MGT 499 Final Exam

In a non-equity alliance, which of the following types of information would firms most likely share? A. a manager's knowledge related to solving non-routine problems B. a top-level manager's experience related to making strategic decisions C. the documented information about the material composition of a product D. the employees' entrepreneurial skills

the documented information about the material composition of a product

it is necessary for government authorities such as the federal trade commission (FTC) and/or european commission

the horizontal integration activity has the potential to reduce competitive intensity in an industry

Showstopper inc. dominates ladies wigs

the managers need to determine whether the skills needed to create wigs and toupees are similar and whether showstopper creates better hairpieces than its competitors

a microchip company wants a computer company to produce more powerful tablets and therefore use more of its chips

the two companies should enter a strategic alliances to bring about a win-win situation from them and to limit their rivals powers

which of the following factors is the most important determinant of economic distance?

the wealth and per capita income of consumers

which of the following is a result of horizontal integration in terms of porter's five forces model?

there is a reduction of excess capacity in the market

the administrative and political distance between two trading countries decreases when

there is a well-functioning capital market in the host country

which of the following is true of acquisitions?

they can be friendly or hostile

which of the following statements is true of joint ventures?

they enable the exchange of both tacit and explicit knowledge

which of the following is an advantage of equity alliances when compared to non-equity alliances?

they produce stronger ties between partners

which of the following is the most likely advantage of using foreign acquisitions or greenfield plants as a foreign entry mode?

they reduce a firm's exposure to loss of reputation

amber is a strategist for a furniture manufacturer that has a large presence in the united states and canada. by checking economic and political reports, she knows that trade and investment barriers are falling among wealthy nations. she also knows that the price of oil has dropped 50 percent in the previous two years. based on this information, what action should amber and her company take?

they should seriously consider globalization because of the falling trade and investment barriers

mediflow, a medium-sized medical technology company, has been successful in its research and development but needs improvement in its european sales.

acquire a company that has a successful medical technology sales force in europe so that mediflow can gain access to new distribution channels

managers at durkmunder, a firm in west feenistan

an abundance of well-educated english speakers

the palace hotel group purchased orange roof hotels for an estimated value of $120 billion.

an acquisition

screaming eagle, a luxury motorcycle company, sells the same motorcycles and offers the same superior service in both its home country and foreign markets

an international strategy

garrett is an executive vice president at Samm hardware. he researches a proposal by a larger company, Maximum hardware, to combine the two companies

attempt a friendly merger and use managerial hubris to improve results at maximum

horizontal integration through mergers and acquisitions can help firms strengthen their competitive positions by increasing

differentiation

which of the following best explains why disney showed superior post-merger integration capabilities

disney managed its new subsidiaries more like alliances rather than attempting full integration

A candy company called Hearts Aflame Inc. forms an agreement withanother candy company called Dreamcatcher Inc. Through thisagreement, Hearts Aflame owns 30 percent of Dreamcatcher. However,Dreamcatcher does not own any part of Hearts Aflame. This type ofagreement is called a(n). A. non-equity alliance. B. equity alliance. C. joint venture. D. capital venture.

equity alliance.

which of the following statements is true of explicit knowledge

explicit knowledge is shared in non-equity alliance firms

which of the following foreign entry modes primarily involves producing goods in one country to sell in another?

exporting

which of the following modes of entering a foreign market allows for the lowest level of control

exporting

During the period of Globalization 1.0, the mode of entry into foreign markets primarily involved A. exporting goods. B. making foreign direct investments. C. making foreign institutional investments. D. licensing production and distribution.

exporting goods

which of the following entry modes was used extensively in globalization 1.0 stage?

exports

future clothes inc., a publicly traded company designs and manufactures wearable technology

focus on research and development as a form of non-price competition

which of the following types of organizations comparatively requires the lowest levels of investment and control?

franchising

A process of closer integration and exchange between different countries and peoples worldwide.

globalization

ayesha is a strategiest for the firm optiks inc

optiks should acquire expert technology

anthonia is a senior manager at buxley corp., a motorcycle manufacturer

personnel exchanges to share tacit knowledge

which of the following statements is true with regard to international trade between countries?

political integrations decrease the expected trade intensity between two countries

which of the following is part of Geert Hofstede's cultural dimensions?

power distance

the managers at speed automobile inc., want to diversify the business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers

principle-agent problems

fun foods inc. is a snack manufacturer that wants to expand globally. few people abroad are familiar with fun foods snacks

pursue a multidomestic strategy that includes new "local" brands

sven is a senior vice president at a textile manufacturer that wants to move from being 20 percent globalized to 70 percent globalized in the next 10 years. What are some possible drawbacks that sven's company must anticipate?

