Question

When a firm has international operations, choosing the most appropriate structure depends upon the extent of international expansion, the type of strategy, and the degree of product diversity. True or False?

Answer 1

True

Step-by-step explanation:

When a firm has international operations it should choose the most appropriate structure based on the following factors:

1. extent of international expansion: into how many international regions do we plan to expand our activities.
2. the type of strategy: the have to choose between global, multidomestic or international strategy
3. the degree of product diversity: on how many additional markets will our products compete? regionally or globally

Although 1 and 3 may be similar, there can be significant differences. For example, a US company may want to start selling their products in all of South America (regional product diversity), but it will do it by setting a South American office in Brazil only (international expansion is limited to Brazil only).