Question 1

One aim at the heart of corporate strategy is to

Accepted Answer

A) Operationalize the corporate IT strategy 
B) Extract as many synergies as possible from the different businesses in the group 
C) Maximize economies of scale within the group 
D) Articulate the CEO's personal business model

Question 2

Williamson believed that one of the key advantages of the M-form was that it centralized decision making in corporate headquarters.

Accepted Answer

A) True 
 B)False

Question 3

What are some limits of the multidivisional form?

Accepted Answer

The answer of What are some limits of the multidivisional...

Question 4

What are the key differences between a multidivisional company and a holding company?

Accepted Answer

A) A holding company does not have a centralized treasury 
B) The holding company exercises control over the subsidiary by setting detailed strategic goals that are consistent with corporate goals 
C) The holding company's subsidiaries retain high level of autonomy and separate stock market quotations 
D) All of the above

Question 5

Mintzberg criticized the M-form for having two rigidities: in practice decentralization is limited only to division CEOs, and in practice the corporate centre tends to impose standard deadlines on all divisions

Accepted Answer

A) True 
 B)False

Question 6

Parenting advantage means:

Accepted Answer

A) That corporate managers should act like good parents and use the same skills in the corporate center 
B) That a corporate parent must add more value to each division or business unit than other corporate parents could 
C) That the group excels at corporate coaching 
D) That the group has spawned many successful subsidiaries

Question 7

The notion of parenting advantage refers to the need for the corporate head office of a firm to offer larger gains to its divisions than rival corporations could

Accepted Answer

A) True 
 B)False

Question 8

The closer the linkages between groups of businesses, the fewer the opportunities for creating value from sharing resources or transferring capabilities, and the smaller the need for coordination across businesses

Accepted Answer

A) True 
 B)False

Question 9

Which structure is the dominant organizational form for multibusiness companies?

Accepted Answer

A) The matrix structure 
B) The multidivisional structure 
C) The holding structure 
D) The functional structure

Question 10

Hewlett-Packard has a large corporate center, while Berkshire Hathaway employs around 50 people. The cause of this is:

Accepted Answer

A) HP has mediocre profitability 
B) Berkshire Hathaway has mediocre profitability 
C) HP's is a divisional business where each unit has many links with each other and the center, while BH is a financial holding company 
D) Warren Buffett runs a tighter ship than HP

Question 11

In practice, the benefits of centralized common services are:

Accepted Answer

A) Non-existent 
B) Smaller than corporate managers anticipate 
C) Decreasing with time 
D) Increasing with time

Question 12

What is the empirical evidence on merger and acquisition performance?

Accepted Answer

A) The shareholders of the acquired firm gain 
B) The shareholders of acquiring firms rarely gain significantly, and often lose 
C) A and B are both true 
D) A and B are both false

Question 13

A simple advantage of a multibusiness is the ability to share the ideas generated by wide and rich inputs from multiple global sources

Accepted Answer

A) True 
 B)False

Question 14

What is corporate governance?

Accepted Answer

A) The way a firm is organized 
B) The way a firm makes decisions 
C) The system by which the top management of a firm is directed and controlled 
D) The way a firm appoints and replaces its CEO

Question 15

Despite much research the evidence on mergers is confused because:

Accepted Answer

A) Reliable data is hard to find 
B) Each merger is unique and there are many influences on both companies' profitability, even without any merger 
C) Each merger is unique and it is hard to calculate profitability after a merger 
D) Bankers' fees are confidential, and should be netted out

Question 16

The most basic decisions corporate strategy must answer are:

Accepted Answer

A) How should we manage businesses to generate as much value as possible? 
B) What businesses should we be in? 
C) What businesses are we in? 
D) Answers a and b

Question 17

According to the OECD's Principles of Corporate Governance Board Directors of a group are required to act "…in good faith … in the best interests of the company and its creditors."

Accepted Answer

A) True 
 B)False

Question 18

The simplest form of resource sharing in a multidivisional firm is to:

Accepted Answer

A) Provide some services and functions in common - from the corporate center 
B) Transfer technology across divisions 
C) Transfer top executives across divisions 
D) Centralize the provision of command and control instruments

Question 19

How has evolved the conception of corporate managers about the role of a corporate parent regarding its divisions?

Accepted Answer

The answer of How has evolved the conception of corporate...

Question 20

Carlyle, KKR, Blackstone, Texas and Pacific are:

Accepted Answer

A) Mortgage companies 
B) State-owned firms 
C) Equity firms 
D) Large diversified firms' subsidiaries

Exam 17: Implementing Corporate Strategy: Management of the Multibusiness Firm

One aim at the heart of corporate strategy is to

Williamson believed that one of the key advantages of the M-form was that it centralized decision making in corporate headquarters.

What are some limits of the multidivisional form?

What are the key differences between a multidivisional company and a holding company?

Mintzberg criticized the M-form for having two rigidities: in practice decentralization is limited only to division CEOs, and in practice the corporate centre tends to impose standard deadlines on all divisions

Parenting advantage means:

The notion of parenting advantage refers to the need for the corporate head office of a firm to offer larger gains to its divisions than rival corporations could

The closer the linkages between groups of businesses, the fewer the opportunities for creating value from sharing resources or transferring capabilities, and the smaller the need for coordination across businesses

Which structure is the dominant organizational form for multibusiness companies?

Hewlett-Packard has a large corporate center, while Berkshire Hathaway employs around 50 people. The cause of this is:

In practice, the benefits of centralized common services are:

What is the empirical evidence on merger and acquisition performance?

A simple advantage of a multibusiness is the ability to share the ideas generated by wide and rich inputs from multiple global sources

What is corporate governance?

Despite much research the evidence on mergers is confused because:

The most basic decisions corporate strategy must answer are:

According to the OECD's Principles of Corporate Governance Board Directors of a group are required to act "…in good faith … in the best interests of the company and its creditors."

The simplest form of resource sharing in a multidivisional firm is to:

How has evolved the conception of corporate managers about the role of a corporate parent regarding its divisions?

Carlyle, KKR, Blackstone, Texas and Pacific are: