Question 1

Which geographic diversification is most likely to reduce the liability of foreignness?
a. Culturally adjacent countries.
b. Extensive international scope.
c. Beyond geographically neighboring countries.
d. Beyond culturally neighboring countries.
e. All of the above

Accepted Answer

The answer of Which geographic diversification is most likely to...

Question 2

Instead of operational synergy, conglomerates focus on financial synergy.

Accepted Answer

A) True 
 B)False

Question 3

Conglomeration tends to provide all of the following except:
a. Product-unrelated diversification.
b. Financial synergy.
c. Economies of scale.
d. Economies of scope.
e. Internal capital market.

Accepted Answer

The answer of Conglomeration tends to provide all of the...

Question 4

At its core, diversification is essentially driven by all of the following except:
a. Economic benefits.
b. Bureaucratic costs.
c. Synergy.
d. Less complicated information systems.
e. MEB.

Accepted Answer

The answer of At its core, diversification is essentially driven...

Question 5

By the 1980s MBC began to decrease.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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

The answer of You are the CEO of International Widget...

Question 8

Product-related diversification involves all of the following except:
a. A single business strategy.
b. Entries into activities that are related to a firm's existing markets and/or activities.
c. The emphasis is on economies of scale rather than scope.
d. Increases in competitiveness.
e. Synergy.

Accepted Answer

The answer of Product-related diversification involves all of the following...

Question 9

A superior product-related diversification strategy does not require a centralized and cooperative organizational architecture in order to add value.

Accepted Answer

A) True 
 B)False

Question 10

Which is one motive for M&A which does not necessarily increase shareholder value?
a. Synergistic.
b. Hubris.
c. Performance.
d. A and C above.
e. None of the above.

Accepted Answer

The answer of Which is one motive for M&A which...

Question 11

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 12

You recently noticed a comment in a blog which stated: "By its very nature, restructuring is a violation of CSR!" How do you feel about that?

Accepted Answer

The answer of You recently noticed a comment in a...

Question 13

Interest in conglomerates has declined in emerging economies due to their developed capital markets.

Accepted Answer

A) True 
 B)False

Question 14

Diversification discount is the situation when unrelated-product diversification enables conglomerate units to beat stand-alone rivals.

Accepted Answer

A) True 
 B)False

Question 15

Diversification premium is the same thing as:
a. Conglomerate advantage.
b. Diversification discount.
c. Conglomerate disadvantage.
d. Level of product diversification.
e. Measurement of firm performance.

Accepted Answer

The answer of Diversification premium is the same thing as:
a....

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

In combining product and geographic diversification, which is not one of the four possible combinations?
a. Anchored replicators.
b. Multinational replicators.
c. Far-flung conglomerates.
d. Classic replicators.
e. Classic conglomerates.

Accepted Answer

The answer of In combining product and geographic diversification, which...

Question 18

Research regarding the relationship between product diversification and firm performance indicates that:
a. Performance may increase as firms shift from single business strategies to product-related diversification.
b. Performance may decrease as firms change from product-related to -unrelated.
c. The linkage between diversification and performance is inverted U shaped.
d. "Putting your eggs in similar baskets," has emerged as a balanced way to both reduce risk and leverage synergy.
e. All of the above.

Accepted Answer

The answer of Research regarding the relationship between product diversification...

Question 19

High entry barriers often result in green-field entries as opposed to acquisitions.

Accepted Answer

A) True 
 B)False

Question 20

An industry whose products can be easily substituted faces more threats from other firms currently not in the same industry.

Accepted Answer

A) True 
 B)False

Exam 9: Diversifying, Acquiring, and Restructuring

Which geographic diversification is most likely to reduce the liability of foreignness? a. Culturally adjacent countries. b. Extensive international scope. c. Beyond geographically neighboring countries. d. Beyond culturally neighboring countries. e. All of the above

Instead of operational synergy, conglomerates focus on financial synergy.

Conglomeration tends to provide all of the following except: a. Product-unrelated diversification. b. Financial synergy. c. Economies of scale. d. Economies of scope. e. Internal capital market.

At its core, diversification is essentially driven by all of the following except: a. Economic benefits. b. Bureaucratic costs. c. Synergy. d. Less complicated information systems. e. MEB.

By the 1980s MBC began to decrease.

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

Product-related diversification involves all of the following except: a. A single business strategy. b. Entries into activities that are related to a firm's existing markets and/or activities. c. The emphasis is on economies of scale rather than scope. d. Increases in competitiveness. e. Synergy.

A superior product-related diversification strategy does not require a centralized and cooperative organizational architecture in order to add value.

Which is one motive for M&A which does not necessarily increase shareholder value? a. Synergistic. b. Hubris. c. Performance. d. A and C above. e. None of the above.

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

You recently noticed a comment in a blog which stated: "By its very nature, restructuring is a violation of CSR!" How do you feel about that?

Interest in conglomerates has declined in emerging economies due to their developed capital markets.

Diversification discount is the situation when unrelated-product diversification enables conglomerate units to beat stand-alone rivals.

Diversification premium is the same thing as: a. Conglomerate advantage. b. Diversification discount. c. Conglomerate disadvantage. d. Level of product diversification. e. Measurement of firm performance.

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

In combining product and geographic diversification, which is not one of the four possible combinations? a. Anchored replicators. b. Multinational replicators. c. Far-flung conglomerates. d. Classic replicators. e. Classic conglomerates.

High entry barriers often result in green-field entries as opposed to acquisitions.

An industry whose products can be easily substituted faces more threats from other firms currently not in the same industry.