Ch. 9 - SmartBook 2.0 - Entry Strategies and Organizational Structures

Select all that apply Which of the following statements are true of the choices of exporting and importing in international business?

- They are often the only ones available for small and new firms that look to expand their business internationally. - They offer an avenue for large firms that want to begin their international expansion with minimum investment and risk.

Select all that apply In the context of the basic organization structures, identify the features of a global area division.

- This arrangement allows division managers to fulfill the demands of the local market and make quick decisions to accommodate environmental changes. - This arrangement is typically used by firms that are in mature businesses and have geographically differentiated narrow product lines.

Select all that apply Identify the disadvantages of a firm using a product division structure.

- This structure necessitates the duplication of facilities and staff personnel within each division. - This structure tends to encourage managers to pursue currently attractive geographic prospects for products and neglect areas with better long-term potential.

Select all that apply Identify the benefits of a firm's global product structure.

- This structure maintains product emphasis and promotes product planning on a global basis. - This structure allows line and staff managers within a division to achieve expertise in the technical and marketing aspects of products assigned to them. - This structure offers a direct line of communication from the customer to those in the firm who have product knowledge and expertise.

Select all that apply When do firms choose the entry and ownership strategy of mergers/acquisitions?

- When the firms want to construct high-profit products in a new market - When the firms want quick expansion of resources

Select all that apply Identify the types of multinational corporations (MNCs) that typically use a global functional division structure.

- MNCs that transport products and raw materials from one geographic area to another - MNCs that require tight, centralized coordination and control of integrated production processes

Select all that apply In the context of product integration, which of the following statements are true of cross-functional coordination in a multinational corporation (MNC)?

- Personnel spend less time within their functions and thus are less knowledgeable of the developments in their specialized areas. - It leads to product teams becoming independent and thus failing to integrate their overall efforts with the organization at large.

Select all that apply Which of the following are true of licensing?

- The licensor usually restricts licensee sales to a specific geographic locale. - The licensor often limits the time frame covered by the arrangement.

Select all that apply Which of the following are true of a mixed organization structure?

- A firm that uses this arrangement combines elements of function, product, and geographic designs. - A firm that employs this arrangement manages geographic and product lines through the use of a matrix design.

Select all that apply Identify the organizational mechanisms used by Toyota in the worldwide integration of product development.

- Design standards are maintained by the people who are doing the work and are regularly improved to meet new design demands. - Project leaders create standard goals and employ simple forms and procedures so that the work can be done efficiently. - Supervisors who remain highly skilled in the technical side of the work are responsible for mentoring, training, and developing their engineers. - Employees are given in-house technical training and are rotated within one function, thus reducing the continual interaction with other teams. - Toyota uses integrative leadership, wherein managers coordinate the work of functional specialists and act as lead designers on projects.

Select all that apply In the context of the entry strategies used by multinational corporations (MNCs), which of the following are true of the option of having a wholly owned subsidiary?

- Initial investments made in the form of a wholly owned subsidiary in a foreign country are also known as "greenfield" or de novo (new) investments. - This option is often used by small firms, especially if international or transaction costs are high.

Select all that apply Which of the following are true of franchising?

- It gives the franchisor a new stream of income and the franchisee an established concept and products that can be quickly marketed. - It involves an up-front payment of a fee and then a percentage of the revenues by the franchisee to the franchisor.

Select all that apply In the context of the basic organizational structures, which of the following are true of a transnational network?

- It mixes elements of classic functional, product, and geographic structures while relying on a network structure to link the worldwide subsidiaries. - It is a web of business tasks and transmissions where local-level groups make decisions, but groups inform headquarters and sometimes each other.

Match the types of alliances and joint ventures (in the left column) with their examples (in the right column). Nonequity venture --> Equity joint venture -->

--> Dream Home International, a multinational construction company, is hired by the Department of Social Welfare in Iridia to build eco-sustainable houses for the homeless and other disadvantaged groups. --> Stellar Vision, an entertainment company, and Trident Group, an information technology company, form a limited liability company to develop and market virtual reality games together for mobile devices.

In the context of organizational characteristics, match the types of specialization (in the left column) with their features (in the right column). Horizontal specialization --> Vertical specialization -->

--> Employees tend to develop functional expertise in a specific area. --> Employees at higher management positions are given much more status than those in lower levels.

Match the groups of firms (in the left column) with the corresponding basic values (in the right column). Asian firms --> Western firms -->

--> Group, trust, compromising, and fluid --> Individual, legal, confrontational, and analytic

Match the categories of formalization identified in a study of U.S. and Japanese firms in Taiwan (in the left column) with the ways in which they were measured (in the right column). Instructions Objective formalization --> Subjective formalization -->

--> It was measured by things such as the number of various documents given to employees, organizational charts, information booklets, operating instructions, written job descriptions, procedure manuals, written policies, and work-flow schedules and programs. --> It was measured by the extent to which goals were left unspecific and vague, informal controls were used, and culturally induced values facilitated getting things done.

Match the types of networks created by a multinational corporation (MNC) (in the left column) with the corresponding managerial dimensions (in the right column). Internal networks --> External networks -->

--> Presence of shared vision and clear organizational mandates --> Absence of shared vision and ambiguous organizational mandates

In the context of organizational characteristics, match the types of specialization (in the left column) with their descriptions (in the right column). Horizontal specialization --> Vertical specialization -->

--> The assignment of jobs so that individuals are given a particular function to perform and tend to stay within the confines of this area --> The assignment of work to groups or departments where individuals are collectively responsible for performance

In the context of the use of export arrangement as the initial division structure of a firm, match the types of companies (in the left column) with the descriptions of their reporting structures (in the right column). A company that has a narrow product line --> A company that has a broad product line and intends to export different products into the international market -->

--> The export manager typically reports directly to the head of marketing, and international operations are coordinated by the marketing department. --> The export manager typically heads a separate department and reports directly to the president of the company.

