Question 1

Compared with acquisitions, alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

Accepted Answer

A) True 
 B)False

Question 2

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..

Question 3

In reality, the need for flexible diversification strategies is because of the static nature of:

Accepted Answer

A) ​Industry dynamics. 
B) ​Resource repertoires. 
C)  ​Institutional conditions. 
D)  None of the above.

Question 4

In addition to product relatedness as a factor when considering acquisitions, relatedness can come in the form of:

Accepted Answer

A) ​Hubris. 
B) ​Dominant logic. 
C)  ​Bureaucratic costs. 
D)  ​Acquisition premiums.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

When conglomerate units are better off competing as stand-alone entities, we call it diversification premium.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following motives for M&A does NOT necessarily increase shareholder value?

Accepted Answer

A) Synergy. 
B) Hubris. 
C)  Performance. 
D)  Marginal economic benefits.

Question 8

Other comments you saw in the blog are less hostile to business. In one, the person was claiming that recent developments in financial markets suggest that it is time to revive the use of conglomerates. Based on what is happening now, do you agree? Why or why not?

Accepted Answer

The answer of Other comments you saw in the blog...

Question 9

Not all product-related diversifiers outperform product-unrelated diversifiers.

Accepted Answer

A) True 
 B)False

Question 10

Answering why firms choose different diversification strategies does not help answer why firms differ and how they behave.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of relatedness?

Accepted Answer

A) Measurement of product relatedness is no longer debatable. 
B) A "product-related" firm will be considered related regardless of the measure used. 
C)  Product-unrelated conglomerates are not linked by institutional relatedness. 
D)  Relatedness can be a common underlying dominant logic that connects various businesses in a diversified firm.

Question 12

Diversification premium is the same thing as:

Accepted Answer

A) Conglomerate advantage. 
B) Diversification discount. 
C)  Measurement of firm performance. 
D)  Level of product diversification. 
E)  Measurement of firm performance

Question 13

In the United States between the 1950s and 1970s MEB decreased, resulting in a decreased scope of the firm into conglomeration.

Accepted Answer

A) True 
 B)False

Question 14

A classic conglomerate is characterized by:

Accepted Answer

A) ​Product-related diversification and limited geographic scope. 
B) ​Product-unrelated diversification and limited geographic scope. 
C)  ​Product-unrelated diversification and extensive geographic scope. 
D)  ​Product-related diversification and extensive geographic scope.

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

To add maximum value, a product-related diversifier needs to:

Accepted Answer

A) ​Focus primarily on geographic diversification. 
B) ​Switch to a product-unrelated diversification strategy. 
C)  ​Foster a centralized organizational structure with a cooperative culture. 
D)  ​None of the above.

Question 18

Among the following synergistic motives for M&As, which is a resource-based consideration?

Accepted Answer

A) ​Learning and developing new skills. 
B) ​Overcoming entry barriers. 
C)  ​Responding to formal institutional constraints. 
D)  ​Reducing risk.

Question 19

Which of the following managerial motives for conglomerations benefits shareholders?

Accepted Answer

A) Norms. 
B) Reducing managers' employment risk. 
C)  Organizational stability. 
D)  Pursuing power, prestige, and income.

Question 20

Horizontal and vertical M&As are typically involve product-related diversification.

Accepted Answer

A) True 
 B)False

Exam 9: Diversifying, Acquiring, and Restructuring

Compared with acquisitions, alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

Which would be more characteristic of conglomerates?

In reality, the need for flexible diversification strategies is because of the static nature of:

In addition to product relatedness as a factor when considering acquisitions, relatedness can come in the form of:

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

When conglomerate units are better off competing as stand-alone entities, we call it diversification premium.

Which of the following motives for M&A does NOT necessarily increase shareholder value?

Other comments you saw in the blog are less hostile to business. In one, the person was claiming that recent developments in financial markets suggest that it is time to revive the use of conglomerates. Based on what is happening now, do you agree? Why or why not?

Not all product-related diversifiers outperform product-unrelated diversifiers.

Answering why firms choose different diversification strategies does not help answer why firms differ and how they behave.

Which of the following is true of relatedness?

Diversification premium is the same thing as:

In the United States between the 1950s and 1970s MEB decreased, resulting in a decreased scope of the firm into conglomeration.

A classic conglomerate is characterized by:

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

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

To add maximum value, a product-related diversifier needs to:

Among the following synergistic motives for M&As, which is a resource-based consideration?

Which of the following managerial motives for conglomerations benefits shareholders?

Horizontal and vertical M&As are typically involve product-related diversification.