Deck 11: Mne Organization Structure and Design

Question 1

The main advantages of ________________ structures are a global vision and the ability to leverage resources across regions.

A) product-based
B) geographic-based
C) functional-based
D) none of the above

Answer 1

A

Question 2

What provides the appropriate linkage between different task units within the organization?

A) coordination
B) development
C) control
D) orientation

Answer 2

A

Question 3

Which of the following is not a product of global structure?

A) related divisional format
B) international division format
C) cluster format
D) unrelated holding company format

Answer 3

B

Question 4

Advances in communication technology and the decline in _____________ have made global products more attractive by making it possible to establish multinational teams consisting of individuals who are physically apart.

A) raw materials costs
B) terrorism
C) travel costs
D) labor costs

Question 5

Which structure makes it easy to dispose of non-core assets while strengthening core ones?

A) mixed product
B) cluster format
C) matrix design
D) holding company format

Question 6

This role is where subsidiaries operate in less strategically important markets but have competence to maintain local operations.

A) strategic Leader
B) implementer
C) contributor
D) black hole

Question 7

Which of these is not a MNE design?

A) global functional
B) technological
C) global geographical
D) none of the above

Question 8

Subsidiary strategy can be______________________.

A) autonomous
B) receptive
C) active
D) all of the above

Question 9

Which of the following was one of the first to shift to global structures?

A) Nestlé
B) Royal Dutch/Shell
C) Unilever
D) all of the above

Question 10

What subsidiary strategies play a key role in balancing integration and local responsiveness?

A) autonomous, receptive, active
B) multi-domestic, global, transnational
C) strategic leader, contribution, implementer
D) design, knowledge, structure

Question 11

_____________designs are unique in that they contain simultaneous, intersecting differentiation bases, with many employees reporting to two or more supervisors simultaneously.

A) Strategic
B) Global
C) Matrix
D) None of the above

Question 12

The main objective of organizational design is

A) to help employees find information.
B) to provide, maintain and develop the organizational structure that works best towards the achievement of the company's strategic goals.
C) to help prospective customers choose what company to do business with.
D) to determine what areas of interest the company should pursue.

Question 13

MNEs operate in what kind of environment?

A) relaxed and stable
B) diverse and rapidly changing
C) global
D) generalized

Question 14

This type of strategy indicates relative standardization across national markets, allowing strategic and operational control.

A) global
B) multi-domestic
C) receptive
D) transnational

Question 15

This type of strategy is one where the subsidiary performs most activities of the value chain independently of headquarters, selling most of its output in the local market.

A) autonomous
B) active
C) transnational
D) receptive

Question 16

Global matrix structures are

A) transnational
B) involving combinations of products and functions.
C) not 2k compatible.
D) all of the above

Question 17

Subsidiary strategy can be

A) autonomous
B) receptive
C) active
D) all of the above

Question 18

This type of strategy is one where many activities are located locally but carried out in close coordination with other subsidiaries.

A) global
B) receptive
C) multi-domestic
D) active

Question 19

The three basic types of product structure include

A) duplication, organization resources, and functional specialization.
B) the related divisional format, the cluster format, and the unrelated holding company.
C) economic realities, business prospects, and regional integration.
D) none of the above

Question 20

An example of a _________________, is when corporate management develops resources and capabilities to make it more responsive to the local environment.

A) black hole
B) implementer subsidiary
C) contributor subsidiary
D) highly competent national subsidiary

Question 21

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

Question 22

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.

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

The one exception to prioritization is ______________________.

A) international division structure
B) matrix design structure
C) national subsidiary structure
D) global functional design

Question 33

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

Question 34

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

Question 35

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

A) integration
B) competition
C) information technology
D) standardization

Question 36

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

Question 37

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

A) production
B) performance targets
C) finished product
D) throughput

Question 38

_______________ 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

Question 39

__________ 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

Question 40

An essential component of organizational structure in MNEs is_______________.

A) corporate headquarters
B) human resource development
C) research and development
D) global relations

Question 41

A transnational (or hybrid) strategy seeks to achieve both global efficiency and local responsiveness.

