Deck 10: The Transnational Corporationhow Does the Global Firm Keep It All Together

Question 1

The so-called myth of the global corporation views TNCs as simply an organizational "black box" that converts ___________________ and creates profits for its shareholders.

A) Inputs into outputs
B) Production processes into capital
C) International currencies
D) All of the above
E) None of the above

Answer 1

Inputs into outputs

Question 2

The myth of the global corporation is underpinned by its apparently:

A) Enormous financial capital
B) Massive productive capacity
C) Huge levels of employment
D) All of the above
E) None of the above

Answer 2

All of the above

Question 3

TNCs have substantial corporate power to negotiate and bargain with developing countries, particularly those characterized by:

A) A growing middle-class
B) Rapid economic development and industrialization
C) Weak or failed states
D) All of the above
E) None of the above

Answer 3

Weak or failed states

Question 4

This is a sophisticated framework for understanding the forms of value-adding activity organized and coordinated by the TNC in conjunction with its many global partners, suppliers, service providers, and customers.

A) Commodity chain approach
B) Global production networks
C) Econometrics
D) All of the above
E) None of the above

Question 5

The most spatially mobile part of a TNC's global production network is often its:

A) Headquarters
B) Production operations
C) R&D facilities
D) All of the above
E) None of the above

Question 6

In this pattern of industrial organization, the parent TNC directly owns and controls most of its operations a the production chain.

A) Territorial integration
B) Pivotal integration
C) Vertical integration
D) Logistics integration
E) Subsidiary integration

Question 7

These are value-added activities that occur within the legal and organizational boundaries of a particular TNC.

A) External exchanges
B) Internalized transactions
C) Domestic transactions
D) All of the above
E) None of the above

Question 8

These are business relationships that exist between independent firms, some of which may be TNCs.

A) Internal exchanges
B) Transnational transactions
C) Externalized transactions
D) All of the above
E) None of the above

Question 9

These are the nerve centers of TNCs where important strategies are formulated and decisions are made.

A) Research and development (R&D) facilities
B) Corporate and regional headquarters
C) Transnational operating units
D) All of the above
E) None of the above

Question 10

These organizational units of the TNC provide important knowledge and expertise to keep the firm competitive in the global marketplace.

A) Research and development (R&D) facilities
B) Corporate and regional headquarters
C) Transnational operating units
D) All of the above
E) None of the above

Question 11

These units cover a wide range of activities from manufacturing plants and facilities to sales and marketing offices, fulfillment centers, and after-sale service centers.

A) Research and development (R&D) facilities
B) Corporate and regional headquarters
C) Transnational operating units
D) All of the above
E) None of the above

Question 12

R&D facilities encompass which of the following activities?

A) Product development
B) New process technologies
C) Operational research
D) All of the above
E) None of the above

Question 13

This is the lowest level of R&D facility and is primarily concerned with adapting parent company technologies for the local market and providing technical backup.

A) Internationally integrated R&D lab
B) Locally integrated R&D lab
C) Support lab
D) All of the above
E) None of the above

Question 14

These R&D facilities are oriented toward local markets and regulatory requirements that are not necessarily found in other markets.

A) Internationally integrated R&D lab
B) Locally integrated R&D lab
C) Support lab
D) All of the above
E) None of the above

Question 15

This is the brain behind a TNC's innovative products and/or services that contribute to its competitive advantage.

A) Internationally integrated R&D lab
B) Locally integrated R&D lab
C) Support lab
D) All of the above
E) None of the above

Question 16

This mode of organizing transnational production units is the most developed and coordinated organizational structure.

A) Host-market production structure
B) Product specialization for a global or regional market
C) Transnational vertical integration
D) Modular production
E) Globally concentrated production

Question 17

This mode of transnational production tends to be applicable mainly to manufacturing industries--for example, the electronics, automobile, and petrochemical industries.

A) Host-market production structure
B) Product specialization for a global or regional market
C) Transnational vertical integration
D) Modular production
E) Globally concentrated production

Question 18

This mode of organizing transnational production is preferred where there are considerable barriers to trade in host countries, meaning that exports may not be the most efficient channel to reach host markets.

A) Host-market production structure
B) Product specialization for a global or regional market
C) Transnational vertical integration
D) Modular production
E) Globally concentrated production

Question 19

This mode of transnational production applies to some resource extraction and manufacturing industries. It does not generally work well for service industries, as services are much harder to export.

A) Host-market production structure
B) Product specialization for a global or regional market
C) Transnational vertical integration
D) Modular production
E) Globally concentrated production

Question 20

Most TNCs start with this strategy in their early years, when they are likely to locate all production in their home countries and export to the rest of the world.

