1
Chapter 7
Implementing the Strategy:
Building Multidimensional Capabilities
True/False
1. To respond to the heightened complexity and diversity associated with managing global
operations in the 21st century, MNEs can be expected to increasingly adopt organizational
forms characterized by hierarchical structures which emphasize either-or choices in place of
forms that emphasize flexible coordinative processes and integrated networks of assets and
resources.
2. In general, the global business manager, the geographic (country) subsidiary manager and
the worldwide functional manager respectively cope with challenges of developing global
efficiency and competitiveness, national responsiveness and flexibility, and worldwide
innovation and learning capabilities. Nevertheless, it does not mean that they undertake their
tasks unilaterally.
3. The global business manager alone is responsible for formulating the strategic priorities of
the MNE.
4. The global business manager does not need to be located in the MNE’s home country.
5. While the global business manager must routinely incorporate the perspectives of the
geographic (country) managers when formulating the MNE’s global business strategy, there
is no need to incorporate the perspectives of the worldwide functional managers because
these perspectives are incorporated into the formulation of the broader corporate strategy.
6. When products of high strategic importance are transferred internally between an MNE’s
business units, global business managers will prefer to facilitate these transfers via internal
quasi-markets, rather than exerting direct control over quantities shipped and prices charged.
7. When commodity-like products are transferred internally between an MNE’s business units,
global business managers will principally develop internal quasi-markets to coordinate
cross-border flows of materials, components and finished products.
8. Worldwide functional managers are principally responsible for diffusing products and
services worldwide between the MNE’s geographic units.
9. Innovations can be stimulated by all of the following – revolutionary technological
breakthroughs, emerging consumer trends, new competitive challenges and pending
government regulations.
10. In the transnational, worldwide functional managers are often linked most effectively
through informal networks that are nurtured and maintained through frequent meetings,
visits and transfers.
11. The role of the geographic (country) subsidiary manager has become more difficult in an
era of global business units and global customers due to the fact that the manager is
accountable for results, but exercises limited authority over the employees and assets
situated within the country.
12. As an information broker, the geographic (country) manager must understand the national
culture well, and thereby decide how to modify the MNE’s goals, strategies and values so
that that they become appropriate for the local context.
13. Two key tasks associated with the geographic (country) manager’s role as a national
defender and advocate are both the responsibility for advocating the subsidiary’s role in the
MNE’s worldwide organization and the responsibility for championing transnational
innovations.
14. In the transnational organization of today, top management must control global business
management, worldwide functional management and geographic (country) subsidiary
management, so that three groups would not attempt to provide divergent influence on the
corporate strategies.
15. The major challenge facing all MNEs is to allocate their major strategic tasks and
organizational roles among key management groups.
16. It is not important to assign a qualified person to the global business management role.
17. The biggest challenge facing transnational organizations is to create a generation of managers
that have the requisite skills and the perspective needed to operate in a multibusiness,
multifunctional, multinational system.
6
Multiple Choice
18. All of the following forces are contributing to the complexity and diversity encountered by
MNEs in the 21st century, except:
a. the acceleration of product and technology life cycles.
b. the globalization of markets.
c. the assertion of national government demands.
d. the devaluation of some national currencies.
19. To succeed in the modern international operating environment, managers must be able to do
all of the following, except:
a. build and manage complicated yet subtle new organizations that deliver coordinated
worldwide action.
b. sense and interpret complex and dynamic environmental changes.
c. develop and integrate multiple strategic capabilities.
d. respond aggressively to below-budget financial results.
20. In light of the dramatic changes in the organizational form of MNEs, which of the following
do not receive enough attention from those who manage modern MNEs
a. a review of the new roles and responsibilities of the firm’s managers.
b. the analysis of new international environmental forces.
c. the refinement of global strategy.
d. the study of characteristics that contribute to effective transnational organizations.
21. Which of the following is not considered a key management category in the modern
transnational company
a. the top-level corporate executives / managers.
b. the country subsidiary manager.
c. the integrated services manager.
d. the global business manager.
22. In overseeing the worldwide distribution of key assets and resources, the global business
manager is responsible for all of the following, except
a. linking the assets and resources in a configuration that resembles the integrated network
form.
b. seeking the input of geographic and functional managers.
c. complying with the wishes of local municipal governments responsible for governing the
regions within which the assets and resources are situated.
d. leveraging existing resources and capabilities.
8
23. In executing responsibilities for cross-border coordination, the global business manager will
not typically
a. decide on sourcing patterns.
b. manage cross-border transfer processes.
c. enforce fair market value transaction pricing between all global business units.
d. employ coordination mechanisms ranging from direct control over pricing and quantities
shipped to the establishment of rules that create an internal market.
24. Worldwide functional managers would not occupy the following executive role in the MNE
a. Vice-President, Research and Development.
b. President, Marketing.
c. Chief Financial Officer.
d. Vice-President, South America.
25. In their role as worldwide intelligence scanners, worldwide functional managers lead efforts
to diffuse innovations throughout the MNE by engaging in all of the following activities,
except
a. sensing strategically important changes or information in the environments of foreign
subsidiaries.
b. acting as repositories for specialist information.
c. leading disruptive innovations.
d. facilitating the communication and transmission of strategically important information to
specialists in the business groups or geographic groups.
26. To overcome the not-invented-here (NIH) syndrome that often prevails in international firms,
which of the following techniques are not employed by the worldwide functional manager
when facilitating the transfer of new ideas and innovations throughout the MNE
a. identifying best practices through informal contacts and formal evaluations.
b. replacing geographic (country) managers that resist the adoption of best practices.
c. arranging cross-unit visits and transfers.
d. hosting conferences and forming task forces.
