3

An options strategy provides what kind of benefit from a partnership?

A. knowledge about developing and expanding projects

Which of the following is not a trend in partnering?

A. the diffusion of manufacturing practices

In which of the following situations is a firm sometimes ill-advised to vertically integrate an activity?

A. the firm's competence to perform the activity is high but the activity's strategic importance is low

Which of the following is not a key component of control determining vertical integration decisions?

A. the supplier's growth rate

When does the ability of a potential partner to cooperate effectively become apparent?

A. when the network of partnerships in the industry develops

Which of the following is a source of strategic inflexibility in partnerships?

B. a partners' commitments to relationship-specific investments

Which of the following types of technology partnership is most appropriate for a window strategy?

B. an R&D contract

The property rights theory of vertical integration assumes that the organization that vertically integrates an activity:

B. benefits the most from performing the activity in-house

Which of the following is not a rationale for vertical integration?

B. the relative competence of the firm to perform the activity has decreased

Vertical integration and outsourcing decisions are made for:

C. activities

Which of the following is a key practice in a strategic sourcing relationship?

C. build a strong purchasing organization

Which of the following is generally is not a motivation for the formation of technology partnerships among large firms?

C. coalition building in the context of standards competition

Which of the following alleviates antitrust concerns regarding an alliance?

C. demonstration of greater efficiency than harm to competition

which of the following ways must a potential partner exhibit competence?

C. the ability to grow its operations at a rate consistent with the partnership's goals

In the strategic sourcing framework, firms outsource when:

C. the firm's need to control, and its ability to perform, an activity are both low

Which of the following generally is not essential to successful cooperation for managing complementary assets in a partnership?

C. the life of the project the partnership is based on

The standard theory of vertical integration over the industry life cycle states:

C. vertical integration occurs primarily in the early and late stages

In the efficient boundaries framework, the coordination and production costs of vertical integration relative to outsourcing:

D. both decrease as customization increases

A key assumption underlying theories of vertical integration is:

D. employees give up control over work that cannot be specified in advance

According to transaction cost theory, vertical integration occurs under two conditions:

D. high uncertainty and high supplier asset specialization

According to the efficient boundaries model, when supplier asset specialization is high, vertical integration is more costly than sourcing in the market. T/F

F

Complementarities among the firm's activities typically have little to do with boundary decisions. T/F

F

In the efficient boundaries model, vertical integration is determined by production costs alone. T/F

F

Large scale operations in partnerships rarely provide learning benefits. T/F

F

The only situation forcing a firm to outsource is a change in its strategy. T/F

F

The property rights approach to vertical integration has to do primarily with real estate transactions. T/F

F

Types of technology partnership (e.g., R&D partnership, licensing, joint venture) are generally mutually exclusive. T/F

F

When a firm's motivation for partnership shifts from window to option to positioning, its degree of control decreases. T/F

F

When demand or volume uncertainty is high, a firm should outsource the activity. T/F

F

A firm with proprietary technology will be more likely to outsource technology development when technological uncertainty is high and supplier markets are competitive. T/F

T

A profit center operating inside a firm and that sells to both internal and external customers is considered a hybrid sourcing arrangement. T/F

T

Constraints on a firm's cooperative behavior typically emerge as the industry evolves. T/F

T

Industry partnerships based on patent sharing are prevalent in the semiconductor industry. T/F

T

Partnerships in concentrated industries often raise antitrust concerns. T/F

T

Partnerships in general lower flexibility in strategic decision-making. T/F

T

Partnerships tend to be more effective when there is a convergence of purpose among the partners. T/F

T

The emergence of regional networks of cooperating firms is one trend associated with the rise of partnerships. T/F

T

The goal of altering industry structure is usually not sufficient for a firm to form a partnership. T/F

T

The strategic sourcing framework shows the conditions under which partnerships can occur. T/F

T

Vertical integration usually occurs because of control problems with the supplier over strategically important decisions. T/F

T