Chapter 7 Multiple Choice Questions

. Subsidiary-level strategy deals with the question of:

which business or businesses to compete in.

how a subsidiary positions itself among local and international rivals.

who should run the multinational firm.

which business should be divested.

. The two broad types of subsidiary-level strategy are:

support and implementation, and autonomous subsidiaries.

support and implementation, and integrated subsidiaries.

integrated subsidiaries, and coordinated subsidiaries.

support and implementation, and global subsidiaries.

. Michael Porter proposed:

two basic strategies that a subsidiary can use to create value for customers.

one basic strategy that a subsidiary can use to create value for customers.

three basic strategies that a subsidiary can use to create value for customers.

Five basic strategies that a subsidiary can use to create value for customers.

. A subsidiary cost leadership strategy involves:

setting out to become the lowest-cost producer relative to other subsidiaries.

setting out to become the lowest-cost producer relative to local firms.

setting out to become the lowest-cost producer relative to the multinational firm.

setting out to become the lowest-cost producer relative to the firm's rivals.

. The two global level strategies are:

Localization and globalization

Headquarter and integration

Strategic and functional

Corporate and subsidiary

. When the subsidiary faces conditions of high environmental uncertainty, headquarter managers should:

give more authority to subsidiaries to make strategic decisions.

give less authority to subsidiaries to make strategic decisions.

close the subsidiary.

move the subsidiary to another country.

. A global mandate gives the subsidiary:

global responsibility for a single function.

global responsibility for a single product line.

global responsibility for a single activity.

global responsibility for all functions.

. The more similar the local markets are:

the more likely that subsidiaries play an integrative role.

the more likely that subsidiaries play a mediating role.

the more likely that subsidiaries play a support and implementation role.

the more likely that subsidiaries play an independent role.

. Mini-replica subsidiaries operate as:

Small-scale replicas of other subsidiaries

A hub for the parent firm

A small-scale replicas of their parent firms

A small replica of rival firms

. Multinational firms should have a single standard corporate strategy if:

their products and services require significant adaptation to meet local needs.

their products and services are accepted around the world.

their subsidiaries are located in most countries.

If their subsidiaries are managed by local people.

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