Test Bank Docx | Organization Structure And Control – Ch.8 - International Management 10e | Test Bank with Answer Key by Helen Deresky by Helen Deresky. DOCX document preview.
International Management, 10e, (Deresky/Miller)
Chapter 8 Organization Structure and Control Systems
1) Organization ________ refers to the formal arrangement of roles, responsibilities, and relationships within an organization.
A) structure
B) systems
C) culture
D) strategy
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation
AACSB: Application of knowledge
2) ________ is the process by which a firm gradually changes in response to global competition; domestic market saturation; and the desire for expansion, new markets, and diversification.
A) Segmentation
B) Integration
C) Segregation
D) Internationalization
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
3) The design of an organization, as with any other management function, should be contingency based, taking into account the variables of that particular system at that specific point in time. The major variable not included is the ________.
A) firm's strategy
B) firm's size
C) firm's location
D) firm's technology
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
4) Additional factors structural choice relating to geographical dispersion include all EXCEPT ________.
A) differences in time
B) differences in language
C) differences in technology
D) differences in business practices
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
5) 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 and accomplish organizational objectives
D) the procurement of selected value-chain activities, including production of intermediate goods or finished products, from independent suppliers
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
6) 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
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
7) Which of the following is true with regard to the structural evolution model?
A) Typically, firms that start their internationalization at a higher level of involvement use this model.
B) Firms using this model do not export.
C) This model has become known as the stages model.
D) All firms follow this model without exception.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
8) Which of the following does NOT represent a typical way in which firms organize their international activities?
A) domestic structure plus export department
B) creating an international division organized along functional, product or geographic lines
C) domestic structure plus foreign subsidiary
D) regional structure
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
9) Smaller firms are most likely to reorganize into ________ during their internationalization.
A) domestic structure plus export department
B) domestic structure plus foreign subsidiary
C) global product structure
D) global functional structure
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
10) Sedona Inc. is an American firm that manufactures high-quality handbags, duffel bags, and leather belts at its facility in Arizona. Sedona's products have been featured in various fashion magazines and as a result, consumer demand has increased significantly. Currently, Sedona is organized as a domestic structure plus export department. Executives at Sedona believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Sedona should give its subsidiary managers significant autonomy?
A) Praxis Inc., one of Sedona's domestic competitors, has a flat organizational structure.
B) Sedona is a family-owned business that began as a subsidiary to Aloha enterprises.
C) Sedona has recently reorganized into a domestic structure plus foreign subsidiary.
D) Sedona conducts a large percentage of domestic sales through the company's web site.
Difficulty: 1: Easy
Chapter: 8
Skill: Application
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Analytical thinking; Application of knowledge
11) A ________ structure is the ideal way to organize work when global integration is more important than local responsiveness and the industry structure encourages cost leadership.
A) decentralized
B) matrix
C) divisional
D) global functional
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
12) To be effective, firms reorganizing into a domestic structure plus foreign subsidiary in one or more countries should ________.
A) categorically ignore niche markets
B) stop investing in domestic businesses
C) refrain from exporting
D) allow a great deal of autonomy to subsidiary managers
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
13) A(n) ________ permits managers to allocate and coordinate resources for foreign activities under one roof, and thus enhances the firm's ability to respond, both reactively and proactively, to market opportunities.
A) local division
B) international division
C) export department
D) domestic structure plus foreign subsidiary
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
14) A firm that uses an international division structure sometimes experiences intra-organizational conflict because ________.
A) such a structure disallows managers to coordinate resources for foreign activities under one roof
B) the international division invariably fails to respond to cultural differences
C) more resources and management attention tend to get channeled toward the international division than toward the domestic divisions
D) such a structure depresses the firm's ability to respond to market opportunities
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
15) Acme United. is an American firm that manufactures disposable medical supplies at its facility in California. Acme United's products have been featured in various medical journals and as a result, demand in hospitals has increased significantly. Currently, Acme United is organized as a domestic structure plus export department. Executives at Acme United believe the firm is ready to internationalize its operations, and they are considering various organizational structures. Which of the following best supports the argument that Acme United should reorganize into a global functional structure?
A) Acme United has a highly decentralized system of management.
B) Acme United uses a variety of technologies for its numerous and varied product lines.
C) Acme United has only a few domestic competitors.
D) Acme United serves a narrow spectrum of customers and has a product line that uses similar technology.
