Question 1

While the global business manager must routinely incorporate the perspectives of the geographic (country) managers when formulating the MNE's global business strategy, there is no need to incorporate the perspectives of the worldwide functional managers because these perspectives are incorporated into the formulation of the broader corporate strategy.

Accepted Answer

(Given that the geographic and functional managers represent strategic interests that may conflict with the global business manager's goals, there is need to incorporate the perspectives of both the geographic and functional managers).

Question 2

In the transnational organization of today, top management must control global business management, worldwide functional management and geographic (country) subsidiary management, so that three groups would not attempt to provide divergent influence on the corporate strategies.

Accepted Answer

(Top management must maintain the organizational legitimacy of each group, balance and integrate their often-divergent influences in the ongoing management processes, and maintain a unifying sense of purpose and direction in the face of often-conflicting needs and priorities).

Question 3

In the transnational, worldwide functional managers are often linked most effectively through informal networks that are nurtured and maintained through frequent meetings, visits and transfers.

Accepted Answer

(Through informal networks worldwide functional managers develop the contacts and relationships that enable them to transmit information rapidly around the globe. Thus the functional managers at the corporate level become the linchpins in this worldwide intelligence scanning effort and play a vital role as facilitators of communication and repositories of specialist information).

Question 4

Two key tasks associated with the geographic (country) manager's role as a national defender and advocate are both the responsibility for advocating the subsidiary's role in the MNE's worldwide organization and the responsibility for championing transnational innovations.

Accepted Answer

(The geographic (country) manager's role contemplates two distinct but related tasks: (i) defending national differentiation and responsiveness by ensuring that the overall corporate strategies, policies and organization processes are appropriate from the subsidiary's perspective; and (ii) advocating the subsidiary's role in the MNE's worldwide integrated system. The task of championing transnational innovations is typically the responsibility of the worldwide functional manager).

Question 5

The role of the geographic (country) subsidiary manager has become more difficult in an era of global business units and global customers due to the fact that the manager is accountable for results, but exercises limited authority over the employees and assets situated within the country.

Accepted Answer

(Even though MNEs are moving more towards structures dominated by global business units and global customers, the geographic (country) subsidiary manager typically continues to wield only very limited formal authority over the people and assets within his or her jurisdiction).

Question 6

When products of high strategic importance are transferred internally between an MNE's business units, global business managers will prefer to facilitate these transfers via internal quasi-markets, rather than exerting direct control over quantities shipped and prices charged.

Accepted Answer

(Direct central control over quantities shipped and prices charged is more likely for products of high strategic importance. For example, direct central control is employed by Viagra with respect to the quantities and pricing of shipments of the active ingredients used in Viagra, and also by Coca-Cola to coordinate the supply of Coke syrup worldwide).

Question 7

Innovations can be stimulated by all of the following - revolutionary technological breakthroughs, emerging consumer trends, new competitive challenges and pending government regulations.

Accepted Answer

(Most innovations start with some stimulus driving the company to respond to a perceived opportunity or threat which may emanate from technological breakthroughs, changes in consumer behaviour, shifts in the strategy of competitors, or changes in government policy and regulations).

Question 8

The global business manager alone is responsible for formulating the strategic priorities of the MNE.

Accepted Answer

(There is almost certainly some need to incorporate the perspectives of geographic and functional managers who represent strategic interests that may run counter to the global business manager's drive to maximize global efficiency).

Question 9

Worldwide functional managers are principally responsible for diffusing products and services worldwide between the MNE's geographic units.

Accepted Answer

(Worldwide functional managers have the specialist responsibility for activities like R&D, manufacturing and marketing. Their job, broadly speaking, is to diffuse innovations and transfer knowledge on a worldwide basis).

Question 10

As an information broker, the geographic (country) manager must understand the national culture well, and thereby decide how to modify the MNE's goals, strategies and values so that that they become appropriate for the local context.

Accepted Answer

(As a bicultural interpreter, the geographic (country) manager not only must have a sensitivity to and understanding of the national culture, he or she must also be comfortable in the corporate culture at the MNE. He or she must interpret the MNE's broad goals, strategies and values to local employees. Moreover, he or she must apply corporate values and organizational processes in a way that respects local cultural norms. Meanwhile, he or she must be able to present their ideas and proposals to the headquarters in a way that is sensitive to the MNE's overall strategy and values.).

