Deck 10: The Organization of Global Business

Question 1

The reason why some organizations reject a functional organizational structure is because they believe it renders them unable to respond to environmental changes that require coordination between functional areas,and because it offers each employee a restricted view of the organization's primary goal.

Answer 1

True

Question 2

The first step a domestic firm takes when entering an international arena is usually to create an international division.

Answer 2

False

Question 3

There are typically _____ organizational structures for global business.

A) two
B) three
C) four
D) five
E) six

Answer 3

C

Question 4

According to C.K.Prahalad,stateless corporations represent the third stage of globalization.

Question 5

According to Carol Bartz,former CEO of Yahoo!,organizational structure can sometimes get in the way of innovation.

Question 6

In the final stage of globalization,global companies produce goods in one country and export them to other countries.

Question 7

A market structure is a particular kind of divisional structure that groups products into separate divisions according to the needs of different customers.

Question 8

Global businesses with a narrow product line or a highly integrated product mix,such as aircraft manufacturers or oil and gas firms typically use a(n)_____ organizational structure.

A) functional
B) product
C) geographical region
D) matrix
E) hybrid

Question 9

North American Operations,GM Acceptance Corporation,International Operations,and Hughes Electronics are some of the subsidiaries of General Motors.

Question 10

An international division is advantageous because it allows global businesses to concentrate all international efforts and expertise in one location.

Question 11

A market structure is also called area structure.

Question 12

Global businesses that use a functional structure usually have a narrow product line.

Question 13

Global businesses with a hybrid structure are said to be organized by more than one dimension at the top level.

Question 14

The primary advantage of the divisional structure is that it has very low operating and managing costs.

Question 15

The initial step toward globalization is ______.

A) domestication
B) creating a statelessness
C) creating a wholly owned subsidiary
D) exporting
E) developing foreign manufacturing base through joint venture

Question 16

C.K.Prahalad would say that Chinese computer manufacturer Lenovo is in which stage of globalization?

A) First
B) Second
C) Third
D) Fourth
E) Fifth

Question 17

A global defense contractor needs deep functional skills as well as the ability to coordinate across the functions of each contract or project.For this example,the organizational structure that would best suit their needs would be a matrix structure.

Question 18

Under a matrix structure,the functional managers and the divisional managers have equal authority within the organization.

Question 19

A market structure is also sometimes called ______ structure.

A) functional
B) product
C) geographical region
D) customer
E) hybrid

Question 20

The organizational structure that results from combining functional and divisional structures is called a geographic region structure.

Question 21

Limited Clothing Inc.has a corporate headquarters with three divisions: North American Division,European Division,and Asia Division.Limited Clothing Inc.has a _____ structure.

A) global
B) multinational
C) geographical region
D) continental
E) hybrid

Question 22

Of the following,which is NOT a disadvantage of an international division?

A) Managers in the international division may feel like "second class" citizens.
B) Designing products with both domestic and international appeal may be difficult.
C) Core competencies and knowledge may not be shared.
D) It may be difficult to capture learning-curve savings.
E) It fosters a global mindset in the people working within the division.

Question 23

A basic problem of the _____ structure is it is difficult to determine the responsibility and authority relationships between the functional and divisional managers.

A) divisional
B) functional
C) matrix
D) product
E) hybrid

Question 24

At IBM,there are five divisions: Global Technology Services,Global Business Services,Software,Systems and Technology,and Global Financing.IBM utilizes a _____ structure.

A) matrix
B) product
C) geographical region
D) market
E) hybrid

Question 25

C.K.Prahalad postulates that stateless corporations represent the _____ stage of globalization.

A) first
B) second
C) third
D) fourth
E) fifth

Question 26

Lenovo,the Chinese computer manufacturer,is a corporation where it is difficult to identify one country as the home country.Lenovo can be described as a _____ corporation.

A) domesticated
B) stateless
C) divided
D) hybrid
E) matrix

Question 27

While many major corporations have a global presence,stateless corporations are different because they _____.

A) have no board of directors
B) are socially responsible
C) are more concerned with human rights
D) are usually more profitable
E) attempt to transcend nationality altogether

Question 28

A(n)______ is a tool that people use to coordinate their actions to obtain something they seek or value.

