ULUSLARARASI İŞLETME

Exploratory learning refers to the learning of product and process development skills that are entirely new to the current experiences of the firm. Search, variation, risk-taking, experimentation, play, flexibility, discovery, and innovation are among the keywords in exploratory learning activities.  The correct answer is B.

Exploitative learning refers to learning from the knowledge and skills that are familiar with the organizations’ current experiences. The correct answer is D.

In market development strategies, businesses modify the characteristics of their products and services. By doing so, modified products and services enable the organization to enter new markets. For example, an aircraft manufacturer that manufactures passenger aircrafts modifies its aircraft to carry air cargo that, in return, enables the manufacturer to sell its aircraft to logistics companies. The correct answer is C.

The diversification strategy is generally known as the riskiest strategy in the matrix. This is because, according to diversification strategy, businesses change both their product mix and their markets (Ansoff, 1957: 114). Simultaneous changes in the market and product mix cause this strategy to be known as risky.  The correct answer is D.

Porter (1980), in his pioneering book Competitive Advantage, identifies three generic strategies for businesses. Each of these strategies aims to help organizations achieve a competitive advantage. These three strategies are cost leadership, differentiation, and focus. The correct answer is C.

Global area structure is a commonly preferred organizational structure by international businesses. When businesses operate in different geographical areas with different specifications, the global area structure offers a few advantages for international businesses. In this structure, businesses are organized around countries or country groups (Figure 4.9). The departments and divisions are responsible for the whole functions and products in a given geographical area. The correct answer is A.

A matrix structure is a hybrid organizational design option that blends two organizational responsibilities, such as functional structure and product structure or regional structure and product structure . For example, if the structure is a combination of regional and functional structures, then the structure is developed to combine the geographic support for - global integration and the one for local responsiveness; also it can be used to utilize personnel skills and experience shared across functional and divisional structures (Deresky, 2014: 267). In the matrix structure, the lines of responsibility are drawn both vertically and horizontally. The correct answer is E.

The matrix structure enables an organization to focus on its capabilities and experiences and share its resources between its divisions, which, in turn, leads to efficient use of organizational resources. Especially when the environmental conditions call for specialization, innovation, and meeting regional needs, the matrix structure could be an excellent organizational design option. On the other hand, there are a few disadvantages of the matrix structure. First, it may lead to problems in authority. The dual authority that is inherent in the matrix structure may cause problems for both employees and supervisors since subordinates report to two supervisors in the structure. When not appropriately managed, the matrix structure is prone to communication problems. Finally, the matrix structure is a costly structure. Offering constant training to the employees and supervisors, and establishing an effective communication system are the essential for a strong structure. The correct answer is E.

Cost Leadership Strategy The focus of the cost leadership strategy is to reduce the costs of the business while maintaining quality. This strategy requires the business to achieve costs lower than its competitors. The correct answer is A.

Strategic flexibility refers to an organization’s ability to respond to uncertainties by adjusting its objectives with the support of its superior knowledge and capabilities.

The diversification strategy is generally known as the riskiest strategy in the matrix. This is because, according to diversification strategy, businesses change both their product mix and their markets (Ansoff, 1957: 114). Simultaneous changes in the market and product mix cause this strategy to be known as risky. One of the main factors that determine the level of risk is how far the business departs from the existing products and markets. In other words, when pursuing the diversification strategy, if the business does not entirely leave its products and markets, the risk level would be lower. However, businesses encounter a higher level of risks when they radically diversify their products and markets.

Differentiation strategy is a strategy very different from the cost leadership strategy because it focuses on innovation and superior value creation instead of cost control.

Prahalad (1999) lists four significant trends that must be considered in the current discussions about strategy. 1. Recognizing the changes in the field of strategy: The deregulation and privatization of government-controlled industries, the rapidly changing technological environment, and access to new market opportunities in developing countries such as China, India, and Brazil and in transitioning economies such as those in Central and Eastern Europe offer businesses completely new strategic options and opportunities. Such an expansion provides businesses with new opportunities in the modern global economy. 2. Recognizing the effects of globalization: The globalization of business activities introduces new strategic opportunities and threats. Furthermore, although debatable, the distinction between domestic and international businesses has become obsolete. This is because , in today’s business environment, domestic businesses have to respond to the actions of global businesses in their local markets. Mass customization and quick-response strategies require international businesses to be responsive to local demands. 3. Recognizing the importance of timely response: Today’s competitive environment is so complex that even the validity of annual plans is in question. This is because organizations’ capability to deal with opportunities and threats mainly depends on how fast they take action for these opportunities and threats. 4. Recognizing the importance of innovation: Although innovation has been considered as one of the critical success factors of businesses, it has become increasingly important in today’s dynamic business environment. Successful businesses still have to innovate their products, services, and processes. Furthermore, current innovations are expected to provide businesses with timely, reliable, and quick information about their customers.

The international division structure centralizes all international operations. There are advantages and disadvantages of this structure. First, it reduces the CEO’s burden of the direct operation of overseas subsidiaries and domestic operations. Second, it creates a management team that prioritizes overseas operations. All information, authority, and decision making related to foreign efforts are channeled to this division, so there is one central clearing point for international activities.

Compared to the structure explained above, the global functional structure is less commonly used by international businesses. According to this structure, businesses are organized around the main functions performed by the business (Figure 4.10). For example, such an organizational structure may have departments such as marketing, finance, production, and R&D. It is important to note that these departments and functions vary from one organization to another.

Global area structure is a commonly preferred organizational structure by international businesses. When businesses operate in different geographical areas with different specifications, the global area structure offers a few advantages for international businesses. In this structure, businesses are organized around countries or country groups (Figure 4.9). The departments and divisions are responsible for the whole functions and products in a given geographical area.

There are advantages and disadvantages of global functional structure. The most important advantage of this structure is that it is a simple and lean structure. Thus, it is much easier to establish a robust coordination mechanism in global functional structures. It also supports and enhances specialization within the organization. It allows an easier and more effective career planning for the employees.

The matrix structure enables an organization to focus on its capabilities and experiences and share its resources between its divisions, which, in turn, leads to efficient use of organizational resources. Especially when the environmental conditions call for specialization, innovation, and meeting regional needs, the matrix structure could be an excellent organizational design option. On the other hand, there are a few disadvantages of the matrix structure. First, it may lead to problems in authority. The dual authority that is inherent in the matrix structure may cause problems for both employees and supervisors since subordinates report to two supervisors in the structure. When not appropriately managed, the matrix structure is prone to communication problems. Finally, the matrix structure is a costly structure. Offering constant training to the employees and supervisors, and establishing an effective communication system are the essential for a strong structure.