Chapter 8—International Strategy
TRUE/FALSE
1. The threat posed by Chinese automakers is restricted to firms competing for the Chinese market as
these firms do not export their product.
ANS: F PTS: 1 DIF: Medium REF: 212
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing the task environment
2. As a formerly innovative product becomes standardized, its production can be moved out of the U.S.
to a country with low manufacturing costs, thus extending the product's life cycle.
ANS: T PTS: 1 DIF: Medium REF: 213
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
3. A traditional motive for internationalization has been to secure needed resources, especially minerals
and energy.
ANS: T PTS: 1 DIF: Easy REF: 213
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Knowledge of
general business functions
4. In order to achieve economies of scale, some manufacturing industries in nations (such as Korea)
with small domestic markets must globalize.
ANS: T PTS: 1 DIF: Medium REF: 214
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing the task environment
5. It is generally easier to negotiate employee layoffs in Europe than in the United States because of the
generous government-provided social services in Europe.
ANS: F PTS: 1 DIF: Hard REF: 214
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity| Management: Legal Responsibilities | Dierdorff & Rubin:
Managing the task environment
6. Universal product demand has permeated all types of goods and services so thoroughly that firms
rarely find they need to customize products for particular cultures or nations.
ANS: F PTS: 1 DIF: Hard REF: 215
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity| Management: Strategy | Dierdorff & Rubin: Managing the
, task environment
7. To the extent that a firm is able to standardize products across country borders, use the same or
similar production facilities, and coordinate critical resource functions, the more likely it is to achieve
economies of scale.
ANS: F PTS: 1 DIF: Easy REF: 215-216
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
8. Cemex, the Mexico-based cement maker, is very successful in emerging nations because it uses low-
tech methods for coordinating its operations suitable to the conditions in these countries. This has
allowed Cemex unusually strong economies of scale.
ANS: F PTS: 1 DIF: Medium REF: 215
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
9. The example of General Motors’ business in China and Europe vividly illustrates that a firm’s home
market, not international markets, is always responsible for the majority of profits.
ANS: F PTS: 1 DIF: Hard REF: 215 | 216
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
10. The requirement for local repair and service capabilities has discouraged manufacturers of household
appliances, such as General Motors and Toyota, from diversifying internationally.
ANS: F PTS: 1 DIF: Easy REF: 216-217
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy & innovation
11. Companies wishing to gain cost efficiencies may choose to take advantage of low production costs
found in countries such as Malaysia.
ANS: T PTS: 1 DIF: Easy REF: 217
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing logistics & technology
12. The liability of foreignness has become an obsolete concern, as illustrated by the success of many
U.S. firms overseas and the success of foreign companies in the U.S.
ANS: F PTS: 1 DIF: Easy REF: 217
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
, strategy & innovation
13. When a firm initially pursues an international business-level strategy, its home country of operation
may be its most important source of competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 218
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
14. Both the size and the nature of a country’s domestic demand for a particular industry’s good or
service are important in Porter’s model of national competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 218 (Figure 8.2)
OBJ: 08-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing the task environment
15. Having substantial supplies of critical basic natural resources is a necessary condition for a country to
support businesses which can successfully compete in international markets.
ANS: F PTS: 1 DIF: Hard REF: 218
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
16. Despite the growth and spread of an internationally diversified organization, the influence of the
home country's culture remains an important source of competitive advantage.
ANS: T PTS: 1 DIF: Hard REF: 219
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
17. Part of Japan’s success in the video game industry is derived from two related and support industries,
cartoons and animation, and electronics.
ANS: T PTS: 1 DIF: Medium REF: 219
OBJ: 08-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
18. A multidomestic strategy assumes that consumer needs, industry conditions, and social norms are
homogeneous in every country.
ANS: F PTS: 1 DIF: Medium REF: 220
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
, 19. A major advantage of multidomestic strategies is the ability to customize for the specific market,
although this sacrifices economies of scale.
ANS: T PTS: 1 DIF: Medium REF: 220-221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
20. A global strategy assumes that the strategic business units operating in each country are
interdependent.
ANS: T PTS: 1 DIF: Medium REF: 221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
21. A global strategy is an international strategy through which the firm offers standardized products
across country markets, with competitive strategy being dictated by offices within the host markets
served.
ANS: F PTS: 1 DIF: Medium REF: 221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
22. A transnational strategy is difficult to achieve because the multiple objectives involved are
contradictory.
ANS: T PTS: 1 DIF: Medium REF: 222
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
23. A company that chooses a truly global corporate-level strategy assumes that the liability of
foreignness will be minimal.
ANS: T PTS: 1 DIF: Hard REF: 223
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
24. The “liability of foreignness” will have a greater negative impact on a firm using a multi-domestic
strategy than on a firm using a global strategy.
ANS: F PTS: 1 DIF: Hard REF: 223
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
TRUE/FALSE
1. The threat posed by Chinese automakers is restricted to firms competing for the Chinese market as
these firms do not export their product.
