Question 1

Sedona Industries is a U.S. firm that manufactures high-quality handbags, luggage, and belts from its facility in Arizona. Sedona's products have been featured in various fashion magazines, and as a result, consumer demand has increased significantly. Currently, Sedona is organized as a domestic structure plus export department. Executives at Sedona believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Sedona should reorganize into a domestic structure plus foreign subsidiary?
A) Sedona executives want to open numerous subsidiaries in both Europe and Asia.
B) Sedona is a family-owned business which began as an entrepreneurial enterprise.
C) Sedona executives are prepared to give subsidiary managers significant autonomy.
D) Sedona conducts a large percentage of domestic sales through the company's website.

Accepted Answer

The fact that Sedona executives are prepared to give subsidiary managers significant autonomy is a key indicator that a foreign subsidiary structure would be appropriate. This structure allows for more localized decision-making and flexibility, which is important when operating in foreign markets with different cultural and business practices. The other answer choices do not necessarily support the argument for a domestic structure plus foreign subsidiary.

Question 2

A firm that uses an international division structure may experience conflict among all of its divisions because ________.
A) the structure type is not very efficient
B) the international division fails to respond to cultural differences
C) more resources tend to be provided to the international division
D) fewer resources tend to be provided to the international division

Accepted Answer

When a firm uses an international division structure, more resources tend to be provided to the international division. This can lead to conflict among all divisions as they compete for resources and may feel neglected in comparison to the international division.

Question 3

Which of the following is NOT a stage in Stopford's stages model?
A) global product structure
B) matrix structure
C) international division
D) regional structure

Accepted Answer

Stopford's stages model includes global product structure, matrix structure, and international division, but not regional structure.

Question 4

Firms typically internationalize in response to all of the following EXCEPT ________.
A) need for diversification
B) affects of governmentalism
C) increased global competition
D) domestic market saturation

Accepted Answer

Internationalization is usually a strategic response to challenges posed by certain factors, such as domestic market saturation, increased global competition, and the need for diversification. However, governmentalism, or the interference of government policies and regulations in business operations, is not a typical reason why firms choose to go international.

Question 5

What led Samsung to reorganize in 2009?
A) failed joint ventures
B) foreign trade restrictions
C) global economic conditions
D) emerging market competition

Accepted Answer

Samsung reorganized in 2009 due to the global economic conditions that resulted from the financial crisis. This led to a decline in demand for their products, prompting the company to restructure its operations and cut costs.

Question 6

Small firms typically begin their international involvement by ________.
A) exporting
B) franchising
C) outsourcing
D) forming joint ventures

Accepted Answer

Small firms typically start their international business by exporting their products. This is because exporting is considered the most straightforward and low-risk method of entering foreign markets. It allows companies to test their products in foreign markets, gain market knowledge, and generate additional revenue without committing significant resources to foreign operations.

Question 7

Which of the following forms of organization is particularly appropriate for product lines using similar technology and for businesses with a narrow spectrum of customers?
A) global functional structure
B) global product structure
C) global geographic structure
D) global market structure

Accepted Answer

A global functional structure is suitable for organizations with product lines using similar technology and a narrow customer base, as it allows for specialization and efficiency in functions like production and marketing.

Question 8

The stages model is best described as the stages of change in an organizational structure that ________.
A) link markets within cultural regions
B) identify the risks faced by firms that are globalizing
C) follow the evolution of the internationalization process
D) control the strategic decisions made by global managers

Accepted Answer

The stages model is a framework that traces the evolution of the internationalization process of a firm, from the initial domestic operations to a fully globalized structure. It identifies the different stages that a firm goes through, such as export, foreign sales, strategic alliances, and direct investment, among others. The model helps managers understand and manage the complexities that arise as a firm expands globally.

Question 9

Company XYZ is a small firm with a highly centralized system and a narrow spectrum of customers. It most likely has a ________ structure.
A) global geographic
B) global product
C) global functional
D) global cultural

Accepted Answer

Company XYZ has a centralized system which is characteristic of a functional structure. The term "global" suggests that the company may have operations in multiple locations or markets, but the focus is on the internal structure rather than the external market or product offerings. Thus, global functional structure would be the best choice.

Question 10

Sedona Industries is a U.S. firm that manufactures high-quality handbags, luggage, and belts from its facility in Arizona. Sedona's products have been featured in various fashion magazines, and as a result, consumer demand has increased significantly. Currently, Sedona is organized as a domestic structure plus export department. Executives at Sedona believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Sedona should reorganize into a global functional structure?
A) Sedona uses a decentralized system of management.
B) Sedona uses a variety of technologies for its products.
C) Sedona has a limited number of domestic competitors.
D) Sedona has a narrow spectrum of customers that it serves.

Accepted Answer

A global functional structure is suitable for companies with a narrow product line or customer base, allowing them to focus on specialized functions and achieve efficiencies.

Question 11

The creation of a(n) ________ facilitates the beginning of a global strategy by allowing managers to coordinate resources for foreign activities from one location.
A) local division
B) international division
C) transnational division
D) matrix division

Accepted Answer

The international division is designed to coordinate resources for foreign activities from one location, making it easier to begin a global strategy. The other options do not specifically focus on international coordination.

