Deck 11: Strategy and Organization in the International Firm

Question 1

Describe the three strategic objectives for creating a competitive advantage in international business as proposed by Bartlett and Ghoshal. Provide an example to illustrate each objective.

Answer 1

a.Efficiency-The firm must build efficient international supply chains. Efficiency refers to lowering the costs of the firm's operations and activities on a global scale. MNEs with multiple value chains around the world must pay special attention to how they organize their R&D, manufacturing, supply chain, product, marketing, and customer service activities. For example, automotive companies such as Toyota strive to achieve scale economies by concentrating manufacturing and sourcing activities in a limited number of locations around the world.
b.Flexibility-The firm must develop worldwide flexibility to manage diverse country-specific risks and opportunities. The diversity and volatility of the international environment is a special challenge for managers. Therefore, the firm's ability to tap local resources and exploit local opportunities is critical. For example, managers may opt for contractual relationships with independent suppliers and distributors in one country while engaging in direct investment in another.
c.Learning-The firm must create the ability to learn from international exposure and exploit learning on a worldwide basis. The diversity of the environment presents the internationalizing firm with unique learning opportunities. Even though the firm goes abroad to exploit its unique advantages, such as technology, brand-name, or management capabilities, managers can add to the stock of capabilities by internalizing new knowledge gained from international exposure. Thus, the organization can gain new technical and managerial know-how, new product ideas, R&D capabilities, partnering skills, and survival capabilities in unfamiliar environments. As an example, it was Procter & Gamble's research center in Belgium that developed a special capability in water-softening technology, primarily because the water in Europe contains more mineral than in the United States.

Question 2

Which of the following is an example of a multidomestic industry?

A)chemicals
B)telecommunications
C)fashion
D)aerospace

Answer 2

C

Question 3

The managerial routines, behaviors, and mechanisms that allow a firm to function as intended are known as ________.

A)organizational designs
B)organizational culture
C)organizational processes
D)organizational structure

Answer 3

C

Question 4

How can a firm's strategy make the best use of the firm's resources? How does a firm's decision to have a centralized versus a decentralized organizational structure affect its strategy?

Question 5

________ refers to lowering the cost of the firm's operations and activities on a global scale.

A)Efficiency
B)Protectionism
C)Flexibility
D)Currency control

Question 6

Strategy is ________.

A)a quality of executive management that provides inspirational guidance and motivation to personnel, leading the firm to a better future
B)the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt
C)a planned set of actions that managers employ to make the best use of the firm's resources and core competencies to gain competitive advantage
D)the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers

Question 7

Organizational culture is ________.

A)the pattern of shared values, behavioral norms, systems, policies, and procedures that employees learn and adopt
B)an approach in which a firm views international business as separate from, and secondary to, its domestic business
C)a reporting structure inside the firm that specifies the links between people, functions, and processes
D)an organizational design in which all international activities are centralized within one division in the firm, separate from domestic units

Question 8

Efficiency refers to emphasizing consensus-based decision making and problem solving, in which managers readily share their knowledge.

Question 9

Firms that want to become globally competitive must seek simultaneously three strategic objectives-efficiency, flexibility, and learning.

Question 10

Brogj Inc. is a cosmetics manufacturer based in California, United States. The firm varies its products to suit the different conditions abroad. Brogj is an example of a ________.

A)multidomestic industry
B)regional industry
C)global industry
D)globally integrated industry

Question 11

Which of the following is the most critical asset of any organization?

A)goodwill
B)computer programs
C)human capital
D)bonds

Question 12

A culturally diverse team would ________.

A)use diverse languages for business communications across various teams across the globe
B)follow country-specific ethical standards across the globe
C)use local employees, for accountability, for all major company decisions
D)create a global view inside the firm while remaining in touch with local realities

Question 13

Which of the following activities would be considered last by a manager while developing strategies?

A)analyzing the particular challenges that confront the firm
B)deciding how best to contend with competitors
C)examining the firm's specific strengths and weaknesses
D)analyzing the particular opportunities for the firm

Question 14

Managers who exemplify an open-minded attitude and who appreciate cultural diversity are described as applying a global ________.

A)sensitivity
B)standard
C)posture
D)mindset

Question 15

Companies that proactively build a global organizational culture will ________.

