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Global enterprises - class-XI

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Global market leader is an organization which _________.

  1. has more than $50\%$ global market share.

  2. is recognized as being ahead of the rest in terms of market share

  3. is ahead of the competition in terms of global innovation

  4. has the monopoly over several foreign markets


Correct Option: B
Explanation:

Global market leader is an organization which is recognized as being ahead of the rest of the organizations in the global market in terms of the market share of the organization.

Tick mark the correct answer.
M.B.O is a technique which requires that objectives of the enterprise.

  1. Be written and defined in broad terms

  2. Lay down the time period for achieving the results

  3. Induce a plan of action for achieving the desired results

  4. Be defined in terms of measurable results


Correct Option: D

A Company which has gone global is called a _______.

  1. Multinational

  2. Transnational

  3. Either (A) or (B)

  4. None of these


Correct Option: C
Explanation:

MNC has an international identity as belonging to a particular home country where they are headquartered. A transnational company is borderless, as it does not consider any particular country as its base, home or headquarters. Transnational corporations are a type of multinational corporations.

Out of the following _________ represents a company's effort to identify and categorize groups of customers and countries according to common characteristics.

  1. global targeting

  2. global marketing research

  3. global marketing segmentation

  4. global positioning.


Correct Option: C
Explanation:

The global marketing segmentation represents a company's efforts to identify and categorize groups of customers and countries according to common characteristics.

If it is a global organization it means _______.

  1. creating both standardized and customized products

  2. creating standardized products for homogeneous markets

  3. customizing the product range for each segment in part

  4. none of the above


Correct Option: A
Explanation:

A global organization is creating both type of products, i.e standardized product for a region that sell standardized products and also customized products for customers.

MNCs have played a huge role in the Indian economy in the past decade.

  1. True

  2. False


Correct Option: A
Explanation:

In the last ten years MNC'S have played an important role in the Indian economy. They have become a common feature of most developing economies in the world. 

Global enterprises are in position to exercise massive control on world economy.

  1. True

  2. False


Correct Option: A
Explanation:

Top 200 MNC'S control over a quarter of the world economy. Therefore MNC'S are in a position to exercise massive control on the world economy because of their capital resources, latest technology and goodwill.

Which of the following is not a characteristic of MNCs?

  1. Huge size

  2. Operation in a single nation

  3. Large number of products

  4. Marketing strategies


Correct Option: B
Explanation:

MNC'S are gigantic corporations which have their operations in a number of countries. They are characterized by their huge size, large number of products, advanced technology, marketing strategies and network of operations all over the world.

The main aim of global enterprises is to ______________.

  1. gain profits from the products

  2. provide different types of products

  3. to spread their branches all over

  4. to gain market share in a particular country


Correct Option: C
Explanation:

Global enterprises are the companies that operate around the world.Through a network of their branches in several countries, global enterprises extend their industrial and marketing operations. Their vision to work across many global frontiers to earn in international currencies of many countries.

Global enterprises have to make extra efforts with their marketing strategy in an untapped market.

  1. True

  2. False


Correct Option: A
Explanation:

Vertical Expansion - Manufacturing

Vertical expansion occurs when multinational companies expand production processes to other countries. This strategy allows them to take advantage of factors such as the low costs of labor and raw materials, lower capital investment requirements and less stringent local laws and regulations. This means these companies can lower production costs and maximize profits. Some developing countries encourage multinational companies because of the innovative technology they bring to the host country and because they typically offer higher wages than the national average.

Vertical Expansion - Sales

Multinational companies also might expand by setting up sales units in host countries instead of marketing their products through local agencies. This allows the companies to ensure that their products reach their buyers and that they are in control of prices. Multinationals also may enter foreign markets when other brands offering the same products set up operations there. Competition makes it necessary for these companies to follow suit with units of their own. Multinational companies can give their sales units a level of autonomy, which allows them to operate and adapt their sales efforts according to market conditions in the host country.

