61.
In which of the following organizational structures are the domestic
operations and foreign operations isolated from each other leading to
coordination problems?
A.
Global matrix structure
B.
International division structure
C.
Worldwide product division structure
D.
Worldwide area structure
Another problem with international division structure is the implied lack of
coordination between domestic operations and foreign operations, which
are isolated from each other in separate parts of the structural hierarchy.
This can inhibit the worldwide introduction of new products, the transfer of
core competencies between domestic and foreign operations, and the
consolidation of global production at key locations so as to realize location
and experience curve economies.
62.
Which of the following is NOT true regarding a worldwide area structure?
A.
It tends to be favored by firms with a low degree of diversification.
B.
It facilitates local responsiveness.
C.
It tends to be favored by firms with a domestic structure based on
functions.
D.
Decision-making responsibilities are centralized.
A worldwide area structure facilitates local responsiveness. Because
decision-making responsibilities are decentralized, each area can customize
product offerings, marketing strategy, and business strategy to the local
conditions. However, this structure encourages fragmentation of the
organization into highly autonomous entities.
63.
A _____ structure encourages fragmentation of the organization into highly
autonomous entities.
A.
worldwide area
B.
global matrix
C.
worldwide product
D.
global network
A worldwide area structure tends to be favored by firms with a low degree
of diversification and a domestic structure based on functions. This
structure encourages fragmentation of the organization into highly
autonomous entities.
64.
A(n) _____ tends to be adopted by firms that are reasonably diversified.
A.
worldwide area structure
B.
international division structure
C.
worldwide product division structure
D.
global matrix structure
A worldwide product division structure tends to be adopted by firms that are
reasonably diversified and, accordingly, originally had domestic structures
based on product divisions in which each division is a self contained, largely
autonomous entity with full responsibility for its own value creation
activities. The headquarters retains responsibility for the overall strategic
development and financial control of the firm.
65.
The worldwide product division structure:
A.
is weak in local responsiveness.
B.
inhibits the realization of location economies.
C.
inhibits the realization of experience curve economies.
D.
limits the transfer of core competencies between areas.
The main problem with the worldwide product division structure is the
limited voice it gives to area or country managers, since they are seen as
subservient to product division managers. The result can be a lack of local
responsiveness, which can lead to performance problems.
66.
In the classic global matrix structure, horizontal differentiation proceeds
along two dimensions. These dimensions are:
A.
hierarchy and overall strategy.
B.
target returns and sales potential.
C.
marketing strategy and sales potential.
D.
product division and geographic area.
In the classic global matrix structure, horizontal differentiation proceeds
along two dimensions: product division and geographic area. The
philosophy is that responsibility for operating decisions pertaining to a
particular product should be shared by the product division and the various
areas of the firm.
67.
In practice, the dual-hierarchy in a global matrix structure:
A.
lessens all forms of conflict.
B.
makes it easy to ascertain accountability.
C.
results in extremely quick decision making.
D.
can lead to perpetual power struggles.
The dual hierarchy structure can lead to conflict and perpetual power
struggles between the areas and the product divisions, catching many
managers in the middle. To make matters worse, it can prove difficult to
ascertain accountability in this structure.
68.
The need for coordination between subunits is lowest in firms pursuing
a(n):
A.
localization strategy.
B.
international strategy.
C.
global strategy.
D.
transnational strategy.
Firms pursuing a localization strategy are primarily concerned with local
responsiveness. Such firms are likely to operate with a worldwide area
structure in which each area has considerable autonomy and its own set of
value creation functions. Because each area is established as a stand-alone
entity, the need for coordination between areas is minimized.
69.
The need for coordination between subunits is highest in firms pursuing
a(n):
A.
localization strategy.
B.
international strategy.
C.
global strategy.
D.
transnational strategy.
The need for coordination is greatest in transnational firms, which
simultaneously pursue location and experience curve economies, local
responsiveness, and the multidirectional transfer of core competencies and
skills among all of the firm’s subunits.
70.
_____ refers to giving a person in each subunit responsibility for
coordinating with another subunit on a regular basis.
A.
Global learning
B.
Liaison roles
C.
Knowledge network
D.