A) union
B) subunit
C) stateless corporation
D) structure
E) organization

Question 29

Some companies are global and so well integrated into the countries where they have a presence,that it is difficult,if not impossible,to identify one country as the home country for these corporations.such companies are called _____.

A) domestic
B) stateless
C) divided
D) hybrid
E) matrix-based

Question 30

According to the text,ConocoPhillips placed their ethics office in which part of the organization structure?

A) Research and development department
B) Manufacturing department
C) Maintenance department
D) Audit and finance department
E) Human resources department

Question 31

At ExxonMobil,divisions include Upstream,Downstream,and Chemical.The Upstream division includes exploration,development,production,and gas and power marketing.The Downstream division includes refining and supply,fuels and marketing,and lubricants.ExxonMobil utilizes a _____ structure.

A) matrix
B) product
C) geographical region
D) market
E) hybrid

Question 32

Of the following,which is NOT an advantage of an international division?

A) It permits global businesses to concentrate all international efforts in one location.
B) If the international division is at the same organizational level as domestic operations,it signals to international customers their importance to the company.
C) It ensures that the company will be more profitable.
D) It fosters a global mindset in the people working within the division.
E) It facilitates the key process of designing products that cater to local tastes.

Question 33

A business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service is known as a(n)_____.

A) partition
B) division
C) structure
D) union
E) formation

Question 34

A defense contractor may need deep functional skills as well as the ability to coordinate across the functions for each contract or project.This contractor ought to use a _____ structure.

A) functional
B) product
C) geographical region
D) market
E) matrix

Question 35

According to C.K.Prahalad,a global firm is in the third stage of globalization when it _____.

A) sets up operations in other countries
B) produces goods in one country and exports them to other countries
C) establishes a foreign subsidiary to handle the exports from its home country
D) locates its core corporate functions and top executives in different countries
E) is headquartered in its home country

Question 36

All of the following are advantages of the matrix structure EXCEPT that it _____.

A) ​allows the company to meet multiple demands from the environment
B) facilitates innovation and creativity
C) ​permits the company to allocate resources flexibly
D) ​rarely allows employees the chance to acquire functional skills
E) ​fosters cooperation among employees with different functional expertise

Question 37

A special case of the divisional structure where products are grouped into separate divisions according to their similarities or differences is called a _____ structure.

A) matrix
B) product
C) geographical region
D) divisional
E) hybrid

Question 38

An area structure is one where an organization:

A) groups people together because they hold similar positions in a company,perform a similar set of tasks,or use the same kind of skills.
B) groups products into separate divisions according to their similarities or differences.
C) groups products into separate divisions according to the needs of the different geographical regions the company serves.
D) groups products into separate divisions according to the needs of different customers.
E) is said to be organized by more than one dimension at the top level.

Question 39

Of the following,which is NOT an advantage of the functional structure?

A) It promotes economies of scale.
B) It can help the organization to acquire the latest and most scale-intensive machinery.
C) It promotes in-depth skill development of employees.
D) It ensures that organizations will engage in socially responsible efforts.
E) It encourages collaboration,efficiency,and quality within the function.

Question 40

A global business is organized into four groups: Manufacturing,Research and Development,Finance,and Sales.This company uses a(n)______ structure.

A) geographic region
B) functional
C) area
D) market
E) product

Question 41

Also called customer structure or customer class structure,a ______ is a particular kind of divisional structure that groups products into separate divisions according to the needs of different customers.

Question 42

Scenario - Mirkhani Mining Supplies
Mirkhani Mining Supplies is the industry leader in the production of underground mining equipment.The company has its headquarters in South Africa and has been in operation there since its inception in 1987.Mirkhani is known worldwide for the safety features it incorporates in its equipment.This company conducts its operations with the safety of the underground miner as its guiding objective.
Mirkhani Mining was recently called in to respond to the latest mine accident in China.Mirkhani not only provides safe mining equipment,it also makes superior mine rescue equipment.The company will be receiving a global award for freely rendering the use of its rescue equipment to China during a mine collapse.Mirkhani Mining Supplies will be recognized around the globe as saving the lives of forty underground miners in China.The company states,"Saving those lives is better than receiving a billion dollars for mining machinery."
As the growth of Mirkhani Mining Supplies has taken place,which one of the following is least likely to be a step it has taken in its international advancement?

