Question 1

Instead of operational synergy,conglomerates focus on financial synergy.

Accepted Answer

A) True 
 B)False  True

Question 2

Sources of operation synergy:

Accepted Answer

A)  Technologies. 
B)  Marketing. 
C)  Manufacturing. 
D)  All of the above. 
E)  None of the above. 
A)  Technologies. 
B)  Marketing. 
C)  Manufacturing. 
D)  All of the above. 
E)  None of the above. D

Question 3

Your manager tells you ​that your firm is considering several acquisitions.The manager asks you for an assessment of which one might be the best for your firm in the immediate future.Without knowing any details about the acquiring or target firms,provide a general checklist of information your manager will need to make a decision.

Accepted Answer

​The generality of this question allows students to go any number of directions,but an answer should include industry-,resource-,and institution-based considerations and a focus on strategic and organizational fit.

Question 4

The economic benefits of the last unit of growth (such as the last acquisition)can be defined as MBC.

Accepted Answer

A) True 
 B)False

Question 5

​In an acquisition,shareholders of the acquiring firm typically see a greater increase in stock value than do shareholders of the target firm.

Accepted Answer

A) True 
 B)False

Question 6

​Hubris often leads to acquisition premiums.

Accepted Answer

A) True 
 B)False

Question 7

At its core,diversification is essentially driven by all of the following EXCEPT:

Accepted Answer

A)  Economic benefits. 
B)  MEB. 
C)  Synergy. 
D)  Less complicated information systems. 
A)  Economic benefits. 
B)  MEB. 
C)  Synergy. 
D)  Less complicated information systems.

Question 8

You are the CEO of International Widget and you are contemplating expanding into Lower Slobovia.You have the resources needed to start from scratch in that country but it would be possible to acquire the company that dominates the Lower Slobovian Widget industry.Which do you think would be best: start from scratch or an acquisition?

Accepted Answer

In all of these questions,the important

Question 9

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 10

You and your firm need to develop policies that avoid acquisitions and restructuring.

Accepted Answer

A) True 
 B)False

Question 11

​Describe how a firm goes from a single product to conglomeration and what the primary issues on that journey might be.

Accepted Answer

​Answers need to make mention of operati

Question 12

​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 13

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

Accepted Answer

A) True 
 B)False

Question 14

​One of the dangers of a centralized structure for a product-unrelated diversified conglomerate is:

Accepted Answer

A)  ​Information overload. 
B)  ​Inability to spread out risk. 
C)  The opportunity for financial synergy. 
D)  ​None of the above. 
A)  ​Information overload. 
B)  ​Inability to spread out risk. 
C)  The opportunity for financial synergy. 
D)  ​None of the above.

Question 15

The scope of the firm is thus determined by a comparison between MEB and MBC.

Accepted Answer

A) True 
 B)False

Question 16

Which would be more characteristic of conglomerates?

Accepted Answer

A)  "Putting one's eggs in one basket." 
B)  "Putting one's eggs in similar baskets." 
C)  "Putting one's eggs in different baskets." 
D)  None of the above.. 
A)  "Putting one's eggs in one basket." 
B)  "Putting one's eggs in similar baskets." 
C)  "Putting one's eggs in different baskets." 
D)  None of the above..

Question 17

​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 18

Which of the following is TRUE regarding M&As?

Accepted Answer

A)  As many as 70 percent of M&As reportedly fail. 
B)  On average,the acquiring firms' performance improves after acquisitions. 
C)  The outstanding success of M&As is due to pre- and postacquisition phases. 
D)  The only identifiable losers are the shareholders of target (acquired)firms. 
A)  As many as 70 percent of M&As reportedly fail. 
B)  On average,the acquiring firms' performance improves after acquisitions. 
C)  The outstanding success of M&As is due to pre- and postacquisition phases. 
D)  The only identifiable losers are the shareholders of target (acquired)firms.

Question 19

Research shows that the linkage between product diversification and firm performance seems to be inverted-U shaped.

Accepted Answer

A) True 
 B)False

Question 20

​The most straightforward motivation for a firm to diversify is growth opportunities in an industry.

Accepted Answer

A) True 
 B)False

Instead of operational synergy,conglomerates focus on financial synergy.

Sources of operation synergy:

The economic benefits of the last unit of growth (such as the last acquisition)can be defined as MBC.

In an acquisition,shareholders of the acquiring firm typically see a greater increase in stock value than do shareholders of the target firm.

Hubris often leads to acquisition premiums.

At its core,diversification is essentially driven by all of the following EXCEPT:

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

You and your firm need to develop policies that avoid acquisitions and restructuring.

Describe how a firm goes from a single product to conglomeration and what the primary issues on that journey might be.

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

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

One of the dangers of a centralized structure for a product-unrelated diversified conglomerate is:

The scope of the firm is thus determined by a comparison between MEB and MBC.

Which would be more characteristic of conglomerates?

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 is TRUE regarding M&As?

Research shows that the linkage between product diversification and firm performance seems to be inverted-U shaped.

The most straightforward motivation for a firm to diversify is growth opportunities in an industry.

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

Exam 9: Diversifying, acquiring, and Restructuring

Instead of operational synergy,conglomerates focus on financial synergy.

Sources of operation synergy:

The economic benefits of the last unit of growth (such as the last acquisition)can be defined as MBC.

​In an acquisition,shareholders of the acquiring firm typically see a greater increase in stock value than do shareholders of the target firm.

​Hubris often leads to acquisition premiums.

At its core,diversification is essentially driven by all of the following EXCEPT:

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

You and your firm need to develop policies that avoid acquisitions and restructuring.

​Describe how a firm goes from a single product to conglomeration and what the primary issues on that journey might be.

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

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

​One of the dangers of a centralized structure for a product-unrelated diversified conglomerate is:

The scope of the firm is thus determined by a comparison between MEB and MBC.

Which would be more characteristic of conglomerates?

​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 is TRUE regarding M&As?

Research shows that the linkage between product diversification and firm performance seems to be inverted-U shaped.

​The most straightforward motivation for a firm to diversify is growth opportunities in an industry.

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

In an acquisition,shareholders of the acquiring firm typically see a greater increase in stock value than do shareholders of the target firm.

Hubris often leads to acquisition premiums.

Describe how a firm goes from a single product to conglomeration and what the primary issues on that journey might be.

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

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

One of the dangers of a centralized structure for a product-unrelated diversified conglomerate is:

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:

The most straightforward motivation for a firm to diversify is growth opportunities in an industry.