Question 1

Aetna is an example of a global firm with ____________________.
A) money
B) good relations with the rest of the world
C) global product structure
D) high stock prices

Accepted Answer

Aetna has a global product structure, meaning they have a presence in multiple markets around the world and offer similar products and services in those markets.

Question 2

Among organizational characteristics, the level of global integration is likely to be high if the firm
A) attempts to use transfer pricing, tax minimization, or transaction cost savings.
B) targets local market expansion.
C) building presence in highly uncertain markets.
D) aims to seize market opportunities.

Accepted Answer

High level of global integration is typically associated with the use of various mechanisms like transfer pricing, tax minimization, or transaction cost savings which help firms leverage their resources across borders and operate efficiently in different markets. These mechanisms enable firms to coordinate and integrate their operations on a global scale. Therefore, option A is the best choice. Options B, C, and D may not necessarily result in a high level of global integration. Targeting local market expansion, building presence in highly uncertain markets, or aiming to seize market opportunities can be part of a firm's global strategy, but these actions alone do not necessarily require a high level of global integration.

Question 3

Among organizational characteristics, local responsiveness is likely to be high if the firm
A) targets local market expansion or building presence in highly uncertain markets.
B) aims to seize market opportunities overseas or develop a sustained competitive position in the host country.
C) seeks acquisition of local firms' knowledge and experience, or tries to improve organizational legitimacy through localization and adaptation.
D) all of the above

Accepted Answer

All of the above options contribute to higher local responsiveness in an organization. Targeting local market expansion or building presence in highly uncertain markets requires a strong understanding of the local market dynamics and adapting to the local culture and customer preferences. Seizing market opportunities overseas or developing a sustained competitive position in the host country also requires a high level of local responsiveness to adapt to local competitors, pricing strategies, and cultural differences. Acquiring local firms' knowledge and experience or improving organizational legitimacy through localization and adaptation requires a deep understanding of local business practices, regulations, and cultural nuances.

Question 4

A __________ strategy is one in which strategic and operational decisions are delegated to strategic business units in each country.
A) multidomestic
B) global
C) transnational
D) hybrid

Accepted Answer

A multidomestic strategy is one in which strategic and operational decisions are decentralized to strategic business units in each country, giving them autonomy to tailor products and services to local markets. This strategy allows for greater responsiveness to local customer needs and preferences, but can result in higher costs due to duplication of efforts across different countries.

Question 5

Which of the following strategies leverages economies of scale and can quickly disseminate innovations across borders; however, it lacks in responsiveness to local markets?
A) multidomestic
B) global
C) transnational
D) hybrid

Accepted Answer

The global strategy leverages economies of scale, which means companies can produce goods or services in large quantities and distribute them at a lower cost. This strategy enables companies to quickly disseminate innovations across borders. However, it lacks responsiveness to local markets, as the same products or services are offered in all countries without considering local preferences or cultural differences.

Question 6

The major disadvantages of the geographic structure are
A) operating problems in a context of diverse product lines and marketing characteristics.
B) product emphasis is weak, which interferes with information flow between manufacturing and marketing.
C) it is also difficult to transfer technology and ideas across regions.
D) all of the above

Accepted Answer

The statement mentions all three options as major disadvantages of the geographic structure, therefore the correct answer is D.

Question 7

In the _______________, product divisions report directly to headquarters.
A) related divisional format
B) cluster format
C) unrelated holding company format
D) none of the above

Accepted Answer

In the related divisional format, product divisions report directly to headquarters. In the cluster format, divisions are grouped by geography or customer base and report to a regional or customer-focused manager. In the unrelated holding company format, divisions operate as independent companies and do not report directly to headquarters. Therefore, the best choice is A.

Question 8

In the ______________. a business reports to a cluster headquarters that is accountable to corporate headquarters for business results.
A) related divisional format
B) cluster format
C) unrelated holding company format
D) none of the above

Accepted Answer

In the cluster format, a business reports to a cluster headquarters that is accountable to corporate headquarters for business results. This format allows for the sharing of resources and expertise within clusters, leading to greater efficiency and cost savings for the overall organization.

Question 9

In the ____________________ or conglomerate format, businesses are managed as investment rather than profit centers with wide reporting variations.
A) related divisional format
B) cluster format
C) unrelated holding company format
D) none of the above

Accepted Answer

The unrelated holding company format, also known as the conglomerate format, involves businesses being managed as investments rather than profit centers, and typically have wide reporting variations. This format is characterized by a collection of unrelated businesses that are jointly owned and managed by a holding company. The businesses within the conglomerate may operate in completely different industries and have little to no correlation with each other.

Question 10

Among sociopolitical characteristics, which of the following tend to boost local responsiveness?
A) The host environment is volatile and complex.
B) Government regulations are opaque, cumbersome, or arbitrarily changed.
C) There is a strong and unique local business culture.
D) all of the above

Accepted Answer

All of the above sociopolitical characteristics tend to boost local responsiveness. A volatile and complex host environment often requires companies to be flexible and adaptable to quickly respond to changes. Opaque, cumbersome, or arbitrarily changed government regulations can make it difficult for companies to implement standardized strategies, thus requiring more tailor-made solutions. A strong and unique local business culture may require companies to adjust their products, services, or marketing efforts to resonate with the local consumers.

