Quick Study Questions
Quick Study 1
1. Q: A written statement of why a company exists and what it plans to accomplish is called a
what?
A. Most companies have a general purpose for why they exist that they express in a mission
statement—a written statement of why a company exists and what it plans to accomplish.
2. Q: A special ability of a company that competitors find extremely difficult or impossible to
equal is called a what?
A: A core competency is a special company ability that competitors find extremely difficult or
impossible to equal. It is not a skill. Individuals possess skills such as the ability to hit 70 home
runs in professional baseball. A core competency refers to multiple skills that are coordinated
3. Q: Value-chain analysis involves separating a company’s activities into what two categories of
activities?
A: Value-chain analysis is the process of dividing a company’s activities into primary and
support activities and identifying those that create value for customers. Primary activities
include inbound and outbound logistics, manufacturing (or operations), marketing and sales,
Quick Study 2
1. Q: What strategy involves adapting products and their marketing strategies to national markets
to suit local preferences?
A: A multinational (multidomestic) strategy is a strategy of adapting products and their
marketing strategies in each national market to suit local preferences. The main benefit of a
multinational strategy is that it allows companies to closely monitor buyer preferences in each
2. Q: What is the benefit of using a global strategy?
A: A global strategy is a strategy of offering the same products using the same marketing
strategy in all national markets. The main benefit of a global strategy is its cost savings due to
another.
3. Q: Deciding on a general competitive strategy in the marketplace is the key to developing
what?
A: The key to developing an effective business-level strategy is deciding on a general
competitive strategy in the marketplace.
Quick Study 3
1. Q: How a company divides its activities among separate units and coordinates activities among
units is called what?
A: Organizational structure is the way in which a company divides its activities among separate
appropriate for its strategic plans, it will be more effective in working toward its goals.
2. Q: What type of decision making helps coordinate the operations of international subsidiaries?
A: A vital issue for top managers is determining the degree to which decision making in the
organization will be centralized or decentralized. Centralized decision making is the degree to
3. Q: What is the benefit of decentralized decision making in an organization?
A: Decentralized decision making is beneficial when fast changing national business
environments put a premium on local responsiveness.
Quick Study 4
1. Q: What type of organizational structure tends to concentrate all international expertise in one
division?
A: An international division structure separates domestic from international business activities
2. Q: An organizational structure that divides worldwide operations according to a firm’s product
areas is called what?
A: A global product structure divides worldwide operations according to a company’s product
services.
3. Q: What do we call a group of employees who work at similar levels in different departments?
A: A cross-functional team is one that is composed of employees who work at similar levels in
improve product quality, and help companies in reorganizing themselves around processes.
Ethical Challenge
You are the CEO of a multinational corporation that operates in more than 100 nations worldwide.
Recent changes in the global economy are redrawing many geographical and political borders. The
growing interdependence of socially, politically, economically, and legally diverse countries is causing
firms to revise operating policies and strategies. You are personally involved in developing a code of
ethics for your firm that reflects today’s legal and moral atmosphere. You want your firm’s code to be
effective across all markets in which it operates.
11-5 Given the complexity of the issues involved, what sort of policy do you think is appropriate for
a firm involved in dissimilar nations?
A: Student responses to this question will vary. However, it should be noted that building a
code of ethics for a multinational firm is a complicated task. In many foreign countries,
business practices that would not be appropriate domestically and perhaps illegal are often a
11-6 Do you think that it is possible to create a uniform code of ethics that is applicable to any
business operating in any culture? What issues should such a code address?
A: Many CEOs wrestle with the idea of adapting their firm’s code of ethics to local laws and
customs around the world. Clearly, such global codes of conduct do exist. However, students
Teaming Up
Two groups of four students each will debate the merits of adopting either a multinational or global
strategy (each side will advocate one strategy). After the first student from each side has spoken, the
second student will question the opposing side’s arguments, looking for holes and inconsistencies. The
third student will attempt to answer these arguments. The fourth student will present a summary of
each side’s arguments. Finally, the class will vote to determine which team has offered the more
compelling argument.
A: Students should be sure to support their arguments with features of each of the two types of
strategies discussed in this chapter. They should also be prepared to defend their positions, after the
Practicing International Management Case
IKEA’s Global Strategy
11-9 Q: When company founder Kamprad decided to expand into China his decision was not based
on market research but, rather, on his own intuition. How well is IKEA doing in China? Did
Kamprad’s decision pay off?
A: So far IKEA’s stores in Beijing and Shanghai are performing well. IKEA changed some
elements of its global strategy in culturally diverse China. In China, the company balances the
11-10 Q: Relying on topics covered in this chapter, would you classify IKEA’s approach as one of
standardization or adaptation in markets around the world? Explain.
A: IKEA has standardized its brand image and main marketing concept worldwide. It has only adapted
its facilities in terms of size to suit the U.S. market. The approach certainly seems to be working well
for IKEA. However, IKEA also has had at times adapted its marketing strategy when doing business in
IKEA also adjusted its store location strategy. In Europe and the US, where most customers use
personal vehicles, IKEA stores are usually located in the suburbs. In China, however, most customers