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:

Licenses

Legal permissions granted by authorities to individuals or companies to engage in certain activities or businesses.

Patents

Legal documents granted by a government that give an inventor exclusive rights to use, make, and sell an invention for a certain period of time.

Perfect Mobility

The theoretical condition in which factors of production such as labor and capital can be moved without any barriers between industries or geographical locations.

Perfect Knowledge

A theoretical situation in which all participants in a market have complete and accurate information about past, present, and future conditions.