MANGT 595 - Final - Quiz Questions

According to the build-borrow-buy framework, which of the following examples of build-borrow-buy decisions is not correct? - Build - internal development - Buy - joint venture - Borrow - licensing agreement - Borrow - equity alliance

Buy - Joint Venture

All of the following reasons can explain why appropriate executive compensation is difficult to determine except: - An executive's decisions are typically complex and non-routine - an executive's decisions often affect firm performance only over the long run - a number of factors intervene between decisions by top executives and firm performance (e.g., unpredictable economic, social, or legal changes) - It is very difficult for the board to access accounting-based measures of firm performance, such as ROA and ROI

It is difficult for the board to access accounting-based measures of firm performance, such as ROA and ROI

Which of the following is a disadvantage of equity alliances when compared to non-equity alliances? - They are reflective of weaker relationships between firms - They are more likely to be characterized by lack of trust and commitment between partners - They require significantly higher levels of investment - They do not allow firms to exchange explicit knowledge

They require significantly higher levels of investment

Which of the following terms describes the costs that accrue to firms when they enter unfamiliar foreign markets that are different from their domestic market in important ways? - agency costs - diseconomies of scale - liability for foreignness - conglomerate discount - none of the above

liability of foreignness

Executives of Octa Auto Inc. want to expand the company's operations to foreign markets. They want to ensure that the company's mode of foreign intellectual property, even though it may mean investing a significant amount of capital and other resources. In this scenario, which of the following foreign entry modes would best suit Octa Autos inc.? - exporting - franchise agreement - acquisition - licensing

Acquisition

Which of the following is true about acquisitions? - Acquisitions can be friendly or hostile - In acquisitions, two independent companies join resources to form a separate third party - Acquisitions increase the competitive intensity in an industry - Acquisitions can only succeed when the involved firms are of comparable size

Acquisitions can be friendly or hostile

Steve is a recent graduate who states that he has interned at a major accounting firm so that his value as a candidate for employment increase. A start-up recruits Steve based on his stated credentials without verifying them. Two days into the job, Steve's team lead realized that Steve does not know much of what he claimed to know during the interview. This scenario best exemplifies _________. - moral hazard - adverse selection - shared value creation - corporate governance q

Adverse selection

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used a functional structure. Five years ago, the company branched into online publishing and small-batch printing in addition to its regular large-batch operations. Both new businesses are significantly different in technology and marketing from each other and from Ball's traditional business. Despite the hiring of experienced professionals in these new endeavors, performance continues to be poor and is affecting Ball's overall performance. Which of the following statements is TRUE based on the information provided? - These businesses are impossible to coordinate within one corporation, so the company should restructure and spin off these divisions. - Mr. Ball has insufficient power to change the structure of the firm. - Restructuring must only be done from a position of strength, so it is necessary to wait until the company's overall performance improves before making radical changes - Amos should consider adopting the multidivisional structure to better manage and coordinate its activities

Amos should consider adopting the multidivisional structure to better manage and coordinate its activities

All of the following are likely consequences of Walt Disney's recent acquisition of 21st Century Fox, except: - Disney will increase its differentiation by adding new content/channels to its portfolio - Disney's industry will become less consolidated - Disney will be less dependent on content distributors (e.g., Netflix) - Disney will face lower competitive threats from smaller movie studios

Disney's industry will become less consolidated

Acme Corp. has decided to enter a foreign market organically, by building its own production facilities and establishing distribution channels from the ground up. This will allow it to have strong control over all of its business activities. Which of the following foreign entry models has Acme Corp. chosen? - Greenfield venture - export - joint venture - acquisition

Greenfield venture

Which of the following corresponds to the use of tacit knowledge? - Heather reads a demographic report about minorities in Texas. - Pedro studies a fact sheet about France. - Henrietta uses a scientific article to defend her thesis about global warming. - John assembles the motorcycle from memory.

John assembles the motorcycle from memory.

All of the following are among the reasons why a large proportion of acquisitions fail to achieve desire results, except: - Integration difficulties - Low acquisition premiums - Principal-agent problem - Poor due diligence - Managerial hubris

Low acquisition premiums

Isidore Crocker, CEO of Gotham Engines, is strongly in favor of acquiring Caroline Textiles, a firm in an unrelated industry. Gotham Engines has recently completed a series of other unrelated acquisitions and some members of the board of directors are questioning Crocker's motives for the acquisitions. They are that the CEO is using this acquisitor to create greater power for himself and increase his compensation rather than to increase shareholder value. In this scenario, this acquisition by Gotham Engines is most like a result of ___________. - time compression diseconomies - experience-curve effects - principal-agent problems - resource ambiguity

Principal-agent problems

Which of the following is not one of the indicators of commonly accepted good corporate governance practices meant to ensure that agents act in principal's interests? - CEO and the chairman positions are separated. - A majority of the board consists of independent directors. - Majority of directors have been appointed to the board before the CEO was appointed. - Several affiliated outsiders are serving on the firm's board of directors.