Difficulty: 2: Moderate
Chapter: 8
Skill: Application
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Analytical thinking; Application of knowledge
16) In which of the following is a firm's foreign operations integrated into the activities and responsibilities of each department to gain operative specialization and economies of scale?
A) global matrix structure
B) global functional structure
C) global geographic structure
D) global divisional structure
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
17) Sigma Inc. is designed on the basis of the company's business activities such as production, finance, and marketing. Foreign operations at Sigma are integrated into the activities and responsibilities of each division to achieve economies of scale and operative specialization. In other words, Sigma has a(n) ________.
A) domestic structure with foreign subsidiary
B) domestic structure with export department
C) global functional structure
D) international division structure
Difficulty: 2: Moderate
Chapter: 8
Skill: Application
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Analytical thinking; Application of knowledge
18) Which of the following organizational structures is particularly appropriate for product lines using similar technology and for businesses with a narrow spectrum of customers?
A) global functional structure
B) international division
C) global product structure
D) matrix structure
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
19) Which of the following is true with regard to a global product structure?
A) A global product structure is disadvantageous for firms with diversified product lines that are aimed at dissimilar or dispersed markets.
B) The advantages of this organizational form are market concentration, innovation, and responsiveness to new opportunities in a particular environment.
C) In a global product structure, a cluster of products are grouped into a single division.
D) A global product structure does not facilitate diversification and inhibits growth.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
20) Which of the following refers to a self-contained business within a company with its own functional departments and accounting systems?
A) buying center
B) supply chain
C) value chain
D) strategic business unit
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
21) Which of the following forms of organization is particularly appropriate in a dynamic and diverse environment?
A) the global functional structure
B) the global product structure
C) the domestic structure plus export department
D) the domestic structure plus foreign subsidiary
Difficulty: 3: Challenging
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
22) With the geographic structure, the focus is on ________, since products can be adapted to local requirements.
A) marketing
B) innovation
C) divesting
D) importing
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
23) The ________ takes responsibility for overseeing international operations, marketing products, processing orders, working with foreign distributors, and arranging financing when necessary.
A) corollary approach
B) export department
C) international division
D) global product design
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
24) A firm would most likely establish an international division when ________.
A) domestic market sales fluctuate
B) decision making becomes decentralized
C) foreign and domestic customers are similar
D) specialization in foreign market operations becomes essential
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
25) Which of the following is true with regard to the global geographic structure?
A) With the geographic structure, the focus is on importing.
B) Marketing-oriented companies are most likely to opt for this structure.
C) The geographic structure is not an adequate structure for consolidating regional expertise.
D) In a geographic structure, problems of coordination across different regions are virtually nonexistent.
Difficulty: 3: Challenging
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Reflective thinking; Application of knowledge
26) Marketing-oriented companies, such as Nestlé and Unilever, which produce a range of products that can be marketed through similar channels of distribution to similar customers, will usually opt for the ________.
A) domestic structure plus foreign subsidiary
B) global geographic structure
C) matrix structure
D) domestic structure plus export department
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
27) 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) the ability to manage across national boundaries, retaining local flexibility while achieving global integration.
D) The differences in market-to-market distribution channels must be accommodated.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
28) The focus of Selina Inc., an MNC producing a range of products that can be marketed through common channels to similar customers worldwide, is marketing. Its aim is to become an insider in every country it operates. Which of the following organizational forms is most likely to be favored by Selina's management?
A) a global geographic structure
B) a global functional structure
C) a domestic structure plus export department
D) a domestic structure plus foreign subsidiary
Difficulty: 2: Moderate
Chapter: 8
Skill: Application
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
29) A ________ is developed to combine geographic support for both global integration and local responsiveness, and it can be used to take advantage of personnel skills and experience shared across both functional and divisional structures.
A) functional structure
B) divisional structure
C) product structure
D) matrix structure
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
30) The fundamental limitation of a matrix structure is that it ________.
A) creates a poor organizational culture
B) isolates upper management from operational levels
C) institutes a dual hierarchy that violates the unity-of-command principle
D) introduces more errors in the decision-making process due to the speed of the process
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
31) No matter what the stage of internationalization, a firm's structural choices always involve ________.
A) low standardization procedures
B) integration and differentiation
C) vertical job specialization
D) mass marketing and niche marketing
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
32) 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
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
33) Which of the following refers to focusing on and specializing in specific markets?
