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International Business
Q:
The temporary arrangement of independent companies, suppliers, and free agents for the purpose of completing a task or project is best known as a(n) ________ organization.
A) virtual
B) independent
C) decentralized
D) international
Q:
A virtual organization is ________ of a traditional vertical hierarchy.
A) an elaboration
B) the antithesis
C) the latest interpretation
D) a selective application
Q:
A Japanese keiretsu is best described as a ________.
A) family business
B) product division
C) network structure
D) centralized control system
Q:
Which of the following is the most likely benefit of a network structure?
A) encouraging competition among members for resources
B) facilitating supplier changes anywhere in the value chain
C) developing core competencies in a broad range of value activities
D) maintaining a strong sense of organization in the face of dynamic partnerships
Q:
Which of the following is promoted by a neoclassical structure?
A) innovation of ideas
B) information control
C) project competition
D) minimal relationships
Q:
Neoclassical structures attempt to minimize boundaries between all of the following EXCEPT ________.
A) vertical ranks and functions
B) horizontal units in different areas
C) the firm and its suppliers
D) the firm and its competitors
Q:
Vertical and horizontal constraints that segment employees and their tasks within an organization are generally referred to as ________.
A) structures
B) networks
C) boundaries
D) classifications
Q:
The neoclassical structure implemented by Cisco primarily enables the firm to ________.
A) respond quickly to new opportunities
B) thoroughly assess new competitors
C) assign leaders to new products
D) clarify managers' duties
Q:
Which of the following is the LEAST likely characteristic of neoclassical structures?
A) few barriers between people
B) extensive collaborative efforts
C) higher capacity for change and learning
D) centralized decision making
Q:
Neoclassical structures aim to support organizations ________.
A) in which the location of control in a network alliance is evident
B) that centralize decision-making authority to those who can make informed decisions
C) that dismantle horizontal, vertical, or external boundaries that block ideas and relationships
D) that create predictable workplaces with minimal collaboration among subsidiaries
Q:
IBM puts investments, people, and work anywhere in the world based on the best mix of costs, skills, and environment and uses sophisticated strategies and technologies to support and coordinate activities. IBM most likely uses a ________ structure.
A) classical
B) product
C) neoclassical
D) locational
Q:
In reality, the organizational charts of ________ MNEs neatly depict a functional, divisional, or matrix structure.
A) no
B) few
C) most
D) all
Q:
The fundamental limitation of a matrix structure is that it ________.
A) creates a poor organizational culture
B) isolates upper management from operational levels
C) institutes a dual hierarchy that violates the unity-of-command principle
D) introduces more errors in the decision-making process due to the speed of the process
Q:
Gary is a manufacturing manager at Forman Enterprises. Gary works at the MNE's headquarters in the U.S. Before Gary can implement any major changes or decisions, he must communicate and coordinate his plans with Raj, a sales manager at Forman's facility in India. Which structure is most likely used by Forman Enterprises?
A) global
B) matrix
C) product division
D) geographic division
Q:
Which of the following factors increasingly encourages MNEs to install a geographic division structure?
A) growth of emerging markets
B) diversification of products
C) rise of social networking
D) global recession
Q:
Historically, the geographic division structure is associated with companies pursuing ________ strategies.
A) multidomestic
B) transnational
C) global
D) international
Q:
The primary limitation with the product division structure is the ________.A) cost of duplicated functions and international activitiesB) poor response to local market demands for a productC) inability to transfer core competencies within unitsD) difficulty of selling product lines
Q:
Avery Designs is an MNE with a diverse portfolio of products including cookware and clothing. Both the foreign and domestic operations for the firm's cookware products report to the same manager. Which structure is most likely used by Avery?
A) matrix division
B) product division
C) international division
D) geographic division
Q:
Chapman Enterprises is an MNE that markets a diverse portfolio of products including jewelry, luggage, and furniture. Which structure would most likely be used by Chapman?
A) international division
B) functional division
C) geographic division
D) product division
Q:
A major benefit of the international division structure is ________.
A) the elimination of conflicts of interest among domestic and foreign operations
B) the integration of domestic and foreign operations
C) deemphasis of economies of scale
D) cost effectiveness
Q:
In which of the following situations would a company most likely benefit from using the international division structure?
