Chapter 21—Strategy Myths Key
1. Market share
2. To gain market share
3. Economic profits are earned when
4. Market power and market concentration
5. To gain market share a firm should
6. To maximize total revenue
7. To protect economic profits
8. Growth should
9. When a firm acquires another,
10. When a firm acquires another,
11. In a cash acquisition
12. Business executives are more honest that other groups because
13. Diversification
14. Diversification makes sense as a business strategy if it
15. Studies show that
16. The performance of diversified companies
17. Stock options were developed as a form of executive compensation
18. The tournament effect
19. The superstar effect is that
20. The market for corporate takeovers
21. Suppressed technologies
22. If suppressed technologies exist then
23. A firm must stress market share to be successful.
24. CEOs must create value for shareholders to be successful.
25. To maximize market share managers need to maximize profits.
26. If marginal revenue is zero then total revenue is maximized.
27. Mergers often do not lead to value creation.
28. The winner’s curse is not useful in understanding the performance of companies after a merger.
29. Studies show that business executives are generally more dishonest than the average professional.
30. Diversified companies show above average performance because risk is better managed.
31. Stock options have been shown to not align the work of the CEO with the interests of shareholders.
32. Globalization raises the standard of living of all countries.