In an Institution-Based View of Strategy, the Informal Rules of the Game

question 25

Multiple Choice

In an institution-based view of strategy, the informal rules of the game:

• A)Must be avoided because global business is not a mere game.
• B)Are being replaced by formal rules.
• C) Often require that the firm seek to change the informal rules instead of going along with those rules.
• D) Need to be understood by firms.

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Definitions:

Net Capital Outflow

The difference between the domestic country's purchase of foreign assets and foreign investments in domestic assets over a certain period.

Real Exchange Rate

The rate at which the goods and services of one country can be exchanged for the goods and services of another country, adjusted for price level differences.

Real Exchange Rate

A measure that reflects the ratio of the prices of goods and services between two countries, taking into account inflation and thereby providing a more accurate comparison.

Net Exports

The difference between a country's total value of exports and total value of imports; a positive value indicates a trade surplus, while a negative value indicates a trade deficit.