters diamond model? What criticisms have been made of this model?
Q:
What is the benefit of formal, rule-based, impersonal exchange with third-party enforcement (often termed arms-length transaction) versus informal institutions? Why cant we assume that formal institutions are inherently better than informal ones? How do formal and informal institutions complement each other?
Q:
What are the pillars that are important in supporting formal and in formal institutions and how do they interact?
Q:
In regards to individualism versus collectivism:
a. Collectivists never discriminate against out-group members and may be more opportunistic when dealing with in-group members.
b. Individualists make more distinction between in-group and out-group membership.
c. Individualists are more opportunistic when dealing with in-group members.
d. Collectivists may view social interactions/activities as unessential and wasteful of resources.
Q:
When it comes to taking action, a savvy strategist will:
a. Follow the advice When in Rome, do as the Romans do.
b. Do homework to understand the formal and informal institutions that govern firm behavior.
c. Seek to share the values held by others of that country.
d. Realize that strategy is, like ethics, a game that is played like a musical instrument.
Q:
Although it has been suggested that firms in general may prefer to do business with countries that have shorter cultural distances, which of the following arguments can be made against this assumptions?
a. Critics point out that a number of findings are consistent with the cultural distance hypothesis.
b. Cultural distance, while important, is only one of many factors to consider.
c. Cultural distance can be replaced by institutional distance.
d. Institutional distance exaggerates cultural distance.
Q:
A company realizes one of its products could potentially have a defective part. Although no problems have been reported, the company recalls the product to check for and if necessary replace the part in question. This company is using a _________ strategic response to its ethical challenge.
a. Reactive.
b. Positive.
c. Accommodative.
d. Proactive.
Q:
Which of the following is NOT considered one of the strategic responses to ethical challenges a firm may face?
a. Reactive.
b. Positive.
c. Accommodative.
d. Proactive.
Q:
Which best defines an accommodative strategy?
a. Firms do not feel compelled to act unless faced with a disaster or public outcry.
b. Denial is the first line of defense.
c. Focus on regulatory compliance, firm fights demand for changes unless they are regulatory.
d. Organizational norms emerge to accept responsibility for actions cognitive beliefs/values that promote ethical choices are internalized.
Q:
The Foreign Corrupt Practices Act (FCPA) bans:
a. Bribery to American officials by companies based in other countries.
b. Bribery to foreign officials by companies based in the United States.
c. Bribery to all officials everywhere by companies based anywhere.
d. Bribery to foreign officials by companies based overseas.
Q:
The Foreign Corrupt Practices Act passed in 1977 in the United States:
a. Gave U.S. companies a distinct advantage in conducting business with companies around the globe.
b. Makes no exceptions to the prohibition against bribery of foreign officials.
c. Means that U.S. firms exhibit systematically lower levels of corruption than other OECD firms.
d. Originally had little normative or cognitive support despite its regulatory teeth.
Q:
Ethical imperialism is best expressed by which of the following:
a. When in Rome, do as the Romans do.
b. There is only one set of Ethics, and we have it!
c. Respect for human dignity and basic rights should be the absolute, minimal ethical threshold for ALL operations around the world.
d. Ignore corruption.
Q:
Managers who strive to show respect for institutional context:
a. Can ignore codes of conduct when outside the culture where they apply.
b. Can work to find guidelines that accommodate cultural differences.
c. Cannot accept gifts from business associates.
d. Cannot make exceptions to codes of conduct that ban bribery.
Q:
Which of the following is descriptive of ethical imperialism?
a. Ethical standards can and should vary significantly around the world.
b. It ascribes to the clich When in Rome, do as the Romans do.
c. A single set of ethics applies worldwide.
d. Good ethics are a way to achieve good profits.
Q:
Which of the following is descriptive of ethical relativism?
a. Ethical and unethical behaviors are universally agreed upon for the most part.
b. Ethical standards vary significantly around the world.
c. It contradicts the clich When in Rome, do as the Romans do.
d. Ethics is an instrument to impose the values of the elite on the masses.
Q:
Which is the instrumental view regarding motivation to become ethical?
a. Jump on the bandwagon to appear more legitimate without becoming more ethical.
b. Be self-motivated to do it right regardless of social pressures.
c. Good ethics are a way to achieve good profits.
d. Ethics is an instrument to impose the values of the elite on the masses.
Q:
The norms, principles and standards of conduct that govern behavior:
a. Are an important part of national culture but not organizational culture.
b. Are private matters and not issues for formal institutions.
c. Have a substantial overlap with what is illegal.
d. Are sometimes ignored in the case of unwritten guidelines for ethical conduct.
Q:
Which tends to be true of masculine cultures?
a. May have a relative advantage in small-scale, customized manufacturing.
b. May be at a disadvantage in making products efficiently, well and fast.
c. Stereotypical manager is decisive.
d. Stereotypical manager is accustomed to seeking consensus.
Q:
Which of the following is TRUE regarding cultures and strategic choices?
a. Managers in high power distance countries have a greater penchant for decentralized authority.
b. Solicitation of subordinate feedback and participation is a sign of weak leadership in high power distance countries.
c. Individualistic cultures prefer more informal contractual safeguards in alliances than collectivistic cultures.
d. Managers in low uncertainty avoidance countries place a high premium on job security and retirement benefits.
Q:
Long-term orientation is best defined as:
a. The degree of social inequality.
b. The identity of an individual is not based on the identity of his or her collective group.
c. Emphasis on perseverance and savings.
d. The extent to which people accept ambiguous situations.
