FINAL TEST

1. What’s the difference between standardization and localization?

Standardization Localization

o Standardization refers to the use of the o Localization is when a corporation

same or similar marketing mix in as
many countries across the globe as
possible when a corporation operates
beyond its national borders.
o Corporations that pursue
standardization are referred to as Global
Corporations and their strategies are
referred to as Global or standardized
strategies.
o Standardization benefits include:
 Economies of scale.
 Lowered costs.
 Uniform products.
 Shorter learning curve.
modifies its marketing mix in
virtually every country that it
operates to suit national taste,
preferences and culture.
o Most Multinational Corporations
(MNC) pursue localized strategy.
o Localization is preferred:
 Different customer preferences.
 Different performance
requirements and standards
across countries.
 Different cultural perceptions.

2. Can you explain Power Distance? What does it mean when it’s low? And high?

Power distance refers to the relationship between those in power and the subordinates in a
society where lower ranking individuals depending on the high or low power distance
culture react to that authority. The Power Distance Index is a tool to measure the
acceptance of power established between the individuals with the greatest power and
those with the least. This is an anthropology concept, used in cultural studies to
understand the relationship between individuals with varying power, the effects, and the
perceptions of those individuals
In these societies, power distance is divided into two categories that resembles that
culture's power index.
High power distance
A society of great power disparities means that the level of bitter resentment is relatively
high and always increases over time. People will tend to see power as a fact of life and
believe that everyone has a specific place in the hierarchy of power.
You want the power to be distributed unevenly and easily accept relationships based on
tyranny and paternalism. If you are a subordinate, you simply need to acknowledge the
superior's strength based on his equal position in the power hierarchy. You will rarely
have the right to question commands in advance because your role in the hierarchy is to
obey commands.
In these countries, there is a huge gap between the powerful and the short-haired.
Guatemala, Malaysia, the Philippines and a few Middle Eastern countries are typical
examples of high power distance
Low power distance
In contrast, in societies with a low power gap, the difference between the strong and the
weak is very small. You will expect relationships of power with contribution, democracy,
and exchange. You treat your leader equally, regardless of his or her position or title. You
feel you have a right to participate in decision-making and are not afraid to make such
statements.
You believe that you have the right to participate in political and professional decisions.
Leaders exist to guide and help you, instead of ordering you to do this and that. Respect
for leaders is earned by themselves, not a right of the right or title they are holding.
In Scandinavian countries such as Denmark and Sweden, for example, governments built
tax and welfare systems to ensure that their countries maintain relative equality in income
and power. The United States is a country with a relatively low power gap.
3. What’s the difference between centralization and decentralization?

BASIS FOR
CENTRALIZATION DECENTRALIZATION
COMPARISON

Definition A pivot location or group of The assignment of authorities and

managerial personnel for the
planning and decision-making
or taking activities of the
organization is known
as Centralization. In this type
of organization, all the
important rights and powers
are in the hands of the top-
level management.
responsibilities by the top-level
management to the middle or low-
level management is known as
Decentralization. It is the perfect
opposite of centralization, in which
the decision-making powers are
delegated to the departmental,
divisional, unit or center level
managers, organization-wide. 

People involved Only a few handpicked people A higher number of people from
are involved in the decision- each level are involved in the
making process decision-making process

Communication Vertical Open and Free

Flow

Decision Slow Comparatively faster

Making

Advantage Proper coordination and Sharing of burden and

Leadership responsibility

Power of Lies with the top management Multiple persons have the power of
decision making decision making

Implemented Inadequate control over the Considerable control over the

when organization organization

Best suited for Small sized organization Large sized organization

 BASIS FOR
CENTRALIZATION DECENTRALIZATION
COMPARISON

Burden Only one group is carrying the The burden gets shared among
burden many levels

