MGT 302 - Exam 3

Rank from highest to lowest the need for coordination among these types of strategies. Place the strategy with the highest need for coordination at the top and work down to the lowest need at the bottom of the list. Instructions Choice 1 of 4. transnational toggle button transnational Choice 2 of 4. global toggle button global Choice 3 of 4. international toggle button international Choice 4 of 4. localization toggle button localization

1. transnational 2. global 3. international 4. localization

How do we define strategy in a business?

Actions that managers take to attain the goals of the firm

Budgets and capital spending rules are the most important __________ controls in subunits within multinational firms.

Bureaucratic

What can you conclude about the level of competition?

Competition in Germany is very high

How might we need to adapt our strategy to meet government regulations?

Create a new label that includes the information required by the EU

How does value creation apply to Endless Summer

Customers are willing to pay a higher price for a product if they perceive that it offers more features and/or quality

A business should follow an international strategy when it finds itself in which two situations

Does not face cost pressures and does not face pressures to customize a product based on local preference

The most obvious example of a region where there are institutional forces that are pushing toward convergence is the

EU

Location economies refer to the distribution point of a company's products

False

True or false: In a localization strategy, decision-making is centralized at headquarters because firms are not pressured for local responsiveness.

False

Which markets offer the most potential for us?

Finland, Germany and Czech Republic

A ______ strategy has firms operating with worldwide area structures, where operating decisions are decentralized to functionally self-contained country subsidiaries.

Localization

Lillian's company makes chocolate candy bars. They make one type of candy for the US market and make another type of candy that isn't quite as sweet for the European market because consumers there prefer that. What type of strategy does Lillian's company use to sell its products?

Localization

Identify the components of a business that make up its operations

Marketing, human resources, information systems,

According to the text, what elements must a firm coordinate to achieve maximum performance?

Organizational architecture, strategy and its environment

The manner in which decisions are made and work is performed within the organization is known as

Processes

Which statement is true about firms pursuing a localization strategy?

They do not have a high need for integrating mechanisms, either formal or informal

Which statement is true of incentives?

They refer to the devices used to reward appropriate employee behavior.

Thoughts on distribution and marketing

We need to work with restaurants and bars in Czech Repbulic since most people drink beer at social gatherings instead of home

Based on what we know about the Czech Republic and Finland, how should we position Endless Summer products?

We should continue to position Endless Summer as a premium brand

Anything else that stands out besides the firm requires differentiate between the strategy from country to country to accommodate the demands.

Yes, Czech Republic collab with little retailers rather than big grocery chains

Based on the study in the text, organizations that showed high performance over a period of time had not only strong but also __ cultures

adaptive

If subunit A relies on subunit B, located in a different country, to complete its work, but subunit B fails to do its job and as a result both subunits fail, it demonstrates the idea of performance

ambiguity

After working for the company for three years, Roberto now qualifies to receive an annual bonus if he achieves the performance goals he has been given. This bonus is an example of

an incentive

The organizational __ of a company consists of the people, culture, processes and controls inherent within any company

architecture

Universal needs exist with which two categories of products?

bulk chemicals, petroleum and steel ; personal computers and hand held calculators

Which country would be most likely to form a regional convergence with the United States

canada

The majority of operating decisions are made by the Blank______ for firms operating within a global standardization strategy.

company headquarters

What is the ultimate reason international strategies eventually fail

competition

Daniel's company adopted an international strategy when it introduced the single-cup coffeemaker. However, just nine months later, his company regretted the decision because four other companies came up with a similar product and began selling it at a lower cost and with additional features. What is the main reason Daniel's company's international strategy failed?

competitors

Collecting data to decrease performance ambiguity is costly and time consuming, thereby raising the cost of

control

Many chain restaurants look to McDonald's as the leader in management of fast-food operations. This status demonstrates McDonald's _____________ competence.

core

A global standardization strategy aims to increase profits by implementing

cost reduction

The control systems used in international firms include: personal, bureaucratic, output and

cultural

Select the four control systems that are used in multinational firms.

cultural, personal, output, bureaucratic

The norms and value systems of a company make up the company's Blank______ and are a source of organizational inertia.

culture

The importance of local responsiveness in pursuing a localization strategy would lead firms to adopt a _ decision making model

decentralized

The distribution of power within a company _ help create organizational inertia

does

A product's product costs tend to decline over time. This is referred to as the _ curve

experience

After analyzing the profit projections for next year, lisa reminded the group that production costs would continue to decline on those products that had been in production for five years. What concept was Lisa referring to?

experience curve

A company would typically experience a decrease in profit growth if it should decide to disperse value creation activities to different locations as a way to perform those activities more efficiently

false

Formulating strategy, deciding how to allocate resources within a firm, and evaluating the performance of managers and giving feedback are examples of control systems.

