SGQ 15

personal control

the use of frequent human interaction to enforce control

"not-invented-here"

On the other hand, a subsidiary that may have discovered a best practice and tries to share this with other subsidiaries is likely to face a "not-invented-here" problem

"Foreigner problem"

"foreigner" problem that limits their ability to transfer knowledge across subsidiaries. This challenge relates to the ability of different subsidiaries to understand knowledge provided to them ability: needle in a haystack problem

What is meant by the term company culture ?

A long-lasting system of shared assumptions, beliefs, and values common across the company which affects how employees behave, perhaps subconsciously.

In which of the following organizational structures does a company often designate one boss as the primary boss and the other bosses as secondary bosses?

A matrix structure

"hoarding of experties"

A subsidiary seeking knowledge from another subsidiary may face resistance from individuals in the other subsidiary, who may be reluctant to invest the time, energy, and effort to share their knowledge.

Which of the following defines network structure ? Correct Answer:

An organizational structure with a movement of people and shifting structure by project

In the context of organizational structures, identify a difference between a functional structure and a network structure.

Another potential drawback is that network structures have decentralized decision-making.

In the context of organizational structures, which of the following is an advantage of a network structure?

Collaboration occurs in an informal manner as there are no rigid hierarchies.

What is an organization structure based on units identified by departmental roles?

Functional structure

In the context of organizational structures, which of the following statements is true of a divisional structure?

It allows a company to develop specific and unique offerings for each target group.

Which of the following BEST explains personal control?

It is a control that uses frequent human interaction to enforce control.

is control that focuses on objective performance metrics and reporting systems.

Output control

H&M is a Swedish fashion retailer that operates through physical stores spread across many countries. If the company uses an output control system to evaluate the performance of its stores and explore growth opportunities, which of the following difficulties is it most likely to face?

The challenges of output control are that it can be difficult to get accurate and timely performance data, to efficiently analyze the data, and to ensure that data from one market are comparable to those from other markets. Typically, global companies rely on large-scale information systems such as Oracle or SAP to help organize these efforts, but these systems are costly, include only company information, and are limited by the accuracy of the inputs.

Of the following, which is a motivation challenge of horizontal coordination among subsidiaries where successful units may not wish to go to the effort of documenting and sharing their methods with other units?

The hoarding of expertise problem

In the context of organizational structures, which of the following is a difference between a matrix structure and a network structure?

The main challenge of a matrix structure is the sheer complexity of the operation.

Which of the following is an ability challenge of horizontal coordination among subsidiaries where so much information is shared that it is difficult to be aware of the relevant information? Correct Answer:

The needle-in-a-haystack problem

Novotel, a global lodging service provider based in France, had set standardized rules for all its managers. In addition to manuals that outline the company's routines in detail, the managers are given scripted greetings to give to customers and scripted methods of behavior. Which of the following was likely to have resulted from this approach?

There would probably be a lack of flexible working practices

In the context of virtual organizations, which of the following statements is true of contract employees?

They are paid for the job undertaken.

matrix structure

a structure that organizes a company along multiple dimensions that may include geography, function, and division

network structure

a structure that organizes a company by groups that form to work on a project, and then dissolve once the project is complete

Divisional structure

a structure that organizes a company by units according to the products they make, the customer segments they serve, or the geographic location in which they operate

functional structure

a structure that organizes a company into units identified by their functional roles, or what they do

modular design

a system in which a process, product, or service is divided into components that can be changed independently and then reintegrated into the system

virtual organization

an organization that enables employees to coordinate and execute activities almost entirely through information technology, rather than by working in the same physical space

Bureaucratic control

control accomplished through rules and routines

output control

control that focuses on profitability and/or market share

normative control

control that gets subunits to adhere to the values of the organization

Jet Blue, a U.S. based budget airline, does not perform much of its customer service functions from a physical office space. Instead, it hires workers from across the world who can work from their homes using their personal computers. These employees book flights, change itineraries, and support customer questions. Which of the following statements could be a disadvantage of Jet Blue's approach? a. Its employees are unlikely to have the freedom of flexible working hours. b. The company is likely to face difficulties in building a strong company culture. c. Its employees are likely to have high morale due to increased socialization opportunities. d. The company is unlikely to face any difficulty while hiring workers to take up projects when needed.

b. The company is likely to face difficulties in building a strong company culture.

McDonalds, a leading fast-food restaurant chain, operates globally. It clearly specifies its operational routines, which include taking customers' orders, preparing food, floor arrangement and restaurant décor. This helps the restaurant chain ensure that customers in various parts of the world have similar experiences with the restaurant. Which control system has McDonalds adopted in this scenario?

bureaucratic control

The Foreign Corrupt Practices Act (FCPA) is a law that was originally established in 1977 in the United States prohibiting U.S. citizens, companies, and their entities from bribing foreign government officials to influence decisions pertaining to new business or contracts. Therefore, American companies operating on a global scale must force this compliance onto their divisions and subsidiaries around the world. This is an example of _____. a. government overreach b. bureaucratic control c. output control d. criminal control

bureaucratic control

Matt, the CEO, meets with the heads of all the departments to decide the type of structure that would be most suitable for the firm. The heads agree that the firm would benefit from a divisional structure. However, Matt is not convinced with the idea. Which of the following statements supports Matt's concern in this scenario? a. Organizations with a divisional structure often struggle to respond to market needs and opportunities, especially if these affect more than one functional unit simultaneously. b. If the company adopts a divisional structure, it will not be able to organize units by the geographic location in which it serves. c. A divisional structure could lead to inefficient knowledge flows between units and high coordination costs. d. If the company adopts a divisional structure, it will not be able to develop specific and unique offerings for each target group.

c. A divisional structure could lead to inefficient knowledge flows between units and high coordination costs.

