Applying the Concept 3-1: Global Practices

Identify each practice as more likely to be used by large or small global companies:

A. large MNCs
B. small international companies

1. Companies that develop a product in one country and then bring the product to other countries.
B. Small international companies. They do not usually have the resources to introduce/market the product globally.

2. Companies that only import and/or export to operate globally.
B. Small international companies. They don’t have the resources to have their own facilities in other countries, so they tend to import and export.

3. Companies that have foreign nationals among their top-level managers.
A. Large MNCs. They have foreign nationals running direct investment facilities.

4. Companies that make their products in other countries.
A. Large MNCs. Small companies do not have the resources.

5. Companies that develop the latest technology through R&D.
A. Large MNCs. Small companies usually cannot afford to invest in R&D, so they quickly copy MNCs.

 

Applying the Concept 3-2: Forms of Global Business

Identify which activity or form of global business is described in each statement.

A. global sourcing
B. importing and exporting
C. licensing and franchising
D. contracting
E. strategic alliance and joint venture
F. direct investment

6. Springfield College offers a master’s degree program in Israel at the Health and Behavioral Sciences College, which provides the facilities and administrative support.
E. Joint venture and Strategic Alliances. This is a strategic alliance, which is a form of partnership joint venture even though a new company is not created.

7. Philips in France makes TVs using speakers from Japan.
A. Global sourcing. This is using foreign resources/parts as part of its final product.

8. Tires R Us in the United States buys tires from Bridgestone in Japan for retail sale.
B. Exporting/Importing. Buying foreign goods for sale is importing.

9. Chinese Alibaba buys a warehouse in America to distribute online orders in the United States.
F. Direct investment. Buying a building is a direct investment.

10. The American Children’s Television Workshop gives a Chinese company the right to make its Sesame Street character puppets.
C. Licensing. Licensing involves allowing another country the right to use an asset.

11. Whirlpool makes its appliances in its factory in Russia.
F. Direct investment. This is a foreign subsidiary.

12. Dell assembles its computers in the United States and sells them online to people globally.
B. Exporting/Importing. Selling computers in another country and shipping them is exporting.

13. Costco has a Canadian company make some of its Kirkland brand items for sale in its U.S. stores.
D. Contracting. The foreign firm only manufactures the product.

14. Wilson Sporting Goods buys the rubber for tennis balls from Brazil.
A. Global sourcing. This is using foreign resources/materials in a local product.

15. McDonald’s makes a deal with an Italian businessperson to open a McDonald’s in Rome.
C. Licensing and Franchising. This is giving a franchise.

 

Applying the Concept 3-3: GLOBE Dimensions

Identify the dimension of cultural diversity exemplified by each statement.

A. assertiveness
B. future orientation
C. gender differences
D. uncertainty avoidance
E. power distance
F. societal collectivism
G. in-group collectivism
H. performance orientation
I. humane orientation

16. The people in this country have one of the highest savings rates in the world.
F. Societal collectivism. The preferred sports are team sports rather than individual sports.

17. Managers throughout organizations in this country focus on getting the job done through teamwork.
E. Power distance. Status symbols represent and show power distance.

18. People in this country are known to be difficult to negotiate with.
I. Humane orientation. Providing poor working conditions shows low caring toward people.

19. In some companies in this country, the male managers go around kissing the female employees good morning; and the women get the coffee for the male managers.
D. Uncertainty avoidance. They fear the uncertainty and uncomfortable feeling change brings.

20. The people in this country follow the football/soccer team closely as they take great satisfaction from watching their team in the World Cup.
H. Performance orientation. The statement illustrates high achievement and material success. You cannot tell if the incentives are individual or collective rewards.

21. Managers place great importance on status symbols such as having the executive dining room, reserved parking spaces, and big offices.
E. Power distance. Status symbols like separate dinning and parking represent and show power distance.

22. Managers don’t really care about the safety of their employees and provide poor working conditions.
I. Humane orientation. Providing poor working conditions shows low caring toward people.

23. Employees get nervous and stressed when they even hear that changes are coming.
D. Uncertainty avoidance. They fear the uncertainty and uncomfortable feeling change brings.

24. Employees focus on constant small changes to make the products and processes better.
H. Performance orientation. The statement illustrates striving for improvements.