Deck 8: Organizational Design for Multinational Companies

Question 1

When exports become a significant percentage of company sales and a company wishes greater control over its export operations,managers often create a separate

A) Export department.
B) Functional department.
C) Product department.
D) Liaison office.

Answer 1

A

Question 2

Adopting strategies that include both concerns for local adaptation needs and concern for the economic and product development benefits of globalization is possible with the

A) Worldwide product structure.
B) Worldwide geographic structure.
C) Hybrid structure.
D) None of the above

Answer 2

C

Question 3

The structure adopted by companies in the early stage of internationalization is usually

A) Replica.
B) Network.
C) Export department.
D) Transnational subsidiary.

Answer 3

C

Question 4

The least efficient of the following structural options is

A) Product structure.
B) Functional structure.
C) Vertical structure.
D) Graphic structure.

Question 5

Which of the following structures best support strategies that emphasize global products and rationalization?

A) The functional structure
B) The matrix structure
C) The geographic structure
D) The product structure

Question 6

All of the following statements are true about the worldwide matrix structure EXCEPT

A) To balance the benefits produced by geographic and product structures and to coordinate a mixture of product and geographic subunits,some multinationals create a worldwide matrix structure.
B) Unlike most hybrid organizations,the worldwide matrix structure is a symmetrical organization.
C) It has unequal lines of authority for product groups and for geographic divisions.
D) The matrix structure works well only when there are near equal demands from the environment for local adaptation and for product standardization with its associated economies of scale.

Question 7

The worldwide geographic structure is usually considered best to implement a _____ strategy.

A) Multidomestic or regional
B) Transnational
C) International
D) Indirect exporting

Question 8

All of the following statements are true about the functional structure EXCEPT

A) In the functional structure,departments perform separate business functions such as marketing or manufacturing.
B) The functional structure is the simplest of organizations.
C) In small organizations,the functional structure is the least efficient of all structures.
D) Because functional subunits are separated from each other,coordination among the units can be difficult.

Question 9

One of the major reasons why companies choose a functional structure is because

A) It allows adapting products to country tastes.
B) It enables responding to the needs of different types of customers.
C) It helps balance the strategy with the organization design.
D) It helps achieve efficiency.

Question 10

The manner in which organizations structure subunits and use coordination and control mechanisms to achieve their strategic goals is the

A) Organizational structure.
B) Organizational culture.
C) Degree of formalization.
D) Organizational design.

Question 11

The international division differs from the export department in that

A) The international division is usually larger and has greater responsibilities.
B) The international division has more extensive staff with international expertise.
C) Top management expects the staff of the international division to perform functions such as negotiating licensing and joint venture agreements,translating promotional material,or providing expertise on different national cultures and social institutions.
D) All of the above are true.

Question 12

The functional structure is considered most efficient when

A) An organization gets too large.
B) When customers need special functions.
C) When the organization is in the mature phase of the life cycle.
D) When organizations have few products.

Question 13

The type of subsidiary that supports a multinational firm strategy based on location advantages is a/an

A) Export department.
B) Minireplica subsidiary.
C) Transnational subsidiary.
D) International division.

Question 14

The most balanced structural solution to the national responsiveness versus global efficiency dilemma is

A) The transnational network structure.
B) The worldwide product structure.
C) Worldwide geographic structure.
D) The matrix structure.

Question 15

The minireplica subsidiary

A) Copies the structure and strategy of companies located in the same country.
B) Mostly copies the structure and strategy of the parent company.
C) Replicates only minor parts of the parent's production technology.
D) Copies the structure of small foreign firms.

Question 16

Transnational subsidiaries

A) Look pretty much like a domestic division of the parent company.
B) Often have different structures and functions in each location.
C) Exist near the border to facilitate exporting.
D) Serve mostly to coordinate international currency exchange.

Question 17

All of the following statements are true about product structures EXCEPT

A) The product structure is the most efficient of all structures.
B) Product organizations must still perform some functional tasks of a business.
C) The structure builds a department or subunit around a product .
D) Managers choose product structures when they believe that a product or a group of products is sufficiently unique to require focused efforts on one type of product or service.

Question 18

The worldwide product structure is usually considered best to implement a/an _____ strategy.

A) Multidomestic or regional
B) Transnational
C) International
D) Indirect exporting

Question 19

Which of the following are considered to be the structural building blocks for running a multinational?

A) International division
B) Metanational
C) Mini replica
D) Foreign subsidiaries

Question 20

Organizations that are designed with mixtures of structures that are the best to implement their strategies are

A) Product structures.
B) Geographic structures.
C) Hybrid structures.
D) Functional structures.

Question 21

A permanent unit of the organization designed to focus the efforts of different subunits on particular problems is a

A) Task force.
B) Full-time integrator.
C) Liaison.
D) Team.

