Question 1

Which of the following activities do not benefit from centralization?

Accepted Answer

Even activities such as finance and research and development benefit from centralization. It often happens that firms that have at one point adopted a decentralized model to compete effectively in the international market have rethought their strategies and opted for a centralized model.

Question 2

Under which conditions is a firm likely to use a decentralized organizational structure?

Accepted Answer

Firms that are involved in international marketing primarily through exportation are likely to use a centralized strategy. Also, when qualified managers cannot be found in the target country, the firm is likely to rely on its own talent and use a centralized strategy. However, when qualified labor exists or when the environment is unstable, a decentralized organizational structure is often helpful.

Question 3

Which type of structure is better equipped to immediately process and respond to country-specific information?

Accepted Answer

An advantage of the worldwide regional division structure is that it is better equipped to immediately process and respond to country-specific information and conditions that other formal structures - at some cost to product-related information - because of this strong regional focus.

Question 4

Unilever needs to coordinate marketing activities worldwide involving its global brands and needs to focus on the local market for its local brands. Which type of organizational structure should it use?

Accepted Answer

In a matrix structure, two dimensions are integrated such that each operational unit reports to both region/country managers and product managers. This type of format works particularly well for firms that have global brands as well as local brands; such companies need to coordinate marketing activities worldwide involving the global brand, and need to focus on the local market for the local brand. In fact, Unilever already uses the Matrix structure!

Question 5

Which of the following is a factor that affects organizational design?

Accepted Answer

Organizational design is determined by the competitive environment, environmental stability, environmental similarity with the home country, common regional traits and/or regional integration, availability of local qualified labor, and a number of internal firm factors.

Question 6

While the ____ structure allows for some duplication of activities and thus might increase costs, this organization is considered by managers to be very effective in creating competitive advantage for the firm.

Accepted Answer

While the worldwide regional division structure allows for some duplication of activities and thus might increase costs, this organization is considered by managers to be very effective in creating competitive advantage for the firm.

Question 7

Under which model do subsidiaries report directly to the single division responsible for operations in the country or geographic region?

Accepted Answer

Under the worldwide regional division structure, subsidiaries report directly to the single division responsible for operations in the country or geographic region.

Question 8

Firms with an international division structure have two main divisions. What are those divisions?

Accepted Answer

Firms with an international division structure focus attention on domestic operations and "all other" operations. They are not geocentric in nature. Therefore, they usually have a domestic division and an international division.

Question 9

Which type of organizational structure is helpful for firms that have similar congruent product lines?

Accepted Answer

The worldwide regional division structure is helpful for firms that have similar congruent product lines, such as Frito-Lay, or for services. For example the Guggenheim museum has this type of structure.

Question 10

Which type of focus is likely to be used when companies operate in countries that share language, religion or other cultural similarities?

Accepted Answer

Companies can organize their operations with a regional focus in countries that share a language, religion, or that share other cultural similarities. This is also the case when counties share borders or for countries that are members of a regional alliance.

Question 11

A firm that considers internationalization a priority is likely to have an organizational structure with

Accepted Answer

A firm that considers internationalization a priority is likely to have an organizational structure with regional divisions. Companies that are minimally involved will use international departments or perhaps an international division.

Question 12

Which structure allows for some duplication of activities, which increases costs, but is still considered to be very effective?

Accepted Answer

Under the worldwide regional division structure, subsidiaries report directly to the single division responsible for operations in the country or geographic region. While this structure allows for some duplication of activities and thus might increase costs, this organization is considered by managers to be very effective in creating competitive advantage for the firm.

Question 13

Companies operating in countries that are similar to their home-country are likely to use an organizational structure that

Accepted Answer

Companies operating in countries that are similar to their home-country are likely to use similar strategies. These companies would opt for an organization that would integrate operations between the home and host countries.

Question 14

Which type of international organizational structure is a firm likely to use if its domestic operations are hierarchical and centralized?

Accepted Answer

Companies are likely to maintain their organizational structure when they go international. An organization that is hierarchical and centralized is likely to have a centralized international organization. An organization structured based on product lines is also likely to maintain this structure for its international operations.

Question 15

According to the text, which of the following is not a formal structure used by multinational companies?

Accepted Answer

There are four types of formal structures used by multinational companies: international divisions, worldwide functional divisions, worldwide area divisions, and worldwide product divisions.

Question 16

This structure allows for duplication and might increase costs, but it, nevertheless, is considered effective in creating competitive advantage for the firm.

Accepted Answer

The worldwide regional division structure allows for some duplication of activities and thus might increase costs, this organization is considered by managers to be very effective in creating competitive advantage for the firm.

Question 17

Which format works particularly well for firms that have global brands as well as local brands?

Accepted Answer

In a matrix structure, two dimensions are integrated such that each operational unit reports to both region/country managers and product managers. This type of format works particularly well for firms that have global brands as well as local brands; such companies need to coordinate marketing activities worldwide involving the global brand,and need to focus on the local market for the local brand.

Question 18

Which type of organizational structure is used by Frito-Lay?

Accepted Answer

Frito-Lay, one of the three companies of the Pepsi Co. family, has a worldwide regional division structure. The Frito-Lay Company, headquartered in the U.S., oversees all the functional areas. The regional divisions oversee all regional operations.

Question 19

Which type of organizational structure is helpful for services?

Accepted Answer