A) integration
B) implementation
C) differentiation
D) globalization
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
34) Which of the following refers to the coordination of specific markets?
A) differentiation
B) globalization
C) diversification
D) integration
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
35) A specific strategy that treats the world as one market by using a standardized approach to products and markets is called ________.
A) globalization
B) localization
C) differentiation
D) integration
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
36) Managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology can be attained in order to achieve ________.
A) customer loyalty
B) integration
C) segregation
D) rationalization
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
37) The advantage of rationalization is ________.
A) high cost of production
B) widely varying product design for different markets around the world
C) different marketing and sales strategies are adopted for each country
D) economies of scale
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
38) Which of the following refers to a problem that firms with structurally sophisticated global networks are most likely to face?
A) environmental volatility
B) competition from domestic firms
C) low cost savings
D) import tariffs
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
39) In their rush to get on the globalization bandwagon, too many firms have ________.
A) opted for niche marketing
B) sacrificed the ability to respond to local market structures and consumer preferences
C) overly focused on local markets at the cost of losing out on market share abroad
D) wrongly overestimated the importance of mass customization for the global market
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
40) The ________ the level of the company at which managers make decisions, the more that organization is ________.
A) higher; decentralized
B) lower; centralized
C) lower; decentralized
D) higher; unstructured
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
41) Beautycare is an Illinois-based cosmetics company, manufactures a wide range of natural cosmetics and skin-care products. The company has international divisions located in Singapore and London. The top management at Beautycare is currently considering making a change to the company's organizational structure. Which of the following, if true, best supports the argument that Beautycare should change its organizational structure?
A) The labor union consisting of Beautycare's full-time employees successfully negotiated a hike in their annual compensation with management a few months ago.
B) Beautycare's exports its products to the emerging markets in Asia and Africa.
C) Employee attrition is low at Beautycare.
D) Employees at Beautycare complain that they are too bogged down with administrative tasks to focus on creating new products and concepts.
Difficulty: 3: Challenging
Chapter: 8
Skill: Critical Thinking
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Reflective thinking
42) Centralized global product responsibility implies that ________.
A) a single manager at the headquarters is responsible for a specific product around the world
B) a single manager is responsible for a specific product locally
C) a group of managers at the headquarters jointly shares product responsibility
D) product responsibility rests with subsidiary managers
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
43) The organizational structure for global e-business, in particular for physical products tends to involve ________.
A) network of bricks-and-mortar services
B) this structure of functions and alliances makes up a combination of electronic and physical stages of the supply chain network
C) decentralized e-exchanges for logistics, supplies, and customers that could be housed anywhere
D) the final distribution system and the customer interaction must be tailored to the headquarters-location physical infrastructure and payment infrastructure
Difficulty: 3: Challenging
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
44) ________ refers to an organization running its operations and opening subsidiaries worldwide right from the beginning.
A) International joint venture
B) The subordinateship phenomenon
C) The born-global phenomenon
D) Outsourcing
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
45) CADE International is a small American high-technology firm that has been successfully competing in the international business arena from its inception two years ago. Instead of internationalizing slowly, CADE International embarked upon an ambitious plan to leverage niche market opportunities worldwide—right from the beginning. Papillion Inc. exemplifies the ________ phenomenon.
A) born-global
B) subordinateship
C) outsourcing
D) insourcing
Difficulty: 3: Challenging
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Analytical thinking; Application of knowledge
46) Which of the following is true with regard to born globals?
A) Born globals cater to a single, narrow market segment.
B) In their rush to get on the globalization bandwagon, born globals have categorically ignored domestic market opportunities.
C) Born globals operate in the international business arena right from their inception.
D) Born globals do not have foreign subsidiaries.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
47) Which of the following statements is true regarding business groups?
A) They are common in developed economies but not in emerging markets.
B) Often, they consists of firms in related industrial sections.
C) In countries with strong institutional environments, they help to create a superior internal market for capital, labor and politics.
D) They tend to be comprised of legally separate firms.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
48) Customizing a range of products in a combination suitable for a particular target market, as a response for the increasing need for speedy adaptation to the market, is known as ________.
A) outsourcing
B) diversification
C) platformisation
D) internationalization
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
49) Bonna Inc. is a hybrid organization. The organizational structure of the company has been developed to combine geographic support for both global integration and local responsiveness. Bonna is not a hierarchical organization and uses cross-functional teams to quickly adapt to the dynamic business environment. If the above information is true, which of the following can be fittingly inferred?
