Question 1

Alice Adams' U.K.-based family business exports 4 percent of its total sales to other countries within the EU.The business has no other operations abroad.Which organization for international sales would you suggest the company adopt?

Accepted Answer

Since Alice Adams' family business exports only 4% of its total sales to other countries within the EU and has no other operations abroad, setting up an export department would be a more appropriate choice for international sales. This would allow the company to focus on its export activities and efficiently manage its sales to different markets. A country-based organization or regional organization would be more appropriate for a company with a larger international presence, while a global product organization would be better suited for a business with a wider range of products sold in multiple countries.

Question 2

Canon Car Mirrors has 14 overseas subsidiaries each of which has its own plant and largely determines is own product lines and marketing programs.Canon most likely adheres to which orientation?

Accepted Answer

Polycentric orientation favors local responsiveness rather than global integration. In this case, each subsidiary has autonomy in making decisions related to product lines and marketing programs, which indicates a polycentric approach.

Question 3

For many years Swiss Pharmaceuticals centralized decision-making in Zurich,and Swiss managers made virtually all major decisions for the company's 64 foreign subsidiaries.Decision-making is still centralized,but subsidiaries are closely involved in global product development and global theme advertising campaigns.The firm's orientation has changed from

Accepted Answer

The shift from centralized decision-making in Zurich to involving subsidiaries in global product development and advertising campaigns suggests a move from an ethnocentric orientation to a geocentric orientation, where decisions are made based on the best interests of the global company as a whole.

Question 4

An expressed assignment to carry out a task on a global scale is referred to as a(n)____ mandate.

Accepted Answer

The term "global" refers to a worldwide scope or scale, and in this context, a global mandate would indicate a task assigned on a global level. Therefore, option D is the best choice. Option A, matrix, refers to a structure for organizing groups and resources, and is not related to a mandate. Options B and C, ethnocentric and polycentric, refer to different approaches to managing global operations and are not related to a mandate either.

Question 5

Texas Taffy is developing a new Southwest-flavor line of candy for simultaneous launch in Mexico and the United States.Managers from both its U.S.headquarters and its Mexican subsidiary are involved in product development for this line.Texas Taffy most likely adheres to which orientation?

Accepted Answer

Texas Taffy's involvement of both its U.S. headquarters and Mexican subsidiary in product development for a new line of candy for simultaneous launch in both countries suggests that the company has a geocentric orientation, meaning it seeks to integrate and coordinate global strategies and practices across all regions and countries where it operates. This approach values the unique skills and knowledge of each subsidiary while also leveraging the benefits of a global network.

Question 6

Foreign managers are most likely to reach CEO status in MNCs whose home country is

Accepted Answer

The U.S.A. has a strong tradition of diversity and openness in corporate leadership, which makes it more likely for foreign managers to reach CEO status in MNCs whose home country is the U.S.A. In addition, the U.S. is home to many of the world's largest and most influential MNCs, offering more opportunities for advancement to top positions.

Question 7

MabHill's manager in Malaysia successfully launched a new product that was developed in the Malaysian plant.However,he cannot generate any interest in the product back at global headquarters.Headquarters just isn't interested in an utilizing an idea from Malaysia in any of its other subsidiaries.Most likely the firm adheres to which orientation?

Accepted Answer

The scenario suggests that the headquarters is not willing to utilize an idea from one of its subsidiaries, which indicates a polycentric orientation. In a polycentric firm, each subsidiary operates independently, utilizing its own methods and strategies, without much involvement from the headquarters. Therefore, the lack of interest in a successful product from a subsidiary reflects a polycentric orientation.

Question 8

Sam Nitan's family business exports 3% of its total sales.The business has no other operations abroad.Which organization for international sales would you suggest the company adopt?

Accepted Answer

Since the company exports only 3% of its total sales and has no other operations abroad, it may not require a full-fledged international department or a global product organization. An export department would be sufficient to handle the company's export operations. This department would primarily focus on exporting and related activities such as packaging, labeling, documentation, and logistics. It may work in close coordination with other functions such as sales, marketing, production, and finance to ensure smooth exports. Therefore, the best choice for the company would be to adopt an export department.

Question 9

The main advantage for a born-global firm over a traditional firm is

Accepted Answer

Born-global firms are able to adopt a global organizational structure early on, which enables them to operate in multiple markets and adapt quickly to changes in the global business environment. This is a key advantage over traditional firms that may take longer to expand internationally and may have a more rigid organizational structure. While having extensive market knowledge and experienced managers may be important for success, it is not necessarily a unique advantage of born-global firms.

Question 10

U.S.-based Tin City Bicycles is about to undertake a global roll-out of a new bicycle developed in their Indian subsidiary.Tin city most likely adheres to which orientation?

Accepted Answer

Tin City Bicycles is undertaking a global roll-out of a new bicycle developed by their Indian subsidiary, indicating a geocentric orientation where the company views the world as a single, integrated marketplace and seeks to balance global efficiencies and local responsiveness.