A)promote independent headquarters and subsidiaries to avoid miscommunication
B)subscribe to ethical standards developed in the home market to avert misunderstanding
C)maintain a global perspective in all major initiatives
D)adopt multiple corporate languages for business communications

Question 16

When developing strategies, managers start by ________.

A)configuring and coordinating the firm's activities around the world
B)deciding which customers to target
C)analyzing the particular opportunities and challenges that confront the firm
D)examining the firm's specific strengths and weaknesses

Question 17

GramTech Solutions is a software development firm based in the United States. The firm's CEO, David Ghaster, wants to open an outlet in India. Being a visionary leader, he would ________.

A)require employees to discover a strategic vision for the firm
B)require managers to acquire an openness to, and awareness of, culture in India
C)commit minimum resources for international ventures because of the currency risk involved
D)cut down on employees' cross-cultural training to save capital to open a firm in India

Question 18

Which of the following is true about global teams?

A)It is a locally distributed group of employees charged with specific problem solving that affects company operations at the domestic scale.
B)To develop global strategies, the team should include culturally diverse managers whose business activities span the globe.
C)Strategic global teams focus on the efficient and effective operation of the business across the whole network.
D)Operational global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.

Question 19

During the recent global recession, efficiency and flexibility became particularly important to the success of multinational firms.

Question 20

Which of the following is a characteristic of a global team?

A)culturally diverse
B)similarly trained
C)domestically based
D)constant face-to-face interaction

Question 21

Firms that emphasize global integration make and sell ________.

A)unique products that follow a multilocal strategy
B)an excessive variety of complex products
C)products that require minimal adaptation
D)products designed specifically for local markets

Question 22

Global integration is the coordination of the firm's value-chain activities across multiple countries to achieve worldwide efficiency, synergy, and ________ in order to take advantage of similarities between countries.

A)capability
B)expertise
C)cross-fertilization
D)redundancy

Question 23

A multidomestic industry is one in which competition takes place on a regional or worldwide basis.

Question 24

Which of the following is characteristic of a global industry?

A)A small number of major players compete head-on in multiple markets.
B)Competition is designed on a country-by-country basis.
C)Numerous firms compete within the industry worldwide.
D)Different marketing activities are designed to meet local needs across the globe.

Question 25

Organizational culture refers to managerial routines, behaviors, and mechanisms that allow the firm to function as intended.

Question 26

Contrast the strategies of multidomestic industries and global industries. Why is there a difference in strategies between the two industries? Provide an example for illustration.

Question 27

Which of the following characteristics should the winning candidate most likely possess if Ace executives desire a CEO with a global mind-set?

A)open-minded about diversity
B)subjective ethical standards
C)fluency in two languages
D)proponent of cultural imperialism

Question 28

Visionary leadership is more complex and important in domestic firms than global firms because corporate headquarters is where major decisions are made.

Question 29

Describe four traits that characterize visionary leaders, and explain why these traits are especially necessary for a firm that operates within a global matrix structure.

Question 30

Companies that proactively build a global organizational culture subscribe to subjective ethical and moral standards.

Question 31

Coordinating the international value-chain activities of a firm across multiple countries to achieve maximum efficiency is known as ________.

A)local responsiveness
B)global integration
C)adaptation
D)country-by-country responsiveness

Question 32

Which of the following is necessary for local responsiveness to effectively increase a firm's competitiveness?

A)Local managers need to be able to make decisions based on local needs.
B)Corporate executives must standardize marketing and merchandising.
C)Employees must be hired and trained only within a local region.
D)A firm's bankers and financial managers must be locally based.

Question 33

Managing a firm's value-chain activities on a country-by-country basis to address diverse opportunities and risks is known as ________.

A)global integration
B)global aggregation
C)regional coordination
D)local responsiveness

Question 34

During the interview, Tanya describes her idea of expanding the Ace line into maternity clothes to draw in expecting mothers. Which of the following traits of a visionary leader is Tanya most likely exhibiting?

A)subjective morality
B)cultural imperialism
C)global strategic vision
D)dogmatic view

Question 35

During the interview, Dan states that he expects Ace to surpass the competition in two years if he becomes CEO. Which of the following traits does Dan most likely exhibit with his statement that might appeal to the board of directors?