Horizontal Expansion - Production

Often, multinational companies set up production units in other countries for the sole purpose of catering to the local market. They manufacture products in the host country for distribution in the same country. This helps companies save on transportation costs and shields their operations from uncertainties arising from fluctuations in currency values. They also use sequential marketing, a strategy that edges out the local competition by offering better and more state-of-the-art products. Another method they might use to eliminate competition is to merge with or acquire local companies.

Horizontal Expansion - Sales

When offering products in the host countries, multinational companies may present their goods and services just as they are offered in their home countries. Examples include branded and packaged food and beverages. They carry similar brand names and are similar in appearance. Companies also might set up showrooms and outlets to mimic international norms. Other companies adapt their products to suit local demand, tastes and customer requirements.

Collaboration with MNCs also lead to growth of monopolies.

  1. True

  2. False


Correct Option: A
Explanation:

MNCs also lead to the growth of monopolies.multinational corporation (MNC) has facilities and other assets in at least one country other than its home country. Very large multinationals have budgets that exceed those of many small countries.

Multinational corporations are sometimes referred to as transnational, international or stateless corporations.

Highly developed research and development departments help in the task of developing _________.

  1. new advanced products

  2. higher profits

  3. patents and copyrights

  4. monopoly of the MNCs


Correct Option: A
Explanation:

Global enterprises are characterized by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs for existing products.

Aggressive market strategies are used by global enterprises to __________________.

  1. gain more market share

  2. increase their sales in short period

  3. tap the market from existing business

  4. grow their reach in a nation


Correct Option: B
Explanation:

Aggressive Market. A market or exchange with a high trading volume. When a market becomes very aggressive, the prices of stocks can go up significantly, which in turn makes it more expensive for a trader to become involved in the market by buying stocks.

Global enterprises have a problem in market penetration.

  1. True

  2. False


Correct Option: B
Explanation:

Global enterprises does not have any problem in market penetration  because their operations and activities extend beyond the physical boundaries of their own countries. 

Global Enterprises usually have centralized control in their home nation.

  1. True

  2. False


Correct Option: A
Explanation:

Global enterprises have their headquarters in their home country and exercise control over all branches and subsidiaries. This control is limited to the broad policy framework of the parent company.

Restrictive clauses are signed by the global enterprises to safeguard __________.

  1. transfer of technology

  2. pricing

  3. dividend of payments

  4. all of the above


Correct Option: D
Explanation:

restrictive clause is a clause which functions as an adjective to identify the word it modifies. A restrictive clause is essential for the intended meaning. A restrictive clause is not offset with commas.

Who coined the term "globally integrated enterprise" in $2006$?

  1. Bill gates

  2. Sam Palmisano

  3. Anil Ambani

  4. Azim Premji


Correct Option: B
Explanation:

The globally integrated enterprise is a term coined in 2006 by Sam Palmisano, the then CEO of IBM corporation.

Which of the following is an disadvantage of MNC ?

  1. Harm the National Interests

  2. Dominate Domestic Policies

  3. Adverse Effects on Life Style/Culture

  4. All of the above


Correct Option: D
Explanation:

MNC has many disadvantages. It invest in most profitable sectors and disregard the national goals and priorities of the host country. Many domestic industries have to wind up due to the threat of MNC'S. 


They make people forget about their cultural heritage and tends to promote alien culture in host countries to sell their products.

Which of the following is an advantage of MNC?

  1. Develop Monopolies

  2. Facilitate Inflow of Foreign Exchange

  3. Lead to Brain Drain in Developing Countries

  4. All of the above


Correct Option: B
Explanation:

Foreign exchange transaction is a type of currency transaction that involves two countries. Generally, a foreign exchange transaction involves conversion of currency of one country with that of another. The conversion of currency in a foreign exchange transaction can be performed.

Promotion of Global co-operation through an MNC is an advantage gained by _________.

  1. home country

  2. host country

  3. both country

  4. none of the above


Correct Option: A
Explanation:

Home Country in international compensation, this is the country upon which an expatriate's compensation is based. It is usually the expatriate's home country or the country in which the employee's headquarters is located.

MNCs have helped and also harmed the developing countries.