A) that Bonna has only a few SBUs
B) that Bonna has a matrix structure
C) that Bonna is a born global
D) that Bonna does not favor standardization of its products
Difficulty: 3: Challenging
Chapter: 8
Skill: Critical Thinking
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Reflective thinking; Application of knowledge
50) Using the Internet to streamline global supply systems ________.
A) enhances the efficiency of the supply chain
B) eliminates the reliance on local suppliers
C) creates a vertical hierarchical structure within organizations
D) increases fixed costs
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Information technology
51) ________ refers to the ability to manage across national boundaries, retaining local flexibility while achieving global integration.
A) Positioning
B) Globalization
C) Transnational capability
D) Filtering capability
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
52) To address the globalization–localization dilemma, firms that have evolved through the multinational form and the global company seek the advantages of ________ in the pursuit of transnational capability.
A) niche marketing
B) horizontal organization
C) a narrow product line
D) vertical organization
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
53) Two major variables in choosing the structure and design of an organization are the opportunities and need for ________.
A) globalization and localization
B) mass marketing and niche marketing
C) vertical mobility and horizontal mobility
D) differentiation and integration
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
54) According to the ________ model, as the company becomes larger, more complex, and more sophisticated in its approach to world markets, it may evolve into a transnational corporation.
A) four stages of contribution
B) crowdsourcing
C) matrix
D) evolutionary stages
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
55) The ________ strategy involves maximizing opportunities for both efficiency and local responsiveness by adopting a structure that uses alliances, networks, and horizontal design formats.
A) multidomestic structure
B) transnational corporation
C) international division structure
D) global structure
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
56) Historically, the geographic division structure is associated with companies pursuing ________ strategies.
A) multidomestic
B) transnational
C) global
D) international
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
57) At persistent signs of ineffective work, a company should ________.
A) switch from a customer orientation to a product orientation
B) implement price skimming
C) analyze its organizational design, systems, and work flow for the possible causes of those problems
D) acquire smaller born globals to regain lost market share
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
58) The organizational culture has a low impact in a ________ strategy.
A) global
B) transnational
C) multidomestic
D) international
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
59) In general, centralized decision making is common for some functions such as ________.
A) sales
B) finance
C) marketing
D) production
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
60) Which of the following indicates a need for change in organizational design?
A) low turnover
B) a decrease in overseas customer complaints
C) seamless innovation
D) new management with different goals and strategies
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
61) In general, decentralized decision making is common for some functions such as ________.
A) finance
B) research and development
C) production
D) strategic management
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
62) Decentralized decision making is beneficial when ________.
A) all subsidiaries use the same inputs in production
B) fast-changing national business environments put a premium on local responsiveness
C) one subsidiary's output is another's input
D) it aims to create a single global organizational culture
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
63) The best organizational structure is the one that ________.
A) does not allow any compromise on the globalization-localization continuum
B) upholds the status quo
C) actively resists organizational change
D) facilitates the firm's goals and is appropriate to its industry, size, technology, and competitive environment
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
64) 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
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
65) To be effective, an organizational structure should ________.
A) not accommodate overlapping responsibilities
B) be rigid
C) be highly adaptable to the changing needs of the company
D) be the same as that of its competitors
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
66) ________ is most likely to reduce the effectiveness of an organizational structure.
A) Low adaptability
B) Fluidity
C) Dynamism
D) High flexibility
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
67) The feedback from the control process and the information systems should ________.
A) point out the most suitable organizational structure for a company at a given point in time
B) help employees formulate a plan for personal development
C) signal any necessary change in strategy, structure, or operations in a timely manner
D) eliminate organizational anarchy
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
68) Which of the following is true with regard to direct coordinating mechanisms?
A) Expatriates from "headquarters" do not exert control over the foreign affiliate through the expectations of the national and corporate culture of the parent company.
B) Even in situations where parent control is considered less important, delegating the control to the local level is ritually avoided.
C) Direct coordinating mechanisms that provide the basis for the overall guidance and management of foreign operations include, the design of appropriate organizational structures and the use of effective staffing practices.
D) Direct coordinating mechanisms do not include staffing practices.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
69) Which of the following is an example of an "indirect" control mechanism for the MNC?
