In general, cross-border alliances are more _______ and _______ than domestic
alliances, especially in emerging markets.
a. uncertainty reducing; diversifying
b. complex; risky
c. highly leveraged; tightly monitored
d. flexible; trust-based
In an SBU structure, _______ is/are evaluated using strategic controls, whereas
_______ is/are evaluated using financial controls.
a. each SBU; divisions within the SBUs
b. divisions within the SBUs; each SBU
c. managers of the SBUs; headquarters staff
d. headquarters staff; managers of the SBUs
In the hybrid form of the combination structure, some divisions are oriented toward
products while others are oriented toward market areas.
a. True
b. False
Walmart’s effective strategy/structure configuration is
a. cost leadership/functional.
b. differentiation/functional.
c. related constrained/multidivisional.
d. related linked/multidivisional.
A hostile takeover defense wherein the target firm makes its stock less attractive to a
potential acquirer is called
a. greenmail.
b. a standstill agreement.
c. crossing the palm with silver.
d. a poison pill.
Value creation through internal innovation originates with
a. an entrepreneurial mind-set.
b. cross-product development teams.
c. shared values and entrepreneurial leadership.
d. innovation.
When the target firm does not solicit the acquiring firm’s bid, it is referred to as a(n)
a. stealth raid.
b. adversarial acquisition.
c. takeover or unfriendly acquisition.
d. leveraged buyout.
Although growing in popularity with small and medium-sized firms because they can
gain economies of scale, large companies tend to avoid strategic alliances.
a. True
b. False
The primary drivers of hypercompetition are
a. rising global socio-economic instability and increased inflation.
b. the emergence of a global economy and rapid technological change.
c. increased global competition and decreased tariffs.
d. increased availability of capital and increased competition.
The competitive form of the M-form structure is characterized by complete
independence among the form’s divisions. Unlike the divisions included in the
cooperative structure, divisions that are part of the competitive structure do not share
common strengths.
a. True
b. False
An office management firm has developed a system for efficiently organizing small
medical and dental practices both through proprietary software and through unique
training programs for staff. It has recently acquired a firm specializing in providing
management services for veterinary practices. The office management firm is hoping to
a. achieve economies of scope.
b. implement vertical integration.
c. achieve financial economies through an unrelated acquisition.
d. acquire specialized talent from the veterinary management company.
Stable alliance networks will most often
a. be used to enhance a firm’s internal operations.
b. appear in mature industries where demand is relatively constant and predictable.
c. emerge in industries with short product life cycles.
d. emerge in declining industries as a way to increase process innovations.
A firm successfully implementing a differentiation strategy would expect
a. customers to be sensitive to price increases.
b. to charge premium prices.
c. customers to perceive the product as standard.
d. to have high levels of power over suppliers.
An example of the external labor market is the situation where
a. an assessment center operated by an external consulting firm evaluates company
managers for promotion potential.
b. a new vice president of marketing is hired from a competitor.
c. the senior vice president of finance is promoted to CEO.
d. a vice president of human resources is sent to a university executive MBA program
for professional development.
Firms in markets cooperate to pool resources and gain market power.
a. slow-cycle
b. standard-cycle
c. fast-cycle
d. hyper-cycle
Walmart has recently opened a store in Alsatia, Missouri. Several local small retailers
have decided that choosing not to respond to Walmart’s competitive actions is a viable
long-term option, because although the companies have high market commonality they
have little resource similarity. These small retailers are correct in their decision.
a. True
b. False
The more dependent a firm is on its market, the more aggressively it will defend it from
another competitor.
a. True
b. False
PracticalSolutions is a small firm providing employee assistance programs for
companies with troubled employees.
PracticalSolutions frequently partners with other consulting firms to provide creative
solutions for companies with personnel problems. This history of partnering
exemplifies
a. intellectual capital.
b. institutional capital.
c. alignment of complementary assets.
d. technological capital.
Circuit Corp. is a manufacturer of a broad range of consumer electronics products.
These consumer products are all highly profitable. The firm also manufactures a
low-cost component which is an essential differentiating feature for most of its
consumer products. The costs to manufacture this component have risen sharply in
recent months. Internal cost accounting estimates now indicate the company is breaking
even on the manufacture of this component. Which of the following is most likely?
a. Circuit will likely continue to manufacture the component, even at a loss, due to low
supplier power.
b. Circuit will likely continue to manufacture the component, even at a loss, due to high
strategic stakes.
c. Circuit will likely discontinue manufacture of the component due to low strategic
stakes.
d. Circuit will likely discontinue manufacture of the component due to high supplier
stakes.
Specialty Steel, Inc., needs a particular type of brick to line its kilns in order to safely
achieve the high temperatures needed for the unusually strong steel it produces. The
clay to make this brick is very rare and only two brick plants in the United States make
this type of brick. Specialty Steel owns one of these brick plants and buys all of its
production. The other brick manufacturer has recently developed an inexpensive new
technology whereby ordinary clay can be used to make this fire brick. This significantly
reduces the production cost of this type of brick.
a. Specialty Steel has less flexibility now than if it were not vertically integrated.
b. This is an example of a capacity balance problem.
c. This is a result of conflicts of interest between the managers of the brick plant and the
executives of Specialty Steel.
d. The market power of Specialty Steel has been de-integrated.