27. Which of the following expressions is used to describe one class of transnational innovation
developed by worldwide functional managers
a. internally initiated innovations.
b. nationally integrated innovations.
c. globally linked innovations.
d. internationally targeted innovations.
10
28. Which of the following do not constitute part of the strategic tension facing the geographic
(country) manager
a. initiating the worldwide diffusion of best practices and innovations developed within the host
country.
b. presenting the “face” of the entire organization at the country level.
c. responding to the needs and demands of the host country government.
d. leveraging the MNE’s local resources and capabilities to strengthen the firm’s worldwide
competitive position.
29. In the geographic (country) manager’s role as an information broker, the individual must
engage in all of the following activities, except
a. formulate and implement cross-border transfer policies to be used when coordinating the
flow of materials, components and finished products from the host country to related
business units situated in other host countries.
b. interpret the environmental and cultural differences of the host country, using this
information to predict feasible outcomes to the headquarters.
c. translate corporate goals, strategies and values into meaningful objectives for employees
situated in the host country.
d. communicate the corporation’s goals, strategies and values to the employees situated in the
foreign country.
30. The challenges facing a geographic (country) manager’s who must convert corporate
strategy into actionable plans for the subsidiary do not include
a. the multiplicity and diversity of constituents whose demands and pressures compete for the
geographic (country) manager’s attention.
b. failure of the country manager to identify and communicate worldwide best practices.
c. the expectations of headquarters that the country manager will translate broad corporate
goals and strategies into specific actions which are responsive to the needs of the subsidiary’s
national environment.
d. the need to garner commitment and enthusiasm for the among constituents of the subsidiary
with respect to the corporate strategy and the associated actionable plans.
31. The characteristics that distinguish an effective and energizing global strategic vision do not
include
a. shared by all in the transnational organization.
b. simple, relevant and continuously reinforced.
c. tailored to meet the unique needs of each individual group in the MNE.
d. provides direction and purpose.
32. The top-level management team should balance all of the following processes in order to
fully exploit the MNE’s assets and resources and greatly leverage its performance, except
a. formalizing goods flow.
b. decentralizing decision making.
c. centralizing scarce resources.
d. socializing information and knowledge.
33. Top-level management teams strive to pursue continual renewal within the transnational by
engaging in all of the following activities, except
a. defining the corporate mission and values
b. devoting considerable time and effort to reviewing below-budget financial results.
c. constantly orienting the organization to its customers.
d. forcing adaptation and learning.
34. An effective approach by a transnational manager to the first sign of difficulty at a subsidiary
is to
a. Delegate clear responsibilities
b. Back responsibilities with rewards that align them with corporate goals
c. Send in the headquarter experts
d. Support the relevant management group
13
35. Worldwide functional managers are frequently promoted into their positions after having
demonstrated functional knowledge that is highly specialized, such as technological
capability, marketing expertise or manufacturing know-how, to name a few. This promotion
requires that functional managers evolve from secondary staff roles to take active roles in
transnational management. While the tasks facing worldwide functional managers will vary
widely by specific function, the core roles and responsibilities that all worldwide functional
managers should be expected to fulfill are more predictable. Discuss the three core roles
and responsibilities, explaining why they are integral to the success of the modern
transnational organization. Provide examples to illustrate these roles and responsibilities.
14
• Two important types of transnational innovation include: (i) locally leveraged
innovations; and, (ii) globally linked innovations;
• Locally leveraged innovations are innovations developed in a local subsidiary that have
been identified by worldwide functional managers as having applications elsewhere in
the worldwide operations of the transnational organization;
• Locally leveraged innovations are frequently identified in the context of the functional
manager’s worldwide intelligence scanning efforts;
• Globally linked innovations are more challenging as they often arise from the efforts of
functional managers efforts to exploit the company’s access to worldwide information
and expertise by linking and leveraging intelligence sources with internal centers of
excellence, wherever they may be located;
Difficulty: Moderate
Page: Synthesis of pages 412-416
Topic: Worldwide Functional Management
36. While the role of the geographic (country) subsidiary manager has traditionally
concentrated on responsibilities such as identifying sales and profit opportunities, accessing
local factors of production and leveraging parent company assets and resources, the modern
geographic subsidiary manager’s role has evolved to include an expanded set of
responsibilities. Discuss the tasks executed by the country manager and propose an
associated set of skills that you think would be required by a country manager. Be sure to
link these skills to the list of tasks.
15
37. The role of geographic (country) manager is often considered the acid test of general
management potential and a necessary qualification on the resume of any candidate for a top
management position. Discuss the critical role of the geographic (country) manager as a
bicultural interpreter and detail some of the reasons for failure in both upward
communication and downward communication between the subsidiary and headquarters.
38. You are employed at the headquarters of a large MNE. While visiting one of the firm’s
foreign operations, you overhear the following comment, “Top-level corporate management
has become an increasingly burdensome cost centre in the modern transnational. Our
company employs well-trained and highly skilled individuals as global business managers,
16
worldwide functional managers and geographic (country) managers. To enhance
performance, our firm should thin the ranks at the corporate executive level and allow the
business, functional and geographic managers more liberty to coordinate their own
activities.” Upon returning to headquarters, you are advised that you are being promoted to
a country manager position within the MNE. However, you have been asked to prepare a
report on your observations from your recent trip before you leave to start your new role.
Use this report as an opportunity to discuss your position in support of, or against, this
perspective regarding top-level management.