Deck 16: The Organization of International Business

Question 1

Decision making in a functional structure tends to be ________.

A)decentralized
B)centralized
C)horizontal
D)collaborative

Answer 1

B

Question 2

Functional structures for international operations are most likely found among those companies that ________.

A)have a narrow range of products that rely on economies of scale
B)have multiple products that share few common technologies
C)rely on differentiated marketing methods
D)compete in unstable industries

Answer 2

A

Question 3

A major benefit of the international division structure is ________.

A)outsourcing distribution and shipping tasks
B)responding quickly to foreign events
C)diversifying most product groups
D)hiring low-cost, local workers

Answer 3

B

Question 4

The balance between centralization and decentralization of authority in a company is known as ________.

A)systemic differentiation
B)horizontal differentiation
C)schematic differentiation
D)vertical differentiation

Question 5

At Tyson Manufacturing, departments and units are organized around discrete business activities, such as finance, production, marketing, and human resources.Tyson most likely has a ________ structure.

A)network
B)matrix
C)functional
D)divisional

Question 6

________ is the matter of how the company balances centralization versus decentralization of decision making, whereas ________ is the matter of how the company opts to divide itself into specific units to do specific jobs.

A)Horizontal differentiation; vertical differentiation
B)Vertical differentiation; systemic differentiation
C)Schematic differentiation; schematic differentiation
D)Vertical differentiation; horizontal differentiation

Question 7

In general terms, we see the principles of horizontal differentiation in the design logic of ________.

A)vertical differentiation
B)decentralization
C)the value chain
D)the unity-of-command principle

Question 8

Current approaches to designing an organization see the task of building knowledge-generating and decision-making relationships as less important than specifying the best structural arrangement.

Question 9

Johnson & Johnson distributes decision-making power among departments and divisions.This policy provides managers with a sense of ownership and control at the company.Johnson & Johnson is best described as a ________ organization.

A)vertical
B)centralized
C)horizontal
D)decentralized

Question 10

Whereas executives specify roles and relationships in a functional structure in terms of ________, they use the divisional structure format to specify them according to ________.

A)inputs; outputs
B)buyers; suppliers
C)markets; countries
D)politics; economics

Question 11

Which of the following statements is most likely true regarding vertical differentiation?

A)MNEs with decentralized structures are more appealing to foreign workers.
B)Most MNEs balance authority between headquarters and subsidiaries because of globality.
C)MNEs with many organizational levels are less likely to perform well in emerging markets.
D)Most MNEs implement centralized authority structures due to the complexity of globalization.

Question 12

Organization ________ refers to the formal arrangement of roles, responsibilities, and relationships within an organization.

A)structure
B)systems
C)culture
D)strategy

Question 13

A ________ structure is the ideal way to organize work when global integration is more important than local responsiveness and the industry structure encourages cost leadership.

A)decentralized
B)matrix
C)divisional
D)functional

Question 14

The idea of ________ involves how a company specifies organizational tasks; divides those tasks into jobs, departments, subsidiaries, and divisions; and then assigns authority and authority relationships.

A)systemic differentiation
B)horizontal differentiation
C)vertical differentiation
D)schematic differentiation

Question 15

The ________ the level of the company at which managers make decisions, the more that organization is ________.

A)higher; decentralized
B)lower; centralized
C)higher; centralized
D)higher; unstructured

Question 16

The concept of organization includes how a company does all of the following EXCEPT ________.

A)specifies the framework for work
B)develops systems that coordinate and control tasks
C)cultivates a common workplace culture among employees
D)plans leadership and training programs to develop the managerial staff

Question 17

Which of the following is the LEAST likely reason that global firms are shifting away from formal organizational structures?

A)advancements in communication systems
B)changes in managerial standards
C)opportunities in new markets
D)demands of stockholders

Question 18

In which of the following situations would a company most likely benefit from using the international division structure?

A)when the company's different foreign markets pose significantly different opportunities and threats
B)when the company relies on local managers in foreign operations to make strategic decisions
C)when the company's domestic market activity is much more important than its international business activity
D)when the company's domestic business activity has reached its full market potential

Question 19

Tyrone is a production manager at Penderhall Electronics, an MNE with operations in Asia, Europe, and the United States.Tyrone has very little decision-making authority at Penderhall, since most decisions are made at headquarters and distributed downward.Which structure is most likely used by Penderhall?

A)centralized
B)systematic
C)decentralized
D)multidomestic

Question 20

Historically, managers built organizations by focusing on the boxes and lines of a(n)________ structure.

A)formal
B)innovative
C)collaborative
D)flexible

Question 21

Horizontal differentiation is concerned with how the managers of a firm decide to divide the company into discrete subunits.

