Question 1

Few turnkey projects to date have been in remote areas of the world.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following firms would most likely be involved in a turnkey operation?

Accepted Answer

A)  American Airlines 
B)  Bechtel Construction 
C)  Burger King 
D)  Microsoft

Question 3

An argument for limiting foreign control of key industries is that decisions made abroad can have adverse effects on the local economy.

Accepted Answer

A) True 
 B)False

Question 4

What is the difference between licensing and cross-licensing? What factors do firms need to consider before entering into licensing agreements?

Accepted Answer

The answer of What is the difference between licensing and...

Question 5

All of the following are arguments for governments to limit foreign control of key industries EXCEPT which one?

Accepted Answer

A)  Host countries don't need foreign resources such as technology and export markets for these industries. 
B)  History shows that home governments have used powerful foreign companies to influence policies in the countries where they operate. 
C)  Important decisions can be made abroad that are contrary to the country's best interest. 
D)  Foreign companies can find means of profiting in these industries without having to control them.

Question 6

A turnkey operation is a contract for the construction of an operating facility for a fee.

Accepted Answer

A) True 
 B)False

Question 7

What is an equity alliance?

Accepted Answer

A)  a collaborative arrangement in which at least one collaborating company takes an ownership position in the other 
B)  a collaboration in which each contributor receives an equitable return based on relative contribution 
C)  a collaboration in which partners agree to share technology with each other 
D)  a wholly owned acquisition to prevent appropriation of intellectual property

Question 8

Coca-Cola collaborates extensively abroad,but it refuses collaboration that might imperil control of its core competency.As a result,which of the following is NOT one of its international collaborative forms?

Accepted Answer

A)  sharing ownership in the production of its secret formula concentrate 
B)  using franchisers to bottle, sell, and deliver Coke beverages 
C)  licensing Coke's trademark for use on products in which it lacks skills 
D)  forming joint ventures with companies that provide supplies for Coke products

Question 9

Which of the following is an example of an exclusive license agreement?

Accepted Answer

A)  Three licensees have worldwide rights to sell the product worldwide for three years, during which time no other companies can use the asset. 
B)  The licensee is currently the only company using the intangible property, but the licensor has rights to add other licensees. 
C)  One licensee gets rights for the north island of New Zealand, a second licensee gets rights for the south island of New Zealand, and the licensor agrees to add no new licensees to New Zealand for the next five years. 
D)  The licensee and licensor use the property in the same market.

Question 10

When a large company and a small company enter a collaborative arrangement,________.

Accepted Answer

A)  the large company is expected to contribute more to the arrangement 
B)  the large company is likely to be more active in the venture 
C)  the small company is more likely to view the collaboration's expansion as competition to itself 
D)  the small company is likely to be disadvantaged if legal action is necessary to solve a dispute

Question 11

Risk is an important factor for companies engaged in international business.One way a collaborative arrangement helps minimize risk when operating abroad is by ________.

Accepted Answer

A)  reducing the possibility of technological appropriation 
B)  freeing up resources so a company can diversify into more countries 
C)  preventing the entry of new competitors 
D)  eliminating losses from exchange rate depreciation abroad

Question 12

The advantage to host countries of international management contracts is that they ________.

Accepted Answer

A)  receive state-of-the-art facilities 
B)  get assistance without foreign control 
C)  can pay in local currency 
D)  save on making capital investments

Question 13

A licensing agreement is a contract for the granting of rights on tangible property.

Accepted Answer

A) True 
 B)False

Question 14

Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.

Accepted Answer

A) True 
 B)False

Question 15

Licensing companies commonly negotiate a "front-end" payment from licensees to cover ________ transfer costs.

Accepted Answer

A)  employee 
B)  brand name 
C)  technology 
D)  copyright

Question 16

In collaborative arrangements,when one partner cedes control to another partner,it is no longer responsible for problems.

Accepted Answer

A) True 
 B)False

Question 17

A U.S.firm owns 100% of its production facility in Brazil; thus it is most likely using a(n)________ strategy.

Accepted Answer

A)  comprehensive ownership 
B)  vertical integration 
C)  appropriability 
D)  internalization

Question 18

What is a master franchise?

Accepted Answer

A)  the original agreement between the franchisor and franchisee 
B)  the franchisee with the highest revenue in a region 
C)  a franchisee with rights to open outlets on its own or develop subfranchises 
D)  the set of standard terms regulating the relationship between franchisor and franchisee

Question 19

Large companies that have resources to go it alone may have advantages in product development over small companies that do not because ________.

Accepted Answer

A)  evidence suggests that collaborative arrangements slow the speed of innovation 
B)  large companies can dictate their terms of operations abroad 
C)  small companies are disadvantaged in legal settlements 
D)  large companies need not adapt to national differences

Exam 15: Direct Investment and Collaborative Strategies

Few turnkey projects to date have been in remote areas of the world.

Which of the following firms would most likely be involved in a turnkey operation?

An argument for limiting foreign control of key industries is that decisions made abroad can have adverse effects on the local economy.

What is the difference between licensing and cross-licensing? What factors do firms need to consider before entering into licensing agreements?

All of the following are arguments for governments to limit foreign control of key industries EXCEPT which one?

A turnkey operation is a contract for the construction of an operating facility for a fee.

What is an equity alliance?

Coca-Cola collaborates extensively abroad,but it refuses collaboration that might imperil control of its core competency.As a result,which of the following is NOT one of its international collaborative forms?

Which of the following is an example of an exclusive license agreement?

When a large company and a small company enter a collaborative arrangement,________.

Risk is an important factor for companies engaged in international business.One way a collaborative arrangement helps minimize risk when operating abroad is by ________.

The advantage to host countries of international management contracts is that they ________.

A licensing agreement is a contract for the granting of rights on tangible property.

Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.

Licensing companies commonly negotiate a "front-end" payment from licensees to cover ________ transfer costs.

In collaborative arrangements,when one partner cedes control to another partner,it is no longer responsible for problems.

A U.S.firm owns 100% of its production facility in Brazil; thus it is most likely using a(n) ________ strategy.

What is a master franchise?

Large companies that have resources to go it alone may have advantages in product development over small companies that do not because ________.