Question 1

There is no one best way to manage innovation in MNEs.Please comment.

Accepted Answer

The approaches to innovation in MNEs have changed considerably.Whereas once MNEs relied on simple models of centralized or localized innovation,the vast majority now find it necessary to build their innovation processes around multiple operating units and geographically disparate sources of knowledge.There is no one right way of managing the innovation process in the MNE,because each company has its own unique administrative heritage that it cannot and should not disavow.

Question 2

With responsibility for his company's largely centralized R&D activities,Frank worries that the center may not understand local market needs,while the subsidiaries may not be committed to innovations developed at the center.To respond to these concerns,Frank's priority should be to:

Accepted Answer

A)   adopt a single point of contact between headquarters and the subsidiaries to focus the flow of information.
B)   ensure that several key people in the foreign subsidiaries are linked to individuals at the headquarters who can represent and defend their views.
C)   carefully select the people he interacts with in the subsidiaries in order to reduce conflicting perspectives regarding innovation management.
D)   listen to the different national perspectives and priorities, but minimize differences in views from multiple subsidiaries' input. B

Question 3

The most effective way to exploit the knowledge within an organization depends on the complexity of the technology itself and the understanding of the focal market.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following is not an appropriate coordination mechanism to be employed by a transnational corporation with worldwide activities?

Accepted Answer

A)   The coordination of information flows through the socialization of employees.
B)   The coordination of asset flows through a process of rationalization.
C)   The coordination of product flows through formalized management processes.
D)   The coordination of resource flows through centralized decision-making.

Question 5

What is the primary advantage of operating interdependent subsidiaries?

Accepted Answer

A)   It reduces the need to control subsidiaries and to coordinate their activities.
B)   It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary.
C)   It provides an opportunity to balance the interests of subsidiaries with the needs of the headquarters. .
D)   It prevents subsidiaries from becoming too independent or uncontrolled.

Question 6

Transnational innovation requires management processes to be dominated by simple systems of control.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following management assumptions is most likely to support transnational innovation in MNEs?

Accepted Answer

A)   The roles of different organizational units should be uniform and symmetrical.
B)   The headquarter-subsidiary relationship should be based on clear and unambiguous patterns of dependence or independence.
C)   Career paths should be structured to give managers cross-border and cross-functional experience.
D)   Headquarters should be responsible for exercising decision-making and control uniformly.

Question 8

Linking local managers to corporate decision-making processes makes them more effective in managing local innovation.

Accepted Answer

A) True 
 B)False

Question 9

Frank is director of technology in an MNE in which most of the R&D activities are performed in the parent company's home country,but then,foreign subsidiaries are responsible for introducing the resulting innovations to their local customers.The innovation process adopted by Frank's MNE is:

Accepted Answer

A)   globally linked.
B)   local-for-local.
C)   center-for-global.
D)   locally leveraged.

Question 10

The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries.

Accepted Answer

A) True 
 B)False

Question 11

The two main prerequisites for local innovation are the dispersal of organizational assets and resources and a concentration of authority.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not one of the four processes of cross-border innovation and learning?

Accepted Answer

A)   Locally leveraged
B)   Globally Linked
C)   Center-for-local
D)   Local-for-local

Question 13

Company X is operating in a fast-changing,knowledge-intensive industry.The most feasible structure for its innovative processes is therefore central-to-global because that allows for a high degree of corporate control.

Accepted Answer

A) True 
 B)False

Question 14

Mr.Smith is the recently appointed CEO of a diversified MNE operating in 22 countries on four continents and in multiple industries ranging from bulk chemicals to consumer packaged goods.He became concerned that in his very decentralized organization,all businesses were managed primarily by the national subsidiaries.With a poor record in innovation,Smith wondered what he could do to improve the innovation process.What two or three changes would you recommend he consider?

Accepted Answer

The answer of Mr.Smith is the recently appointed CEO of...

Question 15

In developing differentiated coordination processes in a transnational organization,which of the following factors would be most important for an MNC manager to consider?

Accepted Answer

A)   How the company sources its raw materials, transfers technologies, and manages scarce resources.
B)   How the company is structured and how decision-making authority is assigned.
C)   The environment in which the firm operates and the nature of competition in that environment.
D)   The portfolio of products that the MNE offers and the markets in which it offers them.

Question 16

Globally linked innovations involve processes designed to ensure that the special resources and capabilities of each subsidiary are globally available to other units of the organization.

Accepted Answer

A) True 
 B)False

Question 17

The greatest risk facing center-for-global innovation is market insensitivity.

Accepted Answer

A) True 
 B)False

Question 18

A local-for-local approach to innovation is not compatible with cross-functional integration within national operations.

Accepted Answer

A) True 
 B)False

Question 19

Campbell Enterprises is an MNE in which local-for-local innovation is a priority.A new CEO wants to understand the conditions needed to make such innovations more effective,as well as your reasons for making such recommendations.

Accepted Answer

The answer of Campbell Enterprises is an MNE in which...

Question 20

The development of transnational innovation requires that the roles performed by organizational units worldwide are essentially uniform,and that the headquarters manages all of its subsidiaries in the same manner.

Accepted Answer

A) True 
 B)False

Exam 5: Creating Worldwide Innovation and Learning: Exploiting Cross-Border Knowledge Management

There is no one best way to manage innovation in MNEs.Please comment.

With responsibility for his company's largely centralized R&D activities,Frank worries that the center may not understand local market needs,while the subsidiaries may not be committed to innovations developed at the center.To respond to these concerns,Frank's priority should be to:

The most effective way to exploit the knowledge within an organization depends on the complexity of the technology itself and the understanding of the focal market.

Which of the following is not an appropriate coordination mechanism to be employed by a transnational corporation with worldwide activities?

What is the primary advantage of operating interdependent subsidiaries?

Transnational innovation requires management processes to be dominated by simple systems of control.

Which of the following management assumptions is most likely to support transnational innovation in MNEs?

Linking local managers to corporate decision-making processes makes them more effective in managing local innovation.

Frank is director of technology in an MNE in which most of the R&D activities are performed in the parent company's home country,but then,foreign subsidiaries are responsible for introducing the resulting innovations to their local customers.The innovation process adopted by Frank's MNE is:

The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries.

The two main prerequisites for local innovation are the dispersal of organizational assets and resources and a concentration of authority.

Which of the following is not one of the four processes of cross-border innovation and learning?

Company X is operating in a fast-changing,knowledge-intensive industry.The most feasible structure for its innovative processes is therefore central-to-global because that allows for a high degree of corporate control.

In developing differentiated coordination processes in a transnational organization,which of the following factors would be most important for an MNC manager to consider?

Globally linked innovations involve processes designed to ensure that the special resources and capabilities of each subsidiary are globally available to other units of the organization.

The greatest risk facing center-for-global innovation is market insensitivity.

A local-for-local approach to innovation is not compatible with cross-functional integration within national operations.

Campbell Enterprises is an MNE in which local-for-local innovation is a priority.A new CEO wants to understand the conditions needed to make such innovations more effective,as well as your reasons for making such recommendations.

The development of transnational innovation requires that the roles performed by organizational units worldwide are essentially uniform,and that the headquarters manages all of its subsidiaries in the same manner.