Question 12

An international division may be organized along what lines?
A) vertical and horizontal
B) differentiated and integrated
C) centralized and decentralized
D) functional, product, geographic

Accepted Answer

An international division can be organized according to three main categories - functional, product, and geographic. Functional division is based on the functional areas such as marketing or HR, product division is based on the types of products produced, and geographic division is based on the geographic areas where the company operates. Therefore, option D is the correct answer. Option A and B are not relevant and option C only covers a part of the possible organizational structures.

Question 13

An international division with an integrated global structure can be organized along all of the following lines EXCEPT ________.
A) functional lines
B) product lines
C) geographic lines
D) cultural lines

Accepted Answer

An international division with an integrated global structure would not be organized along cultural lines as this would be counterproductive to integration and collaboration. The other choices (A, B, and C) are all viable options for organizing an integrated global structure.

Question 14

Which of the following is the LEAST relevant variable to consider in organizational design?
A) corporate strategy
B) business size
C) labor market
D) business practices

Accepted Answer

While labor market conditions may have some impact on organizational design, it is generally not as significant as corporate strategy, business size, and business practices. Labor market conditions can be volatile and subject to change, whereas the other variables tend to be more stable and enduring factors that shape organizational design.

Question 15

________ is the process by which a firm gradually changes in response to the imperatives of international competition, domestic market saturation, and desire for expansion.
A) Organizing
B) Strategy
C) Localizing
D) Internationalization

Accepted Answer

Internationalization is the process by which a firm slowly adapts or changes its strategies and operations to compete globally, expand its market reach, and respond to domestic market saturation. This involves entering foreign markets, establishing partnerships with foreign businesses, and adapting products or services to meet the needs of customers in different countries. Therefore, option D is the best choice.

Question 16

Structure must fit an organization's ________, or it will not work.
A) environment
B) traditions
C) culture
D) strategy

Accepted Answer

Structure must be aligned with an organization's strategy in order to effectively support and enable the achievement of strategic goals. While environment, traditions, and culture may also influence structure to some degree, they are less critical to ensuring a structure that works.

Question 17

Based on Samsung's 2009 reorganization, which of the following best describes the firm's new strategy?
A) decreasing political risk
B) controlling and improving cash flow
C) increasing bureaucratic controls and levels
D) competing aggressively in the electronics market

Accepted Answer

The answer of Based on Samsung's 2009 reorganization, which of...

Question 18

In which of the following are a firm's foreign operations integrated into the activities and responsibilities of each department to gain functional specialization and economies of scale?
A) matrix structure
B) international division
C) global divisional structure
D) global functional structure

Accepted Answer

In the global functional structure, the firm's foreign operations are integrated into the activities and responsibilities of each department, allowing for functional specialization and economies of scale in global operations. The other options (matrix structure, international division, and global divisional structure) typically involve separate units or teams dedicated to managing international operations, which may not fully integrate with the rest of the organization.

Question 19

What was the primary aspect of Samsung's 2009 reorganization?
A) consolidating business operations into two operating divisions
B) outsourcing all of its semiconductor manufacturing
C) reducing its international work force by half
D) forming an alliance with Motorola

Accepted Answer

The primary aspect of Samsung's 2009 reorganization was consolidating business operations into two operating divisions. This was done to streamline operations and improve overall efficiency.

Question 20

Which of the following structures represents the most common way that small firms enter the global market?
A) domestic structure plus export department
B) domestic structure plus foreign subsidiary
C) international division
D) matrix structure

Accepted Answer

The domestic structure plus export department is the most common way for small firms to enter the global market. This allows the firm to continue focusing on their domestic operations while also exporting products to international markets through a separate department. It is often the simplest and most cost-effective approach for small firms with limited resources. Option B (domestic structure plus foreign subsidiary) is more complex and expensive, while option C (international division) and D (matrix structure) are typically used by larger firms with greater resources and more complex operations.

Quiz 8: Organization Structure and Control Systems

A firm that uses an international division structure may experience conflict among all of its divisions because ________.

Which of the following is NOT a stage in Stopford's stages model?

Firms typically internationalize in response to all of the following EXCEPT ________.

What led Samsung to reorganize in 2009?

Small firms typically begin their international involvement by ________.

Which of the following forms of organization is particularly appropriate for product lines using similar technology and for businesses with a narrow spectrum of customers?

The stages model is best described as the stages of change in an organizational structure that ________.

Company XYZ is a small firm with a highly centralized system and a narrow spectrum of customers. It most likely has a ________ structure.

The creation of a(n) ________ facilitates the beginning of a global strategy by allowing managers to coordinate resources for foreign activities from one location.

An international division may be organized along what lines?

An international division with an integrated global structure can be organized along all of the following lines EXCEPT ________.

Which of the following is the LEAST relevant variable to consider in organizational design?

________ is the process by which a firm gradually changes in response to the imperatives of international competition, domestic market saturation, and desire for expansion.

Structure must fit an organization's ________, or it will not work.

Based on Samsung's 2009 reorganization, which of the following best describes the firm's new strategy?

In which of the following are a firm's foreign operations integrated into the activities and responsibilities of each department to gain functional specialization and economies of scale?

What was the primary aspect of Samsung's 2009 reorganization?

Which of the following structures represents the most common way that small firms enter the global market?