BU398 Post-Midterm Content Exam Questions
With Complete Answers
motivations for global expansion - ANSWER 1) economies of scale
2) economies of scope
3) low-cost production factors
economies of scale - ANSWER increasing size lowers cost
economies of scope - ANSWER number and variety of products and services
offered, number and variety of regions, countries, markets
offers. marketing power, synergy, market power through brand knowledge
four stages of international evolution - ANSWER 1) domestic
2) international
3) multinational
4) global
domestic stage - ANSWER - domestically oriented,
- may consider initial foreign involvement,
- domestic structure plus export department,
- market potential is limited and mostly domestic
international stage - ANSWER - export oriented, begins to think multi-
domestically (competitive issues in each country are independent)
- concerned with competitive positioning
- domestic structure plus international division
- market potential is large and multi-domestic
multinational stage - ANSWER - the company has extensive experience in a
number of international markets
- explosion occurs as international operations take off
- structure: worldwide geographic, product
- market potential is very large
(i.e. Coca-Cola)
global stage - ANSWER - subsidiaries are interlinked where competitive position
in one country affects another
- stateless corporations rather than having a single home country
- structure: matrix, transnational
(i.e. Nestle)
,types of alliances for global expansion - ANSWER 1) licensing (i.e. cross-
licensing to reduce high fixed costs of R&D for pharmaceutical comps)
2) joint venture: separate entity created with two or more active firms as
sponsors (customers or competitors)
3) consortia: groups. of independent companies that join together to share
skills, resources, costs. and access to one another's markets
globalization strategy - ANSWER means that product design, manufacturing,
and marketing strategy are standardized throughout the world (i.e. Coca-Cola,
with. only. advertising and marketing tailored. to specific regions)
multidomestic strategy - ANSWER means that competition in each country is
handled independently to meet specific needs in each country
model to fit organization structure to international advantages - ANSWER
globalization strategy > global product structure
export strategy > international division
both globalization and multidomestic strategy > global matrix structure
multidomestic strategy > global geographic structure
global product structure - ANSWER the product division takes responsibility of
global operations in their specific product area
one of the most commonly used structures; works best when the company has
opportunities for worldwide production and sale of products (economies of
scale)
division managers can focus on organizing international operations as they see
fit
international division - ANSWER international division has:
a status equal to the other major departments or divisions within the company
its own hierarchy to handle business in various countries, selling the product
and services created by domestic division, opening subsidiary plants and in
general moving the org into more sophisticated international operations
global matrix structure - ANSWER similar to the matrix described in ch. 3 but the
geographic distances for communication are greater and coordination is more
complex
, works best when pressure for decision making balances the interests of both
product standardization and when coordination to share resources is important
(volatile environments)
global geographic structure - ANSWER divides the world into geographic
regions, with each division reporting to the CEO; each division has full control of
functional activities within their area
companies that use this structure typically have mature product lines and stable
technology
problems result from the autonomy of each regional division
three segments of the global organizational challenge - ANSWER 1) greater
complexity and differentiation - complexity in international environment
(language, politics, culture) is mirrored in a greater internal organizational
complexity
2) need for integration (quality of collaboration across organizational units)
3) transferring knowledge and innovation (essential for organizations to learn
from international experiences)
reasons for limited cross-border transfer of knowledge - ANSWER - knowledge
remains hidden in various units because of language, culture, distance, making
it hard for managers to realize it exists
- divisions sometimes view knowledge as power and want to hold onto it as a
way to gain an influential position
- "not invented here" syndrome makes some managers reluctant to tap into
know how of other units
- much of an org's knowledge is in the minds of employees and cannot be easily
written down
global coordination mechanisms - ANSWER global teams
headquarters planning
specific coordination roles
global teams - ANSWER cross-border work groups made up of multiskilled,
multinational members whose activities span multiple countries; also called
transnational teams.
