Chapter 14 The Organization of International Business

True / False Questions

1)Organizational structure refers to the totality of a firm's organization.

True    False

2. A manager receives a bonus because the national operating subsidiary, that she is in charge of, exceeds its performance target. This is an example of an incentive.

True    False

3. A decentralized organization allows managers to respond to environmental changes more quickly than in a centralized organization.

True    False

4. The choice between centralization and decentralization is not absolute.

True    False

5. Beyond the initial functional division of the organization, further horizontal differentiation may be required if the firm significantly diversifies its product offering, which takes the firm into different business areas.

True    False

6. In a worldwide area structure, each area tends to be a self-contained, largely autonomous entity with its own set of value creation activities.

True    False

7. In a worldwide product divisional structure, each division is a self-contained, largely autonomous entity with full responsibility for its own value creation activities.

True    False

8. The worldwide product division structure facilitates local responsiveness.

True    False

9. It is difficult to ascertain accountability in the global matrix structure.

True    False

10. The need for coordination between units is greatest in firms pursuing a localization strategy.

True    False

11. Direct contact between subunit managers is the simplest integrating mechanism.

True    False

12. A knowledge network is a network for transmitting information within an organization that is based on formal organizational structure.

True    False

13. Bureaucratic control involves personal contact with subordinates.

True    False

14. The basic principle behind incentive systems is to ensure that the incentive scheme for an individual employee is linked to an output target that he or she has some control over and can influence.

True    False

15. Performance ambiguity lowers the cost of control.

True    False

16. New processes that might lead to a competitive advantage can be developed anywhere within the organization's global network of operations.

True    False

17. Norms are abstract ideas about what a group believes to be good, right, and desirable.

True    False

18. An organizational culture can be strong but bad.

True    False

19. Firms pursuing a localization strategy tend to operate with an array of formal and informal integrating mechanisms.

True    False

20. National regulations including local content rules and policies pertaining to layoffs might act as a source of inertia.

True    False

21. It is important to realize that organizational change will occur regardless of the commitment of senior managers to it.

True    False

22. Refreezing an organization should happen quickly.

True    False

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