Question 1

Which design is the most common form of organizational design adopted by MNCs?

Accepted Answer

Global product design is the most common form of organizational design adopted by MNCs as it allows them to focus on product lines and leverage global efficiencies.

Question 2

Scale Systems, an MNE, analyzes the needs of its customers worldwide and then adopts standardized operations for all markets that the firm serves. Which of the following is most likely used by Scale Systems?

Accepted Answer

The geocentric approach involves analyzing the needs of customers worldwide and then adopting standardized operations for all markets, which is what Scale Systems is doing. This approach combines the global integration of operations with local responsiveness, without prioritizing any one national market.

Question 3

Which of the following is a characteristic of the global product design?

Accepted Answer

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

Question 4

Adecco, a temporary employment agency with worldwide clients, has ten regional divisions. Managers in each division handle recruiting, distribution, promotion, and client services for that region. Adecco is a service firm that focuses on marketing. Which organizational design is most likely used by Adecco?

Accepted Answer

Adecco's organizational structure is based on geographic regions, with each division handling operations within a specific area, which aligns with the global area design.

Question 5

Which of the following is an advantage of the functional design?

Accepted Answer

Functional design allows organizations to focus on specific areas or functions, such as marketing, finance, or operations, enabling a more concentrated and specialized approach to managing and improving those areas.

Question 6

Which type of organizational design organizes the firm's activities around specific regions of the world?

Accepted Answer

Global area design organizes a company's activities around specific geographic regions, allowing for tailored strategies that address the unique needs and characteristics of each region.

Question 7

The ________ is used when a firm serves different customers or customer groups, each with specific needs calling for special expertise or attention.

Accepted Answer

The global customer design is used when a firm serves different customers or customer groups, each requiring specific needs that call for special expertise or attention. This structure allows the company to focus on the unique demands of distinct customer segments.

Question 8

Which design is practical only when a firm has relatively few products or customers?

Accepted Answer

A global functional design is practical when a firm has relatively few products or customers because it organizes the company based on functions (e.g., marketing, finance) rather than products or regions, which can be more efficient for smaller product lines or customer bases.

Question 9

The ________ calls for a firm to create departments or divisions that have worldwide responsibility for common organizational functions.

Accepted Answer

The global functional design organizes a company's operations into departments or divisions based on common functions (such as marketing, finance, etc.) that have worldwide responsibility, rather than being organized by geographic regions or product lines.

Question 10

British Airways is a single-business firm with company-wide function operations dedicated to marketing and operations, public affairs, human resources, and other basic functions. How could the organizational design of British Airways best be described?

Accepted Answer

British Airways' organizational design can best be described as a global functional design because it is organized around company-wide functions such as marketing, operations, public affairs, and human resources, rather than around products, geographic regions, or a matrix structure.

Question 11

The polycentric approach to management is most likely used by firms that ________.

Accepted Answer

The polycentric approach to management involves a firm customizing its operations and strategies to suit each foreign market it enters, recognizing and respecting the differences in consumer preferences, business practices, and regulatory environments across countries. This approach contrasts with ethnocentric (operate the same internationally as domestically) and geocentric (standardized operations across all markets) approaches.

Question 12

What corporate philosophy is facilitated by a global product design?

Accepted Answer

A geocentric approach to corporate philosophy facilitates global product design by focusing on creating products that can be universally marketed across different countries, rather than tailoring them to individual local markets or adhering strictly to the home country's product design.

Question 13

Which design assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm?

Accepted Answer

Global product design assigns worldwide responsibility for specific products or product groups to separate operating divisions within a firm, allowing for focused expertise and resources on particular product lines across global markets.

Question 14

Which of the following is an advantage of global area design?

Accepted Answer

Global area design allows firms to focus on specific geographic areas, enabling them to gain in-depth knowledge and expertise about local markets, preferences, regulations, and competition, which can be leveraged to tailor products and services more effectively to meet local demands.

Question 15

The ________ is used by MNCs that have relatively narrow or similar product lines.

Accepted Answer

The global functional design is used by MNCs with narrow or similar product lines, as it organizes the company based on functions rather than products.

Question 16

Manix Enterprises, an MNC, uses a global product organizational design. Manix manufactures and sells chemical products and electronics. The firm also owns a financial services company and a small hotel chain. Which form does Manix most likely use?

Accepted Answer

Manix Enterprises likely uses the H-form (holding company form) because it operates in unrelated industries such as chemicals, electronics, financial services, and hotels, which is characteristic of a conglomerate structure.

Question 17

Vantage Computers, an MNE, has a multi-domestic corporate philosophy. Which organizational design would be most useful for Vantage?

Accepted Answer

A multi-domestic corporate philosophy emphasizes the need to be highly responsive to local preferences and conditions. Therefore, a global area design, which organizes the company's activities around specific regions or countries, allowing for tailored strategies and operations to meet local demands, is most suitable.

Question 18

Which of the following is an advantage of using a global area design?

Accepted Answer

The answer of Which of the following is an advantage...

Question 19

Garvey Enterprises, an MNC, uses a global product organizational design. Garvey manufactures and sells boating accessories to customers around the world. Which form does Garvey most likely use?

Accepted Answer

The M-form, or Multidivisional form, is typically used by multinational corporations (MNCs) like Garvey Enterprises that operate in diverse product lines or geographical areas. This structure allows for the management of products or services across different countries or regions, aligning with Garvey's global operations in boating accessories.

Question 20

Parker Industries manufactures and sells a variety of goods including carpeting, power tools, and wallpaper. Which form of organization would most likely be appropriate for Parker Industries?

Accepted Answer

The answer of Parker Industries manufactures and sells a variety...

Quiz 14: International Organization Design and Control