two types: (1) intercultural teams (face to face with ppl from different countries),
(2) virtual global teams
With Complete Answers
motivations for global expansion - ANSWER 1) economies of scale
2) economies of scope
3) low-cost production factors
economies of scale - ANSWER increasing size lowers cost
economies of scope - ANSWER number and variety of products and services
offered, number and variety of regions, countries, markets
offers. marketing power, synergy, market power through brand knowledge
four stages of international evolution - ANSWER 1) domestic
2) international
3) multinational
4) global
domestic stage - ANSWER - domestically oriented,
- may consider initial foreign involvement,
- domestic structure plus export department,
- market potential is limited and mostly domestic
international stage - ANSWER - export oriented, begins to think multi-
domestically (competitive issues in each country are independent)
- concerned with competitive positioning
- domestic structure plus international division
- market potential is large and multi-domestic
multinational stage - ANSWER - the company has extensive experience in a
number of international markets
- explosion occurs as international operations take off
- structure: worldwide geographic, product
- market potential is very large
(i.e. Coca-Cola)
global stage - ANSWER - subsidiaries are interlinked where competitive position
in one country affects another
- stateless corporations rather than having a single home country
- structure: matrix, transnational
(i.e. Nestle)
,types of alliances for global expansion - ANSWER 1) licensing (i.e. cross-
licensing to reduce high fixed costs of R&D for pharmaceutical comps)
2) joint venture: separate entity created with two or more active firms as
sponsors (customers or competitors)
3) consortia: groups. of independent companies that join together to share
skills, resources, costs. and access to one another's markets
globalization strategy - ANSWER means that product design, manufacturing,
and marketing strategy are standardized throughout the world (i.e. Coca-Cola,
with. only. advertising and marketing tailored. to specific regions)
multidomestic strategy - ANSWER means that competition in each country is
handled independently to meet specific needs in each country
model to fit organization structure to international advantages - ANSWER
globalization strategy > global product structure
export strategy > international division
both globalization and multidomestic strategy > global matrix structure
multidomestic strategy > global geographic structure
global product structure - ANSWER the product division takes responsibility of
global operations in their specific product area
one of the most commonly used structures; works best when the company has
opportunities for worldwide production and sale of products (economies of
scale)
division managers can focus on organizing international operations as they see
fit
international division - ANSWER international division has:
a status equal to the other major departments or divisions within the company
its own hierarchy to handle business in various countries, selling the product
and services created by domestic division, opening subsidiary plants and in
general moving the org into more sophisticated international operations
global matrix structure - ANSWER similar to the matrix described in ch. 3 but the
geographic distances for communication are greater and coordination is more
complex
, works best when pressure for decision making balances the interests of both
product standardization and when coordination to share resources is important
(volatile environments)
global geographic structure - ANSWER divides the world into geographic
regions, with each division reporting to the CEO; each division has full control of
functional activities within their area
companies that use this structure typically have mature product lines and stable
technology
problems result from the autonomy of each regional division
three segments of the global organizational challenge - ANSWER 1) greater
complexity and differentiation - complexity in international environment
(language, politics, culture) is mirrored in a greater internal organizational
complexity
2) need for integration (quality of collaboration across organizational units)
3) transferring knowledge and innovation (essential for organizations to learn
from international experiences)
reasons for limited cross-border transfer of knowledge - ANSWER - knowledge
remains hidden in various units because of language, culture, distance, making
it hard for managers to realize it exists
- divisions sometimes view knowledge as power and want to hold onto it as a
way to gain an influential position
- "not invented here" syndrome makes some managers reluctant to tap into
know how of other units
- much of an org's knowledge is in the minds of employees and cannot be easily
written down
global coordination mechanisms - ANSWER global teams
headquarters planning
specific coordination roles
global teams - ANSWER cross-border work groups made up of multiskilled,
multinational members whose activities span multiple countries; also called
transnational teams.
two types: (1) intercultural teams (face to face with ppl from different countries),
(2) virtual global teams
