As a domestic firm evolves into an MNE,
A) reporting and communication flows change.
B) the organizational structure becomes more simplified.
C) it changes from a product emphasis to an international division structure.
D) the existing organizational structure cannot be changed because of the ensuing confusion.

Question

Quizplus · Accepted Answer

As a domestic firm evolves into an MNE, reporting and communication flows become more complex due to the involvement of multiple countries, cultures, and languages. This requires changes in communication and reporting structures to accommodate the increased complexity. The other options are either incorrect (B and D) or incomplete (C). While an MNE may adopt an international divisional structure, this is not the only option or necessarily a natural progression. It is possible for an MNE to maintain a product or geographic organizational structure, depending on the company's strategy and goals.

As a Domestic Firm Evolves into an MNE