A) when the company's different foreign markets pose significantly different opportunities and threats
B) when the company relies on local managers in foreign operations to make strategic decisions
C) when the company's domestic market activity is much more important than its international business activity
D) when the company's domestic business activity has reached its full market potential
Q:
A major benefit of the international division structure is ________.
A) outsourcing distribution and shipping tasks
B) responding quickly to foreign events
C) diversifying most product groups
D) hiring low-cost, local workers
Q:
Whereas executives specify roles and relationships in a functional structure in terms of ________, they use the divisional structure format to specify them according to ________.
A) inputs; outputs
B) buyers; suppliers
C) markets; countries
D) politics; economics
Q:
Functional structures for international operations are most likely found among those companies that ________.
A) have a narrow range of products that rely on economies of scale
B) multiple products that share few common technologies
C) rely on differentiated marketing methods
D) compete in unstable industries
Q:
Decision making in a functional structure tends to be ________.
A) decentralized
B) centralized
C) horizontal
D) collaborative
Q:
At Tyson Manufacturing, departments and units are organized around discrete business activities, such as finance, production, marketing, and human resources. Tyson most likely has a ________ structure.
A) network
B) matrix
C) functional
D) divisional
Q:
A ________ structure is the ideal way to organize work when global integration is more important than local responsiveness and the industry structure encourages cost leadership.
A) decentralized
B) matrix
C) divisional
D) functional
Q:
The idea of ________ involves how a company specifies organizational tasks; divides those tasks into jobs, departments, subsidiaries, and divisions; and then assigns authority and authority relationships.
A) systemic differentiation
B) horizontal differentiation
C) vertical differentiation
D) schematic differentiation
Q:
In general terms, we see the principles of horizontal differentiation in the design logic of ________.
A) vertical differentiation
B) decentralization
C) the value chain
D) the unity-of-command principle
Q:
Which of the following statements is most likely true regarding vertical differentiation?
A) MNEs with decentralized structures are more appealing to foreign workers.
B) Most MNEs balance authority between headquarters and subsidiaries because of globality.
C) MNEs with many organizational levels are less likely to perform well in emerging markets.
D) Most MNEs implement centralized authority structures due to the complexity of globalization.
Q:
________ is the matter of how the company balances centralization versus decentralization of decision making, whereas ________ is the matter of how the company opts to divide itself into specific units to do specific jobs.
A) Horizontal differentiation; vertical differentiation
B) Vertical differentiation; systemic differentiation
C) Schematic differentiation; schematic differentiation
D) Vertical differentiation; horizontal differentiation
Q:
Tyrone is a production manager at Penderhall Electronics, an MNE with operations in Asia, Europe, and the U.S. Tyrone has very little decision-making authority at Penderhall, since most decisions are made at headquarters and distributed downward. Which structure is most likely used by Penderhall?
A) centralized
B) systematic
C) decentralized
D) multidomestic
Q:
The ________ the level of the company at which managers make decisions, the more that organization is ________.
A) higher; decentralized
B) lower; centralized
C) higher; centralized
D) higher; unstructured
Q:
The balance between centralization and decentralization of authority in a company is known as ________.
A) systemic differentiation
B) horizontal differentiation
C) schematic differentiation
D) vertical differentiation
Q:
Organization ________ refers to the formal arrangement of roles, responsibilities, and relationships within an organization.
A) structure
B) systems
C) culture
D) strategy
Q:
The concept of organization includes how a company does all of the following EXCEPT ________.
A) specifies the framework for work
B) develops systems that coordinate and control tasks
C) cultivates a common workplace culture among employees
D) plans leadership and training programs to develop the managerial staff
Q:
Concord Foods, an international firm based in the U.S., is in the process of transitioning from a classical organizational structure to a neoclassical structure. Which of the following tools would most likely enable Concord to make this change?
A) annual performance appraisals
B) cross-functional task forces
C) flexible benefits plans
D) merit awards
Q:
Which of the following is the LEAST likely reason that global firms are shifting away from formal organizational structures?
A) advancements in communication systems
B) changes in managerial standards
C) opportunities in new markets
D) demands of stockholders
Q:
Historically, managers built organizations by focusing on the boxes and lines of a(n) ________ structure.
