Question 1

The control issue in managing the multidivisional structure is
A)how much authority should be centralized at corporate headquarters.
B)how much authority should be decentralized to the divisions.
C)how much authority should be given to each functional unit.
D)how much authority should be centralized at corporate headquarters and decentralized to the divisions.
E)how much authority should be given to corporate division heads.

Accepted Answer

The control issue in managing the multidivisional structure is how much authority should be centralized at corporate headquarters and decentralized to the divisions. This requires finding the right balance between headquarters and divisional autonomy. This balance is important for maintaining consistency in the organization's strategies and objectives while still allowing the divisions to be flexible and respond to their respective market conditions.

Question 2

America Online blended its operations with those of Time Warner to create AOL Time Warner.America Online is using which entry mode to enter the broadcast industry?
A)Acquisition
B)Internal new venture
C)Merger
D)Divestiture
E)Joint venture

Accepted Answer

America Online used a merger entry mode to enter the broadcast industry by combining its operations with those of Time Warner to create AOL Time Warner.

Question 3

A localization strategy
A)involves an appropriate mix of centralization and decentralization.
B)centralizes all functions.
C)centralizes only the research and development (R&D)and marketing functions.
D)is the most complex strategy.
E)is oriented toward local responsiveness.

Accepted Answer

A localization strategy is oriented toward local responsiveness, which means that companies adapt their strategies and products to best fit the local markets they are operating in. This can include decentralizing certain functions to allow for better understanding and responsiveness to local consumer preferences and behaviors.

Question 4

A global strategy
A)involves an appropriate mix of centralization and decentralization.
B)centralizes all functions at the optimal global locations.
C)centralizes only the research and development (R&D)and marketing functions.
D)is the most complex strategy.
E)maximizes local responsiveness.

Accepted Answer

The answer of A global strategy
A)involves an appropriate mix of...

Question 5

The easiest and cheapest type of diversification strategy for a company to manage is
A)related diversification.
B)unrelated diversification.
C)vertical integration.
D)horizontal diversification.
E)none of these choices.

Accepted Answer

The answer of The easiest and cheapest type of diversification...

Question 6

Problems in effectively managing the multidivisional structure include
A)distortion of information.
B)competition for resources.
C)transfer pricing.
D)all of these choices.
E)none of these choices.

Accepted Answer

All of the choices listed are problems in effectively managing the multidivisional structure. Distortion of information can occur when divisions withhold information or provide biased information to gain advantages. Competition for resources can lead to divisions prioritizing their own interests rather than the overall success of the organization. Transfer pricing, where divisions charge each other for goods or services, can result in inflated prices and decreased efficiency. Therefore, managing a multidivisional structure requires addressing all of these potential problems.

Question 7

The multidivisional organization structure offers several advantages,including
A)enhanced corporate financial control.
B)enhanced strategic control.
C)enhanced growth.
D)stronger pursuit of internal efficiency.
E)all of these choices.

Accepted Answer

The multidivisional organization structure offers all the mentioned advantages, including enhanced corporate financial control, enhanced strategic control, enhanced growth, and stronger pursuit of internal efficiency. By dividing the organization into smaller divisions, it becomes easier to manage each unit independently, focus on their specific needs, and make strategic decisions that benefit the entire organization. Additionally, it allows for more effective allocation of resources, facilitates growth and expansion into new markets and products, and enables better monitoring and control of each division's financial performance. Therefore, the multidivisional organization structure is beneficial for organizations that operate in diverse and complex markets.

Question 8

In its U.S.operations,Japanese-based Sony has decentralized almost all of its tasks to an independent firm that it created and which it owns.Based on this information,which entry mode is Sony using in the United States?
A)Internal new venture
B)Acquisition
C)Joint venture
D)Divestiture
E)Merger

Accepted Answer

Sony has created an independent firm that it owns to handle its tasks in the United States. This is an example of an internal new venture, where the parent company creates a new subsidiary to carry out its operations in a foreign market.

Question 9

Reasons why a firm might benefit from the creation of a separate new-venture division include all of the following except
A)better protection of the division's autonomy.
B)less scrutiny from top managers.
C)removal from day-to-day pressures of the firm.
D)ease in developing a culture that fosters innovation.
E)development of a science-based business model.

Accepted Answer

The answer of Reasons why a firm might benefit from...

Question 10

Which of the following factors must be considered in choosing the structure and control systems for managing a global business?
A)How to distribute and allocate responsibility and authority between managers at home and abroad
B)The selection of the organizational structure that groups divisions both at home and abroad
C)The selection of the right kinds of integration and control mechanisms
D)The selection of the right kinds of organizational culture
E)All of these choices

Accepted Answer

All of these factors must be considered in choosing the structure and control systems for managing a global business. The distribution and allocation of responsibility and authority between managers at home and abroad, the organizational structure that groups divisions both at home and abroad, the selection of integration and control mechanisms, and the organizational culture are all important considerations. A company must ensure that it has the appropriate structure and control systems in place to effectively and efficiently manage its global operations.

Question 11

For its South American operations,Caterpillar performs most functions at its U.S.headquarters but markets through cooperative relationships with local distributors.Based on this information,which entry mode is Caterpillar using in South America?
A)Internal new venture
B)Joint venture
C)Merger
D)Acquisition
E)Intrapreneurship

Accepted Answer

Caterpillar is using a joint venture entry mode in South America, as it is partnering with local distributors for marketing while performing most functions at its U.S. headquarters.

