Question 1

Subsidiaries that are located anywhere in the world where they can benefit the organization are called _____.
A) chaebols
B) keiretsus
C) specialized subunits
D) dispersed subunits

Accepted Answer

Dispersed subunits are subsidiaries that are located anywhere in the world where they can benefit the organization.

Question 2

Which of the following is a feature of a global functional division?
A) Easy coordination of manufacturing and marketing
B) An emphasis on functional expertise
C) Easy management of multiple product lines
D) A lack of centralized control

Accepted Answer

A number of important advantages are associated with the global functional division structure. These include (1) an emphasis on functional expertise, (2) tight centralized control, and (3) a relatively lean managerial staff. There also are some important disadvantages: (1) Coordination of manufacturing and marketing often is difficult, (2) managing multiple product lines can be very challenging because of the separation of production and marketing into different departments, and (3) only the chief executive officer can be held accountable for the profits.

Question 3

A multinational structural arrangement that combines elements of function,product,and geographic designs while relying on a network arrangement to link worldwide subsidiaries is referred to as a _____.
A) transnational network structure
B) cross-cultural matrix structure
C) transnational divisional structure
D) cross-cultural network structure

Accepted Answer

Besides matrix structures, another alternative international organizational design to recently emerge is the transnational network structure. This is designed to help multinational companies (MNCs) take advantage of global economies of scale while also being responsive to local customer demands. The design combines elements of classic functional, product, and geographic structures while relying on a network arrangement to link the various worldwide subsidiaries.

Question 4

In which type of multinational structure is bureaucratic control considered unimportant?
A) Global product division structure
B) Global area division structure
C) Matrix structure
D) International division structure

Accepted Answer

Bureaucratic control is not very important in a matrix structure.

Question 5

A structure that is a combination of a global product,an area,or a functional arrangement is referred to as a(n)_____ organizational structure.
A) assimilated
B) transnational
C) mixed
D) team-based

Accepted Answer

Some companies find that neither a global product, an area, nor a functional arrangement is satisfactory. Instead they opt for a mixed organization structure, which combines all three into a multinational company (MNC) that supplements its primary structure with a secondary one and, perhaps, a tertiary one.

Question 6

Individuals who work for a company,usually via the Internet,and move on to other employment when their assignment is done are known as _____.
A) purchasing agents
B) marketing managers
C) international outsourcers
D) electronic freelancers

Accepted Answer

Over the last few years, there has been a major increase in the number of "electronic freelancers"-individuals who work on a project for a company, usually via the Internet, and move on to other employment when the assignment is done.

Question 7

Which of the following organizes worldwide operations based primarily on function and secondarily on product?
A) International division structure
B) Global product division structure
C) Global area division structure
D) Global functional division structure

Accepted Answer

A global functional division organizes worldwide operations based primarily on function and secondarily on product.

Question 8

Interdependent relationships are:
A) designed to tap specialized expertise or other resources in a company's worldwide subsidiaries.
B) subsidiaries that are located anywhere in the world where they can benefit the organization.
C) used to share information and resources throughout dispersed and specialized subunits.
D) designed to take advantage of low factor costs.

Accepted Answer

Interdependent relationships are used to share information and resources throughout dispersed and specialized subunits.

Question 9

Which of the following statements is true about global product divisions?
A) A global product division structure prevents line and staff managers within the division from gaining expertise in the technical and marketing aspects of the products assigned to them.
B) A global product division structure provides a direct line of communication from the customer to those in the organization who have product knowledge and expertise.
C) The products in a global product division are in the maturity stage and require very little promotion and marketing.
D) Managers of a global product division depend heavily on corporate headquarters to run the operation.

Accepted Answer

One of the advantages of a global product division is that it provides a direct line of communication from the customer to those in the organization who have product knowledge and expertise, thus enabling research and development (R&D) to work on the development of products that serve the needs of the world customer. It also permits line and staff managers within the division to gain expertise in the technical and marketing aspects of the products assigned to them.

Question 10

Which of the following statements is true about transnational network structures?
A) A major drawback of transnational network structures is that they focus on goods that are proven winners and now are marketed conveniently worldwide.
B) It is easy to draw a transnational network structure in the form of an organization chart because it is simple and constant.
C) They may use more than one strategy to supplement inefficient operations, but they are still fairly centralized in the sense that decisions are balanced between the main headquarters and international subsidiaries.
D) They are convoluted integrations of business functions and communications where decisions are made at the local level, but each grouping informs headquarters and sometimes each other.

Accepted Answer

Transnational networks are convoluted integrations of business functions and communications where decisions are made at the local level, but each grouping informs headquarters and sometimes each other. At the center of the transnational network structure are nodes, which are units charged with coordinating product, functional, and geographic information.

Question 11

The output control in which profit responsibility is shared with product and geographic units is characteristic of a(n)_____.
A) global area division structure
B) international division structure
C) matrix structure
D) transnational network structure

Accepted Answer

The output control in which profit responsibility is shared with product and geographic units is characteristic of a matrix structure.