A) staffing key positions at foreign affiliates with expatriates
B) visits by head office personnel
C) sales quotas and budgets
D) regular meeting to allow employees around the world to consult and troubleshoot
Difficulty: 2: Moderate
Chapter: 8
Skill: Application
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
70) Indirect coordinating mechanisms typically include all of the following EXCEPT ________.
A) sales quotas
B) budgets
C) visits by head-office personnel
D) feedback reports
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
71) Which of the following refers to a financial variable in MNC reports that complicates financial statements and performance evaluations?
A) annual budget
B) inflation level
C) sales forecast
D) overhead costs
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
72) To reconcile accounting statements, MNCs usually require ________ different sets of financial statements from subsidiaries.
A) two
B) three
C) five
D) seven
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
73) Which of the following is true with regard to indirect coordinating mechanisms?
A) Indirect coordinating mechanisms do not include feedback reports.
B) Indirect coordinating mechanisms typically include visits by head-office personnel.
C) Indirect coordinating mechanisms typically include sales quotas.
D) Indirect coordinating mechanisms include regular meetings to allow employees around the world to consult and troubleshoot.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
74) The degree to which headquarters' practices and goals are transferable most likely depends on whether ________.
A) top managers are from the head office, the host country, or a third country
B) the organization is product- or service-oriented
C) financial performance reports show a positive trend in growth over the past several years
D) the production system is standardized
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
75) Which of the following is true of Ueno and Sekaran's study of Japanese and U.S. firms with regard to monitoring and reporting systems?
A) U.S. firms tend to use long-term evaluations to a greater extent.
B) Compared to U.S. firms, Japanese firms build budget slack to a greater extent.
C) U.S. firms tend to use communication and coordination processes more extensively than Japanese firms.
D) Japanese managers are more likely to use formal communication and coordination processes.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
76) Which of the following factors adversely affects the accuracy and the timeliness of information systems in less-developed countries?
A) limited sources of data for decision making
B) high cost of capital items
C) expensive labor
D) strict labor laws
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
77) Which of the following is true with regard to information systems in less-developed countries?
A) In less-developed countries, the sources of reliable data for decision making is relatively high in number.
B) The accuracy and timeliness of information systems are often less than perfect in less-developed countries.
C) In less-developed countries, the sources of reliable data for decision making are easy to locate.
D) Government information in less-developed countries is rarely fabricated, so it is considered to be the most reliable source of information for headquarters managers.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
78) The noncomparability of performance data across countries ________.
A) reduces employee empowerment
B) hinders the evaluation process
C) lowers production
D) enhances the overall organizational efficiency
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
79) Meaningful, long-term performance standards can be provided by taking into account nonfinancial measures such as ________.
A) union relations
B) taxes
C) transfer pricing
D) exchange-rate fluctuations
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
80) Strategic plans are decision that cannot have an affect on a company's competitive position or bottom line only after they are implemented.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation
AACSB: Application of knowledge
81) It is not necessary to adapt organizational structures to facilitate changes in strategy, competitive moves, and changes in the environment.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-1: To understand the importance of appropriate organizational structures to effective strategy implementation
AACSB: Application of knowledge
82) Smaller firms usually start their international involvement by exporting, using the services of an export management company.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
83) To develop specific markets to their maximum potential toward worldwide operations by setting up an operation that includes a wholly owned foreign subsidiary.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
84) Internationalization is the process by which a firm gradually changes in response to global competition; domestic market saturation; and the desire for expansion, new markets, and diversification.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
85) If a firm uses the stages model they may start their internationalization as an exporter, and then pursue either an international joint venture or the setting up of a foreign subsidiary.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
86) Small firms typically start their international involvement by getting involved in exporting.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
87) A strategic business unit (SBU) is a self-contained business with its own functional departments and accounting systems.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
88) Regardless of the stage of internationalization, a firm's structural choices always involve two opposing forces: globalization and localization.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
89) The advantages of this organizational form are market concentration, innovation, and responsiveness to new opportunities in a particular environment.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
90) Global functional structures are primarily used by small firms with highly decentralized systems.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
91) Global trends and competitive forces have put increased pressure on multinational corporations to adopt a strategy of internationalization.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
92) A global functional structure is designed on the basis of the company's functions—production, marketing, finance, and so forth.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
93) For firms with diversified product lines that have different technological bases and are aimed at dissimilar or dispersed markets, a functional structure is far more strategically advantageous than a global product structure.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
