Question 1

Industrial-products firms tend to adopt geographic area divisions, and consumer-goods companies often rely on global product divisions.

Accepted Answer

False

Question 2

Many MNEs have phased out the international division structure.

Accepted Answer

Many MNEs have moved away from the traditional international division structure in favor of a more integrated global or regional structure to better align with their overall business strategy.

Question 3

Duplicating home country-based competencies in foreign countries is known as localization.

Accepted Answer

Localization involves adapting products or services to meet the cultural, legal, and other specific needs of a foreign market, not duplicating home country-based competencies.

Question 4

Being locally responsive can run the risk of MNE fragmentation.

Accepted Answer

Being locally responsive means adapting to the needs and preferences of the local market, which can lead to MNEs fragmenting their operations and strategies. This can create inconsistencies and inefficiencies, and ultimately undermine the effectiveness of the MNE as a whole.

Question 5

Transnational strategy supposedly is a trade off between being cost efficient and locally responsive but is really locally responsive.

Accepted Answer

A transnational strategy aims to achieve both cost efficiency and local responsiveness by balancing global integration and local adaptation.

Question 6

Because consumer tastes around the world are converging, product differentiation will soon be unnecessary.

Accepted Answer

While there may be some convergence in consumer tastes around the world, there will always be cultural and regional differences that require some level of product differentiation. Additionally, consumers will continue to have individual preferences and needs that will require tailored products and services.

Question 7

A localization strategy is most appropriate in industries where the pressures for cost reduction are significant.

Accepted Answer

A localization strategy is most appropriate in industries where the pressures for local responsiveness are significant, not cost reduction.

Question 8

The Porter five forces are not helpful in understanding MNE structure.

Accepted Answer

The Porter five forces framework is used to analyze the competitive environment of an industry, which can indirectly help in understanding the strategic decisions and structure of multinational enterprises (MNEs) as they navigate these competitive forces.

Question 9

For most MNEs, their stakeholders do not react well to a top echelon of company officials coming almost entirely from one nationality.

Accepted Answer

This statement is true for most multinational enterprises (MNEs) as having a top echelon of company officials from one nationality can be perceived as lacking diversity and inclusiveness, which can lead to negative reactions from stakeholders.

Question 10

No one argues that knowledge management is the defining feature of MNEs.

Accepted Answer

While knowledge management is an important aspect of MNEs, it is not the sole defining feature. Other defining features may include global presence, diverse operations, and cultural diversity.

Question 11

A home replication strategy takes advantage of current competencies but risks alienating foreign customers if it lacks local responsiveness.

Accepted Answer

A home replication strategy involves replicating the business model and competencies from the home country in the foreign market. This strategy relies on leveraging existing capabilities and may not take into account local customer needs or preferences, potentially leading to a lack of local responsiveness. As a result, foreign customers may feel alienated, and the company may struggle to gain traction in the foreign market.

Question 12

When buyer firms that have a great deal of bargaining power move internationally, components suppliers are often forced to internationalize in order to retain the buyer firm's business.

Accepted Answer

This is true because if the components supplier does not internationalize, the buyer firm can easily switch to another supplier in the international market that offers more favorable terms. Thus, the supplier is forced to adapt in order to retain the business of the powerful buyer firm.

Question 13

Knowledge management not only depends on IT, but also on informal social relationships within the MNE.

Accepted Answer

While IT plays an important role in knowledge management, it is the informal social interactions and relationships that also contribute to the sharing and transfer of knowledge within a multinational enterprise. Therefore, knowledge management is not solely dependent on IT.

Question 14

Localization strategy is an extension of the home replication strategy.

Accepted Answer

Localization strategy is an extension of the home replication strategy because it involves replicating data from a central location to multiple locations, but it also includes additional features such as data translation and currency conversion to make the data more relevant to local users.

Question 15

Home replication strategy emphasizes the home country replication of international based competencies.

Accepted Answer

The home replication strategy focuses on replicating the home country's competencies in international markets, not the other way around.

Question 16

MNEs that buy and use enterprise resource planning (ERP) packages provide themselves with a firm-specific advantage in doing so.

Accepted Answer

ERP packages are widely available and used by many companies, so they do not provide a unique firm-specific advantage.

Question 17

Global product division structure is the same as the geographic area structure.

Accepted Answer

Global product division structure is different from the geographic area structure. In global product division, the products are divided into different divisions based on their nature while in the geographic area structure, the organization divides its operations based on different regions or countries.

Question 18

A main advantage of a global standardization strategy is that it leverages low-cost advantages.

Accepted Answer

Global standardization allows companies to utilize low-cost advantages by producing a standardized product that can be sold in multiple markets, reducing the costs associated with customization and localization.

Question 19

Strategy drives structure: a misfit, such as combining a global strategy with a geographic area structure, may have grave performance consequences.

Accepted Answer

Strategy and structure need to be aligned for optimal performance. A global strategy would require a global structure, whereas a geographic area structure would be more appropriate for a local strategy. Combining the two could lead to inefficiencies, miscommunication, and ultimately lower performance.

Question 20

It is obviously a lot easier to imitate an intangible philosophy or mentality than to imitate a tangible structure.

Accepted Answer

The answer of It is obviously a lot easier to...

Quiz 10: Strategizing, Structuring, and Learningaround the World