A) formal
B) innovative
C) collaborative
D) flexible
Q:
Johnson & Johnson embodies its organizational culture in "The Credo," which is the firm's ________.
A) code of conduct
B) vision statement
C) strategic plan
D) mission statement
Q:
Johnson & Johnson distributes decision-making power among departments and divisions. This policy provides managers with a sense of ownership and control at the company. Johnson & Johnson is best described as a(n) ________ organization.
A) vertical
B) centralized
C) horizontal
D) decentralized
Q:
What are the various types of collaborative arrangement options available to international businesses? How can firms most effectively manage international collaborative arrangements?
Q:
What is an equity alliance? What motives would a firm have for forming an equity alliance?
Q:
What is a turnkey operation? What features generally make turnkey operations different from other collaborative arrangements?
Q:
What is a management contract? What are the potential advantages to both parties in the contract?
Q:
Explain how franchising agreements differ from licensing agreements.
Q:
What is the difference between licensing and cross-licensing? What factors do firms need to consider before entering into licensing agreements?
Q:
What motives do businesses have for entering into collaborative arrangements? What are some of the problems associated with collaborative arrangements?
Q:
There are two ways companies can invest in a foreign country. They can either acquire an interest in an existing operation or construct new facilities. In a short essay, describe the advantages and disadvantages of each alternative.
Q:
According to the appropriability theory and the internalization theory, why would companies want to control their foreign operations?
Q:
In a short essay, discuss how transportation, trade restrictions, domestic capacity, and country-of-origin affect companies' decisions about modes of operating internationally.
Q:
The sums needed to develop and market many new products are out of reach of most companies acting alone.
Q:
It is important when setting up a collaborative arrangement to agree on mutual goals and expectations.
Q:
Although a company may have a good track record with collaborative arrangements, this is of little help when negotiating new collaborative arrangements with different companies.
Q:
Internal tension may develop within a company as it changes an international operating mode because some managers gain responsibility and others lose it.
Q:
The truly experienced international firm will usually make use of various modes of operation simultaneously.
Q:
In collaborative arrangements, when one partner cedes control to another partner, it is no longer responsible for problems.
Q:
When a large company and a small company enter a joint venture, the large company is expected to contribute more to the arrangement.
Q:
The more partners in a joint venture, the more complex the management of the arrangement will be.
Q:
An international joint venture is an agreement between two or more companies for the use of a trademark.
Q:
Few turnkey projects to date have been in remote areas of the world.
Q:
A turnkey operation is a contract for the construction of an operating facility for a fee.
Q:
The use of management contracts has been significant in hotel operations.
Q:
An international management contract is an agreement between a company and a foreign government on the number of foreign personnel it can employ.
Q:
When entering foreign countries, many franchisors encounter difficulty in transferring the domestic success factors of product and service standardization.
Q:
An agreement for the use of a trademark and assistance with business operations is known as a cross-licensing agreement.
Q:
Licenses are often given to companies owned in whole or in part by the licensor.
Q:
In a licensing arrangement, it is rare for companies to agree to a front-end payment to cover technology transfer costs.
Q:
A licensing agreement is a contract for the granting of rights on tangible property.
Q:
The dependencia theory holds that the terms for a foreign investor's operations depend on how much the investor and the host country need each other's assets.
Q:
An argument for limiting foreign control of key industries is that decisions made abroad can have adverse effects on the local economy.
Q:
The more a company engages in collaborative agreements, the more it loses control over decisions and their implementation.
Q:
Collaborative arrangements prevent the possibility of information being passed to potential competitors.
Q:
An advantage of collaborative agreements is the ability to spread faster geographically.
Q:
Collaborative agreements allow companies to specialize more in those activities that best fit their competencies.
Q:
Governments sometimes prohibit foreign acquisitions because they fear market dominance by foreign enterprises.
Q:
Foreign acquisitions are more advantageous than start-ups when the industry has little excess capacity than when it has a lot of excess capacity.
Q:
Wholly owned operations abroad inhibit a company's ability to pursue a global strategy.
Q:
Appropriability theory describes a firm's desire to deny rivals access to its competitive resources.
Q:
Exporting is usually more feasible when transportation costs are high rather than low in relation to production costs.