MGMT 466 Final (chapter 7 (1-30),8 (31-60), 9 (61-90), 10 (90-120), 12 (121-150), part of 11)

Shareholder activists are very unhappy with a certain board of directors' recent pattern of decisions. The activists believe they need to be given more decision-making capabilities, have their voices heard, and have the opportunity to nominate another board member. What should the shareholder activists propose? a. A proxy vote b. A hostile takeover c. A coup d'état d. A dumping of shares to drop stock price and force actions by the board

a

What is the main reason why bribery is a major issue for governments, especially countries with emerging economies? a. Bribery tends to limit entrepreneurial activity that could help a country's economy grow. b. Bribery negatively impacts the performance of firms by eating up profits. c. Bribery is impossible to monitor. d. Bribery makes firms less competitive, which negatively impacts a country's economy.

a

What is the market for corporate control? a. An external governance mechanism that is active when a firm's internal governance mechanisms fail b. A term that describes the power that purchasers have when buying shares of stocks c. A set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations d. The pool of prospects who are qualified to become CEO

a

Which of the following characteristics can be used to describe licensing as an entry mode? a. Low risk b. Shared costs c. Maximum control d. Time consuming

a

A technology firm has had some issues in its decision making. The company is the leader in innovation and is always ahead of the curve on technological advances. But the business struggles with operations and marketing decisions. The leadership team is the same group of five people that started in a garage after meeting in a computer science class. What would you suggest to this company? a. Create a more homogeneous top management team. b. Create a more heterogeneous top management team. c. Leave all decision making to a single leader. d. Continue operations as is.

b

Not all CEO changes are successful. Which one of the following scenarios has the greatest chance of failure? a. Hiring an external CEO b. Hiring an international external CEO c. Hiring an international internal CEO d. Hiring an internal CEO

b

The four determinants of national advantage are factors of production; demand conditions; firm strategy, structure, and rivalry; and: a. nature and size of domestic market. x b. related and supporting industries. c. factors of distribution. d. unrelated industries.

b

The need to create _____ for stakeholders is a primary influence on a firm's decisions to engage in merger and acquisition activity. a. growth b. value c. profitability d. shares

b

What are the concepts that affect attitudes toward corporate governance in Japan? a. Friendship, honor, loyalty b. Obligation, family, consensus c. Service, responsibility, modesty d. Integrity, responsibly, respect

b

Why are corporate governance mechanisms important to foreign investors? a. To prove that the organization being invested in is legitimate b. To protect their investments c. To prevent exposure for investors who might otherwise place their money in a legal gray area d. To ensure that the country's government is in control of the business, which protects shareholders' investments

b

_____ generally leads to more positive outcomes in both the short and long term. a. Downsizing b. Down scoping c. A leveraged buyout d. A non leveraged buyout

b

_____ is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. a. Strategic power b. Strategic leadership c. Influence d. Teamwork

b

_____ organizational cultures constantly use processes to anticipate future market needs and to satisfy them before competitors learn how to do so. a. Competitively aggressive b. Proactive c. Innovative d. Risk-averse

b

A car manufacturer and its partner in a cooperative strategic alliance have very minimal contract terms. Both firms are hoping to learn from each other to develop new, value-creating, innovative products. By implementing very few contractual terms in their alliance, the two firms are managing their cooperative strategy using which approach? a. Cost maximization b. Cost minimization c. Opportunity maximization d. Opportunity minimization

c

A firm is attempting to break into an international market. It easily establishes alliances in that foreign market and is able to successfully expand. Which of the following has helped the firm with its transition? a. Intellectual capital b. Innovations c. Social capital d. Corporate culture

c

Christopher is the CEO of a firm that another company is trying to acquire. The success of Christopher's company has declined dramatically over recent years. Christopher knows that the acquisition could help save the shareholders and other stakeholders from the turmoil that would ensue if the company went bankrupt. However, this is Christopher's only line of income for his family. He decides to defend his company from being taken over to help secure his position. Which defense strategy would you recommend be implemented that would benefit all stakeholders? a. Capital structure change b. Charter amendment c. Golden parachute d. Litigation

c

In what type of strategy do several firms form multiple partnerships in order to reach their shared objectives? a. Complementary strategic alliance b. Cross-border strategic alliance c. Network cooperative strategy d. Uncertainty reducing strategy

c

Lisa is the CEO of her company and has a distinct leadership style. In order to empower her employees, she delegates responsibility for many things to them, and she strengths their capabilities through continuous training. She has built a team culture in which the team and the company are more important than personal interests. What type of manager is Lisa? a. Micromanager b. Performance leader c. Transformational leader d. Laissez faire

c

What is quite possibly the most critical skill for a strategic leader to possess? a. The ability to create a context in which stakeholders can perform efficiently b. The ability to think innovatively c. The ability to respond to changes in the external environment d. The ability to attract and manage human capital

d

When a firm makes continual improvements to the processes used to produce, sell, distribute, and service its products across country borders, its ability to learn how to reduce costs and increase the value of its products for its customers is enhanced. The firm is: a. increasing its market size. b. achieving strategic competitiveness. c. developing economies of scale and learning. d. gaining a local advantage.

c

Which is an alternate definition for "poison pill"? a. A contract between the target firm and the potential acquirer specifying that the acquirer will not purchase additional shares of the target firm for a specified period of time in exchange for a fee paid by the target firm b. The repurchase of the target firm's shares of stock that were obtained by the acquiring firm at a premium in exchange for an agreement that the acquirer will no longer target the company for takeover c. A strategy whereby a company decides to increase the number of overall shares, which will both dilute the hostile company's shares and increase the cost of the company overall, making the company less appealing to take over d. A lump-sum payment of cash that is given to one or more top-level managers when the firm is acquired in a takeover bid

c

Which of the following is a potential benefit of establishing CEO duality? a. Higher performance b. Faster response to change c. Increased crisis management d. Higher CEO monitoring

c

A _____ is composed of individuals who are responsible for making certain a company uses the strategic management process, especially to select and implement strategies. a. Strategy implementation team b. Strategy department c. Business development team d. Top management team

d

Do German firms face agency problems to the same degree as U.S. firms? a. Yes, German firms have the same exact issues and difficulties as U.S. firms. b. Yes, German agencies have the same structures as U.S. agencies. c. No, many German firms are publicly owned by the government and its citizens. d. No, many German firms are managed and owned by the same individual.