A) Development of an export division
B) Collaboration between the sales department and the export division
C) Use of advanced marketing techniques for its products within its home country of South Africa
D) Adaptation of its products to better fit the needs of its customers
E) Development of an international division

Question 43

According to C.K.Prahalad,the first stage of globalization is _____.

A) when global firms set up operations in other countries
B) when companies produce goods in one country and export them to other countries
C) when global businesses establish foreign subsidiaries to handle the exports from their home countries
D) when stateless corporations locate their core corporate functions and top executives in different countries
E) when multinational companies headquarter in their home country

Question 44

The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals is referred to as the _______.

Question 45

A(n)______ is a tool that people use to coordinate their actions to obtain something they seek or value.

Question 46

A(n)______ is a business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service.

Question 47

Scenario - Windmere Technologies
Windmere Technologies has been in operation since 1984.Today,Windmere is actually considered to be a globally-based firm with corporate offices in thirteen foreign nations.There is not one office of this company with higher authority or more decision making power than any other of the thirteen in operation.Windmere Technologies is recognized as a business leader in all thirteen nations in which it has corporate offices.According to the CEO of the company,"Windmere considers the world to be its home base." The management has done a good job of creating its organizational structure where people are grouped simultaneously by function and by division.
Windmere is best known for its work in creating alternative energy sources.As this is of vital concern to all nations of the world today,Windmere's ideas and products are welcomed by all nations.This business takes in revenues in excess of $8 billion per year and expects it to substantially increase in the future.
Which one of the following would Windmere Technologies not claim as a purpose of its organizational structure?

A) Serves as a barrier to interactions with other organizations
B) Determines the boundaries of the organization
C) Regulates its interactions with the environment
D) Utilizes a division of labor system that leads to departmentalization
E) Integrates mechanisms such as formal rules and procedures

Question 48

______ structures are used only by companies that depend upon rapid product development for their survival.

Question 49

The geographic region structure is sometimes referred to as _________ structure.

Question 50

Scenario - Mirkhani Mining Supplies
Mirkhani Mining Supplies is the industry leader in the production of underground mining equipment.The company has its headquarters in South Africa and has been in operation there since its inception in 1987.Mirkhani is known worldwide for the safety features it incorporates in its equipment.This company conducts its operations with the safety of the underground miner as its guiding objective.
Mirkhani Mining was recently called in to respond to the latest mine accident in China.Mirkhani not only provides safe mining equipment,it also makes superior mine rescue equipment.The company will be receiving a global award for freely rendering the use of its rescue equipment to China during a mine collapse.Mirkhani Mining Supplies will be recognized around the globe as saving the lives of forty underground miners in China.The company states,"Saving those lives is better than receiving a billion dollars for mining machinery."
All of the following characteristics would be seen if Mirkhani Mining Supplies was considered a stateless corporation except which one?

A) It is almost impossible to identify the home country of the company
B) It requires the company to maintain its own individuality within the host country
C) It represents a new phase in the evolution of multinational companies
D) It sends work to wherever it is performed most efficiently
E) It allows the company to transcend international boundaries without difficulty

Question 51

Scenario - Windmere Technologies
Windmere Technologies has been in operation since 1984.Today,Windmere is actually considered to be a globally-based firm with corporate offices in thirteen foreign nations.There is not one office of this company with higher authority or more decision making power than any other of the thirteen in operation.Windmere Technologies is recognized as a business leader in all thirteen nations in which it has corporate offices.According to the CEO of the company,"Windmere considers the world to be its home base." The management has done a good job of creating its organizational structure where people are grouped simultaneously by function and by division.
Windmere is best known for its work in creating alternative energy sources.As this is of vital concern to all nations of the world today,Windmere's ideas and products are welcomed by all nations.This business takes in revenues in excess of $8 billion per year and expects it to substantially increase in the future.
Which one of the following best describes Windmere Technologies claim that the world is its home base?

