MANA 1301 Chapter 10

stateless corporations

a multinational enterprise with operations so geographically dispersed and integrated that it lacks a strong, exclusive identification with any single home nation.

organization

a tool that people use to coordinate their actions to obtain something they seek or value

division

a business subunit that consists of a collection of functions or departments that share responsibility for producing a particular product or service

organizational structure

defines how activities like task allocation, coordination, and supervision are directed toward achieving organizational goals

functional structure

an organizational structure that groups people together because they hold similar positions in a company, perform similar tasks, or use the same kinds of skills

divisional structure

an organizational structure in which functions are grouped together to serve the needs of products, markets, or geographical regions

product structure

a special case of the divisional structure where products are grouped into separate divisions according to their similarities or differences

geographical region structure

a special case of the divisional structure where products are grouped into separate divisions according to the needs of the different geographical regions the company serves

market structure

a special case of the divisional structure where products are grouped into separate divisions according to the needs of different customers

hybrid structure

a combination of different organizational structures

matrix structure

an organizational structure in which people are grouped simultaneously by function and by division

To achieve a sustainable competitive advantage, global businesses have resorted to one of the most basic weapons in their arsenals, namely the ability to perform which task with people and resources?

a. organize

b. divide

c. control

d. manage

a. organize

According to C. K. Prahalad, an expert in the field, the third stage of globalization is referred to as what?

a. when global firms set up operations in other countries

b. when global businesses establish foreign subsidiaries to handle the exports from their home countries

c. when stateless corporations locate their core corporate functions and top executives in different countries

d. when companies produce goods in one country and export them to other countries

a. when global firms set up operations in other countries

What term refers to a new phase in the evolution of the multinational corporation, where work is sourced wherever it is most efficient, and the corporation transcends nationality altogether?

a. organization

b. global business

c. division

d. stateless corporation

d. stateless corporation

The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals is known as what aspect of an organization?

a. market

b. division

c. structure

d. region

c. structure

The first step a domestic firm takes when entering the global arena is usually to perform what activity?

a. becoming a franchisee

b. importing foreign products

c. becoming a licensed vendor

d. exporting some of its products

d. exporting some of its products

An organizational structure that groups people together because they hold similar positions in a company, perform similar tasks, or use the same kinds of skills represents what type of structure?

a. functional

b. matrix

c. product

d. geographical

a. functional

Which structure is a particular kind of divisional structure where products are grouped into separate divisions according to the needs of different customers?

a. product

b. geographical

c. matrix

d. market

d. market

A combination of different structures is known as which type of structure?

a. geographical

b. market

c. hybrid

d. product

c. hybrid

An organizational structure in which people are grouped simultaneously by function and by division is known as what type of structure?

a. functional

b. market

c. matrix

d. product

c. matrix

Most domestic firms start with what type of structure?

a. functional

b. hybrid

c. product

d. matrix

a. functional

Of the following, which is the primary disadvantage of the divisional structure?

a. Divisions may start to compete for organizational resources.

b. Each employee has a restricted view of the organization's primary goals.

c. It requires high operating and managing costs.

d. There can be an inability to respond to environmental changes.

c. It requires high operating and managing costs.

According to the text, Procter & Gamble (P&G) has what type of structure?

a. market

b. matrix

c. hybrid

d. product

c. hybrid

A global business has established foreign subsidiaries to handle the exports from their home countries. According to C. K. Prahalad, what stage of globalization is the firm in?

a. first

b. second

c. third

d. fourth

b. second

According to the text, the software company Trend Micro has financial headquarters in Tokyo, where it went public; it has product development in Taiwan, where there is an abundance of workers with PhD degrees; and it has sales in Silicon Valley, giving it access to the giant U.S. market. What stage of globalization is the firm in?

a. first

b. second

c. third

d. fourth

d. fourth

What is defined as a tool that people use to coordinate their actions to obtain something they seek or value?

a. division

b. consultant

c. organization

d. acquisition

c. organization

According to the text, General Motors (GM) operates its North American Operations, GM Acceptance Corporation, International Operations, and Hughes Electronics. What are these examples of?

a. divisions

b. consultancies

c. partners

d. franchises

a. divisions

What is an advantage of an international division?

a. It concentrates all international efforts and expertise in one location.

b. It creates a franchise network for strategic partnerships.

c. It allows firms to specialize in multiple products across divisions.

d. It increases opportunities to import goods from new markets.

a. It concentrates all international efforts and expertise in one location.

Specific drawbacks of separating domestic and international operations include all EXCEPT which of the following?

a. It prevents the design of products with both domestic and international appeal.

b. It complicates the capture of learning-curve savings resulting from consolidating production in manufacturing plants around the world.

c. It streamlines communication and coordination between global operations hubs.

d. It precludes the sharing of core competencies and knowledge.

c. It streamlines communication and coordination between global operations hubs.

