WPC 480 Chapter 10 Exam With Complete
Solutions
The process of closer integration and exchange between different countries and peoples worldwide,
made possible by falling trade and investment barriers, advances in telecommunications, and
reductions in transportation costs.
Globalization
A company that deploys resources and capabilities in the procurement, production, and distribution
of goods and services in at least two countries.
Multinational enterprise (MNE)
A firm's investments in value chain activities abroad.
Foreign direct investment (FDI)
Part of a firm's corporate strategy to gain and sustain a competitive advantage when competing
against other foreign and domestic companies around the world.
Global strategy
1. Gain access to a larger market
2. Gain access to low-cost input factors
3. Develop new competencies
Advantages of going global
Benefits from locating value chain activities in the world's optimal geographies for a specific activity
wherever that may be.
Location economies
Additional costs of doing business in an unfamiliar cultural and economic environment, and
coordinating across geographic distances.
Liability of foreignness
A decision framework based on the relative distance between home and a foreign target country
along four dimensions; cultural distance, administrative and political distance, geographic distance,
and economic distance.
CAGE distance framework
The collective mental and emotional "programming of the mind" that differentiates human groups.
National culture
Cultural disparity between an internationally expanding firm's home country and its targeted host
country.
Cultural distance
Assumption that consumer needs and preferences throughout the world are converging and thus
becoming increasingly homogenous.
Globalization hypothesis
Solutions
The process of closer integration and exchange between different countries and peoples worldwide,
made possible by falling trade and investment barriers, advances in telecommunications, and
reductions in transportation costs.
Globalization
A company that deploys resources and capabilities in the procurement, production, and distribution
of goods and services in at least two countries.
Multinational enterprise (MNE)
A firm's investments in value chain activities abroad.
Foreign direct investment (FDI)
Part of a firm's corporate strategy to gain and sustain a competitive advantage when competing
against other foreign and domestic companies around the world.
Global strategy
1. Gain access to a larger market
2. Gain access to low-cost input factors
3. Develop new competencies
Advantages of going global
Benefits from locating value chain activities in the world's optimal geographies for a specific activity
wherever that may be.
Location economies
Additional costs of doing business in an unfamiliar cultural and economic environment, and
coordinating across geographic distances.
Liability of foreignness
A decision framework based on the relative distance between home and a foreign target country
along four dimensions; cultural distance, administrative and political distance, geographic distance,
and economic distance.
CAGE distance framework
The collective mental and emotional "programming of the mind" that differentiates human groups.
National culture
Cultural disparity between an internationally expanding firm's home country and its targeted host
country.
Cultural distance
Assumption that consumer needs and preferences throughout the world are converging and thus
becoming increasingly homogenous.
Globalization hypothesis
