Chapter 6

Question 1

What are the 3 motivations for global expansion?

Answer 1

Economies of scale
Economies of scope
Low cost production factors

Question 2

What are the 4 stages for international development?

Answer 2

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

Question 3

What are the characteristics of the Domestic Stage?

Answer 3

Domestically oriented with initial foreign involvement
Domestic structure + export department
Domestic/moderate market potential

Question 4

What are the characteristics of the International Stage?

Answer 4

Export oriented
Multidomestic
Domestic Structure + International department
Multidomestive, large market potential

Question 5

What are the characteristics of the Multinational Stage?

Answer 5

Multinational
Explosion development
Worldwide, geographic product
Very large market potential

Question 6

What are the characteristics of the Global Stage?

Answer 6

Global orientation and development
matrix, transnational
Whole world market potential

Question 7

What are 3 ways for global expansion through international strategic alliances?

Answer 7

1. Licensing
2. Joint Venture
3. Consortia : group of independent companies join together to share skills/resources/markets

Question 8

Name the 4 global organizational structures

Answer 8

International division
Global product
Global geographic
Global matrix

Question 9

What are the dimensions for global strategy/structure?

Answer 9

Forces for global integration / standardization

Forces for national responsiveness

Question 10

What is standardization?

Answer 10

Policy to ensure all branches of the company operate the same way

Question 11

What is a globalization strategy?

Answer 11

Standardization of product/advertising strategy throughout the world

Question 12

What is a multidomestic strategy?

Answer 12

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

Question 13

Explain the dimensions and strategy for: International Division

Answer 13

Low forces for global integration
Low forces for national responsiveness
Strategy: Export

Has its own hierarchy to handle business in various countries

Question 14

Explain the dimensions and strategy for: Global Product

Answer 14

High forces for global integration
Low forces for national responsiveness
Strategy: Globalization

Product divisions take responsibility for global operations in their specific areas

Works best when a division handles products that are tech similar and can be standardized for marketing worldwide

Question 15

Explain the dimensions and strategy for: Global Geographic

Answer 15

Low forces for global integration
High forces for national responsiveness
Strategy: Multidomestic

Divides operations into world regions
Works best with mature product lines and stable technology

Question 16

Explain the dimensions and strategy for: Global Matrix

Answer 16

High forces for global integration
High forces for national responsiveness
Strategy: Globalization and Multidomestic

product and geographical are implemented simultaneously

Question 17

What are 3 segments for global organizational challenges?

Answer 17

1. Greater complexity and differentiation
2. Need for integration
3. Knowledge and innovation transfer across global firm

Question 18

What are the 3 global coordination mechanisms and explain them?

Answer 18

Global teams: multinational members whose activities span multiple countries
Headquarters planning: planning, scheduling, and control to keep all org pieces working together
Expanded coordination roles: similar to integrators

Question 19

What are the 3 coordination roles?

Answer 19

Functional manager: coordinate across countries
Country manager: coordinates across functions in a country
Network manager: coordinates key customer accounts info

Question 20

What are the 2 global teams?

Answer 20

Intercultural and Virtual

Question 21

What are the 2 cultural differences in coordination and control?

Answer 21

Power distance: extent to which a society expects power to be distributed equally
Uncertainty avoidance: extent to which society relies on rules, procedures, etc to minimize ambiguity

Question 22

Explain low vs high power distance

Answer 22

Low: decentralized
High: centralized + formal authority

Question 23

Explain low vs high uncertainty avoidance

Answer 23

Low tolerance = certain and conformity

High tolerance = unstructured, unclear, unpredictable

Question 24

What are the 3 national approaches to coordination and control?

Answer 24

1. Centralized in Japanese companies
2. Decentralized in European companies
3. Formalization in US companies

Question 25

What is the transnational model?

Answer 25

A form of a horizontal organization that has multiple centers, subsidiary managers who initiate strategy and innovation and unity/coordination through culture, shared, vision, and values

Question 26

What are the 3 goals of the transnational model?

Answer 26

Maximize efficiency, learning, responsiveness

Question 27

What are the 4 characteristics of the transnational model?

Answer 27

1. assets/resources dispersed world wide into operations liked through relationships
2. structures are flexible and ever changing
3. subsidiary managers initiate strategy that apply to whole org
4. coordination achieved through org culture, shared vision/values rather than formal structures