Question 11

All of the following forces are contributing to the complexity and diversity encountered by MNEs in the 21^st century, except: A) the acceleration of product and technology life cycles. B) the globalization of markets. C) the assertion of national government demands. D) the devaluation of some national currencies.

Accepted Answer

(Fluctuating international exchange rates constitute an omnipresent force in international business operations. Most MNEs task their finance departments to monitor international exchange rates and take appropriate positions in foreign currencies in order to facilitate anticipated international business transactions).

Question 12

The global business manager does not need to be located in the MNE's home country.

Accepted Answer

(In fact, in many cases, significant benefits can accrue as a result of relocating the global business manager).

Question 13

Which of the following is not considered a key management category in the modern transnational company
A) the top-level corporate executives / managers.
B) the country subsidiary manager.
C) the integrated services manager.
D) the global business manager.

Accepted Answer

(While top-level corporate executives / managers, country subsidiary managers and global business managers are key management categories in the modern transnational company, the "integrated services manager" role is not a management category discussed in Chapter 7).

Question 14

In general, the global business manager, the geographic (country) subsidiary manager and the worldwide functional manager respectively cope with challenges of developing global efficiency and competitiveness, national responsiveness and flexibility, and worldwide innovation and learning capabilities. Nevertheless, it does not mean that they undertake their tasks unilaterally.

Accepted Answer

(New challenges encountered by MNEs in 21^st century require them to develop multiple strategic assets: global-scale efficiency and competitiveness, national responsiveness and flexibility, and world innovation and learning capabilities. The fundamental task of the global business manager is to see opportunities and risks across national boundaries and functional specialties, and to coordinate activities across barriers to capture the potential benefits. The country subsidiary manager needs to defend the company's market positions against global competitors, satisfy the demands of the host government, and respond to the unique needs of local customers. The worldwide functional manager's job is to provide support to line managers, particularly by diffusing innovations and transferring knowledge on a worldwide basis.)

Question 15

In light of the dramatic changes in the organizational form of MNEs, which of the following do not receive enough attention from those who manage modern MNEs
A) a review of the new roles and responsibilities of the firm's managers.
B) the analysis of new international environmental forces.
C) the refinement of global strategy.
D) the study of characteristics that contribute to effective transnational organizations.

Accepted Answer

(While consultants and managers spend an enormous amount of time and energy analyzing environmental forces, refining global strategy and understanding the characteristics of an effective transnational organization, too little time is devoted to understanding the implications associated with the changes in the roles and responsibilities of those who manage MNEs. These changes in roles and responsibilities have emerged as a consequence of traditional hierarchical structures evolving into the transnational organizational form).

Question 16

To succeed in the modern international operating environment, managers must be able to do all of the following, except:
A) build and manage complicated yet subtle new organizations that deliver coordinated worldwide action.
B) sense and interpret complex and dynamic environmental changes.
C) develop and integrate multiple strategic capabilities.
D) respond aggressively to below-budget financial results.

Accepted Answer

(Top managers in transnational companies must abandon old notions of control that are based primarily on responding to below-budget financial results and, instead, strive to rely more on control mechanisms that are personal and proactive. These control mechanisms include clearly identifying and agreeing upon strategic and operational priorities, setting demanding standards and engaging in frequent informal visits to discuss operations and to identify new problems or opportunities quickly).

Question 17

To respond to the heightened complexity and diversity associated with managing global operations in the 21^st century, MNEs can be expected to increasingly adopt organizational forms characterized by hierarchical structures which emphasize either-or choices in place of forms that emphasize flexible coordinative processes and integrated networks of assets and resources.

Accepted Answer

(Traditional hierarchical structures have evolved toward organizational forms that are characterized by integrated networks of assets and resources, multidimensional management perspectives and capabilities, and flexible coordinative processes).

Question 18

When commodity-like products are transferred internally between an MNE's business units, global business managers will principally develop internal quasi-markets to coordinate cross-border flows of materials, components and finished products.

