Chapter 12 Strategizing, Structuring, and Learning Around the World

The district manager wanted to be able to run his part of the company as a business. Obviously he was already running part of a business, so what did he mean by that? a. He did not feel that he was really running the business but rather implementing decisions made by others who were not as familiar with his market as he was. b. All of these choices. c. He felt he was unable to run his part of the business because of lack of funding. d. He believed he was not allowed to run his part of the business because of political reasons.

a. He did not feel that he was really running the business but rather implementing decisions made by others who were not as familiar with his market as he was.

Which of the following is a disadvantage of adopting a home replication strategy? a. It often lacks local responsiveness. b. ​It is organizationally complex and difficult to implement. c. ​It focuses on the demands made by the foreign countries. d. ​It involves high costs due to duplication efforts in multiple countries than localization strategy.

a. It often lacks local responsiveness. Home replication strategy often lacks local responsiveness because it focuses on home country, proving to be a disadvantage. When a firm aspires to broaden its international scope, failing to be mindful of the foreign customers' needs and wants may alienate those potential customers. See 12-1: Multinational Strategies and Structures

Why do you think Kotler made it a point to let the viewer know that the district manager who was addressing the board was a highly regarded, senior person in the industry? a. To better explain their surprise that he was allowed to speak to the board of directors b. All of these choices c. To better explain their surprise that he was allowed to reach the level of district manager d. To better explain their surprise that he was there to complain that he was unable to get the resources he needed

a. To better explain their surprise that he was allowed to speak to the board of director

Multinational enterprises that engage in a _____ strategy promote global learning and diffusion of innovations in multiple ways. a. ​transnational b. ​home replication c. ​localization d. global standardization

a. transnational Multinational enterprises that engage in a transnational strategy promote global learning and diffusion of innovations in multiple ways. Innovations not only flow from the home country to host countries, but also flow from host countries to the home country and flow among subsidiaries in multiple host countries. See 12-1: Multinational Strategies and Structures

In the context of organizational cultures, which of the following is true of a wolf culture? a. ​It centers on relentless pursuit with highly motivated employees working overtime. b. ​It focuses on appointing a host-country national as the head of a foreign subsidiary. c. ​It is the proactive and deliberate pursuit of new opportunities by a subsidiary to expand its scope of responsibility. d. It centers on an organizational structure that assigns global responsibilities.

a. ​It centers on relentless pursuit with highly motivated employees working overtime. China's Huawei, for example, is known to have a distinctive ''wolf culture'', which centers on ''continuous hunting'' and ''relentless pursuit'' with highly motivated employees who routinely work over time and sleep in their offices. Although rivals can imitate everything Huawei does technologically, their biggest hurdle lies in their lack of ability to wrap their arms around Huawei's ''wolf'' culture. See 12-2: How institutions and resources affect, multinational strategy, structure, and learning

Which of the following is an advantage of adopting a home replication strategy? a. ​It is relatively easy to implement. b. ​It focuses on host country. c. ​It is effective when the pressures for cost reductions are low. d. ​It encourages the fragmentation of a company into fiefdoms.

a. ​It is relatively easy to implement. Home replication strategy is relatively easy to implement. It is also usually the first one adopted when firms venture abroad. See 12-1: Multinational Strategies and Structures

Companies following a localization strategy differ from companies following a home replication strategy in that the companies following a localization strategy: a. ​develop and retain knowledge within each subsidiary. b. develop and retain knowledge at the center and key locations. c. develop knowledge at the center and transfer it to subsidiaries. d. ​develop knowledge and share it worldwide.

a. ​develop and retain knowledge within each subsidiary When multinational enterprises adopt a strategy, knowledge is developed and retained within each subsidiary. The focus is on sensing and exploiting local opportunities. See 12-3: Worldwide learning, innovation, and knowledge management

​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: a. ​formal institutional frameworks erected by the host-country government. b. ​formal institutional frameworks erected by the home-country government. c. informal rules of the game erected by the host-country government. d. ​informal rules of the game erected by the home-country government.

a. ​formal institutional frameworks erected by the host-country government. In the given scenario, Widget Corp. is subject to the formal institutional frameworks erected by the host-country government. Externally, multinational enterprises (MNEs) are subject to the formal institutional frameworks erected by various home-country and host-country governments. See 12-2: How institutions and resources affect, multinational strategy, structure, and learning

For what purpose was the district manager appealing to the board? a. For additional funds that he believed would maximize profit for the company. b. All of these choices. c. For additional funds that he believed would improve the district's performance. d. For a change in the way the company operated, because he was not allowed to get the resources he wanted.

b. All of these choices

How could headquarters determine which local manager has the best feel for opportunity? a. Autonomy would be based on a consideration of the person's track record b. All of these choices c. By allowing a manager to have greater autonomy d. By holding a manager accountable for his or her decisions

b. All of these choices

Which of the following best explains Kotler's assertion that "all markets are local"? a. A company must identify those who have a set of needs and treat them as a specific market. b. All of these choices. c. Buyers' needs may differ from one geographic area to another. d. There is rarely a successful "one size fits all" strategy

b. All of these choices.