Question 42

The main advantages of product-based structures are a global vision and the ability to leverage resources across regions.

Question 43

The organization design decision can be summarized as a choice between differentiation and integration.

Question 44

When referring to structure, MNE management has considerable leeway in design choices and continuously monitors the appropriateness of the structure as its operations evolve and the business environment changes.

Question 45

Functional structures are usually adopted by MNEs with a diversified product line.

Question 46

A transnational strategy is one that seeks to achieve both global efficiency and local responsiveness.

Question 47

The autonomous strategy is typical of subsidiaries of MNEs competing in multi-domestic industries.

Question 48

In the global product design, product managers report to their counterparting divisions, which allows for the integration of development, production, and marketing.

Question 49

Organization design represents an opportunity to adapt the MNEs structure to the multiple environments in which it operates and to its employees.

Question 50

Implementer subsidiaries operate in more strategically important markets and have competence to maintain local operations.

Question 51

Integrating sub-units involves control, which is a direct intervention into the operations of subsidiaries to ensure conformity with organizational goals.

Question 52

The major disadvantage of the geographic structure are operating problems in a context of diverse product lines and marketing characteristics.

Question 53

The product region matrix overlaps a regional divisional structure with a number of product managers who are expected to achieve business results and whose responsibilities cut across regional lines.

Question 54

Contributor subsidiaries operate in important markets and have distinctive capabilities.

Question 55

The organization design decision can be summarized as a choice between differentiation and integration.

Question 56

If a unit acts as a black hole, corporate management develops resources and capabilities to make it less responsive to the local market.

Question 57

Organization design is both driven by strategy and driving that strategy.

Question 58

Since organization design is a vehicle for strategy formulation and implementation, MNE strategy is the key input in devising its structure.

Question 59

The matrix design structure has become quite popular in businesses today.

Question 60

In an active strategy approach, many activities are located globally and carried out in close coordination with other subsidiaries.

Question 61

Removing compartmentalization between domestic and international operations allows a company to improve knowledge flow within its two new business units.

Question 62

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

Question 63

The relative strength of global integration and local responsiveness pressures can be analyzed at different levels, such as industry, division, or subsidiary.

Question 64

Among sociopolitical characteristics, customer needs tend to be the same or similar across borders tend to boost local responsiveness.

Question 65

Among organizational characteristics, the level of global integration is likely to be high if the firm seeks acquisition of local firms' knowledge and experience.

Question 66

Local responsiveness is likely to be high if the firm emphasizes global vertical integration and global value-chain control.

Question 67

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

Question 68

A global strategy indicates relative standardization across national markets, allowing strategic and operational control.

Question 69

A multidomestic strategy leverages economies of scale and can quickly disseminate innovations across borders; however, it lacks in responsiveness to local markets.

Question 70

Local responsiveness concerns the attempt to respond to specific needs within each host country.

Question 71

Local responsiveness 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.

Question 72

Large MNEs maintain only a few forms of differentiation.

Question 73

The strategic leader role is played by a highly competent national subsidiary located in a strategically important market.

Question 74

Matrix designs are unique in that they contain simultaneous, intersecting differentiation bases, with many employees reporting to two or more supervisors at the same time.

Question 75

In subunits with lead roles, the head office ensures that strategies fit MNEs overall goals and priorities.

Question 76

The national subsidiary structure used to be called the "mother-daughter" design.

Question 77

The international division format was mainly used by firms with a low ratio of domestic revenues and low foreign product diversity.

Question 78

One important reason for MNEs to globally organize, structure, and coordinate geographically dispersed businesses is due to the complexity and rapid change of global business which necessitates paying close attention to different sources of knowledge and expertise.

Question 79

Once an organization has been divided to separate divisions and units, each subunit becomes subject to its own interests, goals, and environmental demands, which will often lead the unit to develop and pursue its own strategies rather than implement those of the firm as a whole.

Question 80

Global structures were based on principles of unity of command, reducing communications barriers and enhancing coordination.