Learn: Global Business Strategy: Structures, Entry Modes & Political Risk

What structure keeps home-country departments and adds one unit to handle all business outside the home country?

International division

What division has one executive running all appliances worldwide and another for all electronics worldwide?

Global product division

In which division does each regional head run every product sold in that region?

Global area division

What structure blends product and geography, causing confusion over decision-making?

Matrix structure

In a matrix structure, who does the sales manager in Spain report to?

Both the Europe region head and the Beverages product head

What is the term for the organizational chart that has Consumer and Industrial Products heads running each line in every country?

Global product divisions; move to a matrix that adds regional managers

What is a long-term plan for competing around the world, tied to mission and vision?

Global strategy

What is the first step for Pinecrest Foods wanting to sell overseas?

Scan the environment and analyze the company's own resources

What involves listing what the company does well, such as strong engineers and a trusted brand?

Internal resource analysis

Which activity is environmental scanning, not internal resource analysis?

Tracking a target country's upcoming election and new trade laws

What goal area is described by 'cut the cost of making each unit by 10% at the new plant'?

Operations

What entry mode has the least risk and involvement, common for small or new firms?

Exporting

What allows local Brazilian owners to run hotels under a brand's name and system for fees?

Franchising

What is it called when American and Chinese companies each own half of a new theme park and share control?

A joint venture

Order the following from least to most risk and control: exporting, franchising, joint venture, wholly owned subsidiary.

Exporting → franchising → joint venture → wholly owned subsidiary

How is political risk best described?

The chance that government action or political instability will hurt a business

What occurs when the government takes over a foreign company's oil wells and pays little or nothing?

Expropriation

What is it called when a new government takes over all foreign-owned mines, affecting only one industry?

Expropriation; micro political risk aimed at one industry

What is the term for when a company hires representatives to meet lawmakers about a proposed rule that would cost jobs?

Lobbying

What issues arise when alliance partners argue over final decisions and managers clash over meetings and deadlines?

Control conflicts and cultural differences