ANS: F PTS: 1 DIF: Medium REF: 212
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing the task environment
2. As a formerly innovative product becomes standardized, its production can be moved out of the U.S.
to a country with low manufacturing costs, thus extending the product's life cycle.
ANS: T PTS: 1 DIF: Medium REF: 213
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
3. A traditional motive for internationalization has been to secure needed resources, especially minerals
and energy.
ANS: T PTS: 1 DIF: Easy REF: 213
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Knowledge of
general business functions
4. In order to achieve economies of scale, some manufacturing industries in nations (such as Korea)
with small domestic markets must globalize.
ANS: T PTS: 1 DIF: Medium REF: 214
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing the task environment
5. It is generally easier to negotiate employee layoffs in Europe than in the United States because of the
generous government-provided social services in Europe.
ANS: F PTS: 1 DIF: Hard REF: 214
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity| Management: Legal Responsibilities | Dierdorff & Rubin:
Managing the task environment
6. Universal product demand has permeated all types of goods and services so thoroughly that firms
rarely find they need to customize products for particular cultures or nations.
ANS: F PTS: 1 DIF: Hard REF: 215
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity| Management: Strategy | Dierdorff & Rubin: Managing the
, task environment
7. To the extent that a firm is able to standardize products across country borders, use the same or
similar production facilities, and coordinate critical resource functions, the more likely it is to achieve
economies of scale.
ANS: F PTS: 1 DIF: Easy REF: 215-216
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
8. Cemex, the Mexico-based cement maker, is very successful in emerging nations because it uses low-
tech methods for coordinating its operations suitable to the conditions in these countries. This has
allowed Cemex unusually strong economies of scale.
ANS: F PTS: 1 DIF: Medium REF: 215
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
9. The example of General Motors’ business in China and Europe vividly illustrates that a firm’s home
market, not international markets, is always responsible for the majority of profits.
ANS: F PTS: 1 DIF: Hard REF: 215 | 216
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
10. The requirement for local repair and service capabilities has discouraged manufacturers of household
appliances, such as General Motors and Toyota, from diversifying internationally.
ANS: F PTS: 1 DIF: Easy REF: 216-217
OBJ: 08-01 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Environmental Influence | Dierdorff & Rubin:
Managing strategy & innovation
11. Companies wishing to gain cost efficiencies may choose to take advantage of low production costs
found in countries such as Malaysia.
ANS: T PTS: 1 DIF: Easy REF: 217
OBJ: 08-01 TYPE: knowledge
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing logistics & technology
12. The liability of foreignness has become an obsolete concern, as illustrated by the success of many
U.S. firms overseas and the success of foreign companies in the U.S.
ANS: F PTS: 1 DIF: Easy REF: 217
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
, strategy & innovation
13. When a firm initially pursues an international business-level strategy, its home country of operation
may be its most important source of competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 218
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
14. Both the size and the nature of a country’s domestic demand for a particular industry’s good or
service are important in Porter’s model of national competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 218 (Figure 8.2)
OBJ: 08-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing the task environment
15. Having substantial supplies of critical basic natural resources is a necessary condition for a country to
support businesses which can successfully compete in international markets.
ANS: F PTS: 1 DIF: Hard REF: 218
OBJ: 08-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
16. Despite the growth and spread of an internationally diversified organization, the influence of the
home country's culture remains an important source of competitive advantage.
ANS: T PTS: 1 DIF: Hard REF: 219
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
17. Part of Japan’s success in the video game industry is derived from two related and support industries,
cartoons and animation, and electronics.
ANS: T PTS: 1 DIF: Medium REF: 219
OBJ: 08-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
18. A multidomestic strategy assumes that consumer needs, industry conditions, and social norms are
homogeneous in every country.
ANS: F PTS: 1 DIF: Medium REF: 220
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
, 19. A major advantage of multidomestic strategies is the ability to customize for the specific market,
although this sacrifices economies of scale.
ANS: T PTS: 1 DIF: Medium REF: 220-221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
20. A global strategy assumes that the strategic business units operating in each country are
interdependent.
ANS: T PTS: 1 DIF: Medium REF: 221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
21. A global strategy is an international strategy through which the firm offers standardized products
across country markets, with competitive strategy being dictated by offices within the host markets
served.
ANS: F PTS: 1 DIF: Medium REF: 221
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
22. A transnational strategy is difficult to achieve because the multiple objectives involved are
contradictory.
ANS: T PTS: 1 DIF: Medium REF: 222
OBJ: 08-03 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Strategy | Dierdorff & Rubin: Managing
strategy & innovation
23. A company that chooses a truly global corporate-level strategy assumes that the liability of
foreignness will be minimal.
ANS: T PTS: 1 DIF: Hard REF: 223
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
24. The “liability of foreignness” will have a greater negative impact on a firm using a multi-domestic
strategy than on a firm using a global strategy.
ANS: F PTS: 1 DIF: Hard REF: 223
OBJ: 08-04 TYPE: comprehension
NOT: AACSB: Multicultural & Diversity | Management: Creation of Value | Dierdorff & Rubin:
Managing strategy & innovation