Leugeot Cycles, a fictional bicycle manufacturer, uses a common modular platform, which can be configured based on consumer needs in different countries, for its bicycle models. In this scenario, which of the following statements is true based on the concept of modularity? a. The overall design of the manufactured products is likely to be optimized. b. The company is likely to be restricted from simultaneously working on different aspects of a product. c. The company is more likely to be able to achieve economies of scale. d. All components of the developed products are likely to work well together with minimal integration.

c. The company is more likely to be able to achieve economies of scale.

"needle-in-a-haystack"

challenging in global companies where personal interaction is limited knowledge probider: foreigner problem

Canty Co. is a health hardware company. They encourage employees to share the values of the organization. By providing training and career development opportunities in a democratic-like cooperation environment, Canty facilitates increased knowledge sharing and loyalty amongst its employees. What kind of informal organizational control does this BEST represent?

company culture

Mraz Ltd. has an organizational structure that is organized by geographical areas, for example North America, South America, East Asia, Europe, and MENA. Each region has their own departments of R&D, marketing, finance, etc.; however, they are facing budget issues as the units spend a lot of resources in ineffective coordination with one another. Of the following options, which is the BEST way for Mraz to go about changing their organizational structure? a. They should centralize R&D to reduce duplication of effort, and production to reach economies of scale. They should also switch to a functional structure to maximize efficiencies in each function. These changes will allow them to increase their profitability. b. They should change the organizational structural to be a company culture scheme. Everybody will have the same norms and values. This way Mraz can reduce redundancies by allocating a budget of R&D in each region. The production should remain local. c. They should use an output control system because it will increase employee morale and loyalty. They could also increase bonuses for each person that reaches a quota. That will increase revenues because people are motivated to produce more. d. They should come together with other competitors and create an organizational structure that allows them to have the same technological standards. This way they can develop a common standard that everybody will follow, and thus the company will save money.

d. They should come together with other competitors and create an organizational structure that allows them to have the same technological standards. This way they can develop a common standard that everybody will follow, and thus the company will save money.

France's LVMH, a luxury brand, is a meganational business. Its commercial activities are split into six business groups, namely wine and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, selective retailing, and other activities. In the context of organizational structures, which of the following structures has LVMH adopted?

divisional structure

Nestlé is a company that has a multidivisional structure. In addition to a product oriented divisional structure (e.g., Nestlé Waters, Nestlé Health Science) for standardization of brands, it also is organized to allow the company to focus on the unique needs of different markets with divisions such as Americas; Asia, Oceania, and Africa; and Europe & MENA. What is the type of structure called?

divisional structure focused by geographic region

Most companies, both large and small, have a structure that is organized and identified by their functional roles, such as a Vice President of Marketing and Vice President of Finance. This type of structure is known as ________ structure. Correct Answer:

functional

incentives

hey add a new source of motivation to reward additional effort, whether the goal is improved individual, unit, or organizational performance enable leaders to directly reward specific desired behaviors

In the context of control systems, which of the following is a drawback of personal control?

high cost of individual interaction

In the context of communication in organizations and their subsidiaries, _____ is the process by which subsidiaries communicate and coordinate work among themselves. Correct Answer:

horizontal coordination

Company culture

is a system of shared assumptions, beliefs, and values that effect how employees behave

A ________ is a structure where employees have two or more reporting relationships generally to a functional manager and a product manager and in global firms often a geographic manager. Correct Answer:

matrix structure

Belinda is a production engineer with a transnational manufacturing company. She primarily reports to the site Director of Manufacturing in San Antonio, but also reports to the VP of Production Engineering who is located in Tokyo, Japan. Which of the following organizational structures is Belinda a part?

matrix structure

control systems

means by which headquarters can force compliance from global subsidiaries

Jenny is not employed as a full-time employee in a particular company. Instead, she chooses to be an outside worker who can be hired by different firms to perform specific tasks in order to broaden her experience base and build her network. She is paid solely for the job performed by her rather than a set salary. In this scenario, Jenny is NOT a(n) _____.

mercenary

freelancer

new employees, free agents

Unlike a functional structure, a divisional structure:

organizes a company s units by the geographic region in which it operates, or the customer segments it serves.

Contract employees

outside workers who are hired by a firm to perform specific predetermined tasks for a company and who are paid by the job

Toyota frequently sends experts from its headquarters to its regional automotive production units. These experts are trusted employees of the company who visit global subsidiaries to interact with and enforce compliance by the units. In this scenario, Toyota appears to have adopted a(n) _____.

personal control system

organizational structure

reinforce international strategies by clarifying reporting channels, facilitating knowledge flows up and across the company, and determining where decision making happens.

Unlike in functional structures, in network structures, _____.

the importance of informal structures is high.

horizontal coordination

the process by which subsidiaries communicate and coordinate work among themselves