Deck 8: Strategy and Organization in the International Firm

Question 1

Strategic global teams are often assigned the task of determining the most efficient manner of running the corporation across the entire global network.

Answer 1

False

Question 2

To be locally responsive, managers need to determine the unique needs of customers and markets country by country.

Answer 2

True

Question 3

Sourcing inputs from a large-scale, centralized supplier improves quality control and efficiency.

Answer 3

True

Question 4

Firms that manage their operations differently in each country are more prepared to coordinate and respond to foreign and domestic competition.

Question 5

The home replication strategy is often employed as a vehicle for extending a product's life cycle in a foreign market.

Question 6

In the export department structure, the export department answers directly to top management.

Question 7

Decentralized structures are generally based on geographic regions, while centralized structures are usually organized around major categories of products.

Question 8

A corporate strategy is most likely based on which of the following?

A) culture risk and political stability in home country
B) strengths and weaknesses compared to a competitor
C) international trade regulations and restrictions
D) positive and negative feedback of a single store

Question 9

An organization's international strategy should support managers in doing all of the following except ________.

A) emphasize day-to-day operations
B) allocate scarce resources on a worldwide basis
C) participate in major international markets
D) enter global partnerships

Question 10

The diverse environment encountered by an international firm often leads to which of the following benefits?

A) communication breakdowns
B) new product ideas and partnering skills
C) manufacturing activities dispersed to numerous countries
D) providing uniform products and services to multidomestic customers

Question 11

Firms with global oriented organizational cultures exhibit all of the following except ________.

A) internationally accepted ethics
B) independent foreign subsidiaries
C) single corporate language
D) cross-cultural skills

Question 12

A global team is most often characterized by which of the following?

A) culturally diverse
B) similarly trained
C) domestically based
D) strategically located

Question 13

The global IT infrastructures of international corporations has increased efficiency and facilitated product development by ________.

A) making it possible for employees to globally collaborate
B) improving the means to disperse manufacturing among numerous countries
C) altering the way in which firms compete domestically
D) allowing the rapid exchange of managerial solutions at headquarters

Question 14

In its Coke sales, Coca-Cola participates in which of the following?

A) multidomestic industry
B) layered industry
C) global industry
D) integrated industry

Question 15

Firms that emphasize global integration make and sell which kinds of products?

A) unique products that cannot be reproduced
B) products that are highly different from each other
C) products that require minimal adaptation
D) products designed specifically for local markets

Question 16

Managing the firm's value-chain activities on a country-by-country basis is known as ________.

A) global integration
B) market structuring
C) regional accommodation
D) local responsiveness

Question 17

Coordinating the international value-chain activities of a firm in order to maximize efficiency is known by which of the following terms?

A) cross-fertilization
B) global integration
C) synergy
D) international strategy

Question 18

Which of the following would exert pressure on a firm to become locally responsive?

A) the need to conduct global sourcing
B) the need to accommodate differences in distribution channels
C) the desire to capitalize on converging consumer trends
D) the desire to provide uniform service to consumers

Question 19

All of the following are reasons that a clothing firm might decide to become locally responsive except ________.

A) local customer demands
B) cultural differences
C) host government regulations
D) economies of scale

Question 20

Which of the following most likely describes the foreign units of a company using a multidomestic strategy?

A) They are centralized to ensure efficiency and learning.
B) They are highly controlled by the company's headquarters.
C) They are autonomous and operate very independently.
D) They are rare, as most company units are located domestically.

Question 21

Which of the following is a negative aspect of a multidomestic strategy?

A) shared knowledge
B) locally adapted products
C) inefficient manufacturing
D) responsive management

Question 22

________ is characterized by corporate control over country operations in an attempt to increase efficiency and integration.

A) International strategy
B) Home replication strategy
C) Multi-domestic strategy
D) Global strategy

Question 23

A transnational strategy to internationalization is best characterized by which of the following?

A) identical cross border strategies and operations
B) adjustable plans driven by local managers
C) local responsiveness with central control
D) operations determined local partners

Question 24

In establishing a firm's organizational structure, the choice between centralization and decentralization concerns which of the following?

A) how many employees can be managed through each of the firm's subsidiaries
B) how much decision-making responsibility the firm should retain at headquarters
C) how many global subsidiaries the firm should choose to develop
D) how the firm should implement its primary vision and strategies

Question 25

Determining the balance between centralizing authority and de-centralizing authority most likely depends on which of the following factors?

A) type of product
B) domestic trade barriers
C) local culture
D) outsourcing

Question 26

To establish positive relationships with country managers, senior corporate managers should do all of the following except ________.

A) transfer employees to different positions within the corporate structure
B) minimize the impact on local managers of centralized corporate decision making
C) invite local managers to discuss their experiences at regional and global conferences
D) provide incentives and penalties to promote compliance with headquarters' goals

Question 27

Which of the following organizational arrangements for foreign operations is considered the most basic?

A) export department
B) international division
C) geographic area
D) product division

Question 28

Which of the following most likely explains why firms shift from an international division structure to a more complex organizational design?

A) Firms need to concentrate their efforts on the needs of local operations and meet domestic demands more economically.
B) Firms want to be able to negotiate profitable contracts with suppliers and distributors with the knowledge gained from global management.
C) Firms want to be able to pool resources to meet the domestic market demand, which reduces burdens from global production.
D) Firms need to market their products more efficiently and maximize production capabilities by utilizing global resources.

Question 29

All of the following characterize the geographic area division structure except ________.

A) domestic and foreign markets receive equal treatment from headquarters
B) products and services require few modifications or adaptations
C) manufacturers offer a wide variety of products and services
D) foreign and domestic operations share both assets and strategic goals

Question 30

Which of the following is most likely a disadvantage to the geographic division structure?

