Scandals at Enron, WorldCom, and HealthSouth illustrate the negative effects of poor
ethical behavior on a firm’s efforts to satisfy stakeholders.
a. True
b. False
Profit pools allow strategic leaders to predict the outcomes of their decisions before
taking efforts to implement them.
a. True
b. False
The three internal corporate governance mechanisms are ownership concentration,
board of directors, and the market for corporate control.
a. True
b. False
______ markets are often described as volatile and innovative.
a. Slow-cycle
b. Fast-cycle
c. Standard-cycle
d. Sheltered
Firms entering into synergistic strategic alliances expect to attain
a. technological complexity.
b. economies of scope.
c. monopolistic market power.
d. learning curve efficiencies.
International strategy refers to a(n)
a. action plan pursued by American companies to compete against foreign companies
operating in the United
States.
b. strategy through which the firm sells products in markets outside the firm’s domestic
market.
c. political and economic action plan developed by businesses and governments to cope
with global competition.
d. strategy American firms use to dominate international markets.
Walmart’s change in strategy to attract more upscale customers will likely succeed
because cost leaders are good at differentiating.
a. True
b. False
Private synergies are unique to the acquired and acquiring firms and could not be
developed by combining either firm’s assets with another company.
a. True
b. False
Capabilities of an organization emerge spontaneously through the interaction of
tangible and intangible resources.
a. True
b. False
An ability to efficiently allocate capital through an internal market may help the firm
protect the competitive advantages it develops
a. through reduced disclosure to outside parties.
b. by the ability to not report losses to investors.
c. by the ability to increase pay to managers without shareholders being aware.
d. through the ability to reinvest cash in dividends to shareholders.
Mutual forbearance is a form of explicit collusion between firms in which competitors
avoid attacking rivals they meet in multiple markets.
a. True
b. False