Ch 12

Which of the following is an effect of adopting a local responsiveness strategy?

Costs of products and services are increased.

The business leader of a specific country (or a geographic region) is known as a(n) ______:

Country manager

From a resource-based standpoint, a fundamental basis for competitive advantage is innovation-based firm heterogeneity. _____ virtually guarantees that there will be persistent heterogeneity in the solutions generated.

Decentralized R&D work performed by different teams around the world

_______ is an organizational structure often used to alleviate the disadvantages associated with both geographic area and global product division structures, particularly when adopting a transnational strategy.

Global matrix

TrinkCan Inc., a soft drink company in Wales, establishes new branches in England, Australia, and the United States. To minimize its costs, the company uses similar packaging, distribution, and promotion across all the countries. According to the integration-responsiveness framework, which of the following strategies is used by TrinkCan?

Global standardization strategy

Frolik Foods Inc., a fast food franchise in the United States, opens a new outlet in Germany. The franchise develops recipes in the U.S. and then transfers them to its outlets in Germany. Which of the following strategies is being used by Frolik Foods?

Home replication strategy

In the context of organizational cultures, which of the following is true of a wolf culture?

It centers on relentless pursuit with highly motivated employees working overtime.

Which of the following is a leading problem with the international division organizational structure?

It does not give sufficient voice to foreign subsidiary managers relative to the heads of domestic divisions.

Which of the following statements is true of a geographic area structure?

It encourages the fragmentation of the multinational enterprises into fiefdoms.

Which of the following is true of a localization strategy?

It is effective when pressures for cost reductions are low.

Which of the following statements is true of a global product division structure?

It is highly responsive to cost reduction pressures.

Which of the following is an advantage of adopting a home replication strategy?

It is relatively easy to implement.

Which of the following is a disadvantage of adopting a home replication strategy?

It often lacks local responsiveness.

Which of the following is a disadvantage of a global product division structure?

It results in the suffering of local responsiveness

Which of the following is a disadvantage of adopting a global standardization strategy?

It sacrifices local responsiveness.

In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a localization strategy?

Knowledge is developed and retained within each subsidiary.

In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a home replication strategy?

Knowledge is developed at the center and transferred to subsidiaries.

In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a transnational strategy?

Knowledge is developed jointly and shared worldwide.

In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a global standardization strategy?

Knowledge is mostly developed and retained at the center and key locations.

_____ can be defined as the structures, processes, and systems that actively develop, leverage, and transfer knowledge.

Knowledge management

_____ means reacting to different consumer preferences and host-country demands.

Local responsiveness

The proactive and deliberate pursuit of new opportunities by a subsidiary to expand its scope of responsibility is known as _____.

Subsidiary initiative

Which of the following is true of the business leader of a specific country (or a geographic region)?

They carry a great deal of weight in their geographic area.

What did Theodore Levitt argue in his 1983 article "The Globalization of Markets"?

Worldwide consumer tastes are converging

The two sets of pressures that multinational enterprises (MNEs) confront are _____.

cost reduction and local responsiveness

Companies following a localization strategy differ from companies following a home replication strategy in that the companies following a localization strategy:

develop and retain knowledge within each subsidiary.

In the context of strategizing, structuring, and learning around the world, an implication for savvy managers will be to

develop learning and innovative capabilities to leverage multinational presence as an asset.

Widget Corp., a manufacturing firm in Lithuania, exports its manufactured tools to Wales. To protect its domestic firms, the Government of Wales imposes a 20 percent tax on the tools imported from Widget Corp. Therefore, Widget Corp. is subject to:

formal institutional frameworks erected by the host-country government.

Multinational enterprises appoint home-country nationals as the head of a foreign subsidiary because the home-country nationals:

have an understanding of the informal workings of multinational enterprises.

Burger Mart, a fast food franchise in the U.S. is famous for its unique recipes that are a combination of a variety of spices. Their products are very popular in the U.S. They open a new outlet in Germany. They do not change their menu or their recipes as their menu and products are already popular in the U.S. Based on the integration-responsiveness framework, the strategy used by Burger Mart is a(n) _____.

home replication strategy

Asset Sports, a sports equipment manufacturing company based in India, specializes in cricket equipment. It establishes a new manufacturing plant in Brazil that specializes in soccer equipment. Based on the integration-responsiveness framework, the strategy adopted by Asset Sports is called a(n) _____.

localization strategy

The global matrix structure supports the goal of the transnational strategy, but in practice it is often difficult to deliver because:

managers have to deal with two bosses who are often in conflict.

Unlike a transnational strategy, a global standardization strategy involves:

the development and retention of knowledge at the center and key locations.

Altonland Inc., a pharmaceutical company based in the United States, generally appoints a U.S. national as the head of its foreign subsidiaries for the first few years after a subsidiary is established. The company has been following this practice from the time it started its overseas operations. The given scenario illustrates:

the informal rules of the game.

Multinational enterprises that engage in a _____ strategy promote global learning and diffusion of innovations in multiple ways.

transnational