Economic Systems and Institutions

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What is the main objective of the Integration strategy?

To focus on a number of foreign countries/regions as stand-alone markets

To develop and distribute standardized products globally

To adapt to different customer preferences around the world

To achieve economies of scale by standardizing practices/products (correct)

What type of strategy focuses on a number of foreign countries/regions, each of which is regarded as a stand-alone ‘local’ market?

Localization strategy (correct)

Global Standards strategy

Cross-Border Mergers and Acquisitions

Integration strategy

What is the goal of the Global Standards strategy?

To develop and distribute customized products locally

To achieve local responsiveness by standardizing practices

To focus on economies of scale by adapting to local markets

To develop and distribute standardized products globally (correct)

What is the term for the integration of different business units across countries?

Transnational Environment (C) Signup and view all the answers

What is the primary goal of a Multinational Corporation (MNC)?

To maximize profits through economies of scale (C) Signup and view all the answers

What is the term for the strategy of developing and distributing standardized products globally?

Global Standards strategy (A) Signup and view all the answers

What is the main advantage of the Integration strategy?

Achieving economies of scale (A) Signup and view all the answers

What is the term for the ability of a multinational corporation to respond to different customer preferences around the world?

Local Responsiveness (C) Signup and view all the answers

What is the term for the strategy of focusing on a number of foreign countries/regions, each of which is regarded as a stand-alone ‘local’ market?

Localization strategy (D) Signup and view all the answers

What is the primary function of formal institutions in a country?

To establish laws, regulations, and rules for economic transactions (C) Signup and view all the answers

What are norms in the context of institutions?

Values, beliefs, and actions that shape individual and firm behavior (C) Signup and view all the answers

What is the primary focus of the institution-based view?

The impact of institutions on the success and failure of firms (D) Signup and view all the answers

What is the primary characteristic of a totalitarian political system?

Strong emphasis on collectivism and a powerful central authority (B) Signup and view all the answers

What is the term for the costs associated with economic transactions or doing business?

Transaction costs (C) Signup and view all the answers

What is the term for fundamental and comprehensive changes to formal and informal rules of the game?

Institutional transitions (D) Signup and view all the answers

What is the primary focus of the institutional framework?

Formal and informal institutions governing individual and firm behavior (B) Signup and view all the answers

What are the three major types of political systems mentioned in the text?

Totalitarianism, Democracy, and Socialism (D) Signup and view all the answers

What is the term for the 'rules of the game' in a country?

Institutions (C) Signup and view all the answers

What is the impact of prohibitively high transaction costs on trade in a country?

People may choose not to undertake trade in that country at all (B) Signup and view all the answers