raising wages may cancel out cost savings of access to low-cost input factors

The Hershey Company, the largest U.S. chocolate manufacturer, decided to enter the Chinese market in 2013 because A. the U.S. population was growing slowly and becoming more health conscious. B. its strategic position in the U.S. market was well protected through high entry barriers. C. this would help the company gain access to large cocoa plantations in China. D. Hershey's main strategic focus was on product and market diversification and not on the domestic market.

the U.S. population was growing slowly and becoming more health conscious

which of the following reasons motivated Facebook to acquire instagram, a photo and video sharing social media site for $ 1 billion

the desire to gain a new capability

A company that is using extrinsic motivation as an output control mechanism will most likely A) organize training sessions for employees. B) cut budgets during recessions. C) implement a peer review system. D) threaten to lay off employees if they do not achieve targets.

threaten to lay off employees if they do not achieve targets.

Why did incumbent pharmaceutical firms enter into hundreds of strategic alliances with biotech start-ups? A. to pursue an unrelated-options perspective without disrupting existing market economics B. to make small-scale investments in ventures poised to disrupt existing market economics C. to invest their excess cash flow in the superior technology of the biotech start-ups D. to share their continuously updated research technology with the biotech start-ups

to make small scale investments in ventures poised to disrupt existing market economics

European aircraft maker Airbus is investing $600 million in Mobile, Alabama, to build jetliners. Which of the following statements best explains why it is employing this strategy? A. to take advantage of the high labor costs in the southern United States B. to take advantage of the high cost of living in the southern United States C. to take advantage of the low impact of globalization in the United States D. to take advantage of lower taxes in the southern United States

to take advantage of lower taxes in the southern united states

When does a merger between companies typically occur?

when two firms of comparable size join to form a combined entity

Jen works as a front-line employee for a nationwide retail store. She reports to a floor manager, who reports to a departmental manager, who reports to a regional supervisor, who reports to a vice president, who reports to the CEO. Which of the following best describes this retail store? A) flat structure B) tall structure C) centralized structure D) decentralize structure

tall structure

frederica, the chief financial officer at a moped manufacturer in canada, wants to build new plants

"it will be much more difficult to protect our intellectual property if we build factories overseas"

How does horizontal integration within an industry affect the surviving firms?A. By increasing the threat the surviving firms will face from new entrantsB. By strengthening the rivalry among existing firmsC. By requiring the surviving firms to shift their focus from non-price to price competitionD. By strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers

D. By strengthening the bargaining power of the surviving firms vis-à-vis suppliers and buyers

which of the following best illustrates a merger between the two companies HQ inc. and AV inc.?

HQ inc. and AV inc. join together to form a single new company called HQAC inc.

which of the following examples describes the task of an alliance manager?

Hussein train the employees of his alliance partner in the skills needed to create a display for an 3-notebook

What is horizontal integration?

Process of merging with a competitor at the same stage in the value chain

Which of the following types of groups is most susceptible to groupthink? A) a diverse group B) a cohesive group C) a heterogeneous group D) a decentralized group

a cohesive group

which of the following companies will geographic distance be the most relevant factor

a firm that extracts and exports iron ore

which of the following accurately describes a common difference between a merger and an acquisition

a merger tends to be friendly; an acquisition can be friendly or unfriendly

sky pioneers inc. manufactures airplane parts. it wants to globalize and is willing to spend considerable amounts to protect its intellectual property

acquiring an airplane-parts manufacturer in another country

When large, incumbent firms buy start-up companies, the transaction is generally described as a(n) A. joint venture. B. partnership. C. acquisition. D. alliance.

acquisition

vassar systems inc. wants to globally expand its markets. it intends to ensure that its mode of foreign entry allows it to have strong control over its operations and protect its intellectual property

acquisition

maddox bauxite extractions inc has decided to enter into a foreign market by setting up its own production facilities and distribution channels from scratch

greenfield operation

sanibel autos inc. merged with its competitor vroom autos inc. this allowed sanibel autos to use its technological competencies along with vroom

horizontal

which of the following corresponds to the use of tacit knowledge?

igor assembles a motorcycle from memory

what is the main reason that most mergers and acquisitions negatively effect shareholder value?

promised synergies never take place

which of the following is a feature of the Globalization 2.0 stage?

multinational enterprises (MNEs) began to create smaller, self-contained replicas of themselves in a few key countries

Two leading home appliance companies, Redwood Inc. and Boxer Technologies, are in competition for market share. In their quest for exciting new products, Redwood employs an open innovation model, while Boxer pursues a closed innovation model. Which of the following statements is most likely true? A) Redwood has a greater chance of capturing market share. B) Boxer has a superior absorptive capacity. C) Boxer will protect its intellectual property with patents and trade secrets. D) Redwood is most concerned with securing first-mover advantages.

