Chapterg1gExpan
dinggabroad:
Motivations,gmeans,gandgmentalities
True/False
1. TheglargestgMNEsgaregequivalentgingtheirgeconomicgimportancegtoglessgdevelopedgeco
nomiesgsuchgasgNigeria,gMoldova,gorgJamaica.
ANS:Falseg(SalesgofgtheglargestgMNEsgexceedgthegGDPsgofglessgdevelopedgcountries.)g
Difficulty:gModerate
Pg:g16gandgTableg1.3g(16)
Subject:gMNEginfluencegingthegglobalgeconomy
2. Thegprocessgofginternationalizationgfollowedgbygmostgfirmsgisgusuallygwell-
thoughtgoutgingadvancegandgtypicallygbuildsgongagcombinationgofgrationalganalysis
,gplanninggandgimplementation.
ANS:Falseg(Itgisgmoreglikelygagcombinationgofgrationalganalysis,gopportunism,gandgluc
k.gIngregardsgtogopportunism,gseveralgstudiesghavegfoundgthatgmostgfirmsgbegingexport
inggduegtogangunsolicitedgexportgorder.)
Difficulty:gModerat
egPg:g22-23
Subject:gThegProcessgofgInternationalization
3. Allgcompaniesginternationalizegingangincrementalgmanner.gFirst,gtheygmakeganginitia
lgcommitmentgofgresourcesgtogthegforeigngmarketgingordergtogsecureglocalgmarketgk
nowledge.gBuildinggongthisgknowledge,gtheygmakegsubsequentgresourcegcommitment
s,geventuallygleadinggtoghigherglevelsgofginvestmentgingthegforeigngmarket.
ANS:Falseg(Theregaregmanygexceptionsgtogthegincrementalgapproach.gSomegfirmsgareg“
borngglobals”.gOthergfirmsgretaingthegsamegmode,gincludingglevelgofgsubsidiaryginvolve
ment,gingallgforeigngmarkets.)
Difficulty:gModerat
egPg:g23
Subject:gThegProcessgofgInternationalization
4. Agjointgventuregisgagcontractualgmodegofgforeigngentryginvolvinggaghighglevelgof
gresourcegcommitmentgbygallgpartners.
ANS:Falseg(AgJVgwillgnotgtypicallygrequiregasghighgagresourcegcommitmentgasgwegwou
ldgseegingwhollygownedgsubsidiaries.gIngaddition,gtheregisgsignificantgvariabilitygingtheg
levelgofgresourcesgcontributedgbygpartners.)
1
,Difficulty:g ModerategPg:
24g(Figureg1.2)gSubject:
Foreigngentrygmode
5. Emerginggmotivationsgforginternationalizationgincludegthegdesiregtogenhancegtheg
firm’sgcompetitivegpositiongandgthegdesiregtogdevelopgglobalgscanninggcapabiliti
es.
ANS:TruegDiff
iculty:
ModeratePg:
19-20
Subject:gEmerginggMotivations
6. ForgangMNEgtogexist,gfirstgforeigngcountriesgmustgprovideglocation-
specificgadvantagesgtogattractgthegcompanygtoginvestgthere,gsecondgthegcompanygmust
ghavegownership-
specificgadvantagesgthatgcounteractgitsgliabilitygofgforeignness,gthirdgthegcompanygmu
stghavegthegorganizationalgcapabilitygtogleveragegitsgstrategicgadvantagesgmoregeffectiv
elyginternallygthangexternally.
ANS:TruegDifficult
y:gModerategPg:g2
2
Subject:gPrerequisitesgforginternationalization
7. AngMNEgwithgang‘internationalgmentality’gwillgtypicallygbegmanagedgasgagcoor
dinatedgfederation.
ANS:TruegDifficult
y:gModerategPg:g2
6
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
8. AngMNEgwithgag‘multinationalgmentality’gwillgtypicallygbegmanagedgasgagcoor
dinatedgfederation.
ANS:Falseg(Itgwillgtypicallygbegmanagedgasgagdecentralizedgfederation.)Difficulty:g
Moderate
Pg:g26-27
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
2
,9. AngMNEgwithgag‘globalgmentality’gwillgtypicallygmanagegitsgoperationsgcentrally.
