Question 1

A(n)_____ tends to be adopted by firms that are reasonably diversified and,accordingly,originally had domestic structures based on product divisions.

Accepted Answer

The worldwide product division structure is suitable for firms that are diversified and have a domestic structure based on product divisions. This structure allows for centralized coordination of product-oriented activities across multiple markets. The international division structure is more suitable for firms with a low level of diversification, while the global matrix structure is appropriate for firms with a high degree of global integration. The worldwide area structure is used for companies that operate in geographically diverse regions.

Question 2

Firms structured on this basis may encounter significant problems if local responsiveness is less critical than reducing costs or transferring core competencies for establishing a competitive advantage.

Accepted Answer

The worldwide area structure focuses on local responsiveness, which can be problematic if the firm's strategy prioritizes cost reduction or core competency transfer over local adaptation.

Question 3

The worldwide product division structure:

Accepted Answer

The main problem with the worldwide product division structure is the limited voice it gives to area or country managers, since they are seen as subservient to product division managers. The result can be a lack of local responsiveness, which can lead to performance problems.

Question 4

In practice,the dual-hierarchy structure:

Accepted Answer

The dual-hierarchy structure can lead to perpetual power struggles as two sets of leaders and decision-makers overlap and compete for authority. This can create inefficiencies and delays in decision making and ultimately hamper organizational effectiveness.

Question 5

The main types of control systems used in MNEs include all of the following,except:

Accepted Answer

The main types of control systems used in MNEs include personal controls, bureaucratic controls, cultural controls, and output controls. Input controls are not one of the main types of control systems used in MNEs.

Question 6

The need for coordination between subunits is lowest in firms pursuing a(n):

Accepted Answer

Firms pursuing a localization strategy focus on catering to the needs and preferences of local markets, which means that they have less need for coordination between subunits in different regions.

Question 7

In the classic global matrix structure,horizontal differentiation proceeds along two dimensions.These dimensions are:

Accepted Answer

In the classic global matrix structure, horizontal differentiation proceeds along two dimensions: product division and geographic area. This means that the organization is divided into different product divisions, and each division is responsible for specific geographical regions. This structure allows the organization to focus on both product specialization and market localization, which can lead to greater efficiency and effectiveness. The other options listed are not the two dimensions used in the classic global matrix structure.

Question 8

Which of the following is a problem that arises due to an international division structure?

Accepted Answer

The answer of Which of the following is a problem...

Question 9

A(n)_____ is valuable because it can be used as a nonbureaucratic conduit for information flows within a multinational enterprise.

Accepted Answer

A knowledge network is a network for transmitting information within an organization that is based not on formal organization structure, but on informal contacts between managers within an enterprise and on distributed information systems.

Question 10

The simplest integrating mechanism in an MNE is:

Accepted Answer

Direct contact between managers is the simplest integrating mechanism in an MNE as it involves direct communication and coordination between managers from different units or subsidiaries. It does not require additional resources or organizational restructuring, making it an easy and straightforward approach to integrate different parts of the organization.

Question 11

Firms traditionally have tried to achieve coordination by adopting:

Accepted Answer

The most effective way for firms to achieve coordination is through formal integrating mechanisms such as standardization, planning and scheduling systems, and process-based management systems. These mechanisms establish a common set of rules and procedures that allow for effective communication and collaboration across different functions and departments within the organization. Informal integrating mechanisms may also be used, but they are generally less reliable and may not be sufficient for managing complex organizational issues. Vertical and horizontal differentiation are structural features of organizations and do not necessarily relate specifically to coordination mechanisms.

Question 12

The main problem with this structure is the limited voice it gives to area or country managers,since it makes them subservient to product division managers.

Accepted Answer

The description of limited voice for area or country managers being subservient to product division managers suggests a product divisional structure. Therefore, the best choice would be A, the worldwide product divisional structure.

Question 13

Regardless of a firm's domestic structure,its international division tends to be organized on:

Accepted Answer

International divisions are typically organized based on geography, meaning that they are divided by different regions or countries. This allows the division to understand the unique cultural, political, and economic factors of each area and tailor their strategy accordingly. Organizing by product, people or economy may not allow for this level of focus on individual markets.

Question 14

This structure encourages fragmentation of the organization into highly autonomous entities.

Accepted Answer

The worldwide area structure divides the organization into regions or areas, each with a high degree of autonomy, leading to fragmentation.

Question 15

The implied lack of coordination between domestic operations and foreign operations,which are isolated from each other in separate parts of the structural hierarchy,is a problem encountered with a(n):

Accepted Answer

The described problem is commonly encountered in an international division structure, where separate domestic and foreign divisions operate independently without much coordination. This type of structure can lead to inefficiencies, duplication of efforts, and suboptimal decision-making. In contrast, global matrix, worldwide product division, and worldwide area structures aim to integrate domestic and foreign operations more closely to achieve greater synergies and coordination.

Question 16

In a domestic firm with a product divisional structure,each division is responsible for a distinct:

Accepted Answer

In a product divisional structure, divisions are organized around specific product lines, and each division has complete responsibility for the performance of its assigned product line. Therefore, the best choice is A) product line.

Question 17

In practice,the global matrix structure:

Accepted Answer

In many organizations, the global matrix structure can lead to bureaucracy and complications. This is because employees may have multiple reporting lines and conflicting priorities. Therefore, it is often seen as a clumsy and complicated structure.

Question 18

The need for coordination between subunits is highest in firms pursuing a(n)

Accepted Answer

A transnational strategy involves a high level of coordination and integration between subunits in different countries to achieve global efficiency, local responsiveness, and knowledge transfer. Therefore, the need for coordination between subunits is highest in firms pursuing a transnational strategy.

Question 19

Which of the following is a potential drawback of the worldwide area structure?

Accepted Answer

The worldwide area structure can lead to fragmentation because it establishes geographic divisions that operate more or less independently of each other. This can result in communication and coordination difficulties, as well as a lack of standardization across the organization.

Question 20

Which of the following is not true regarding a worldwide area structure?

Accepted Answer

A worldwide area structure is characterized by decentralization of decision-making responsibilities instead of centralization. The regions or areas in which the company operates have a bigger say in decision-making, leading to local responsiveness. This structure is usually favored by firms with a high degree of diversification that operate in many different markets and regions. Domestic structures based on function are usually characterized by a centralized decision-making process.

Quiz 13: The Organization of International Business

A(n) _____ tends to be adopted by firms that are reasonably diversified and,accordingly,originally had domestic structures based on product divisions.