Matrix Structures
Liaison roles are a bit complex. When the volume of contacts between
subunits increases, coordination can be improved by giving a person in each
subunit responsibility for coordinating with another subunit on a regular
basis. Through these roles, the people involved establish a permanent
relationship.
71.
A(n) _____ is valuable because it can be used as a nonbureaucratic conduit
for information flows within a multinational enterprise.
A.
liaison network
B.
matrix structure
C.
organizational structure
D.
knowledge network
A knowledge network is a network for transmitting information within an
organization that is based not on formal organization structure, but on
informal contacts between managers within an enterprise and on
distributed information systems.
72.
Which control system is most widely used by small firms?
A.
Personal
B.
Output
C.
Bureaucratic
D.
Cultural
Personal control is control by personal contact with subordinates. This type
of control tends to be most widely used in small firms, where it is seen in
the direct supervision of subordinates’ actions.
73.
Control through a system of rules and procedures that directs the actions of
subunits is:
A.
personal control.
B.
bureaucratic control.
C.
output control.
D.
cultural control.
Bureaucratic control is control through a system of rules and procedures
that directs the actions of subunits. The most important bureaucratic
controls in subunits within multinational firms are budgets and capital
spending rules.
74.
_____ control is achieved by comparing actual performance against targets
and intervening selectively to take corrective action.
A.
Personal
B.
Output
C.
Bureaucratic
D.
Cultural
Output controls involve setting goals for subunits to achieve and expressing
those goals in terms of relatively objective performance metrics such as
profitability, productivity, growth, market share, and quality. Control is
achieved by comparing actual performance against targets and intervening
selectively to take corrective action.
75.
There is low interdependence, performance ambiguity, and costs of control
in firms pursuing a(n):
A.
localization strategy.
B.
international strategy.
C.
transnational strategy.
D.
global strategy.
In firms pursuing a localization strategy, each national operation is a stand-
alone entity and can be judged on its own merits. The level of performance
ambiguity is low.
76.
Which of the following is NOT true of a strong corporate culture?
A.
Almost all managers share a relatively consistent set of values and
norms that have a clear impact on the way work is performed.
B.
A strong culture leads to high performance.
C.
Outsiders see firms with a strong culture as having a certain way of doing
things.
D.
A strong culture can be a bad culture.
Strong does not necessarily mean good. A culture can be strong but bad.
The culture of the Nazi Party in Germany was certainly strong, but it was
most definitely not good. Nor does it follow that a strong culture leads to
high performance.
77.
Firms pursuing a(n) _____ attempt to create value by transferring core
competencies from home to foreign subsidiaries.
A.
localization strategy
B.
international strategy
C.
transnational strategy
D.
global strategy
Firms pursuing an international strategy attempt to create value by
transferring core competencies from home to foreign subsidiaries. If they
are diverse, as most of them are, these firms operate with a worldwide
product division structure.
78.
Firms pursuing a global standardization strategy:
A.
have low performance ambiguity.
B.
attempt to create value by transferring core competencies from home to
foreign subsidiaries.
C.
are less centralized than enterprises pursuing a localization or
international strategy.
D.
have a high need for coordination and cultural controls.
Firms pursuing a global standardization strategy focus on the realization of
location and experience curve economies. In addition to output and
bureaucratic controls, firms pursuing a global standardization strategy tend
to stress the need to build a strong organizational culture that can facilitate
coordination and cooperation.
79.
A firm that operates with matrix-type structures in which both product
divisions and geographic areas have significant influence would use which
of the following strategies?
A.
International strategy
B.
Transnational strategy
C.
Global strategy
D.
Localization strategy
Firms pursuing a transnational strategy focus on the simultaneous
attainment of location and experience curve economies, local
responsiveness, and global learning. These firms may operate with matrix-
type structures in which both product divisions and geographic areas have
significant influence.
80.
Firms pursuing a transnational strategy:
A.
have a low need for coordination.
B.
require very few integrating mechanisms.
C.
have a very high need for cultural controls.
D.
operate with a worldwide product division structure.
The need for coordination is high in transnational firms. This is reflected in
the use of an array of formal and informal integrating mechanisms,
including formal matrix structures and informal management networks. In
addition to output and bureaucratic controls, firms pursuing a transnational
strategy need to cultivate a strong culture.
Essay Questions