Test Bank

Chapter 5

1. The innovation process described as local-for-local implies the decentralization of R&D activities in multiple countries. Answer: True

2. Globally linked innovations involve processes designed to ensure that the special resources and capabilities of each subsidiary are globally available to other units of the organization. Answer: True

3. The greatest risk facing center-for-global innovation is market insensitivity. True

4. Company X is operating in a fast-changing, knowledge-intensive industry. The most feasible structure for its innovative processes is therefore central-to-global because that allows for a high degree of corporate control. Answer: False

5. To make central innovation effective, the purpose of building multiple linkages between headquarters and subsidiaries is to exercise better control over those operations. Answer: False

6. The two main prerequisites for local innovation are the dispersal of organizational assets and resources and a concentration of authority. Answer: False

7. Linking local managers to corporate decision-making processes makes them more effective in managing local innovation. Answer: True

8. A local-for-local approach to innovation is not compatible with cross-functional integration within national operations. Answer: False

9. The development of transnational innovation requires that the roles performed by organizational units worldwide are essentially uniform, and that the headquarters manages all of its subsidiaries in the same manner. Answer: False

10. In transnational companies like Unilever, products, functions, and geographic regions are coordinated in a differentiated manner, accounting for the respective demands for integration and responsiveness. Answer: True

11. Emerging strategic demands make organizational models based on interdependence the most appropriate form for headquarter-subsidiary relationships. Answer: True

12. Transnational innovation requires...