Deck 10: Strategizing, Structuring, and Learningaround the World

Question 1

Industrial-products firms tend to adopt geographic area divisions, and consumer-goods companies often rely on global product divisions.

Answer 1

False

Question 2

Many MNEs have phased out the international division structure.

Answer 2

True

Question 3

Duplicating home country-based competencies in foreign countries is known as localization.

Answer 3

False

Question 4

Being locally responsive can run the risk of MNE fragmentation.

Question 5

Transnational strategy supposedly is a trade off between being cost efficient and locally responsive but is really locally responsive.

Question 6

Because consumer tastes around the world are converging, product differentiation will soon be unnecessary.

Question 7

A localization strategy is most appropriate in industries where the pressures for cost reduction are significant.

Question 8

The Porter five forces are not helpful in understanding MNE structure.

Question 9

For most MNEs, their stakeholders do not react well to a top echelon of company officials coming almost entirely from one nationality.

Question 10

No one argues that knowledge management is the defining feature of MNEs.

Question 11

A home replication strategy takes advantage of current competencies but risks alienating foreign customers if it lacks local responsiveness.

Question 12

When buyer firms that have a great deal of bargaining power move internationally, components suppliers are often forced to internationalize in order to retain the buyer firm's business.

Question 13

Knowledge management not only depends on IT, but also on informal social relationships within the MNE.

Question 14

Localization strategy is an extension of the home replication strategy.

Question 15

Home replication strategy emphasizes the home country replication of international based competencies.

Question 16

MNEs that buy and use enterprise resource planning (ERP) packages provide themselves with a firm-specific advantage in doing so.

Question 17

Global product division structure is the same as the geographic area structure.

Question 18

A main advantage of a global standardization strategy is that it leverages low-cost advantages.

Question 19

Strategy drives structure: a misfit, such as combining a global strategy with a geographic area structure, may have grave performance consequences.

Question 20

It is obviously a lot easier to imitate an intangible philosophy or mentality than to imitate a tangible structure.

Question 21

European MNE's are more likely than Japanese MNE to appoint host-country or third country nationals as head of a foreign subsidiary.

Question 22

Customer-focused dimensions cut across all three existing mainstream dimensions.

Question 23

Open innovation, although it accelerates internal innovation, tends to get out of control and is more of a detriment than a benefit.

Question 24

Overall, the micro, informal interpersonal relationships among managers of various units may create a micro-macro link.

Question 25

Global virtual teams must overcome communication and relationship barriers in order to be effective.

Question 26

For MNEs faced with the intensification of competition, R&D can provide a vehicle to access a foreign country's local talent and expertise.​

Question 27

MNEs often must rely on a great deal of informal integrating mechanisms.

Question 28

Transnational strategy aims to capture "the best of both worlds" by endeavoring to be both cost efficient and locally responsive.

Question 29

Subsidiary initiatives are inconsistent with corporate-wide goals.

Question 30

In "think global, act local" a firm needs to leverage its global presence and learn from local operations in order to solve local problems.

Question 31

Advocates of subsidiary initiatives argue that they may inject a much-needed spirit of entrepreneurship throughout a larger bureaucratic MNE.

Question 32

It is hard to distinguish between subsidiary initiative and empire building.

Question 33

In a transnational MNE, the role of subsidiaries is to adapt and leverage parent company competencies.

Question 34

A global account structure is a customer-focused solution that supplies customers in a coordinated and consistent way across various countries.

Question 35

The acquisition and transfer of tacit knowledge requires hands-on practice.

Question 36

Knowledge flow in MNEs follows the path of a top-down hierarchy.

Question 37

An international division serves as a means of coordination with the rest of the firm.

Question 38

Of the four types of multinational enterprises, home replication experiences the most limited flow of knowledge.

Question 39

The "not invented here" syndrome causes managers to accept ideas invented elsewhere.

Question 40

A customer-focused solution in which a provider sells whatever combination of goods and services the customers prefer is known as a global account structure.

Question 41

The type of knowledge that is codifiable (that is, it can be written down and transferred without losing much of its richness) is called:

A)Explicit.
B)Implicit.
C) Tacit.
D) Lucid.

Question 42

The structure that best supports, in theory, the transnational strategy is:

A)​Global matrix.
B)​International division.
C) ​Global product division.
D) ​Geographic area.

Question 43

The structure that is typically set up when firms initially expand abroad is a:

A)International division structure.
B)Flexible matrix structure.
C) Global product division structure.
D) Global matrix structure.

Question 44

When it comes to the relationship between multinational strategy and structure, it is:

A)​Best implemented through the superiority of the matrix structure.
B)​Static.
C) ​One of reciprocity.
D) ​Mostly one way from structure to strategy.

