Question 1

Problems in effectively managing the multidivisional structure include
A) distortion of information.
B) competition for resources.
C) transfer pricing.
D) all of these.
E) none of these.

Accepted Answer

The multidivisional structure is known to face a number of challenges, including information distortion, competition for resources, and transfer pricing issues. Information may be distorted as it moves between different divisions, making it difficult for top management to fully analyze and understand performance. Additionally, each division may compete for scarce resources such as capital, which can lead to inefficiencies and conflict within the company. Finally, transfer pricing can be a difficult issue to manage, particularly when divisions are located in different countries, with different tax structures and regulations. Overall, while the multidivisional structure can offer benefits such as increased efficiency and flexibility, it also requires careful management to overcome these and other potential challenges.

Question 2

In its U.S.operations,Japanese-based Sony has decentralized almost all of its tasks to an independent firm that it created and which it owns.Based on this information,which entry mode is Sony using in the United States?
A) Internal new venture
B) Acquisition
C) Joint venture
D) Divestiture
E) Merger

Accepted Answer

Sony has created an independent firm to handle its tasks in the United States, indicating that it is using an internal new venture entry mode.

Question 3

PepsiCo bought many of its bottlers.Which entry mode is PepsiCo using to enter the bottling industry?
A) Joint venture
B) Internal new venture
C) Acquisition
D) Divestiture
E) Merger

Accepted Answer

PepsiCo is using acquisition as its entry mode to enter the bottling industry, as it has bought many of its bottlers.

Question 4

To expand its global sales,U.S.-based Miller Brewing Company purchased a firm that processes grains in Brazil.Miller plans to manage the new business by allowing it to continue as before,with little integration into the rest of the firm.Based on this information,which entry mode is Miller using in Brazil?
A) Acquisition
B) Internal new venture
C) Joint venture
D) Divestiture
E) Merger

Accepted Answer

Miller Brewing Company has purchased a firm that processes grains in Brazil, which is an acquisition entry mode. Additionally, Miller plans to manage the new business by allowing it to continue as before, with little integration into the rest of the firm, further indicating that an acquisition entry mode is being used.

Question 5

Which of the following factors must be considered in choosing the structure and control systems for managing a global business?
A) How to distribute and allocate responsibility and authority between managers at home and abroad
B) The selection of the organizational structure that groups divisions both at home and abroad
C) The selection of the right kinds of integration and control mechanisms
D) The selection of the right kinds of organizational culture
E) All of these

Accepted Answer

All of the mentioned factors must be considered in choosing the structure and control systems for managing a global business. The distribution and allocation of responsibility and authority between managers at home and abroad, the selection of the organizational structure that groups divisions both at home and abroad, the selection of the right kinds of integration and control mechanisms, and the selection of the right kinds of organizational culture are all crucial factors in effectively managing a global business.

Question 6

Which structure is the best for sharing information and learning across countries?
A) Global-area
B) International division
C) Global product group
D) Global matrix
E) Simple

Accepted Answer

The global matrix structure is the best choice for sharing information and learning across countries because it allows for cross-functional teams to work together and share knowledge and expertise. This structure also promotes collaboration and communication across different departments and geographical locations. It is considered the most effective structure for global organizations.

Question 7

The control issue in managing the multidivisional structure is
A) how much authority should be centralized at corporate headquarters.
B) how much authority should be decentralized to the divisions.
C) how much authority should be given to each functional unit.
D) how much authority should be centralized at corporate headquarters and decentralized to the divisions.
E) how much authority should be given to corporate division heads.

Accepted Answer

The control issue in managing the multidivisional structure is how much authority should be centralized at corporate headquarters and how much should be decentralized to the divisions. This balance is essential for ensuring effective control and coordination across the organization. While too much centralization can lead to slow decision-making and inflexible operations, too much decentralization can result in a lack of consistency and coherence across the different divisions. Therefore, finding the right balance between centralization and decentralization is critical for the success of a multidivisional structure.

Question 8

The U.S.firm Hewlett-Packard (HP)built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D)and marketing are centralized in the United States.Based on this information,which entry mode is HP using in its various locations?
A) Acquisition
B) Internal new venture
C) Joint venture
D) Divestiture
E) Merger

Accepted Answer

HP is utilizing the internal new venture mode of entry by establishing manufacturing facilities in multiple countries while maintaining centralized control of R&D and marketing in the United States.

Question 9

America Online blended its operations with those of Time Warner to create AOL Time Warner.America Online is using which entry mode to enter the broadcast industry?
A) Acquisition
B) Internal new venture
C) Merger
D) Divestiture
E) Joint venture

Accepted Answer

AOL used a merger entry mode to combine its operations with Time Warner.

Question 10

Reasons why a firm might benefit from the creation of a separate new-venture division include all of the following except
A) better protection of the division's autonomy.
B) less scrutiny from top managers.
C) removal from day-to-day pressures of the firm.
D) ease in developing a culture that fosters innovation.
E) development of a science-based business model.

Accepted Answer

A separate new-venture division is typically created to foster innovation, protect autonomy, and reduce day-to-day pressures, but developing a science-based business model is not a primary reason for its creation.

Question 11

A global strategy
A) involves an appropriate mix of centralization and decentralization.
B) centralizes all functions at the optimal global locations.
C) centralizes only the research and development (R&D) and marketing functions.
D) is the most complex strategy.
E) maximizes local responsiveness.