Question 11

When Taiwan Graphics first entered Indonesia,all decisions for the new market were made in Taiwan.Now all decisions for Indonesia are made by the subsidiary there.Taiwan Graphics has changed orientations from

Accepted Answer

When all decisions for the new market were made in Taiwan, Taiwan Graphics had an ethnocentric orientation. However, with the establishment of a subsidiary in Indonesia and the transfer of decision-making powers to that subsidiary, Taiwan Graphics has shifted towards a polycentric orientation where decisions are made locally based on the understanding of the host country's culture and business practices.

Question 12

Which of the following is a two-dimensional organizational structure?

Accepted Answer

A matrix organizational structure is two-dimensional in nature as it combines both functional and product-based structures. It allows for employees to report to both a functional manager and a product/project manager.

Question 13

An organizational advantage of a born-global firm over a traditional multinational firm is it

Accepted Answer

Born-global firms can adopt a global organizational structure from the beginning, avoiding the need to reorganize later. This gives them an advantage over traditional multinational firms, which often have to undergo costly and disruptive reorganizations when expanding globally. Option A is incorrect because simply operating like an export department does not provide an organizational advantage. Option B is incorrect because experience in overseas markets is not a unique advantage of born-global firms. Option D is incorrect because it assumes that all born-global firms have a polycentric orientation, which is not necessarily true.

Question 14

Ben Smith's U.S.-based family business exports 5 percent of its total sales to either Canada or Mexico.The business has no other operations abroad.Which organization for international sales would you suggest the company adopt?

Accepted Answer

Since the business exports only 5% of its total sales and has no other operations abroad, a dedicated international division or regional organization would be unnecessary. A country-based organization would also be too limited in scope. As such, an export department would be the most suitable option for handling the small amount of international sales.

Question 15

Carol Miller's family business exports 3 percent of its total sales.The business has no other operations abroad.Which organization for international sales would you suggest the company adopt?

Accepted Answer

Since the business only exports and has no other operations abroad, the best choice would be to adopt an Export department. This department would focus solely on managing and coordinating the company's export activities. It would be responsible for all aspects of the exporting process, such as negotiating contracts, arranging shipments, and handling customs and regulations in foreign markets. A functional organization may be too general for a company with a specific focus on exports, an international department may be too broad for a company with only one international activity, and a global product organization would not be necessary if the company only has one product line.

Question 16

Tunetoy Industries exports products overseas and has no manufacturing abroad.U.S.-based managers are sent to oversee foreign marketing subsidiaries.Tunetoy most likely adheres to which orientation?

Accepted Answer

Tunetoy Industries is a U.S.-based company that exports products overseas and has no manufacturing abroad. The fact that U.S.-based managers are sent to oversee foreign marketing subsidiaries indicates that Tunetoy has an ethnocentric orientation. This means that the company considers its home country to be superior and therefore relies on its home-country employees to manage foreign operations.

Question 17

Karavel Foods expects its foreign subsidiaries to show profits and growth every year.As long as they do this,headquarters lets subsidiaries do what they want.Karavel most likely adheres to which orientation?

Accepted Answer

Karavel Foods' approach of allowing its foreign subsidiaries autonomy as long as they show profits and growth aligns with a polycentric orientation. This orientation is characterized by a company giving its foreign offices the freedom to operate and make decisions based on the local market's conditions and practices, rather than imposing strict guidelines or practices from the headquarters.

Question 18

Taberet believes that the world can be divided into 5 regional markets: North America,South America,Europe,Asia,and the Middle East/Africa.Each region is given a great deal of autonomy within Taberet.Taberet most likely adheres to which orientation?

Accepted Answer

Polycentric orientation involves giving autonomy and decentralizing decision making to regional subsidiaries. This is exactly what Taberet is doing by dividing the world into 5 regional markets with a great deal of autonomy within each region. Ethnocentric orientation involves a home country-focused approach and geocentric orientation involves a global approach with no preference for any particular region. None of the above does not apply in this case as Taberet is clearly adopting a regional approach.

Question 19

Tunetoy Industries participates in 4 distinct industries,each with its own customers and competitors.Manufacturing economies of scale are high in all these industries and trade barriers are minimal.As a result,Tunetoy needs only one or two plants in each industry to serve the global market.International sales account for 60% of total firm sales.Which organization do you suggest for Tunetoy?

Accepted Answer

Given Tunetoy Industries' involvement in distinct industries with high manufacturing economies of scale and minimal trade barriers, along with a significant portion of sales coming from international markets (60%), a Global Product Organization is most suitable. This structure allows the company to focus on each product line globally, optimizing production and marketing strategies across different regions while leveraging economies of scale.

Question 20

French Bakery Breads believes that every national market is unique in terms of competition and consumer behavior and a local national is the best choice to run a subsidiary and make its key marketing decisions.French Bakery Breads most likely adheres to which orientation?

Accepted Answer

French Bakery Breads believes in adapting to the unique market conditions of each national market, which is the core philosophy of the polycentric orientation. It suggests that businesses should hire local nationals to run subsidiary units in different countries, as they possess better cultural knowledge of the market, consumer behavior, and competition. This philosophy helps companies tailor their marketing strategies to match local conditions, leading to better market penetration and higher revenue generation.

Quiz 16: Organizing for Global Marketing