Question 45

Which of the following is NOT true in regard to institution-based considerations?

A)Externally, MNEs are subject to the formal institutional frameworks erected by various home- and host-country governments.
B)Host-country governments often encourage, or coerce MNEs into undertaking certain activities.
C) To staff the position of the head of a subsidiary, MNEs, in the absence of formal regulations, essentially have only one choice: to use a home-country national as the head of a subsidiary.
D) Formal organizational charts do not necessarily reveal the informal rules of the game, such as organizational norms, values, and networks.

Question 46

In which of the following structures are foreign subsidiary managers not given sufficient voice relative to domestic managers?

A)International division structure.
B)Geographic area structure.
C) Global product division structure.
D) Global matrix structure.

Question 47

Multidomestic strategy involves all of the following EXCEPT:

A)A focus on a number of foreign countries/regions.
B)Regarding each foreign country as a stand-alone "domestic" market.
C) Global standardization strategy is the same as a multidomestic strategy.
D) High costs.

Question 48

The integration-responsiveness framework for dealing with pressures focuses on:

A)How to simultaneously deal with cost reduction and local responsiveness.
B)Host country demands and expectations.
C) Making local customers and governments happy.
D) Producing a global version of a product or service.

Question 49

Institutional factors that affect MNEs include:

A)​External, informal factors.
B)​Internal factors.
C) ​External formal factors.
D) ​All of the above.

Question 50

The most appropriate structure for a multidomestic strategy is a:

A)International division structure.
B)Geographic area structure.
C) Flexible matrix structure.
D) Global matrix structure.

Question 51

When a company's rivals all move toward a global standardization strategy, the strategy:

A)​No longer satisfies the resource-based consideration of rarity.
B)​Makes the rivals more innovative.
C) ​Provides a source of differentiation.
D) ​Allows for easier imitation of informal structures.

Question 52

When the pressure for cost reduction is high, the integration-response framework recommends which form of multinational structure/strategy?

A)​Geographic area structure.
B)​International division structure.
C) ​Home replication strategy.
D) ​Global standardization strategy.

Question 53

Within a given industry, as competitors increasingly match each other in cost efficiencies and local responsiveness

A)​They will be less affected by the bargaining power of suppliers.
B)​Their rivalry naturally focuses on learning and innovation.
C) ​A geographic area division structure will become the most effective structure.
D) ​R&D activities and innovation become less and less important.

Question 54

The high costs due to duplication of efforts in multiple countries is a disadvantage of a:

A)​Global standardization strategy.
B)​Localization strategy.
C) ​Home replication strategy.
D) ​None of the above.

Question 55

Which of the following is NOT true of the global matrix structure?

A)It is often used to alleviate the disadvantages associated with the geographic area structure.
B)It is often used to alleviate the disadvantages associated with the global product division structures.
C) It is often used for sharing and coordinating responsibilities between product divisions and geographic areas.
D) This structure benefits front-line managers who now have only one boss - either a country manager or a product division manager.

Question 56

A main advantage of a global standardization strategy is that it:

A)​Leverages low-cost advantages.
B)​Maximizes local responsiveness.
C) ​Provides for significant local autonomy.
D) ​Engages in global learning and diffusion of innovations.

Question 57

When the pressure for local responsiveness is high, the integration-response framework recommends which form of multinational structure/strategy?

A)​Global matrix structure.
B)​International division structure.
C) ​Home replication strategy.
D) ​Global standardization strategy.

Question 58

Four strategic choices for MNEs do NOT include:

A)Home replication.
B)Domestic.
C) Multidomestic.
D) Transnational.

Question 59

When it comes to multinational enterprises, host countries:​

A)​May provide tax incentives to encourage MNE activity.
B)​Favor MNE investment in higher value-added areas.
C) ​Often put formal institutional factors in place to protect domestic employment.
D) ​All of the above.

Question 60

Knowledge management uses "centers of excellence" in which type of MNE?

A)Home replication.
B)Local (multidomestic).
C) Global.
D) All of the above.

Question 61

This structure is often used to supply customers (often other MNEs) in a coordinated and consistent way across various countries.

A)Global account structure.
B)An industry sector structure.
C) Solutions-based structure.
D) None of the above.

Question 62

Because knowledge management is central to how well a firm functions, it is important to know that knowledge is:

A)​Critical to the firm only if it is explicit knowledge.
B)​Implicit if it can be written down to be transferred.
C) ​Explicit if its acquisition requires hands-on practice.
D) ​Harder to transfer and learn if it is implicit.

Question 63

Which of the following is TRUE of globalized R&D?

