mcq 100-200.docx

100. Host country national (HCN): Nationality of employee is the same as that of the local subsidiary e.g., a Chinese employee working at the Chinese subsidiary of Volkswagen. 101. Third country national (TCN): Nationality of employee is neither that of the headquarters nor the local subsidiary e.g....

100. Host country national (HCN): Nationality of employee is the same as that of the local subsidiary e.g., a Chinese employee working at the Chinese subsidiary of Volkswagen. 101. Third country national (TCN): Nationality of employee is neither that of the headquarters nor the local subsidiary e.g., an Indian employee working at the Chinese subsidiary of Volkswagen 102. At the turn of the millennium, 80% of medium and large companies were using expatriates and almost half of those had planned to further increase their expatriate workforce 103. International assignments last between two & five years 104. Comparative Management is dedicated to exploring the landscape, contours, and national patterns of development 105. Bonache and Brewster (2001) have found that assignments which require a high level of general management knowledge last the longest, while those assignments for which an expatriate needs merely functional expertise in a certain field show the shortest duration. 106. SWAAK 1997 came up with the idea of these different types of assignments 1. Management Development Assignments; 2.Business Development Assignments; 3. Technical Assignments. 1. Management Development Assignments aim to expose manager to foreign business practices so they can gather international experience. 2. Business Development Assignments are where managers from parent company are required to assist a start-up venture abroad. 3. Technical Assignments are assignments in which expatriates need to share their unique technical skills and knowledge with the foreign office. 107. Harzing (2001) classified expats as 1. Bears:are sent to subsidiaries to act as decision-makers with a high level of authority. 2. Bumblebees fly from plant to plant and thereby guarantee close connections between the subsidiaries and the headquarters, as well as amongst each other 3. Spiders work on the establishment if communication networks. 108. Culture shock is caused by The confrontation with a new environment, The failure of intercultural communication, The threat of the emotional well-being of the sojourner and The requirement or even force to adapt the personal behaviour to fit in with the new environment (Selmer 2005). 109. Minimising cultural risk by 1. Fact finding knowledge and interpretation 2. develop a keen interest in the target culture 3. avoid cultural bias 4. develop cross cultural skills 110. Cultural distance describes the extent to which the host culture is different to the home culture and was identified as one of the is most important causes of culture shock 111. Cultural Psychic Distance Paradox causes expatriates, who move to a host country with a culture like that of the home country, to underestimate the differences. 112. Repatriation model issues u-curve model could be more accurately described as a w-curve model 113. What are the four stages of the U Curve Hypothesis? Honeymoon, Culture shock, Adjustment and Integration 114. What are the four stages of the W Curve Hypothesis? Honeymoon, Crisis, Recovery Adjustment 115. Why repatriation can be a problem1. Unrealistic expectations and reverse culture shock 2. Lack of appreciation of expatriate experience 3. Unwelcoming social networks 4. Lack of appropriate jobs and tasks 5. Spouse-or children-related problems 116. Problem of repatriation in academic studies: it was often ignored by practitioners as well as the vast majority of researchers 117. Why is there a lack of appropriate jobs / tasks for expats? Employees see international assignments also as a chance to increase their personal market value for other companies however this is hardly ever the case 118. However, only 4% of companies agree that taking on foreign assignments can have a career-enhancing effect. 119. Improving expat management by 1. Improving selection 2. improving preparation 3. improving support 120. Conclusion for repatriation The repatriation of international managers, the preparation for their departure from their host country and the aftercare once they have returned to their home office are, in fact, the most critical issues of successful management of expatriates. 