Question 22

Knowledge that usually resides within employees and is dependent on the organization's culture and context is

A) Explicit knowledge.
B) Knowledge management.
C) Tacit knowledge.
D) None of the above

Question 23

All of the following are TRUE about product structures EXCEPT

A) Product structure organizations must still perform functional tasks of a business.
B) In product structures,functional areas are concentrated in separate subunits.
C) Product structures are required when products or service are sufficiently unique to require different functional support.
D) All of the above are true.

Question 24

Which of the following statements regarding explicit knowledge is FALSE?

A) Explicit knowledge can be easily codified.
B) Explicit knowledge can be found in records and other information repositories.
C) Explicit knowledge can be easily transferred from employee to employee.
D) Explicit knowledge usually resides within employees and is dependent on the organization's context and culture.

Question 25

Output control systems

A) Focus on managing behaviors,not outcomes,within the organization.
B) Represent the level in the organizational hierarchy where managers have the authority to make decisions.
C) Assess the performance of a unit based on results,not on the processes used to achieve those results.
D) Use the organizational culture to control the output and attitudes of employees.

Question 26

The type of vertical control mechanism most often associated with a profit center is

A) Bureaucratic.
B) Output.
C) Cultural.
D) Decision making.

Question 27

Which of the following control systems uses the organizational culture to control behaviors and attitudes of employees?

A) Cultural control systems
B) Decision-making control systems
C) Bureaucratic control systems
D) Output control systems

Question 28

Subunits of a multinational company located in other countries than the parent company's headquarters is known as

A) Functional divisions.
B) Foreign functional divisions.
C) Foreign subsidiaries.
D) International minireplica.

Question 29

A __________ helps link the organization horizontally.

A) Control system
B) Coordination system
C) Cultural system
D) Centralized operations

Question 30

Which of the following control systems focuses on managing behaviors of employees rather than outcomes?

A) Bureaucratic control systems
B) Budgets and standard operating procedures
C) Cultural control systems
D) None of the above

Question 31

Which of the following is NOT one of the questions asked when designing an organization?

A) How should work be divided among the organization's subunits?
B) How should the work be coordinated among the various subunits?
C) How should the work of the various subunits be controlled?
D) How many subunits should the multinational have?

Question 32

Which of the following represents the strongest coordination mechanism?

A) Task forces
B) Teams
C) Liaison roles
D) Direct contact

Question 33

_________ mean/means that management locates subsidiaries anywhere in the world where they can benefit the company.

A) Dispersed subunits
B) Specialized operations
C) Interdependent relationships
D) None of the above

Question 34

Which of the following is NOT true regarding the use of control options by most multinationals?

A) Most multinationals use several types of coordination mechanisms.
B) Multinationals with export departments have very high need for coordination.
C) Matrix and transnational structures have very high needs for coordination.
D) For transnational networks,teams are increasingly virtual with members seldom meeting face-to-face.

Question 35

Which of the following types of control system uses budgets,statistical reports,standard operating procedures,and centralized decision making to manage organizational processes?

A) Profit center
B) Bureaucratic control system
C) Decision-making control
D) Cultural control system

Question 36

A large,entrepreneurial multinational that is able to tap into hidden pockets of innovation,technology,and market know-how scattered around the world,especially in emerging markets is known as

A) A transnational.
B) A minireplica subsidiary.
C) A metanational.
D) A foreign subsidiary.

Question 37

__________ help link the organization vertically,up and down the organizational hierarchy.

A) Coordination systems
B) Dispersed subunits
C) Control systems
D) Subunits

Question 38

The basic issue (s)that need to be considered for organizational design are

A) Division of work.
B) Coordination.
C) Control.
D) All of the above

Question 39

Temporary groups created to solve a particular organizational problem such as entering a new market are

A) Teams.
B) Liaisons.
C) Taskforces.
D) Full time integrators.

Question 40

The type of control system favored by the transnational is

A) Bureaucratic.
B) Output.
C) Cultural.
D) Decision making.

Question 41

What are control systems? Pick two control systems and describe how they work.

Question 42

Describe the use of export management as a design structure to go international.When does it become necessary to use an international division? What are some of the problems associated with international divisions?

Question 43

What is the transnational-network structure? Discuss some costs and benefits of having a transnational network structure.Under what situation would a transnational-network be appropriate?

Question 44

Discuss some of the advantages of a functional structure over the product or geographic structure.When is it necessary to adopt a geographic or product structure?

Question 45

Compare and contrast bureaucratic control with output control.

Question 46

What are some advantages of a worldwide product structure over a worldwide geographic structure? What type of company would most likely choose each type?

Question 47

Describe some functions of coordination mechanisms.Pick two coordination systems and describe how they work.

Question 48

What is cultural control? Why is it the favored control mechanism for transnational-network structures?

Question 49

What is knowledge management? Distinguish between the types of knowledge.

Question 50

What is a minireplica subsidiary? How is a minireplica subsidiary different from a transnational subsidiary?

Question 51

What are hybrid structures? What are the costs and benefits of having a hybrid structure?