A)For large firms, there are actually diminishing returns for R&D.
B)One way to access such a high technology and research-rich cluster is to avoid FDI.
C) R&D work performed by different locations and teams around the world virtually guarantees failure.
D) Global virtual teams, which do not meet face to face, may overcome communication and relationship barriers.

Question 64

For MNEs pursuing a home-replication strategy, knowledge management:

A)​Is characterized by a great deal of dependence among subsidiaries.
B)Develops mostly at the subsidiary level and flows upward to headquarters.​
C) ​Occurs in a one-way flow from center to subsidiaries.
D) ​None of the above.

Question 65

Subsidiary initiatives that are not consistent with corporate-wide goals:​

A)Lead to potential chaos.​
B)​Are essential for entrepreneurship within the MNE.
C) ​Marginalize the roles of subsidiary managers.
D) ​Are characteristic of decentralized MNE structures.

Question 66

Unique to international competition are the pressures for local responsiveness, which are reflected in:

A)Consumer preferences.
B)Distribution channels.
C) Host country demands.
D) All of the above.

Question 67

Which of the following is a customer-focused dimension?

A)Knowledge leakage.
B)Out-of-the-box packaged solutions.
C) Solutions-based structure.
D) None of the above.

Question 68

Which is NOT one of the suggestions for international managersthat can be drawn from thisChapter?

A)Create a common structure for all MNEs.
B)Understand the nature and evolution of your industry.
C) Actively develop learning and innovation capabilities.
D) Understand and be prepared to change the internal rules of the game.

Question 69

Which of the following is a solution rather than a problem in knowledge management?

A)Open innovation.
B)Knowledge leakage.
C) Not invented here syndrome.
D) All of the above.

Question 70

A large firm that uses a more centralized corporate control structure is more likely to encounter:

A)​Subsidiary initiatives.
B)​Greater expansion of subsidiary scope of responsibility.
C) ​Chaos.
D) ​A much-needed spirit of entrepreneurship throughout the MNE.

Question 71

Which of the following is a key idea regarding the reciprocal relationship between strategies and structures within MNEs?

A)The fit between strategies and structures is crucial.
B)The relationship is typically one way.
C) Strategies and structures are static.
D) A good strategy cancels the effect of a bad structure.

Question 72

For most MNEs, from a resource-based view tacit knowledge is:

A)​Strategically less important than explicit knowledge.
B)​Central to the informal relationships of the firm.
C) ​Easily captured, stored, and transmitted.
D) ​Seldom transferred through hands-on practice.

Question 73

Knowledge that is mostly developed and retained at the center and key locations of an MNE is characteristic of:

A)​Home replication strategy.
B)​Localization strategy.
C) ​Global standardization strategy.
D) ​Transnational strategy.

Question 74

Which of the following statements about GE (opening case) and its knowledge management is true?

A)​Interdependence is low.
B)​An integrated network of subsidiaries is slowly being replaced by a top-down hierarchy.
C) ​Each subsidiary not only develops locally relevant knowledge but also aspires to contribute knowledge to benefit the MNE as a whole.
D) ​Knowledge and people typically flow from headquarters to subsidiaries.

Question 75

When dealing with the different internal rules of the game the come with being a multinational organization, MNEs need to keep in mind that:

A)​It is important to stand firm on rules of the game set by MNE corporate headquarters.
B)​Having a foreigner as CEO is most beneficial for MNEs using a home replication strategy.
C) ​Some rules facilitate MNE actions, others constrain them.
D) ​When in Rome, do as the Romans do.

Question 76

A limited absorptive capacity leads to:

A)A tendency to block inflows of knowledge.
B)Reductions in corporate-level overload of responsibilities.
C) Better motivation among subsidiary-level managers.
D) A tendency away from the "not invented here" syndrome.

Question 77

When faced with the complexity and cost of value-added customer-focused dimensions, the textbook suggests that you:

A)​Create new formal structures.
B)​Simplify.
C) ​Find temporary solutions.
D) ​None of the above.

Question 78

A main purpose in engaging in open innovation is for MNEs to:

A)Adding rules to the R&D game to deter rivals.
B)Reduce dependence on collaborative research.
C) Counteract the diminishing returns of R&D in large firms.
D) None of the above.

Question 79

In knowledge management, when the role of foreign subsidiaries is make differentiated contributions that are integrated in worldwide operations, the MNE is following a:

A)​Home replication strategy.
B)​Localization strategy.
C) ​Global standardization strategy.
D) ​Transnational strategy.

Question 80

Which of the following is NOT an argument in favor of centralization in knowledge management but instead is an argument in favor of decentralization?

A)Capability to facilitate corporate-wide coordination.
B)Consistency in decision-making.
C) Permits greater speed, flexibility, and innovation.
D) Sufficient power for corporate-level managers to initiate necessary actions.