Deck 14: International Organization Design and Control

Question 1

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

Answer 1

A

Question 2

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

Answer 2

B

Question 3

Which of the following is a characteristic of the current organizational design at Lenovo?

A) establishing clearly defined functional divisions
B) making decisions and plans through consensus
C) decreasing the importance of local managers
D) centralizing the authority of management

Answer 3

B

Question 4

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 5

________ 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

Question 6

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 7

What is another name for organizational design?

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

Question 8

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 9

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 10

Which of the following is not typically accomplished through a firm's organizational design?

A) Tasks are assigned to employees.
B) Division of profits is determined.
C) Organizational resources are allocated.
D) Employees learn about performance expectations.

Question 11

Which of the following types of knowledge is not necessary to compete effectively in international business?

A) area knowledge
B) product knowledge
C) functional knowledge
D) geocentric knowledge

Question 12

Maureen is manager of the export department at Claussen Cutlery. Which of the following is LEAST likely a responsibility of Maureen's department?

A) overseeing domestic operations
B) working with foreign distributors
C) processing orders
D) marketing products

Question 13

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) foreign market familiarity becomes essential

Question 14

Which of the following is not a form of global organization design?

A) product
B) geocentric
C) matrix
D) customer

Question 15

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 16

Which of the following is not one of the managerial philosophies that guide the approach to functions like organizational design and marketing?

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

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

Managers at Audio-Tech, an MNE, are trying to determine the best organizational design for the firm. Which factor is LEAST relevant to this decision?

A) firm size
B) HR metrics
C) technology
D) environment

Question 19

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

A) year
B) two years
C) five years
D) ten years

Question 20

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 21

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

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

Question 22

What corporate philosophy is facilitated by a global product design?

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

Question 23

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 24

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 25

Vantage Computers, an MNE, has a multidomestic 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 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

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 28

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 29

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

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

Question 30

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 31

Which of the following is not an advantage of the functional design?

A) Expertise can be transferred easily between functional areas.
B) Managers can maintain centralized control over functional operations.
C) Attention is focused on key areas of the firm.
D) Coordination between divisions is simplified.

Question 32

Kodak has three divisions. One division focuses on selling high-quality film to film studios. Another division sells to professional and 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 33

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 34

Adecco, a temporary employment agency with worldwide clients, has eight 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 35

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 36

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 37

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 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

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 40

Cadbury Schweppes PLC has five basic divisions, each representing a different area of the world. Which organization design does it use?

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

Question 41

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 42

The main levels at which control can be implemented include all of the following except ________.

A) marketing level
B) strategic level
C) organizational level
D) operations level

Question 43

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 44

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 45

What is a primary characteristic of the responsibility center control system?

A) decentralization
B) centralization
C) duplication
D) standardization

Question 46

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 47

________ 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 48

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) exchange rate risk

Question 49

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 50

Which organization design is LEAST appropriate 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 51

________ 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 52

At Garmen Industries, each unit has the same control system and the locus of authority resides at the firm's headquarters. Which control system is most likely used at Garmen?

A) responsibility center control
B) generic organizational control
C) planning process control
D) operations control

Question 53

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 54

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 55

What is the most common type of organizational control system?

A) responsibility center control
B) generic organizational control
C) planning process control
D) operations control

Question 56

Which of the following would LEAST likely trigger the development of an informal management network?

A) mutual acquaintances
B) training programs
C) performance appraisals
D) joint meetings

Question 57

According to the text, which form of international organizational design is used by most MNCs?

A) global hybrid
B) global matrix
C) global area
D) global customer

Question 58

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 59

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 60

Management at Isis International, an MNE, is attempting to integrate the functions and activities of the firm's different units and divisions. Which of the following would LEAST likely help Isis to accomplish coordination?

A) organizational hierarchy
B) rules and procedures
C) performance metrics
D) task forces

Question 61

Which of the following would most likely reduce resistance to control?

A) promoting strategic selection systems
B) creating a system that has a flexible focus
C) creating a system that creates reasonable accountability
D) providing an appeals system overseen by central management

Question 62

What control function is Ford primarily using to ensure the firm increases its global automobile sales?

A) regulations
B) annual goals
C) accounting systems
D) performance appraisals

Question 63

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

Question 64

A(n) ________ is a numerical index of performance that the firm wants to maintain.

A) control standard
B) performance ratio
C) accounting standard
D) benchmark

Question 65

When a firm tries to exert more control over individuals than the individuals think is appropriate, the result is ________.

A) authoritarianism
B) overcontrol
C) undercontrol
D) control resistance

Question 66

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

Question 67

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 68

Which element of performance is relatively easy to measure?

A) worker productivity
B) advertising effectiveness
C) ethical managerial conduct
D) employee motivation

Question 69

According to the text, Japan's zombie firms should do all of the following EXCEPT ________.

A) monitor inventory levels
B) use information technology effectively
C) expand and diversify product lines
D) listen and respond to customer feedback

Question 70

Which of the following is not a step in a control system?

A) Set control standards for performance.
B) Compare results against competitors' performance.
C) Measure actual performance.
D) Compare performance against standards.

Question 71

A common performance ratio used by many firms is ________.

A) breakeven point
B) inventory turnover
C) cost of goods sold
D) earnings per share

Question 72

How long is the scope of time for operational control typically?

A) daily
B) weekly
C) monthly
D) yearly

Question 73

Acme Medical Equipment, an MNC, pursues pursue a similar strategy in each market in which the firm competes and typically experiences very predictable operations. Which control system would most likely be best for Acme Medical Equipment?

A) responsibility center control
B) generic organizational control
C) planning process control
D) operations control

Question 74

A(n) ________ calls for a firm to concentrate its organizational control system on the actual mechanics the firm uses to develop strategic plans.

A) responsibility center control
B) generic organizational control
C) planning process control
D) operations control

Question 75

What is the first step in establishing an international control system?

A) Set control standards for performance.
B) Measure actual performance.
C) Compare performance against standards.
D) Discuss deviations with employees.

Question 76

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

Question 77

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

Question 78

________ focuses specifically on operating processes and systems within both the firm and its subsidiaries and operating units.

A) Responsibility center control
B) Generic organizational control
C) Planning process control
D) Operations control

Question 79

Which element of performance is relatively difficult to measure?

A) actual output
B) worker productivity
C) product quality
D) advertising effectiveness

Question 80

United Distillers PLC uses the same strategy in every market. Which type of control method should it use?

A) standardized organizational control
B) centralized organizational control
C) generic organizational control
D) responsibility center control