How could a company implement autonomy to the manager in a way that would limit the risks to the firm? a. Expect the manager to be monitored to determine whether actual results being obtained are in line with those that were projected. b. Both expect the manager to submit his plans to those higher in the chain of command, and expect the manager to be monitored to determine whether actual results being obtained are in line with those that were projected. c. Expect the manager to submit his plans to those higher in the chain of command. d. Expect the manager will be fired if he fails.

b. Both expect the manager to submit his plans to those higher in the chain of command, and expect the manager to be monitored to determine whether actual results being obtained are in line with those that were projected.

​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? a. ​Localization strategy b. Home replication strategy c. Global standardization strategy d. ​Transnational strategy

b. Home replication strategy Frolik Foods is using a home replication strategy. In multinational enterprises pursuing a home replication strategy, interdependence is moderate and the role of subsidiaries is largely to adapt and leverage parent-company competencies. Thus, knowledge on new products and technologies is mostly developed at the center and flown to subsidiaries, representing the traditional one-way flow. See 12-3: Worldwide learning, innovation, and knowledge management

​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) _____. a. home replication strategy b. localization strategy c. ​transnational strategy d. ​acquisition strategy

b. localization strategy The strategy adopted by Asset Sports is called localization strategy. Localization strategy focuses on a number of foreign countries/regions, each of which is regarded as a stand-alone local market worthy of significant attention and adaptation. See 12-1: Multinational Strategies and Structures

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. a. Adding more researchers in centralized R&D units b. ​Decentralized R&D work performed by different teams around the world c. ​Nationalizing R&D functions d. Increased interdependence between the headquarters and foreign subsidiaries of a company

b. ​Decentralized R&D work performed by different teams around the world Intense competition for innovation drives the globalization of R&D. From a resource-based standpoint, a fundamental basis for competitive advantage is innovation-based firm heterogeneity. Decentralized R&D work performed by different locations and teams around the world virtually guarantees that there will be persistent heterogeneity in the solutions generated. GSK, for example, began aggressively spinning off R&D units as it became clear that simply adding more researchers in centralized R&D units did not necessarily enhance global learning and innovation. See 12-3: Worldwide learning, innovation, and knowledge management

​In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a localization strategy? Select one: a. ​Knowledge is developed at the center and transferred to subsidiaries. b. ​Knowledge is developed and retained within each subsidiary. c. Knowledge is mostly developed and retained at the center and key locations. d. ​Knowledge is developed jointly and shared worldwide.

b. ​Knowledge is developed and retained within each subsidiary. When multinational enterprises (MNEs) adopt a localization strategy, the interdependence is low. Knowledge management centers on developing insights that can best serve local markets. See 12-3: Worldwide learning, innovation, and knowledge management

​_____ can be defined as the structures, processes, and systems that actively develop, leverage, and transfer knowledge. a. ​Knowledge engineering b. ​Knowledge management c. ​Global standardization d. ​Global product division

b. ​Knowledge management Knowledge management can be defined as the structures, processes, and systems that actively develop, leverage, and transfer knowledge. Knowledge management depends not only on information technology but also on informal social relationships within the multinational enterprise. See 12-3: Worldwide learning, innovation, and knowledge management

In the context of strategizing, structuring, and learning around the world, an implication for savvy managers will be to: a. understand and be prepared to change the external rules of the game governing multinational enterprise (MNE) management. b. ​develop learning and innovative capabilities to leverage multinational presence as an asset. c. ​focus on structuring the internal rules of the game for different strategies. d. ​develop the rules of the game and their transitions at both global and regional levels.

b. ​develop learning and innovative capabilities to leverage multinational presence as an asset Managers need to actively develop learning and innovation capabilities to leverage multinational presence. A winning formula is: Think global, act local. Failing to do so may be costly. See 12-4: Management Savvy

Which of the following best argues against Kotler's assertion that "all markets are local"? a. A firm cannot be profitable at the local level only. b. All of these choices. c. A firm can be profitable if it finds commonalities among various countries and thus aim for volume that will permit economies of scale. d. A firm that finds commonalities among markets in various countries can cease dealing in local markets.

c. A firm can be profitable if it finds commonalities among various countries and thus aim for volume that will permit economies of scale

What was the key to granting greater autonomy to local managers who were willing to go out on a limb? Select one: a. Financial training b. A standardization strategy c. Accountability d. A board decision

c. Accountability

What was the key to granting greater autonomy to local managers who were willing to go out on a limb? a. Financial training b. A standardization strategy c. Accountability d. A board decision

c. Accountability

Which of the following is a disadvantage of adopting a global standardization strategy? Select one: a. ​It is organizationally complex. b. ​It leads to local autonomy. c. It sacrifices local responsiveness. d. ​It is very difficult to implement.

c. It sacrifices local responsiveness. In terms of disadvantages, a global standardization strategy obviously sacrifices local responsiveness. This strategy are paramount and pressures for local responsiveness are relatively minor. See 12-1: Multinational Stategies and Structures

