Chapter 14 – Building Global Strategies

Arbitrage opportunities are higher the lower the cultural and resource distance between two countries.
1. True
2. False
Divestment is a form of investments that diverges funds from older projects to new, high risk projects.
1. True
2. False
Globalfocusing is a form of strategic changes that involves divestment of peripheral activities in the home country.
1. True
2. False
In the context of pre-acquisition due diligence, organizational fit refers to the cultural and structural characteristics of the two organizations that affect the ability to integrate the acquired company.
1. True
2. False
Strategic alliances do not involve foreign direct investment.
1. True
2. False
Synergies can arise in form of new values created, or in form of cost savings.
1. True
2. False
An “acquisition premium” is:
1. The increase in the stock price of the acquirer associated with the acquisition
2. The pay-off to the directors of the acquired company in return for their cooperation with the acquiring firm
3. The difference between stock prices of the acquirer and the acquired company
4. The difference between the market price of the acquired firm before the acquisition and the price offered by the acquirer
Managers sometimes overestimate their own ability to create value in a company that they acquire. This phenomenon is also known as
1. Managerial hupris
2. Managerial hubris
3. Managerial diligence
4. Managerial digilence
Small private firms that prosper in market niche which keeping a low profile are also known as
1. SMEs
2. Single line businesses
3. Niche prospectors
4. Hidden champions
Which of the following is not an element of Ghemawat’s AAA typology of global strategies
1. Acquisition
2. Adaptation
3. Aggregation
4. Arbitrage
Subsidiaries that have a leading role within an MNE to develop new products or technology are also known as
1. Centres of excellence
2. Centres of excel
3. Centres of hubs
4. Centres of hubris
Global key accounts are:
1. Cost positions that are aggregated globally
2. Distribution channels that cover multiple countries
3. Customers that are served at multiple sites but with central negotiation of contracts
4. Suppliers that have established production facilities in several countries

Chapter 14 – Building Global Strategies

Quiz