Question 1

When a firm becomes highly diversified through acquisitions, managers often focus on financial controls rather than on strategic controls.

Accepted Answer

A) True 
 B)False

Question 2

A merger occurs when:

Accepted Answer

A) one firm buys controlling interest in another firm 
B) two firms agree to integrate their operations on a relatively coequal basis 
C) two firms combine to create a third separate entity that conducts one given function 
D) two firms agree to share certain information, but their operations remain independent 
A) one firm buys controlling interest in another firm 
B) two firms agree to integrate their operations on a relatively coequal basis 
C) two firms combine to create a third separate entity that conducts one given function 
D) two firms agree to share certain information, but their operations remain independent

Question 3

According to recent research, acquisitions remain the quickest route companies have to:

Accepted Answer

A) new markets and new capabilities 
B) synergy within a portfolio of businesses 
C) financial economies of scale 
D) expanded economies of scope 
A) new markets and new capabilities 
B) synergy within a portfolio of businesses 
C) financial economies of scale 
D) expanded economies of scope

Question 4

Downscoping generally leads to more positive outcomes than leveraged buyouts both in the long term and the short term.

Accepted Answer

A) True 
 B)False

Question 5

Why are acquisitions seen as an alternative to new product development? What impediments exist in undertaking internal product development?

Accepted Answer

Developing new products internally and s

Question 6

The best long-term outcomes are typically associated with which restructuring activity?

Accepted Answer

A) Downsizing 
B) Downscoping 
C) Leveraged buyout 
D) Acquisitions 
A) Downsizing 
B) Downscoping 
C) Leveraged buyout 
D) Acquisitions

Question 7

Evidence suggests that acquisitions usually lead to favourable financial outcomes, especially for the acquiring firm.

Accepted Answer

A) True 
 B)False

Question 8

Discuss the pitfalls of too much diversification and, more specifically, overdiversification.

Accepted Answer

The level at which overdiversification o

Question 9

What are the attributes of a successful acquisition program?

Accepted Answer

Although potentially problematic, acquis

Question 10

Define vertical acquisition.How does vertical acquisition lead to increased market power?

Accepted Answer

Vertical acquisition refers to a firm ac

Question 11

Firms often use downsizing as a responsive management strategy to attain better economies of scale.

Accepted Answer

A) True 
 B)False

Question 12

In acquisitions, managers do not become involved in:

Accepted Answer

A) preparing for negotiations 
B) managing the integration process after the acquisition is completed 
C) searching for viable acquisition candidates 
D) monitoring the movements of competitors 
A) preparing for negotiations 
B) managing the integration process after the acquisition is completed 
C) searching for viable acquisition candidates 
D) monitoring the movements of competitors

Question 13

Junk bonds are a financial option through which acquiring and acquired firms can increase the likelihood of creating private synergy of acquisition.

Accepted Answer

A) True 
 B)False

Question 14

Discuss the outcome potential of the various restructuring strategies.

Accepted Answer

Downsizing does not commonly lead to a h

Question 15

Research suggests that horizontal acquisitions of firms with dissimilar characteristics result in higher performance levels.

Accepted Answer

A) True 
 B)False

Question 16

A primary reason for a firm to pursue an acquisition is to:

Accepted Answer

A) rationalise all upper and middle management 
B) achieve greater financial returns in the short run 
C) avoid the risks of new product development 
D) avoid competition 
A) rationalise all upper and middle management 
B) achieve greater financial returns in the short run 
C) avoid the risks of new product development 
D) avoid competition

Question 17

Market power is derived primarily from the:

Accepted Answer

A) creativity of a firm 
B) quality of a firm's top management team 
C) size of a firm and its resources and capabilities 
D) depth of a firm's strategy 
A) creativity of a firm 
B) quality of a firm's top management team 
C) size of a firm and its resources and capabilities 
D) depth of a firm's strategy

Question 18

Overdiversification varies with:

