MAN6635 Exam 1 || With Questions &
100% Accurate Answers
Organizational Structure - ANSWER - How jobs and tasks are divided and coordinated
between individuals and groups within the company, an outcome of design
Organizational Design - ANSWER - a process or style used by management to arrange
the components of structure
Functional Structure - ANSWER - 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 - ANSWER - 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? - ANSWER - Functional Structure
What is organizational design impacted by? - ANSWER - 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 - ANSWER - Integration;
local responsiveness problem...coordinating and balancing the opposing forces of
integrating their foreign operation
International Organizational Structure - ANSWER - •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 - ANSWER - 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 - ANSWER - •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 - ANSWER - • 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 - ANSWER - •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 - ANSWER - 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 - ANSWER - •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 - ANSWER - •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 - ANSWER - Extent to which subsidiary and headquarters develop a unified
whole
Local Responsiveness - ANSWER - Extent to which subsidiaries respond to local
differences
International Business Strategy - ANSWER - •Limited integration and limited local
responsiveness
•No overseas office or operations
•Generally used for exporting, licensing, or
subcontracting
Multi-domestic Business Strategy - ANSWER - •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 - ANSWER - •High integration and low local responsiveness
•Unified strategy implemented for all countries regardless of their culture or national
differences.
•Ethnocentric Orientation
Transnational Business Strategy - ANSWER - •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 - ANSWER - Achieved by defining a company's missions and
goals, its external opportunities and threats, and its internal strengths and weaknesses
Strategy Implementation - ANSWER - Achieved by devising structures and allocating
resources
International Mergers & Acquisitions - ANSWER - Two firms become one
International Joint Ventures - ANSWER - Two or more firms create a separate entity
International Alliances - ANSWER - Two or more firms enter into formal or non-formal
agreements without creating a separate entity
Motivation to Integrate - ANSWER - •It enhances industry consolidation, thus reducing
industry overcapacity
•It enables geographic expansion
•It enhances expansion into new markets
•It allows the firm to acquire new technology, products, or knowledge without having to
develop those things internally
•It will create synergy and/or economies of scale
The Process of Integration: Portfolio - ANSWER - • Maintain separate cultures
• Managers in both companies retain autonomy
The Process of Integration: Blending - ANSWER - • Choose the best elements from
each culture
• New organization retains the best aspects of the original partners
The Process of Integration: New Creation - ANSWER - • Develop a new culture fitting
the new organization
The Process of Integration: Assimilation - ANSWER - Assign legitimacy to one culture
and expect assimilation by members of
other culture
The Process of Integration: Concerns - ANSWER - Resistance to change
• Employees' sense of loss or worry about the loss of their corporate
cultures and values
How organizational combinations are handled effects the bottom line
• If handled poorly, lower productivity, loss of key talent, and emergence of a cynical
organizational culture can result
• Without sufficient planning before the merger or acquisition, dissolution or divestiture is
often the result of a lack of sufficient planning
100% Accurate Answers
Organizational Structure - ANSWER - How jobs and tasks are divided and coordinated
between individuals and groups within the company, an outcome of design
Organizational Design - ANSWER - a process or style used by management to arrange
the components of structure
Functional Structure - ANSWER - 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 - ANSWER - 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? - ANSWER - Functional Structure
What is organizational design impacted by? - ANSWER - 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 - ANSWER - Integration;
local responsiveness problem...coordinating and balancing the opposing forces of
integrating their foreign operation
International Organizational Structure - ANSWER - •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 - ANSWER - 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 - ANSWER - •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 - ANSWER - • 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 - ANSWER - •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 - ANSWER - 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 - ANSWER - •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 - ANSWER - •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 - ANSWER - Extent to which subsidiary and headquarters develop a unified
whole
Local Responsiveness - ANSWER - Extent to which subsidiaries respond to local
differences
International Business Strategy - ANSWER - •Limited integration and limited local
responsiveness
•No overseas office or operations
•Generally used for exporting, licensing, or
subcontracting
Multi-domestic Business Strategy - ANSWER - •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 - ANSWER - •High integration and low local responsiveness
•Unified strategy implemented for all countries regardless of their culture or national
differences.
•Ethnocentric Orientation
Transnational Business Strategy - ANSWER - •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 - ANSWER - Achieved by defining a company's missions and
goals, its external opportunities and threats, and its internal strengths and weaknesses
Strategy Implementation - ANSWER - Achieved by devising structures and allocating
resources
International Mergers & Acquisitions - ANSWER - Two firms become one
International Joint Ventures - ANSWER - Two or more firms create a separate entity
International Alliances - ANSWER - Two or more firms enter into formal or non-formal
agreements without creating a separate entity
Motivation to Integrate - ANSWER - •It enhances industry consolidation, thus reducing
industry overcapacity
•It enables geographic expansion
•It enhances expansion into new markets
•It allows the firm to acquire new technology, products, or knowledge without having to
develop those things internally
•It will create synergy and/or economies of scale
The Process of Integration: Portfolio - ANSWER - • Maintain separate cultures
• Managers in both companies retain autonomy
The Process of Integration: Blending - ANSWER - • Choose the best elements from
each culture
• New organization retains the best aspects of the original partners
The Process of Integration: New Creation - ANSWER - • Develop a new culture fitting
the new organization
The Process of Integration: Assimilation - ANSWER - Assign legitimacy to one culture
and expect assimilation by members of
other culture
The Process of Integration: Concerns - ANSWER - Resistance to change
• Employees' sense of loss or worry about the loss of their corporate
cultures and values
How organizational combinations are handled effects the bottom line
• If handled poorly, lower productivity, loss of key talent, and emergence of a cynical
organizational culture can result
• Without sufficient planning before the merger or acquisition, dissolution or divestiture is
often the result of a lack of sufficient planning