d

Jordan Brady just purchased an additional 2,000 shares of Singleton Inc., which means he now possesses about 6 percent of the firm's issued shares. This makes Jordan a(n): a. insider. b. institutional owner. c. angel investor. d. large-block shareholder.

d

Many companies encourage employees to pursue entrepreneurial opportunities. While this could cause companies to lose top talent, why may companies want to foster this behavior? a. To boost employee satisfaction b. To have employee downtime be constructive c. To increase their work efficiency d. To spark innovation

d

Support from which of the following sources is crucial to successfully implementing a new organizational culture? a. CEO b. Top management c. Middle-level managers d. All of these

d

Why is it challenging for firms using international strategies to effectively use executive compensation as a mechanism for corporate governance? a. Communication barriers b. Cultural differences in expectations c. Differences in currency conversion rates d. The diversity and complexity of compensation plans across a corporation

d

Why would a company want to have a heterogeneous top management team? a. To make it easier to cohesively implement strategies b. To increase the speed of decision making c. To ensure the CEO does not have too much power d. To make better decisions

d

_____ has _____ success as a hostile takeover defense strategy and _____ effects on shareholder wealth. a. A golden parachute; high; positive b. A standstill agreement; low; positive c. A capital structure change; high; inconclusive d. Greenmail; medium; negative

d

A U.S.-based auto manufacturer is founded to focus on environmentally friendly smart cars. As it expands, it sets its sights on operating in France, where the population highly values compact "green" cars. By implementing an international strategy in France, the company will hope to gain: a. increased market size. b. increased economies of scale and learning. c. development of a competitive advantage through location. d. decreased market size.

a

A common reason firms enter into cross-border strategic alliances is: a. complete control over their foreign operations. b. limited domestic growth opportunities and foreign government economic policies. c. abundance of domestic growth opportunities and foreign government economic policies. d. help from domestic partners from an operational perspective.

b

A strategy through which the firm sells its goods or services outside its domestic market is called a(n) _____ strategy. a. local b. international c. national d. domestic

b

Managerial opportunism occurs when managers: a. seek the counsel of internal or external advisors. b. make decisions to satisfy their own self-interests. c. make strategic decisions to improve performance. d. agree to serve on other firms' boards of directors.

b

A company is looking to expand internationally in the least costly way as possible. Which entry mode should it choose? a. Licensing b. Exporting. c. A greenfield venture d. A cross-border acquisition

a

A CEO wants to implement a new strategy for her firm. Previously, the company's strategy was differentiation and focused on having the highest quality product. Now, instead of increasing the quality of the product, she wants to maintain quality but drive down cost per unit. What term defines this scenario? a. Strategic change b. Strategic leadership c. Organizational change d. Industry shift

a

A company has a tool to monitor its progress. This tool analyzes the company's finances and its strategy. The executives use this tool to understand how the firm responds to shareholders, how customers view the firm, what processes to focus on to successfully use its competitive advantage, and how it can use innovation to improve its performance. What is this a description of? a. Balanced scorecard b. Control dashboard c. Business analytics d. Corporate monitoring

a

A fashion apparel company has seen much success over the years. For almost a decade, it seems to have perfected the formula for success. The tenured CEO of 12 years has developed a strategy, and this success has become her career "legacy." Recently, the company has seen its growth slow. The year-to-year profit growth is also leveling out. The current CEO has stated that it is a bump in the road, and that changing strategy would be rash. What is the diagnosis of this CEO's mind-set? a. Risk averse b. Charismatic c. Risk favorable d. Denial of the circumstances

a

A firm can cope with differences in governmental policies and practices in the host country in which it has implemented an international strategy by: a. forming a strategic alliance. b. setting up a wholly owned subsidiary. c. setting up in a host country where governmental policies and practices are similar to the firm's home market. d. establishing clear lines of communication between the firm and the host country's government.

a

A firm owns a wide variety of consumer goods businesses. Its portfolio includes a grocery store, shoe store, and gas station. How might the diversification of its businesses impact its ability to have successful acquisitions? a. Managers are unequipped to evaluate the success of businesses on a deeper level than finances. b. Managers are too focused on new acquisitions to maintain the success of the firm's current businesses. c. The firm is used to service-based businesses. d. Managers have been successful at juggling several different businesses.

a

A large car manufacturer has cut all but two of the employees in its marketing department to save money and return to profitability. What is the likely long-term outcome of this move? a. Loss of human capital and lower performance b. Loss of human capital and higher risk c. Higher performance and higher risk d. Lower performance and higher risk

a

A semiconductor company has established a plant overseas in South Africa, where the power grid is somewhat unreliable. Which of the following economic risks is most relevant to the circumstances of the semiconductor company? a. Infrastructure b. Potential naturalization of private assets c. Lack of natural resources d. Security risk

a

A strategy through which a firm collaborates with one or more companies to expand its operations is called: a. corporate-level cooperative strategy. b. diversifying strategic alliance. c. synergistic strategic alliance. d. cross-border strategic alliance.

