MGT Ch. 9
20. Disney's purchase of Pixar is an example of _____, in which both teams believed that joining the two companies was a good idea.
A friendly acquisition
51. A non-equity alliance has a major drawback which is that it has _____. A. A slower pace of execution B. A lack of trust and commitment C. Strong ties between the firms
A lack of trust and commitment
59. Which type of alliance is most commonly used? A. A non-equity alliance B. An equity alliance C. A joint venture alliance D. A merger
A non-equity alliance
87. _________ occurs when a network exhibits local clusters, each with a high degree centrality. A. A market-domain phenomenon B. A market-domain network C. A small-world phenomenon D. A small-world network
A small-world phenomenon
36. _____ is a voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to a competitive advantage. A. A merger B. An acquisition C. A strategic alliance D. A consortium
A strategic alliance
83. _____ is a space where two organizations are connected to the same organization, but are not connected to one another. A. An organizational disconnection B. A structural disconnection C. A structural hole D. A structural separation
A structural hole
88. Not all networks are successful. In the case of the global network Unisource, which grew to 25 telecom companies, what was the main cause of the demise of the network? A. The global telecom recession of 2001. B. AT&T came to dominate the network and smaller firms exited. C. Vital large knowledge broker firms left the network. D. The network gained a high degree of closure and collapsed on itself.
AT&T came to dominate the network and smaller firms exited.
31. Based on Strategy Highlight 9.1, Kraft's hostile takeover of Cadbury was mainly motivated by Kraft's desire for _____. A. Increased differentiation B. Access to new markets and distribution channels C. Reduction in competitive intensity D. Lower costs
Access to new markets and distribution channels
34. Despite M&A generally destroying rather than creating shareholder value, reasons for mergers include the following EXCEPT _____. A. The desire to overcome competitive disadvantage B. Superior acquisition and integration capability C. Access to new markets and distribution channels D. Principal-agent problems
Access to new markets and distribution channels
17. A(n) ______________ is the purchase or takeover of one company by another.
Acquisition
19. When large, incumbent firms buy up startup companies, the transaction is generally described as a(n) _____.
Acquisition
46. Alliances can be governed by all of the following mechanisms EXCEPT _______. A. Contractual agreements for non-equity alliances B. Acquisitions C. Equity alliances D. Joint ventures
Acquisitions
33. Adidas acquired Reebok because _____. A. Adidas and Reebok wanted to overcome its competitive disadvantage B. Adidas embarked on an acquisitions-led growth strategy C. There were principal-agent problems D. Adidas and Reebok wanted to pursue unrelated diversification
Adidas and Reebok wanted to overcome its competitive disadvantage
73. _____ is a senior, corporate-level executive responsible for high-level support and oversight. A. An alliance manager B. An alliance leader C. An alliance champion D. An alliance planning supervisor
An alliance champion
74. ______ has the technical expertise and knowledge needed for the specific technical area. A. An alliance champion B. An alliance leader C. An alliance manager D. An alliance technician
An alliance leader
75. _____ serves as an alliance process resource and business integrator between the two alliance partners. A. An alliance partner B. An alliance manager C. An alliance leader D. An alliance champion
An alliance manager
77. Pharmaceutical company Eli Lilly is a knowledge leader in alliance management, and the alliances are managed by a three-person team. Which of the following is NOT included in the team? A. An alliance planning supervisor B. An alliance manager C. An alliance leader D. An alliance champion
An alliance planning supervisor
60. _______ describes equity investments by established firms in entrepreneurial ventures. A. Corporate venture capital B. A joint venture C. A strategic alliance D. A non-equity alliance
Corporate venture capital
63. Large firms frequently have dedicated ______ units, such as Johnson & Johnson Development Corporation. A. Corporate venture capital B. Merger C. Alliance management D. Acquisition
Corporate venture capital
65. ________, in which one partner takes partial ownership in the other partner, are less common than contractual, non-equity alliances because they often require larger investments. A. Equity alliances B. Consortia C. Mergers D. Joint ventures
Equity alliances
29. The mergers between Delta and Northwest Airlines, United Airlines and Continental, and Southwest and AirTran _____ in the industry overall. A. Increased system capacity B. Increased differentiation C. Helped them gain access to new markets and distribution channels D. Decreased competitive intensity
Decreased competitive intensity
76. To accomplish effective alliance management, it is suggested that firms create a(n) _____, endowed with its own resources and support staff. A. Partner compatibility B. Dedicated alliance function C. Structure-conduct-performance (SCP) model D. Alliance network
