Question

reference organization chart 6.1:
comparing the structure that is diagramed to a global geographic structure:

the firm shown above is not as far along in developing opportunities for multidomestic strategy as the global geographic structure would be.

product managers differ in that in the chart above, the product heads are line managers primarily accountable for their product domestically whereas in the global geographic structure, product coordinators are staff advisors.

the structure shown is better than the global geographic structure.

the global geographic structure is more domestically oriented than the one above.

Explanation:

Analyze the diagrammed structure

The organization chart shows a hybrid structure where domestic operations are organized by product divisions (Bus Division, Auto Division, Truck Division) alongside functional departments (Human Resources, Finance, R&D). International operations are isolated within a single International Division (with sub-units for South America and Africa). This represents an early stage of internationalization, typically used when a firm is beginning to expand abroad but still focuses primarily on its domestic market.

Compare with a global geographic structure

Using the International Division concept, we know that this structure keeps international activities separate from domestic product divisions. In contrast, a Global Geographic Structure divides the entire organization into geographic regions (e.g., North America, Europe, Latin America). Each regional division is fully responsible for all functional activities and product lines within its territory. This structure is highly decentralized and allows the firm to tailor its products and marketing to local needs, which is the hallmark of a Multidomestic Strategy.

Evaluate the options

• Option 1: "the firm shown above is not as far along in developing opportunities for multidomestic strategy as the global geographic structure would be."
• This is correct. An international division structure represents an earlier stage of International Evolution Stages compared to a global geographic structure. A global geographic structure is specifically designed to maximize local responsiveness and implement a Multidomestic Strategy effectively.
• Option 2: This option discusses product managers being line managers vs. staff advisors, which is not the primary structural distinction between an international division and a global geographic structure.
• Option 3: "the structure shown is better..." is an absolute value judgment that is theoretically incorrect, as structural fit depends on the firm's strategy and environment.
• Option 4: "the global geographic structure is more domestically oriented..." is incorrect; a global geographic structure treats the entire world as its market, whereas the diagrammed structure is highly domestically oriented with a separate international division.

Answer:

• (A) the firm shown above is not as far along in developing opportunities for multidomestic strategy as the global geographic structure would be. (Correct answer)
• (B) product managers differ in that in the chart above, the product heads are line managers primarily accountable for their product domestically whereas in the global geographic structure, product coordinators are staff advisors.
• (C) the structure shown is better than the global geographic structure.
• (D) the global geographic structure is more domestically oriented than the one above.