Accepted Answer

The answer of A global strategy
A) involves an appropriate mix...

Question 12

All of the following strategies can be employed by companies as they begin to market their products and establish production facilities overseas except:
A) Localization
B) International
C) Global
D) Transnational
E) Divestiture

Accepted Answer

Divestiture means to sell off or get rid of assets or subsidiaries. It does not relate to marketing or establishing production facilities overseas, so it cannot be considered a strategy for companies in this context. The other options - Localization, International, Global, and Transnational - are all valid strategies for companies to expand their global presence.

Question 13

When a firm's managers are very concerned about the possibility of losing control of proprietary know-how,which entry mode should the firm avoid?
A) Acquisition
B) Internal new venture
C) Joint venture
D) Divestiture
E) Merger

Accepted Answer

Joint ventures involve sharing ownership and control with another company, which can increase the risk of losing proprietary know-how to the partner. Therefore, a firm's managers who are very concerned about the possibility of losing control of proprietary know-how should avoid joint ventures as an entry mode.

Question 14

A localization strategy
A) involves an appropriate mix of centralization and decentralization.
B) centralizes all functions.
C) centralizes only the research and development (R&D) and marketing functions.
D) is the most complex strategy.
E) is oriented toward local responsiveness.

Accepted Answer

A localization strategy focuses on adapting products and services to meet the specific needs and preferences of local markets, emphasizing local responsiveness.

Question 15

In its African operations,Sony Corporation performs most functions at its Japanese headquarters but markets through cooperative relationships with local distributors.In the United States,Sony has decentralized almost all of its tasks to an independent firm that it owns.Based on this information,which strategy is Sony pursuing?
A) Localization
B) Transnational
C) International
D) Global standardization
E) Stuck in the middle

Accepted Answer

Sony is pursuing a transnational strategy by performing most functions at its Japanese headquarters and delegating tasks to independent firms in different regions of the world, depending on the specific needs of each market. This approach allows Sony to take advantage of global efficiencies while adapting to local market conditions.

Question 16

The easiest and cheapest type of diversification strategy for a company to manage is
A) related diversification.
B) unrelated diversification.
C) vertical integration.
D) horizontal diversification.
E) none of these.

Accepted Answer

The answer of The easiest and cheapest type of diversification...

Question 17

For its South American operations,Caterpillar performs most functions at its U.S.headquarters but markets through cooperative relationships with local distributors.Based on this information,which entry mode is Caterpillar using in South America?
A) Internal new venture
B) Joint venture
C) Merger
D) Acquisition
E) Intrapreneurship

Accepted Answer

Caterpillar is using a joint venture entry mode in South America, as it has cooperative relationships with local distributors for marketing but performs most functions at its U.S. headquarters.

Question 18

The U.S.firm Intel,a maker of semiconductor chips,built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D)and marketing are centralized in the United States.Based on this information,which strategy is Intel pursuing?
A) Localization
B) Transnational
C) International
D) Global standardization
E) Stuck in the middle

Accepted Answer

Intel is pursuing an international strategy, where production is spread across multiple countries, but R&D and marketing are centralized in the home country.

Question 19

Which of the following strategies is most likely to facilitate the transmission of a company's norms and values and,hence,the development of a global corporate culture?
A) Focus
B) Localization
C) International
D) Global standardization
E) Transnational

Accepted Answer

The answer of Which of the following strategies is most...

Question 20

An international strategy
A) centralizes only the research and development (R&D) and marketing functions.
B) centralizes all functions.
C) involves an appropriate mix of centralization and decentralization.
D) is the most complex strategy.
E) maximizes local responsiveness.

Accepted Answer

The answer of An international strategy
A) centralizes only the research...

Quiz 13: Implementing Strategy in Companies That Compete Across Industries and Countries

Problems in effectively managing the multidivisional structure include

In its U.S.operations,Japanese-based Sony has decentralized almost all of its tasks to an independent firm that it created and which it owns.Based on this information,which entry mode is Sony using in the United States?

PepsiCo bought many of its bottlers.Which entry mode is PepsiCo using to enter the bottling industry?

Which of the following factors must be considered in choosing the structure and control systems for managing a global business?

Which structure is the best for sharing information and learning across countries?

The control issue in managing the multidivisional structure is

The U.S.firm Hewlett-Packard (HP) built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D) and marketing are centralized in the United States.Based on this information,which entry mode is HP using in its various locations?

America Online blended its operations with those of Time Warner to create AOL Time Warner.America Online is using which entry mode to enter the broadcast industry?

Reasons why a firm might benefit from the creation of a separate new-venture division include all of the following except

A global strategy

All of the following strategies can be employed by companies as they begin to market their products and establish production facilities overseas except:

When a firm's managers are very concerned about the possibility of losing control of proprietary know-how,which entry mode should the firm avoid?

A localization strategy

The easiest and cheapest type of diversification strategy for a company to manage is

For its South American operations,Caterpillar performs most functions at its U.S.headquarters but markets through cooperative relationships with local distributors.Based on this information,which entry mode is Caterpillar using in South America?

The U.S.firm Intel,a maker of semiconductor chips,built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D) and marketing are centralized in the United States.Based on this information,which strategy is Intel pursuing?

Which of the following strategies is most likely to facilitate the transmission of a company's norms and values and,hence,the development of a global corporate culture?

An international strategy