Question 22

Gary is a manufacturing manager at Forman Enterprises.Gary works at the MNE's headquarters in the United States.Before Gary can implement any major changes or decisions, he must communicate and coordinate his plans with Raj, a sales manager at Forman's facility in India.Which structure is most likely used by Forman Enterprises?

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

Question 23

In a matrix structure, product, functional, or geographic groups compete for resources.

Question 24

The functional structure is ideal when the company faces complex and changing environments.

Question 25

A firm's vertical differentiation determines where in its organization structure managers have decided to concentrate decision-making authority.

Question 26

Technology such as e-mail, VoIP, teleconferencing, and social networks helps MNEs respond to increasing globality.

Question 27

Decentralization has the key advantage of letting decisions be made by those who directly deal with customers, competitors, and markets.

Question 28

The fundamental limitation of a matrix structure is that it ________.

A)creates a poor organizational culture
B)isolates upper management from operational levels
C)institutes a dual hierarchy that violates the unity-of-command principle
D)introduces more errors in the decision-making process due to the speed of the process

Question 29

Avery Designs is an MNE with a diverse portfolio of products including cookware and clothing.Both the foreign and domestic operations for the firm's cookware products report to the same manager.Which structure is most likely used by Avery?

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

Question 30

Chapman Enterprises is an MNE that markets a diverse portfolio of products including jewelry, luggage, and furniture.Which structure would most likely be used by Chapman?

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

Question 31

A major benefit of the international division structure is ________.

A)the elimination of conflicts of interest among domestic and foreign operations
B)the integration of domestic and foreign operations
C)de-emphasis of economies of scale
D)cost effectiveness

Question 32

Which of the following factors increasingly encourages MNEs to install a geographic division structure?

A)growth of emerging markets
B)diversification of products
C)rise of social networking
D)global recession

Question 33

A divisional structure tends to be adopted by firms that are diversified by products or markets.

Question 34

In reality, the organizational charts of ________ MNEs neatly depict a functional, divisional, or matrix structure.

A)no
B)few
C)most
D)all

Question 35

One advantage of centralized corporate practices is a reduced risk that lower-level employees make costly, wrong decisions.

Question 36

Andrews Enterprises, which uses an international division structure, should be able to respond quickly to foreign activities but will most likely experience costly country-to-country duplication.

Question 37

The primary limitation with the product division structure is the ________.

A)cost of duplicated functions and international activities
B)poor response to local market demands for a product
C)inability to transfer core competencies within units
D)difficulty of selling product lines

Question 38

The functional structure is inappropriate for firms with products and manufacturing methods that are largely undifferentiated among countries.

Question 39

Historically, the geographic division structure is associated with companies pursuing ________ strategies.

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

Question 40

Companies tend to use geographic divisions when they have large foreign operations that are not dominated by a single country or market.

Question 41

Neoclassical structures aim to support organizations ________.

A)in which the location of control in a network alliance is evident
B)that centralize decision-making authority to those who can make informed decisions
C)that dismantle horizontal, vertical, or external boundaries that block ideas and relationships
D)that create predictable workplaces with minimal collaboration among subsidiaries

Question 42

Explain the major types of classical organization structures and the advantages and disadvantages of each for international operations.

Question 43

A Japanese keiretsu is best described as a ________.

A)family business
B)product division
C)network structure
D)centralized control system

Question 44

IBM puts investments, people, and work anywhere in the world based on the best mix of costs, skills, and environment and uses sophisticated strategies and technologies to support and coordinate activities.IBM most likely uses a ________ structure.

A)classical
B)product
C)neoclassical
D)locational

Question 45

Which of the following is the most likely benefit of a network structure?

A)encouraging competition among members for resources
B)facilitating supplier changes anywhere in the value chain
C)developing core competencies in a broad range of value activities
D)maintaining a strong sense of organization in the face of dynamic partnerships

Question 46

Concord Foods, an international firm based in the United States, is in the process of transitioning from a classical organizational structure to a neoclassical structure.Which of the following tools would most likely enable Concord to make this change?

A)annual performance appraisals
B)cross-functional task forces
C)flexible benefits plans
D)merit awards

Question 47

In a brief essay, discuss how decentralized management and organizational culture affect Johnson & Johnson.

Question 48

Vertical and horizontal constraints that segment employees and their tasks within an organization are generally referred to as ________.

A)structures
B)networks
C)boundaries
D)classifications

Question 49

Neoclassical structures aim to centralize decision-making authority by removing boundaries that impede the decentralization of decision making.

Question 50

A matrix organization is a hybrid of the functional and geographic organizations.

Question 51

Some MNEs that have tried contemporary structures have run into problems, most notably ________.

