Chapter 12 - Strategy and Structure

Question 1

Home replication strategy

Answer 1

duplicates home-country competencies in foreign countries

*when a company does things in foreign countries the same way they do it back in their home country

Question 2

Localization strategy

Answer 2

focuses on a number of foreign countries/regions, each of which is regarded as a standalone local (domestic) market worthy of significant attention and adaptation

easier wording: when a company tailors their products/services to match the preferences of people in each country

Question 3

Global standardization strategy

Answer 3

focuses on development and distribution of standardized products worldwide in order to reap the maximum benefits from low-cost advantages

*a plan that a company uses when it wants to keep things the same across different countries

*the company tries to offer the same thing everywhere, keeping a consistent approach

Question 4

Transnational strategy

Answer 4

a strategy that is cost efficient, locally responsive, and learning-driven around the world

*instead of doing things the same way everywhere or completely customizing for each country, a company following this aims to find a balance

Question 5

4 Structures

Answer 5

1. International Division
2. Geographic Area Structure
3. Global Product Division
4. Global Matrix

how a company organizes their structure for global business

Question 6

International division

Answer 6

a structure that is typically set up when firms initially expand abroad, often engaging in home replication strategy

Question 7

Geographic area structure

Answer 7

a structure that organizes MNE according to different geographic areas (countries and regions)

Question 8

Global product division

Answer 8

an organizational structure that assigns global responsibilities to each product division

Question 9

Global matrix

Answer 9

a structure often used to alleviate the disadvantages associated with both geographic area and global product division structures

Question 10

Knowledge management

Answer 10

the structures, processes, and systems that actively develop, leverage, and transfer knowledge

Question 11

Explicit knowledge

Answer 11

something that can be written down and transferred with little loss of richness

Question 12

Tacit knowledge

Answer 12

knowledge that requires hands-on practice (e.g. learning a language)