ADMS 4570 Chapter Notes - Chapter 4: Goal Setting, Tacit Knowledge, Social Capital
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The primary costs of FDI to host countries are:
Loss of sovereignty and patriotism | ||
Adverse effects on competition and exports | ||
Capital outflow | ||
Loss of sovereignty, adverse effects on competition, and capital outflow |
____ suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantage by specializing in the production of certain goods or services.
The radical view | ||
The free market view | ||
Pragmatic nationalism | ||
Expropriation |
What are the benefits of FDI to home countries?
Repatriated earnings from profits from FDI. | ||
Increased exports of components and services to host countries. | ||
Learning via FDI from operations abroad. | ||
All of these answers |
When one firm enters a foreign country through FDI, its rivals are likely to follow by undertaking additional FDI in a host country to:
Create knowledge spillover | ||
Discover a new market for its goods | ||
Overcome and combat market failure through FDI | ||
Acquire location advantages or neutralize the first moverâs location advantages |
Most countries practice:
Pragmatic nationalism | ||
Free market based FDI | ||
Government embracing radical view | ||
French patriotism |
FDI may be viewed as a reflection of firm motivation to extend firm-specific capabilities abroad and their responses to overcome imperfections and failures.
True | ||
False |
Most countries practice a totally "free market" view.
True | ||
False |
8. Outsourcing is the process of turning over an organizational activity to an outside supplier, located in a foreign country, which will perform it on behalf of the local firm.
True | ||
False |
Financial, physical, and technological resources and capabilities are all tangible assets.
True | ||
False |
A firm's resources and capabilities are tangible assets a firm uses to choose and implement its strategies.
True | ||
False |
An example of low power distance would be when subordinates address their bosses on a first-name basis.
True | ||
False |
Benchmarking is an assessment as to whether a firm has resources and capabilities to perform a particular activity in a manner superior to competitors.
True | ||
False |
A country with low-masculinity has a more subtle differentiation between the gender roles.
True | ||
False |
Setting up subsidiaries abroad so the work can be performed in-house but in the foreign location is also called captive sourcing.
True | ||
False |
Managers in low uncertainty avoidance countries rely more on experience and training than managers in high uncertainty avoidance countries who rely more on rules.
True | ||
False |
Informal institutions include laws, regulations, and rules.
True | ||
False |
The United States is often classified as a collective society.
True | ||
False |
A pure market economy characterized by the "invisible hand" of market forces is noted by
John Stuart Mill | ||
Adam Smith | ||
Aristotle | ||
Amatya Zen |
Culture is defined in the text as:
The communication between members of similar location. | ||
The collective programming of the mind, which distinguishes the members of one group or category of people from another. | ||
The main component of formal institutions. | ||
The attitudes and behaviors characteristic of a particular social group or organization. |
When an expat employee returns to her or his current employer but the employer does not provide attractive opportunities, she/he often may be hired by a competitor firm. Why?
Competitor firms are also interested in globalizing their business. | ||
Former expats bring instant expertise and experience. | ||
Competing firms will pay a higher premium for expertise. | ||
All of these answers |
The government taking a "hands-off approach" is known as:
Laissez faire | ||
Command economy | ||
Mixed economy | ||
Liberal approach |
Expatriate managers make ideal candidates for top management positions.
True | ||
False |
____ are defined as rights associated with the ownership of intellectual property.
Patents | ||
Copyrights | ||
Trademarks | ||
Intellectual property rights |
In a collective society:
Family units are highly valued. | ||
Being an entrepreneur is a popular mindset | ||
Being different than your neighbor is important. | ||
Outsiders are easily trusted. |
Which of the following definitions best defines an expatriate manager?
A manager who works outside his or her native country | ||
A manager of great expertise | ||
An ex-manager rehired for advisory purposes | ||
None of these answers |
Question 1
Which compensation method helps to explain the large difference between the salaries of top-level managers and mid-level managers in a firm?