a

An entrepreneur just started a business and decides that she needs a team to help this new business grow. Which of the following groups of individuals, with their specific backgrounds, would give the entrepreneur a heterogeneous top management team? a. 1 Finance, 1 Marketing, 1 Technology b. 3 Finance c. 2 Marketing, 2 Finance d. 3 Technology, 1 Finance

a

An international diversification strategy creates the potential for firms to do all of the following EXCEPT: a. sustain a competitive advantage without the need to continually upgrade it. b. generate the resources required to sustain a large-scale research and development (R&D) operation. c. achieve greater return on their innovations. d. reduce the often-substantial risks of R&D investments.

a

Based on the various long-term outcomes, which restructuring strategy is the least recommended to implement? a. Downsizing b. Leveraged buyouts c. Down scoping d. Corporate restructure

a

Because the resources and relationships among partners is complex, most R&D strategic alliances are what type? a. Equity b. Nonequity c. Cross-border d. Joint venture

a

Which of the following is NOT a form of executive compensation? a. Salaries b. Stock performance c. Stock options d. Stock awards

b

When a target firm does not solicit an acquiring firm's bid, it is known as a(n): a. acquisition. b. merger. c. takeover. d. cross-border acquisition.

c

Based on what you know about the various cooperative strategies, which is the most costly to implement? a. Corporate-level cooperative strategy b. Business-level cooperative strategy c. Strategic alliance d. Network cooperative strategy

a

Disney bought Pixar in 2004 to extend and begin a new partnership in its renewed focus on animation. In the deal, Steve Jobs, the CEO of Pixar at the time, vowed to preserve the independent nature of Pixar. Since then, the two have put out hits such as the Toy Story, The Incredibles, and Nemo franchises. This partnership is an example of a(n): a. merger. b. acquisition. c. joint venture. d. strategic alliance.x

a

Environmental trends, such as liability of foreignness, can impact a firm's choice of _____ strategy. a. international corporate-level b. national c. domestic d. business-level

a

Germany is known for its excellent technical training system, which has a strong emphasis on continuous product and process improvements. If Germany did not have such a system, it would lack which of the following determinants of national advantage? a. Firm strategy, structure, and rivalry b. Demand conditions c. Related and supporting industries. x d. Nature and size of domestic market

a

How is an opportunity maximization approach a more effective alternative to the cost minimization approach of managing cooperative strategy? a. Opportunity maximization comes with a high level of trust between partners, which leads to an increased likelihood of success. b. Opportunity maximization enables firms to decrease their cost structure, which leads to an increased likelihood of success. c. Opportunity maximization leads to more definite contractual obligations for each partner, which leads to an increased likelihood of success. d. Opportunity maximization allows firms to take advantage of each other's resources without limitations imposed by one another.

a

If IKEA chose to implement a multidomestic strategy in which it practiced global efficiency and local responsiveness instead of its current successful global strategy, which of the following would be the most likely outcome? a. It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices. b. It would need less time to open stores in other countries based on speedy research of prime locations. c. Its products would stay the same, with the quirky Swedish selection IKEA currently offers. d. Its products would be even harder for customers to build themselves upon purchase.

a

If firms did not participate in cross-border strategic alliances, what might happen for firms expanding internationally? a. Firms would be more successful in entering foreign markets because they would be minimally influenced by other firms. b. Firms would be more successful in their domestic markets because they would not be as concerned with establishing themselves in a foreign market. c. There would be no measurable impact if firms did not implement cross-border strategic alliances. d. Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter.

a

In order to remain relevant, firms must explore opportunities to maintain or increase their competitive advantage at all times. In doing so, some opportunities may be out of reach of the firm's normal capabilities. By entering into strategic alliances, how can a firm achieve competitive advantage? a. Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage. b. Both firms can achieve competitive advantage over one another, even if they are operating in the same product market, by using each other's most valuable resources. c. Both firms can behave opportunistically towards one another to keep the other from gaining competitive advantage. d. One firm can gain competitive advantage by taking advantage of its partner's resources and giving its partner less valuable resources.

a

In which of the following scenarios would a firm choose to downsize rather than down scope? a. A firm has excess resources after acquiring another firm. b. A firm wants to cut business units that are unrelated to its core business. c. A firm wants to correct managerial mistakes. d. A firm wants to build resources and expand operations

a

Susan is worried that her company's poor performance is reflecting badly on her performance as CEO. She thinks she may lose her position, receive a cut to her salary, or be seen by her peers as incompetent and ineffective. What is another term for Susan's concerns? a. Managerial employment risk b. Unemployment risk c. Failure to perform d. Negative performance reviews

a

The board of directors is deciding who the new CEO should be for a company. It has narrowed the candidates down to two highly credentialed individuals. Steve is known to be harsh but fair. He is a proven CEO and has driven companies to success quickly. Kim, the other candidate, is known to be a "people person" with a high emotional intelligence. In the past she has demonstrated success building company culture to achieve great results. Knowing this, which candidate should the company choose if it is seeking to motivate its employees? a. Kim, because she is a transformational leader b. Kim, because she is easier to like c. Steve, because he is known to be successful d. Steve, because a CEO needs to be harsh to be effective

a

The main objective of the collaborating firms in a cooperative strategy is to: a. increase competitive advantage. b. neutralize each other's competitive advantage. c. decrease the other's competitive advantage. d. decrease both partners' competitive advantage.

a

Two American appliance firms have equal share of the market. U.S. Elite, one of the firms, has decided to implement an international strategy in China. The firm is looking to grow manufacturing and start selling internationally while increasing its competitive advantage in the process. Why is a cross-border strategic alliance the most effective option for U.S. Elite? a. The alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market. b. The alliance keeps U.S. Elite from sharing resources with Chinese manufacturers to help them with manufacturing. c. The alliance gives U.S. Elite minimal responsibility for its foreign operations in China. d. The alliance gives the Chinese manufacturer sole control of U.S. Elite operations.

