Question 1

By the 1980s MBC began to decrease.

Accepted Answer

A) True 
 B)False

Question 2

The manager of Firm X watches the manager of a competing firm (Firm Y) successfully pursue some vertical integration up the supply chain; Firm A's manager immediately begins acquiring companies in its supply chain. At first glance, the manager's motives appear to be:

Accepted Answer

A) ​Synergistic. 
B) ​Risk reducers. 
C)  ​Hubris. 
D)  ​Self-interest. 
A) ​Synergistic. 
B) ​Risk reducers. 
C)  ​Hubris. 
D)  ​Self-interest.

Question 3

Which of the following statements is TRUE?

Accepted Answer

A) ​Diversification creates value in all circumstances. 
B) ​Diversification can create value by leveraging certain core competencies and capabilities. 
C)  ​Compared with diversified firms, non-diversified single-business firms are better able to spread risk. 
D)  ​Firms that undertake acquisitions have mastered the art of post-acquisition integration. 
A) ​Diversification creates value in all circumstances. 
B) ​Diversification can create value by leveraging certain core competencies and capabilities. 
C)  ​Compared with diversified firms, non-diversified single-business firms are better able to spread risk. 
D)  ​Firms that undertake acquisitions have mastered the art of post-acquisition integration.

Question 4

Which of the following is TRUE regarding restructuring?

Accepted Answer

A) The two primary ways of restructuring are downsizing and upsizing. 
B) Restructuring (downsizing) is used more often by acquiring firms than by seller firms. 
C)  Corporate restructuring is the primary tool for reducing firm size and scope. 
D)  Restructuring is easier in knowledge-intensive firms than capital intensive firms. 
A) The two primary ways of restructuring are downsizing and upsizing. 
B) Restructuring (downsizing) is used more often by acquiring firms than by seller firms. 
C)  Corporate restructuring is the primary tool for reducing firm size and scope. 
D)  Restructuring is easier in knowledge-intensive firms than capital intensive firms.

Question 5

Cross-border M&As:

Accepted Answer

A) ​Are rare. 
B) ​Have increased in the past 20 years. 
C)  ​Have decreased in the past 20 years. 
D)  ​Consist mainly of mergers rather than acquisitions. 
A) ​Are rare. 
B) ​Have increased in the past 20 years. 
C)  ​Have decreased in the past 20 years. 
D)  ​Consist mainly of mergers rather than acquisitions.

Question 6

Which is not true regarding geographic diversification and firm performance?

Accepted Answer

A) U-shaped relationship at low level of internationalization. 
B) Initially a negative effect of international expansion on performance. 
C)  Inverted-U shape at moderate to high levels of internationalization. 
D)  Positive only at high levels of internationalization. 
A) U-shaped relationship at low level of internationalization. 
B) Initially a negative effect of international expansion on performance. 
C)  Inverted-U shape at moderate to high levels of internationalization. 
D)  Positive only at high levels of internationalization.

Question 7

Gaining access to complementary resources is an institution-based motivation for acquisitions.

Accepted Answer

A) True 
 B)False

Question 8

To improve the odds for success with its acquisitions, a firm should:

Accepted Answer

A) ​Engage its rivals in a bidding war. 
B) ​Look for potential firms with high acquisition premiums. 
C)  ​Conduct due diligence concerning strategic and organizational fit. 
D)  ​Only acquire after participating in an alliance first. 
A) ​Engage its rivals in a bidding war. 
B) ​Look for potential firms with high acquisition premiums. 
C)  ​Conduct due diligence concerning strategic and organizational fit. 
D)  ​Only acquire after participating in an alliance first.

Question 9

Research regarding the relationship between product diversification and firm performance indicates that:

Accepted Answer

A) Putting your eggs in similar baskets," has emerged as a balanced way to both reduce risk and leverage synergy. 
B) Performance may decrease as firms change from product-related to -unrelated. 
C)  The linkage between diversification and performance is inverted U shaped. 
D)  All of the above. 
A) Putting your eggs in similar baskets," has emerged as a balanced way to both reduce risk and leverage synergy. 
B) Performance may decrease as firms change from product-related to -unrelated. 
C)  The linkage between diversification and performance is inverted U shaped. 
D)  All of the above.

Question 10

A nondiversified single-business firm faces less risk than a diversified firm.

Accepted Answer

A) True 
 B)False

Question 11

With _________ M&As, Firm A, which is a gas and oil company, acquires a chemical company, a transportation company, and a financial services company.

Accepted Answer

A) ​Horizontal. 
B) ​Vertical. 
C)  ​Conglomerate. 
D)  ​Hostile. 
A) ​Horizontal. 
B) ​Vertical. 
C)  ​Conglomerate. 
D)  ​Hostile.

Question 12

Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

Accepted Answer

A) ​It wants learning opportunities without long-term commitment. 
B) ​It wants greater control of day-to-day operations. 
C)  ​It wishes to engage in a long-term enduring relationship. 
D)  ​It wishes to consolidate market power, reduce risks, and leverage economies of scope. 
A) ​It wants learning opportunities without long-term commitment. 
B) ​It wants greater control of day-to-day operations. 
C)  ​It wishes to engage in a long-term enduring relationship. 
D)  ​It wishes to consolidate market power, reduce risks, and leverage economies of scope.

