Exam 6: Designing Organizations for the International Environment

As organizations become more differentiated, with multiple products, divisions, departments, and positions scattered across numerous countries, managers face a tremendous ____ challenge.

List the benefits that result from interunit collaboration.

In parts of Mexico, laundry detergent is used to wash dishes, not clothes, pointing out the need for a multidomestic strategy.

European companies typically take a decentralized approach to coordination and control.

In one survey, 70 percent of global companies reported that the most important function of corporation headquarters was to:

All of the following are characteristics that distinguish the transnational organization from other global organization forms except:

The only way an organization can reasonably expect to be successful in different countries is to customize its products and services to suit the local interests, preferences, and values in each country.

Many large international companies are moving toward a multidomestic model of organization.

When should a company begin using an international division? What problems are likely to be solved? As the company progresses in its international development, what problems will likely not be solved by this structure?

____ are groups of independent companies that join together to share skills, resources, costs, and access to one another's markets.

The globalization strategy means that product design, manufacturing, and marketing strategy are standardized throughout the world, whereas a multidomestic strategy means that competition in each country is handled independently of competition in other countries.

The global product structure:

The international stage of international development means that exports are taken seriously and that the company deals with the competitive issues of each country separately.

Which of the following is not a benefit that results from inter-unit collaboration?

Case 6.0 It was reported in the Wall Street Journal that Ford Motor Co. was reorganizing to place its functions such as product development, sales, and engine/transmissions under their own executives with global authority. Alexander Trotman, chairman and CEO, wanted to create a structure that would avoid costly duplication in different parts of the world and that would foster Ford's developing models such as its Mondeo (Europe) and Contour (U.S.) which could sell worldwide with few modifications. Trotman wanted a company that was strong internationally in product development, manufacturing, and purchasing that could take advantage of where Ford's strength was around the world. The company had been organized geographically into three relatively independent divisions--Ford North America, Ford of Europe, and Ford Asia/Pacific. The new product cited above, the Mondeo and Contour, sapped $6 billion in development costs because of expensive coordination time between the sometimes-conflicting European and North American divisions. Elimination of duplication was a goal of the new structure. Simultaneously a new "program team facility" was being constructed so that all of Ford's new product development would be by teams. The new coupe Mustang was borne from an experimental cross-functional team that designed the product in less than three years compared to Ford's normal four to five year development cycle. Trotman emphasized that he wanted to change the process, not just the structure, by which new products were developed. Ford apparently found the team process convincing because the Mustang was developed on a budget about 30% lower than comparable project budgets. -Reference Case 6.0. Identify the strategy given in our textbook that Ford appeared to be adopting. Describe advantages and disadvantages of that strategy for Ford. Why do you think CEO Trotman moved to that strategy?

A ____ strategy would encourage production design, assembly, and marketing tailored to the specific needs of each country.

High uncertainty avoidance means that people accept inequality in power among institutions, organizations, and people.

The global product division structure works best when pressure for decision-making balances the interests of both product standardization and geographical localization and when coordination to share resources is important.

Compare and contrast the globalization strategy and the multidomestic strategy. Give an example of effective use of each strategy.

Which type of international strategic alliance, if any, would you recommend for a business that wanted to gain entry into China? Explain the reasons behind your choice.