Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

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?

Accepted Answer

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. 
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. A

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

A company-owned subsidiary is ________.

Accepted Answer

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 
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

Question 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

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 
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

Question 8

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?

Accepted Answer

The strategic view of global sourcing-ca

Question 9

The growth of global sourcing has been driven by ________.

Accepted Answer

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 
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

Question 10

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

Accepted Answer

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

Question 11

Discuss the major risks associated with global sourcing.

Accepted Answer

In addition to potential benefits, globa

Question 12

To maximize returns, management should outsource those activities ________.

Accepted Answer

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 
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

Question 13

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.

Accepted Answer

Beyond initial entry, most firms, large

Question 14

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?

Accepted Answer

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. 
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.

Question 15

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.

Accepted Answer

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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 
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

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

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

Question 20

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 ________.

Accepted Answer

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 
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

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

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

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

A company-owned subsidiary is ________.

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

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

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?

The growth of global sourcing has been driven by ________.

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

Discuss the major risks associated with global sourcing.

To maximize returns, management should outsource those activities ________.

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.

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.

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

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

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

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

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters

Exam 13: Exporting and Global Sourcing

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

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

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

A company-owned subsidiary is ________.

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

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

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?

The growth of global sourcing has been driven by ________.

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

Discuss the major risks associated with global sourcing.

To maximize returns, management should outsource those activities ________.

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.

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.

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

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

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

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

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

The Cultural Environment of International Business

Ethics, Corporate Social Responsibility, Sustainability and Corporate Governance in International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention and Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Financial Management and Accounting in the Global Firm

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Filters