Question 13

In general, the costs associated with doing business abroad but maintaining product-related diversification are:

Accepted Answer

A) ​Greater than the costs of managing a conglomeration while mostly staying at home. 
B) ​Less than the costs of managing a conglomeration while mostly staying at home. 
C)  ​About the same as the costs of managing a conglomeration while mostly staying at home. 
D)  ​Greater than the costs for all other combinations of geographic and product scope. 
A) ​Greater than the costs of managing a conglomeration while mostly staying at home. 
B) ​Less than the costs of managing a conglomeration while mostly staying at home. 
C)  ​About the same as the costs of managing a conglomeration while mostly staying at home. 
D)  ​Greater than the costs for all other combinations of geographic and product scope.

Question 14

High entry barriers often result in green-field entries as opposed to acquisitions.

Accepted Answer

A) True 
 B)False

Question 15

In combining product and geographic diversification, which is not one of the four possible combinations?

Accepted Answer

A) Anchored replicators. 
B) Multinational replicators. 
C)  Far-flung conglomerates. 
D)  Classic replicators. 
A) Anchored replicators. 
B) Multinational replicators. 
C)  Far-flung conglomerates. 
D)  Classic replicators.

Question 16

For definitional purposes, mergers and acquisitions are exactly the same thing.

Accepted Answer

A) True 
 B)False

Question 17

Operational synergy is a primary goal of product-unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 18

Firms that engage in product-related diversification as well as far-flung multinational expansion are following a classic conglomerate strategy.

Accepted Answer

A) True 
 B)False

Question 19

Interest in conglomerates has declined in emerging economies due to their developed capital markets.

Accepted Answer

A) True 
 B)False

Question 20

The mechanisms needed to obtain financial synergy in diversification are the same as those needed to obtain operational synergy.

Accepted Answer

A) True 
 B)False

By the 1980s MBC began to decrease.

The manager of Firm X watches the manager of a competing firm (Firm Y) successfully pursue some vertical integration up the supply chain; Firm A's manager immediately begins acquiring companies in its supply chain. At first glance, the manager's motives appear to be:

Which of the following statements is TRUE?

Which of the following is TRUE regarding restructuring?

Cross-border M&As:

Which is not true regarding geographic diversification and firm performance?

Gaining access to complementary resources is an institution-based motivation for acquisitions.

To improve the odds for success with its acquisitions, a firm should:

Research regarding the relationship between product diversification and firm performance indicates that:

A nondiversified single-business firm faces less risk than a diversified firm.

With _________ M&As, Firm A, which is a gas and oil company, acquires a chemical company, a transportation company, and a financial services company.

Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

In general, the costs associated with doing business abroad but maintaining product-related diversification are:

High entry barriers often result in green-field entries as opposed to acquisitions.

In combining product and geographic diversification, which is not one of the four possible combinations?

For definitional purposes, mergers and acquisitions are exactly the same thing.

Operational synergy is a primary goal of product-unrelated diversification.

Firms that engage in product-related diversification as well as far-flung multinational expansion are following a classic conglomerate strategy.

Interest in conglomerates has declined in emerging economies due to their developed capital markets.

The mechanisms needed to obtain financial synergy in diversification are the same as those needed to obtain operational synergy.

Strategizing Around the Globe

Managing Industry Competition

Leveraging Resources and Capabilities

Emphasizing Institutions, Cultures, and Ethics

Growing and Internationalizingthe Entrepreneurial Firm

Entering Foreign Markets

Making Strategic Alliancee and Networks Work

Managing Global Competitive Dynamics

Strategizing, Structuring, and Learningaround the World

Governing the Corporation Around the World

Strategizing With Corporate Social Responsibility

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Exam 9: Diversifying, Acquiring, and Restructuring

By the 1980s MBC began to decrease.

The manager of Firm X watches the manager of a competing firm (Firm Y) successfully pursue some vertical integration up the supply chain; Firm A's manager immediately begins acquiring companies in its supply chain. At first glance, the manager's motives appear to be:

Which of the following statements is TRUE?

Which of the following is TRUE regarding restructuring?

Cross-border M&As:

Which is not true regarding geographic diversification and firm performance?

Gaining access to complementary resources is an institution-based motivation for acquisitions.

To improve the odds for success with its acquisitions, a firm should:

Research regarding the relationship between product diversification and firm performance indicates that:

A nondiversified single-business firm faces less risk than a diversified firm.

With _________ M&As, Firm A, which is a gas and oil company, acquires a chemical company, a transportation company, and a financial services company.

Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

In general, the costs associated with doing business abroad but maintaining product-related diversification are:

High entry barriers often result in green-field entries as opposed to acquisitions.

In combining product and geographic diversification, which is not one of the four possible combinations?

For definitional purposes, mergers and acquisitions are exactly the same thing.

Operational synergy is a primary goal of product-unrelated diversification.

Firms that engage in product-related diversification as well as far-flung multinational expansion are following a classic conglomerate strategy.

Interest in conglomerates has declined in emerging economies due to their developed capital markets.

The mechanisms needed to obtain financial synergy in diversification are the same as those needed to obtain operational synergy.

Strategizing Around the Globe

Managing Industry Competition

Leveraging Resources and Capabilities

Emphasizing Institutions, Cultures, and Ethics

Growing and Internationalizingthe Entrepreneurial Firm

Entering Foreign Markets

Making Strategic Alliancee and Networks Work

Managing Global Competitive Dynamics

Strategizing, Structuring, and Learningaround the World

Governing the Corporation Around the World

Strategizing With Corporate Social Responsibility

Filters