Question 1

In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analysing worldwide opportunities and threats.

Accepted Answer

(Managing in an environment in which strategic forces are both diverse and changeable, the transnational company must create the ability to sense and analyze the numerous and often conflicting opportunities, pressure and demands it faces worldwide. Strong national subsidiary managers are ideally situated to sense, analyze and represent the changing needs of local consumers and the increasing pressures from host governments).

Question 2

Which of the following is not a characteristic of the companies with centralized hub structure?
A) Most of the key assets and resources are concentrated in the home country.
B) Tight strategic and operational controls are maintained over the subsidiaries.
C) Most of the manufacturing and product development is executed by the subsidiaries.
D) Corporate management regards its subsidiaries as delivery pipelines to the global market.

Accepted Answer

(The centralized hub model is adopted by companies that pursue a centrally controlled, export-based internationalization strategy. These MNEs strive to secure competitive advantage at the upstream end of the value-added chain. As such, their competitive strategy emphasizes cost advantages and quality assurance which demands tight control over product development, procurement and manufacturing. Consequently, these MNEs keep many of these major value-adding and strategic activities at home).

Question 3

The key strategic capability associated with the coordinated federation organizational model is global-scale efficiency.

Accepted Answer

(The key strategic capability associated with companies that adopt the coordinated federation model is the worldwide transfer of home country innovations. Global-scale efficiency is the key strategic capability associated with companies that adopt a centralized hub model).

Question 4

Summit Corp. is transitioning from a multinational strategy to a transnational strategy. It would probably be more effective and less costly if the company commenced its accompanying organizational transition by focusing on changing employees' attitudes and mentalities, than it would be if it led its efforts by engaging in structural change.

Accepted Answer

(Forcing changes in the organizational process and management mentality by altering the formal structure can have a high cost. The new relationships defined in the reorganized structure will often take months to establish at the most basic level and a year or more to become truly effective. Developing new attitudes and behaviours will take even longer because many employees will be frustrated, alienated or simply unequal to the new job requirements. Alternatively, most change processes can be managed in a more evolutionary manner, focusing first on the modification of individual perspectives and interpersonal relationships before tackling the formal redistribution of responsibilities and power).

Question 5

In a transnational organization, knowledge is developed at the headquarters and transferred to foreign units.

Accepted Answer

(In transnational organizations, management breaks away from the restricted view that assumes it must centralize the activities for which a global scale or expertise is important. Instead, management regards each of its worldwide units as a source of ideas, skills, capabilities and knowledge that can be harnessed for the benefit of the entire organization).

Question 6

Which of the following strategic approach and strategic capabilities cannot be paired?
A) Transnational strategy and national responsiveness
B) Transnational strategy and learning
C) Transnational strategy and global efficiency
D) Global strategy and national responsiveness

Accepted Answer

(In order to have a transnational strategy, some degree of each of the three capabilities of efficiency, learning, and responsiveness is required simultaneously. Global strategy, however, is to be paired with efficiency, not responsiveness)

Question 7

A transnational organization integrates its dispersed assets, resources, and capabilities through flexible processes involving centralization, formalization and rationalization.

Accepted Answer

(The transnational organization integrates its dispersed assets and resources by implementing management processes that effectively distribute roles and responsibilities. This distribution requires the development of a rather sophisticated and subtle decision-making machinery based on three different but interdependent management processes. The first, centralization, is a focused and constrained escalation process that allows top management to intervene directly in key decision content. The second, formalization, is a process in which management structures individual roles and administrative systems to influence specific decisions. The third, socialization, is a self-regulatory capability in which top management's role is to establish a broad culture and set of relationships that provide a supportive organizational context for delegated decisions).

Question 8

Which of the following is not a core characteristic of the coordinated federation structure?
A) Most assets and resources are decentralized but well controlled by the headquarters.
B) Subsidiaries are regarded as key sources of knowledge and expertise.
C) Subsidiary control exercised by the headquarters is usually quite formal and rigorous.
D) Corporate managers tend to regard offshore subsidiaries as extensions of domestic operations.

Accepted Answer

(Companies that adopt the coordinated federation model permit foreign subsidiaries to adapt products or strategies to reflect market differences, but their dependence on the parent company for new products, processes and ideas results in a significant degree of coordination and control being exercised by headquarters. In fact, these companies often view foreign operations as appendages whose principal purpose is to leverage the capabilities and resources developed in the home market).