A)commitment to the success of Ace
B)arrogance about his abilities to help Ace
C)recognition of the homogeneity across communities
D)subjective ethical standards

Question 36

Strategic global teams identify or implement initiatives that enhance the long-term direction of the firm in its global industry.

Question 37

Which of the following best supports the decision by the Ace board of directors to hire Tanya as the CEO?

A)Tanya's recognition of the homogeneity across communities.
B)Tanya's innovative ideas and ability to spot future retail trends.
C)Tanya's subjective moral and ethical standards.
D)Tanya's competitive personality and dogmatic determination.

Question 38

Which of the following is an example of a global industry?

A)automobiles
B)beverages
C)publishing
D)retailing

Question 39

Global IT infrastructure and tools such as intranets, the Internet, and electronic data interchange ensure that distant parts of the global network share knowledge and learn from each other.

Question 40

The computer industry is an example of a ________.

A)locally responsive industry
B)multidomestic industry
C)global industry
D)country-by-country competitor

Question 41

Marketing the same product worldwide is most appropriate for the ________ industry.

A)furniture
B)electronics
C)food and beverage
D)retailing

Question 42

What is the integration-responsiveness framework? Describe the two main components of the framework.

Question 43

Which of the following is a disadvantage of a multidomestic strategy?

A)lack of opportunities to delegate tasks
B)high pressure on headquarters staff
C)inefficient manufacturing
D)standardized products in culturally different markets

Question 44

Which of the following is a characteristic of a transnational strategy to internationalization?

A)minimal pressure on headquarters staff
B)decision making is delegated to local managers
C)local responsiveness with central control
D)international business is viewed as separate from, and secondary to domestic business

Question 45

Which of the following best characterizes the concept of global integration?

A)Effective global competition requires that products be specialized based on the market.
B)Making adjustments for unique markets is an essential element of international business.
C)Creating variations of the same product for different markets is an unnecessary expense.
D)The differences in market-to-market distribution channels must be accommodated.

Question 46

Which of the following would exert pressure on a firm to become locally responsive?

A)the need to monitor and respond to global competitors
B)the need to cater to local customer needs
C)the desire to capitalize on converging consumer trends
D)the desire to provide uniform service to consumers

Question 47

A ________ strategy is characterized by substantial control over country operations by headquarters in order to increase efficiency and integration.

A)multilocal
B)home replication
C)multidomestic
D)global

Question 48

Which of the following is true about foreign units of a company using a multidomestic strategy?

A)They are centralized to ensure efficiency and learning.
B)They are highly controlled by the company's headquarters.
C)They are autonomous and operate independently.
D)They pursue global integration.

Question 49

In the ________ strategy, a firm views international business as separate from, and secondary to, its domestic business.

A)home replication
B)multilocal
C)global
D)transnational

Question 50

Which of the following would exert pressure on a U.S.-based clothing company, ZSource Ltd. , to become locally responsive?

A)to seek cost reduction through scale economies
B)to conduct global sourcing of raw materials, components, energy, and labor
C)to monitor and respond to global competitors
D)to meet host government requirements and regulations

Question 51

Global integration is a plan of action that accounts for competition on a country-by-country basis.

Question 52

A firm would be compelled to seek global integration when it has to ________.

A)adjust to cultural differences
B)cater to local customer needs
C)capitalize on converging consumer trends and universal needs
D)accommodate differences in distribution channels

Question 53

Firms undertake global integration to seek cost reduction through scale economies.

Question 54

Which of the following characterizes a multidomestic strategy?

A)Subsidiary managers adapt products and services to meet local needs.
B)Management practices are universal across local businesses.
C)Firm executives control all subsidiaries to maximize efficiency.
D)The firm allows subsidiaries to standardize products and services across countries.

Question 55

Which of the following is an advantage of a multidomestic strategy?

A)standardized organizational culture
B)minimal pressure on headquarters staff
C)minimum redundancy
D)low operating costs

Question 56

Describe local responsiveness and explain how a multidomestic strategy allows an international firm to pursue local responsiveness.

Question 57

Sourcing inputs from large-scale, centralized suppliers allows firms to obtain economies of scale, more consistent quality, lower costs, and generally more efficient operations.

