Chapter 1 Multiple Choice Questions

1. Strategic management can be defined as:

a process of setting written long-term profit plans for the organization.

a process of measuring performance of the organization.

a process of operational planning.

a process of setting long-term direction for the organization.

2. A global - as opposed to international - strategy involves:

a wide variety of business strategies across countries.

a single strategy for a subsidiary of a multinational firm.

a single strategy for the entire global network of subsidiaries and partners.

a wide variety of subsidiary strategies within the global network of subsidiaries.

3. Which of the following is NOT an example of a global strategy?

The British subsidiary of global insurance group Aviva develops a new product for the UK market.

IKEA sells standardized, Swedish designed, self-assembly furniture products at low price.

LVMH sells luxury goods made in France.

Walmart withdraws from Germany in order to avoid changing its global strategy of selling low-priced products.

4. Alan Rugman said that:

Trade between nations is conducted at global and local levels.

Most multinational firms have a global strategy.

Most multinational firms have a local strategy.

Most economic activity is regional - not global.

5. Which of the following is NOT a dimension of global strategy?

Localization

Coordination and configuration

Standardization

Integration

6. What three broad factors determine global strategy of multinational firms?

Local globalizing drivers, industry globalizing drivers, internal globalizing drivers

Cultural globalizing drivers, industry globalizing drivers, global orientation

Industry globalizing drivers, internal globalizing drivers, global orientation

Macro globalizing drivers, industry globalizing drivers, internal globalizing drivers

7. What are the four industry globalizing drivers?

Market drivers, cost drivers, government drivers, and localization drivers

Market drivers, cost drivers, government drivers, and competitive drivers

Market drivers, cost drivers, competitive drivers, bargaining drivers

Market drivers, cost drivers, competitive drivers, regionalization drivers

8. A global consumer culture means that:

cultural traditions and values are converging around the world.

consumers are becoming very similar around the world.

there is a world-wide demand for the same global brands.

national cultures are disappearing around the world.

9. Global economies of scale arise when:

a product or a process can be globally performed using cheap labour.

a product or a process can be performed more cheaply thanks to alliances with multinational firms in other sectors.

a product or a process can be performed more cheaply at greater volume than at lesser volume.

a product or a process can be performed more cheaply thanks to globally performed cross-business cost-saving activities.

10. Governments can encourage globalization of industries by:

increasing tariffs and regulations

creating common international technical standards

subsidising domestic firms that expand internationally

subsidising foreign firms that invest in their country

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