A) A hybrid structure
B) A functional structure
C) A divisional structure
D) A stateless corporation
E) A geographical regional structure

Question 52

A(n)________ refers to one type of organizational structure in which functions are grouped together to serve the needs of products,markets,or geographical regions.

Question 53

A market structure is one where an organization:

A) groups people together because they hold similar positions in a company,perform a similar set of tasks,or use the same kind of skills.
B) groups products into separate divisions according to their similarities or differences.
C) groups products into separate divisions according to the needs of the different geographical regions the company serves.
D) groups products into separate divisions according to the needs of different customers.
E) is said to be organized by more than one dimension at the top level.

Question 54

Scenario - Windmere Technologies
Windmere Technologies has been in operation since 1984.Today,Windmere is actually considered to be a globally-based firm with corporate offices in thirteen foreign nations.There is not one office of this company with higher authority or more decision making power than any other of the thirteen in operation.Windmere Technologies is recognized as a business leader in all thirteen nations in which it has corporate offices.According to the CEO of the company,"Windmere considers the world to be its home base." The management has done a good job of creating its organizational structure where people are grouped simultaneously by function and by division.
Windmere is best known for its work in creating alternative energy sources.As this is of vital concern to all nations of the world today,Windmere's ideas and products are welcomed by all nations.This business takes in revenues in excess of $8 billion per year and expects it to substantially increase in the future.
Which one of the following organizational structures best identifies the one currently used by Windmere Technologies?

A) Functional structure
B) Matrix structure
C) Divisional structure
D) Market structure
E) Geographical region structure

Question 55

CEMEX has three divisions: (1)North America; (2)South America and the Caribbean; and (3)Europe,Asia,and the Middle East.CEMEX has a _____ structure.

A) continental
B) geographical region
C) global
D) hybrid
E) multinational

Question 56

_________ is an organizational structure that groups people together because they hold similar positions in a company,perform a similar set of tasks,or use the same kind of skills.

Question 57

A(n)_______ is a new phase in the evolution of the multinational corporation,where work is sourced wherever it is most efficient and the corporation transcends nationality altogether.

Question 58

A product structure is one where an organization:

A) groups people together because they hold similar positions in a company,perform a similar set of tasks,or use the same kind of skills.
B) groups products into separate divisions according to their similarities or differences.
C) groups products into separate divisions according to the needs of the different geographical regions the company serves.
D) groups products into separate divisions according to the needs of different customers.
E) is said to be organized by more than one dimension at the top level.
Enter the appropriate word(s)to complete the statement.

Question 59

Of the following,which is NOT listed in the text as a purpose of organizational structure?

A) It allows the members of the organization to perform a wide variety of activities based upon a division of labor that leads to specialization of functions.
B) It permits the organization members the coordination of their activities.
C) It permits the organization members to create hierarchical supervision.
D) It determines the boundaries of the organization and regulates its interfaces with the environment and its interactions with other organizations.
E) It allows the members of an organization to develop a cohesive company culture.

Question 60

________ is a particular kind of divisional structure that groups products into separate divisions according to their similarities or differences.

Question 61

Scenario - Mirkhani Mining Supplies
Mirkhani Mining Supplies is the industry leader in the production of underground mining equipment.The company has its headquarters in South Africa and has been in operation there since its inception in 1987.Mirkhani is known worldwide for the safety features it incorporates in its equipment.This company conducts its operations with the safety of the underground miner as its guiding objective.
Mirkhani Mining was recently called in to respond to the latest mine accident in China.Mirkhani not only provides safe mining equipment,it also makes superior mine rescue equipment.The company will be receiving a global award for freely rendering the use of its rescue equipment to China during a mine collapse.Mirkhani Mining Supplies will be recognized around the globe as saving the lives of forty underground miners in China.The company states,"Saving those lives is better than receiving a billion dollars for mining machinery."
Which of the following structure type best identifies the structure Mirkhani Mining Supplies would be using if it grouped its products and services into separate divisions based on the needs of different areas served by the company?

A) Matrix structure
B) Hybrid structure
C) Globalized structure
D) Market structure
E) Geographical region structure