  1. True

  2. False

  3. Partly true

  4. Partly false


Correct Option: A
Explanation:

Multinational Corporations in developing countries

  • Environmental costs. Multinational companies can outsource parts of the production process to developing economies with weaker environmental legislation. For example, there is a trade in rubbish, which gets sent to developing economies like India for disposal and recycling.
  • Profit repatriated. Although multinationals invest in developing economies, the profit is reptriated to the location of the multinational, so the net capital inflows are less than they seem.
  • Skilled labour. When undertaking new projects, the multinational may have to employ skilled labour from other economies and not the developing economy. This means best jobs are not received by local workers and the investment is diffused.
  • Raw materials. A large component of multinational investment in developing economies is seeking out raw materials – oil, diamonds, rubber and precious metals. The extraction of raw materials can cause environmental externalities – polluted rivers, loss of natural landscape.
  • Sweat-shop labour. Not all economists are convinced sweat-shop labour is a good thing. Critics argue that weak labour conditions allow multinationals to use their monopsony power and pay lower wages to workers than they should get paid

Accelerated Industrial Growth through a MNC is an advantage to ______.

  1. home country

  2. host country

  3. both country

  4. none of the above


Correct Option: B
Explanation:

Host country a nation in which representatives or organizations of another state are present because of government invitation and/or international agreement. Dictionary of Military and Associated Terms.

Aim for MNCs drive is to ___________.

  1. avoid trade barriers

  2. meet different rules and regulations (avoid non-tariff barriers)

  3. secure supplies of raw materials or markets

  4. all of the above


Correct Option: D
Explanation:

Business enterprises wants to be international because it has many advantages. It avoids trade barriers which are the rules and regulations that regulates foreign trade and investment. Tarrif is the tax imposed by the government on the import and export of goods. MNC get some relaxation in these tarrifs. Secure, timely and cost effective supply of raw materials is the backbone of any enterprise. MNC can get easy access to the raw materials as it can set up operations where the raw materials are easily found which in turn reduces the production cost.

Apple's main business is ________.

  1. fruits

  2. computers

  3. retailing

  4. none of the above


Correct Option: B
Explanation:

Apple Inc. is an American multinational technology

company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services its online services include the iTunes Store, the iOS App Store and Mac App Store, Apple Music, and iCloud.

Good Food, Good Life is the Slogan of which company?

  1. Walmart

  2. Britannia

  3. Parle

  4. Nestle


Correct Option: D
Explanation:

Nestlé S.A. is a Swiss transnational food and drink company headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world, measured by revenues and other metrics, since 2014.

IBM Corporation was founded in _______.

  1. 1895

  2. 1911

  3. 1921

  4. 1931


Correct Option: B
Explanation:

(IBM) International Business Machines Corporation is an American multinational information technology company headquartered in Armonk, New York, with operations in over 170 countries. The company began in 1911 as the Computing-Tabulating-Recording Company and was renamed "International Business Machines" in 1924.

Which company is world's largest retailer?

  1. Shoppers Stop

  2. Smart

  3. Spencer

  4. Walmart


Correct Option: D
Explanation:

Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969.

Which of the following is autonomous or semi-autonomous corporation and companies establishes, owned and controlled by the state and engaged in industrial & commercial undertakings?

  1. Private enterprises

  2. Public enterprises

  3. Semi private enterprises

  4. None of the above


Correct Option: B
Explanation:

Public enterprise, a business organization wholly or partly owned by the state and controlled through a public authority. Some public enterprises are placed under public ownership because, for social reasons, it is thought the service or product should be provided by a state monopoly.

Which of the following is/are advantage of MNC's?

  1. The activities of MNC's in the host countries may be harmful to the national interests as MNC's are solely guided by the profit maximization.

  2. MNC's restrict competition and acquire monopoly power in certain areas in the host countries.

  3. The activities of MNC's in the host countries not harmful to the national interests as MNC's are solely guided by the profit maximization.

  4. MNC's help the host countries to reduce the imports and promote the exports by raising domestic production.


Correct Option: D
Explanation:

Advantages of multinational companies. Multinationals create jobs which boosts the local economy and more workers to tax. They bring expertise in that skills of workforce are improved, some may use IT that would never have before or other skills now deemed basic by the western or developing world.

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