Question 1

The output control in which profit responsibility is shared with product and geographic units is characteristic of a(n):

Accepted Answer

The described output control is characteristic of a Matrix structure, where profit responsibility is shared among both product and geographic units. Global area division structure, International division structure, and Transnational network structure do not involve the same level of shared profit responsibility between units.

Question 2

The decision-making control in which local units are given autonomy is characteristic of a(n):

Accepted Answer

The answer of The decision-making control in which local units...

Question 3

In terms of cultural control in a global area division:

Accepted Answer

In a global area division, local subsidiary culture is often the most important factor in cultural control. This is because the subsidiary operates in a distinct cultural context with unique societal norms, values, and expectations. Therefore, MNCs must ensure that their global area divisions are culturally sensitive and responsive to local cultures to succeed. Alternatively, treating it like any other MNC structural division (A) or making shared decision making a cultural necessity (D) may not be as effective in achieving cultural control in global area divisions. While it is possible for some companies to forgo cultural control (C), it is not recommended as it could lead to misunderstandings, conflicts, and reputational damage.

Question 4

That division managers may pursue currently attractive geographic prospects for their products and neglect other areas with better long-term potential is a major drawback of the:

Accepted Answer

Unfortunately, the approach also has some drawbacks. One is the necessity of duplicating facilities and staff personnel within each division. A second is that division managers may pursue currently attractive geographic prospects for their products and neglect other areas with better long-term potential. A third is that many division managers spend too much time trying to tap the local rather than the international market because it is more convenient and they are more experienced in domestic operations.

Question 5

A _____ is designed to help MNCs take advantage of global economies of scale while also being responsive to local customer demands.

Accepted Answer

Besides matrix structures, another alternative international organizational design to recently emerge is the transnational network structure. This is designed to help MNCs take advantage of global economies of scale while also being responsive to local customer demands.

Question 6

Which of the following organizes worldwide operations based primarily on function and secondarily on product?

Accepted Answer

A global functional division organizes worldwide operations based primarily on function and secondarily on product.

Question 7

Interdependent relationships are:

Accepted Answer

Interdependent relationships are used to share information and resources throughout the dispersed and specialized subunits.

Question 8

A structure that is a combination of a global product, an area, or a functional arrangement is referred to as a(n) _____ organizational structure.

Accepted Answer

Some companies find that neither a global product, an area, or a functional arrangement is satisfactory. Instead they opt for a mixed organization structure, which combines all three into an MNC that supplements its primary structure with a secondary one and, perhaps, a tertiary one.

Question 9

Bureaucratic control is not very important in which type of multinational structure?

Accepted Answer

Matrix structures are less bureaucratic than other multinational structures because they allow for more flexibility and autonomy in decision-making.

Question 10

Advantages of alliances and joint ventures include all of the following except:

Accepted Answer

Some of the most commonly cited advantages include:1. Improvement of efficiency. The creation of an alliance or JV can help the partners achieve economies of scale and scope that would be difficult for one firm operating alone to accomplish. Additionally, the partners can spread the risks among themselves and profit from the synergies that arise from the complementary resources.2. Access to knowledge. In alliances and JVs each partner has access to the knowledge and skills of the others. So one partner may bring financial and technological resources to the venture while another brings knowledge of the customer and market channels.3. Mitigating political factors. A local partner can be very helpful in dealing with political risk factors such as a hostile government or restrictive legislation.4. Overcoming collusion or restriction in competition. Alliances and JVs can help partners overcome the effects of local collusion or limits being put on foreign competition by becoming part of an "insider" group.

Question 11

Specialized operations are:

Accepted Answer

Specialized operations are activities carried out by subunits that focus on particular product lines, research areas, and marketing areas, and are designed to tap specialized expertise or other resources in the company's worldwide subsidiaries.

Question 12

In which of the following MNC structures are tight process bureaucratic controls used to maintain product quality and consistency?

Accepted Answer

In the global product division structure, there is a focus on maintaining product quality and consistency through strict control processes. This is because the division is organized around specific products, and strict control processes are necessary to ensure consistency across the various geographical locations where those products are sold. In contrast, the transnational network structure focuses more on collaboration and innovation, the global area division structure is organized by geographic regions, and the matrix structure focuses on flexibility and adaptability.

Question 13

All of the following are advantages of the global functional division structure except:

Accepted Answer

A number of important advantages are associated with the global functional division structure. These include (1) an emphasis on functional expertise, (2) tight centralized control, and (3) a relatively lean managerial staff.

Question 14

At the center of the _____ are nodes, which are units charged with coordinating product, functional and geographic information.

Accepted Answer

At the center of the transnational network structure are nodes, which are units charged with coordinating product, functional, and geographic information.

Question 15

A multinational structural arrangement that combines elements of function, product and geographic designs, while relying on a network arrangement to link worldwide subsidiaries is referred to as a:

Accepted Answer

Besides matrix structures, another alternative international organizational design to recently emerge is the transnational network structure. This is designed to help MNCs take advantage of global economies of scale while also being responsive to local customer demands. The design combines elements of classic functional, product, and geographic structures while relying on a network arrangement to link the various worldwide subsidiaries.

Question 16

The difficulty encountered in reconciling a product emphasis with a geographic orientation is the primary disadvantage of a(n):

Accepted Answer

The primary disadvantage of the global area division structure is the difficulty encountered in reconciling a product emphasis with a geographic orientation.

Question 17

Which of the following is an advantage gleaned from a mixed organization structure?

Accepted Answer

Many advantages can be gleaned from a mixed organization structure. In particular, it allows the organization to create the specific type of design that best meets its needs.

Question 18

A global functional division structure is used primarily by:

Accepted Answer

A global functional division organizes worldwide operations based primarily on function and secondarily on product. This approach is not widely used other than by extractive companies, such as oil and mining firms.

Question 19

Subsidiaries that are located anywhere in the world where they can benefit the organization are called:

Accepted Answer

Dispersed subunits are subsidiaries that are located anywhere in the world where they can benefit the organization.

Question 20

A structure under which global operations are organized on a geographic rather than a product basis is referred to as a(n):

Accepted Answer

Instead of a global product division, some MNCs prefer to use a global area division. In this structure, illustrated in Figure 9-5, global operations are organized based on a geographic rather than a product orientation.

Quiz 9: Entry Strategies and Organizational Structures

The output control in which profit responsibility is shared with product and geographic units is characteristic of a(n) :

The decision-making control in which local units are given autonomy is characteristic of a(n) :