94) To achieve rationalization, managers choose the manufacturing location for each product based on where the best combination of overall cost—for example, labor, transportation, utilities, taxes—quality of products or services, technology, proximity to markets.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
95) The downside of rationalization is the lack of differentiation and specialization for local markets.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
96) To achieve rationalization, managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology can be attained.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
97) Rationalization involves producing different products or component parts in different countries.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
98) Two major variables in choosing the structure and design of an organization are the opportunities and need for differentiation and integration.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-3: To become familiar with the types of organizational designs suitable for the level and scope of internationalization of the firm
AACSB: Application of knowledge
99) Intel's "Platformisation" refers to customizing a range of chips in a combination suitable for a particular target market, as a response for the increasing need for speedy adaptation to the market.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
100) The organizational structure for global e-businesses, in particular for physical products, typically involves a network of virtual e-exchanges and "bricks and mortar" services.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
101) A matrix organization with unclear responsibilities, a lack of accountability, and political battles over resources, results in risk-averse behavior and loss of market share.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
102) A matrix structure can be used to take advantage of personal skill and experiences shared across both functional and divisional structures.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
103) To address the globalization-localization dilemma, firms that have evolved through the multinational form and the global company seek the advantages of horizontal organization in the pursuit of transnational capability.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
104) The global functional structure typical of the transnational company creates a complex coordination and control system, as it attempts to combine the capabilities and resources of a multinational corporation.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
105) A matrix structure is a hybrid organization of overlapping responsibilities.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
106) A matrix structure is an organizational structure that divides worldwide operations according to a company's product areas.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
107) Globalization is a specific strategy that treats the world as one market by using a non standardized approach to products and markets adapting to each market differently.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
108) Companies are increasingly abandoning rigid structures in an attempt to be more flexible and responsive to the dynamic global environment.
Difficulty: 1: Easy
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
109) Rapidly changing competition and global business activities demand companies to run their worldwide operations effectively and efficiently, based on the right business models and organizational structures.
Difficulty: 1: Easy
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
110) In dealing with the rapidly changing global business environment structural changes could include becoming more hierarchical.
Difficulty: 1: Easy
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
111) In general, decentralized decision making is common for functions such as finance, and research and development
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-5: To understand the role of technology in the evolution of the networked structure and to appreciate the role of teams in achieving business goals
AACSB: Application of knowledge
112) By transitioning to formats such as interorganizational networks, companies are abandoning traditional structures and switching to more rigid organizational structures.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
113) Effective means doing this the right way, while efficient means doing so without wasting any resources.
Difficulty: 1: Easy
Chapter: 8
Skill: Application
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
114) Direct mechanisms that provide the basis for the overall guidance and management of foreign operations include the design of appropriate structures.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
115) Management information system can be a problem for headquarters managers in their attempt to maintain efficient coordination of activities and consolidation of results.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
116) Variables such as transfer pricing and exchange-rate fluctuations do not influence profitability patterns.
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
117) What are the major variables that should be taken into account when designing a firm's organizational structure?
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
118) List the typical ways in which firms organize their international activities.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
119) Briefly describe the characteristics of the global geographic structure.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-2: To understand the structural changes necessary as the firm develops and changes strategies over time
AACSB: Application of knowledge
120) What is a transnational organization?
Difficulty: 2: Moderate
Chapter: 8
Skill: Application
LO: 8-4: To understand emergent structural forms in the global economy
AACSB: Application of knowledge
121) Why are global companies increasingly abandoning rigid structures? How are they adapting to the changing global environment?
Difficulty: 1: Easy
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
122) Describe the organizational structure and characteristics of transnational corporations.
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
123) What are the changes necessitating new structural designs for organizations?
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
124) What are direct and indirect coordinating mechanisms?
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-6: To realize how organizational design affects the manager's job, for example, on the level and location of decision making
AACSB: Application of knowledge
125) What are the major challenges presented by information systems in less-developed countries?
Difficulty: 2: Moderate
Chapter: 8
Skill: Concept
LO: 8-7: To emphasize the role of control and monitoring systems suitable for specific situations and locations in the firm's international operations
AACSB: Application of knowledge
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International Management 10e | Test Bank with Answer Key by Helen Deresky
By Helen Deresky