121. Feldman and Thomas (2001) report that numerous repatriates regret taking on international assignments because they felt that rather than it being the springboard for the next step up the career ladder, being abroad for several years in fact hindered them from being promoted 122. What is globalization?' Being tied together into a single globalised marketplace and village driven by the spread of free market capitalism to virtually every country in the world ' 123. Hyper globalisation Is the convergence towards a global system 124. Globalisation Index measures a level of;Economic integration - trade, FDI etc, Personal contact - international travel, tourism etc, Technology - number of Internet users and hosts Political engagement - memberships of international organizations 126. Impacts of Globalization 1. Economic benefits 2. Diffusion over tech 3. The environment 4. Social 127. Who benefits from globalization? Globalisation carries both promises and threats and has winners and losers at national, regional and organisation level 128. Competitive advantage of the MNC: large capital, human, brand, and tech resources that it can leverage in many countries 129. Host Society Benefits: new jobs, industrialisation, technology transfer, spill over effect 130. Host Society Adverse effects: vulnerable to location shifts, environment degradation 131. Home Society Benefits- growth in outward FDI, increased corporate profit, increased shareholder value 132. Home Society Adverse effects: income inequality, loss of low skilled jobs 133. MNC definition: "An enterprise that engages in FDI and owns or controls value adding activities in more than one country" 134. A firm engaged in trade activities with no FDI component is referred to as an International firm 135. Dynamic Capability Theory states MNCs cannot merely rely on existing resources but must develop dynamic capabilities to create, deploy and upgrade resource in pursuit of sustained CA MNCs cannot merely rely on existing resources but must develop capabilities to create, deploy and upgrade resource in pursuit of sustained CA 136. The Wholly Owned Subsidiary: 100% ownership in a new country, Investment in green field site or through purchase of existing firm, Offers increased flexibility and control. 137. Production under licence - A process whereby the production of goods is subject to patent, brand or other intellectual property rights is contracted out to another firm under terms & conditions agreed with the owner 138. FDI Related Entry Modes & FDI motives 1. Marketrelated-proximity to market's actual & potential is a powerfull pull factor. Car manufacturing is a good example where transport costs & delivery times are important 2. Production related - economies of scale or technological capabilities 3. Resource related - seeking proximity to resources or raw materials 4. Control of specific strategic assets - through the acquisition of brands or other assets 139. Country competitiveness measures & compares how effective countries are in providing firms with an environment that sustains the domestic & international competitiveness of those firms 140. Country Level Determinants Science, education, innovation Economic Soundness. 141. Firm Level Determinants Tech, innovation, Organizing, Factor, creation. 142. Individual Level Determinants are Entrepreneurs Managers Engineers Educators Politicians 143. Global Strategic Alliance are Cross border partnerships between two or more firms from different countries with an attempt to pursue mutual interests through sharing their resources & capabilities' GSA are a popular way for MNCs to expand globally & improve Competitive Advantage Most frequently they take the form of a joint venture (JV) between two firms and are another entry made for internationalisation 144. Equity Joint Venture (EJV) Is a legally & economically separate entity created by 2 or more parent firms that collectively invest financial & other resources 145. Greenfield Investment Occurs when a firm invests to build a new manufacturing or administrative facility as opposed to acquiring existing facilities. Greenfield investment Is a form of FDI where the foreign company builds its operations from the ground up in its new home 146. Cooperative joint venture is a Contractual arrangement whereby profits & responsibilities are assigned to each party according to stipulations in a contract without creation of new entity 147. Joint Exploration is a special type of non-equity alliance whereby exploration costs are borne by the foreign partner, with development costs later shared by a local entity - Oil exploration in Brazil, Ecuador, and Indonesia 148. R & D Consortium: Costs may be allocated according to an agreed formula but the revenue each partner earns depends on what it does with technology created 149. Co-production/ Service Agreement: Boeing & Japan Aircraft Development Corp each responsible for manufacturing their part of the product, costs depend on each firm’s efficiency 150. Co-marketing Agreement: Provides a platform for each party to reach more customers 151. Long term supply: Manufacturing buyer gives supplier free info on products, markets, and technologies – IKEA 152. Co-management arrangement is a loosely structured alliance in which cross national partners collaborate in training, production management and information systems development 153. Joint Venture advantages 1. allows a firm to enter activities that might be too costly & risky for one 2. allow a firm to acquire partner knowledge or resources to build competitive strength 3. allow a firm to enhance economies of scale or scope to develop synergies 4. allows a firm to prevent or reduce competition 5. allow a firm to boost local acceptance as perceived by foreign consumers 6. allow firms to bypass entry barriers into a foreign country 154. Key to Selecting local partners: 1. Goal compatibility 2. resource complementary 3. cooperative culture 4. commitment 5. Capabilities 155. over 70% of JVs fail 157. Problems and risks of Joint Ventures: 1. Loss of autonomy & control often leads to conflict & alliance instability. 