Question 9

Which of the following is not a core characteristic of the decentralized federation structure?
A) Most key assets and resources are decentralized.
B) Subsidiaries are highly autonomous.
C) Corporate management regards subsidiaries as largely independent national operations.
D) Reporting and oversight conflicts prevail.

Accepted Answer

(Companies that adopt the decentralized federation model develop an internal culture that emphasizes personal relationships rather than formal structures and financial controls more than operational controls. This management style tends to reinforce the willingness of these companies to delegate more operating independence and strategic freedom to foreign subsidiaries. As a result, highly autonomous national companies are characterized by loose, personal controls, rather than formal reporting and oversight).

Question 10

The key capabilities of national responsiveness, learning and transfer of home country knowledge abroad, and global efficiency are mutually exclusive. That is, having one capability inhibits the concurrent possession of others.

Accepted Answer

(The counter-example is a transnational organization. These organizations need to simultaneously achieve some degree of the strategic capabilities of efficiency, responsiveness and learning in order to remain competitive).

Question 11

Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?
A) Change in individual attitudes and mentalities; then, change in interpersonal relationships and processes; and finally, change in the formal structure and responsibilities
B) Change in the formal structure and responsibilities; then, change in interpersonal relationships and processes; and finally, change in individual attitudes and mentalities
C) Change in interpersonal relationships and processes; then, change in the formal structure and responsibilities; and finally, change in individual attitudes and mentalities.
D) Change in individual attitudes and mentalities; then, change in the formal structure and responsibilities; and finally, change in interpersonal relationships and processes

Accepted Answer

(The emerging change process model commences with efforts to change individual attitudes and mentalities, and is followed by efforts to modify interpersonal relationships and processes before pursuing changes in formal structure and responsibilities).

Question 12

Which of the following strategy-structure combinations cannot be paired?
A) Coordinated federation and multinational strategy.
B) Decentralized federation and international strategy.
C) Centralized hub and global strategy.
D) Integrated network and transnational strategy.

Accepted Answer

(Companies that adopt a coordinated federation structure are most likely to pursue an international strategy. Further, companies that adopt a decentralized federation structure are most likely to pursue a multinational strategy).

Question 13

Isatis Co. has successfully transitioned from a global strategy to a transnational strategy. Which of the following describes the likely configuration of assets and capabilities that now most likely prevails at Isatis?
A) Decentralized and nationally self-sufficient.
B) Centralized and globally scaled.
C) Dispersed, specialized, and interdependent.
D) Core competencies are centralized; other assets and capabilities are decentralized.

Accepted Answer

(Companies that pursue a transnational strategy are characterized by dispersed, specialized and interdependent assets and capabilities. Incorrect answer choices a, b and d describe the configurations of assets and capabilities that are characteristic of companies that adopt the decentralized federation model (to pursue a multinational strategy), the centralized hub model (to pursue a global strategy), and the coordinated federation model (to pursue an international strategy), respectively.

Question 14

Which of the following is not characteristic of companies with a transnational strategy?
A) Multiple diverse perspectives are developed and legitimized.
B) Physical assets and management capabilities are internationally distributed, yet interdependent.
C) Integrative processes are flexible and robust.
D) Knowledge is developed centrally and adapted locally.

Accepted Answer

(Firms engaged in a transnational strategy do not typically centralize the development of knowledge and then adapt this knowledge to the local environs of their foreign subsidiaries. Instead, companies that pursue an international strategy and adopt a coordinated federation model are more likely to develop knowledge centrally and pursue local adaptation of this knowledge).

Question 15

Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.

Accepted Answer

(The decentralized federation model is regarded as the most appropriate model for companies that pursue a multinational strategy because the model positions companies to delegate more operating independence and strategic freedom to their foreign subsidiaries. Equally, the model encourages subsidiaries to foster a culture of self-sufficiency).

Question 16

Installing a matrix structure is the most effective way to transition from an organization based on multiple regional divisions to one able to manage both geographic and product diversity.

Accepted Answer

(Theoretically, a matrix structure offers the advantage of providing a balance between centralized efficiency, local responsiveness and worldwide knowledge transfer. However, in practice, the dual reporting and command lines that are characteristic of the matrix structure often breed conflict and confusion).

Question 17

In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.

