Question 1

What is organizational design, and why is it an important topic for managers of international companies to understand?

Accepted Answer

Answers may vary but should include such points as the following: Organizational design is a process that deals with how an international business should be organized in order to ensure that its worldwide business activities are able to be integrated in an efficient and effective manner. It is essential that the structures and systems being implemented are not merely consistent with each other but also consistent with the environmental context in which the organization is operating and the strategy the company is using for competing in this international environment. The size of the organization and the complexity of its business operations must also be considered in the design of a company.
The structure of an international company (IC) must be able to evolve over time, to allow the organization to respond to change and to efficiently and effectively reconfigure the way in which its competencies and resources are integrated within and across the IC's various units. This is a major challenge for ICs, especially as their activities are increasingly dispersed across the globe as well as subject to rapid and ongoing environmental and strategic change. Failure to successfully deal with this challenge threatens the IC's performance and, indeed, its long-term survival.
The IC's strategic planning process itself, because it encompasses an analysis of the firm's external environments as well as its strengths and weaknesses, often discloses a need to alter the organization. Changes in an IC's strategy may require changes in the organization, but the reverse is also True. For instance, a new CEO may join the firm, or the IC may acquire a company in another nation or in another area of business activity. Strategic planning and organizing are so closely related that usually management treats the structure of the organization as an integral part of the strategic planning process.

Question 2

Subsidiary management morale is one element in determining where decisions would be made.

Accepted Answer

A) True 
 B)False  True

Question 3

Organizational change refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these various organizational components.

Accepted Answer

A) True 
 B)False  False

Question 4

All the reasons for making decisions at IC headquarters, at 100 percent-owned subsidiary headquarters, or cooperatively do not apply in joint venture situations.

Accepted Answer

A) True 
 B)False

Question 5

A company's international operating environment, both currently and as it is expected to be in the future, is the primary determinant of its organizational structure.

Accepted Answer

A) True 
 B)False

Question 6

The regionalized organization appears to be popular with companies that manufacture products with a rather low technological content.

Accepted Answer

A) True 
 B)False

Question 7

Global companies:

Accepted Answer

A)  none of the following is correct. 
B)  do not have international divisions. 
C)  are large companies with numerous overseas manufacturing facilities. 
D)  are organized on the basis of products and do not have other organizing dimensions in a pure organization. 
A)  none of the following is correct. 
B)  do not have international divisions. 
C)  are large companies with numerous overseas manufacturing facilities. 
D)  are organized on the basis of products and do not have other organizing dimensions in a pure organization.

Question 8

Organizational structure:

Accepted Answer

A)  refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these organizational components. 
B)  helps to determine where formal power and authority will be located within the organization. 
C)  is primarily created and evolved by senior management. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these organizational components. 
B)  helps to determine where formal power and authority will be located within the organization. 
C)  is primarily created and evolved by senior management. 
D)  all of the above. 
E)  two of A, B, and C.

Question 9

Decisions to standardize product and equipment with which to make it and to tailor it to fit each national market are most likely to be made by:

Accepted Answer

A)  IC headquarters. 
B)  subsidiary headquarters. 
C)  LDC government officials. 
D)  none of the above. 
E)  two of A, B, and C. 
A)  IC headquarters. 
B)  subsidiary headquarters. 
C)  LDC government officials. 
D)  none of the above. 
E)  two of A, B, and C.

Question 10

Companies that adopted the global organizational form felt that this organization would:

Accepted Answer

A)  permit them to obtain cheaper labor. 
B)  be more capable of developing strategies to confront new global competition. 
C)  enable them to get lower interest rates to finance expansion. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  permit them to obtain cheaper labor. 
B)  be more capable of developing strategies to confront new global competition. 
C)  enable them to get lower interest rates to finance expansion. 
D)  all of the above. 
E)  two of A, B, and C.

Question 11

To facilitate Kraft's goal of enhancing growth prospects within developing-country markets, the company:

Accepted Answer

A)  moved an increasing proportion of decisions to the company's Illinois headquarters. 
B)  gave full profit-and-loss accountability to the business units. 
C)  expanded core product categories into large developing countries. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  moved an increasing proportion of decisions to the company's Illinois headquarters. 
B)  gave full profit-and-loss accountability to the business units. 
C)  expanded core product categories into large developing countries. 
D)  all of the above. 
E)  two of A, B, and C.

Question 12

Some of the variables that determine which decision is made where include:

Accepted Answer

A)  product and equipment. 
B)  competence of subsidiary. 
C)  state-of-the-art communication networks. 
D)  two of the above. 
E)  all of A, B, and C. 
A)  product and equipment. 
B)  competence of subsidiary. 
C)  state-of-the-art communication networks. 
D)  two of the above. 
E)  all of A, B, and C.

Question 13

The international division is a division in the organization that is responsible for all non-home-country activities and reports to the domestic division.

Accepted Answer

A) True 
 B)False

Question 14

The __________ organization has evolved from management's attempt to mesh product and regional and functional expertise while maintaining clear lines of authority.

Accepted Answer

A)  hybrid 
B)  matrix 
C)  global 
D)  functional 
E)  network 
A)  hybrid 
B)  matrix 
C)  global 
D)  functional 
E)  network

Question 15

According to the text, the types of information an IC needs to have reported by subsidiaries include:

Accepted Answer

A)  financial. 
B)  organizational structure and systems. 
C)  political. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  financial. 
B)  organizational structure and systems. 
C)  political. 
D)  all of the above. 
E)  two of A, B, and C.