Boxer will protect its intellectual property with patents and trade secrets.

Elemental Pharma Inc. recently acquired Crick Pharmaceuticals Inc. It now sells its own products along with the products originally sold by Crick Pharmaceuticals. As a result, Elemental Pharma's sales force will also be marketing the acquired company's products. How will this horizontal integration most likely affect Elemental Pharma?

It will lower its costs through economies of scale.

Which of the following is true of the process of organizing for competitive advantage? A) To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes. B) Strategy formulation and strategy implementation are independent activities. C) Organizing for competitive advantage is a static and not a dynamic process. D) Formulating an effective strategy is a necessary and sufficient condition for gaining and sustaining competitive advantage.

To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes

Tony's Tacos is a nationwide fast-food chain. Decision power resides at the top of the organization. Each job is documented in minute detail. The firm has many levels of supervision, including vice presidents and regional managers. Tony's headquarters provides detailed instructions to each of its franchisees so that they provide comparable quality and service across the board. Based on this scenario, which of the following is an accurate statement about Tony's? A) Tony's has a low degree of specialization and formalization, a high degree of centralization, and relies on a flat hierarchy. B) Tony's has a high degree of specialization and formalization, a low degree of centralization, and relies on a tall hierarchy. C) Tony's has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy. D) Tony's has a low degree of specialization, formalization, and centralization and relies on a flat hierarchy.

Tony's has a high degree of specialization, formalization, and centralization and relies on a tall hierarchy

Mona sets up a business consulting firm in which the employees are motivated because they find their work interesting and creative. She carefully hires workers who fit well with their assigned tasks. Also, she clearly defines the results expected of each worker, but allows the workers to determine the means to these results. Which of the following best describes Mona's business? A) a firm that relies on high input controls to tap into intrinsic motivation B) a firm that relies on high input controls to tap into extrinsic motivation C) a firm that relies on high output controls to tap into intrinsic motivation D) a firm that relies on high output controls to tap into extrinsic motivation

a firm that relies on high output controls to tap into intrinsic motivation

Which of the following accurately describes an organic organization? A) an inflexible organization that fosters slow decision making and high employee motivation B) an inflexible organization that fosters fast decision making and high employee motivation C) a flexible organization that fosters slow decision making and high employee motivation D) a flexible organization that fosters fast decision making and high employee motivation

a flexible organization that fosters fast decision making and high employee motivation

solaris autos inc., a large automobile company, made an initial small investment in a start - up company that was developing a solar powered car

a real-options perspective

which of the following is an example of explicit knowledge

a research summary

braintree inc, a manufacturer of smartphones, has entered into a 15 year partnership with a software company to develop sophisticated operating systems

a strategic alliance

which of the following will most likely harm a multinational enterprise's (MNE's) reputation

a sweatship owned by an MNE has an explosion that kills hundreds of workers

which of the following is an observable feature in the Globalization 3.0 stage?

based on an optimal mix of costs, skills, and PESTLE factors, companies now freely locate business functions anywhere in the world

which of the following has been a key driver for firms to expand globally during the globalization 3.0 stage?

benefits from lower labor costs in manufacturing and services

how did canada, mexico, and the United States reduce the administrative and political distance between them?

by establishing the north american free trade agreement (Nafta)

How did the recent horizontal integration in the U.S. airline industry provide benefits to the surviving carriers? A. by facilitating excess capacity in the industry B. by preventing mergers from taking place C. by lowering competitive intensity in the industry overall D. by increasing the threat of entry in the industry

by lowering competitive industry in the industry overall

how does horizontal integration within an industry affect the surviving firms?

by strengthening the bargaining power of the surviving firms v suppliers and buyers

