Exam 12: Diversification Strategy

A critical advantage of diversified over specialized firms is in their allocation of human resources where diversified firms can utilize their superior information on their employees to allocate individuals according to their proven abilities.

(True/False)

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Question 21

The key drivers of diversification for most of the 20^th century were:

(Multiple Choice)

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Question 22

The continuing prominence of large, highly diversified business groups in many emerging market countries (e.g.Tata Group in India) is mainly the result of:

(Multiple Choice)

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Question 23

One reason for the inconsistent findings over the relative performance of related diversification and unrelated diversification is uncertainty and imprecision over what constitutes related diversification

(True/False)

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Question 24

The expression "conglomerate discount" means:

(Multiple Choice)

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Question 25

The failure of empirical research to find unambiguous evidence that related diversification outperforms unrelated evidence points to:

(Multiple Choice)

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Question 26

Which is a more efficient mechanism for allocating capital among different businesses: the internal capital allocation of diversified firms or the external capital market?

(Multiple Choice)

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Question 27

A major reason for the trend to corporate refocusing after 1980 was a shifting of corporate goals from growth to profitability.

(True/False)

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Question 28

The history of diversification since the mid-20^th century features two periods: during 1950 to 1980, the trend was to diversify; since 1980, most large companies have refocused upon their core businesses.

(True/False)

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Question 29

If a company can deploy its intellectual property in a different industry, the higher are the transaction costs of licensing that intellectual property, the more likely it is that the firm will choose to diversify into that industry.

(True/False)

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Question 30

Empirical studies of the outcomes of corporate refocusing initiatives show that divesting diversified businesses increases profitability and generates positive returns for shareholders.

(True/False)

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Question 31

Diversification has been an important source of value creation for most of the firms that have dared to expand beyond the boundaries of their own industry.

(True/False)

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Question 32

When a company in industry A acquires a company in industry B, Porter's "better-off" test is satisfied when:

(Multiple Choice)

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Question 33

Which of the following is not an example of an economy of scope from diversification?

(Multiple Choice)

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Question 34

Economies of scope may be viewed as economies of scale that are exploited over multiple products.

(True/False)

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Question 35

Tata Group, the Virgin Group, and Berkshire Hathaway are holding companies that comprise largely independent businesses with few relationships with one another.Inevitably, these groups lack significant potential to add value to the individual businesses.

(True/False)

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Question 36

Tyco International's decision to split into three separate companies was motivated by:

(Multiple Choice)

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Question 37

Harold Geneen's statement that: "Telephones, hotels, insurance-it's all the same.If you know the numbers inside out, you know the company inside out" is basically correct: the essentials of a business are revealed by its metrics; industry-specific knowledge is not essential to the effective running of a business.

(True/False)

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Question 38

The capital asset pricing model predicts that corporate diversiﬁcation that reduces the unsystematic risk of a company's securities will result in those securities being higher valued by the stock market.

(True/False)

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Question 39

The continuing dominance of highly-diversified business groups in many emerging countries is a result of the less developed capital and labor markets in these countries.

(True/False)

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Question 40

Showing 21 - 40 of 48

A critical advantage of diversified over specialized firms is in their allocation of human resources where diversified firms can utilize their superior information on their employees to allocate individuals according to their proven abilities.

The key drivers of diversification for most of the 20^th century were:

The continuing prominence of large, highly diversified business groups in many emerging market countries (e.g.Tata Group in India) is mainly the result of:

One reason for the inconsistent findings over the relative performance of related diversification and unrelated diversification is uncertainty and imprecision over what constitutes related diversification

The expression "conglomerate discount" means:

The failure of empirical research to find unambiguous evidence that related diversification outperforms unrelated evidence points to:

Which is a more efficient mechanism for allocating capital among different businesses: the internal capital allocation of diversified firms or the external capital market?

A major reason for the trend to corporate refocusing after 1980 was a shifting of corporate goals from growth to profitability.

The history of diversification since the mid-20^th century features two periods: during 1950 to 1980, the trend was to diversify; since 1980, most large companies have refocused upon their core businesses.

If a company can deploy its intellectual property in a different industry, the higher are the transaction costs of licensing that intellectual property, the more likely it is that the firm will choose to diversify into that industry.

Empirical studies of the outcomes of corporate refocusing initiatives show that divesting diversified businesses increases profitability and generates positive returns for shareholders.

Diversification has been an important source of value creation for most of the firms that have dared to expand beyond the boundaries of their own industry.

When a company in industry A acquires a company in industry B, Porter's "better-off" test is satisfied when:

Which of the following is not an example of an economy of scope from diversification?

Economies of scope may be viewed as economies of scale that are exploited over multiple products.

Tata Group, the Virgin Group, and Berkshire Hathaway are holding companies that comprise largely independent businesses with few relationships with one another.Inevitably, these groups lack significant potential to add value to the individual businesses.

Tyco International's decision to split into three separate companies was motivated by:

The capital asset pricing model predicts that corporate diversiﬁcation that reduces the unsystematic risk of a company's securities will result in those securities being higher valued by the stock market.

The continuing dominance of highly-diversified business groups in many emerging countries is a result of the less developed capital and labor markets in these countries.

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers, Acquisitions, and Alliances

Current Trends in Strategic Management

Filters

Exam 12: Diversification Strategy

A critical advantage of diversified over specialized firms is in their allocation of human resources where diversified firms can utilize their superior information on their employees to allocate individuals according to their proven abilities.

The key drivers of diversification for most of the 20th century were:

The continuing prominence of large, highly diversified business groups in many emerging market countries (e.g.Tata Group in India) is mainly the result of:

One reason for the inconsistent findings over the relative performance of related diversification and unrelated diversification is uncertainty and imprecision over what constitutes related diversification

The expression "conglomerate discount" means:

The failure of empirical research to find unambiguous evidence that related diversification outperforms unrelated evidence points to:

Which is a more efficient mechanism for allocating capital among different businesses: the internal capital allocation of diversified firms or the external capital market?

A major reason for the trend to corporate refocusing after 1980 was a shifting of corporate goals from growth to profitability.

The history of diversification since the mid-20th century features two periods: during 1950 to 1980, the trend was to diversify; since 1980, most large companies have refocused upon their core businesses.

If a company can deploy its intellectual property in a different industry, the higher are the transaction costs of licensing that intellectual property, the more likely it is that the firm will choose to diversify into that industry.

Empirical studies of the outcomes of corporate refocusing initiatives show that divesting diversified businesses increases profitability and generates positive returns for shareholders.

Diversification has been an important source of value creation for most of the firms that have dared to expand beyond the boundaries of their own industry.

When a company in industry A acquires a company in industry B, Porter's "better-off" test is satisfied when:

Which of the following is not an example of an economy of scope from diversification?

Economies of scope may be viewed as economies of scale that are exploited over multiple products.

Tata Group, the Virgin Group, and Berkshire Hathaway are holding companies that comprise largely independent businesses with few relationships with one another.Inevitably, these groups lack significant potential to add value to the individual businesses.

Tyco International's decision to split into three separate companies was motivated by:

The capital asset pricing model predicts that corporate diversiﬁcation that reduces the unsystematic risk of a company's securities will result in those securities being higher valued by the stock market.

The continuing dominance of highly-diversified business groups in many emerging countries is a result of the less developed capital and labor markets in these countries.

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers, Acquisitions, and Alliances

Current Trends in Strategic Management

Filters

The key drivers of diversification for most of the 20^th century were:

The history of diversification since the mid-20^th century features two periods: during 1950 to 1980, the trend was to diversify; since 1980, most large companies have refocused upon their core businesses.