Dedicated alliance function
84. If a firm is highly visible and prominent in the cluster and has access to many channels of information, it has a high _____. A. Degree of centrality B. Degree of freedom C. Degree of linearity D. Degree of separation
Degree of centrality
40. Firms would use strategic alliances to _____ in countries such as Saudi Arabia or China. A. Hedge against uncertainty B. Strengthen competitive position C. Learn new capabilities D. Enter new markets
Enter new markets
61. Corporate venture capital (CVC) investments are _____ investments by established firms in entrepreneurial ventures. A. Merger and acquisition B. Joint venture C. Equity D. Non-equity
Equity
56. Which alliance type is the Renault-Nissan alliance, where Nissan owns 15 percent of Renault? A. Equity alliance B. Integration C. Consortium D. Joint venture
Equity alliance
64. Toyota is using a(n) ________ with Tesla Motors, a designer and developer of electric cars, to learn new knowledge and gain a window into new technology. A. Non-equity alliance B. Merger C. Joint venture D. Equity alliance
Equity alliance
70. _____ and ______ are frequently stepping stones toward full integration of the partner firms either through a merger or acquisition. A. Equity alliances; joint ventures B. Non-equity alliances; joint ventures C. Equity alliances; non-equity alliances D. Equity alliances; acquisition
Equity alliances; joint ventures
62. _________ alliances tend to produce stronger ties and greater trust between partners than ________ alliances do. A. Non-equity; joint venture B. Equity; joint venture C. Joint venture; equity D. Equity; non-equity
Equity; non-equity
44. In a non-equity alliance, firms tend to share _____________ that can be codified. A. Explicit knowledge B. Implicit knowledge C. Tacit knowledge D. Corporate venture capital
Explicit knowledge
26. _____ is NOT one of the drawbacks in horizontal integration. A. Integration failure B. Reduced flexibility C. The increased potential for legal repercussions D. Higher costs
Higher costs- Lower costs would be a benefit in this kind of integration.
21. _____ is the process of acquiring and merging with competitors, leading to industry consolidation.
Horizontal integration
27. Looking through the lens of the structure-conduct-performance (SCP) model, _____ changes in the underlying industry structure favor the surviving firms. A. Horizontal integration B. Vertical integration C. Alliance D. Joint venture
Horizontal integration
30. Firms use _____ to lower costs through economies of scale, and thus enhance their economic value creation and, in turn, their performance. A. Joint ventures B. Mergers C. Vertical integration D. Horizontal integration
Horizontal integration
25. A ______ describes an acquisition in which the target company does not wish to be acquired. A. Horizontal integration B. Merger C. Joint venture D. Hostile takeover
Hostile takeover
72. Which of the following is NOT included in the phase of post-formation alliance management? A. Identify partner compatibility B. Relation-specific investments C. Interfirm trust D. Knowledge-sharing routines
Identify partner compatibility
23. Which of the following is NOT related to horizontal integration?
It concerns the number of activities a firm participates in up and down the industry value chain.
81. Which of the following is NOT related to strategic networks? A. It can provide advantages but also constrain individual members. B. It is a social structure composed of multiple organizations and the links among the nodes. C. It has the ability to effectively manage three alliance-related tasks. D. It has powerful vehicles to execute business and corporate-level strategy.
It has the ability to effectively manage three alliance-related tasks.
55. In a joint venture, all the following is true EXCEPT _____. A. It can entail long negotiations and significant investments B. It is a long-term solution C. It is mostly weak ties D. Managers have double reporting lines
It is mostly weak ties
52. Which of the following is NOT one of the pros in equity alliance? A. It's easy to initiate and terminate. B. It's a strong tie. C. Trust and commitment can emerge. D. It's a window into new technologies
It's easy to initiate and terminate.
54. Which of the following is NOT one of the pros in a Joint Venture? A. It's the strongest tie. B. Trust and commitment is likely to emerge. C. It's flexible. D. It may be required by an institutional setting.
It's flexible.
41. NUMMI, formed between GM and Toyota, was the first ______ in the U.S. automobile industry. A. Joint venture B. Non-equity alliance C. Acquisition D. Equity alliance
Joint venture
57. Hulu, owned by NBC, Fox, and ABC is an example of a(n) _______. A. Joint venture B. Acquisition C. Equity alliance D. Non-equity alliance
Joint venture
86. A _____ allows a firm to find novel solutions to thorny problems because she often has access to diverse knowledge, and can link that information to implement solutions in the form of new products or processes. A. Boundary broker B. Knowledge broker C. Knowledge agent D. Legal affairs medium
Knowledge broker
53. Which of the following is NOT one of the cons in equity alliance? A. Lack of trust and commitment. B. It's less flexible. C. It's slower. D. It can entail significant investments.
Lack of trust and commitment.