3
, ANS:TruegDifficult
y:gModerategPg:g2
7
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
10. AngMNEgwithgag‘transnationalgmentality’gwillgtypicallygbegmanagedgasgangintegratedgnetw
ork.
ANS:TruegDifficult
y:gModerategPg:g2
7
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
11. Thegcoregadvantagegmultinationalgmentalityghasgovergglobalgmentalitygisgmorege
fficientgmanufacturing.
ANS:Falseg(itgisgthegothergwaygaround)Difficulty:
Moderate
gPg:g26-
27
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
12. RaymondgVernon’sgarticleg“Gonegaregthegcashgcowsgofgyesteryear”ghighlightsgagco
mpany’sgglobalgscanninggandglearninggcapability.
ANS:TruegDiff
iculty:gHard
Pgg19g(footnoteg10)
Subject:gEmerginggMotivations
13. Onlygonegarticlegfurthergdevelopsgthegideagthatg“thegprocessgofgdevelopinggthesegstrat
egicgandgorganizationalgattributesgliesgatgthegheartgofgtheginternationalizationgprocessg
throughgwhichgagcompanygbuildsgitsgpositiongingworldgmarkets.
ANS:Falseg(2garticlesgfurthergdevelopgthegidea:gA.gJonssongandgN.gJ.gFoss,g“Internat
ionalgexpansiongthroughgflexiblegreplication:glearninggfromgtheginternationalizationgex
periencegofgIKEA,”gJournalgofgInternationalgBusinessgStudies,g42:9g(2011),
1079–
1102gandgJ.gW.gLugandgP.gW.gBeamish,g“Internationalgdiversificationgandgfirmg performan
ce:gthegS-curveghypothesis,”gAcademygofgManagementgJournal,g47:4g(2004),g598–
609.)gDifficulty:gHard
Pg:g22-23g(footnoteg15)
Subject:gProcessgofgInternationalization
4
dinggabroad:
Motivations,gmeans,gandgmentalities
True/False
1. TheglargestgMNEsgaregequivalentgingtheirgeconomicgimportancegtoglessgdevelopedgeco
nomiesgsuchgasgNigeria,gMoldova,gorgJamaica.
ANS:Falseg(SalesgofgtheglargestgMNEsgexceedgthegGDPsgofglessgdevelopedgcountries.)g
Difficulty:gModerate
Pg:g16gandgTableg1.3g(16)
Subject:gMNEginfluencegingthegglobalgeconomy
2. Thegprocessgofginternationalizationgfollowedgbygmostgfirmsgisgusuallygwell-
thoughtgoutgingadvancegandgtypicallygbuildsgongagcombinationgofgrationalganalysis
,gplanninggandgimplementation.
ANS:Falseg(Itgisgmoreglikelygagcombinationgofgrationalganalysis,gopportunism,gandgluc
k.gIngregardsgtogopportunism,gseveralgstudiesghavegfoundgthatgmostgfirmsgbegingexport
inggduegtogangunsolicitedgexportgorder.)
Difficulty:gModerat
egPg:g22-23
Subject:gThegProcessgofgInternationalization
3. Allgcompaniesginternationalizegingangincrementalgmanner.gFirst,gtheygmakeganginitia
lgcommitmentgofgresourcesgtogthegforeigngmarketgingordergtogsecureglocalgmarketgk
nowledge.gBuildinggongthisgknowledge,gtheygmakegsubsequentgresourcegcommitment
s,geventuallygleadinggtoghigherglevelsgofginvestmentgingthegforeigngmarket.
ANS:Falseg(Theregaregmanygexceptionsgtogthegincrementalgapproach.gSomegfirmsgareg“
borngglobals”.gOthergfirmsgretaingthegsamegmode,gincludingglevelgofgsubsidiaryginvolve
ment,gingallgforeigngmarkets.)
Difficulty:gModerat
egPg:g23
Subject:gThegProcessgofgInternationalization
4. Agjointgventuregisgagcontractualgmodegofgforeigngentryginvolvinggaghighglevelgof
gresourcegcommitmentgbygallgpartners.
