Chapter 16*

Question 1

Organizational structure

Answer 1

the formal arrangement of roles, responsibilities, and relationships in the MNE

Question 2

Vertical differentiation

Answer 2

• the balance between the centralization and decentralization of authority
• chain of command that runs from “top to bottom”

Question 3

Horizontal differentiation

Answer 3

• involves specifying which people do which jobs in which units
• separate tasks or skills that run “sideways” in the organization

Question 4

Centralization

Answer 4

degree to which high-level managers make strategic decisions and delegate them to lower levels for implementation

Question 5

Decentralization

Answer 5

degree to which lower-level managers make and implement strategic decisions

Question 6

Functional structure

Answer 6

• groups people based on common expertise and resources
• is popular among companies with narrow product lines
• work well in stable environments that support continuous operations

Question 7

Divisional structure

Answer 7

• divides employees based on the product, customer segment, or geographical location
• duplicates functions and resources across divisions

Question 8

Matrix structure (organization)

Answer 8

• institutes overlaps among functional and divisional forms
• gives functional, product, and geographic groups a common focus
• violates the unity of command principle (had dual reporting rather than single line of command)

Question 9

Unity of command principle

Answer 9

A single line of command reporting relationships

Question 10

Mixed structure

Answer 10

• combines elements of the functional, area, and product structure
• allows the firm to better adapt to market conditions worldwide

Question 11

Neoclassical structures

Answer 11

emphasize coordination and cultivation (collaborate) not command and control

Question 12

Network structure

Answer 12

arranges differentiated elements in patterned flows of activity that allocate people and resources to problems and projects in a decentralized manner

Question 13

Virtual organization

Answer 13

a dynamic arrangement among partners that efficiently adapts to market change

Question 14

Virtual organization

Answer 14

a virtual organization is a temporary arrangement among independent companies, suppliers, customers, and rivals that “works across space, time, and organizational boundaries with links strengthened by webs of communication technology”

Question 15

Control systems

Answer 15

define how managers compare performance to plans, identify differences, and where found, assess the basis for the gap and impose corrections
- Bureaucratic control
- Market control
- Clan control

Question 16

Control tools include:

Answer 16

• reports
• visits to subsidiaries
• evaluative metrics
• information systems

Question 17

Coordination by Standardization

Answer 17

relies on objectives and schedules to set rules and regulations, and enforces consistency

Question 18

Coordination by Plan

Answer 18

requires interdependent units to meet common deadlines and objectives

Question 19

Coordination by Mutual adjustment

Answer 19

depends on managers interacting extensively with their counterparts

Question 20

Organization culture

Answer 20

the coherent set of assumptions about an MNE and its goals and practices shared by its members
- management values and principles
- work climate and atmosphere
- ‘how we do things around here’ patterns
- traditions
- ethical standards

Question 21

An MNE’s organization reflects its

Answer 21

• market circumstances
• strategic choice
• value chain configuration
• administrative legacy
• executive preferences

Question 22

Organization structure

Answer 22

formal arrangement of roles, responsibilities, and relationships

Question 23

Differentiation

Answer 23

means that the company is composed of different units that work on different tasks with different degrees of authority

Question 24

Classical structure

Answer 24

• applies explicit vertical and horizontal differentiation to organize the workplace
• emphasize command and control

Question 25

International division

Answer 25

• creates a critical mass of international expertise
• competes with powerful domestic divisions for resources
• fits the demands of the MNE that generates most sales in a single nation

Question 26

Geographic divisions

Answer 26

fit the demands of MNEs who have extensive international operations that are distributed across many countries

Question 27

Persistent problems coordinating responsibilities and resources

Answer 27

have led MNEs to question the matrix structure’s practical usefulness

Question 28

Boundarylessness follows from

Answer 28

eliminating vertical, horizontal, and external boundaries that constrain information, relationships, and initiative

Question 29

Network structure

Answer 29

is a flatter, less-hierarchical format that decentralizes decision making to promote connections, communications, and collaboration among agents, both internal and external to the firm

Question 30

Bureaucratic control

Answer 30

emphasizes organizational authority and relies on rules and regulations

Question 31

Market control

Answer 31

uses external market mechanisms to set standards that regulate performance

Question 32

Clan control

Answer 32

uses shared values and ideals to regulate employee behaviour

Question 33

Organizational culture

Answer 33

refers to the ideologies, symbols, and core values that employees, no matter their location in the MNE’s worldwide operations, regard as legitimate

Question 34

An organization’s culture

Answer 34

shapes the behaviour patterns of current workers as well as new hires, by endorsing workplace values

Question 35

Key features of a company’s organization culture include

Answer 35

• values and principles of management
• work climate and atmosphere
• logics of “how we do things around here”
• traditions and legacies
• ethical outlooks