According to the text, this concept determines the boundaries of the organization and regulates its interfaces with the environment and its interactions with other organizations. What concept is being described?

a. division

b. market

c. region

d. structure

d. structure

When the demand for a firm's products sold in foreign markets grows, the number of people needed to handle the job increases as well, which leads to the formation of what department?

a. import

b. sales

c. finance

d. export

d. export

A U.S. firm wants to position itself to achieve a competitive advantage in its foreign markets. What should the firm consider first about its structure?

a. how to manage internal sales orders

b. how to divide markets across borders

c. how to organize people and resources

d. how to control all costs of production

c. how to organize people and resources

The CEO of a consumer products firm in the United States believes it is in the third stage of globalization. What evidence should the CEO look for to determine this?

a. The firm has set up operations in countries in Europe and Asia.

b. The firm locates its top executives in countries across the globe.

c. The firm has established a subsidiary in Germany to handle exports.

d. The firm produces goods in the United States and exports them to Africa.

a. The firm has set up operations in countries in Europe and Asia.

The CEO of ArcelorMittal, the world's largest private/publicly traded steel company, reports that the firm has no nationality but is "truly global." How should this firm be described?

a. as a division of the steel industry

b. as a stateless multinational corporation

c. as a global manufacturing business

d. as a U.S.-based organizatio

b. as a stateless multinational corporation

A multinational enterprise (MNE) allows the organization's members to perform a wide variety of activities based upon a division of labor that leads to the departmentalization, standardization, and specialization of functions and tasks. What has the firm created?

a. division

b. structure

c. market

d. region

b. structure

A manager wants to expand the firm to establish it as a global brand. What is the first step the firm should take?

a. License another firm's leading brand.

b. Export its best-known products overseas.

c. Import raw materials from a foreign market.

d. Acquire a franchise of a new business.

b. Export its best-known products overseas.

In a firm, all purchasing agents are part of the purchasing area, and the purchasing manager is responsible for all purchasing activities. What type of structure does this represent?

a. functional

b. product

c. geographical

d. matrix

a. functional

Hilton Hotels Corporation manages approximately 600 properties totaling about 200,000 rooms in 94 countries across six continents. Each of its brands meets the needs of a specific type of guest. What type of structure does this represent?

a. geographical

b. product

c. market

d. matrix

c. market

When a company grows beyond the affairs that can be handled by a single group of people and one boss, it usually adopts which type of structure?

a. matrix

b. hybrid

c. product

d. functional

d. functional

One of the primary issues in a divisional structure is the degree of autonomy granted to the divisions when making strategic decisions and involving a significant number of resources. What disadvantage can this lead to?

a. Divisions adapt as market needs change.

b. Each division has its own set of functions.

c. Divisions develop a common identity.

d. Divisions create high-quality products.

b. Each division has its own set of functions.

A multinational firm has divisions that include technology, consumer goods, automotive, health care, and global business services. What type of organizational structure does the firm use?

a. hybrid

b. market

c. product

d. matrix

a. hybrid

A U.S. firm recently established subsidiaries in Bangladesh and India to handle the exports from its home market. According to C. K. Prahalad, what stage of globalization is the firm in?

a. third

b. first

c. second

d. fourth

c. second

According to the text, Lenovo is global and so well integrated into the countries where it has a presence that it is difficult, if not impossible, to identify any one country as the home country for the firm. According to C. K. Prahalad, what stage of globalization is the firm in?

a. third

b. fourth

c. first

d. second

b. fourth

A group of entrepreneurs wants to start a technology business. What system will permit them to coordinate their activities by integration mechanisms such as hierarchical supervision, formal rules and procedures, and training and socialization?

a. consultant

b. acquisition

c. division

d. structure

d. structure

A pharmaceutical manufacturer is arranged according to the departments that share responsibility for producing particular product lines, such as diabetes care and vaccines. What type of structure does it use?

a. division

b. skills

c. function

d. hybrid

a. division

A domestic firm plans to expand into various geographic markets and wants first to create an international division. What advantage would the firm likely experience?

a. fostering a global mindset in the people working within the division

b. shared ideas and knowledge across employees in all regions

c. reduced conflict between domestic and international operations

d. improving product design for domestic and international customers

a. fostering a global mindset in the people working within the division

A start-up firm quickly grows beyond its initial capacity to fulfill orders. The firm decides to separate its domestic and international operations. Which example below would the firm likely experience as a drawback to this strategy?

a. It would promote in-depth skill development of employees by providing a well-defined career ladder.

b. It would develop a common approach to problem solving.

c. It would complicate the capture of learning-curve savings resulting from consolidating production in manufacturing plants around the world.

c. It would complicate the capture of learning-curve savings resulting from consolidating production in manufacturing plants around the world.

Global businesses in the mining and energy industries tend to have what kind of structures?

a. functional

b. region

c. division

d. market

a. functional

The demand for a firm's exported products to Asia has recently increased significantly, and the total company hires have increased by 10 percent. What should the firm do?

a. Focus on increasing sales.

b. Emphasize international finance.

c. Find ways to buy more imports.

d. Create an export department.

d. Create an export department.