Decision Making in an International Context

Question 1

Factors Affecting Decision-Making Authority (Centralized vs Decentralized structure)

Answer 1

Centralized vs Decentralized
-centralized structures often retain decision authority at headquarters, while decentralized structures empower local subsidiaries to make region specific decisions

Question 2

Factors Affecting Decision-Making Authority (Matrix Structure)

Answer 2

In multinational companies, a matrix approach can distribute authority across functional and geographic lines

Question 3

Cultural Differences in Decision Making: Individualism vs Collectivism

Answer 3

-Individualist culture: often encourage quick, decisive actions by single leaders

Collectivist Cultures: Prefer consensus-building, group harmony, and lengthy discussion

Question 4

Cultural Differences in Decision Making: Power Distance

Answer 4

High power distance: employees may rely on top management for major decisions (many Asian and Latin American cultures)

Low power distance: employees expect to participate in decisions and challenge superiors if needed (Scandanavian countries)

Question 5

Cultural Differences in Decision Making: Uncertainty Avoidance

Answer 5

High uncertainty avoidance: detailed processes, long discussions, robust data analysis.

Low uncertainty avoidance: more comfortable with ambiguity, quicker decisions, adaptability

Question 6

Stategic Control

Answer 6

-focuses on monitoring the organization’s strategic direction and ensuring alignment with long-term goals
-in an international context, strategic controls ensure global subsidaries’ decision align with corporate strategy

Question 7

Tactical/Operational Control

Answer 7

-Dat-to-day operations, short-term objectives, and resource allocation

Ex: monitoring sales targets in various countries, controlling costs at local plants

Question 8

Financial Control

Answer 8

-Budgetary oversight, financial reporting, cost controls.
-Exchange rate fluctuations and diverse tax regimes add complexity in international settings.

Question 9

Cultural/Clan Control

Answer 9

-Shaping employee behavior through organizational culture and shared values
-often used by MNCs to unify a geographical dispersed workforce under one “corporate culture”

Question 10

Direct vs Indirect Control

Answer 10

Direct: frequent reports, daily metrics, face-to-face checks

Indirect: broad guidelines, infrequent reporting, reliance on trust and shared values

Question 11

Behavioral vs. Output Control

Answer 11

Behavioral: monitoring processes, standard operating procedures (regular quality inspections)

Output: monitoring results (local subsidiary profit goals, market share objectives)