2. The risk of possible leakage of critical technologies may be high & often difficult to avoid 3. Differences in strategic goals decision processes which can be inflexible 4. Local partners may become global competitors into the future 158. Greater centralisation, tall hierarchies, more supervisory staff, large wage differentials and white-collar job values are commonly associated with Hofstede's High power distance component 169. MOTIVES FOR Mergers & Acquisitions: 1. Extensions 2. Consolidation: Can be used to consolidate competition in a market or competitors in an industry. 3. Capabilities: to increase inhouse capabilities 4. Financial efficiency- A poor performing company with potential may be attractive to a larger profitable company- acquisition pay out may be lower 5. Tax efficiency- sometimes there may be tax advantages for bringing two companies together- profits or tax losses may be transferrable 170. Ethnocentrism is The perspective of individuals and organisation completely imbued with their own culture to the exclusion of differing cultures 176. Culture is an elusive concept with many varied definitions. However, there is a consensus regarding the 3 main features, they are: Shared / Intangible / Learned by others 177. The globalization index measures the levels of Economic integration Social & Political 178. Which is NOT one of Hofstede’s dimension of culture universalism VS particularism 179. What are a proactive motives for internationalization? Gov. Incentives (tax) Economies of scale Tech. advances and Access to talent and labour 180. According to Morrison, culture can be defined as shared, learned values and norms of behaviour, means of communication and other outward expressions of distinguishing one group from another 181. Ireland's top ten export product groups include perfumes and cosmetics organic chemicals meat 182. What is a feature of a democratic political system? Editorial & Reporting independence from the state 183. Export house, confirming house and buying house are all types of indirect exporting 184. Indirect Exporting is when Exporting function is outsourced to intermediaries who prepare the export documentation, take responsibility for the physical distribution of good and set up sales and distribution channels in the foreign market. 185. Because some firms seem to assume that English is the international language of business, this can be problematic because 1. Prospective foreign customers cannot understand English technical/legal terms 2. Prospective foreign customers are fluent in written English but do not speak it very well 186. Export house buys products from a domestic firm & sells them abroad on its own account 187. Confirming house - acts for foreign buyers & is paid on a commission basis, brings sellers & buyers into direct contact & guarantees payment for the export 188. Buying house - similar to confirming house but more active in seeking out sellers to match the buyers’ particular needs 189. Hofstede argues that national culture is more influential than organisational culture 190. Hofstede found than in some countries, like Germany that have long term orientation while others like the UK have short term. his results mean that British businesses prefer investments with a quick return 191. In which political system does one person/small group of people hold absolute power - Authoritarian 192. In countries with a federal system of government like the US, firms wanting public contract may have to persuade decision makers at different levels of the federation to award them contracts 193. Tax rates on profits are falling, why would this be the case? to retain and attract investment by multinational companies 194. When defining a strong culture, which would be the most correct? Uniformity Homogeneous Shared 195. Which represent elements of national culture? Location Religion Language 196. Which item describes a legal system based on precedent? Common Law 197. Which describes a legal system based on written rules? Civil Law 198. Foreign Exchange Risk Also known as currency risk May harm the profitability of a business transaction An organisation can be protected through "hedging" 199. Industry Lifecycle: introduction, growth, maturity, decline 200. Political/ country Risk is Defined as Exposure to potential loss or adverse effects on company operations and profitability, caused by developments and/or legal systems Operate interdependently of each other