Employee Demotivated employee Highly motivated employee

motivation

Conflict in Least likely to occur Most likely to occur

decision

Stability Relatively stable as decisions Prone to instability due to multiple

are made by a central authority conflicting decisions
sharing a common ideology

4. What’s an acquisition? Is it better than the greenfield strategy?

An acquisition is when one company purchases most or all of another company's shares
to gain control of that company. Purchasing more than 50% of a target firm's stock and
other assets allows the acquirer to make decisions about the newly acquired assets
without the approval of the company’s shareholders. Acquisitions, which are very
common in business, may occur with the target company's approval, or in spite of its
disapproval. With approval, there is often a no-shop clause during the process.
We mostly hear about acquisitions of large well-known companies because these huge
and significant deals tend to dominate the news. In reality, mergers and
acquisitions (M&A) occur more regularly between small- to medium-size firms than
between large companies.
A green field investment analysis can have slightly higher risks than an acquisition
because the costs may be unknown. With an acquisition, analysts usually have actual
financial statements and costs to work with. In a green field investment, it can be
important to use analysis of similar companies or business models in the target market to
obtain a framework for costs. In general, green field investment analysis involves
structuring a detailed business plan along with building a financial model that includes all
of the expected costs. With a green field investment, there can be slightly more flexibility
to adjust costs according to the parent company’s business plans. In a green field
investment, a parent company would need to obtain costs for land, building licenses,
building construction, maintenance of new facilities, labor, financing approvals, and
more.
5. What are the advantages and disadvantages of joint-ventures?

6. What is a Country Competitive report? Why is it useful?

- Matrix organisation is a two dimensionals structure, a combination of pure project

structure and the traditional functional departments. Members of a particular project team
are drawn from the functional departments and are placed under the direction of the
project manager.
+ Features of matrix structure:
- Management by project objectives is paramount to the way of thinking and
working in a matrix organisation. The matrix organisation structure depicts that the
workload of the Construction Division is composed of various projects each with specific
objectives and a well-defined period of completion. This Division has certain functional
departments each of which provides functional support to the Division projects. The
project manager is given the authority and responsibility for the achievement of project
objectives. in a matrix organisation, the project manager does not have complete
authority for use of resources. Instead the shares them with the rest of the enterprise.
- Matrix organisation focuses attention on specific projects. The charge of the
project is given to the project manager who is given the necessary authority to complete
the project in accordance with the time, cost, quality and other conditions communicated
to him by the top management.
 - The project manager draws groups of personnel from various functional
departments. He assigns work to the various functional groups. Upon completion of the
project, the functional groups return to their respective departments for reassignment to
other projects. The project manager himself is also available for reassignment by the
division manager.

7. Do you think globalization is expanding? Why?

Yes, It’s expanding. Because the globalization involves goods, services, data, technology,

and the economic resources of capital. The expansion of global markets liberalizes the
economic activities of the exchange of goods and funds. Removal of cross-border trade
barriers has made the formation of global markets more feasible. [2] Advances
in transportation, like the steam locomotive, steamship, jet engine, and container ships,
and developments in telecommunication infrastructure, like the telegraph, Internet,
and mobile phones, have been major factors in globalization and have generated
further interdependence of economic and cultural activities around the globe.

8. What’s the difference between a functional structure and a divisional structure?

Functional Structure vs Divisional Structure

Functional structure is organizational structure in Divisional structure is a type of

which the organization is divided into smaller groups organizational structure where operations
based on specialized functional areas such as are grouped based on divisions or separate
production, marketing, and sales. product categories.

Specialization

High specialization can be seen in functional Divisional organizations use separate

organizations since the use of shared functions functions and this result in low
specialization.

Autonomy for managers

The majority of the decisions are taken by the top In divisional structure, significant
management, thus limited autonomy for managers autonomy is granted for divisional
under the functional structure. managers.
   Suitability

Functional structure is suitable for organizations that Divisional structure is appropriate for
operate in a single location with a single product companies that have multiple product
category categories and is present in a number of
locations.

