Ch 2 Transnational Mgmt

Chapter 2

Understanding the International Context: Responding to Conflicting Environmental Forces

True/False

1. MNEs from emerging markets seem to be more poorly equipped to compete in other emerging markets when compared to their counterparts from developed markets.

Answer: False (Increasingly, it is MNEs from emerging markets that seem best equipped to compete in other emerging markets. This is due in part to the experience they already possess in dealing with customers with similar income levels as well as with markets with similar institutions.)

Difficulty: Moderate

Page: 110; ppt slide 2-25

Topic: Growing pressures for localization

2. The three conflicting environmental forces that MNEs encounter are cross-border integration and coordination, national differentiation and responsiveness, and worldwide innovation and learning.

Answer: True

Difficulty: Easy

Page: 101-102; ppt slide 2-21

Topic: Responding to conflicting environmental forces

3. Global integration and coordination forces encountered by MNEs include economies of scale, government demands, and the expanding spiral of globalization.

Answer: False (Government demands are part of the ‘forces for local differentiation and responsiveness’.)

Difficulty: Moderate

Page: 102-105; ppt slides 2-22 to 2-24

Topic: Forces for global integration and coordination

4. Local responsiveness forces encountered by MNEs include cultural differences, government demands and economies of scope.

Answer: False (Economies of scope is part of ‘global integration and coordination forces’.)

Difficulty: Moderate

Page: 106 - 111; ppt slides 2-25 to 2-29

Topic: Forces for local differentiation and responsiveness

5. Worldwide innovation and learning forces that are encountered by MNEs are driven by factor costs.

Answer: False (It is mainly driven by the simultaneity of the globalizing and localizing forces, in general, and the increasing cost of R&D coupled with shortening life cycles of technologies and...