Question 11

Which of the following features is exempt from market and industrial characteristics which tend to trigger global integration?
A) Customer needs tend to be the same or similar across borders or require relatively low responsiveness.
B) Major competitors are few but global.
C) Economy of scale is essential to global success.
D) none of the above

Accepted Answer

All the listed features (A, B, C) are characteristics that tend to trigger global integration, not exempt from it.

Question 12

The one exception to prioritization is ______________________.
A) international division structure
B) matrix design structure
C) national subsidiary structure
D) global functional design

Accepted Answer

The one exception to prioritization is the matrix design structure, as this structure involves employees working on multiple projects simultaneously and requires equal prioritization of all projects.

Question 13

Which company gave its responsibility of new store development to its foreign subsidiaries?
A) Wal-Mart
B) Aetna
C) Caterpillar
D) none of the above

Accepted Answer

Wal-Mart gave its responsibility of new store development to its foreign subsidiaries, allowing them to adapt to local market conditions and regulations.

Question 14

The European Union creates powerful forces towards ______________, which makes divisional structure more feasible and facilitates coordination and control among country units?
A) standardization
B) differentiation
C) homogenization
D) both A and C

Accepted Answer

The European Union aims to standardize and homogenize policies and regulations among member countries, which creates a more uniform environment that makes divisional structure more feasible. Additionally, this standardization makes coordination and control among country units easier.

Question 15

Interestingly, this does not play a big role in the Asian Pacific region.
A) integration
B) competition
C) information technology
D) standardization

Accepted Answer

Information technology does not play a big role in the Asian Pacific region in the context provided, suggesting that other factors might be more influential in this region's dynamics or development.

Question 16

What did Ford change in hopes of avoiding duplication and cutting costs?
A) its name
B) marketing strategies
C) its structure
D) type of metal

Accepted Answer

Ford changed its structure in hopes of avoiding duplication and cutting costs.

Question 17

What is another name for output, which is used to control in MNEs?
A) production
B) performance targets
C) finished product
D) throughput

Accepted Answer

Performance targets are used in MNEs to measure and control output. This includes targets for overall performance, as well as specific metrics such as sales or market share. Production (A) and finished product (C) are related to output but do not encompass the full range of control measures used in MNEs. Throughput (D) is a measure of the amount of material or information that can pass through a system, but is not entirely relevant in the context of MNEs.

Question 18

_______________ refers to the coordination of activities across countries in an attempt to build efficient operational networks and take maximum advantage of internalized synergies and similarities across locations.
A) Global integration
B) Local integration
C) Transnational integration
D) None of the above

Accepted Answer

Global integration refers to the strategy of coordinating a company's activities across different countries to achieve efficiency and leverage synergies. This involves standardizing processes and products to take advantage of economies of scale and similarities across markets.

Question 19

__________ needs stem from diversity of market conditions and social and political environments in the various countries in which the firm operates.
A) Global integration
B) Local integration
C) Transnational integration
D) Local responsiveness

Accepted Answer

Local responsiveness refers to a firm's ability to meet the specific needs and demands of the local markets where it operates. These needs can vary greatly depending on the diversity of market conditions and social and political environments in each country. Therefore, local responsiveness needs stem from these differences, making option D the correct answer. Global integration (option A) refers to the standardization of processes and products across different markets, while local integration (option B) refers to the integration of a firm's various local operations. Transnational integration (option C) refers to the integration of a firm's global operations to achieve global efficiencies and local responsiveness simultaneously.

Question 20

An essential component of organizational structure in MNEs is_______________.
A) corporate headquarters
B) human resource development
C) research and development
D) global relations

Accepted Answer

Corporate headquarters is an essential component of organizational structure in MNEs as it allows for centralized decision-making, coordination of operations across regions, and implementation of global strategies. Human resource development, research and development, and global relations are also important components, but they are not as fundamental as corporate headquarters.

Quiz 11: Mne Organization Structure and Design

Aetna is an example of a global firm with ____________________.

Among organizational characteristics, the level of global integration is likely to be high if the firm

Among organizational characteristics, local responsiveness is likely to be high if the firm

A __________ strategy is one in which strategic and operational decisions are delegated to strategic business units in each country.

Which of the following strategies leverages economies of scale and can quickly disseminate innovations across borders; however, it lacks in responsiveness to local markets?

The major disadvantages of the geographic structure are

In the _______________, product divisions report directly to headquarters.

In the ______________. a business reports to a cluster headquarters that is accountable to corporate headquarters for business results.

In the ____________________ or conglomerate format, businesses are managed as investment rather than profit centers with wide reporting variations.

Among sociopolitical characteristics, which of the following tend to boost local responsiveness?

Which of the following features is exempt from market and industrial characteristics which tend to trigger global integration?

The one exception to prioritization is ______________________.

Which company gave its responsibility of new store development to its foreign subsidiaries?

The European Union creates powerful forces towards ______________, which makes divisional structure more feasible and facilitates coordination and control among country units?

Interestingly, this does not play a big role in the Asian Pacific region.

What did Ford change in hopes of avoiding duplication and cutting costs?

What is another name for output, which is used to control in MNEs?

_______________ refers to the coordination of activities across countries in an attempt to build efficient operational networks and take maximum advantage of internalized synergies and similarities across locations.

__________ needs stem from diversity of market conditions and social and political environments in the various countries in which the firm operates.

An essential component of organizational structure in MNEs is_______________.