Chapter 7: Designing Organizations for the International Environment

Question 1

What are the motivations for entering the global arena?

Answer 1

• economies of scale (through large-volume production, these industrial giants were able to achieve the lowest possible cost per unit of production.)
• economies of scope (Having a presence in multiple countries provides marketing power and synergy compared to the same size firm that has a presence in fewer countries.)
• low-cost production factors (opportunity to obtain raw materials and other resources at the lowest possible cost)

Question 2

Four Stages of Development

Answer 2

1. Domestic
2. International
3. Multinational
4. Global

Question 3

Domestic stage

Answer 3

company is domestically oriented, but managers are aware of the global environment and may want to consider initial foreign involvement to expand production volume and realize economies of scale

Question 4

international stage

Answer 4

company takes exports seriously and begins to think multidomestically.

Question 5

Multidomestic

Answer 5

means competitive issues in each country are independent of other countries; the company deals with each country individually.

Question 6

multinational stage

Answer 6

company has extensive experience in a number of international markets and has established marketing, manufacturing, or research and development facilities in several foreign countries.

Question 7

global stage

Answer 7

company transcends any single country. The business is not merely a collection of domestic industries

Question 8

What is another name for global companies?

Answer 8

Stateless corporations

Question 9

Cultural intelligence

Answer 9

the ability to use reasoning and observation skills to interpret unfamiliar gestures and interpretations and devise appropriate responses

Question 10

Joint ventures

Answer 10

separate entity created with two or more active firms as sponsors.

Question 11

Consortia

Answer 11

groups of independent companies—including suppliers, customers, and even competitors—that join together to share skills, resources, costs, and access to one another’s markets

Question 12

Challenges of global design

Answer 12

1. complexity and differentiation
2. need for coordination
3. transfer of knowledge and reverse innovation

Question 13

Globalization strategy

Answer 13

product design, manufacturing, and marketing strategy are standardized throughout the world.

Question 14

multidomestic strategy

Answer 14

competition in each country is handled independently of competition in other countries.

Question 15

Two forces that determine the strategy and design structure that orgs should follow

Answer 15

global integration
national responsiveness

Question 16

international division

Answer 16

has its own hierarchy to handle business (licensing, joint ventures) in various countries, selling the products and services created by the domestic divi- sions, opening subsidiary plants, and in general moving the organization into more sophisticated international operations

Question 17

global product structure

Answer 17

each division’s manager is responsible for planning, organizing, and controlling all functions for the production and distribution of its products for any market around the world.

Question 18

global geographic structure

Answer 18

divides the world into geo- graphic regions, with each geographic division reporting to the CEO. Each division has full control of functional activities within its geographic area.

Question 19

global matrix structure

Answer 19

works best when pressure for decision making balances the interests of both product standardization and geographic localization, and when coordination to share resources is important.

Question 20

The global organizational challenge

Answer 20

-increased complexity and differentiation
-need for integration
-transfer of knowledge and innovation

Question 21

global coordination mechanisms

Answer 21

• global teams
• stronger HQ planning
• specific coordiantion roles

Question 22

building global capabilities

Answer 22

• know the local markets
• achieving global efficiencies
• continues organizational learning

Question 23

Globe Dimensions

Answer 23

1. power distance
2. gender egalitarianism
3. uncertainty avoidance
4. institutional collectivism
5. in-group collectivism
6. future orientation
7. assertiveness
8. performance orientation
9. humane orientation

Question 24

Hofstede Dimensions

Answer 24

1. indulgence vs, restraint
2. power distance
3. individualism vs collectivism
4. masculinity vs femininity
5. time orientation
6. uncertainty avoidance

Question 25

Gesteland model

Answer 25

1. Deal-focused versus relationship-focused.
2. Informal versus formal.
3. Rigid time versus fluid time.
4. Expressive versus reserved

Question 26

Three National Approaches to Coordination and Control

Answer 26

1. Centralized Coordination in Japanese Companies.
2. European Firms’ Decentralized Approach
3. North America: Coordination and Control Through Formalization

Question 27

Transnational model of organization

Answer 27

• assets and resources are dispersed worldwide into highly specialized operations and linked together through interdependent relationships
• structures are flexible and ever changing
• subsid managers initiate strategy and innovations that become the strategy for the corporation as a whole
• unification and coordination are achieved through org culture rather than formal