Question 16

Reliance on subsidiary management can depend on items such as:

Accepted Answer

A)  two of B, C, and 
B)  how well the executives know one another. 
C)  IC management understanding host-country conditions. 
D)  all of B, C, andE 
E)  the financial condition of the parent company. 
A)  two of B, C, and 
B)  how well the executives know one another. 
C)  IC management understanding host-country conditions. 
D)  all of B, C, andE 
E)  the financial condition of the parent company.

Question 17

Problems with the matrix structure include that:

Accepted Answer

A)  two or more managers must agree on decisions, which can lead to slow decision making. 
B)  special divisions often must be established to serve heterogeneous customer segments. 
C)  global branding and production coordination are hindered. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  two or more managers must agree on decisions, which can lead to slow decision making. 
B)  special divisions often must be established to serve heterogeneous customer segments. 
C)  global branding and production coordination are hindered. 
D)  all of the above. 
E)  two of A, B, and C.

Question 18

In larger, older organizations more decisions are made at the subsidiaries.

Accepted Answer

A) True 
 B)False

Question 19

According to the text, which of the following dimensions provide(s) the basis for organizational subdivisions at the secondary, tertiary, and still lower levels?

Accepted Answer

A)  Two of B, C, and D 
B)  Process 
C)  Customer class 
D)  Nature of competition 
E)  All of B, C, and D 
A)  Two of B, C, and D 
B)  Process 
C)  Customer class 
D)  Nature of competition 
E)  All of B, C, and D

Question 20

According to the text, the types of information an IC needs to have reported by subsidiaries include:

Accepted Answer

A)  technological. 
B)  market opportunities. 
C)  economic events. 
D)  all of the above. 
E)  two of A, B, and C. 
A)  technological. 
B)  market opportunities. 
C)  economic events. 
D)  all of the above. 
E)  two of A, B, and C.

What is organizational design, and why is it an important topic for managers of international companies to understand?

Subsidiary management morale is one element in determining where decisions would be made.

Organizational change refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these various organizational components.

All the reasons for making decisions at IC headquarters, at 100 percent-owned subsidiary headquarters, or cooperatively do not apply in joint venture situations.

A company's international operating environment, both currently and as it is expected to be in the future, is the primary determinant of its organizational structure.

The regionalized organization appears to be popular with companies that manufacture products with a rather low technological content.

Global companies:

Organizational structure:

Decisions to standardize product and equipment with which to make it and to tailor it to fit each national market are most likely to be made by:

Companies that adopted the global organizational form felt that this organization would:

To facilitate Kraft's goal of enhancing growth prospects within developing-country markets, the company:

Some of the variables that determine which decision is made where include:

The international division is a division in the organization that is responsible for all non-home-country activities and reports to the domestic division.

The __________ organization has evolved from management's attempt to mesh product and regional and functional expertise while maintaining clear lines of authority.

According to the text, the types of information an IC needs to have reported by subsidiaries include:

Reliance on subsidiary management can depend on items such as:

Problems with the matrix structure include that:

In larger, older organizations more decisions are made at the subsidiaries.

According to the text, which of the following dimensions provide(s) the basis for organizational subdivisions at the secondary, tertiary, and still lower levels?

According to the text, the types of information an IC needs to have reported by subsidiaries include:

The Challenging World of International Business

International Trade and Foreign Direct Investment

International Institutions From an International Business Perspective

Sociocultural Forces

Natural Resources and Environmental Sustainability

Political and Trade Forces

Intellectual Property and Other Legal Forces

The International Monetary System and Financial Forces

International Competitive Strategy

Global Leadership Issues and Practices

Assessing International Markets

Entry Modes

Export and Import Practices

Marketing Internationally

Global Operations and Supply Chain Management

Managing Human Resources in an International Context

International Accounting and Financial Management

Filters

Exam 10: Organizational Design and Control

What is organizational design, and why is it an important topic for managers of international companies to understand?

Subsidiary management morale is one element in determining where decisions would be made.

Organizational change refers to the way that an organization formally arranges its various domestic and international units and activities and the relationships among these various organizational components.

All the reasons for making decisions at IC headquarters, at 100 percent-owned subsidiary headquarters, or cooperatively do not apply in joint venture situations.

A company's international operating environment, both currently and as it is expected to be in the future, is the primary determinant of its organizational structure.

The regionalized organization appears to be popular with companies that manufacture products with a rather low technological content.

Global companies:

Organizational structure:

Decisions to standardize product and equipment with which to make it and to tailor it to fit each national market are most likely to be made by:

Companies that adopted the global organizational form felt that this organization would:

To facilitate Kraft's goal of enhancing growth prospects within developing-country markets, the company:

Some of the variables that determine which decision is made where include:

The international division is a division in the organization that is responsible for all non-home-country activities and reports to the domestic division.

The __________ organization has evolved from management's attempt to mesh product and regional and functional expertise while maintaining clear lines of authority.

According to the text, the types of information an IC needs to have reported by subsidiaries include:

Reliance on subsidiary management can depend on items such as:

Problems with the matrix structure include that:

In larger, older organizations more decisions are made at the subsidiaries.

According to the text, which of the following dimensions provide(s) the basis for organizational subdivisions at the secondary, tertiary, and still lower levels?

According to the text, the types of information an IC needs to have reported by subsidiaries include:

The Challenging World of International Business

International Trade and Foreign Direct Investment

International Institutions From an International Business Perspective

Sociocultural Forces

Natural Resources and Environmental Sustainability

Political and Trade Forces

Intellectual Property and Other Legal Forces

The International Monetary System and Financial Forces

International Competitive Strategy

Global Leadership Issues and Practices

Assessing International Markets

Entry Modes

Export and Import Practices

Marketing Internationally

Global Operations and Supply Chain Management

Managing Human Resources in an International Context

International Accounting and Financial Management

Filters