a

Two approaches used to manage cooperative strategies are: a. cost minimization and opportunity maximization. b. cost maximization and opportunity maximization. c. cost minimization and opportunity minimization. d. cost maximization and opportunity minimization.

a

Why would a firm in a standard-cycle market want to pursue a strategic alliance? a. To gain access to a restricted market b. To speed up new market entry c. To share risky R&D expenses d. To overcome trade barriers

d

What are the advantages of choosing a vertical complementary strategic alliance versus a horizontal complementary strategic alliance? a. Firms can partner to share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain. b. Firms can partner to share resources for the same parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain. c. Firms can prevent their partners from having access to their most valuable resources, which helps the firms prevent opportunistic behavior by their partners. d. A firm can give its partner access to its most valuable resources, which enables both partners to maximize its success.

a

What are the three basic benefits that firms can enjoy by successfully using international strategies? a. Increased market size, increased economies of scale and learning, and development of a competitive advantage through location b. Decreased market size, decreased economies of scale and learning, and development of a competitive disadvantage through location c. Increased market size, decreased economies of scale and learning, and development of a competitive advantage through location d. Decreased market size, increased economies of scale and learning, and development of a competitive disadvantage through location

a

What is an international diversification strategy? a. A strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations or markets b. An international strategy through which the firm seeks to achieve both global efficiency and local responsiveness c. An international strategy in which strategic and operating decisions are decentralized to the strategic business units in individual countries or regions for allowing each unit the opportunity to tailor its products to the local market d. A strategy through which the firm sells its goods or services outside its domestic market

a

What tends to happen when the board of directors is involved in shaping the strategic direction of a firm? a. The firm's performance improves. b. There is a high rate of turnover among top-level managers. c. There is a high rate of turnover among middle-level managers. d. The firm is unable to respond quickly to market changes.

a

Which of the following best explains the underlying premise of the balanced scorecard? a. Firms jeopardize their future performance when they emphasize financial controls at the expense of strategic controls. b. Managers tend to make self-serving decisions when they focus on the long term. c. Focusing on long-term goals rather than short-term goals generally leads to higher performance. d. Financial control encourages lower-level managers to make decisions that incorporate moderate and acceptable levels of risk.

a

Which of the following involves specifying the vision and the strategy to achieve the vision? a. Determining strategic direction b. Corporate governance c. Strategic planning d. Vision planning

a

Which of the following is the result of a merged firm that maintains a low to moderate debt position? a. Lower financing cost b. Higher risk c. Inevitable trade-offs that are associated with high debt d. Maintenance of long-term competitive advantage in markets

a

Which of the following statements about the German two-tiered board structure is true? a. Proponents of the German structure suggest that it helps prevent corporate wrongdoing and rash decisions by "dictatorial CEOs." b. The corporate governance practices in Germany make it easier to restructure companies more quickly. c. All German firms are required to have a two-tiered board structure. d. Critics of the German structure maintain it allows inside managers to dominate a firm's board of directors.

a

Which of the following statements does NOT describe a challenge associated with the integration process of an acquisition? a. Meld two or more similar businesses' cultures b. Link different financial and control systems c. Build effective working relationships d. Determine the leadership structure and those who fill it for the integrated firm

a

Your company, which transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country. Which of the following findings in the political risk analysis would indicate that the company should NOT sign the contract? a. Potential nationalization of invested assets b. Devaluation of the country's currency. c. Uncertain prices for critical commodities d. High government debt

a

A CEO recently led her company through a period of significant growth and profitability. Her structure change, new strategy, and other decisions caused the company to grow beyond expectations. As a result of her efforts, the CEO and her company won several awards and received press in magazines such as Forbes, Inc., and Chief Executive. But recently her decisions have been poor, which may have to do with lack of analysis and attention to the details of projects put before her. When her team suggests alternatives, she pushes back. What most likely happened to the CEO? a. Power and influence b. Overconfidence c. Overexertion d. Too much span of control

b

A convenience store chain recently implemented an international diversification strategy by opening stores in Canada, Australia, and several South American countries. As a U.S.-based company, the chain is still actively learning how to manage its new geographical diversification. Six months in, the firm has seen a drop in its return on investment. Should executives be concerned for the firm's future? a. Yes, the firm should see a quick increase in return on investment since there are more stores for profits to be made from. b. No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created. c. No, the firm should see its return on investment drop and then increase gradually to match its return on investment before implementing an international diversification strategy. d. Yes, the firm should have kept its previous rate of return on investment before implementing an international diversification strategy

b

A firm in France that makes locally made designer loafers has decided to expand its operation to the United States to meet the "Made in America" market demand. In order to do so, the firm has decided to partner with a United States shoe manufacturer to produce the loafers. What type of strategic alliance would best fit the partnership the firm is looking for? a. Synergistic b. Diversifying c. Franchising d. Business

b

A firm is struggling with the behavior of its employees. There have been reports of ethically questionable behavior. When asking some employees about their motives for these actions, a common theme was uncovered. They were cutting corners to hit their performance numbers. The firm now wants to focus on ethical behavior and shift organizational culture. The company distributes emails from HR about appropriate behavior and ethics and hosts a series of office workshops on ethics. This firm is attempting to become a(n) _____ culture. a. performance-based b. values-based c. self-serving d. ethics-based

b

A firm seeks to implement an international strategy in a location with which it is unfamiliar. The firm is unaware of the economics and cultural preferences of the location. The firm is influenced by which of the following environmental trends? a. Insensitivity to foreign culture b. Liability of foreignness c. Regionalization d. Localization

b

A firm whose operations are human-capital intensive would most likely use which of the following entry modes? a. Licensing. b. A cross-border acquisition c. Exporting d. A greenfield venture

b

A popular juniors clothing store features young designers and has been very successful. To gain strategic competitiveness, the clothing store frequently acquires young social-media sensations' designs and brings their designs to life in the store. What type of acquisition is the store using to increase its strategic competitiveness? a. Unrelated acquisition b. Related acquisition c. Cross-border acquisition d. Vertical acquisition

b

A publishing company publishes books, magazines, and scholarly journals. It is making far more money from its magazines and journals, so the firm has decided to down scope its book business, which will enable it to focus exclusively on new developments and growth in magazines and journals. What is the long-term outcome of the firm's decision? a. Lower performance b. Higher performance c. Reduced workforce d. Higher risk

b

A small software firm has formed a cooperative strategic alliance with a startup company to develop the startup's product, an app for smartphones. The startup promised to connect the software firm with other startup companies looking for software services. So far, the startup has not followed through, while the software firm has neared completion of its portion of the app development. Based on this scenario, which risk has manifested in the alliance between the software firm and the startup company? a. The software firm has misrepresented its resources to the startup. b. The startup has failed to make its resources available to the software firm. c. The software firm has failed to make its resources available to the startup. d. The startup is acting opportunistically towards the software firm.

b

A tech startup is exploring ways to develop an app that allows patients to visit their doctors virtually. The startup is partnering with a local practice to compile data, including symptoms, common ailments, and clinical expertise, to be accessible through the interface of the app. The company anticipates the project will take two to three years. What type of business-level strategy best fits this partnership? a. Competition-reducing strategy b. Vertical complementary strategic alliance c. Uncertainty-reducing strategy d. Competition response strategy

b

An institution that holds 15 percent of shares in a company in order to be a powerful governance mechanism is an example of a(n): a. internal shareholder. b. institutional owner. c. external shareholder. d. corporate sponsor

b

Donna is the retired CEO of a large hospital chain. Although her former employer never did business with MediScan, a medical device manufacturing firm, she has been asked to sit on MediScan's board of directors. In this context, Donna is a(n): a. insider. b. outsider. c. related outsider. d. large-block shareholder.

b

Gina is a transformative leader. She wants as much input from others as possible and has developed a top management team. The team is composed of the brightest minds with highly diverse backgrounds. However, the team sometimes has trouble cohesively implementing strategies and making decisions in a timely manner. As a result, the company is losing its competitive advantages. What does Gina need to change? a. Create a homogeneous top management team. b. Cut the number on her top management team. c. Apply hard deadlines to decisions. d. Realign strategy.

b

Greg is the CEO of a leading company in the consumer packaged goods industry. He is trying to grow his company for personal gain and wealth. However, Greg sees that his company has an opportunity to break into the chemical industry. He has decided to invest free cash flow into acquiring small chemical companies that have the potential for growth if funded properly. Shareholders are not happy because they are concerned about: a. underdiversification. b. overdiversification. c. diversification. d. segmentation.

b

Interactions among the four determinants of national advantage influence a firm's: a. ability to be successful in its domestic market. b. choice of international business-level strategy. c. choice of national business-level strategy. d. competency within its domestic market.

b

Kevin is on the board of directors of a local company and has become concerned with a situation that came to his attention. The board is considering electing the current CEO as chair of the board. Does Kevin have a reason for concern? a. Yes, if Kevin knows the CEO and doesn't like his or her personality. b. Yes, as the CEO will not be able to be forced out if his or her performance becomes unacceptable. c. No, because the board will be sure to elect the best individual to the chair position, regardless of current title. d. No, because a single individual as CEO and chair of the board has proven to be very successful in the past.

b

Melissa is the CEO of her company and has to make a business decision. She is faced with a scenario in which she can please one group of stakeholders, or all of them minimally. What is Melissa's most likely action? a. To please the suppliers, as they are the highest priority b. To please as many stakeholders as possible, because if stakeholders are not minimally satisfied, they will give support to another company c. To please the employees, because a happy workforce will have a ripple effect on the rest of the value chain d. To determine which action will result in higher executive compensation and make that choice

b

One of the biggest economic risks of international strategy that can reduce the value of a firm's assets is: a. security risk. b. currency fluctuations. c. sufficient access to electrical power. d. the potential nationalization of invested assets.

b

Risks associated with cooperative strategies include a partner's failure to present its resources to the other, as well as one firm acting opportunistically towards the other with the use of the partner's resources. How can these two risks be a result of each other? a. If a firm acts fairly towards its partner, the partner might misrepresent its resources in order to keep the firm from gaining any more access. b. If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information. c. If one firm presents its resources first, the other will not present its resources to compete against the partner. d. When one firm doesn't present its resources, it is likely that it is going to try to act opportunistically towards its partner

b

SmallTown BigWorld, Inc. created a sports game that is customized for many different locations. The company has expanded its local markets in many locations in several countries. Although the company is doing well, it has several problems. Because each location does so much on its own, the corporation doesn't share knowledge internally because of the differences across markets, decentralization, and the different international business-level strategies employed by local units. It has not been able to develop economies of scale. Which of the following strategies is the company using? a. Transnational strategy b. Multidomestic strategy c. Global strategy d. International strategy

b

Southern Poultry, a large poultry-growing operation, has agreed to be acquired by its' best customer, Chuck's Chicken 'N Biscuits, a popular regional chain of fast-food restaurants, to ensure the long-term health of the operation. This type of acquisition is called: a. a takeover.x b. a vertical acquisition. c. a horizontal acquisition. d. a merger.

b

The complexities of cooperative strategies increase the challenge of effectively implementing them and may contribute to alliance: a. success. b. failure. c. partnerships. d. extensions.

b

The short-term outcomes of downscoping include reduced debt costs and an emphasis on strategic controls. What is the long-term outcome that results from the short-term outcomes? a. Higher risk b. Higher performance c. Lower performance d. Loss of human capital

b

The strategy through which a firm changes its set of businesses or its financial structure is called: a. downsizing. b. restructuring. c. an acquisition. d. a merger.

b

Two specialty craft stores have just been bought by craft giant Ultimate Crafts. By rebranding the small stores, Ultimate Crafts' executives hope to gain strategic competitiveness in what way? a. Diversification b. Market power c. Developing new capabilities d. Decreasing debt

b

Upon reaching saturation level in the U.S. market, a fitness firm with an activity tracker decides to expand its service internationally, where its technology is superior. This illustrates which of the following incentives for implementing an international strategy? a. Searching for needed resources to help improve these technological capabilities.x b. Using rapidly developing technologies in other countries c. Competing with similar services in other countries d. Gaining classification as an international company

b

What does it mean when an acquisition is unable to achieve synergy? a. When a firm finds itself in extraordinary debt as the result of acquiring another firm b. When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses c. When a firm has too many business units and no clear method of measuring their performance d. When a firm becomes so large it does not have the economics necessary to manage the complexity of the organization made by the acquisition

b

What is explicit collusion? a. A form of competition-reducing strategy in which several firms indirectly coordinate their production and pricing decisions by observing each other's actions and responses b. A form of competition-reducing strategy in which two or more firms negotiate directly to determine the amount to produce and the prices for the product c. A form of competition-reducing strategy in which firms do not take competitive actions against rivals d. A form of competition-reducing strategy in which firms share some of their resources from different stages of the value chain to create competitive advantage

b

What is the definition of ownership concentration? a. The ratio of owners and their specialty fields of training to the industry of the company b. The number of large-block shareholders and the total percentage of the firm's shares they own c. The total number of shareholders of a company d. The percentage of shareholders who are internal versus external

b

What is the term for a company's options outside the firm for managerial positions? a. Job market b. External managerial labor market c. Resignation market d. Internal managerial labor market

b

When a company in a cooperative strategy is implementing mechanisms to ensure that its partner does not use its trade secrets to benefit outside the relationship alone, a firm is practicing which cooperative strategy management practice? a. Cost maximization b. Cost minimization c. Opportunistic minimization d. Opportunity maximization

b

Which of the following is NOT a managerial function for top-level executives during the acquisition process? a. Searching for viable acquisition candidates b. Identifying and pursuing other opportunities with external stakeholders c. Preparing for negotiations d. Managing the integration process after the acquisition

b

Which of the following statements best explains how shareholders are affected by acquisitions? a. Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn below-average returns as a result of acquisitions. b. Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn returns that are close to zero as a result of acquisitions. c. Acquired firms' shareholders often earn below-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn above-average returns as a result of acquisitions. d. Both acquired and acquiring firms' shareholders often earn above-average returns as a result of acquisitions.

b

Why would firms choose to use complementary strategic alliances? a. To reduce competition b. To launch competitive responses to their competitor's actions c. To expand operations d. To focus on long-term product development and distribution opportunities

d

A clothing manufacturer that sells wholesale to small fashion boutiques has just expanded its operations internationally to South Korea. In that country, labor costs and various materials are cheaper. If South Korea contemplates closing its border to importing and exporting because of an international military conflict, the clothing manufacturer would suffer as a result of which of the following environmental risks to its international strategy? a. Economic risks b. International risks. c. Political risks d. Cultural risks

c

A large car manufacturer has acquired its tire supplier through a vertical acquisition. Unfortunately, instead of realizing economies of scale by adding to its value chain, the manufacturer has had a very small return on its investment. The firm is struggling to prioritize its efforts between manufacturing and acting as a tire supplier for outside businesses. With so much production power and so little use of it, the manufacturer's operations have become ineffective. What common problem of acquisitions has the manufacturer encountered? a. Inability to achieve synergy b. Too much diversification c. Too large d. Inadequate evaluation of target

c

A stable alliance network is formed primarily to do what? a. Explore new ideas that may lead to product innovation b. Allow partners to develop new markets c. Exploit economies of scale and/or scope that exist between the partners. d. Enable partners to gain entry into new markets

c

A strategy in which firms collaborate to achieve a shared objective is known as: a. corporate strategy. b. a strategic alliance. c. cooperative strategy. d. international strategy.

c

After a recent round of share releases, many individuals bought up shares and reduced the number of large-block shareholders. The company's managers recently had the luxury of performing without much interference or monitoring by their shareholders. The managers are now engaging in risky strategic tactics that may not be in the best interest of shareholders. What type of ownership does this company have? a. Universal ownership b. Diverse ownership c. Diffuse ownership d. Hostile ownership

c

An American sandal company has completely saturated its local market. The sandals, which are made of specially molded rubber soles that minimize soreness associated with unsupportive soles, have started to build a demand in Australia, a market the company is unfamiliar operating in. Why might the sandal company enter into a cooperative strategy with an Australian firm? a. To explore export options from the United States to Australia b. To give responsibility of the company's expansion to the Australian firm c. To share unique resources to design, produce, and launch the product in Australia d. To take advantage of the Australian company in a hostile takeover

c

An appliance company is considering entering the global market. It is unsure of what steps to take and is looking for a cost-effective method to work with a company that is already in the hosting country. Based on these preferences, which of the following modes of entry should the company choose? a. Exporting b. Setting up a greenfield venture c. Entering into a strategic alliance d. Making a cross-border acquisition.

c

An automotive company has entered into a strategic alliance with a motor manufacturer. The automotive company is depending on the motor manufacturer's expertise and experience in developing high horsepower motors for small sports cars. The automotive company holds a 60 percent stake in the partnership, and the motor manufacturer holds 40 percent. The strategic alliance between the two firms is best described as a(n): a. cooperative strategy. b. joint venture. c. equity strategic alliance. d. nonequity strategic alliance.