A. | Tournaments | |
B. | New blood | |
C. | Piece rate | |
D. | Backloaded compensation |
3 points
Question 2
Please consider the information provided under Question 19 in Chapter 3 (page 54). Based on the stated information, the optimal number of bees kept if the externality is ignored by Yung is 5,000. Is the socially optimal number of bees higher or lower than 5,000?
A. | We do not have enough information to answer this question | |
B. | Same | |
C. | Lower | |
D. | Higher |
3 points
Question 3
Which of the following factors contribute to the existence of firms?
A. | All of these factors contribute to firm existence | |
B. | Risks associated with specialization | |
C. | Incomplete contracts | |
D. | Willingness of some people to take on risk in exchange for residual income |
3 points
Question 4
Public goods are often subject to free-rider problems because these goods are:
A. | Non-rival and non-excludable | |
B. | Rival and non-excludable | |
C. | Non-rival and excludable | |
D. | Rival and excludable |
3 points
Question 5
Which of the following is the most efficient mechanism for allocating scarce goods?
A. | Government allocation system | |
B. | First-come-first-served system | |
C. | Market system | |
D. | Random allocation system |
3 points
Question 6
Many years ago, most of the major Hollywood movie studios also owned chains of local movie theaters across the US. Today, most of the local movie theaters are owned by other companies. What has happened to the degree of integration in the movie industry over time?
A. | Less horizontally integrated | |
B. | Less vertically integrated | |
C. | More horizontally integrated | |
D. | More vertically integrated |
3 points
Question 7
Your firm produces replacement parts for the nuclear submarines operated by the US Navy. Which one of Porter's Five Forces will be most prominent in determining your strategies and profitability?
A. | Bargaining Power of Suppliers | |
B. | Bargaining Power of Customers | |
C. | Threat of New Entrants | |
D. | Threat of Substitutes |
3 points
Question 8
Which of the following statements is NOT true?
A. | The market mechanism for allocating resources is most efficient due to the incentives it creates. | |
B. | Markets are always the most efficient way to allocate goods, even if the market is not perfectly competitive. | |
C. | The random allocation mechanism provides no incentives at all. | |
D. | The government allocation mechanism provides no incentive for the economy to grow. |
3 points
Question 9
Suppose a firm's cost structure exhibits economies of scope. Which of the following actions is compatible with this cost structure?
A. | Diversify into other product lines | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | Focus on core competencies and reduce production | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | Focus on core competencies and maintain constant production | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. | Focus on core competencies and expand production Question 10 Please refer to Table 8.3 on page 132 in the book. Suppose we change the payoffs in the "low price, low price" cell to 0, 25 from 0, 0. Does this change the Nash equilibrium for the game, and is the game still a Prisoner's Dilemma?
3 points Question 11 Which of the following statements about restricting entry to markets is NOT true?
3 points Question 12 Your firm earns $2 million per quarter in total revenue, and your accounting profits are $100,000 per quarter. You do not charge the firm for the use of an old building that you own because it is 50 years old and fully depreciated. However, another firm has offered you $200,000 per quarter to use the facility, and this is the market rental rate for similar facilities. In this case, we know that your:
3 points Question 13 Please refer to Question 13 in Chapter 1 (page 17). What is the marginal cost of reducing global warming by 0.017 degrees?
3 points Question 14 In Chapter 6, Boyes focuses on negative externalities such as the various types of pollution. However, as we discussed during our online session, we can also observe positive externalities in which external benefits are generated for people. Which of the following is NOT an example of a positive externality?
3 points Question 15 Common property resources are:
3 points Question 16 The free-rider problem arises in markets for common property resources.
3 points Question 17 Firms that set their product price below the actual cost of production may be engaging in:
3 points Question 18 Under a cap-and-trade mechanism to control air pollution, what happens to the price of pollution rights if the supply of righs is reduced (i.e., the supply of rights is reduced)?
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