A) Host-market production structure
B) Product specialization for a global or regional market
C) Transnational vertical integration
D) Modular production
E) Globally concentrated production

Question 21

The primary advantage of transnational vertical integration is to exploit spatial variations in ___________________ costs.

A) Advertising
B) Production
C) Trademark and patenting
D) All of the above
E) None of the above

Question 22

Major car makers continue to organize their transnational production networks with a great deal of:

A) Inclusivity
B) Mergers and acquisitions
C) Vertical integration
D) All of the above
E) None of the above

Question 23

Most TNCs are simultaneously controlling their own intra-firm networks of foreign subsidiaries and affiliates at the same time as managing a dense web of __________________ networks.

A) Proprietary
B) Inter-firm
C) Intra-firm
D) Communication
E) Marketing

Question 24

An example of an inter-firm relationship is:

A) Subcontracting and joint venture
B) Strategic alliances and joint ventures
C) Franchising and cooperative agreements
D) All of the above
E) None of the above

Question 25

Subcontracting is also commonly referred to as:

A) In-house contracting
B) Outsourcing
C) Preferential hiring
D) All of the above
E) None of the above

Question 26

Subcontracting involves engaging ________________ firms to produce goods specifically for the principal firm.

A) Host-country
B) Research and development
C) Independent
D) All of the above
E) None of the above

Question 27

This occurs when the principal firm (the buyer) subcontracts most, if not the entire, production to another firm (the supplier) in another country.

A) Industrial subcontracting
B) Intra-firm subcontracting
C) Commercial subcontracting
D) All of the above
E) None of the above

Question 28

This mode of international subcontracting is most common in today's electronics industry, particularly the manufacturing of personal computers, consumer electronics, and household appliances.

A) Commercial subcontracting
B) Transnational subcontracting
C) Inter-firm subcontracting
D) All of the above
E) None of the above

Question 29

Buyers who subcontract their manufacturing may supply product specifications in what is called ____________________________ so that the finished products are exactly the same as if the buyer had produced them.

A) Original design manufacturing (ODM)
B) Original equipment manufacturing (OEM)
C) Original target manufacturing (OTM)
D) All of the above
E) None of the above

Question 30

Industrial subcontractors do not engage in _____________________________ and final distribution on behalf of their customers.

A) Original design manufacturing (ODM)
B) Original equipment manufacturing (OEM)
C) Original target manufacturing (OTM)
D) All of the above
E) None of the above

Question 31

Industrial subcontracting takes place when the suppliers only carry out:

A) Design
B) Research and development
C) Manufacturing
D) All of the above
E) None of the above

Question 32

International subcontracting has led to the development of enclaves of ____________________ production in developing countries.

A) Export-oriented
B) Domestic-oriented
C) Targeted subregional
D) All of the above
E) None of the above

Question 33

Enclaves host ______________________ activity that forms an integral part of the global production networks of most TNCs.

A) Command and control
B) Research and development
C) Labor-intensive manufacturing
D) All of the above
E) None of the above

Question 34

Enclaves are also commonly referred to as:

A) Tertiary extensions
B) Satellite production clusters
C) Spatial units
D) All of the above
E) None of the above

Question 35

Firms participating in strategic alliances or joint ventures do not experience ____________________ and thus remain independent of the alliance or joint venture partner.

A) Ownership change
B) Intra-firm restructuring
C) Tariffs
D) All of the above
E) None of the above

Question 36

Firms in very ________________ industries tend to engage in inter-firm collaborations such as strategic alliances.

A) Creative
B) Collaborative
C) Competitive
D) All of the above
E) None of the above

Question 37

__________________ refers to an organizational form in which the TNC owner of a registered trademark or intellectual property rights agrees to let a franchisee (often outside the home country) use that trademark or rights.

A) Collaboration
B) Cooperation
C) Franchising
D) All of the above
E) None of the above

Question 38

"Co-opetition" refers to:

A) A creative approach to collaboration
B) A cooperative approach to competition
C) A competitive approach to collaboration
D) All of the above
E) None of the above

Question 39

Strategic alliances are common in industries that exhibit:

A) Intense competition
B) High costs of R&D and new product development
C) Rapid rate of technological change
D) All of the above
E) None of the above

Question 40

A(n) _______________ relationship is established between the franchisor (a TNC) and the franchisee (a local firm).

A) Domestic
B) Inter-firm
C) Intra-firm
D) Proprietary
E) Property

Question 41

How does a focus on global production networks differ from a focus on commodity chains?

Question 42

Discuss four aspects of vertical integration as a pattern of industrial organization that are a benefit to the parent TNC. In which sectors does vertical integration persist, and why is this the case?