Accepted Answer

A) a firm's general capabilities 
B) a firm's general resources 
C) a firm's capabilities to manage diversification 
D) a firm's resources to manage diversification 
A) a firm's general capabilities 
B) a firm's general resources 
C) a firm's capabilities to manage diversification 
D) a firm's resources to manage diversification

Question 19

Cross-border acquisitions are becoming more popular because they allow an acquiring firm to:

Accepted Answer

A) market a broader range of products and negotiate better contracts with distributors 
B) increase profits, better serve customers and gain market control 
C) overcome barriers to entering a new market while gaining more control over foreign operations relative to the control offered by alliances 
D) exploit resources in the acquired firm, gain new technical knowledge and access new sources of capital 
A) market a broader range of products and negotiate better contracts with distributors 
B) increase profits, better serve customers and gain market control 
C) overcome barriers to entering a new market while gaining more control over foreign operations relative to the control offered by alliances 
D) exploit resources in the acquired firm, gain new technical knowledge and access new sources of capital

Question 20

What are the differences between downscoping and downsizing?

Accepted Answer

Downsizing is a set of actions that redu

When a firm becomes highly diversified through acquisitions, managers often focus on financial controls rather than on strategic controls.

A merger occurs when:

According to recent research, acquisitions remain the quickest route companies have to:

Downscoping generally leads to more positive outcomes than leveraged buyouts both in the long term and the short term.

Why are acquisitions seen as an alternative to new product development? What impediments exist in undertaking internal product development?

The best long-term outcomes are typically associated with which restructuring activity?

Evidence suggests that acquisitions usually lead to favourable financial outcomes, especially for the acquiring firm.

Discuss the pitfalls of too much diversification and, more specifically, overdiversification.

What are the attributes of a successful acquisition program?

Define vertical acquisition.How does vertical acquisition lead to increased market power?

Firms often use downsizing as a responsive management strategy to attain better economies of scale.

In acquisitions, managers do not become involved in:

Junk bonds are a financial option through which acquiring and acquired firms can increase the likelihood of creating private synergy of acquisition.

Discuss the outcome potential of the various restructuring strategies.

Research suggests that horizontal acquisitions of firms with dissimilar characteristics result in higher performance levels.

A primary reason for a firm to pursue an acquisition is to:

Market power is derived primarily from the:

Overdiversification varies with:

Cross-border acquisitions are becoming more popular because they allow an acquiring firm to:

What are the differences between downscoping and downsizing?

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition and Competitor Analysis

The Internal Environment: Resources, Capabilities, Core Competencies and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

International Strategy

Cooperative Strategy

Corporate Governance

Organisational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

Exam 7: Acquisition and Restructuring Strategies

When a firm becomes highly diversified through acquisitions, managers often focus on financial controls rather than on strategic controls.

A merger occurs when:

According to recent research, acquisitions remain the quickest route companies have to:

Downscoping generally leads to more positive outcomes than leveraged buyouts both in the long term and the short term.

Why are acquisitions seen as an alternative to new product development? What impediments exist in undertaking internal product development?

The best long-term outcomes are typically associated with which restructuring activity?

Evidence suggests that acquisitions usually lead to favourable financial outcomes, especially for the acquiring firm.

Discuss the pitfalls of too much diversification and, more specifically, overdiversification.

What are the attributes of a successful acquisition program?

Define vertical acquisition.How does vertical acquisition lead to increased market power?

Firms often use downsizing as a responsive management strategy to attain better economies of scale.

In acquisitions, managers do not become involved in:

Junk bonds are a financial option through which acquiring and acquired firms can increase the likelihood of creating private synergy of acquisition.

Discuss the outcome potential of the various restructuring strategies.

Research suggests that horizontal acquisitions of firms with dissimilar characteristics result in higher performance levels.

A primary reason for a firm to pursue an acquisition is to:

Market power is derived primarily from the:

Overdiversification varies with:

Cross-border acquisitions are becoming more popular because they allow an acquiring firm to:

What are the differences between downscoping and downsizing?

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition and Competitor Analysis

The Internal Environment: Resources, Capabilities, Core Competencies and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

International Strategy

Cooperative Strategy

Corporate Governance

Organisational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters