Question 1

In many instances, companies will need to respond to both global and local opportunities simultaneously. In this case, the global matrix structure can be used.

Accepted Answer

The global matrix structure allows companies to combine global and local perspectives and respond to both types of opportunities simultaneously. This is achieved by creating cross-functional teams that are responsible for specific projects or initiatives, and that bring together people from different geographic locations and areas of expertise. The matrix structure can help companies to balance their global and local strategies, and to leverage their strengths in different markets around the world.

Question 2

Truly global companies no longer think of themselves as having a single home country and have been called stateless corporations.

Accepted Answer

This statement is true. Stateless corporations are companies that do not have a single national identity or home country, as they operate and have a presence in multiple countries around the world. They are truly global in their operations and perspectives.

Question 3

A joint venture is a separate entity created with two or more active firms as sponsors.

Accepted Answer

A joint venture is a type of partnership that involves two or more companies working together on a shared project for a short period of time. It is a separate legal entity created with active participation from each sponsor, and it operates with a specific purpose and timeline.

Question 4

In parts of Mexico, laundry detergent is used to wash dishes, not clothes, pointing out the need for a multidomestic strategy.

Accepted Answer

This statement is true. In some parts of Mexico, laundry detergent is used to wash dishes because it is more affordable and readily available than dish soap. This illustrates the need for companies to tailor their strategies to address local preferences and practices in different markets, which is a key aspect of a multidomestic strategy.

Question 5

As companies begin to explore international opportunities, they typically start with an international division that grows into an export department.

Accepted Answer

Typically, companies start with an export department to handle international sales and then may expand into a more comprehensive international division as their global operations grow.

Question 6

The globalization strategy means that product design, manufacturing, and marketing strategy are standardized throughout the world, whereas a multidomestic strategy means that competition in each country is handled independently of competition in other countries.

Accepted Answer

The statement correctly defines the differences between a globalization strategy and a multidomestic strategy.

Question 7

To meet new competitive threats, many manufacturing firms are emphasizing the ability to customize their products to meet specific needs which requires a greater emphasis on global responsiveness.

Accepted Answer

The answer of To meet new competitive threats, many manufacturing...

Question 8

The international stage of international development means that exports are taken seriously and that the company deals with the competitive issues of each country separately.

Accepted Answer

When a company enters the international stage of international development, it becomes crucial to take exports seriously and tackle competitive issues of each country separately. This helps the company to establish its presence in the global market and expand its operations to different countries.

Question 9

Functional structures are found more frequently in a worldwide business than in a domestic business.

Accepted Answer

Functional structures are more common in domestic businesses because they focus on specialization and efficiency within a single market, whereas worldwide businesses often require more complex structures to manage diverse markets and operations.

Question 10

The global product division structure works best when pressure for decision-making balances the interests of both product standardization and geographical localization and when coordination to share resources is important.

Accepted Answer

The answer of The global product division structure works best...

Question 11

The product-based structure works best when a division handles products that are technologically similar and can be standardized for marketing around the world.

Accepted Answer

This is because the product-based structure focuses on grouping products based on their similarities, which can be beneficial in standardizing marketing strategies and production processes. This structure may not work as well if the products being produced are vastly different from each other, as it may lead to difficulties in managing and coordinating different divisions.

Question 12

Building a global presence expands an organization's scale of operations, enabling it to realize economies of scale.

Accepted Answer

Building a global presence allows an organization to reach a larger customer base and access new markets, which can lead to increased sales and production volumes. This, in turn, can help the organization realize economies of scale by spreading fixed costs over a larger output and reducing per-unit costs.

Question 13

A company typically shifts its interest from domestic activity to exporting in the 3rd stage (multinational) of international development.

Accepted Answer

The correct sequence of international development stages is: domestic, international, multinational, and global. The company typically shifts its interest from domestic activity to international activity in the 2nd stage of international development. The 3rd stage (multinational) involves a significant commitment to foreign direct investment and the establishment of subsidiaries in multiple countries.

Question 14

The global geographic structure divides the world into geographical regions, with each geographical division reporting to the CEO.

Accepted Answer

The statement accurately describes the global geographic structure, where the world is divided into geographical regions with each division reporting to the CEO.

Question 15

The second stage of international evolution, "International Stage," will usually be structured with a domestic structure with an export department.

Accepted Answer

The answer of The second stage of international evolution, "International...

Question 16

Stage two is the global stage which means the company takes exports seriously and begins to think multidomestically.

Accepted Answer

The answer of Stage two is the global stage which...

Question 17

Four primary factors motivate companies to expand internationally: profitability, economies of scale, economies of scope, and low-cost production factors.

Accepted Answer

The answer of Four primary factors motivate companies to expand...

Question 18

With a global geographic division structure, each division's manager is responsible for planning, organizing, and controlling all functions for the production and distribution of its products for any market around the world.

Accepted Answer

The answer of With a global geographic division structure, each...

Question 19

Managers and organizations all over the world are very reluctant to cooperate to achieve competitive advantage on a global scale.

Accepted Answer

Managers and organizations often engage in cooperation to achieve competitive advantage, particularly in the global market where collaboration and partnerships can provide access to new markets, technologies, and resources.

Question 20

Having a presence in multiple countries provides marketing power and synergy compared to the same size firm that has presence in fewer countries.

Accepted Answer

When a company has presence in multiple countries, it can leverage the collective resources, knowledge, and networks of its different branches to reach a larger audience, build brand recognition, and develop better marketing strategies. This can result in increased marketing power and synergy, which can give the firm a competitive advantage over similar sized firms that focus on fewer countries or regions.

Quiz 6: Designing Organizations for the International Environment