Question 1

Policy and control mechanisms,along with awareness of the historical treatment of multinational companies (MNCs)within certain nations,allow firms to evaluate the inherent risk of doing business in those countries.

Accepted Answer

A) True 
 B)False

Question 2

Broadly,_____ strategies may include leveraging bilateral,regional,and international trade and investment agreements,drawing on bilateral and multilateral financial support,and using project finance structures to separate project exposure from overall firm risk.

Accepted Answer

A)  protective and defensive 
B)  vertical investment 
C)  integrative 
D)  proactive political

Question 3

When host governments do not require alliances as a condition for entry,many multinational companies:

Accepted Answer

A)  are advised not to voluntarily pursue alliances, as they tend to be problematic. 
B)  are usually indifferent about establishing alliances. 
C)  find that having an alliance is advantageous to their entry and expansion. 
D)  are likely to consider alliances, except in emerging markets and highly regulated industries.

Question 4

Not all MNCs are confident about international investment in countries with _____.

Accepted Answer

A)  low labor costs 
B)  political unrest 
C)  emerging economies 
D)  cultural differences

Question 5

Explain and give examples of the three basic categories of political risks.

Accepted Answer

The answer of Explain and give examples of the three...

Question 6

Identify a true statement about protective strategies for responding to political risks.

Accepted Answer

A)  These strategies are designed to help overseas operation become part of a host country's infrastructure. 
B)  These strategies are designed with the objective that a multinational company is perceived as less foreign and thus unlikely to be the target of government action. 
C)  Protective strategies for responding to political risks include developing good relations with the host government and other local political groups. 
D)  Organizations with an emphasis on innovative technology prefer a protective technique as a way to safeguard against actions such as counterfeiting.

Question 7

In the context of the special nature of foreign direct investment (FDI),patterns of ownership relate to whether businesses are wholly or partially owned.

Accepted Answer

A) True 
 B)False

Question 8

Identify a true statement about classic terrorism.

Accepted Answer

A)  It is carried out by individuals holding very strong core beliefs, regardless of how well defined their objectives are. 
B)  It tends to occur once and has poorly defined objectives, and therefore members are less committed. 
C)  It tends to be more chaotic and scattered because the individuals involved are extremely passionate about the cause, despite the lack of unified goals. 
D)  It entails a specific, well-defined objective pursued by well-trained, professional, underground members.

Question 9

Foreign ownership limitations,pressure for local participation,confiscation,expropriation,and abrogation of property rights are examples of _____.

Accepted Answer

A)  transfer risks 
B)  functional risks 
C)  ownership-control risks 
D)  tactical risks

Question 10

In their attempts to forestall harm in risky venues,multinational companies must thoroughly evaluate the political environment,install modern security systems,compile a crisis handbook,and _____.

Accepted Answer

A)  go on the offensive 
B)  appeal to the religious leaders in the country 
C)  establish an effective bargaining position 
D)  prepare employees for situations that may arise

Question 11

In recent years,_____ risk analysis has become of increasing concern to multinational companies because of the growing number of countries that are finding their economies in trouble as in Southeast Asia or,even worse,unable to make the transition to a market-driven economy.

Accepted Answer

A)  micro 
B)  basic 
C)  macro 
D)  complex

Question 12

Laws that require that nations hold a majority interest in the operation are known as _____.

Accepted Answer

A)  commercial laws 
B)  appropriation laws 
C)  indigenization laws 
D)  expropriation laws

Question 13

Explain relative bargaining power analysis.

Accepted Answer

The answer of Explain relative bargaining power analysis....

Question 14

_____ risks stem from government policies that limit the transfer of capital,payments,production,people,and technology in or out of a country.

Accepted Answer

A)  Operational 
B)  Bureaucratic 
C)  Transfer 
D)  Expropriation

Question 15

Comprehensive political strategies are most important in stable policy environments.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following cultural differences tends to be more disruptive for international joint ventures than the others?

Accepted Answer

A)  Power distance 
B)  Uncertainty avoidance 
C)  Individualism 
D)  Masculinity

Question 17

Which of the following criteria involves maximum political risk?

Accepted Answer

A)  International financial standing 
B)  Economic growth during previous 5 years 
C)  Restrictions imposed on imports 
D)  Effectiveness of public administration

Question 18

Firms with technology that is not available to the government should the firm be taken over have higher risk than those with technology that is easily acquired.

Accepted Answer

A) True 
 B)False

Question 19

The seizure of businesses by a host country with little,if any,compensation to the owners is referred to as _____.

Accepted Answer

A)  nationalization 
B)  expropriation 
C)  dispossession 
D)  removal

Question 20

Benefits of proactive political strategies include all of the following except _____.

Accepted Answer

A)  enhancing government relations in unstable and transitional policy environments 
B)  mitigating risk before it becomes unmanageable 
C)  providing support for national and sub-central governments in transitional economies 
D)  counteracting competitors' efforts to influence government policy

Exam 10: Managing Political Risk, Government Relations, and Alliances

Policy and control mechanisms,along with awareness of the historical treatment of multinational companies (MNCs)within certain nations,allow firms to evaluate the inherent risk of doing business in those countries.

Broadly,_____ strategies may include leveraging bilateral,regional,and international trade and investment agreements,drawing on bilateral and multilateral financial support,and using project finance structures to separate project exposure from overall firm risk.

When host governments do not require alliances as a condition for entry,many multinational companies:

Not all MNCs are confident about international investment in countries with _____.

Explain and give examples of the three basic categories of political risks.

Identify a true statement about protective strategies for responding to political risks.

In the context of the special nature of foreign direct investment (FDI),patterns of ownership relate to whether businesses are wholly or partially owned.

Identify a true statement about classic terrorism.

Foreign ownership limitations,pressure for local participation,confiscation,expropriation,and abrogation of property rights are examples of _____.

In their attempts to forestall harm in risky venues,multinational companies must thoroughly evaluate the political environment,install modern security systems,compile a crisis handbook,and _____.

In recent years,_____ risk analysis has become of increasing concern to multinational companies because of the growing number of countries that are finding their economies in trouble as in Southeast Asia or,even worse,unable to make the transition to a market-driven economy.

Laws that require that nations hold a majority interest in the operation are known as _____.

Explain relative bargaining power analysis.

_____ risks stem from government policies that limit the transfer of capital,payments,production,people,and technology in or out of a country.

Comprehensive political strategies are most important in stable policy environments.

Which of the following cultural differences tends to be more disruptive for international joint ventures than the others?

Which of the following criteria involves maximum political risk?

Firms with technology that is not available to the government should the firm be taken over have higher risk than those with technology that is easily acquired.

The seizure of businesses by a host country with little,if any,compensation to the owners is referred to as _____.

Benefits of proactive political strategies include all of the following except _____.