Chapter 9 Multiple Choice Questions

. What do organizational structures explain?

Who does what, where and when

The competitive advantage of the firm

Formal and informal reporting within the firm

The core competencies of the firm

. What are the advantages of the functional structure?

It enhances communication between top and low level managers.

It makes communication easy among people from different functions.

It makes communication easy among people from the same specialists.

It enhances team spirit throughout the organization.

. When is the international division structure appropriate?

When foreign operations are relatively small.

When foreign operations are relatively high.

When pressure to respond to local needs is high.

When pressure to respond to local need is low.

. When is the geographical division appropriate?

When economies of scale are necessary.

When customers' taste does not vary significantly across countries.

When cultural differences are very high.

When customers' taste varies significantly across countries.

. Typically, in a global product structure:

adaptation to local needs is high.

marketing is the most important function.

marketing is subservient to operations.

operations is subservient to marketing.

. Barlett and Ghoshal (1989) said that the matrix structure is:

"too simple for a complex environment".

"speeds decision making".

"prove all but unmanageable".

"easy to manage".

. A significant weakness of the multi-domestic arrangement is:

dual reporting system.

duplication of activities.

cumbersome structure.

does not respond to local needs.

. In transnational firms, managers must emphasize:

the importance of control systems.

formal hierarchies of the firm.

dependence between subsidiaries.

interdependence between subsidiaries.

. According to the Stopford and Wells model, a high degree of diversification and high level of foreign sales should lead the multinational firm to adopt:

Matrix structure

International division structure

Area structure

Global product structure

. The transnational structure is:

dominated by hierarchy.

not dominated by hierarchy.

designed for vertically integrated international firm.

appropriate for export firms.

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