41.When McDonald’s entered into an agreement with a French entrepreneur

Question : 41.When McDonald’s entered into an agreement with a French entrepreneur


41.When McDonald’s entered into an agreement with a French entrepreneur who wanted to own and operate a McDonald’s fast-food restaurant in Paris, it saw the new restaurant as an opportunity. Unfortunately, the restaurant in Paris was not maintained at the cleanliness standards prescribed by McDonald’s but at the cleanliness standards acceptable to the French. McDonald’s brought legal action to have the restaurant closed. This example illustrates: opportunity for McDonald’s to enter into more joint ventures

b.a need for McDonald’s to curtail its international franchising

c.a cultural threat against McDonald’s

d.a weakness within the McDonald’s franchising system

e.a problem with franchising in different cultures

42.Proton is the national carmaker of Malaysia. A(n) _____ with Volkswagen had been seen as vital to the survival of the company. VW promised to provide technical help in improving the quality of Proton cars, to add VW models to Proton’s product line, and to assist with expanding Proton’s small export market.  In return, VW sought a degree of management control that found little favor with the Malaysian government that owns Proton.

a.exporting license

b.cooperative contract

c.franchisee agreement

d.strategic alliance

e.indirect investment

43.A ____ is a strategic alliance in which two existing companies collaborate to form a third, independent company.

a.joint venture


c.wholly owned affiliate new venture

e.cooperative contract

44.Which of the following forms of organizing a global business help companies to avoid tariff and nontariff barriers to entry of a given foreign market?


b.franchising joint ventures

d.wholly owned affiliates

e.all of these

45.In Canada, General Motors and Suzuki entered into a ____ to create CAMI Automotive. Suzuki management ran the plant, which made GM’s Geo cars. The agreement gave Suzuki access to GM dealers to sell its brand of vehicles.

a.licensing agreement

b.subsidiary arrangement

c.cooperative contract

d.exporting agency

e.joint venture

46.German chip manufacturer Infineon AG joined with Motorola Inc. and Agere Systems Inc. to establish a new company to develop and license chip designs for cell phones. These three companies created a:

a.license facilitator

b.subsidized corporation new venture

d.joint venture

e.export merchant

47.Ford Motor Company owns and operates a $1.9 billion manufacturing plant in Brazil. What method of organizing for global business has Ford used in this example?

a.joint venture

b.strategic alliance

c.cooperative contract

d.wholly owned affiliate

e.strategic franchise

48.The primary disadvantage of using wholly owned affiliates as the means of entering a foreign market is:



c.nontariff barriers



49.Which of the following is a trend that has allowed companies to skip the phase model when going global?

a.quick, reliable air travel

b.the globalization of the cocooning trend

c.a critical mass of resources

d.the metamorphosis of marketplaces

e.all of these

50.New companies with sales, employees, and financing in different countries that are founded with an active global strategy are called: new ventures

b.strategic alliances

c.wholly-owned affiliates


e.subsidized corporations



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