RHC pharmaceuticals INC., Lawrence Pharma INC., and Quincy pharma inc are three rival firms who have set up an alliance to conduct research and find a cure for cancer

co-opetition

a trend observed during the globalization 3.0 stage involves

mulinational companies organizing as global-collaboration networks

Emirates, Etihad Airlines, and Qatar Airways are a threat to U.S. legacy carriers because they offer A. higher quality for lower costs for international routes. B. higher quality for similar costs for U.S domestic routes. C. similar quality for lower costs for international routes. D. similar quality for lower costs for U.S domestic routes.

higher quality for lower costs for international routes

which of the following statements is true of an equity alliance?

in an equity alliance, the partners frequently exchange personnel to make the acquisition of tacit knowledge possible

a great cultural distance between two trading countries

increases the liability of foreignness

adverse selection in a public stock company occurs when

information asymmetry increases the likelihood of selecting inferior alternatives

Because keeping cost low is critical to IKEA's value innovation, it switched from a(n) A. transnational strategy to a multidomestic strategy. B. transnational strategy to a global-standardization strategy. C. international strategy to a multidomestic strategy. D. international strategy to a global-standardization strategy.

international strategy to a global-standardization strategy

A firm is said to be pursuing a polycentric innovation strategy when A. its research facility is situated in the headquarters and all other business activities are located around the world. B. it draws from multiple, equally important research facilities located throughout the world. C. it restricts its innovation to Western economies and production to developing markets. D. its knowledge flow takes a one-way path—from its headquarters to the subsidiaries.

it draws from multiple, equally important research facilities located throughout the world

culinary solutions Inc., manufactures cooking and baking equipment and has its base in the country of vandevar

it underestimated its liability of foreignness when entering the balalaika market

worldwide minerals inc. wants to expand into international markets

joint ventures

which of the following is a common drawback of a non-equity alliance?

lack of trust between partners

downshift autos inc., has shifted its research and development unit from its home country to germany

location economies

unilver's new-concept center is situated in downtown Shanghai, China, attracting hundreds of egar volunteers

location economies

in eli lilly's office of alliance management, the alliance champion is primarily responsible for

making sure that an alliance fits with the firm's existing alliance portfolio and corporate-level strategy

Why did Quaker Oats Company's acquisition of Snapple fail? A. strong competitive disadvantage B. managerial hubris C. inferior acquisitions ability D. shareholder unrest

managerial hubris

because strategic alliances rarely work as well as managers expect they will, why do companies continue to go through with them?

many owners, managers, and business analysts believe they are essential to survive in an industry

esther is the CEO of a line of accessories and cosmetics, Starring Me! inc.,

multinational enterprise

Disney became the world's leading media company to a large extent by pursuing a corporate strategy of _____. A. related-linked diversification B. cost-leadership C. unrelated diversification D. hostile takeovers

related-linked diversification

InSeason Inc. started a chain of organic supermarkets that had initial success. The managers achieved a mastery of the firm's current environment, thereby filling a need in the market. However, InSeason defined and measured it success by financial metrics, with a focus on short-term performance. As a result, the firm put in place metrics and systems to accommodate and manage increasing firm size due to continued success. As a result of this tightly coupled system, InSeason developed a A) resistance to change. B) innovative approach. C) significant value gap. D) holacratic system.

resistance to change.

juno LLC is a small, new pharmaceutical company that is developing a valuable new drug. Which strategy is wise for the owners

seek an alliance with a company or companies that will complete the value chain

The process of alliance management begins with _____.

selecting the best possible partner

which of the following statements accurately explains the primary reason behind walmart's failure in germany

significant differences between its U.S. personnel policies and germany's culture

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

Employees learn about an organization's culture through the process of A) socialization. B) exploitation. C) co-opetition. D) acculturation.

socialization

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that A. the foreign firm will need to make larger investments when compared to entering the new market on its own. B. some of the firm's proprietary know-how may be appropriated by the foreign partner. C. all potential business risks in the new market will have to be faced alone by the foreign firm. D. the shareholder value of the foreign partner will decline drastically.

some of the firms proprietary know-how may be appropriated by the foreign partner

a voluntary agreement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services is best described as a

strategic alliance

Telescopic Inc., a web development firm, is headed by Rob Dennis, the CEO. Each functional department of the company—marketing, finance, and HR—has a president who reports to the CEO directly. Each department has various managers who manage teams. The managers report to the presidents, and the team leads report to the managers. Finally, the employees at the lowest level report to their team leads. It is rare for a lower-level employee to interact with the CEO of the company. In this scenario, Telescopic Inc. can be said to have a(n) A) organic organizational structure. B) decentralized organizational structure. C) tall hierarchical structure. D) flat hierarchical structure.

tall hierarchical structure.