Multiple Choice Questions

21. (p. 305) The primary reason for the use of _____ is a desire by the MNC for total control and the belief that managerial efficiency will be better without outside partners. 

A. Licensing agreements

B. Franchising

C. Wholly owned subsidiaries

D. Joint ventures

22. (p. 310) This is an agreement in which two or more partners own and control an overseas business. 

A. Franchise

B. Wholly owned subsidiary

C. Licensing agreement

D. Joint venture

23. (p. 310) The equity joint venture: 

A. Is characterized by one group merely providing a service for another

B. Involves a financial investment by the MNC in a business enterprise with a local partner

C. Organizes worldwide operations based primarily on function and secondarily on product

D. Provides the most benefits when the need for product specification or differentiation is high

24. (p. 310) The nonequity venture: 

A. Is characterized by one group merely providing a service for another

B. Provides the most benefits when the need for product specification or differentiation is high

C. Involves a financial investment by the MNC in a business enterprise with a local partner

D. Organizes worldwide operations based primarily on function and secondarily on product

25. (p. 310) The two types of joint ventures are: 

A. Equity and non-equity ventures

B. Proprietary and public ventures

C. Statutory and unofficial ventures

D. External and internal ventures

26. (p. 312) This is an agreement that allows one party to use an industrial property right in exchange for payment to the other party. 

A. Franchise

B. Joint venture

C. License

D. Certificate of proprietary usage

27. (p. 313) A _____ is a business arrangement under which one party allows another to operate an enterprise using its trademark, logo, product line and methods of operation in return for a fee. 

A. License

B. Franchise

C. Certificate of proprietary usage

D. Joint venture

28. (p. 313) These agreements typically require payment of a fee upfront and then a percentage of the revenues. 

A. Franchise

B. Wholly owned subsidiary

C. Export

D. Joint venture

29. (p. 316) Aircraft manufacturing fits which of the following globalization versus local responsiveness combination? 

A. High pressure for globalization, high pressure for local responsiveness

B. High pressure for globalization, low pressure for local responsiveness

C. Low pressure for globalization, low pressure for local responsiveness

D. Low pressure for globalization, high pressure for local responsiveness

30. (p. 316) Clothing manufacturing fits which of the following globalization versus local responsiveness combination? 

A. Low pressure for globalization, low pressure for local responsiveness

B. Low pressure for globalization, high pressure for local responsiveness

C. High pressure for globalization, low pressure for local responsiveness

D. High pressure for globalization, high pressure for local responsiveness