Question

A primary drawback of a global strategy is that it: A) allows firms to address local needs as precisely as locally based rivals can.B) permits firms to be more responsive to changes in local market conditions, either in the form of new opportunities or competitive threats.C) provides for lower transportation costs and also may involve higher tariffs. D) involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise. E) raises production costs due to the greater variety of designs and components.

Answer 1

Answer:

D) involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.

Explanation:

A global strategy means that a plan that involves a number of different companies, departments and people from various cultures and nationalities having different first languages. Also, the question asks 'primary drawback'. The option A and B has no drawbacks or disadvantages in them so they can't be the answer. Having a global strategy decreases tariff issues and production costs as you have access to local production techniques and can produce locally so no need to import. Now option D focuses on 'higher coordination costs due to more complex tasks' which is true as a global strategy will require a lot of communication and information transfer. Hence, D is the correct answer.