Deck 14: International Organization Design and Control

Question 1

________ is the overall pattern of structural components and configurations used to manage the total organization.

A) Organizational design
B) Functional design
C) Management
D) Strategy

Answer 1

A

Question 2

What is another name for organizational design?

A) functional design
B) strategic hierarchy
C) management design
D) organization structure

Answer 2

D

Question 3

What are the four functions of organizational design?

Answer 3

Organizational design allocates organizational resources. It assigns tasks to its employees. It informs those employees about the firm's rules, procedures, and expectations. It collects and transmits information necessary for problem solving, decision making, and effective organizational control.

Question 4

Tasks are assigned, resources are allocated and performance expectations are established through ________.

A) training objectives.
B) organizational design
C) strategic hierarchy
D) intuitive leadership

Question 5

There is no one single best form of organizational design for a global business.

Question 6

A firm would most likely establish an international division when ________.

A) domestic market sales fluctuate
B) decision making becomes decentralized
C) foreign and domestic customers are similar
D) specialization in foreign market operations becomes essential

Question 7

An important characteristic of a successful firm is its ability to match its strategy with a compatible organizational design.

Question 8

The ________ takes responsibility for overseeing international operations, marketing products, processing orders, working with foreign distributors, and arranging financing when necessary.

A) corollary approach
B) export department
C) international division
D) global product design

Question 9

Product knowledge refers to the idea that managers must ________.

A) understand the cultural, commercial, social, and economic conditions in each host country in which the firm does business
B) be aware of the competitive forces that have implications for global strategy in each market
C) comprehend features such as technological trends, customers needs, and competitive forces affecting the goods the firm produces
D) have access to coworkers with expertise in basic business functions such as production, marketing, finance, accounting, human resources management, and information technology

Question 10

Functional knowledge refers to the idea that managers must ________.

A) understand the cultural, commercial, social, and economic conditions in each host country in which the firm does business
B) be aware of the competitive forces that have implications for global strategy in each market
C) comprehend features such as technological trends, customers needs, and competitive forces affecting the goods the firm produces
D) have access to coworkers with expertise in basic business functions such as production, marketing, finance, accounting, human resources management, and information technology

Question 11

Which of the following is one of the managerial philosophies that guide the approach to functions like organizational design and marketing?

A) ethnocentric approach
B) transnational approach
C) supranational approach
D) intranational approach

Question 12

The ________ allows a firm to concentrate resources and create specialized programs targeted on international business activity while simultaneously keeping that activity segregated from the firm's ongoing domestic activities.

A) corollary approach
B) export department
C) international division
D) global product design

Question 13

What are the typical levels a firm goes through with regard to its organizational design as it transitions from domestic to international to global? What are the three managerial philosophies that guide organization design? Briefly explain when each philosophy is appropriate.

Question 14

The ________ is typical for a firm with only a small level of international activity.

A) corollary approach
B) export department
C) international division
D) global product design

Question 15

Apex Enterprises has recently started to engage in a small amount of direct exporting. As a result, Apex managers have delegated responsibilities for processing international orders to individuals within the production department. Which of the following is most likely used by Apex?

A) corollary approach
B) export department
C) international division
D) global product design

Question 16

The corollary approach is the final evolution a firm takes to become a global organization.

Question 17

The ethnocentric approach to management is most likely used by firms that ________.

A) operate internationally the same way they do domestically
B) customize their operations for each foreign market in which they serve
C) analyze the needs of their customers worldwide and then adopt standardized operations for all markets they serve
D) adapt their marketing strategies for foreign markets, but not their finance strategies

Question 18

Area knowledge refers to the idea that managers must ________.

A) understand the cultural, commercial, social, and economic conditions in each host country in which the firm does business
B) be aware of the competitive forces that have implications for global strategy in each market
C) comprehend features such as technological trends, customers needs, and competitive forces affecting the goods the firm produces
D) have access to coworkers with expertise in basic business functions such as production, marketing, finance, accounting, human resources management, and information technology

Question 19

The most complex form of international organizational design is the global matrix design.

Question 20

A study of design changes found that most firms make major design changes about every ________.

A) month
B) one to two years
C) four to five years
D) nine to ten years

Question 21

Which design is the most common form of organizational design adopted by MNCs?