Question 12

An important feature of the global area division structure approach is that:
A) it is generally used by companies that are growing businesses and have broad product lines.
B) it prevents division managers from catering to the tastes of the local market and making rapid decisions to accommodate environmental changes.
C) it often signals a major change in company strategy because now international operations are put on the same level as domestic operations.
D) it focuses on a product set and discovers where it can survive and subsequently distributes it to that region.

Accepted Answer

An important feature of the global area division structure approach is that it often signals a major change in company strategy because now international operations are put on the same level as domestic operations. The primary disadvantage of the global area division structure is the difficulty encountered in reconciling a product emphasis with a geographic orientation.

Question 13

The decision-making control in which local units are given autonomy is characteristic of a(n)_____.
A) global area division structure
B) international division structure
C) global product division structure
D) transnational network structure

Accepted Answer

The decision-making control in which local units are given autonomy is characteristic of a global area division structure.

Question 14

Specialized operations are:
A) designed to tap specialized expertise or other resources in a company's worldwide subsidiaries.
B) subsidiaries that are located anywhere in the world where they can benefit the organization.
C) designed to take advantage of low factor costs.
D) used to share information and resources throughout dispersed and specialized subunits.

Accepted Answer

Specialized operations are activities carried out by subunits that focus on particular product lines, research areas, and marketing areas, and they are designed to tap specialized expertise or other resources in a company's worldwide subsidiaries.

Question 15

A _____ is designed to help multinational companies (MNCs)take advantage of global economies of scale while also being responsive to local customer demands.
A) global matrix structure
B) transnational network structure
C) worldwide divisional structure
D) cross-cultural matrix structure

Accepted Answer

Besides matrix structures, another alternative international organizational design to recently emerge is the transnational network structure. This is designed to help multinational companies (MNCs) take advantage of global economies of scale while also being responsive to local customer demands.

Question 16

A feature of global area division structures is that they:
A) often ignore research and development (R&D) efforts because they are selling goods that have reached the maturity stage.
B) fail to focus on goods that are proven winners and now are being marketed conveniently worldwide.
C) focus on latest technologically superior goods that will win the market in the long run.
D) are characterized by strong centralized management and control system.

Accepted Answer

One of the drawbacks of global area division structures is that new R&D efforts often are ignored by division groups because they are selling goods that have reached the maturity stage. Their focus is not on the latest technologically superior goods that will win in the market in the long run but on those that are proven winners and now are being marketed conveniently worldwide.

Question 17

Which of the following statements is true about cultural control mechanism in a global area division?
A) Cultural control mechanism is treated like all other multinational company (MNC) structural divisions.
B) Local subsidiary culture is often the most important.
C) Cultural control mechanism is possible for some companies but not always necessary.
D) Culture must support the shared decision making.

Accepted Answer

In terms of cultural control in a global area division, the local subsidiary culture is often the most important.

Question 18

In which of the following multinational company (MNC)structures is tight process bureaucratic control used to maintain product quality and consistency?
A) Transnational network structure
B) Global area division
C) Matrix structure
D) Global product division

Accepted Answer

In a global project division, tight process bureaucratic control is used to maintain product quality and consistency.

Question 19

At the center of a _____ are nodes,which are units charged with coordinating product,functional,and geographic information.
A) cross-cultural matrix structure
B) worldwide divisional structure
C) transnational network structure
D) global product division structure

Accepted Answer

At the center of a transnational network structure are nodes, which are units charged with coordinating product, functional, and geographic information.

Question 20

Which of the following is an advantage of a mixed organization structure?
A) As the matrix design's complexity increases, coordinating the personnel and getting everyone to work toward common goals often become difficult.
B) It allows an organization to create the specific type of design that best meets its needs.
C) Too many groups go their own way.
D) Coordination of manufacturing and marketing often becomes difficult.

Accepted Answer

Many advantages can be gleaned from a mixed organization structure. In particular, it allows an organization to create the specific type of design that best meets its needs.

Quiz 9: Entry Strategies and Organizational Structures

Subsidiaries that are located anywhere in the world where they can benefit the organization are called _____.

Which of the following is a feature of a global functional division?

A multinational structural arrangement that combines elements of function,product,and geographic designs while relying on a network arrangement to link worldwide subsidiaries is referred to as a _____.

In which type of multinational structure is bureaucratic control considered unimportant?

A structure that is a combination of a global product,an area,or a functional arrangement is referred to as a(n) _____ organizational structure.

Individuals who work for a company,usually via the Internet,and move on to other employment when their assignment is done are known as _____.

Which of the following organizes worldwide operations based primarily on function and secondarily on product?

Interdependent relationships are:

Which of the following statements is true about global product divisions?

Which of the following statements is true about transnational network structures?

The output control in which profit responsibility is shared with product and geographic units is characteristic of a(n) _____.

An important feature of the global area division structure approach is that:

The decision-making control in which local units are given autonomy is characteristic of a(n) _____.

Specialized operations are:

A _____ is designed to help multinational companies (MNCs) take advantage of global economies of scale while also being responsive to local customer demands.

A feature of global area division structures is that they:

Which of the following statements is true about cultural control mechanism in a global area division?

In which of the following multinational company (MNC) structures is tight process bureaucratic control used to maintain product quality and consistency?

At the center of a _____ are nodes,which are units charged with coordinating product,functional,and geographic information.

Which of the following is an advantage of a mixed organization structure?