c

As web development continues to grow as a career field, more and more education options are being created for interested mid-career professionals. A software firm that has developed online courses for people to learn web development has decided to partner with a popular computer manufacturer to build a laptop with a special keyboard and interface elements for web development education. The idea came after a competitor implemented a similar strategy to develop a smartphone interface compatible with educational software. Which of the following is a motive for the education and computer firms to implement a cooperative strategy? a. To minimize their rivals' returns b. To gain a higher a price point than their rivals c. To outperform rivals with a similar idea d. To neutralize competition with rivals

c

Corporate governance is: a. a group of elected individuals whose primary responsibility is to act in the owners' best interests by formally monitoring and controlling the firm's top-level managers. b. a means by which firms collaborate to achieve a shared objective. c. the set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations. d. defined by the number of large-block shareholders and the total percentage of the firm's shares they own.

c

How can firms implementing an international strategy become limited by diversification? a. Too many consumer cultures start to mirror one another as customers mold themselves to demand the same thing as a result of international diversification of the same products. b. Eventually, too many firms implement an international diversification strategy for similar products, making the market too saturated for any firm to be successful. c. Greater geographic dispersion across country borders results in increased costs of coordination between units and distribution of products. d. As a firm becomes more geographically dispersed, it loses its ability to keep track of its operations in terms of organization and costs.

c

In which of the following international strategies are strategic and operating decisions decentralized to the strategic business units in individual countries or regions in order to allow each unit the opportunity to tailor its products to the local market? a. International business-level strategy. x b. Transnational strategy c. Multidomestic strategy d. Global strategy

c

MarTech is a technology firm. It must constantly develop product innovations and seek new markets. Its products are made up of a combination of hardware, requiring multiple component parts, and software which is regularly updated. What type of alliance network will MarTech use in order to develop additional competitive advantages? a. A stable alliance network b. A joint venture alliance network c. A dynamic alliance network d. A nonequity alliance network

c

_____ capital refers to the knowledge and skills of a firm's entire workforce. a. Social b. Organizational c. Intellectual d. Human

d

Some strategic leaders who are committed to identifying the best organizational activities to take, regardless of their cultural origin, have been successful in building a short-term foundation to reach a long-term vision. Which of the following terms describes this type of leader? a. Risk averse b. Charismatic c. Ambicultural d. Long tenure

c

Strategic competitiveness is achieved when a firm successfully manages political, economic, and other institutional risks while implementing its international strategies. The degree to which a firm achieves strategic competitiveness through international strategies is increased when they successfully implement: a. a national diversification strategy. b. an international expansion strategy. c. an international diversification strategy. d. political and economic risk analysis.

c

The CEO at MysTek is planning to retire at the end of the year. In narrowing its search for a replacement, the firm needs to decide whether to focus on the internal or external managerial labor markets. Which combination of circumstances would suggest that the firm should seek a new CEO from within MysTek? a. MysTek has a need to enhance its ability to innovate and undertake strategic change. b. The industry as a whole is experiencing rapid growth, MysTek needs to enhance its ability to innovate, and the firm needs a CEO with a clear understanding of the firm's personnel and their capabilities. c. MysTek needs a CEO with a clear understanding of the firm's personnel and their capabilities, knowledge of the firm's core competencies, and the ability to develop new core competencies as appropriate. d. The industry as a whole is experiencing rapid growth, MysTek has a need to enhance its ability to innovate and undertake strategic change, and the CEO must understand the firm's core competencies well enough to be able develop new ones as appropriate.

c

The Carter family has been the successful owner of a manufacturing company for more than 50 years. The company has always performed better than expected and was projected to grow for years to come. To help with this growth, the Carters decided to hire a CEO who is not from the family, the first time in its history. After the hire, the performance of the company shifted for the worse, and there is now a separation of ownership and managerial control. What is the best next step? a. The Carters should align the goals of the family and the CEO. b. The CEO should diversify the company, as it has reached the end of its growth projection. c. The Carters should appoint a family member as CEO, as research shows that family-owned firms perform better when a member of the family is the CEO. d. The Carters must sell the company to a larger corporation.

c

The long-term outcomes of a leveraged buyout are higher performance and higher risk. What two short-term outcomes lead to these long-term outcomes? a. Reduced labor costs and reduced debt costs b. Reduced debt costs and emphasis on strategic controls c. Emphasis on strategic controls and high debt costs d. Reduced labor costs and high debt costs

c

The probability of disruption of the operations of multinational enterprises by political forces or events whether they occur in host countries, home country, or result from changes in the international environment describes which of the following risks associated with international strategy? a. Economic risk. b. Reputational risk c. Political risk d. Financial risk

c

Tommy's Toys, once the leading children's toy retailer in the region, has seen declining profits over the past decade. The firm has decided to close all of its 38 stores and move to an online-only retailing operation. Although it will need to expand its warehouse operations by about 100 employees, it will be eliminating approximately 500 retail sales employees. What is this restructuring strategy called? a. Downscoping b. A leveraged buyout c. Downsizing d. Restructuring

c

What are the benefits of having strong corporate governance? a. Because managers and employees fear for their jobs, it allows fear to improve productivity. b. It shifts accountability and responsibility for developing an ethical organizational culture and making sure the firm performs effectively from top-level managers to the board of directors. c. It encourages top-level managers to be strategically competitive. d. There are no benefits to corporate governance, which is seen as an unneeded expense.

c

When a firm takes over another firm in an unfriendly acquisition process, what is a challenge to its future success? a. The firm will have a high probability of synergy and competitive advantage by maintaining strengths. b. The firm will struggle to maintain long-term competitive advantage in markets. c. The firm will struggle to effectively integrate its operations. d. Financing will be harder to obtain.

c

When a firm uses a franchise as a form of corporate-level strategy, the franchisee gains the license of the franchisor's trademark and method of doing business through a(n): a. one-time royalty fee. b. ongoing franchise royalty rate. c. initial franchise fee and ongoing royalty rate. d. initial franchise fee.