A) global area design
B) global product design
C) global functional design
D) global matrix design

Question 22

Scale Systems, an MNE, analyzes the needs of its customers worldwide and then adopts standardized operations for all markets that the firm serves. Which of the following is most likely used by Scale Systems?

A) ethnocentric approach
B) polycentric approach
C) geocentric approach
D) transnational approach

Question 23

Which of the following is a characteristic of the global product design?

A) minimizes costly duplication of activities
B) simplifies processes for corporate learning
C) decreases need for regional market metrics
D) facilitates global marketing activities

Question 24

Adecco, a temporary employment agency with worldwide clients, has ten regional divisions. Managers in each division handle recruiting, distribution, promotion, and client services for that region. Adecco is a service firm that focuses on marketing. Which organizational design is most likely used by Adecco?

A) global product design
B) global area design
C) global functional design
D) global hybrid design

Question 25

Which of the following is an advantage of the functional design?

A) Expertise is transferred with difficulty between functional areas.
B) Managers no longer have centralized control over functional operations.
C) Attention is focused on key areas of the firm.
D) Coordination between divisions is simplified.

Question 26

Which type of organizational design organizes the firm's activities around specific regions of the world?

A) global product design
B) global area design
C) global matrix design
D) global hybrid design

Question 27

The ________ is used when a firm serves different customers or customer groups, each with specific needs calling for special expertise or attention.

A) global area design
B) global functional design
C) global matrix design
D) global customer design

Question 28

Which design is practical only when a firm has relatively few products or customers?

A) global product design
B) global area design
C) global functional design
D) global matrix design

Question 29

The ________ calls for a firm to create departments or divisions that have worldwide responsibility for common organizational functions.

A) global product design
B) global area design
C) global functional design
D) global matrix design

Question 30

British Airways is a single-business firm with company-wide function operations dedicated to marketing and operations, public affairs, human resources, and other basic functions. How could the organizational design of British Airways best be described?

A) global product design
B) global area design
C) global functional design
D) global matrix design

Question 31

The polycentric approach to management is most likely used by firms that ________.

A) operate internationally the same way they do domestically
B) customize their operations for each foreign market in which they serve
C) analyze the needs of their customers worldwide and then adopt standardized operations for all markets they serve
D) adapt their marketing strategies for foreign markets, but not their finance strategies

Question 32

What corporate philosophy is facilitated by a global product design?

A) ethnocentric approach
B) polycentric approach
C) geocentric approach
D) transnational approach

Question 33

Which design assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm?

A) global area design
B) global functional design
C) global product design
D) global hybrid design

Question 34

Which of the following is an advantage of global area design?

A) a firm may sacrifice cost efficiencies
B) diffusion of technology may be slowed
C) there may be a duplication of resources
D) firms may develop expertise about the local market

Question 35

The ________ is used by MNCs that have relatively narrow or similar product lines.

A) global product design
B) global functional design
C) global matrix design
D) global hybrid design

Question 36

Manix Enterprises, an MNC, uses a global product organizational design. Manix manufactures and sells chemical products and electronics. The firm also owns a financial services company and a small hotel chain. Which form does Manix most likely use?

A) C-form
B) H-form
C) M-form
D) U-form

Question 37

Vantage Computers, an MNE, has a multi-domestic corporate philosophy. Which organizational design would be most useful for Vantage?

A) global product design
B) global area design
C) global customer design
D) global matrix design

Question 38

Which of the following is an advantage of using a global area design?

A) eliminating duplication of functional areas
B) gaining cost efficiencies in manufacturing
C) tailoring the product mix in a region
D) encouraging global product planning

Question 39

Garvey Enterprises, an MNC, uses a global product organizational design. Garvey manufactures and sells boating accessories to customers around the world. Which form does Garvey most likely use?

A) C-form
B) H-form
C) M-form
D) U-form

Question 40

Parker Industries manufactures and sells a variety of goods including carpeting, power tools, and wallpaper. Which form of organization would most likely be appropriate for Parker Industries?

A) global product design
B) global functional design
C) global matrix design
D) global hybrid design

Question 41

What types of firms use the functional design?

Question 42

The global matrix design is the result of superimposing one form of organizational design on top of a different, existing form.

Question 43

What are the competitive advantages associated with a global product design?

Question 44

Which organizational design promotes flexibility and fluidity in the firm?

