Question 1

Localization strategy is an extension of the home replication strategy.

Accepted Answer

True

Question 2

An international division serves as a means of coordination with the rest of the firm.

Accepted Answer

False

Question 3

Knowledge management not only depends on IT, but also on informal social relationships within the MNE.

Accepted Answer

Informal social relationships such as networks, trust, and communication play a crucial role in knowledge sharing and transfer within an MNE, alongside IT systems and tools.

Question 4

The Porter five forces are not helpful in understanding MNE structure.

Accepted Answer

The Porter five forces model helps in understanding the competitive forces in an industry that affects the profitability and structure of firms. It can be applied to multinational enterprises (MNEs) too as they operate in different markets and face competition from local as well as global firms. The model can help MNEs understand the level of competition, bargaining power of suppliers and buyers, threat of new entrants, and threat of substitutes in different markets they operate. It can also help in analyzing the competitive advantage of the MNE and its position in the industry. Therefore, the Porter five forces model is helpful in understanding MNE structure.

Question 5

The "not invented here" syndrome causes managers to accept ideas invented elsewhere.

Accepted Answer

The "not invented here" syndrome actually causes managers to reject ideas that were not created within their own company or organization.

Question 6

The text recommended that firms avoid simplifying both product and geographic scope by downsizing and downscoping.

Accepted Answer

The text likely suggests that firms should simplify product and geographic scope by downsizing and downscoping to focus on core areas and improve efficiency.

Question 7

In a transnational MNE, the role of subsidiaries is to adapt and leverage parent company competencies.

Accepted Answer

The answer of In a transnational MNE, the role of...

Question 8

Home replication strategy emphasizes the home country replication of international based competencies.

Accepted Answer

The answer of Home replication strategy emphasizes the home country...

Question 9

No one argues that knowledge management is the defining feature of MNEs.

Accepted Answer

The statement is false. While knowledge management is important for MNEs, it is not necessarily the defining feature. Other features such as global presence, diverse operations, and cross-cultural management also play a significant role in defining MNEs.

Question 10

Customer-focused dimensions cut across all three existing mainstream dimensions.

Accepted Answer

Customer-focused dimensions, such as product quality and customer service, are important considerations in all three existing mainstream dimensions of sustainability (social, environmental, and economic).

Question 11

It is obviously a lot easier to imitate an intangible philosophy or mentality than to imitate a tangible structure.

Accepted Answer

The answer of It is obviously a lot easier to...

Question 12

Global product division structure is the same as the geographic area structure.

Accepted Answer

The global product division structure groups together business units that are responsible for a particular product or product line and is not organized geographically, whereas the geographic area structure groups together business units based on their geographic location.

Question 13

Transnational strategy supposedly is a trade off between being cost efficient and locally responsive but is really locally responsive.

Accepted Answer

The answer of Transnational strategy supposedly is a trade off...

Question 14

Transnational strategy aims to capture "the best of both worlds" by endeavoring to be both cost efficient and locally responsive.

Accepted Answer

Transnational strategy is a combination of global standardization and local adaptation to achieve cost efficiency and local responsiveness. Therefore, the statement is true.

Question 15

MNEs often must rely on a great deal of informal integrating mechanisms.

Accepted Answer

MNEs (Multinational Enterprises) typically operate in multiple countries with different cultures, languages, and business practices. As a result, informal integrating mechanisms such as shared values, trust, and communication are essential for global coordination and collaboration within the organization. These mechanisms help to bridge the gap between the diverse units and create a cohesive culture across borders.

Question 16

Overall, the micro, informal interpersonal relationships among managers of various units may create a micro-macro link.

Accepted Answer

Micro-macro link refers to the connection between the individual level (micro) and the organizational or societal level (macro). The informal interpersonal relationships among managers of various units may create a connection between individual behavior and organizational outcomes, thus creating a micro-macro link.

Question 17

Strategy drives structure: a misfit, such as combining a global strategy with a geographic area structure, may have grave performance consequences.

Accepted Answer

Strategy and structure need to align for optimal performance. Combining a global strategy with a geographic area structure may create conflicting priorities and hinder effective implementation, leading to poor performance.

Question 18

Many MNEs have phased out the geographical area structure.

Accepted Answer

Many MNEs have moved away from the traditional geographical area structure and have adopted matrix or product-based structures that prioritize cross-functional collaboration and decentralized decision-making.

Question 19

European MNE's are more likely than Japanese MNE to appoint host-country or third country nationals as head of a foreign subsidiary.

Accepted Answer

This is true according to research studies which have shown that Europeans MNEs are more open to diversity in hiring employees, including at the leadership level, whereas Japanese MNEs have a stronger preference for promoting Japanese nationals to leadership positions in foreign subsidiaries.

Question 20

It is hard to distinguish between subsidiary initiative and empire building.

Accepted Answer

Subsidiary initiative and empire building can have similar actions and outcomes, making it difficult to differentiate between the two. Subsidiary initiative refers to an effort by a subsidiary company to take the lead in new initiatives within the larger parent company, while empire building refers to attempts by individuals or departments within a company to increase their power or influence at the expense of others. In some cases, subsidiary initiatives may be mistaken for empire building, as the subsidiary may be seen as trying to take control and establish its own power within the larger organization.

Quiz 10: Strategizing, Structuring, and Learning