Exam 10: Organizational Design and Control

The rapidly changing business environment caused by increased global competition, customer preference for custom-made rather than mass-produced products, and faster technological change is pressuring companies to make greater use of global product structures.

Few international companies are organized by function at the top level.

Global firms that organize by function at the top level have functional managers that report directly to the area heads.

Proponents of the horizontal corporation:

The use of a global product organization structure:

Organizational structure deals with how an international business should be organized in order to ensure that its worldwide business activities are integrated.

The initial choice of organizational structure after discarding the international division is usually a hybrid based on product and market factors.

Strategic business units are an organizational form in which geographic divisions have been defined as though they were distinct, independent businesses.

__________ are organizational forms in which product divisions are defined as though they were independent businesses.

The regionalized organization seems to be popular with companies that:

Subsidiary detriment occurs when a small loss for a subsidiary results in a greater gain for the total IC.

An evolving structure for an international organization over time is normal, as the company's involvement in foreign markets increases over time.

A structure organized by more than one dimension at the top level is known as a:

Where are decisions made?

The matrix overlay organizational form attempts to eliminate some of the problems of the matrix organization.

Both multinational and global companies use regionalized organizations.

Most companies establish worldwide organizations based on product, region, function, or customer classes.

Describe the global product form, explain why a company might adopt this form, and identify the disadvantages of this structure.

Decisions that work to the detriment of the subsidiary may be beneficial to the enterprise.

A matrix organization involves two or more dimensions, such as area and product, in which managers are at the same level but do not have overlapping responsibilities.