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Identify the statements are true about globalization methods.
Answer to Problem 1STQ
c. Global sourcing involves the close coordination of research and development, purchasing, marketing, and manufacturing across national boundaries.
Explanation of Solution
Globalization is a process where managers become aware of and involve in cross-border trade and operations.
Explanation for the incorrect answer:
a. International licensing involves the creation of a new company that is owned by two or more firms from different countries. No, international licensing involves contractual agreements that permits a foreign a company to use a domestic company’s trademarks, patents, technology or processes. Hence, this is incorrect answer.
b. Exporting involves contracts that allow a foreign company to use a domestic company’s trademarks, patents, processes, or technology. No, exporting is the selling of goods and service to a foreign customer that maintains control over product creation and licensing ensures control for a monetary return. Hence, this is incorrect answer.
Explanation for the correct answer:
c. Global sourcing involves the close coordination of research and development, purchasing, marketing, and manufacturing across national boundaries.
Global sourcing: Global sourcing is the close coordination of research and development, manufacturing, and marketing across the national boundaries that typically includes, exporting, licensing, joint ventures, and wholly owned subsidiaries in cross border operations. Hence, this is the correct answer.
d. A wholly owned international subsidiary is created when a foreign government owns 100 percent of the equity in a U.S.-based firm.
International joint venture: International joint venture is a company that is owned by two or more companies from different countries. Hence, this is correct answer.
From the above explanation, Options c. and d. are two methods of globalization.
Hence, Option c. Global sourcing and d. wholly owned international subsidiary are true about globalization methods.
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Chapter 15 Solutions
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