CHAPTER 10: The Organization of Global Business
1. In the final stage of globalization, global companies produce goods in one country and export
them to other countries.
False
2. The first step a domestic firm takes when entering an international arena is usually to create an
international division.
False
3. An international division is advantageous because it allows global businesses to concentrate all
international efforts and expertise in one location.
True
4. The reason why some organizations reject a functional organizational structure is because they
believe it renders them unable to respond to environmental changes that require coordination
between functional areas, and because it offers each employee a restricted view of the
organization's primary goal.
True
5. Global businesses with a hybrid structure are said to be organized by more than one dimension
at the top level.
True
6. A global defense contractor needs deep functional skills as well as the ability to coordinate
across the functions of each contract or project. For this example, the organizational structure
that would best suit their needs would be a matrix structure.
True
7. Under a matrix structure, the functional managers and the divisional managers have equal
authority within the organization.
True
8. Lenovo, the Chinese computer manufacturer, is a corporation where it is difficult to identify one
country as the home country. Lenovo can be described as a _____ corporation.
Stateless
9. While many major corporations have a global presence, stateless corporations are different
because they _____.
Attempt to transcend nationality altogether
10. According to C.K. Prahalad, the first stage of globalization is _____.
when companies produce goods in one country and export them to other countries
11. Some companies are global and so well integrated into the countries where they have a
presence, that it is difficult, if not impossible, to identify one country as the home country for
these corporations. such companies are called _____.
Stateless
12. Of the following, which is NOT an advantage of an international division?
It ensures that the company will be more profitable.
13. Global businesses with a narrow product line or a highly integrated product mix, such as aircraft
manufacturers or oil and gas firms typically use a(n) _____ organizational structure.
Functional
14. A special case of the divisional structure where products are grouped into separate divisions
according to their similarities or differences is called a _____ structure.
Product
15. At ExxonMobil, divisions include Upstream, Downstream, and Chemical. The Upstream division
includes exploration, development, production, and gas and power marketing. The Downstream
division includes refining and supply, fuels and marketing, and lubricants. ExxonMobil utilizes a
_____ structure.
Product
16. At IBM, there are five divisions: Global Technology Services, Global Business Services, Software,
Systems and Technology, and Global Financing. IBM utilizes a _____ structure.
Product
17. A market structure is also sometimes called ______ structure.
Customer
18. CEMEX has three divisions: (1) North America; (2) South America and the Caribbean; and (3)
Europe, Asia, and the Middle East. CEMEX has a _____ structure.
Geographical region
19. A defense contractor may need deep functional skills as well as the ability to coordinate across
the functions for each contract or project. This contractor ought to use a _____ structure.
Matrix
20. A basic problem of the _____ structure is it is difficult to determine the responsibility and
authority relationships between the functional and divisional managers.
Matrix
21. Limited Clothing Inc. has a corporate headquarters with three divisions: North American
Division, European Division, and Asia Division. Limited Clothing Inc. has a _____ structure.
Geographical region
22. A market structure is one where an organization:
groups products into separate divisions according to the needs of different customers.
23. An area structure is one where an organization:
groups products into separate divisions according to the needs of the different geographical
regions the company serves.
24. A global business is organized into four groups: Manufacturing, Research and Development,
Finance, and Sales. This company uses a(n) ______ structure.
Functional
25. A product structure is one where an organization:
groups products into separate divisions according to their similarities or differences.