Q:
Individualism is best defined as:
a. The degree of social inequality.
b. The identity of an individual is not based on the identity of his or her collective group.
c. Sex role differentiation.
d. The extent to which people accept ambiguous situations.
Q:
Strategists who are sensitive to cultural differences in making strategic decisions will find that:
a. A long-term orientation is always more helpful when it comes to strategy.
b. The identity of an individual is based on the identity of his or her collective group.
c. It is not especially helpful in avoiding strategic blunders.
d. They better understand business situations in other parts of the world.
Q:
In high femininity societies (such as Sweden):
a. Men frequently assume the roles of teachers, nurses, and househusbands.
b. Women have occupations that fall primarily in the caring professions.
c. Men experience a strong form of societal-level sex role differentiation.
d. Women seldom take on the roles of politicians and scientists.
Q:
Which of the following is NOT one of Porters five dimensions of culture?
a. Power distance.
b. Individualism.
c. Long-term learning.
d. Uncertainty avoidance.
Q:
Power distance is best defined as:
a. The degree of social inequality.
b. The identity of an individual is not based on the identity of his or her collective group.
c. Sex role differentiation.
d. The extent to which people accept ambiguous situations.
e. Emphasis on perseverance and savings.
Q:
According to ___________ culture is the Collective programming of the mind which distinguishes the members of one group or category of people from another.
a. Porter
b. Hofstede
c. North
d. Scott
Q:
How does bounded rationality affect strategic decision making?
a. Managers pursue their interests and make choices within the formal and informal constraints in a given institutional framework.
b. Relying on informal connections as a strategy is only relevant for firms in emerging economies.
c. Only with prior experience can managers of multinationals make rational strategy decisions.
d. Bounded rationality has no effect on decision making.
Q:
Which of the following statements about strategy and institutions is TRUE?
a. When formal institutional constraints fail, informal constraints tend to fail as well.
b. Institutions are little more than background conditions to strategic decisions.
c. The institution-based view focuses on the dynamic interaction between institutions and firms, and considers strategic choices the outcome of such interaction.
d. The institutional similarities between developed and emerging economies have propelled the institution-based view to the forefront of strategy discussions.
Q:
In Porters diamond model, factor endowments refer to:
a. Domestic economy demand for products and services.
b. Related and supporting industries.
c. Firm strategy and structure.
d. Inputs such as land, water, and people.
Q:
Which of the following is NOT one of the four factors in Porters diamond model?
a. Firm strategy, structure, and rivalry.
b. Relational contracting.
c. Factor endowments.
d. Domestic demand.
Q:
Which are true regarding informal constraints?
a. When formal institutional constraints fail, informal constraints tend to fail as well.
b. Following the collapse the former Soviet Union, informal constraints were unable to facilitate growth of entrepreneurial firms.
c. Even in developed economies, the best-connected firms can reap significant benefits.
d. All of the above.
Q:
Porters diamond model:
a. Explains competitive advantage of leading industries within the same country.
b. Explains competitive disadvantage of globally leading industries in different countries.
c. Has been criticized for ignoring history.
d. Has been criticized for focusing on institutions.
Q:
Which of the following statements about institutional transitions is TRUE?
a. Without relational contracting, institutional transitions cannot be made.
b. Arms-length transactions with third-party enforcement are the most effective approach to institutional transitions.
c. Institutional transitions are widespread in the world, especially in emerging economies.
d. The nature of institutional frameworks is unrelated to strategic decision making during transitions.
Q:
Over time, when the scale and scope of informal transactions ________, the cost per transaction move down and benefits move up.
a. Expand
b. Contract
c. Are eliminated
d. Increase through opportunism
Q:
How do institutions reduce uncertainty?
a. Ethical contracting.
b. Arms-length transaction with third party enforcement.
c. Transaction costs.
d. Opportunism.
Q:
The cognitive pillar that supports informal institutions does so through:
a. The way in which values and norms of the relevant players influence firm behavior.
b. The taken-for-granted values and beliefs that guide individual and firm behavior.
c. The way in which laws and regulations influence firm behavior.
d. Formal institutions.
Q:
Which of the following is an example of a formal institution?
a. Rules.
b. Culture.
c. Ethics.
d. None of the above.
Q:
Institutions do which of the following?
a. Reduce uncertainty.
b. Signal which conduct is acceptable and which is not.
c. Reduce opportunism and transaction costs.
d. All of the above.
Q:
Which of the following does NOT define institutions?
a. Institutionally devised constraints that structure human interaction.
b. Regulatory, normative and cognitive structures and activities that provide stability and meaning to social behavior.
c. Government of individual and firm behavior.
d. The rules of the game.
Q:
Reasons for increased FDI in China in recent years do not include:
a. Low cost labor.
b. A sizeable domestic market.
c. Strong intellectual property protections.
d. Increased emphasis on binding international commercial arbitration by Chinese authorities.
Q:
An institution-based view of strategy considers which of the following factors?
a. Industry-level conditions.
b. Firm-specific conditions..
c. Societys culture and ethics.
d. All of the above.
Q:
The best managers, who expect norms to shift over time, constantly decipher the changes in the informal rules of the game and then incorporate them in setting the strategies of the firm.
a. True
b. False
Q:
Firms from collectivist cultures are the most collaborative with out-groups.
a. True
b. False
Q:
In facing ethical challenges, a defensive firm anticipates institutional changes and does more than is required to before ethically.
a. True
b. False