Question 12

To expand its global sales,U.S.-based Miller Brewing Company purchased a firm that processes grains in Brazil.Miller plans to manage the new business by allowing it to continue as before,with little integration into the rest of the firm.Based on this information,which entry mode is Miller using in Brazil?
A)Acquisition
B)Internal new venture
C)Joint venture
D)Divestiture
E)Merger

Accepted Answer

Miller Brewing Company is using the acquisition entry mode in Brazil, as they purchased a firm that processes grains in Brazil. They plan to manage the new business by allowing it to continue as before, with little integration into the rest of the firm. This indicates that Miller has acquired an existing entity and will operate it under its control without much integration, which is a characteristic of an acquisition.

Question 13

The U.S.firm Intel,a maker of semiconductor chips,built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D)and marketing are centralized in the United States.Based on this information,which strategy is Intel pursuing?
A)Localization
B)Transnational
C)International
D)Global standardization
E)Stuck in the middle

Accepted Answer

The answer of The U.S.firm Intel,a maker of semiconductor chips,built...

Question 14

Which structure is the best for sharing information and learning across countries?
A)Global-area
B)International division
C)Global product group
D)Global matrix
E)Simple

Accepted Answer

The global matrix structure is the best for sharing information and learning across countries as it allows for cross-functional teams to work together on projects, promoting knowledge-sharing and collaboration. This structure also allows for local and global perspectives to be integrated, which can improve decision-making and problem-solving.

Question 15

To expand its global sales,the U.S.-based foods maker ConAgra purchased a firm that processes grains in the United Kingdom.ConAgra plans to manage the new business by allowing it to continue as before,with little integration into the rest of the firm.Based on this information,which strategy is ConAgra pursuing?
A)Stuck in the middle
B)Transnational
C)International
D)Global standardization
E)Localization

Accepted Answer

The answer of To expand its global sales,the U.S.-based foods...

Question 16

Which of the following strategies is most likely to facilitate the transmission of a company's norms and values and,hence,the development of a global corporate culture?
A)Focus
B)Localization
C)International
D)Global standardization
E)Transnational

Accepted Answer

The answer of Which of the following strategies is most...

Question 17

In its African operations,Sony Corporation performs most functions at its Japanese headquarters but markets through cooperative relationships with local distributors.In the United States,Sony has decentralized almost all of its tasks to an independent firm that it owns.Based on this information,which strategy is Sony pursuing?
A)Localization
B)Transnational
C)International
D)Global standardization
E)Stuck in the middle

Accepted Answer

Sony is pursuing a transnational strategy, as it is maintaining centralized control over tasks in its Japanese headquarters but also decentralizing tasks to an independent firm in the United States. Additionally, it is utilizing cooperative relationships with local distributors in Africa, indicating a desire to tailor its operations to local markets to some degree. This blend of centralized control and localization is a key characteristic of a transnational strategy.

Question 18

The U.S.firm Hewlett-Packard (HP)built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D)and marketing are centralized in the United States.Based on this information,which entry mode is HP using in its various locations?
A)Acquisition
B)Internal new venture
C)Joint venture
D)Divestiture
E)Merger

Accepted Answer

HP is using an Internal new venture mode since they built their manufacturing facilities in different countries but still centrally conduct research and development and marketing in the United States. This means they are expanding through their own internal efforts rather than acquiring or partnering with other companies.

Question 19

When a firm's managers are very concerned about the possibility of losing control of proprietary know-how,which entry mode should the firm avoid?
A)Acquisition
B)Internal new venture
C)Joint venture
D)Divestiture
E)Merger

Accepted Answer

In a joint venture, the firm will be partnering with another company and sharing ownership and control of the venture, which increases the risk of disclosing proprietary information. The other entry modes - acquisition, internal new venture, divestiture, and merger - would provide the firm with more control over its proprietary know-how.

Question 20

An international strategy
A)centralizes only the research and development (R&D)and marketing functions.
B)centralizes all functions.
C)involves an appropriate mix of centralization and decentralization.
D)is the most complex strategy.
E)maximizes local responsiveness.

Accepted Answer

The answer of An international strategy
A)centralizes only the research and...

Quiz 13: Implementing Strategy in Companies That Compete Across Industries and Countries

The control issue in managing the multidivisional structure is

America Online blended its operations with those of Time Warner to create AOL Time Warner.America Online is using which entry mode to enter the broadcast industry?

A localization strategy

A global strategy

The easiest and cheapest type of diversification strategy for a company to manage is

Problems in effectively managing the multidivisional structure include

The multidivisional organization structure offers several advantages,including

In its U.S.operations,Japanese-based Sony has decentralized almost all of its tasks to an independent firm that it created and which it owns.Based on this information,which entry mode is Sony using in the United States?

Reasons why a firm might benefit from the creation of a separate new-venture division include all of the following except

Which of the following factors must be considered in choosing the structure and control systems for managing a global business?

For its South American operations,Caterpillar performs most functions at its U.S.headquarters but markets through cooperative relationships with local distributors.Based on this information,which entry mode is Caterpillar using in South America?

The U.S.firm Intel,a maker of semiconductor chips,built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D) and marketing are centralized in the United States.Based on this information,which strategy is Intel pursuing?

Which structure is the best for sharing information and learning across countries?

Which of the following strategies is most likely to facilitate the transmission of a company's norms and values and,hence,the development of a global corporate culture?

The U.S.firm Hewlett-Packard (HP) built twelve worldwide manufacturing facilities in several different countries,but its research and development (R&D) and marketing are centralized in the United States.Based on this information,which entry mode is HP using in its various locations?

When a firm's managers are very concerned about the possibility of losing control of proprietary know-how,which entry mode should the firm avoid?

An international strategy