MAN 6635 EXAM 1 QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
Organizational Structure - Answers How jobs and tasks are divided and coordinated between
individuals and groups within the company, an outcome of design
Organizational Design - Answers a process or style used by management to arrange the components
of structure
Functional Structure - Answers functional departmentalization and high centralization.
•very efficient
•tend to be inflexible and insensitive to subtle
differences across products, regions, or clients •most appropriate in stable, predictable environments
President --- VP Finance, VP Marketing, VP R&D
Divisional Structure - Answers workflow departmentalization and low levels of
centralization.
•not very efficient
•tend to be more flexible and innovative
•tend to be sensitive to subtle differences across
products, regions, or clients
Product Structure
President -- VP Electronics (Finance, Marketing R&D) , VP Home furnishings (Finance, Marketing R&D),
VP Automotive (Finance, Marketing R&D)
Client Based Structure
President -- VP Direct Sales (Finance, Marketing R&D) , VP Internet Sales (Finance, Marketing R&D),
VP Large Vendor Contracts (Finance, Marketing R&D)
Geographic Structure
Assume our company, HRM Suppliers, sells 2 distinct product lines, bombs and baby formula. What
type of structural configuration would be most appropriate, a divisional or functional structure? Why?
- Answers Functional Structure
What is organizational design impacted by? - Answers Business Environment
•Consists of customers, competitors, suppliers, distributors, and other factors external to the firm
•Global Presence
Company Strategy
•Low-Cost vs. Product Differentiation
Company Size
•As companies become larger, they need to rely on some combination of specialization,
formalization, and centralization to control activities
Multinational Enterprise Organizational Design Challenges - Answers Integration; local
responsiveness problem...coordinating and balancing the opposing forces of integrating their foreign
operation
International Organizational Structure - Answers •Weak pressures for local responsiveness and weak
pressures for worldwide integration
•Foreign subsidiaries dependent on headquarters for resources and limited direction, but still have
major freedom to adapt to local conditions
Multi-domestic Organizational Structure - Answers concentrates efforts on location
•Strong pressures for local responsiveness and weak pressures for worldwide
integration
•Subsidiaries in multiple countries operate independently within each country, independently of
operations in other countries, and often fairly independently of parent company headquarters
•Each national market seen as a specialized market for its particular subsidiaries products
Global Organizational Structure - Answers •Strong pressures for local responsiveness and strong
pressures for
, worldwide integration
•Structure resembles a centralized hub where foreign subsidiaries are heavily managed and
controlled by headquarters
•Products and services are generally designed for and marketed to customers all over the world
Transnational Organizational Structure - Answers • Weak pressures for local responsiveness and
strong pressures for worldwide integration
• Has a truly global focus, making resource decisions without reference to national origins, sharing its
ideas and technology with all units on a global scale, while cultivating the local character in all of its
individual businesses
• Interdependence of resources and responsibilities across all business units regardless of national
boundaries
Cost strategy - Answers •Strategy focuses on low costs of production
•Achieved through economies of scale, capitalizing on the experience curve, and controlling overhead
•Provides above average returns and makes it difficult for new competitors to enter the market
Differentiation strategy - Answers Strategy focuses on creating the impression that the company's
product or service is somehow different
from others in the industry
•Achieved through creating a brand image, from technology, or for offering unique features or
experiences to customers
•Provides above average returns and protects the company from price sensitivity
Companies engaging in a cost strategy - Answers •May seek to minimize labor costs •Seek efficiency
through employee input •Use performance-based compensation •Promote internally •Have clear and
consistent pay grades •Specifically define the skills they require and train on
these skills •Will likely consider global production options
Companies engaging in a differentiation strategy
seek employees that - Answers •Are highly creative and cooperative •Have only a moderate concern
for quantity •Have a long-term focus •Are willing to tolerate ambiguity •Are risk takers •Are willing to
"drink the Kool-Aid"
Integration - Answers Extent to which subsidiary and headquarters develop a unified whole
Local Responsiveness - Answers Extent to which subsidiaries respond to local
differences
International Business Strategy - Answers •Limited integration and limited local responsiveness
•No overseas office or operations
•Generally used for exporting, licensing, or
subcontracting
Multi-domestic Business Strategy - Answers •Low integration and high local responsiveness
•Subsidiaries in multiple countries operate
independently within each country, independently of operations in other countries, and often fairly
independently of parent company headquarters
•Poly-centric orientation
Global Business Strategy - Answers •High integration and low local responsiveness
•Unified strategy implemented for all countries regardless of their culture or national differences.
•Ethnocentric Orientation
Transnational Business Strategy - Answers •High integration and high local responsiveness
•Firms work hard to be seen as a local firm that draws upon global expertise, technology, and
resources
•Geocentric Orientation
Strategy Formulation - Answers Achieved by defining a company's missions and goals, its external
opportunities and threats, and its internal strengths and weaknesses
Strategy Implementation - Answers Achieved by devising structures and allocating
resources
International Mergers & Acquisitions - Answers Two firms become one
International Joint Ventures - Answers Two or more firms create a separate entity
International Alliances - Answers Two or more firms enter into formal or non-formal agreements
without creating a separate entity
Motivation to Integrate - Answers •It enhances industry consolidation, thus reducing
industry overcapacity
Organizational Structure - Answers How jobs and tasks are divided and coordinated between
individuals and groups within the company, an outcome of design
Organizational Design - Answers a process or style used by management to arrange the components
of structure
Functional Structure - Answers functional departmentalization and high centralization.
