Question 1

It is common for less-developed countries to require foreign companies to ____ in order to manufacture and sell products in the less-developed country.

Accepted Answer

A)  sell 100 percent of its locally produced goods within the host country 
B)  contract to operate in the host country for long periods of time, such as 20 years 
C)  invest in more than one company in the host country 
D)  form a joint venture with a host country firm 
A)  sell 100 percent of its locally produced goods within the host country 
B)  contract to operate in the host country for long periods of time, such as 20 years 
C)  invest in more than one company in the host country 
D)  form a joint venture with a host country firm D

Question 2

A cooperative partnership between firms across the value chain is a horizontal strategic alliance.

Accepted Answer

A) True 
 B)False  False

Question 3

More strategic alliances succeed than fail.

Accepted Answer

A) True 
 B)False  False

Question 4

As the level of equity investment by the foreign alliance partner increases, the probability of the alliance's failure decreases.

Accepted Answer

A) True 
 B)False

Question 5

Why do organizations enter into strategic alliances?

Accepted Answer

There are many reasons to enter strategi

Question 6

Opportunism by alliance partners is a greater threat in horizontal alliances than in vertical alliances.

Accepted Answer

A) True 
 B)False

Question 7

The key factor in the success of a vertical strategic alliance is

Accepted Answer

A)  trust between partners. 
B)  sufficient cash flow. 
C)  a well-written contract. 
D)  effective exchange of core competencies. 
A)  trust between partners. 
B)  sufficient cash flow. 
C)  a well-written contract. 
D)  effective exchange of core competencies.

Question 8

When an organization forms a strategic alliance with another organization, the alliance should be managed by

Accepted Answer

A)  a third party who will be unbiased toward either organization. 
B)  a pair of alliance sponsors, one from each organization. 
C)  the CEO of the organization holding the largest equity stake. 
D)  an alliance committee formed from the board of directors of each organization. 
A)  a third party who will be unbiased toward either organization. 
B)  a pair of alliance sponsors, one from each organization. 
C)  the CEO of the organization holding the largest equity stake. 
D)  an alliance committee formed from the board of directors of each organization.

Question 9

When partners in a strategic alliance share resources or integrate complementary capabilities to build economies of scope, synergy has been created.

Accepted Answer

A) True 
 B)False

Question 10

The likelihood of a strategic alliance producing synergy and innovation is increased by

Accepted Answer

A)  the emergence of path dependence between the alliance partners. 
B)  the equality of the resources that the two organizations contribute. 
C)  the similarity of the corporate and national cultures of the organization. 
D)  the extent to which the knowledge stocks of each organization are integrated. 
A)  the emergence of path dependence between the alliance partners. 
B)  the equality of the resources that the two organizations contribute. 
C)  the similarity of the corporate and national cultures of the organization. 
D)  the extent to which the knowledge stocks of each organization are integrated.

Question 11

To compete more fully and offer better value to their customers, Dow and Monsanto are working together to develop and produce new corn seed. Each partner will contribute four genetic traits for each new seed that will overcome some problems with pests and ward off weeds. This is an example of a ____ alliance

Accepted Answer

A)  horizontal 
B)  vertical 
C)  network 
D)  symbiotic 
A)  horizontal 
B)  vertical 
C)  network 
D)  symbiotic

Question 12

Strategic alliances are typically delayed until the strength and complementarity of the partner's competencies are completely assessed and a trusting relationship has been established.

Accepted Answer

A) True 
 B)False

Question 13

A horizontal strategic alliance is a cooperative partnership between firms

Accepted Answer

A)  outside the value chain. 
B)  across the value chain. 
C)  at the same stage of the value chain. 
D)  at any point within the value chain. 
A)  outside the value chain. 
B)  across the value chain. 
C)  at the same stage of the value chain. 
D)  at any point within the value chain.

Question 14

Tacit collusion is more likely to be a concern with

Accepted Answer

A)  horizontal alliances. 
B)  vertical alliances. 
C)  international alliances of any kind compared with domestic alliances. 
D)  U.S. alliances with companies in less- developed countries. 
A)  horizontal alliances. 
B)  vertical alliances. 
C)  international alliances of any kind compared with domestic alliances. 
D)  U.S. alliances with companies in less- developed countries.

Question 15

Many companies have discovered that outsourcing lowers costs and

Accepted Answer

A)  improves morale. 
B)  improves quality. 
C)  increases customer responsiveness. 
D)  decreases turnover. 
A)  improves morale. 
B)  improves quality. 
C)  increases customer responsiveness. 
D)  decreases turnover.

Question 16

A joint venture is a type of equity alliance.

