International Business, 12e (Hill)
1) Organizational structure refers to the totality of a firm’s organization.
2) A manager receives a bonus because the national operating subsidiary that she is in charge of
exceeds its performance target. This is an example of an incentive.
3) A decentralized organization allows managers to respond to environmental changes more
quickly than in a centralized organization.
4) The choice between centralization and decentralization is absolute.
5) Beyond the initial functional division of the organization, further horizontal differentiation may
be required if the firm significantly diversifies its product offering, which takes the firm into
different business areas.
6) In a worldwide area structure, each area tends to be a self-contained, largely autonomous entity
with its own set of value creation activities.
7) In a worldwide product divisional structure, each division is a self–contained, largely
autonomous entity with full responsibility for its own value creation activities.
8) The worldwide product division structure may create a lack of local responsiveness.
9) It is difficult to ascertain accountability in the global matrix structure.
10) The need for coordination between units is greatest in firms pursuing a localization strategy.
11) Direct contact between subunit managers is the simplest integrating mechanism.
12) A knowledge network is a network for transmitting information within an organization that is
based on formal organizational structure.
13) The basic principle behind incentive systems is to ensure that the incentive scheme for an
individual employee is linked to an output target that he or she has some control over and can
influence.
14) Performance ambiguity lowers the cost of control.
15) New processes that might lead to a competitive advantage can be developed anywhere within
the organization’s global network of operations.
6
Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
16) Norms are abstract ideas about what a group believes to be good, right, and desirable.
17) An organizational culture can be strong but bad.
18) Firm ABC is pursuing a localization strategy that is focused on local responsiveness.
Therefore, the need for integration and coordination between self-contained country subsidiaries is
low.
19) Firms pursuing a localization strategy tend to operate with an array of formal and informal
integrating mechanisms.
20) A firm’s organizational architecture must be consistent with its strategy.
21) It is important to realize that organizational change will occur regardless of the commitment of
senior managers to it.
22) Refreezing an organization should happen quickly.
23) A firm’s organizational culture refers to the
A) norms and value systems that are shared among the employees of an organization.
B) formal organizational structure of the company.
C) control systems and incentives in place.
D) human resources component.
24) Organizational structure includes several elements. Which of the following is one of them?
A) The establishment of integrating mechanisms to coordinate the activities of subunits.
B) The horizontal decision making that occurs daily, for example, on the plant floor to improve
operations.
C) The manner in which decisions are made and work is performed by individuals.
D) The informal division of the organization into cultural groups.
25) Which of the following terms refers to the metrics used to measure the performance of subunits
and make judgments about how well managers are running those subunits?
A) key processes
B) control systems
C) knowledge networks
D) job evaluations
26) Historically, Unilever measured the performance of national operating subsidiary companies
according to profitability. In this example, profitability is
A) a control system.
B) a process.
C) an integrating mechanism.
D) an incentive.
27) The manner in which decisions are made and work is performed within the organization is
known as the firm’s
A) organizational culture.
B) incentives.
C) control systems.
D) processes.
28) The norms and values systems that are shared among the employees of a company are referred
to as
A) processes.
B) control systems.
C) incentives.
D) organizational culture.