Question 1

Industries that benefit the most from global sourcing are characterized by low labor intensity in product and service production.

Accepted Answer

A) True 
 B)False

Question 2

________ is the primary rationale for sourcing abroad.

Accepted Answer

A)  Superior quality control 
B)  Centralized management of work teams 
C)  Cost efficiency 
D)  Uninterrupted innovation 
A)  Superior quality control 
B)  Centralized management of work teams 
C)  Cost efficiency 
D)  Uninterrupted innovation

Question 3

An American company that planned to outsource IT development would be most likely to save significantly in salary costs by hiring qualified professionals from ________.

Accepted Answer

A)  Hong Kong 
B)  Philippines 
C)  the United States of America 
D)  Germany 
A)  Hong Kong 
B)  Philippines 
C)  the United States of America 
D)  Germany

Question 4

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 5

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 a potential benefit that Echo can derive from global sourcing?

Accepted Answer

A)  cheap R&D 
B)  access to qualified personnel in the home country 
C)  strong intellectual property protection 
D)  improved productivity and service 
A)  cheap R&D 
B)  access to qualified personnel in the home country 
C)  strong intellectual property protection 
D)  improved productivity and service

Question 6

Which of the following nations is a popular base for technical and user-support services for English-, French-, and German-speaking customers throughout Europe?

Accepted Answer

A)  Saudi Arabia 
B)  the United States of America 
C)  South Africa 
D)  Germany 
A)  Saudi Arabia 
B)  the United States of America 
C)  South Africa 
D)  Germany

Question 7

Global sourcing eliminates the possibility of new rivals being created in a country.

Accepted Answer

A) True 
 B)False

Question 8

The likelihood of a firm internalizing research and development instead of outsourcing it is low.

Accepted Answer

A) True 
 B)False

Question 9

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.
-The concept of creative destruction can be reasonably used by Group A to support the view that ________.

Accepted Answer

A)  firms that engage in offshoring are more likely than not to fail in the long run 
B)  offshoring forces unskilled workers to seek additional education 
C)  global sourcing creates opportunities and stimulates innovation 
D)  outsourcing technical jobs leads to brain drain 
A)  firms that engage in offshoring are more likely than not to fail in the long run 
B)  offshoring forces unskilled workers to seek additional education 
C)  global sourcing creates opportunities and stimulates innovation 
D)  outsourcing technical jobs leads to brain drain

Question 10

Most companies cite cost cutting as the main reason for global sourcing.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

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.

Question 14

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 15

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following refers to a risk, stemming from environmental factors, that is closely associated with global sourcing?

Accepted Answer

A)  weak intellectual property laws 
B)  overreliance on suppliers 
C)  high energy costs 
D)  rapid turnover of skilled employees 
A)  weak intellectual property laws 
B)  overreliance on suppliers 
C)  high energy costs 
D)  rapid turnover of skilled employees

Question 17

In a short essay, explain how global sourcing can affect home-country employees.

Accepted Answer

Global sourcing can leave employees caug

Question 18

Which of the following most likely explains why India is a popular offshoring destination?

Accepted Answer

A)  total absence of trade unions 
B)  inexpensive land available for developing new MNE facilities 
C)  lack of educated engineers, managers, and other specialists 
D)  skilled workers who work for low wages 
A)  total absence of trade unions 
B)  inexpensive land available for developing new MNE facilities 
C)  lack of educated engineers, managers, and other specialists 
D)  skilled workers who work for low wages

Question 19

Close collaboration with suppliers in codevelopment and codesign activities enables the focal firm to continuously tap ideas for new products, processes, technologies, and improvements.

Accepted Answer

A) True 
 B)False

Question 20

What is offshoring? Describe the types of industries that tend to offshore. What industries are not conducive to offshoring and why not?

Accepted Answer

Offshoring is the relocation of a busine

Industries that benefit the most from global sourcing are characterized by low labor intensity in product and service production.

________ is the primary rationale for sourcing abroad.

An American company that planned to outsource IT development would be most likely to save significantly in salary costs by hiring qualified professionals from ________.

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

Which of the following nations is a popular base for technical and user-support services for English-, French-, and German-speaking customers throughout Europe?

Global sourcing eliminates the possibility of new rivals being created in a country.

The likelihood of a firm internalizing research and development instead of outsourcing it is low.

Most companies cite cost cutting as the main reason for global sourcing.

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

The growth of global sourcing has been driven by ________.

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

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

Which of the following refers to a risk, stemming from environmental factors, that is closely associated with global sourcing?

In a short essay, explain how global sourcing can affect home-country employees.

Which of the following most likely explains why India is a popular offshoring destination?

Close collaboration with suppliers in codevelopment and codesign activities enables the focal firm to continuously tap ideas for new products, processes, technologies, and improvements.

What is offshoring? Describe the types of industries that tend to offshore. What industries are not conducive to offshoring and why not?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters

Exam 17: Global Sourcing

Industries that benefit the most from global sourcing are characterized by low labor intensity in product and service production.

________ is the primary rationale for sourcing abroad.

An American company that planned to outsource IT development would be most likely to save significantly in salary costs by hiring qualified professionals from ________.

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

Which of the following nations is a popular base for technical and user-support services for English-, French-, and German-speaking customers throughout Europe?

Global sourcing eliminates the possibility of new rivals being created in a country.

The likelihood of a firm internalizing research and development instead of outsourcing it is low.

Most companies cite cost cutting as the main reason for global sourcing.

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

The growth of global sourcing has been driven by ________.

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

Given the complexities of international business, manufacturing is generally the only value-chain activity that firms outsource abroad.

Which of the following refers to a risk, stemming from environmental factors, that is closely associated with global sourcing?

In a short essay, explain how global sourcing can affect home-country employees.

Which of the following most likely explains why India is a popular offshoring destination?

Close collaboration with suppliers in codevelopment and codesign activities enables the focal firm to continuously tap ideas for new products, processes, technologies, and improvements.

What is offshoring? Describe the types of industries that tend to offshore. What industries are not conducive to offshoring and why not?

Introduction: What Is International Business

Globalization of Markets and the Internationalization of the Firm

Organizational Participants That Make International Business Happen

The Cultural Environment of International Business

Ethics and International Business

Theories of International Trade and Investment

Political and Legal Systems in National Environments

Government Intervention in International Business

Regional Economic Integration

Understanding Emerging Markets

The International Monetary and Financial Environment

Strategy and Organization in the International Firm

Global Market Opportunity Assessment

Exporting and Countertrade

Foreign Direct Investment and Collaborative Ventures

Licensing, Franchising, and Other Contractual Strategies

Marketing in the Global Firm

Human Resource Management in the Global Firm

Financial Management and Accounting in the Global Firm

Filters