Master of International Business (MIB) — Questions and Answers

Question 1: Which framework categorizes national innovation systems by the role of government, industry, and universities in producing and diffusing knowledge?

Porter's Diamond Model
Resource-Based View
Uppsala Internalization Model
Triple Helix Model (Correct answer)

Correct answer: Triple Helix Model

The Triple Helix Model (Etzkowitz & Leydesdorff) examines the interplay among government, academia, and industry as the three helices driving national innovation.

Question 2: When a foreign government expropriates a multinational's assets with fair compensation, this is termed:

Nationalization (Correct answer)
Creeping expropriation
Confiscation
Domestication

Correct answer: Nationalization

Nationalization is the government takeover of private assets, typically with compensation, distinguishing it from confiscation where no payment is made.

Question 3: What is 'global talent management' in an MNC context?

Standardizing job titles across all international locations
Managing payroll across multiple countries
Hiring employees only from top global universities
Systematically identifying, developing, and deploying talent globally to meet organizational strategy (Correct answer)

Correct answer: Systematically identifying, developing, and deploying talent globally to meet organizational strategy

Global talent management is the systematic process of identifying critical roles, developing high-potential employees, and deploying talent globally to meet strategic business needs across all markets.

Question 4: In Hofstede's framework, a country scoring high on 'long-term orientation' would most likely emphasize:

Strong uncertainty avoidance and formal rules
Immediate gratification and quick results
Respect for tradition and fulfilling social obligations
Thrift, perseverance, and future rewards (Correct answer)

Correct answer: Thrift, perseverance, and future rewards

Long-term orientation cultures value perseverance, thrift, and investing in the future, often associated with East Asian societies.

Question 5: In global HR, 'country clustering' refers to:

Grouping employee nationalities for team assignments
Concentrating manufacturing in select low-cost countries
Grouping subsidiaries into regional reporting structures
Categorizing countries with similar cultural characteristics for HR policy development (Correct answer)

Correct answer: Categorizing countries with similar cultural characteristics for HR policy development

Country clustering groups nations with similar cultural, institutional, or economic characteristics, allowing MNCs to develop targeted regional HR policies rather than fully universal or fully local approaches.

Question 6: What is 'global leadership development' primarily focused on in international HRM?

Building leadership capabilities suited to managing across cultural, geographic, and organizational boundaries (Correct answer)
Creating standardized leadership competency frameworks
Training leaders in all local languages
Developing leaders for headquarters positions only

Correct answer: Building leadership capabilities suited to managing across cultural, geographic, and organizational boundaries

Global leadership development builds the cognitive, emotional, and interpersonal capabilities needed to lead effectively in complex, multicultural, and geographically dispersed international environments.

Question 7: Which supply chain disruption risk is classified as a 'geopolitical risk'?

Factory fire at a key supplier
Demand forecast error
Trade embargo imposed by a foreign government (Correct answer)
IT system failure

Correct answer: Trade embargo imposed by a foreign government

Geopolitical risks in supply chains include trade embargoes, tariff changes, political instability, and regulatory shifts imposed by governments that disrupt cross-border trade.

Question 8: A firm pursuing a transnational strategy seeks to achieve:

Centralized R&D with decentralized manufacturing only
Simultaneous global efficiency, local responsiveness, and worldwide learning (Correct answer)
Deep local adaptation in each market independently
Full standardization of products globally for cost efficiency

Correct answer: Simultaneous global efficiency, local responsiveness, and worldwide learning

The transnational strategy integrates global efficiency with local adaptation and cross-border knowledge transfer, the most complex of the four international strategies.

Question 9: According to Michael Porter, the primary factor(s) affecting a company's profitability are:

Industry attractiveness (Correct answer)
Economies of scale
Bargaining power
Conditions in the home diamond

Correct answer: Industry attractiveness

According to Michael Porter's Five Forces framework, the primary factor affecting a company's profitability is the overall attractiveness of the industry in which it operates. Industry attractiveness is determined by the collective strength of the five competitive forces: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, and intensity of rivalry. These forces shape the long-run profit potential of an industry.

Question 10: Hofstede's 'Power Distance' dimension measures:

A society's tolerance for ambiguity and uncertainty
The extent to which less powerful members of society accept unequal power distribution (Correct answer)
The balance between masculine and feminine values in a culture
The degree to which individuals prefer working alone versus in groups

Correct answer: The extent to which less powerful members of society accept unequal power distribution

Power Distance reflects how much inequality in power and authority is accepted and expected by subordinates within a society.

Question 11: What distinguishes the stakeholder approach as a whole?

