Multi International Business Facts Quiz

12 Questions

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Multi International Business Facts Quiz

It is one thing to have a local business, and it is another to venture into the global market. A multinational corporation is usually a large corporation incorporated in one country which produces or sells goods or services in various countries. The companies are commonly large and are centered on parent companies. Take this quiz and test your understanding of multi-international business facts.


Questions and Answers
  • 1. 
    • A. 

      The activities the firm itself performs versus purchases from independent firms

    • B. 

      The level of expertise of the firm's workforce

    • C. 

      The breadth of products a firm produces

    • D. 

      The production output level for a firm

    • E. 

      The chain of production processes from raw materials to finished good

  • 2. 
    Which of the following processes is most representative of a vertically integrated firm on the "make" end of the make-or-buy continuum?
    • A. 

      Arm's length market transactions

    • B. 

      Long-term contracts

    • C. 

      Strategic alliance and joint ventures

    • D. 

      Parent/subsidiary relationships

    • E. 

      Perform activity internally

  • 3. 
    Which of the following processes is is most representative of a less integrated firm on the "buy" end of the make-or-buy continuum?
    • A. 

      Arm's length market transactions

    • B. 

      Long-term contracts

    • C. 

      Strategic alliance and joint ventures

    • D. 

      Parent/subsidiary relationships

    • E. 

      Parent/subsidiary relationships

  • 4. 
    Which of the following has a downstream relationship with a Toyota Motor Corporation?
    • A. 

      Steel manufacturer

    • B. 

      Tire companies

    • C. 

      Dealerships

    • D. 

      Paint producer

    • E. 

      Car parts manufacturer

  • 5. 
    The biotechnology industry is seeing a broad pattern of disintegration due to the fact that big pharma companies are less and less doing which of the following core functions?
    • A. 

      Infrastructure

    • B. 

      Product innovation

    • C. 

      Obtaining regulatory approval

    • D. 

      Customer relationship

    • E. 

      Manufacturing and communications

  • 6. 
    • A. 

      Firms should make an asset, rather than buy it, if that asset is a source of competitive advantage for the firm

    • B. 

      Firms should buy, rather than make, to avoid the costs of making the product

    • C. 

      Firms should make, rather than buy, to avoid paying a profit margin to independent firms

    • D. 

      Firms should buy, rather than make, in general, because market firms are subject to the discipline of the market and must be efficient and innovative to survive

    • E. 

      Firms should make, rather than buy, because a vertically integrated producer will be able to avoid paying high market prices for the input during periods of peak demand or scarce supply

  • 7. 
    What is a reason that companies might want to "buy" instead of "make" talent from the market when looking to acquire employees with a particular skill set?
    • A. 

      External training methods are better than internal ones

    • B. 

      Companies are always willing to pay more for external employees

    • C. 

      External training is more advanced (up-to-date) than internal

    • D. 

      Scale economies can result in fixed education costs while in house education methods may be more expensive

    • E. 

      Externally trained employees are more likely to become better business leaders

  • 8. 
    What is a market firm?
    • A. 

      Firm representing a particular industry

    • B. 

      Financial firm

    • C. 

      Subsidiary of the large parent firm

    • D. 

      Large scale firm

    • E. 

      An independent outsourcing partner

  • 9. 
    What are agency costs?
    • A. 

      Costs of the sales force

    • B. 

      Costs associated with slack effort and with the administrative controls to deter it

    • C. 

      Costs related to general and administrative expenses

    • D. 

      Costs associated with outsourcing and firm functions

    • E. 

      Costs attributed to the use of professional service firms

  • 10. 
    • A. 

      Costs centers have no dedicated "customer"

    • B. 

      Costs centers are easy to judge against market counterparts performing similar functions

    • C. 

      Firms are unwillingly to endure the ill will generated by firing unproductive elements in an organization

    • D. 

      Firms are always looking to cut costs when they retain an advantage insulting it from the market

    • E. 

      Managers of costs centers have significant latitude to complete their jobs

  • 11. 
    What primary agency cost problem plagued the partnership between Sony's hardware and software from 1998-2008 with regards to digital music?
    • A. 

      High infrastructure costs

    • B. 

      Contract disputes

    • C. 

      High transaction costs

    • D. 

      Overlapping distribution channels

    • E. 

      Manager/worker slacking

  • 12. 
    • A. 

      Costs associated with slack effort with the administrative controls to deter it

    • B. 

      The cost of activities aimed at affecting the distribution of benefits in an organization

    • C. 

      Costs related to the negotiation of external contacts

    • D. 

      Costs of recruiting ("buying") outside employees with a particular skill set

    • E. 

      The costs of advertising to customers