Deck 6: Designing Organizations for the International Environment

Question 1

The global geographic division structure:

A) is most useful for new product lines.
B) works well for products with rapidly changing technologies.
C) works best if there are similar needs for the product across countries.
D) may cause product planning on a global scale to be challenging.

Answer 1

D

Question 2

Which of the following strategies should an organization pursue if the forces for national responsiveness and the forces for global integration are high?

A) Export
B) Multidomestic
C) Globalization
D) Globalization and multidomestic

Answer 2

D

Question 3

A ____ strategy would encourage production design, assembly, and marketing tailored to the specific needs of each country.

A) focused
B) multidomestic
C) globalization
D) joint venture

Answer 3

B

Question 4

Building a global presence expands an organization's scale of operations, enabling it to realize:

A) economies of scale.
B) economies of scope.
C) factors of production.
D) its international development stage.

Question 5

When a company such as Coca-Cola decides to use the same product design and advertising strategy throughout the world, it is following the ____ strategy.

A) multidomestic
B) consortia
C) focused
D) globalization

Question 6

Which of these operates in truly global fashion, and the entire world is their marketplace?

A) Multidomestic firms
B) Domestic organizations
C) Governmental agencies
D) Global companies

Question 7

All of the following except ____ are typical alliances used for global expansion.

A) wholly-owned subsidiaries
B) joint ventures
C) consortia
D) licensing

Question 8

Reference Organization Chart 6.2. This structure is:

A) Global geographic division structure
B) Global matrix structure
C) Global product division structure
D) Global functional structure

Question 9

One of the earliest, and still one of the most powerful, motivations for U.S. companies to invest abroad relates to ____: obtaining raw materials, labor, and other resources at the lowest possible cost.

A) factors of production
B) economies of scope
C) economies of scale
D) technological factors

Question 10

The worldwide geographic or product structures are most likely to appear during the ____ stage of international evolution.

A) domestic
B) international
C) multinational
D) global

Question 11

Which stage is export-oriented and in a competitive position?

A) Multinational
B) Global
C) Domestic
D) International

Question 12

Which of the following is not a primary factor that motivates companies to expand internationally?

A) Cheaper production factors
B) Smaller number of distribution channels
C) Economies of scale
D) Economies of scope

Question 13

____ is a popular approach to sharing development and production costs and penetrating new markets.

A) Consortia
B) Licensing
C) Joint ventures
D) Franchising

Question 14

The global product structure works best when a division handles products that:

A) are technologically dissimilar.
B) can be standardized for marketing worldwide.
C) obsolete in one country, but not in another.
D) cheap and easy to produce.

Question 15

____ refers to the number and variety of products and services a company offers, as well as the number and variety of regions, countries, and markets it serves.

A) Economies of scale
B) Market potential
C) Scope
D) Development stage

Question 16

The global product structure:

A) utilizes country managers who are accountable for profit and loss of every product.
B) fits well with customization of production or marketing.
C) may result in competition among product divisions.
D) will insure that all countries are covered well.

Question 17

Which of the following means that product design, manufacturing, and marketing strategy are standardized throughout the world?

A) Globalization strategy
B) Standardization strategy
C) Multidomestic strategy
D) Transnational strategy

Question 18

In the ____ stage of international evolution, explosion occurs as international operations take off.

A) global
B) domestic
C) multinational
D) international

Question 19

____ are groups of independent companies that join together to share skills, resources, costs, and access to one another's markets.

A) Joint ventures
B) Franchising
C) Licensing
D) Consortia

Question 20

In the ____ stage, an international division has replaced the export department, and specialists are hired to handle sales, service, and warehousing abroad.

A) domestic
B) international
C) global
D) multinational

Question 21

____ are typical in highly volatile environments.

A) Hybrid structures
B) Global geographic structures
C) Global matrix structures
D) Transnational structures

Question 22

As organizations become more differentiated, with multiple products, divisions, departments, and positions scattered across numerous countries, managers face a tremendous ____ challenge.

A) knowledge transfer
B) differentiation
C) coordination
D) development

Question 23

A _____ strategy means that competition in each country is handled independently of competition in other countries.

