BM1917

QUIZ ON THE ORGANIZATION OF INTERNATIONAL BUSINESS

NAME: SECTION: DATE: SCORE:

Salazar, Richelldee M. BSBA OM-3A 11/27/22

Questions (2 items x 5 points):

1. Describe the organizational architecture that a transnational firm might adopt to reduce the costs of control.

 A global company can use output and bureaucratic controls in some capacity, much like all
multinational corporations. However, performance issues prevent many applications of output
controls. When there are several lines of accountability, bureaucratic controls are less effective.
One method of tackling this difficult problem is by providing incentives for cooperation. Creating
a robust culture is another. By instilling in managers, a commitment to high performance criteria
and value systems, this culture may promote cooperation. Another benefit of such a culture is
that it might encourage managers from interdependent sub-units to seek solutions to any
issues that might develop between them. Control expenses would be reduced by a strong,
success-oriented culture.

2. What is the most appropriate organizational architecture for a firm that is competing in an industry where a
global strategy is most appropriate?

 When a corporation adopts a global strategy, it does so because it sees the entire planet as its
market and realizes that by creating and manufacturing a standardized product, it can achieve
economies of scale. A moderately decentralized structure with global product divisions would
be the best organizational structure. Given that working on enterprises globally takes a
significant amount of labor and money, there must be a great deal of coordination, numerous
integrating mechanisms, and a strong culture to be applied in the global strategy. Delegating
responsibilities to lower-level or other subunits can reduce the amount of time it takes top
management to make informed choices, as well as lighten their load and help them concentrate
on the urgent issues at hand.