Chapter 8 Multiple Choice Questions

. One of the key tasks of the corporate parent is:

recruiting top management teams in different countries.

conducting market research on customers' needs in different countries.

deciding on and enforcing the strategic direction of the multinational firm.

looking for ways to adapt subsidiaries to local conditions.

. Corporate parent refers to:

the headquarter's level within a multinational firm with different subsidiaries.

the country level of a multinational firm.

a regional level of a multinational firm.

the name of the parent firm that owns the business.

. Cultural control relies on:

employing expatriate managers as top managers of subsidiaries.

using SMART objectives.

clear output indicators.

employing cross cultural teams.

. Control of subsidiaries can be carried out in:

three ways: electronic, mechanical and technical.

two ways: personal or mechanical.

three ways: personal, technical, or impersonal.

two ways: personal or impersonal.

. What are the three main types of control?

Output control, behavioural control and cultural control

Coordination, harmonization and configuration

Integration control, mechanical control and cultural control

Input control, cultural control and configuration control

. Industrial diversification is justifiable if:

it reduces cost.

if enhances shareholders' value.

it closes failing businesses.

it increases firm's size.

. What are the two options of industrial diversification?

Global diversification and local diversification

Related diversification and unrelated diversification

Marketing diversification and production diversification

Vertical diversification and horizontal diversification

. What is NOT an advantage of vertical integration?

It helps the firm retain control over proprietary knowledge.

It enables the firm cross-subsidize one stage of the value chain by another.

It enables the firm to internationalize quickly.

It reduces uncertainties in demand and price.

. Offshoring generally refers to:

Reallocation of activities to subsidiaries of the multinational firms.

Delegation of authority to subsidiary level managers.

Reallocation of activities to emerging and developing countries.

Reallocation ofheadquarter of the multinational firm to an emergingcountry.

. What is NOT a cause of value destruction by corporate parents?

Incurring overhead costs

Seeking synergies between subsidiaries

Slowing down decisions

Making some ill-judged interventions

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