c

Which of the following is a reason that a firm would want to hire a CEO from the internal managerial labor market? a. The firm needs to enhance its ability to innovate. b. The industry in which the firm competes is experiencing rapid growth. c. The firm needs a CEO who appreciates its culture and core values. d. The firm needs a CEO who can reverse recent poor performance

c

Who are seen as the most significant stakeholders in the United States? a. Employees b. Communities c. Shareholders d. Suppliers

c

A CEO has just resigned and quickly vacated his role for a more lucrative opportunity. The company, with the rapid change, is in limbo and needs leadership. What is the board of directors' next logical action? a. Cautiously hiring a CEO b. Rapidly hiring a CEO c. Hiring an external interim CEO d. Hiring an internal interim CEO

d

A company is part of a keiretsu in Japan. Its leaders are worried about the company's financial viability and ask for help from other members of the keiretsu. Why would other participants of the keiretsu feel the need to aid the failing company? a. Members of the keiretsu are legally obligated to aid when members are in need. b. The keiretsu are companies that make a profit from lending money. c. Members of the keiretsu will not feel obligated to help, as they will have members of the company fend for themselves. d. Members of the keiretsu are seen as family, which commands attention and allegiance.

d

A cross-border strategic alliance is: a. a strategy through which firms combine some of their resources to create a competitive advantage by competing in one or more product markets. b. an alliance in which firms share some of their resources from the same stage of the value chain. c. a strategy in which firms share some of their resources to create economies of scope. d. a strategy in which firms with headquarters in different countries decide to combine some of their resources to create a competitive advantage.

d

A jewelry firm has recently acquired its gem supplier. The jewelry firm prides itself on always being the first to predict and serve new trends. For example, the firm was one of the first to introduce rose gold jewelry pieces after research predicted a large demand. Which of the following attributes of the firm helps it to maintain a long-term competitive advantage in markets? a. Merged firm maintains a low to moderate debt position b. Acquisition is friendly c. Acquiring firm has financial slack d. Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation

d

A large software company is in the process of acquiring a small tech startup that has built an app for developers to code websites on their smartphones. It is rumored that the software company has grossly overestimated the future growth as a result of the acquisition. If this turns out to be true, what common acquisition problem has the software company encountered? a. Integration difficulties b. Inability to achieve synergy c. Too much diversification d. Inadequate evaluation of target

d

All of the following are incentives for pursuing an international strategy EXCEPT: a. extending a product's life cycle. x b. gaining easier access to raw materials. c. gaining access to consumers in emerging markets. d. gaining a bigger share of the national market.

d

Over the past three years, Simcom's board of directors has become increasingly concerned about the top-level managers' reliance on external acquisitions, as opposed to internal product innovations. They are discussing the possibility of replacing the CEO. Their decision to exercise corporate governance is primarily motivated by concerns over a. the market for corporate control. b. ownership concentration. c. executive compensation. d. strategic direction.

d

Ronson Foods, a corporation that operates more than 400 large supermarkets in 12 states in the northeastern United States, is considering acquiring East Coast Organics, a small chain of 26 specialty food stores known for their friendly atmosphere and humorous advertising. While many see the potential in this acquisition, some analysts worry about the integration process following the acquisition. What is a difference between the two that might cause difficult integration? a. East Coast Organics has a smaller share of the market. b. Both firms are experiencing financial instability. c. Ronson Foods and East Coast Organics have been competing in the same domestic market.x d. There may be cultural differences in operations between the two firms.

d

Spark is the only energy company in the fictional country of Blacksburgia and therefore holds a monopoly in its home country. Spark's lack of competition in its home country can contribute to an international strategy in which of the following way? a. Access to raw materials is not a problem in the home country. b. The company has perfected its consumer relationship. c. Other countries may have companies offering similar products. d. The resources gained at home can be invested in international markets.

d

What is an agency relationship? a. A group of people who are in disagreement b. A situation in which one party is responsible for the actions of another in a workplace setting c. A situation in which two parties decide to invest and act as one for a united goal d. A situation in which one party delegates decision-making responsibility to a second party for compensation

d

What is the reasoning behind P&G's commitment to giving employees of all levels meaningful and significant roles? a. To reduce turnover, as employees will feel more attached to the company b. To reduce the headcount of employees by having current employees take on more tasks c. To increase effectiveness by requiring employees to be subject matter experts in many fields d. To develop talent that will be able to move up in the organization and be effective in the future

d

When a firm buys a competitor, supplier, distributor, or business in a highly related industry so a core competency can be used to gain competitive advantage, this demonstrates an acquisition strategy to gain: a. decreased market power. b. resources. c. higher profitability.x d. increased market power.

d

Which of the following is a positive effect of down scoping? a. Firms have fewer employees that they have to compensate. b. Managerial effectiveness decreases. c. Firms spend less in operations costs. d. Firms refocus on their core business.

d

Which of the following is an attribute of a successful acquisition? a. Merged firm maintains moderate to high debt position b. Acquisition is unfriendly c. Acquiring firm conducts ineffective due diligence to select target firms and effectively evaluate the target firms' health d. Acquiring firm has financial slack

d

Which of the following is an example of a problem that can prevent an acquisition from being successful? a. Ability to achieve synergy b. Little to no debt c. Adequate evaluation of target d. Too much diversification

d

Which of the following statements about the recent global emphasis on corporate governance is NOT true? a. Corporate governance is of concern to nations as well as to individual firms. b. Although corporate governance reflects company standards, it also collectively reflects the societal standards of nations. c. Research shows that firms seek to invest in nations with national governance standards that are acceptable to them. d. The recent global emphasis on corporate governance stems mainly from the need to give shareholders more power in organizations.

d