The idea that many different groups have a legitimate interest in the corporation (Correct answer)
A focus on social and environmental responsibilities of a corporation.
The assumption that shareholders are not the main stakeholders in the corporation.
It is a critical perspective on corporations and business.

Correct answer: The idea that many different groups have a legitimate interest in the corporation

The stakeholder approach broadens the traditional view of corporate responsibility beyond just shareholders. It posits that various groups, including employees, customers, suppliers, communities, and the environment, have a legitimate interest in the corporation's activities and outcomes. This perspective encourages management to consider the interests and impacts on all these groups, not just those who own equity.

Question 12: The concept of 'supply chain visibility' in global operations refers to:

Making pricing data available to all partners
Transparency in executive compensation
Real-time tracking of goods, orders, and inventory across the supply network (Correct answer)
Publishing supplier contracts publicly

Correct answer: Real-time tracking of goods, orders, and inventory across the supply network

Supply chain visibility enables all stakeholders to access real-time data on inventory levels, shipment status, and order fulfillment across the entire supply network.

Question 13: What is 'postponement' as a global supply chain strategy?

Deferring product customization until the last possible moment (Correct answer)
Delaying inventory ordering cycles
Postponing market entry decisions
Delaying supplier payments

Correct answer: Deferring product customization until the last possible moment

Postponement defers final product customization or assembly to the point closest to the customer, reducing inventory risk while enabling market-specific configurations.

Question 14: Global value systems have various names, including:

Global capability linkages
Global resource systems
Global value chains (Correct answer)
Global value added

Correct answer: Global value chains

Global value systems are commonly referred to as Global Value Chains (GVCs). These chains describe the full range of activities that firms and workers perform to bring a product from its conception to its end use and beyond, across multiple countries. GVCs encompass all stages of production, from design and raw materials to manufacturing, marketing, distribution, and support to the final consumer.

Question 15: A global firm's R&D unit in Germany develops a process innovation. To transfer this to a subsidiary in Brazil, which barrier is most likely to arise?

Currency fluctuation
Antitrust regulations
Tariff barriers on software
Causal ambiguity making tacit knowledge hard to transfer (Correct answer)

Correct answer: Causal ambiguity making tacit knowledge hard to transfer

Causal ambiguity occurs when the reasons why a practice works are unclear, making tacit knowledge difficult to replicate across cultural and organizational contexts.

Question 16: What does 'total landed cost' include in international supply chain analysis?

Purchase price plus all costs to deliver goods to their final destination (Correct answer)
Only the purchase price of goods
Transportation costs only
Duty and tariff costs only

Correct answer: Purchase price plus all costs to deliver goods to their final destination

Total landed cost encompasses the complete cost of a product including purchase price, transportation, tariffs, insurance, handling, and other fees to reach the final destination.

Question 17: Which supply chain strategy prioritizes speed and responsiveness over cost efficiency, suited for unpredictable demand?

Lean supply chain
Efficient supply chain
Agile supply chain (Correct answer)
Hub-and-spoke supply chain

Correct answer: Agile supply chain

An agile supply chain is designed to respond quickly to market changes and unpredictable demand by prioritizing flexibility and speed over pure cost efficiency.

Question 18: The EPRG framework in international marketing describes four orientations. What does 'G' stand for?

Growth
Geocentric (Correct answer)
Global
Geographic

Correct answer: Geocentric

In the EPRG (Ethnocentric, Polycentric, Regiocentric, Geocentric) framework, Geocentric orientation views the world as a single market and seeks the best strategies globally.

Question 19: Which governance mechanism is most effective for protecting knowledge shared in a strategic alliance when legal IP protection is weak?

Equity stakes and joint ownership structures (Correct answer)
Publishing all shared knowledge openly
Relying solely on trade secret law
Verbal agreements between managers

Correct answer: Equity stakes and joint ownership structures

Equity stakes align partner incentives and create mutual dependence, reducing the risk of opportunistic knowledge appropriation when contractual enforcement is unreliable.

Question 20: Who claimed that a company's main social responsibility is to maximize profits?

Michael Freeman
Milton Friedman (Correct answer)
Edward Freeman
Michael Porter

Correct answer: Milton Friedman

Milton Friedman, a Nobel laureate economist, famously argued that the primary social responsibility of a business is to increase its profits, within the bounds of law and ethical custom. He believed that corporate executives are agents of the shareholders, and their main duty is to serve the interests of those shareholders by maximizing returns. This perspective is a cornerstone of shareholder primacy theory.

Question 21: What does 'psychic distance' refer to in international marketing and business?

Distance of manufacturing facilities
Time zone differences affecting communication
Consumer emotional attachment to brands
Perceived differences between home and target country (Correct answer)

Correct answer: Perceived differences between home and target country

Psychic distance refers to the perceived differences between the home country and a foreign market, including cultural, linguistic, political, and economic factors.