Several affiliated outsiders are serving on the firm's board of directors.

In terms of the build-borrow-buy framework, a firm's internal resources are considered to be relevant when they are - different than those that need to be developed and superior to those of competitors in the targeted area - different from those that need to be developed and inferior to those of competitors in the targeted area - similar to those that need to be developed and inferior to those of competitors in the targeted area - similar to those that need to be developed and superior to those of competitors in the targeted area

Similar to those that need to be developed and superior to those of competitors in the targeted area

Which of the following proves that GE's board of directors is significantly independent? - Twenty-six percent of the board members of GE are female. - The CEO of GE is also the chairman of the board. - GE's board has five committees, each with its own chair. - Sixteen of the 17 board directors are from outside the organization.

Sixteen of the 17 board directors are from outside the organization.

In 2014, Disney canceled its licensing agreement with Mattel and transferred the licensing rights to manufacture the princess dolls line to Mattel's biggest rival - Hasbro. Since Hasbro has traditionally focused on boys' toys, they conducted additional research and redesigned all of Disney's princess dolls. Which of the following benefits of non-equity alliance is Disney taking advantage of in this case? - They are flexible and easy to initiate and terminate. - They facilitate the sharing of tacit knowledge between the alliance partners. - They produce strong ties between alliance partners as they are permanent in nature. - They are based on ownership rather than contracts.

They are flexible and easy to initiate and terminate.

Evara Cosmetics Inc. is a company that operates in 20 countries around the globe. The company clearly understands that the skin and hair type of customers vary from one country to another. Consequently, its products are customized to suit local customer needs and preferences, even though the costs incurred while producing these products are exceptionally high. This strategy helps the company behave as a local firm in a foreign market. In this scenario, which of the following strategies in Evara Cosmetics Inc. most likely pursuing? - a multi-domestic strategy - an international strategy - a global-standardization strategy - a one-product strategy

a multi-domestic strategy

The textbook mentions three key motivations for entering foreign markets. Which of the following is NOT one of these strategically rational motives? - gain access to a larger market - gain access to low-cost input factors - avoid exchange rate fluctuations - develop new competencies

avoid exchange rate fluctuations

If a firm does not have any of the resources needed to pursue a new product development opportunity, and if those resources are highly tradable in factor markets, then the firm will likely - enter into a contractual agreement to obtain the required resources - pursue internal development - borrow the required resources via in acquisition - consider engaging in an equity alliance or acquisition to obtain the required resources

enter into a contractual agreement to obtain the required resources

In his TED talk, Dan Pink discussed the power of incentives in motivating employees. He uses research to make the case that employees are more motivated when they find their work interesting and creative compared to when they are only bonuses and commissions. Firms that offer interesting and creative work opportunities not only carefully hire workers who fit well with their assigned tasks and clearly define the results expected of each worker, but also allow the workers to determine the means to these results. Based on this information, which of the following should the firm emphasize most when motivating and evaluating its employees? - intrinsic motivation and input controls - extrinsic motivation and output controls - extrinsic motivation and input controls - intrinsic motivation and output controls

intrinsic motivation and output controls

Equity alliances are less common than non-equity alliances because they - fail to facilitate the transfer of tacit knowledge - produce weaker ties between partners - often require larger investments - depend on contractual agreements

often require larger investments

Fair Call Inc. is a pharmaceutical company that has many breakthroughs in medicine to its credit. Unlike many other pharmaceutical companies, Fast Call has a relaxed work environment where employees are free to discuss projects with each other. Employees are encouraged to choose the projects that interest them; communication between team members and their supervisors is open and easy. Because of the company's work culture, its employees feel motivated to work harder and display entrepreneurial behaviors. In this scenario, Fast Call Inc. is most likely an organization that is - mechanistic - centralized - organic - formalized

organic

When a country score high on the _________ dimension of Hoftede's national culture index, it means that hierarchy relationships, use of titles, and exercise of interpersonal influence is expected to occur among individuals and that people are generally comfortable with such status differences. - uncertainty avoidance - individualism - collectivism - power distance - long-term orientation

power distance

While working a nigh job, John creates an app called DineSmart, which can be used to make reservations at restaurants, place orders, and rate the restaurants. Because he receives good responses for his app, he quits his current job to focus his efforts on DineSmart. He created a start-up called TYOP and hires three people to help him run DineSmart and maintain the servers that run it. In this scenario, TYOP most likely has a ________ structure. - simple - matrix - mechanistic - functional

simple