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Q: Give the advantages and disadvantages of grouping a business by function?
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Explain the Impact of Regional Economic Grouping on multilateralism?

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How should a US firm that currently exports only to ASEAN countries respond to the creation of a single market in this regional grouping?

A US business firm that is currently exporting to only ASEAN countries should seriously consider opening a facility somewhere in this grouping, as the economics of a common market suggest that outsiders can be at a disadvantage to insiders. The opening of borders within ASEAN also has the potential to increase the size of the market for the firm. Of course it is possible, after careful consideration, that exporting may still be the most appropriate means of serving the market.


What is matrix structure?

Matrix structure: an organizational form that gives two (or more) strategic grouping dimensions equal weighting in the organization structure such that the manager of each operating unit reports to two bosses, one for each dimension.For example one business can have a Business/Function Matrix: On one side there is the traditional functional departments responsible for maintaining their expertise in each function (i.e. R&D, operations, and marketing) and the other side is composed of business groups (i.e. Clothing, footwear and accessories). For each group a head manager will be assign to coordinate and manage the group (i.e. a clothing manager, a R&D manager, a footwear manager etc). Furthermore there will be a total of nine groups for each combination of groups (i.e. R&D-clothing group, operations-clothing group, marketing-clothing group and so on so forth). The manager of each group will report to both respective head managers. This type of grouping is seen as highly penetrated and became popular in the 1980s. It is as you can see much more complex than single dimension organization requiring a dual system of control, roles, and reward to reflect both dimensions. Often it leads to greater confusion, cost and delays in making decision because of two dimensions need to be consolidated before anything is done (which increase the potential conflict). It often becomes the case where one dimension outshines and becomes more powerful than the other, which makes having two bosses even more difficult than it already is.


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What is an industry sector?

The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment of the economy or share a similar business type. Although the terms are commonly used interchangeably, they do, in fact, have slightly different meanings. This difference pertains to their scope; a sector refers to a large segment of the economy, while the term industry describes a much more specific group of companies or businesses. A sector is one of a few general segments in the economy within which a large group of companies can be categorized. An economy can be broken down into about a dozen sectors, which can describe nearly all of the business activity in that economy. For example, the basic materials sector is the segment of the economy in which companies deal in the business of exploration, processing and selling the basic materials such as gold, silver or aluminum which are used by other sectors of the economy. An industry, on the other hand, describes a much more specific grouping of companies with highly similar business activities. Essentially, industries are created by further breaking down sectors into more defined groupings. Each of the dozen or so sectors will have a varying number of industries, but it can be in the hundreds. For example, the financial sector can be broken down into industries such as asset management, life insurance and Northwest regional banks. The Northwest regional bank industry, which is part of the financial sector, will only contain companies that operate banks in the Northwestern states. When breaking down the economy, the first groups are sectors which describe a general economic activity. Then all of the companies that fall into that sector are categorized further into industries where they are grouped only with companies with which they share very similar business activities. This is not the end, however. Industries can be further sub-categorized into various, more specific groupings. It should be noted that you may find situations in which these two terms are reversed. However, the general idea remains: one breaks the economy down into a few general segments while the other further categorizes those into more specific business activities. In the stock market the generally accepted terminology cites a sector as a broad classification and an industry as a more specific one

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