Chapter 5 Multiple Choice Questions

. Internationalization stimuli refer to:

internal motives for foreign investment.

internal organizational factors arising from within the organization that influence a firm's decision to initiate, develop, and sustain international business activities.

a multinational firm's motives for establishing an investment in a foreign location.

internal and external factors that influence a firm's decision to initiate, develop, and sustain international business activities.

. First mover advantage suggests that:

pioneering businesses are able to obtain higher profits and other benefits as the consequence of early market entry.

first mover firms expand more rapidly in international markets than late movers in international markets.

competing multinational firms enter an important market when a market is growing very fast.

multinational firms with first mover advantages have greater strategic incentives for investing in technical innovations than late movers.

. The difficulties as a result of the different norms and rules that constrain human behaviour are called:

Liability of expansion

Liability of foreignness

Liability of smallness

Liability of newness

. High psychic distance can:

encourage the firm's international expansion into a given country.

encourage the firm's foreign investments in new international markets.

discourage the firm's use of strategic alliances.

discourage the firm's international expansion into a given country.

. The Uppsala Model can help to understand:

a firm's initial choice of international location and its mode of entry into foreign markets.

a firm's level of psychic distance and its ability to invest in distant foreign markets.

the role of psychic distance and internationalization stimuli in the international expansion of firms.

a firm's ability to overcome the liability of foreigness in its international expansion.

. A Born Global firm is a firm that:

develops international new ventures from its birth by using outsourcing from foreign locations in multiple countries.

overcomes psychic distance and the liability of foreigness by investing in foreign locations in multiple countries.

ignores the challenges of psychic distance and the liability of foreigness when planning its expansion to foreign locations in multiple countries.

from its birth seeks competitive advantage by using resources from different countries and by selling its products in multiple countries.

. Which of the following is NOT a mode of entry into foreign markets?

Export

Internationalization

International joint venture

Franchising

. Franchising involves:

the transfer of patented information and trademarks, information and know-how as well as information needed to sell a product or service.

the use of franchising for licensing new technologies in global markets.

the transfer of a business concept, with corresponding operational guidelines, to non-domestic parties for a fee.

greenfield investment in a completely new facility, or acquisition of or merger with an already established local firm.

. Horizontal and Vertical are types of:

Greenfield strategy

Licensing and franchising

Mergers and acquisitions

Greenfield investments

. De-internationalization can be the result of two different processes:

Strategic decision-making and operational decision-making

Company failure and strategic decision-making

A forced process and a semi-forced process

A voluntary process and strategic decision-making

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