9. What is a key characteristic of matrix structures?

-      The Global Competitiveness Report (GCR) is a yearly report published by the World
Economic Forum. Since 2004, the Global Competitiveness Report ranks countries based
on the Global Competitiveness Index. The report assesses the ability of countries to
provide high levels of prosperity to their citizens". This in turn depends on how
productively a country uses available resources. Therefore, the Global Competitiveness
Index measures the set of institutions, policies, and factors that set the sustainable current
and medium-term levels of economic prosperity
The reasons:
-      It is a set of institutions, policies and factors that determine the level of productivity of
the a country, conditions of public institutions and technical conditions. In the GCI
Report contains crucial date that all of enterprises must have if their aim is international
market, Firstly, GCI analysis the factors that play significant role in creating favorable
business-climate environment in the country and are important for competitveness and
manufacture point of view. On the top of that, it consider strength and weaknesses of a
country, identifies priorities for the facilitation of political reforms implementation.
While having GCI reports that means you are holding a big treasure (data) for your
company to research, analysis all opportunities and find the best way to invest and
develop your company in which you think is the most suitable, less risky.

10. Why is important to know the religions in the world in business?

Knowing the religions where the companies aim to do is important. Because religion is
one of the big factors influencing to international business of the company. So it’s
necessary for the company to avoid risks of international business.

Typically, international businesses have to deal with four religious issues:

1. Dominant religions.
 2. The importance of religion in society.
3. Degree of homogeneity of religion.
4. Freedom of belief in society.

In addition, religion also affects daily activities of people, thereby affecting business
activities of businesses. For example: Religions affect opening – closing hours, vacations,
celebrations, ...

Example about religions affect on busniness:

Islam: Businesses engaged in international business are not allowed to trade beer in
Muslim countries because Muslims do not drink beer.

Hindu: Businesses engaged in international business are not allowed to trade pork, beef
because they do not eat pork, beef.

11. Explain the polycentric, geocentric and ethnocentric HR approaches.

Ethnocentric HR approaches
Ethnocentric HR approaches is a policy in which activities outside of the host country of
the company are placed under the control of individuals from that country. This kind of
policy tends to appeal to companies wishing to retain tight control over decisions made
by branch offices abroad. Correspondingly, companies of this type devise policies
designed for the job in each of the countries in which they do business. Note, however,
that companies generally pursue this policy only towards top management positions in
their business operations. Implementing this type of policy at lower levels often appears
impractical.
Polycentric HR approaches
Polycentric HR approaches is a personnel policy in which activities outside of the
country are run by individuals who are from the host country. Companies can take a
multifaceted approach towards middle and high levels of management, toward lower-
level employees, or toward non-staff members. This approach is well-suited for
companies wishing to grant establishments in other countries a certain degree of
independence in decision-making. This policy does not mean that local managers are
allowed to operate the branch in the manner they deem appropriate. Large international
companies often conduct intensive training programs for managers who come to study
abroad for a certain period of time. There they are rubbed with company culture and
certain business practices. Small and medium companies may find this policy expensive,
but they can count on local managers who understand that what is expected of them goes
beyond all costs. so.
Geocentric HR approaches
Geocentric HR approaches is a personnel policy in which business activities outside of
the country are run by the best qualified managers, regardless of nationality. Local
businesses may select managers from the host country, from the home country, or from a
third country. The choice depends mainly on certain needs of the business. Policies of
this type typically apply to top management.

12. Do you believe that data is the new gold?

For me, I completely believe that data is the new gold.
Like gold, the quality of data is also important, you can make an 18-karat ring from a 9-
karat nugget. The lower grade material might be cheaper, but it won’t last as long. In the
gold world ‘hardness’ does not equal ‘durability’. The same is true of data. Garbage in
equals garbage out. High-quality data is fundamental to producing reliable models and
insights. Regardless of how good your models are, if the data used to create them is poor,
incomplete, outdated, biased or otherwise inaccurate, then the resulting predictions have
little chance of being accurate, reliable or impactful.
Data has a shorter history than gold, but it will have a greater impact on global businesses
of all sizes in the future. We have already seen that the companies that have already
figured out how to collect and use data are outperforming their competitors. Look at
Google, Facebook, Amazon & Uber for example, the applications they make are
primarily aimed at collecting data.
So, is data the new gold? Data is a commodity like gold. Quality is important, like gold.
It needs refining to get the most out of it, like gold. But data isn’t valuable, it’s
everywhere. The value of data is the insight that it can create.
Insights derived from the smart use of good quality data are very powerful. Brands and
companies that are able to develop actionable insights, from any level of data will be
winners.