DBA Global Business Strategy and International Management 1

Question 1

Which entry mode gives a firm the highest degree of control over its international operations but also carries the highest financial risk?

Accepted Answer

Wholly owned subsidiary

Answer

A wholly owned subsidiary means the firm owns 100% of the foreign operation, granting full control but requiring the largest capital commitment and absorbing all risk.

Question 2

Porter's Diamond Model identifies four determinants of national competitive advantage. Which of the following is NOT one of them?

Accepted Answer

Currency exchange rates

Answer

Porter's Diamond consists of factor conditions, demand conditions, related and supporting industries, and firm strategy/structure/rivalry; exchange rates are not a core determinant.

Question 3

A company that standardizes its products globally while adapting its marketing messages to local cultures is following which international strategy?

Accepted Answer

Transnational strategy

Answer

A transnational strategy seeks to achieve both global efficiency through standardization and local responsiveness through cultural adaptation simultaneously.

Question 4

The Uppsala model of internationalization suggests that firms expand abroad in a sequence primarily driven by:

Accepted Answer

Psychic distance and incremental learning

Answer

The Uppsala model posits that firms begin internationalization in countries with low psychic distance (similar language, culture, systems) and progressively enter more distant markets as experiential knowledge accumulates.

Question 5

Which theoretical framework explains a firm's decision to internalize foreign activities rather than license them by focusing on transaction cost minimization?

Accepted Answer

Eclectic paradigm (OLI framework)

Answer

Dunning's OLI (Ownership, Location, Internalization) eclectic paradigm specifically includes the internalization advantage, explaining why firms prefer FDI over licensing to avoid transaction costs.

DBA - Doctor of Business Administration Practice Test

DBA - Doctor of Business Administration Practice Test

DBA Global Business Strategy and International Management 1