Kotler discussed a plea by a district manager for IBM who was concerned about his Chicago market. Of the key terms from the chapter, which of the following best defines what that district manager was seeking? a. Local responsiveness b. Integration responsiveness c. Localization d. Home replication

c. Localization

_____ means reacting to different consumer preferences and host-country demands. Select one: a. ​Global integration b. ​Global standardization c. ​Local responsiveness d. ​Home replication

c. ​Local responsiveness Local responsiveness means reacting to different consumer preferences and host-country demands. Being locally responsive certainly makes local customers and governments happy, but unfortunately increases costs. See 12-1: Multinational Strategies and Structures

​_____ means reacting to different consumer preferences and host-country demands. Select one: a. ​Global integration b. ​Global standardization c. ​Local responsiveness d. ​Home replication

c. ​Local responsiveness Local responsiveness means reacting to different consumer preferences and host-country demands. Being locally responsive certainly makes local customers and governments happy, but unfortunately increases costs. See 12-1: Multinational Strategies and Structures

​Multinational enterprises appoint home-country nationals as the head of a foreign subsidiary because the home-country nationals: Select one: a. create a fiefdom of their enterprise in the host-country. b. ​can deal effectively with two bosses without any major conflict. c. ​have an understanding of the informal workings of multinational enterprises. d. ​focus on implementing a localization strategy.

c. ​have an understanding of the informal workings of multinational enterprises.

Unlike a transnational strategy, a global standardization strategy involves: a. ​the development and transfer of knowledge from the center to the subsidiaries. b. ​the joint development and sharing of knowledge worldwide. c. ​the development and retention of knowledge at the center and key locations. d. ​the development and retention of knowledge within each subsidiary.

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

Which of the following is an effect of adopting a local responsiveness strategy?​ a. ​Standardized products are developed and distributed. b. ​Home-country-based competencies are duplicated in foreign countries. c. ​Regulations on local products are loosened. d.​Costs of products and services are increased.

d. Costs of products and services are increased. Being locally responsive certainly makes local customers and governments happy, but unfortunately increases costs. Given the universal interest in lowering cost, a natural tendency is to downplay or ignore the different needs and wants of various local markets and instead market a global version of products and services. See 12-1: Multinational Strategies and Structures

​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? a. ​Home replication strategy b. ​Localization strategy c. ​Transnational strategy d. Global standardization strategy

d. Global standardization strategy The strategy used by TrinkCan is global standardization strategy. Its hallmark is the development and distribution of standardized products worldwide in order to reap the maximum benefits from low-cost advantages. See 12-1: Multinational Strategies and Structures

​In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a transnational strategy? a. ​Knowledge is developed at the center and transferred to subsidiaries. b. ​Knowledge is developed and retained within each subsidiary. c. Knowledge is mostly developed and retained at key locations. d. Knowledge is developed jointly and shared worldwide.

d. Knowledge is developed jointly and shared worldwide. A hallmark of transnational multinational enterprises is a high degree of interdependence and extensive and bi-directional flows of knowledge. For example, Kikkoman first developed teriyaki sauce specifically for the US market as a barbecue glaze. It was then marketed to Japan and the rest of the world. See 12-3: Worldwide learning, innovation, and knowledge management

​Which of the following is true of a localization strategy? a. ​It has low costs due to duplication of efforts in multiple countries. b. ​It promotes diffusion of innovation in multiple ways. c. ​It involves the development and distribution of standardized products worldwide. d. ​It is effective when pressures for cost reductions are low.

d. ​It is effective when pressures for cost reductions are low. Localization strategy is an extension of the home replication strategy. This strategy is effective when differences among national and regional markets are clear and pressures for cost reductions are low. See 12-1: Multinational Strategies and Structures

Which of the following statements is true of a global product division structure? a. ​It encourages the fragmentation of multinational enterprises into fiefdoms. b. ​It increases inefficient duplication in multiple countries. c. ​It is typically used when firms initially expand abroad. d. ​It is highly responsive to cost reduction pressures.

d. ​It is highly responsive to cost reduction pressures. A global product division structure is highly responsive to pressures for cost efficiencies, because it allows for consolidation on a worldwide or at least regional basis and reduces inefficient duplication in multiple countries. For example, Unilever reduced the number of soap-producing factories in Europe from ten to two after adopting this structure. See 12-1: Multinational Strategies and Structures

​In the context of knowledge management, which of the following is true of multinational enterprises (MNEs) adopting a global standardization strategy? a. ​Knowledge is developed at the center and transferred to the various subsidiaries. b. ​Knowledge is developed and retained within each subsidiary. c. ​Knowledge is mostly developed and retained at the center and key locations. d. ​Knowledge is developed jointly and shared worldwide.

d. ​Knowledge is developed jointly and shared worldwide. A hallmark of transnational multinational enterprises is a high degree of interdependence and extensive and bi-directional flows of knowledge. For example, Kikkoman first developed teriyaki sauce specifically for the US market as a barbecue glaze. It was then marketed to Japan and the rest of the world. See 12-3: Worldwide learning, innovation, and knowledge management