Deck 4: Developing a Transnational Organization: Managing Integration, Responsiveness, and Flexibility

Question 1

In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analysing worldwide opportunities and threats.

Answer 1

True
(Managing in an environment in which strategic forces are both diverse and changeable, the transnational company must create the ability to sense and analyze the numerous and often conflicting opportunities, pressure and demands it faces worldwide. Strong national subsidiary managers are ideally situated to sense, analyze and represent the changing needs of local consumers and the increasing pressures from host governments).

Question 2

Which of the following is not a characteristic of the companies with centralized hub structure?

A) Most of the key assets and resources are concentrated in the home country.
B) Tight strategic and operational controls are maintained over the subsidiaries.
C) Most of the manufacturing and product development is executed by the subsidiaries.
D) Corporate management regards its subsidiaries as delivery pipelines to the global market.

Answer 2

C
(The centralized hub model is adopted by companies that pursue a centrally controlled, export-based internationalization strategy. These MNEs strive to secure competitive advantage at the upstream end of the value-added chain. As such, their competitive strategy emphasizes cost advantages and quality assurance which demands tight control over product development, procurement and manufacturing. Consequently, these MNEs keep many of these major value-adding and strategic activities at home).

Question 3

The key strategic capability associated with the coordinated federation organizational model is global-scale efficiency.

Answer 3

False
(The key strategic capability associated with companies that adopt the coordinated federation model is the worldwide transfer of home country innovations. Global-scale efficiency is the key strategic capability associated with companies that adopt a centralized hub model).

Question 4

Summit Corp. is transitioning from a multinational strategy to a transnational strategy. It would probably be more effective and less costly if the company commenced its accompanying organizational transition by focusing on changing employees' attitudes and mentalities, than it would be if it led its efforts by engaging in structural change.

Question 5

In a transnational organization, knowledge is developed at the headquarters and transferred to foreign units.

Question 6

Which of the following strategic approach and strategic capabilities cannot be paired?

A) Transnational strategy and national responsiveness
B) Transnational strategy and learning
C) Transnational strategy and global efficiency
D) Global strategy and national responsiveness

Question 7

A transnational organization integrates its dispersed assets, resources, and capabilities through flexible processes involving centralization, formalization and rationalization.

Question 8

Which of the following is not a core characteristic of the coordinated federation structure?

A) Most assets and resources are decentralized but well controlled by the headquarters.
B) Subsidiaries are regarded as key sources of knowledge and expertise.
C) Subsidiary control exercised by the headquarters is usually quite formal and rigorous.
D) Corporate managers tend to regard offshore subsidiaries as extensions of domestic operations.

Question 9

Which of the following is not a core characteristic of the decentralized federation structure?

A) Most key assets and resources are decentralized.
B) Subsidiaries are highly autonomous.
C) Corporate management regards subsidiaries as largely independent national operations.
D) Reporting and oversight conflicts prevail.

Question 10

The key capabilities of national responsiveness, learning and transfer of home country knowledge abroad, and global efficiency are mutually exclusive. That is, having one capability inhibits the concurrent possession of others.

Question 11

Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?

A) Change in individual attitudes and mentalities; then, change in interpersonal relationships and processes; and finally, change in the formal structure and responsibilities
B) Change in the formal structure and responsibilities; then, change in interpersonal relationships and processes; and finally, change in individual attitudes and mentalities
C) Change in interpersonal relationships and processes; then, change in the formal structure and responsibilities; and finally, change in individual attitudes and mentalities.
D) Change in individual attitudes and mentalities; then, change in the formal structure and responsibilities; and finally, change in interpersonal relationships and processes

Question 12

Which of the following strategy-structure combinations cannot be paired?

A) Coordinated federation and multinational strategy.
B) Decentralized federation and international strategy.
C) Centralized hub and global strategy.
D) Integrated network and transnational strategy.

Question 13

Isatis Co. has successfully transitioned from a global strategy to a transnational strategy. Which of the following describes the likely configuration of assets and capabilities that now most likely prevails at Isatis?

A) Decentralized and nationally self-sufficient.
B) Centralized and globally scaled.
C) Dispersed, specialized, and interdependent.
D) Core competencies are centralized; other assets and capabilities are decentralized.

Question 14

Which of the following is not characteristic of companies with a transnational strategy?

A) Multiple diverse perspectives are developed and legitimized.
B) Physical assets and management capabilities are internationally distributed, yet interdependent.
C) Integrative processes are flexible and robust.
D) Knowledge is developed centrally and adapted locally.

Question 15

Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.

Question 16

Installing a matrix structure is the most effective way to transition from an organization based on multiple regional divisions to one able to manage both geographic and product diversity.

Question 17

In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.

Question 18

MNEs that adopted a centralized hub organizational model were able to develop competitive advantage through their ability to transfer knowledge and expertise and adapt it to markets worldwide.

Question 19

Which of the following statements regarding knowledge diffusion is correct?

A) In a decentralized federation, knowledge is developed in national subsidiaries and diffused throughout the organization
B) In a centralized hub, knowledge is developed and retained at the center.
C) In a coordinated federation, knowledge is developed at the center and transferred to overseas units for local adaptation.
D) Knowledge diffusion is independent of structure, such that knowledge diffuses in a quite similar manner in all organizational structures.

Question 20

In companies with the decentralized federation model, the degree of control and coordination exercised by the headquarters is greater than it is in companies with the coordinated federation organizational model.

Question 21

Historically, many large Japanese companies used a centralized hub configuration. The 2011 earthquake in Japan resulted in a significant cost to Canon by inhibiting its production process. In response, the CEO of Canon announced in the 2011 annual report that they will have three headquarters, instead of one. These will be based in each of the US, Europe, and Japan. What are the challenges that the company will face during this transition?

Question 22

Briefly discuss the characteristics of the decentralized federation organizational model.

Question 23

The CEO of SemChem Co. was considering how to reorganize the company following the management team's decision to create four new product divisions, while maintaining SemChem's existing three regional divisions. A consultant has recommended a solution that centers on driving the change by restructuring the organization around a matrix. Briefly describe the matrix structure and discuss some practical difficulties associated with this organizational structure?

Question 24

Briefly discuss the development and diffusion of knowledge in the decentralized federation, the coordinated federation and the centralized hub, respectively.

Question 25

What is the key lesson behind the metaphor that develops an organizational change model based on a framework related to anatomy, physiology, and psychology?

Question 26

Name and briefly describe three organizational characteristics that distinguish the transnational organization from multinational, international or global organizations.

Question 27

The CEO of AgiTec Co. has decided to transition his firm into a transnational organization. What advice would you give to the company about a change process that could avoid the undesirable outcomes that have often been associated with traditional processes of complex organizational change?