A)frequent managerial intervention in decision making
B)relentless centralization of decision making
C)employees too motivated by bonuses
D)resource competition

Question 52

How might centralization of decision making adversely affect local managers in an MNE?

Question 53

The neoclassical structure implemented by Cisco primarily enables the firm to ________.

A)respond quickly to new opportunities
B)thoroughly assess new competitors
C)assign leaders to new products
D)clarify managers' duties

Question 54

The temporary arrangement of independent companies, suppliers, and free agents for the purpose of completing a task or project is best known as a(n)________ organization.

A)virtual
B)independent
C)decentralized
D)international

Question 55

Neoclassical structures attempt to minimize boundaries between all of the following EXCEPT ________.

A)vertical ranks and functions
B)horizontal units in different areas
C)the firm and its suppliers
D)the firm and its competitors

Question 56

A common feature of neoclassical structures is greater cross-functional collaboration.

Question 57

Which of the following is promoted by a neoclassical structure?

A)innovation of ideas
B)information control
C)project competition
D)minimal relationships

Question 58

A hyperarchy is ________.

A)a form of structure with precise superior and subordinate relationships
B)a form of structure that relies on extensive centralization
C)a large-scale, self-organizing community
D)analogous to a hierarchy

Question 59

Profile the idea and features of horizontal differentiation, paying particular attention to its implications to how managers design their company's structure.

Question 60

Which of the following is the LEAST likely characteristic of neoclassical structures?

A)few barriers between people
B)extensive collaborative efforts
C)higher capacity for change and learning
D)centralized decision making

Question 61

Profile the causes and likely benefits that prompt companies to consider adopting a neoclassical structure.

Question 62

Three types of control systems are used in MNEs.These are ________.

A)market control, bureaucratic control, and clan control
B)standardization control, adjustment control, and clan control
C)market control, adjustment control, and clan control
D)planning control, market control, and clan control

Question 63

Which of the following is NOT one of the three prevalent approaches to coordination?

A)standardization
B)mutual adjustment
C)adaptation
D)planning

Question 64

Adopting a market control system requires that the MNE uses external market mechanisms to establish internal performance benchmarks and standards.

Question 65

Coordination by plan deals with exact rules and procedures that spell out what needs to be done and how.

Question 66

The keiretsu structure, long used by Japanese companies, is an example of virtual organization.

Question 67

Formal reports, management performance evaluations, and financial metrics are three examples of ________.

A)coordinating tools
B)coordinating systems
C)control systems
D)control mechanisms

Question 68

Grover Enterprises is an MNE that relies on shared values among all employees to idealize the preferred behaviors and identify performance measures within the company.Grover is most likely applying a system of ________.

A)market control
B)bureaucratic control
C)planning control
D)clan control

Question 69

Falcon Enterprises is an MNE that uses price competition and relative market share to establish internal performance benchmarks and standards.The firm is most likely applying a system of ________.

A)bureaucratic control
B)market control
C)standardization control
D)clan control

Question 70

Which of the following begins with a company defining critical success factors and specifying objective targets and hard deadlines?

A)coordination by standardization
B)coordination by consensus
C)coordination by plan
D)coordination by intervention

Question 71

The open source model is a hyperarchy that involves giving source code to volunteers who fix software bugs.

Question 72

According to the unity-of-command principle, workers and organizations benefit the most from dual hierarchies of communication.

Question 73

The notion of boundaries, within the context of neoclassical structures, refers to those limitations that interfere with communication and collaboration between the firm and its suppliers, distributors, allies, competitive rivals, and customers.

Question 74

Martin Manufacturing is an MNE that centralizes authority to implement an extensive set of rules and procedures to govern a broad range of activities.Martin Manufacturing is most likely applying a system of ________.

A)market control
B)adjustment control
C)bureaucratic control
D)clan control

Question 75

Johnson & Johnson embodies its organizational culture in "The Credo," which is the firm's ________.

A)code of conduct
B)vision statement
C)strategic plan
D)mission statement

Question 76

What is the difference between a classical structure and a neoclassical structure? Provide examples of each type.

Question 77

Coordination refers to ________.

A)linking various value activities within an organization
B)identifying the span of control within an organization
C)portioning the performance of specific tasks
D)assigning tasks to qualified managers

Question 78

Abel Enterprises has implemented a system based on coordination by mutual adjustment.Which of the following would most likely be used by Abel Enterprises?

A)strict scheduling
B)social networking
C)synchronized training
D)centralized decision making

Question 79

Patrons of McDonald's can enter the restaurant located in any part of the world and expect to see employees wearing the same uniforms and menus offering the same products.McDonald's most likely uses which system of coordination?

A)standardization
B)consensus
C)plan
D)adaptation

Question 80

Coordination methods include mutual adjustment, planning, and standardization.