Question 22: Which international HRM practice involves rotating high-potential employees through different countries to develop global leadership skills?

Global talent pipeline development
Succession planning
Expatriate management
International rotation program (Correct answer)

Correct answer: International rotation program

International rotation programs systematically move high-potential employees across different country operations to build global experience, cultural competence, and leadership breadth.

Question 23: A 'force majeure' clause in an international contract typically:

Requires parties to renegotiate terms whenever economic circumstances change significantly
Designates which currency and exchange rate applies to payment obligations
Excuses a party from performing its obligations when extraordinary, unforeseeable events occur (Correct answer)
Establishes predetermined financial penalties for late or non-delivery

Correct answer: Excuses a party from performing its obligations when extraordinary, unforeseeable events occur

Force majeure clauses relieve a party from liability for non-performance when circumstances beyond its reasonable control—such as war, natural disasters, or pandemics—make performance impossible.

Question 24: The 'balance sheet approach' to expatriate compensation aims to:

Minimize total expatriate compensation costs
Align pay with local market rates gradually
Match the host country salary levels exactly
Ensure expatriates maintain the same standard of living as in their home country (Correct answer)

Correct answer: Ensure expatriates maintain the same standard of living as in their home country

The balance sheet approach equalizes purchasing power by adjusting expatriate pay to maintain the same standard of living they would have had in their home country.

Question 25: Which risk management strategy involves sourcing the same component from multiple suppliers in different countries?

Sole sourcing
Multi-sourcing (Correct answer)
Dual sourcing
Single sourcing

Correct answer: Multi-sourcing

Multi-sourcing distributes procurement across several suppliers in different geographic locations to reduce dependency risk from disruptions affecting any single source.

Question 26: Which staffing approach in international HRM recruits managers exclusively from the parent company's home country?

Ethnocentric approach (Correct answer)
Regiocentric approach
Geocentric approach
Polycentric approach

Correct answer: Ethnocentric approach

An ethnocentric staffing approach fills key positions in foreign subsidiaries with parent-country nationals, reflecting a belief that home-country management practices are superior.

Question 27: The 'Uppsala model' of internationalization describes a firm's expansion as:

Acquisition-led entry into the largest available markets
Gradual, sequential expansion starting with psychically close markets (Correct answer)
Simultaneous entry into all global markets at launch
Technology licensing before any physical presence abroad

Correct answer: Gradual, sequential expansion starting with psychically close markets

The Uppsala model (Johanson & Vahlne, 1977) suggests firms incrementally expand internationally, first entering markets that are culturally and geographically close, then progressively more distant ones.

Question 28: The forecasts are

educated assumptions about future trends and events. (Correct answer)
complex exercises to understand the causes of and interrelationships among new trends.
mental pictures of future scenarios.
hypothetical sequences of events constructed for the purpose of focusing attention on causal processes and decision points.

Correct answer: educated assumptions about future trends and events.

Forecasts are essentially informed predictions or estimations about future trends, events, or conditions. They are based on available data, analysis, and assumptions, aiming to provide a reasonable expectation of what might happen. Unlike scenarios, which explore multiple plausible futures, forecasts typically aim for a single, most likely outcome.

Question 29: Which of the following doesn't warrant international investment?

To provide an expected risk-adjusted return in excess of that required.
To gain access to important raw materials.
To produce products and/or services more efficiently than possible domestically.
International investments have less political risk than domestic investments. (Correct answer)

Correct answer: International investments have less political risk than domestic investments.

International investments typically carry *higher* political risk than domestic investments, not less. Political risks include government instability, policy changes, expropriation, and currency controls, which are generally more prevalent and unpredictable in foreign markets. Therefore, the statement that international investments have less political risk is inaccurate and does not warrant such investment.

Question 30: Innovation is more likely to be outsourced worldwide where:

Innovations are autonomous (Correct answer)
Innovations are made by service sector firms
Innovations are systemic or autonomous
Innovations are systemic

Correct answer: Innovations are autonomous

Autonomous innovations are those that can be developed and implemented independently without requiring significant changes to other components or systems. These innovations are easier to outsource globally because they have fewer interdependencies with the core operations or existing product architecture of the parent company. Systemic innovations, conversely, are highly interconnected and thus more challenging to outsource due to the need for close coordination and integration.

Master of International Business (MIB)

The Master of International Business (MIB) is a graduate-level program that prepares students for careers in global business by covering international marketing, supply chain management, human resources, innovation, and cross-cultural business strategy across multinational environments.

Questions

35 min

Time Limit

60%

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