45. _______ are contractual alliances in which the participants regularly exchange codified knowledge. A. Licensing agreements B. Distribution agreements C. Joint venture agreements D. Equity alliances
Licensing agreements
85. A small-world phenomenon is a situation in which a network exhibits _____ clusters, each with a high degree of centrality. A. Nonlocal B. Local C. Inter-organization D. Cross
Local
35. _____ is a form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary. A. Managerial pride B. Managerial ego C. Managerial arrogance D. Managerial hubris
Managerial hubris
16. A(n) _________ describes the joining of two independent companies to form a combined entity.
Merger
18. The combining of two firms of comparable size is often described as a(n) _____.
Merger
42. The most common type of alliance is a(n) ______, which is based on contracts between firms. A. Non-equity alliance B. Equity alliance C. Joint venture D. Merger
Non-equity alliance
58. The Microsoft-IBM (non-exclusive) licensing agreement for MS-DOS is an example of a(n) ______. A. Joint venture B. Acquisition C. Equity alliance D. Non-equity alliance
Non-equity alliance
32. The main value of Oracle's acquisition of PeopleSoft is _____. A. Tapping into new distribution channels in international markets B. Reducing their sales forces and lowering the overall cost of distribution C. Optimizing their entire vertical and horizontal value chains D. Lowering competitive intensity in the industry overall
Optimizing their entire vertical and horizontal value chains
67. In the first phase of alliance management, _____ captures aspects of cultural fit between different firms. A. Cultural capacity B. Partner compatibility C. Cultural tolerance D. Partner capability
Partner compatibility
47. A distinctive characteristic of equity alliances is _____. A. A focus on short-term contracts B. Creation of new entity by two or more parent firms C. Partners taking an ownership position D. A focus on long-term contracts
Partners taking an ownership position
43. The most frequent forms of non-equity alliance include the following EXCEPT _______. A. Supply agreements B. Distribution agreements C. Licensing agreements D. Partnership agreements
Partnership agreements
71. Hewlett-Packard is known as having made _____ to create long-term partnerships with several smaller technology firms co-located in Silicon Valley. A. Knowledge-sharing routines B. Relation-specific investments C. Inter-firm trust D. Identify partner compatibility
Relation-specific investments
68. Partner commitment concerns the willingness to make available necessary resources and to accept _____ sacrifices to ensure _____ rewards. A. Short-term; short-term B. Short-term; long-term C. Long-term; long-term D. Long-term; short-term
Short-term; long-term
78. A(n) _____ is a social structure composed of multiple organizations and the links among the nodes. A. Alliance network B. Joint venture network C. Strategic network D. Social network
Strategic network
82. Star Alliance includes such carriers as Air Canada, Air China, Continental Airlines, Singapore Airlines, and others. Star Alliance is an example of _____. A. A merger B. A joint venture C. Strategic networks D. Consortia
Strategic networks
28. Horizontal integration can affect several of Porter's five forces for the surviving firms. Which of the following would this include? A. Increasing the threat of entry B. Increasing rivalry among existing firms C. Strengthening bargaining power vis-à-vis supplier and buyers D. Increasing the threat of substitute products
Strengthening bargaining power vis-à-vis supplier and buyers
50. Joint venture alliances are where ___________ knowledge is exchanged. A. Explicit B. Tacit C. Implicit D. Tacit and explicit
Tacit and explicit
66. Equity alliances allow for the sharing of ______ that cannot be codified. A. Tacit knowledge B. Explicit knowledge C. Implicit knowledge D. Corporate venture capital
Tacit knowledge
22. The following characteristics are all related to acquisitions EXCEPT _____.
The combining of firms only of comparable size
69. The third phase in a firm's alliance management capability concerns _____. A. The choice of an appropriate governance mechanism B. Alliance design C. The ongoing management of the alliance D. Partner selection
The ongoing management of the alliance
37. According to _____, critical resources and capabilities frequently are embedded in strategic alliances that span firm boundaries. A. Interorganizational competitive advantage B. The relational view of competitive advantage C. Comparative advantage D. Absolute advantage
The relational view of competitive advantage
79. Which of the following is NOT related to strong ties? A. A trusting relationship buildup through interaction. B. Rapid decision making. C. It may contain an equity-sharing element. D. The transfer of explicit knowledge only.
The transfer of explicit knowledge only.
80. Which of the following is a key characteristic of weak ties? A. A trusting relationship buildup through interaction. B. The transfer of explicit knowledge only. C. It may contain an equity-sharing element. D. Rapid decision making.
The transfer of explicit knowledge only.
38. The reasons firms enter into alliances include all of the following EXCEPT _____. A. To enter new markets B. To increase competitive intensity C. To hedge against uncertainty D. To learn new capabilities
To increase competitive intensity
39. Apple orchestrated a web of strategic alliances with publishing houses to challenge Amazon's early lead in the delivery of e-content. This was due to which of the following reasons listed? A. To hedge against uncertainty B. To access critical complementary assets C. To learn new capabilities D. To strengthen competitive advantage
To strengthen competitive advantage
48. Which of the following is NOT one of the pros of a non-equity alliance? A. It's fast. B. Trust and commitment. C. It's flexible. D. It's easy to initiate and terminate
Trust and commitment.
49. Which of the following is one of the benefits of an equity alliance? A. It's flexible. B. It's fast. C. Trust and commitment. D. It may be acquired by an institutional setting.
Trust and commitment.
24. Which of the following is NOT considered as the benefit of horizontal integration? A. reduction competitive intensity B. increased differentiation C. improvement of supply chain coordination D. access to new markets and distribution channels
improvement of supply chain coordination