A) product development and product management are overlooked
B) coordination among regional subsidiaries is diminished
C) local cultural modifications cannot be implemented
D) country managers lack regional decision-making authority

Question 31

An advantage to firms that use a product structure arrangement is that ________.

A) different support functions are assigned specific roles in product development
B) products are developed for global markets and a variety of consumers
C) international product divisions work together towards common goals
D) R&D, manufacturing, and marketing collaborate on a single product

Question 32

In which of the following types of organizational arrangements would a firm most likely have a division that focused solely on global marketing?

A) product division
B) functional division
C) geographic area division
D) international division

Question 33

Extra Clean Strategy
Extra Clean Soap Company has been manufacturing soap products, such as dish washing liquid, bath soap, and shampoo, for over twenty years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase a soap company in Taiwan and another one in India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations as well. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean.

-Which of the following questions would be most important for Extra Clean managers to evaluate in their struggle to determine the type of strategy to employ?

A) Would changing the Extra Clean marketing program improve sales in Taiwan and India?
B) Should the Extra Clean headquarters relocate to Taiwan for six months?
C) Would the foreign managers benefit from a training session in Ireland?
D) What type of balance is appropriate between headquarters and country managers?

Question 34

Extra Clean Strategy
Extra Clean Soap Company has been manufacturing soap products, such as dish washing liquid, bath soap, and shampoo, for over twenty years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase a soap company in Taiwan and another one in India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations as well. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean.

-Which of the following most likely supports Extra Clean implementing a multidomestic strategy instead of a global strategy?

A) The Taiwan manufacturing facility requires updating.
B) Extra Clean managers lack internationalization experience.
C) Little demand exists for Extra Clean products in India.
D) Extra Clean competitors employ a multidomestic approach.

Question 35

Extra Clean Strategy
Extra Clean Soap Company has been manufacturing soap products, such as dish washing liquid, bath soap, and shampoo, for over twenty years from its facility and headquarters in Dublin, Ireland. A recent opportunity allowed Extra Clean to purchase a soap company in Taiwan and another one in India. Extra Clean is now servicing both foreign and domestic markets with its products and manufacturing in all three locations as well. Recent reports from managers in the foreign facilities indicate that Extra Clean sales in Taiwan and India are low due to a lack of local responsiveness. Extra Clean managers from Ireland, India, and Taiwan are having a teleconference in an attempt to devise a strategy to improve the profitability of Extra Clean.

-Which of the following most likely supports Extra Clean implementing a transnational strategy?

A) The country managers have been trained in the U.S.
B) Extra Clean is a highly centralized organization.
C) Extra Clean could reduce the number of global suppliers.
D) The country managers are familiar with global branding.

Question 36

Quik Meal Structure
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels made by Quik Meal taste much better than the gels sold by other firms, and as a result, Quik Meal sales are rising. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco.

-Which of the following questions would be more important for Quik Meal executives to evaluate when determining whether to centralize or decentralize the firm's structure?

A) How much modification is needed for Quik Meal products in Japan and Brazil?
B) How much do local managers understand about the nutritional needs of athletes?
C) What athletic drinks are available and popular in Japan and Brazil?
D) What is the possibility of Quik Meal establishing a subsidiary in India?

Question 37

Quik Meal Structure
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels made by Quik Meal taste much better than the gels sold by other firms, and as a result, Quik Meal sales are rising. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco.

-Which of the following most likely supports the decision by Quik Meal executives to centralize operations?

A) Quik Meal offers five different flavors of energy gels for athletes.
B) Quik Meal executives report a steady rate of sales in the U.S. market.
C) Quik Meal country managers report few requests to alter product ingredients.
D) Quik Meal products use the same trademark and packaging in every country.

Question 38

Quik Meal Structure
Quik Meal is a fast-growing MNE that manufactures and sells energy gels for consumption by serious athletes, such as marathoners and triathletes. The energy gels made by Quik Meal taste much better than the gels sold by other firms, and as a result, Quik Meal sales are rising. Managers and executives with Quik Meal need to determine the best organizational structure for the young firm. Quik Meal has subsidiaries in Japan and Brazil, while company headquarters are based in San Francisco.

-Quik Meal corporate managers should employ each of the following strategies to encourage collaboration with country managers except ________.

A) visit the Quik Meal subsidiaries in Japan and Brazil
B) organize a Quik Meal management teleconference
C) encourage U.S. managers to obtain additional training
D) offer the country managers sales incentives

Question 39

In a short essay, contrast the strategies of multidomestic industries and global industries. Why is there a difference in strategies between the two industries?

Question 40

What is the integration-responsiveness framework? In a short essay, describe the two main components of the framework.

Question 41

In a short essay, describe the pressures that might persuade a firm to become locally responsive in a nation where it conducts business.

Question 42

In a short essay, describe why firms might employ a global strategy when internationalizing operations.

Question 43

In a short essay, discuss why the expression "Think globally, act locally"
oversimplifies the complexities of global competition for MNEs. What kinds of competition does the firm face as a result of following through with this advice?

Question 44

In a short essay, describe the methods often used by senior corporate managers to develop collaborative relationships with local managers.

Question 45

In a short essay, describe the benefits of an international division structure for firms with global operations. What are some of the disadvantages to such an organizational arrangement?

Question 46

In a short essay, describe the concept of a global matrix structure. How is it implemented by firms?

Question 47

In addition to strategy and structure, what are three other factors that are required to build a successful global firm? Explain your answer in a short essay.