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Typically, firms tend to concentrate research and development activities abroad rather than in their home countries.

A) True
B) False

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False

To maximize returns, management should outsource those activities ________.


A) that offer great value to the bottom line
B) in which it is relatively weak
C) that are critical to the firm's core competencies
D) in which it has the greatest expertise and knowledge

E) A) and B)
F) A) and C)

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A company-owned subsidiary is ________.


A) accomplished by contracting with intermediaries located in the firm's home market
B) typically achieved by contracting with intermediaries located in the foreign market
C) a foreign intermediary that serves as an extension of the exporter, negotiating on behalf of the exporter and assuming such responsibilities as local supply-chain management, pricing, and customer service
D) a representative office of the focal firm that handles marketing, physical distribution, promotion, and customer service activities in the foreign market

E) A) and C)
F) A) and B)

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________ refers to sourcing from the firm's own production facilities.


A) Captive sourcing
B) Crowdsourcing
C) Business process outsourcing
D) Externalization

E) B) and C)
F) B) and D)

Correct Answer

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Audio Component Outsourcing (Scenario) Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality. -Which of the following is TRUE with regard to the risks of global sourcing?


A) Inadequate legal systems, red tape, convoluted tax systems, and complex business regulations complicate local operations in many countries.
B) Firms that source from countries whose currencies are strengthening experience lower costs.
C) Global sourcing weakens competition leading to a considerably risk-free international business environment.
D) Environmental challenges exclude currency fluctuations, tariffs and other trade barriers, high energy and transportation costs.

E) A) and D)
F) C) and D)

Correct Answer

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Back office activities can be classified under BPO (Business Process Outsourcing).

A) True
B) False

Correct Answer

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In a short essay, explain why most firms use exporting as part of their internationalization portfolio, and discuss how Incoterms have mitigated problems with logistics.

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Beyond initial entry, most firms, large ...

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Global Sourcing Debate (Scenario) Prof. Sean Peterson's class of international business has been studying the controversies surrounding global sourcing. Prof. Peterson divided the class into two groups, A and B. Group A was assigned the task of defending global sourcing, whereas Group B was assigned the task of arguing against global sourcing. -Which of the following propositions would most likely be presented by Group B?


A) Global sourcing adversely affects national competitiveness.
B) Global sourcing improves the efficiency of manufacturing firms.
C) Global sourcing empowers workers in general.
D) Global sourcing is usually undertaken by focal firms to increase efficiency.

E) A) and B)
F) B) and D)

Correct Answer

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A

In the decision about whether to outsource, research and development is considered an important issue for the firm.

A) True
B) False

Correct Answer

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Which of the following is the best example of a back-office BPO (Business Processing Outsourcing) activity?


A) customer service
B) billing
C) marketing
D) technical support

E) A) and C)
F) B) and C)

Correct Answer

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Offshoring is a process of creative destruction; according to this view, firms' innovative activities tend to make mature products obsolete over time.

A) True
B) False

Correct Answer

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Focal firms typically source from external suppliers for all of the following reasons EXCEPT ________.


A) the product or service obtained is non-core
B) the product can be purchased inexpensively
C) the supplier specializes in providing the product or service
D) the supplier offers the same product to competing firms

E) All of the above
F) A) and B)

Correct Answer

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Discuss the major risks associated with global sourcing.

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In addition to potential benefits, globa...

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Firms often establish their own sourcing operations abroad to maintain control of outsourced activities and technologies.

A) True
B) False

Correct Answer

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True

As a strategic asset, ________ is of the lowest importance to a firm.


A) customer service
B) R&D, design
C) manufacturing of parts
D) marketing and branding

E) A) and B)
F) All of the above

Correct Answer

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In a short essay, explain how global sourcing can contribute significantly to a firm's ability to achieve its strategic goals. Why is "achievement of strategic goals" actually the best rationale for global sourcing?

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The strategic view of global sourcing-ca...

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The Internet facilitates international trade in the service sector by ________.


A) providing the means to export some types of services to foreign markets
B) providing the means to avoid taxes in the foreign market
C) allowing firms to attain maximum control by establishing ownership of key assets
D) eliminating the need to deal with foreign currency exchange rates

E) A) and B)
F) A) and C)

Correct Answer

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The growth of global sourcing has been driven by ________.


A) the declining demand for highly skilled workers
B) the rapidly aging population in advanced economies
C) technological advances in communications
D) the rising costs of international business

E) B) and D)
F) None of the above

Correct Answer

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Audio Component Outsourcing (Scenario) Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality. -The strategic view of global sourcing suggests that ________.


A) just as firms achieve gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, they also obtain the means to turn around failing businesses, speed up innovation, restructure operations, and fund otherwise-unaffordable development projects
B) firms that procure supplies from foreign subsidiaries are more likely than not to lose ground to competitors who primarily bank on their own resources
C) a strong legal environment is not the prerequisite for increasing efficiencies by relocating strategic operations abroad
D) the firms' innovative activities tend to make mature products obsolete over time

E) None of the above
F) C) and D)

Correct Answer

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If a computer contains a microprocessor from Costa Rica and a hard disk drive from the Philippines, the computer manufacturer, who is based in Texas and operates across Europe and West Asia, most likely uses ________ as an entry strategy.


A) exporting
B) franchising
C) global sourcing
D) licensing

E) B) and C)
F) A) and D)

Correct Answer

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Showing 1 - 20 of 107

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