false

What are the three components of a firms organizational structure?

formal division of the organization into subunits such as product divisions, national operations and functions location of decision-making responsibilities within that structure establishment of integrating mechanisms to coordinate the activities of subunits, including cross-functional and pan-regional teams

When competing globally firms have __ major strategic stances that they can adopt

four

Fatima started her small business two years ago and has been so successful that she is now developing into a large business and is creating purchasing, marketing, and manufacturing positions within the company. Fatima's business now demonstrates the Blank______ organizational structure.

functional

Which organizational structure is typically the first one used by firms?

functional

Centralization of decision making will be used in a Blank______ strategy because the dispersed global activities of the firm that create value need to be tightly coordinated.

global standardization

When a firm adopts a low-cost strategy on a global scale that comes from economies of scale, learning effects, and location economies it is using a ______ strategy.

global standardization

What are the four main strategic postures that firms can use when competing globally?

global standardization strategy, international, transnational, localization

What four mechanisms are used to maintain culture?

hiring and promotional practices of the organization reward strategies socialization processes communication strategy

Dividing an organization formally into subunits is called

horizontal differentiation

The processes and systems used to coordinate the subunits of an organization are called

integrating mechanisms

Firms that follow a(n) Blank______ strategy maintain centralized control over the firm's core competencies, but decentralize most other operating decisions.

international

The strategy in which businesses centralize functions such as R&D and marketing functions, but decentralize operating decisions to subsidiaries is the

international

A firm facing low pressures for local responsiveness and few pressures to contain costs might best pursue a(n) _______________________.

international strategy

Pressures for local responsiveness may make it difficult to

leverage skills and products associated with firms core competencies from one country to another

McDonald's local franchises in France have begun to offer more elegant seating areas and upscale menu. This was done in response to the slow growth rates in the area. Impressed with the increased sales at these stores, McDonald's executives are considering making these changes elsewhere. In this instance, what aspect of creating value is demonstrated?

leveraging subsidiary skills

The level of integration and coordination of subunits is lowest for firms following a(n) Blank______ strategy and highest for firms following a transnational strategy.

localization

What strategy increases the value of a product in the local market through customization for different national tastes and preferences

localization

_ is the most appropriate strategy when there are substanial differences across nations with regard to consumer tastes and preferences, and where cost pressures are not too intense

localization strategy

Trina's company has moved all sewing and piece-work capabilities to a plant in Thailand in order to reduce costs. Her company is taking advantage of a(n) _____ economy.

location

What is defined as the social rules and guidelines that prescribe appropriate behavior in a particular situation?

norms

The totality of a firms organization is called

organizational architecture

Markets are dynamic, and any firm will face competition. In time, international and localization strategies tend to become less viable, and managers need to ________________________________.

orient their companies toward either a global standardization or transnational

The marketing and product development teams at Kyle's company meet once each month to brainstorm ideas. This monthly meeting is an example of a(n) Blank______ used at Kyle's company.

process

Most firms that pursue a global standardization strategy would rely on a worldwide _ division structure

product

Josiah works at a snack food company which has a product divisional structure. In this type of structure, each division is responsible for a distinct

product line

Two types of primary activities found in many businesses

production and customer service

companies typically face two types of competitive pressures when entering global markets. What are these two pressures?

reduce costs and be locally responsive

Convince me that international expanison is the best idea

selling internationally will allow Endless Summer to expand its potential market and profits

The first principle of successful organizational change is to unfreeze the organization through

shock therapy

Geoff's company has separate product divisions for each product line. These product divisions are part of the company's

structure

Which strategy encompasses a high level of interdependence of subunits for some operation decisions combined with high degrees of centralization for others?

transnational

______ strategy may use a mix of centralization and decentralization depending on the pressures for local responsiveness and the need to coordinate a dispersed value chain and transfer core competencies. There is a high need for coordination when using this strategy.

transnational

__ is the most appropriate strategy when the firm simultaneously faces strong pressures for both cost reduction and local responsiveness

transnational strategy

To survive, a firm must strive to achieve a fit between its environment, its strategy, and its organizational architecture.

true

True or false: In order to succeed, a firm's organizational architecture must be consistent with its strategy.

true

True or false: The communication strategy of a company is a key component to maintaining culture within the organization.

true

What are the three basic principles for successful organizational change?

unfreezing the organization moving to the new state refreezing the organization

Consumers through-out the world have the same use for sugar -- it is used as a sweetener in every country. Sugar is an example of a(n) ____ need.

universal

what are two characteristics of an organization with an adaptive culture?

value people who create useful change care take deeply about all stakeholders

The abstract ideas about what a group believes to be good, right, and desirable are known as

values

what are the three dimensions of organizational structure?

vertical, horizontal, integrating mechanisms