Accepted Answer

(Internal quasi-markets are the principal means of coordination with respect to commodity-like products because global product managers recognize that internal transfers should reflect the competitive conditions set by the external environment. It is not uncommon for global product managers to negotiate with the subsidiary managers of an MNE with respect to issues such as product design, price and delivery schedule in order to position the subsidiary managers to meet local market needs).

Question 19

In overseeing the worldwide distribution of key assets and resources, the global business manager is responsible for all of the following, except
A) linking the assets and resources in a configuration that resembles the integrated network form.
B) seeking the input of geographic and functional managers.
C) complying with the wishes of local municipal governments responsible for governing the regions within which the assets and resources are situated.
D) leveraging existing resources and capabilities.

Accepted Answer

(While seeking the input of geographic and functional managers, leveraging existing resources and capabilities, and linking assets and resources are most often the responsibilities of the global business manager, efforts to comply with the wishes of local municipal governments falls outside the domain of activities assigned to global business managers and are more often the responsibility of geographic (country) managers).

Question 20

In executing responsibilities for cross-border coordination, the global business manager will $\underline{not}$ typically
A) decide on sourcing patterns.
B) manage cross-border transfer policies.
C) enforce fair market value transaction pricing between all global business units.
D) employ coordination mechanisms ranging from direct control over pricing and quantities shipped to the establishment of rules that create an internal market.

Accepted Answer

(While the global business manager does make decisions with respect to sourcing patterns and cross-border transfer policies, pricing between global business units is established through a variety of mechanisms (e.g., direct control versus internal market mechanisms) which typically vary with the nature of the product (e.g., commodity-like versus products of high strategic importance), rather than strictly enforcing fair market value transaction pricing between global business units).

Quiz 7: Implementing the Strategy: Building Multidimensional Capabilities

In the transnational organization of today, top management must control global business management, worldwide functional management and geographic (country) subsidiary management, so that three groups would not attempt to provide divergent influence on the corporate strategies.

In the transnational, worldwide functional managers are often linked most effectively through informal networks that are nurtured and maintained through frequent meetings, visits and transfers.

Two key tasks associated with the geographic (country) manager's role as a national defender and advocate are both the responsibility for advocating the subsidiary's role in the MNE's worldwide organization and the responsibility for championing transnational innovations.

The role of the geographic (country) subsidiary manager has become more difficult in an era of global business units and global customers due to the fact that the manager is accountable for results, but exercises limited authority over the employees and assets situated within the country.

When products of high strategic importance are transferred internally between an MNE's business units, global business managers will prefer to facilitate these transfers via internal quasi-markets, rather than exerting direct control over quantities shipped and prices charged.

Innovations can be stimulated by all of the following - revolutionary technological breakthroughs, emerging consumer trends, new competitive challenges and pending government regulations.

The global business manager alone is responsible for formulating the strategic priorities of the MNE.

Worldwide functional managers are principally responsible for diffusing products and services worldwide between the MNE's geographic units.

As an information broker, the geographic (country) manager must understand the national culture well, and thereby decide how to modify the MNE's goals, strategies and values so that that they become appropriate for the local context.

All of the following forces are contributing to the complexity and diversity encountered by MNEs in the 21st century, except:

The global business manager does not need to be located in the MNE's home country.

Which of the following is not considered a key management category in the modern transnational company

In light of the dramatic changes in the organizational form of MNEs, which of the following do not receive enough attention from those who manage modern MNEs

To succeed in the modern international operating environment, managers must be able to do all of the following, except:

When commodity-like products are transferred internally between an MNE's business units, global business managers will principally develop internal quasi-markets to coordinate cross-border flows of materials, components and finished products.

In overseeing the worldwide distribution of key assets and resources, the global business manager is responsible for all of the following, except

In executing responsibilities for cross-border coordination, the global business manager will not‾\underline{not}not​ typically

All of the following forces are contributing to the complexity and diversity encountered by MNEs in the 21^st century, except:

In executing responsibilities for cross-border coordination, the global business manager will $\underline{not}$ typically