Ch.17 Verified Test Bank Formulating the strategic response

Chapter 18

Test Bank

Type: multiple choice question

Title: Chapter 18 Question 01

1) The three main types of control are _______

Feedback: The principal forms of control focus on measures of output (sales output, etc.), influencing behaviour through incentives (e.g. profit sharing), and corporate culture (values, expected behaviours).

A-head reference: 18.7 International strategy control

a. output control, behavioural control, cultural control.

b. coordination, harmonization, configuration.

c. integration control, mechanical control, cultural control.

d. input control, cultural control, configuration control.

Type: true-false

Title: Chapter 18 Question 02

2) Functional organizational structures have the major advantage of dispersing expertise and reducing specialization

a. True

b. False

Feedback: The statement is false. A functional structure has the opposite effect, concentrating expertise and increasing specialization.

A-head reference: 18.3 Alternative organizational forms

Type: true-false

Title: Chapter 18 Question 03

3) Geographical organizational structures encourage staff collaboration in dynamic and disparate markets.

a. True

Feedback: The statement is true, a geographical structure pools expertise around a particular geographical region or area and enables rapid adaptation to changing conditions.

A-head reference: 18.3 Alternative organizational forms

b. False

Type: true-false

Title: Chapter 18 Question 04

4) A product structure is attractive to single commodity or business firms.

a. True

b. False

Feedback: The statement is false because a product structure is designed for multiple or diversified firms that must balance the demands of competing divisions.

A-head reference: 18.3 Alternative organizational forms

Type: true-false

Title: Chapter 18 Question 05

5) Matrix structures suffer from problems of complexity, multiple reporting patterns, and high cost.

a. True

b. False

Feedback: Incorrect. The statement is true because these are precisely the disadvantages of matrix structures and which help explain why they have never been that popular.

A-head reference: 18.3 Alternative organizational forms

Type: true-false

Title: Chapter 18 Question 06

6) Centralization in a global factory is encouraged by a high level of product diversification, significant geographical distance between the home and host countries, and low interdependence between affiliates.

a. True

b. False

Feedback: The statement is false since these are all factors that encourage decentralization not centralization (see Table 18.1).

A-head reference: 18.4 Centralization and decentralization

Type: true-false

Title: Chapter 18 Question 07

7) In principle, a control process is a closed loop system which assesses progress towards predetermined goals.

a. True

Feedback: This is true, particularly for conventional, historical, and often financial, control systems

A-head reference: 18.7 International strategy control

b. False

Type: true-false

Title: Chapter 18 Question 08

8) There has been a trend within global factories to augment traditional output-based control measures.

a. True

Feedback: A number of new approaches including task forces, the enhanced power of big data analytics, and behavioural controls have been introduced.

A-head reference: 18.7 International strategy control

b. False

Type: true-false

Title: Chapter 18 Question 09

9) After completing strategic analysis, an organization faces two further steps in the strategy process: strategic choice and strategic implementation.

a. True

Feedback: Strategic analysis is performed to provide the organization with the knowledge required to make informed choices. This knowledge, though, is of little value unless the company or organization possesses the commitment to act upon it. Furthermore, strategic implementation requires the organization to exercise discipline to ensure that all actions and decisions are consistent with its strategic choice(s).

A-head reference: 18.1 Introduction

b. False

Type: true-false

Title: Chapter 18 Question 10

10) Corporate culture is an example of behavioural controls which seek to influence the behaviour of organizational members.

a. True

Feedback: It involves the transference of the firm’s organizational culture to overseas affiliates through the medium of expatriate and staff exchange, extensive training and socialization, and close contact between the parent company and individual affiliates.

A-head reference: 18.7 International strategy control

b. False

Type: true-false

Title: Chapter 18 Question 11

11) External embeddedness in the local environment increases the ability of a subsidiary to undertake knowledge sourcing and transfer.

a. True

Feedback: Close relationships with external partners assists the identication and absorption of new ideas and processes some of these may be of value elsewhere in the corporate network.

A-head reference: 18.6 Strategy implementation in the global factory

b. False

Type: multiple choice question

Title: Chapter 18 Question 12

12) As well as organizational structure the global factory can also use _______ to facilitate the implementation of strategy.

Feedback: Corporate culture, which can influence the values and behaviour or organizational members is widely used in strategy implementation.

A-head reference: 18.7 International strategy control

a. corporate culture

b. administrative heritage

c. organizational downsizing

d. the creation of core competences

Type: multiple choice question

Title: Chapter 18 Question 13

13) Externalization within the global factory alters the management of activities from one based on hierarchy to one based on _______

Feedback: Externalization means that coordination is no longer confined to internal or owned activities but must now encompass the outputs of outside organizations.

A-head reference: 18.6 Strategy implementation in the global factory

a. inter-organizational coordination.

b. technology transfer.

c. risk minimization.

d. effective sanctions.

Type: multiple choice question

Title: Chapter 18 Question 14

14) The dual loyalties of a subsidiary result from the fact that it is not only part of the corporate network but also _______

Feedback: A subsidiary is also part of a local business network, drawing local suppliers, partners, and customers into the multinational business system. This can create differing objectives and dual loyalties.

A-head reference: 18.6 Strategy implementation in the global factory

a. part of the local business environment.

b. pursuing conflicting goals.

c. subject to expatriate concerns.

d. under pressure from local competitors.

Type: true-false

Title: Chapter 18 Question 15

15) Strategy operates through structure because structure provides a framework for strategy implementation and control.

a. True

b. False

Feedback: Incorrect. It is the role of structure to facilitate implementation and control. The statement is consistent with the contention that structure should follow strategy

A-head reference: 18.3 Alternative organizational forms

Type: true-false

Title: Chapter 18 Question 16

16) Strategic implementation requires the organization to ensure that all actions are consistent with its strategic choice(s).

a. True

Feedback: Consistency between strategic direction and implementation is essential for success. Inconsistencies require correction of either strategic choices or implementation processes

A-head reference: 18.6 Strategy implementation in the global factory

b. False

Type: true-false

Title: Chapter 18 Question 17

17) The complexity of outsourcing has decreased during the current globalization wave.

a. True

b. False

Feedback: Outsourcing complexity has increased as the geographical scope, value of tasks, and degree of fine slicing have all increased.

A-head reference: 18.6 Strategy implementation in the global factory

Type: true-false

Title: Chapter 18 Question 18

18) Coordination and integration are key skills for managers in the global factory

a. True

Feedback: These are exactly the skills needed since their role is primarily one of ensuring effective coordination of value chain activities.

A-head reference: 18.6 Strategy implementation in the global factory

b. False

Type: true-false

Title: Chapter 18 Question 19

19) Knowledge identification, absorption, and sharing are critical tasks for the global factory.

a. True

Feedback: The essence of the global factory is its extensive division of labour and the creation of complementary activities across a value chain. Each of these activities is characterized by different levels and types of capability. This is the source of information asymmetry between headquarters and subsidiaries. Furthermore, knowledge management within a global factory is more than a linear process, involving the transfer of largely codified knowledge from one subsidiary to another; rather, it is a collaborative process involving the identification and nurturing of appropriate partner organizations for the purpose of interactive problem-solving.

A-head reference: 18.6 Strategy implementation in the global factory

b. False

Type: true-false

Title: Chapter 18 Question 20

20) Externalized transactions can still be managed hierarchically under a superior-subordinate relationship.

a. True

b. False

Feedback: The statement is false as externalized relationships need to move to a partnership that has to be fostered and managed.

A-head reference: 18.6 Strategy implementation in the global factory