4. Leading and Managing the Global firm

Question 1

What is an organizational structure?

Answer 1

A system that outlines how certain activities are directed to achieve the goals of an organization.
It gives people formally defined roles,
responsibilities and lines of reporting.

Question 2

What are the four quadrants of the integration- responsiveness framework?

Answer 2

1. Global-Standarization strategy
2. Transnational strategy (Glocal)
3. International Strategy (Home replication)
4. Localization Strategy (Multidomestic)

Question 3

Global-Standarization

Answer 3

Advantages:
Low-cost

Disadvantages:
Lack of local responsiveness
Too much centralized control

Question 4

Transnational strategy (Glocal)

Answer 4

Advantages:
Cost efficient while being local responsive
Global learning and diffusion innovations

Disadvantages:
Organizationally complex
Difficult to implement

Question 5

International Strategy (Home replication)

Answer 5

Advantages:
Home-country-based
Easiest to implement

Disadvantages
Lack of local responsiveness
May result in foreign customer alienation

Question 6

Localization Strategy (Multidomestic)

Answer 6

Advantages:
Maximizes local responsiveness

Disadvantages:
High costs due to duplication of efforts
Too much local autonomy

Question 7

What organizational structure does International Strategy (home replication) follow?

Answer 7

International Division

The “silo” effect: International division activities are not
coordinated with the rest of the firm, which focuses on
domestic activities.

Question 8

What organizational structure does Localization Strategy (multidomestic) follow?

Answer 8

Geographic area structure

While being locally responsive can be a virtue, it may also
encourage the fragmentation of the MNE into highly
autonomous, hard-to-control “fiefdoms”

Question 9

What organizational structure does Global Strategy follow?

Answer 9

Product division structure

Treats each product
division as a stand-alone entity with full worldwide—as
opposed to domestic—responsibilities for its activities

Question 10

What organizational structure does Transnational Strategy (Glocal) follow?

Answer 10

Global matrix

May add layers of management, slow down
decision speed, and increase costs while not
showing significant performance improvement