A) globalization
B) focused
C) multidomestic
D) joint venture

Question 24

Wheras the _____ divisions are typically organized along functional or product lines, the _____ division is organized according to geographic interests.

A) transnational; multidomestic
B) multidomestic; transnational
C) domestic; international
D) international; domestic

Question 25

Some organizations create formal ____ positions to coordinate information and activities related to key customer accounts.

A) functional manager
B) transnational team
C) network coordinator
D) division network

Question 26

All of the following are reasons why many organizations tap only a fraction of the potential that is available from cross-border transfer of knowledge and innovation except:

A) barriers of language, cultural, and geographic distances.
B) lack of trust among people at different locations.
C) divisions sometimes view knowledge and innovation as power and want to hold onto it.
D) economies of scope can increase a company's market power as compared to competitors.

Question 27

The ____ model reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts.

A) transformative
B) transnational
C) global
D) multidomestic

Question 28

Which of the following is not a primary segment of the global organizational challenge?

A) The problem of transferring knowledge across a global firm
B) Greater complexity and differentiation
C) The need for coordination
D) The need for KSAs

Question 29

High ____ means that people accept inequality in power among institutions, organizations, and people.

A) uncertainty avoidance
B) power distance
C) employee empowerment
D) integration

Question 30

In one survey, 70 percent of global companies reported that the most important function of corporation headquarters was to:

A) make shareholders happy.
B) provide enterprise leadership.
C) provide extensive training.
D) develop new goals and visions for the company frequently.

Question 31

In the _____ stage of international development, the company is domestically oriented, but managers are aware of the global environment and may want to consider initial foreign investment.

A) international
B) domestic
C) multinational
D) global

Question 32

All of the following are characteristics that distinguish the transnational organization from other global organization forms except:

A) assets and resources are dispersed worldwide into highly specialized operations that are linked together through interdependent relationships.
B) structures are stable.
C) subsidiary managers initiate strategy and innovations that become strategy for the corporation as a whole.
D) unification and coordination are achieved primarily through corporate culture, shared vision and values, and management style rather than through formal structures and systems.

Question 33

The global matrix structure:

A) will increase horizontal coordination, but will decrease vertical coordination.
B) works best when there is pressure for decision making that balances the interests of both product standardization and geographical localization.
C) commonly utilizes matrix bosses as functional and product heads.
D) is usually found in firms that have reached the "international stage" of international evolution.

Question 34

____ teams are cross-border work groups made up of multiskilled, multinational members whose activities span multiple countries.

A) Management
B) Global
C) Functional
D) Focus

Question 35

Thomas Friedman outlines 10 forces that flattened the world, which he calls Flatteners. Many of these forces are directly or indirectly related to advanced tecnhology, including all of the following except:

A) work flow software.
B) supply-chaining.
C) power distance.
D) the "steroids."

Question 36

Which of the following is not a benefit that results from inter-unit collaboration?

A) Cost savings
B) Better decision making
C) Greater revenues
D) Decreased innovation

Question 37

The transnational model is characterized by:

A) using shared vision and values to achieve coordination in this horizontal structure.
B) being one step short of the matrix in exploiting both global and local advantages for the corporation as well as multiple interrelated competitive issues.
C) has a single headquarters and a single center of control for each country and for each product line.
D) there is no single corporate headquarters, but there is a clear hierarchical responsibility.

Question 38

Nestle SA gets most of its sales from outside the "home" country of Switzerland, and its employees are spread all over the world. The CEO is Belgian, and the chairman was born in Austria, and more than half of the company's managers are non-Swiss. Nestle has hundreds of brands and has production facilities or other operations in almost every country in the world. Nestle is in the _____ stage of international development.

A) multinational
B) international
C) domestic
D) global

Question 39

Which of the following is not true regarding approaches to coordination and control?

A) European countries take a decentralized approach
B) Japanese countries take a decentralized approach
C) The United States uses formalization
D) Chinese companies take a traditional approach

Question 40

The _____ structure divides the world into geographic reasons.

A) global geographic
B) global matrix
C) global product
D) international

Question 41

Managers and organizations all over the world are very reluctant to cooperate to achieve competitive advantage on a global scale.