Accepted Answer

(In transnational organizations, management ensures that viable national units achieve global scale by specializing their activities and giving them the responsibility of becoming the company's world source for a given product or expertise. These organizations are able to tap into important technological advances and market developments wherever they are occurring around the world. One consequence of such a distribution of specialized assets and responsibilities is that the interdependence of worldwide units automatically increases. Simple structural configurations such as the decentralized federation, the coordinated federation and the centralized hub are inadequate for the task facing the transnational corporation. Instead, these companies adopt a structure characterized as an integrated network model).

Question 18

MNEs that adopted a centralized hub organizational model were able to develop competitive advantage through their ability to transfer knowledge and expertise and adapt it to markets worldwide.

Accepted Answer

(The centralized hub model is adopted by companies that pursue a centrally controlled, export-based internationalization strategy in which the MNE keeps all major value-adding and strategic activities at home. These MNEs strive to secure competitive advantage at the upstream end of the value-added chain. As such, their competitive strategy emphasizes cost advantages and quality assurance which demands tight control over product development, procurement and manufacturing).

Question 19

Which of the following statements regarding knowledge diffusion is correct?
A) In a decentralized federation, knowledge is developed in national subsidiaries and diffused throughout the organization
B) In a centralized hub, knowledge is developed and retained at the center.
C) In a coordinated federation, knowledge is developed at the center and transferred to overseas units for local adaptation.
D) Knowledge diffusion is independent of structure, such that knowledge diffuses in a quite similar manner in all organizational structures.

Accepted Answer

(Contrary to the wording offered in answer choice "a", in the context of a decentralized federation, knowledge is developed and retained in the company's national subsidiaries. Furthermore, knowledge diffusion and organizational structure are not independent of each other, as suggested in answer choice "d". However, in the context of the centralized hub model, knowledge is developed and retained at the headquarters. Further, in the case of coordinated federations, management typically views foreign operations as appendages whose principal purpose is to leverage the capabilities and resources developed in the home market in order to adapt products or strategies to reflect market differences).

Question 20

In companies with the decentralized federation model, the degree of control and coordination exercised by the headquarters is greater than it is in companies with the coordinated federation organizational model.

Accepted Answer

(While companies that adopt the decentralized federation model are inclined to delegate operating independence and strategic freedom to their foreign subsidiaries, companies that adopt the coordinated federation model are inclined to delegate responsibility while retaining overall control through sophisticated management systems and specialist corporate staffs. In coordinated federations, foreign subsidiaries are typically free to adapt products or strategies to reflect market differences, but their dependence on the parent company for new products, processes and ideas results in significantly more coordination and control being exercised by headquarters when compared to organizations that adopt the decentralized federation model).

Quiz 4: Developing a Transnational Organization: Managing Integration, Responsiveness, and Flexibility

In the transnational organization, capable managers situated in the national subsidiaries act as the primary source for sensing and analysing worldwide opportunities and threats.

Which of the following is not a characteristic of the companies with centralized hub structure?

The key strategic capability associated with the coordinated federation organizational model is global-scale efficiency.

In a transnational organization, knowledge is developed at the headquarters and transferred to foreign units.

Which of the following strategic approach and strategic capabilities cannot be paired?

A transnational organization integrates its dispersed assets, resources, and capabilities through flexible processes involving centralization, formalization and rationalization.

Which of the following is not a core characteristic of the coordinated federation structure?

Which of the following is not a core characteristic of the decentralized federation structure?

The key capabilities of national responsiveness, learning and transfer of home country knowledge abroad, and global efficiency are mutually exclusive. That is, having one capability inhibits the concurrent possession of others.

Which of the following describes the preferred sequencing of changes associated with implementing the typically more effective emerging change process model?

Which of the following strategy-structure combinations cannot be paired?

Isatis Co. has successfully transitioned from a global strategy to a transnational strategy. Which of the following describes the likely configuration of assets and capabilities that now most likely prevails at Isatis?

Which of the following is not characteristic of companies with a transnational strategy?

Companies that pursue a multinational strategy are inclined to adopt the decentralized federation organizational model.

Installing a matrix structure is the most effective way to transition from an organization based on multiple regional divisions to one able to manage both geographic and product diversity.

In a transnational organization, the asset and capability configuration can be described as dispersed, specialized and interdependent.

MNEs that adopted a centralized hub organizational model were able to develop competitive advantage through their ability to transfer knowledge and expertise and adapt it to markets worldwide.

Which of the following statements regarding knowledge diffusion is correct?

In companies with the decentralized federation model, the degree of control and coordination exercised by the headquarters is greater than it is in companies with the coordinated federation organizational model.