•very efficient
•tend to be inflexible and insensitive to subtle
differences across products, regions, or clients •most appropriate in stable, predictable environments
President --- VP Finance, VP Marketing, VP R&D
Divisional Structure - Answers workflow departmentalization and low levels of
centralization.
•not very efficient
•tend to be more flexible and innovative
•tend to be sensitive to subtle differences across
products, regions, or clients
Product Structure
President -- VP Electronics (Finance, Marketing R&D) , VP Home furnishings (Finance, Marketing R&D),
VP Automotive (Finance, Marketing R&D)
Client Based Structure
President -- VP Direct Sales (Finance, Marketing R&D) , VP Internet Sales (Finance, Marketing R&D),
VP Large Vendor Contracts (Finance, Marketing R&D)
Geographic Structure
Assume our company, HRM Suppliers, sells 2 distinct product lines, bombs and baby formula. What
type of structural configuration would be most appropriate, a divisional or functional structure? Why?
- Answers Functional Structure
What is organizational design impacted by? - Answers Business Environment
•Consists of customers, competitors, suppliers, distributors, and other factors external to the firm
•Global Presence
Company Strategy
•Low-Cost vs. Product Differentiation
Company Size
•As companies become larger, they need to rely on some combination of specialization,
formalization, and centralization to control activities
Multinational Enterprise Organizational Design Challenges - Answers Integration; local
responsiveness problem...coordinating and balancing the opposing forces of integrating their foreign
operation
International Organizational Structure - Answers •Weak pressures for local responsiveness and weak
pressures for worldwide integration
•Foreign subsidiaries dependent on headquarters for resources and limited direction, but still have
major freedom to adapt to local conditions
Multi-domestic Organizational Structure - Answers concentrates efforts on location
•Strong pressures for local responsiveness and weak pressures for worldwide
integration
•Subsidiaries in multiple countries operate independently within each country, independently of
operations in other countries, and often fairly independently of parent company headquarters
•Each national market seen as a specialized market for its particular subsidiaries products
Global Organizational Structure - Answers •Strong pressures for local responsiveness and strong
pressures for
, worldwide integration
•Structure resembles a centralized hub where foreign subsidiaries are heavily managed and
controlled by headquarters
•Products and services are generally designed for and marketed to customers all over the world
Transnational Organizational Structure - Answers • Weak pressures for local responsiveness and
strong pressures for worldwide integration
• Has a truly global focus, making resource decisions without reference to national origins, sharing its
ideas and technology with all units on a global scale, while cultivating the local character in all of its
individual businesses
• Interdependence of resources and responsibilities across all business units regardless of national
boundaries
Cost strategy - Answers •Strategy focuses on low costs of production
•Achieved through economies of scale, capitalizing on the experience curve, and controlling overhead
•Provides above average returns and makes it difficult for new competitors to enter the market
Differentiation strategy - Answers Strategy focuses on creating the impression that the company's
product or service is somehow different
from others in the industry
•Achieved through creating a brand image, from technology, or for offering unique features or
experiences to customers
•Provides above average returns and protects the company from price sensitivity
Companies engaging in a cost strategy - Answers •May seek to minimize labor costs •Seek efficiency
through employee input •Use performance-based compensation •Promote internally •Have clear and
consistent pay grades •Specifically define the skills they require and train on
these skills •Will likely consider global production options
Companies engaging in a differentiation strategy
seek employees that - Answers •Are highly creative and cooperative •Have only a moderate concern
for quantity •Have a long-term focus •Are willing to tolerate ambiguity •Are risk takers •Are willing to
"drink the Kool-Aid"
Integration - Answers Extent to which subsidiary and headquarters develop a unified whole
Local Responsiveness - Answers Extent to which subsidiaries respond to local
differences
International Business Strategy - Answers •Limited integration and limited local responsiveness
•No overseas office or operations
•Generally used for exporting, licensing, or
subcontracting
Multi-domestic Business Strategy - Answers •Low integration and high local responsiveness
•Subsidiaries in multiple countries operate
independently within each country, independently of operations in other countries, and often fairly
independently of parent company headquarters
•Poly-centric orientation
Global Business Strategy - Answers •High integration and low local responsiveness
•Unified strategy implemented for all countries regardless of their culture or national differences.
•Ethnocentric Orientation
Transnational Business Strategy - Answers •High integration and high local responsiveness
•Firms work hard to be seen as a local firm that draws upon global expertise, technology, and
resources
•Geocentric Orientation
Strategy Formulation - Answers Achieved by defining a company's missions and goals, its external
opportunities and threats, and its internal strengths and weaknesses
Strategy Implementation - Answers Achieved by devising structures and allocating
resources
International Mergers & Acquisitions - Answers Two firms become one
International Joint Ventures - Answers Two or more firms create a separate entity
International Alliances - Answers Two or more firms enter into formal or non-formal agreements
without creating a separate entity
Motivation to Integrate - Answers •It enhances industry consolidation, thus reducing
industry overcapacity