ANS:Falseg(AgJVgwillgnotgtypicallygrequiregasghighgagresourcegcommitmentgasgwegwou
ldgseegingwhollygownedgsubsidiaries.gIngaddition,gtheregisgsignificantgvariabilitygingtheg
levelgofgresourcesgcontributedgbygpartners.)
1
,Difficulty:g ModerategPg:
24g(Figureg1.2)gSubject:
Foreigngentrygmode
5. Emerginggmotivationsgforginternationalizationgincludegthegdesiregtogenhancegtheg
firm’sgcompetitivegpositiongandgthegdesiregtogdevelopgglobalgscanninggcapabiliti
es.
ANS:TruegDiff
iculty:
ModeratePg:
19-20
Subject:gEmerginggMotivations
6. ForgangMNEgtogexist,gfirstgforeigngcountriesgmustgprovideglocation-
specificgadvantagesgtogattractgthegcompanygtoginvestgthere,gsecondgthegcompanygmust
ghavegownership-
specificgadvantagesgthatgcounteractgitsgliabilitygofgforeignness,gthirdgthegcompanygmu
stghavegthegorganizationalgcapabilitygtogleveragegitsgstrategicgadvantagesgmoregeffectiv
elyginternallygthangexternally.
ANS:TruegDifficult
y:gModerategPg:g2
2
Subject:gPrerequisitesgforginternationalization
7. AngMNEgwithgang‘internationalgmentality’gwillgtypicallygbegmanagedgasgagcoor
dinatedgfederation.
ANS:TruegDifficult
y:gModerategPg:g2
6
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
8. AngMNEgwithgag‘multinationalgmentality’gwillgtypicallygbegmanagedgasgagcoor
dinatedgfederation.
ANS:Falseg(Itgwillgtypicallygbegmanagedgasgagdecentralizedgfederation.)Difficulty:g
Moderate
Pg:g26-27
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
2
,9. AngMNEgwithgag‘globalgmentality’gwillgtypicallygmanagegitsgoperationsgcentrally.
3
, ANS:TruegDifficult
y:gModerategPg:g2
7
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
10. AngMNEgwithgag‘transnationalgmentality’gwillgtypicallygbegmanagedgasgangintegratedgnetw
ork.
ANS:TruegDifficult
y:gModerategPg:g2
7
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
11. Thegcoregadvantagegmultinationalgmentalityghasgovergglobalgmentalitygisgmorege
fficientgmanufacturing.
ANS:Falseg(itgisgthegothergwaygaround)Difficulty:
Moderate
gPg:g26-
27
Subject:gThegevolvinggmentality:ginternationalgtogtransnational
12. RaymondgVernon’sgarticleg“Gonegaregthegcashgcowsgofgyesteryear”ghighlightsgagco
mpany’sgglobalgscanninggandglearninggcapability.
ANS:TruegDiff
iculty:gHard
Pgg19g(footnoteg10)
Subject:gEmerginggMotivations
13. Onlygonegarticlegfurthergdevelopsgthegideagthatg“thegprocessgofgdevelopinggthesegstrat
egicgandgorganizationalgattributesgliesgatgthegheartgofgtheginternationalizationgprocessg
throughgwhichgagcompanygbuildsgitsgpositiongingworldgmarkets.
ANS:Falseg(2garticlesgfurthergdevelopgthegidea:gA.gJonssongandgN.gJ.gFoss,g“Internat
ionalgexpansiongthroughgflexiblegreplication:glearninggfromgtheginternationalizationgex
periencegofgIKEA,”gJournalgofgInternationalgBusinessgStudies,g42:9g(2011),
1079–
1102gandgJ.gW.gLugandgP.gW.gBeamish,g“Internationalgdiversificationgandgfirmg performan
ce:gthegS-curveghypothesis,”gAcademygofgManagementgJournal,g47:4g(2004),g598–
609.)gDifficulty:gHard
Pg:g22-23g(footnoteg15)
Subject:gProcessgofgInternationalization
4
