Question 1

The global matrix design does not allow for flexibility.

Accepted Answer

The global matrix design allows for flexibility as it combines elements of both functional and divisional structures, providing a balance between centralized and decentralized decision-making.

Question 2

Global area design is particularly useful for firms with a transnational corporate philosophy.

Accepted Answer

The answer of Global area design is particularly useful for...

Question 3

Strategic control often involves time periods of several years.

Accepted Answer

Strategic control is a continuous process that evaluates and adjusts strategies over several years to ensure they remain effective and aligned with the organization's goals and objectives.

Question 4

Operations control usually focuses on the lower levels of a firm such as first-line managers and operating employees.

Accepted Answer

Operations control typically involves managing day-to-day activities and tasks, which are typically performed by first-line managers and operating employees. Therefore, it generally focuses on the lower levels of a firm.

Question 5

The global functional design is most effective when the firm has many products.

Accepted Answer

A global functional design is most effective for firms with a narrow product line, as it allows for specialization and efficiency in specific functions across the organization.

Question 6

The higher the level of interdependence among divisions and functions in a firm, the more coordination is required.

Accepted Answer

When there is a higher level of interdependence, it means that the various divisions and functions within a firm rely on each other more. This requires more coordination to ensure that they work together effectively and efficiently.

Question 7

Most companies use a hybrid of the various organizational designs.

Accepted Answer

Most companies do not rely solely on one organizational design but instead combine different elements to create their own unique hybrid design.

Question 8

The global matrix design is most appropriate for firms that operate in stable environments.

Accepted Answer

The global matrix design is most appropriate for firms that operate in dynamic and complex environments. This design allows for flexibility, integration, and coordination across geographic regions and functions. In stable environments, simpler designs such as functional or divisional structures may be more effective.

Question 9

Informal management networks are typically powerless when it comes to short-circuiting bureaucracy.

Accepted Answer

Informal management networks can actually help to work around bureaucracy by finding alternative solutions and ways to get things done efficiently.

Question 10

Control standards help provide a road map for managers involved in opening and running a new operation.

Accepted Answer

Control standards provide guidelines and expectations for managers to ensure consistency and efficiency in new operations.

Question 11

British Airways use the global customer design because it allows the firm to standardize its maintenance and flight procedures regardless of where a flight originates.

Accepted Answer

The answer of British Airways use the global customer design...

Question 12

Empowering a subsidiary's board promotes centralization.

Accepted Answer

Empowering a subsidiary's board gives more decision-making power to the subsidiary, which can promote decentralization. This can enable quicker decision making to meet local market needs and adapt to regional differences.

Question 13

Peak Manufacturing, an MNE, concentrates its organizational control system on the actual mechanics and processes the firm uses to develop strategic plans. Peak Manufacturing is using operations control.

Accepted Answer

Peak Manufacturing is using strategic control, not operations control, as it focuses on the processes used to develop strategic plans rather than the day-to-day operations.

Question 14

An auditor has the role of handling financial control in an international firm.

Accepted Answer

An auditor's role is to examine and verify a company's financial records and ensure compliance with regulations, not to handle financial control.

Question 15

A group of managers from different parts of the world who are connected to one another in some way is called an informal management structure.

Accepted Answer

This is the definition of an informal network or informal organization, which can exist alongside or within a formal management structure.

Question 16

Responsibility control centers tend to follow a centralized decision-making system.

Accepted Answer

Responsibility control centers typically follow a decentralized decision-making system, allowing managers to make decisions relevant to their specific areas of responsibility.

Question 17

Operations control systems tend to be less specific and focused than strategic and organizational control systems.

Accepted Answer

Operations control systems are more specific and focused, as their main goal is to monitor and improve day-to-day processes and activities within an organization. In contrast, strategic and organizational control systems are broader in scope and focus on long-term goals and overall performance of the organization.

Question 18

Responsibility center control means that the firm creates unique control systems for each SBU.

Accepted Answer

Responsibility center control involves creating unique control systems for each SBU to ensure that they are accountable for their own performance and have the appropriate resources to achieve their goals.

Question 19

The global matrix design is the result of superimposing one form of organizational design on top of a different, existing form.

Accepted Answer

The global matrix design combines elements of both functional and divisional structures, creating a hybrid organization. This is achieved by overlaying a product or project-based structure (divisional) on top of a traditional functional structure.

Question 20

The level of decentralization or centralization used in a firm is fundamental to a firm's organizational design.

Accepted Answer

The level of decentralization or centralization used in a firm is crucial as it influences decision-making, communication, and overall organizational structure. Decentralization refers to a more dispersed decision-making process, while centralization involves decision-making power resting in a centralized authority. The chosen level of centralization or decentralization impacts the flow of information and the efficiency of operations within a firm.

Quiz 14: International Organization Design and Control