Accepted Answer

A) True 
 B)False

Question 17

Franchise relationships are characterized by

Accepted Answer

A)  franchisee independence to adapt the business to the local market. 
B)  the ability to spin off the local franchises into independent businesses. 
C)  the tradeoff of first-mover advantage for lower financial risk for the franchiser. 
D)  tight control of the franchisee's actions by the franchiser. 
A)  franchisee independence to adapt the business to the local market. 
B)  the ability to spin off the local franchises into independent businesses. 
C)  the tradeoff of first-mover advantage for lower financial risk for the franchiser. 
D)  tight control of the franchisee's actions by the franchiser.

Question 18

Which of the following is not a reason for strategic alliances?

Accepted Answer

A)  sharing significant R&D investments 
B)  outsourcing for low costs and high quality output 
C)  blocking foreign competitors from domestic markets 
D)  building economies of scale 
A)  sharing significant R&D investments 
B)  outsourcing for low costs and high quality output 
C)  blocking foreign competitors from domestic markets 
D)  building economies of scale

Question 19

The main protection against opportunistic behavior by an alliance partner is good contracts.

Accepted Answer

A) True 
 B)False

Question 20

The main difference between an equity and a nonequity alliance is that

Accepted Answer

A)  equity alliances are restricted to two partners while nonequity alliances may have any number of partners involved. 
B)  while equity alliances involve ownership, nonequity alliances are contractual relationships without ownership. 
C)  equity alliances require that each partner own an equal percentage of the new organization that is formed, while nonequity alliances involve unequal proportions of ownership between partners. 
D)  equity alliances are allowed between U.S. firms, but U.S. firms must make nonequity alliances with international firms. 
A)  equity alliances are restricted to two partners while nonequity alliances may have any number of partners involved. 
B)  while equity alliances involve ownership, nonequity alliances are contractual relationships without ownership. 
C)  equity alliances require that each partner own an equal percentage of the new organization that is formed, while nonequity alliances involve unequal proportions of ownership between partners. 
D)  equity alliances are allowed between U.S. firms, but U.S. firms must make nonequity alliances with international firms.

It is common for less-developed countries to require foreign companies to ____ in order to manufacture and sell products in the less-developed country.

A cooperative partnership between firms across the value chain is a horizontal strategic alliance.

More strategic alliances succeed than fail.

As the level of equity investment by the foreign alliance partner increases, the probability of the alliance's failure decreases.

Why do organizations enter into strategic alliances?

Opportunism by alliance partners is a greater threat in horizontal alliances than in vertical alliances.

The key factor in the success of a vertical strategic alliance is

When an organization forms a strategic alliance with another organization, the alliance should be managed by

When partners in a strategic alliance share resources or integrate complementary capabilities to build economies of scope, synergy has been created.

The likelihood of a strategic alliance producing synergy and innovation is increased by

Strategic alliances are typically delayed until the strength and complementarity of the partner's competencies are completely assessed and a trusting relationship has been established.

A horizontal strategic alliance is a cooperative partnership between firms

Tacit collusion is more likely to be a concern with

Many companies have discovered that outsourcing lowers costs and

A joint venture is a type of equity alliance.

Franchise relationships are characterized by

Which of the following is not a reason for strategic alliances?

The main protection against opportunistic behavior by an alliance partner is good contracts.

The main difference between an equity and a nonequity alliance is that

The Foundations of Strategic Management

Leading Strategically

Analyzing the External Environment

Analyzing the Firm

Business-Level Strategy

Multiproduct Strategies

Acquiring and Integrating Businesses

Competing Across Borders

Innovating Through Strategic Entrepreneurship

Filters

Exam 9: Creating and Maintaining Alliances

It is common for less-developed countries to require foreign companies to ____ in order to manufacture and sell products in the less-developed country.

A cooperative partnership between firms across the value chain is a horizontal strategic alliance.

More strategic alliances succeed than fail.

As the level of equity investment by the foreign alliance partner increases, the probability of the alliance's failure decreases.

Why do organizations enter into strategic alliances?

Opportunism by alliance partners is a greater threat in horizontal alliances than in vertical alliances.

The key factor in the success of a vertical strategic alliance is

When an organization forms a strategic alliance with another organization, the alliance should be managed by

When partners in a strategic alliance share resources or integrate complementary capabilities to build economies of scope, synergy has been created.

The likelihood of a strategic alliance producing synergy and innovation is increased by

Strategic alliances are typically delayed until the strength and complementarity of the partner's competencies are completely assessed and a trusting relationship has been established.

A horizontal strategic alliance is a cooperative partnership between firms

Tacit collusion is more likely to be a concern with

Many companies have discovered that outsourcing lowers costs and

A joint venture is a type of equity alliance.

Franchise relationships are characterized by

Which of the following is not a reason for strategic alliances?

The main protection against opportunistic behavior by an alliance partner is good contracts.

The main difference between an equity and a nonequity alliance is that

The Foundations of Strategic Management

Leading Strategically

Analyzing the External Environment

Analyzing the Firm

Business-Level Strategy

Multiproduct Strategies

Acquiring and Integrating Businesses

Competing Across Borders

Innovating Through Strategic Entrepreneurship

Filters