Ch. 12 (Final)

A(n) ____ is the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter.

acquisition

The difference between the acquisition price and the market value of target firms is called _____.

acquisition premium

The institution-based view driving alliances and acquisitions focuses on _____ concerns.

antitrust

Pre-acquisition analysis often focuses on strategic fit, which is the effective matching of ____ strategic capabilities.

complementary

A non-equity based alliance is also called a _____.

contractual alliance

In the context of equity-based alliances, _____ involves both firms investing in each other.

cross-shareholding

At stage 1 in the formation of an alliance, a firm must _____. a. check the degree of tacitness b. evaluate institutional constraints c. decide whether growth can be achieved through market transactions d. choose between a contract or an equity approach

decide whether growth can be achieved through market transactions

The act of investigating prior to signing contracts is called _____.

due dilligence

_____ alliances are based on ownership or financial interest between the firms.

equity based

The second phase in an alliance dissolution is _____.

going public

Which is one of the four phases in an alliance dissolution?

going public

Which of the following stakeholders has the most concern over short-term revenue falling during mergers and acquisitions?

investors

Which of the following occurs in the uncoupling stage of an alliance dissolution?

last minute salvage

The combination of operations and management of two firms to establish a new legal entity is called a(n) _____.

merger

In an alliance, keeping critical skills and technologies not meant to be shared a secret helps prevent _____.

opportunism

In the context of acquisitions, the similarity in cultures, systems, and structures between firms is called _____.

organizational fit

The ability to successfully manage interfirm relationships is called _____.

rational capability

A(n) ____ is an investment in real operations as opposed to financial capital.

real option

At which stage in the formation of alliance must a firm decide whether to take a contract or an equity approach?

stage 2

In which type of equity-based alliance does one firm invest in another?

strategic investment

In the context of the motives for acquisition, from a resource-based view, the most important _____ rationale is to leverage superior resources.

synergistic

Which of the following motives for acquisition faces the resource-based issue of access to complementary resources?

synergistic

With respect to the motives for acquisition, _____ motives add value.

synergistic

The set of informal institutions that stresses the cognitive pillar lays emphasis on _____. a. establishing wholly owned subsidiaries b. granting more liberal policies c. copying reputable organizations to ensure a low-cost way to gain legitimacy d. the internalized taken-for-granted values and beliefs that guide firm behavior

the internalized taken-for-granted values and beliefs that guide firm behavior

Who benefits the most from the acquisition premium valued during an acquisition?

the shareholders of the target firm

In the context of acquisitions, which of the following is a resource-based issue faced by synergistic motives? a. Herd behavior b. Enhancement of market power and scale economies c. Chasing fads of M&As d. Self-interested actions

Enhancement of market power and scale economies

Which of the following alliances is a contractual alliance?

Franchising

Which is the best-case scenario for an equity-based alliance? a. High tacitness and high importance to direct organizational monitoring and control b. Low potential as real options and low influence of formal institutions c. High tacitness and low influence of formal institutions d. Low tacitness and high importance to direct organizational monitoring and control

High tacitness and high importance to direct organizational monitoring and control

____ refers to overconfidence in one's capabilities.

Hubris

Which is the best-case scenario for a non-equity-based alliance? a. High tacitness and low influence of formal institutions b. Low potential as real options and low influence of formal institutions c. High tacitness and high importance of direct organizational monitoring and control d. Low tacitness and low importance of direct organizational monitoring and control

Low tacitness and low importance of direct organizational monitoring and control

Which of the following reasons for cross-border acquisition failure is associated with pre-acquisition? a. Failure to address multiple stakeholder groups' concerns b. Poor organizational fit c. Nationalistic concerns against foreign takeovers (political and media levels) d. Clashes of organizational cultures

Nationalistic concerns against foreign takeovers (political and media levels)

_____ are associations between firms that are based on contracts and do not involve the sharing of ownership.

Non-equity based alliances

Which of the following is a disadvantage of alliances? a. Lack of learning race b. Partner opportunism c. Value as real options d. Scale up and scale down of investments

Partner opportunism

In a non-equity-based alliance, which of the following should be high for possible upgrading to equity-based relationships? a. Degree of tacitness b. Importance of direct organizational monitoring and control c. Potential as real option d. Influence of formal institutions

Potential as real option

Which of the following alliances is an equity-based alliance?

Strategic investment