Question 42

The second stage of international evolution, "International Stage," will usually be structured with a domestic structure with an export department.

Question 43

The global geographic structure divides the world into geographical regions, with each geographical division reporting to the CEO.

Question 44

Building a global presence expands an organization's scale of operations, enabling it to realize economies of scale.

Question 45

The global product division structure works best when pressure for decision-making balances the interests of both product standardization and geographical localization and when coordination to share resources is important.

Question 46

In many instances, companies will need to respond to both global and local opportunities simultaneously. In this case, the global matrix structure can be used.

Question 47

In parts of Mexico, laundry detergent is used to wash dishes, not clothes, pointing out the need for a multidomestic strategy.

Question 48

Four primary factors motivate companies to expand internationally: profitability, economies of scale, economies of scope, and low-cost production factors.

Question 49

A company typically shifts its interest from domestic activity to exporting in the 3rd stage (multinational) of international development.

Question 50

Functional structures are found more frequently in a worldwide business than in a domestic business.

Question 51

As companies begin to explore international opportunities, they typically start with an international division that grows into an export department.

Question 52

To meet new competitive threats, many manufacturing firms are emphasizing the ability to customize their products to meet specific needs which requires a greater emphasis on global responsiveness.

Question 53

The international stage of international development means that exports are taken seriously and that the company deals with the competitive issues of each country separately.

Question 54

Truly global companies no longer think of themselves as having a single home country and have been called stateless corporations.

Question 55

The product-based structure works best when a division handles products that are technologically similar and can be standardized for marketing around the world.

Question 56

A joint venture is a separate entity created with two or more active firms as sponsors.

Question 57

With a global geographic division structure, each division's manager is responsible for planning, organizing, and controlling all functions for the production and distribution of its products for any market around the world.

Question 58

Having a presence in multiple countries provides marketing power and synergy compared to the same size firm that has presence in fewer countries.

Question 59

The globalization strategy means that product design, manufacturing, and marketing strategy are standardized throughout the world, whereas a multidomestic strategy means that competition in each country is handled independently of competition in other countries.

Question 60

Stage two is the global stage which means the company takes exports seriously and begins to think multidomestically.

Question 61

Low uncertainty avoidance means that people have a high tolerance for the unstructured, the unclear, and the unpredictable.

Question 62

The trend toward large organizations was initially sparked by the Industrial Revolution.

Question 63

Innovation refers to the quality of collaboration across organizational units.

Question 64

The "not-invented-here" syndrome makes some managers reluctant to tap into the know-how and expertise of other units.

Question 65

Network coordinators would enable a manufacturing organization to provide knowledge and integrated solutions across multiple business, divisions, and countries for a large customer.

Question 66

Functional managers coordinate across functions whereas country managers coordinate among countries.

Question 67

Only a few decades ago, many companies could afford to ignore the international environment.

Question 68

The fourth and ultimate stage of international development is the multinational stage.

Question 69

In the global stage of international development, the market potential of a firm is mostly domestic.

Question 70

A transnational team is a work group made up of multinational members whose activities span multiple countries.

Question 71

European companies typically take a decentralized approach to coordination and control.

Question 72

High uncertainty avoidance means that people accept inequality in power among institutions, organizations, and people.

Question 73

Hybrid structures are typical in highly volatile environments.

Question 74

In general, services are less suitable for globalization because different customs and habits often require a different approach to providing service.

Question 75

The only way an organization can reasonably expect to be successful in different countries is to customize its products and services to suit the local interests, preferences, and values in each country.

Question 76

The transnational model reflects the ultimate in both organizational complexity, with many diverse units, and organizational coordination, with mechanisms for integrating the varied parts.

Question 77

When forces for both global standardization and local responsiveness in many countries are low, simply using an international division with the domestic structure is an appropriate way to handle international business.

Question 78

Many large international companies are moving toward a multidomestic model of organization.

Question 79

The management philosophy of transnational model is based on interdependence rather than either full divisional independence or total dependence of these units on headquarters for decision making and control.

Question 80

Service companies cannot use a divisional structure.