Question 58

Due to the competition involved in global industries, marketing strategies are determined by the unique needs and regulations of each nation.

Question 59

Describe four factors that might persuade a firm to become locally responsive in a nation where it conducts business.

Question 60

A company can be compelled to be locally responsive in individual countries to provide uniform services to global customers.

Question 61

In which of the following are substantial autonomy and decision making authority delegated to a firm's subsidiaries around the world?

A)decentralized approach
B)global strategy
C)transnational strategy
D)nationalization

Question 62

Global strategy is an approach to internationalization in which headquarters delegates considerable autonomy to each country manager, allowing him or her to operate independently and pursue local responsiveness.

Question 63

By standardizing international operations as much as possible, yet being adaptable to the needs of local markets, a firm is utilizing a transnational strategy of globalization.

Question 64

A firm's headquarters is the primary contributor to ________.

A)local market research
B)capital planning
C)human resource management
D)compliance with local laws and regulations

Question 65

Converging buyer characteristics, growing acceptance of global brands, and increased diffusion of uniform technology make it difficult to pursue a global strategy.

Question 66

Armaz Inc. , a manufacturing company, has its headquarters located in Texas, U.S. , and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the most centralized?

A)decision about building factories in Cambodia
B)decision about hiring a marketing manager for its India operations
C)decision to open a retail store in Vietnam
D)decision about marketing newly developed products for the Chinese market

Question 67

Which of the following most likely supports Extra Clean implementing a transnational strategy?

A)The country managers have been trained in the United States.
B)Extra Clean is a highly centralized organization.
C)Extra Clean could reduce the number of global suppliers.
D)There is high local competition in each of the markets.

Question 68

Which of the following most likely supports Extra Clean implementing a multidomestic strategy instead of a global strategy?

A)The Taiwan manufacturing facility requires an update in equipment.
B)Extra Clean managers lack internationalization experience.
C)Recent studies have shown that consumer trends in Taiwan, India, and Ireland are converging.
D)Foreign rivals of Extra Clean compete at a global level.

Question 69

With a global strategy, headquarters seeks substantial control over its country operations in order to minimize redundancy and achieve maximum efficiency, learning, and integration worldwide.

Question 70

The home replication strategy is often employed as a means of extending a product's life cycle in a foreign market and to replicate home-market success.

Question 71

Explain the benefits of a multidomestic strategy to firm internationalization. What are some of the disadvantages to this approach?

Question 72

Which of the following questions would be most important for Extra Clean managers to evaluate the integration-responsiveness framework?

A)What types of global IT infrastructure and tools should be used in Dublin to maintain efficiency?
B)Should the Extra Clean headquarters relocate to Taiwan for six months?
C)Would the foreign managers benefit from a training session in Ireland?
D)What type of balance is appropriate between headquarters and country managers?

Question 73

Armaz Inc. , a manufacturing company, has its headquarters located in Texas, U.S. , and subsidiaries in India, China, and Vietnam. Which of the following decisions will be the LEAST decentralized?

A)decision about building factories in Cambodia
B)decision about hiring a marketing manager in the United States
C)decision to open a retail store in Vietnam
D)decision about developing new products for foreign markets

Question 74

When using a home replication strategy, firms delegate autonomy to managers in each foreign unit, allowing them to operate independently and pursue local responsiveness.

Question 75

When using a multidomestic strategy, products and services are carefully adapted to suit the unique needs of each country.

Question 76

In a multidomestic strategy, there is maximum pressure on headquarters staff because there is little incentive for decision making by individual managers.

Question 77

Which of the following gives headquarters considerable authority and control over the firm's activities worldwide?

A)nationalization
B)home replication strategy
C)centralized approach
D)decentralized approach

Question 78

In establishing a firm's organizational structure, a fundamental issue is ________.

A)how to optimize local responsiveness and flexibility
B)how much decision-making responsibility the firm should retain at headquarters
C)how to leverage natural endowments available to the firm
D)how the firm should invest in human assets

Question 79

Discuss the advantages and implementation of a transnational strategy, and explain why this strategy is closely associated with a global matrix structure.

Question 80

A firm's subsidiary is the primary contributor to ________.

A)transfer pricing
B)capital planning
C)marketing
D)global profitability