Match the multinational organizational structures (in the left column) with the associated descriptions of cultural control (in the right column). Global area division --> Global product division --> Matrix structure --> Transnational network structure -->

--> The local subsidiary culture is usually considered the most important. --> Cultural control is achievable for some firms though it is not always necessary. --> The culture is required to support shared decision making. --> The organization culture has to rise above national cultures and support sharing and learning.

Match the multinational organizational structures (in the left column) with the associated descriptions of their decision-making control (in the right column). International division structure --> Global area division --> Matrix structure --> Transnational network structure -->

--> There is typically some centralization in decision making. --> Local units have autonomy in decision making. --> Decision making is balanced between global area and product units. --> Most of the decisions are centralized in the key network nodes, and few decisions are centralized at headquarters.

Match the parts of a firm's transnational network (in the left column) with their descriptions (in the right column). Dispersed subunits --> Specialized operations --> Interdependent relationships -->

--> They are subsidiaries that are located anywhere in the world where they can add value to the firm. --> They involve activities carried out by worldwide subsidiaries that focus on specific product lines, research areas, and marketing areas. --> They are used to share resources and information throughout the other components of the network.

Match the types of alliances and joint ventures (in the left column) with their descriptions (in the right column). Nonequity ventures --> Equity joint ventures -->

--> They involve one group merely providing a service for another. --> They involve financial investment by all the firms involved in alliances and joint ventures.

Match the groups of firms (in the left column) with the descriptions of their organization preferences (in the right column). Asian firms --> Western firms -->

--> They tend to be informal, generalist, integrated, and cooperative. --> They tend to be formal, fragmented, hierarchical, and competitive.

Select all that apply In the context of the basic organization structure of multinational corporations (MNCs), identify the true statements about an international division structure.

-It is often adopted by firms that are in the developmental stages of international business involvement. - It takes most of the burden off the CEO for monitoring the operations of a series of overseas subsidiaries as well as domestic operations. - It is likely to be used by firms that have small international sales, limited geographic diversity, or few executives with international expertise.

A(n) _____ _____ _____ is a structure under which global operations are organized on a geographic rather than a product basis.

1. global 2. area 3. division

A(n) _____ _____ _____ is an organization structure that organizes worldwide operations primarily based on function and secondarily on product.

1. global 2. functional 3. division

A(n) _____ _____ _____ is a structural arrangement in which domestic divisions are given worldwide responsibility for product groups.

1. global 2. product 3. division

A(n) _____ _____ _____ is a structural arrangement that handles all international operations of a business out of a division created for this purpose.

1. international 2. division 3. structure

A(n) _____ _____ (JV) is a specific type of alliance agreement under which two or more partners own or control a business.

1. joint 2. venture

The cross-border purchase or exchange of equity involving two or more companies is known as a(n) _____ or a(n) _____.

1. merger 2. acquisition

A(n) _____ _____ _____ is a combination of a global product, area, or functional arrangement into an MNC that supplements its primary structure with a secondary one and, perhaps, a tertiary one.

1. mixed 2. organization or organizational 3. structure

The _____ _____ _____ is a multinational structural arrangement that combines elements of function, product, and geographic designs, while relying on a network arrangement to link worldwide subsidiaries.

1. transnational 2. network 3. structure

A(n) _____ _____ _____ is an overseas operation that is totally owned and controlled by a multinational corporation (MNC).

1. wholly 2. owned 3. subsidiary

_____ is an organizational management system in which important decisions are made at the top.

Centralization

_____ involves pushing decision making down the line and getting the low-level personnel of an organization involved.

Decentralization

True or false: A drawback of a firm using a product division structure is that it leads division managers to focus their time and efforts on tapping the international market, and thus the domestic market is often neglected.

False

True or false: Decentralization is an organizational management system in which important decisions are made at the top.

False

True or false: Exporting and importing are sustainable long-term business strategies that guarantee a firm permanent access to overseas markets with minimal direct investment and limited risks.

False

Which of the following is true of the specialized operations component of a firm's transnational network?

It is designed to tap particular expertise or other resources in a firm's worldwide subsidiaries.

Which of the following is true of global product divisions?

They typically operate as profit centers.

True or false: A subsidiary is a typical organizational arrangement for handling finance-related businesses or other operations that need an on-site presence from inception.

True

True or false: In order to achieve the layering of competitive advantage, multinational corporations (MNCs) should create extensive internal networks of international subsidiaries in major national or regional markets and build external networks of strategic alliances with firms around the world.

True

A(n) _____ is any type of cooperative relationship among two or more different firms.

alliance

The use of defined structures and systems in decision making, communicating, and controlling is called _____.

formalization

A(n) _____ is a business arrangement under which one party allows another to operate an enterprise using its trademark, logo, product line, and methods of operation in return for a fee.

franchise

A(n) _____ is an agreement that allows one party to use an industrial property right in exchange for payment to the owning party.

license

A benefit of a firm's global product structure is that _____.

the creation of specialized product sets results in effective alterations