A) global area design
B) global functional design
C) global matrix design
D) global hybrid design

Question 45

Which organizational design is appropriate when the various customer groups targeted by a firm are so diverse as to require totally distinct marketing approaches?

A) global area design
B) global functional design
C) global matrix design
D) global customer design

Question 46

What is the difference between an M-form design and an H-form design? When would
international firms use each of these?

Question 47

Global area design is particularly useful for firms with a transnational corporate philosophy.

Question 48

What is the meaning of functional knowledge?

Question 49

The global matrix design allows for flexibility.

Question 50

Most companies use a hybrid of the various organizational designs.

Question 51

Which organization design is inappropriate for firms with few products and relatively stable markets?

A) global area design
B) global functional design
C) global matrix design
D) global hybrid design

Question 52

What are the disadvantages of the global product design? Why is coordination especially problematic?

Question 53

Kodak has three divisions. One division focuses on selling high-quality digital equipment to film studios. Another division sells digital cameras to amateur photographers. Finally, its new business division targets emerging markets. What organizational design does Kodak utilize?

A) global product design
B) global area design
C) global customer design
D) global matrix design

Question 54

What is the meaning of area knowledge?

Question 55

Explain the meaning of product knowledge.

Question 56

Since selling to foreign customers is not fundamentally different from selling to domestic ones, a firm's export department can get by knowing only a little about foreign markets.

Question 57

The global product design discourages duplication of functional-area skills.

Question 58

A ________ is the result of superimposing one form of organization design on top of a different, existing form.

A) global area design
B) global functional design
C) global matrix design
D) global hybrid design

Question 59

The global design chosen by a firm reflects the relative importance of the three types of knowledge in the firm's operations.

Question 60

British Airways uses the global customer design because it allows the firm to standardize its maintenance and flight procedures regardless of where a flight originates.

Question 61

Active subsidiary boards are most useful in which type of organization?

A) an M-form
B) a U-form
C) an H-form
D) an S-form

Question 62

Strategic control focuses on how well the firm defines and maintains its desired strategic alignment with the firm's ________.

A) administration
B) environment
C) subsidiaries
D) employees

Question 63

Which term refers to a group of managers from different parts of the world who are connected to each other in some way?

A) liaison
B) task force
C) informal management network
D) formal management network

Question 64

What is coordination?

Question 65

What is an informal management network? How are they established? Do you think they are useful to an international business? Why or why not?

Question 66

Empowering a subsidiary's board promotes centralization.

Question 67

Responsibility center control tends to follow a centralized decision-making system.

Question 68

Which term refers to the process of linking and integrating functions and activities of different groups, units, or divisions?

A) decentralization
B) coordination
C) subsidizing
D) channeling

Question 69

________ is the process of monitoring ongoing performance and making necessary changes to keep the organization moving toward its performance goals.

A) Coordination
B) Control
C) Implementation
D) Execution

Question 70

What strategies can firms implement to achieve desired coordination?

Question 71

Sarita, a manager at a large international firm, is primarily responsible for the financial resources of the entire organization. Sarita is most likely the firm's ________.

A) chief financial officer
B) auditor
C) controller
D) vice president of financial affairs

Question 72

The main levels at which control can be implemented includes which one of the following?

A) marketing level
B) financial level
C) organizational level
D) economic level

Question 73

Informal management networks are typically powerless when it comes to short-circuiting bureaucracy.

Question 74

________ is intended to monitor both how well an international business formulates strategy and how well it goes about implementing that strategy.

A) Functional control
B) Strategic control
C) Organizational control
D) Operations control

Question 75

A group of managers from different parts of the world who are connected to one another in some way is called an informal management structure.

Question 76

Derek is the international controller at Cabot Foods, a large MNE. Derek is most likely the most concerned about ________.

A) local financial control
B) financial forecasts
C) monthly budgets
D) managing the inventory of currencies

Question 77

The higher the level of interdependence among divisions and functions in a firm, the more coordination is required.

Question 78

What is the most critical aspect of strategic control?

A) control of firm's financial resources
B) control of a firm's marketing plans
C) quality control
D) control of labor issues

Question 79

When is a subsidiary board beneficial to an international firm? Why would an MNC appoint prominent local citizens to a subsidiary board?

Question 80

What is organizational design? What are the different types of organizational design? Describe each one briefly.