479 Chapter 5 Quiz

The old adage​ "If it​ ain't broke,​ don't fix​ it" pertains to which of the​ following? A. Managing by subjectives B. Managing by continuity C. Managing by extrapolation D. Managing by hope E. Managing by crisis

C. Managing by extrapolation

Recent research reveals that​ small- and​ medium-size firms expanding into other countries should form alliances with noncompetitors rather than with rival firms.​ Why? A. Alliances with noncompetitors are positively associated with international​ performance, whereas alliances with competitors are negatively related. B. Competing firms oftentimes share less knowledge than they could or should. C. Alliances with competitors are more​ costly, directly and​ indirectly, and provide redundant knowledge and resources. D. The benefits of allying with competitors are offset by higher monitoring and control costs. E. All of the above

E. All of the above

Which of the following statements is​ false? A. Partnering has become a core​ competency, a strategic issue of high importance. B. In a global market tied together by the​ Internet, joint​ ventures, and​ partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. C. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. D. Although evidence is mounting that firms should use partnering as a means for achieving​ strategies, most U.S. firms in many industrieslong dash—such as financial​ services, forest​ products, metals, and retailinglong dash—still operate in a merge or acquire mode to obtain growth. E. All of the above statements are true.

E. All of the above statements are true

First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover​ is: A. Securing access to rare resources. B. Gaining new knowledge of key factors and issues. C. Carving out market share and a position that is easy to defend and costly for rival firms to overtake. D. A and B E. ​A, B, and C

E. ​A, B, and C

What strategy seeks to increase market share for present products or services in present markets through greater marketing​ efforts? A. Market penetration B. Market development C. Forward integration D. Vertical integration E. Market saturation

A. Market penetration

Which statement below is​ true? A. A leveraged buyout converts a public firm into a private company. B. All of the statements are true. C. There were far more global mergers and acquisitions in 2014 than in any year since​ 2007, exceeding​ $3.5 billion. D. More than​ 10,000 mergers transpire annually in the United​ States, with​ same-industry combinations predominating. E. In the United​ States, mergers and acquisitions totaled​ $1.52 trillion in​ 2014, comprising 45 percent of global​ deals, up from​ $998 billion, or 43​ percent, the prior year.

B. All of the statements are true.

According to​ Porter, strategies allow organizations to gain competitive advantage from three different bases. What are the three​ bases? A. ​Initiator, differentiation, and focus B. Cost​ leadership, differentiation, and focus C. Being a​ first-mover, being a​ late-follower, and differentiation D. Cost​ leadership, differentiation, and initiator E. ​Differentiation, focus, and being a​ first-mover

B. Cost​ leadership, differentiation, and focus

If an​ organization's present suppliers are especially​ expensive, unreliable, or incapable of meeting the​ firm's needs for​ parts, components,​ assemblies, or raw​ materials, what strategy is likely​ best? A. Market development B. Horizontal diversification C. Backward integration D. Forward integration E. Vertical integration

C. Backward integration

Secondary buyouts occur when what​ happens? A. A private equity firm buys a publically held firm. B. A company buys a firm and then itself is purchased by another company. C. A company buys a firm and then sells the firm within a year. D. A private equity firm buys a firm from another private equity firm. E. A private equity firm buys a privately held firm.

D. A private equity firm buys a firm from another private equity firm.

Nonprofit organizations are basically just like​ for-profit companies except for two major differences. What are the​ differences? A. Nonprofits do not have competitors. B. Nonprofits do not pay taxes. C. Nonprofits do not have shareholders to provide capital. D. B and C E. A and B

D. B and C

______________ involves companies hiring other companies to take over various parts of their functional​ operations, such as human​ resources, information​ systems, payroll,​ accounting, customer​ service, and even marketing. A. Procurement B. Displacement C. Partnering D. Outsourcing E. Backward integration

D. Outsourcing

The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be​ related? A. When they compete in the same SIC code industry B. When they are about the same size C. When they compete in about the same areas D. When their value chains possess competitively valuable​ cross-business strategic fits E. When their objectives and strategies are about the same

D. When their value chains possess competitively valuable​ cross-business strategic fits

Objectives should include which of the following​ characteristics? A. ​Measurable, realistic, and understandable B. ​Measurable, challenging, and hierarchical C. ​Qualitative, obtainable, congruent among organizational​ units, and associated with a timeline D. ​A, B, and C E. A and B

E. A and B

The chapter lists nine reasons why many mergers and acquisitions​ fail, including the following​ reason: A. Inability to achieve synergy B. Too large an acquisition C. Improprieties on one or both sides D. ​A, B, and C E. A and B

E. A and B

What strategy may be best under the following​ conditions? a. The organization competes in a highly competitive or a​ no-growth industry, as indicated by low industry profit margins and returns. b. The​ organization's present channels of distribution can be used to market new products to current customers. c. New products have countercyclical sales patterns compared with an​ organization's present products. d. The​ organization's basic industry is experiencing declining annual sales and profits. A. Retrenchment B. Related diversification C. Divestiture D. Vertical integration E. Unrelated diversification

E. Unrelated diversification

The time frame for​ long-term objectives and strategies should be​ consistent, usually from​ _____ to​ _____ years. A. ​2; 5 B. ​2; 10 C. ​1; 5 D. ​1; 10 E. ​1; 15

A. ​2; 5

When an organization has pursued both a retrenchment strategy and a divestiture​ strategy, and neither has been​ successful, then perhaps the best strategy would be​ ____. A. restructuring B. Chapter 7 bankruptcy C. Chapter 11 bankruptcy D. liquidation E. B and D

E. B and D

What are the five major types of​ bankruptcy? A. Chapters​ 3, 5,​ 7, 9, and 11 B. Chapters​ 2, 4,​ 6, 7, and 8 C. Chapters​ 5, 7,​ 11, 13, and 15 D. Chapters​ 1, 3,​ 5, 7, and 9 E. Chapters​ 7, 9,​ 11, 12, and 13

E. Chapters​ 7, 9,​ 11, 12, and 13

________________ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity. A. Alliancing B. Coordinating C. Joint alliance D. Combining E. Joint venture

E. Joint venture

The largest​ consumer-products company in the​ world, Procter​ & Gamble​ (P&G), is in the process of selling more than half of its brands​ (nearly 100) in order to focus on its core brands​ (about 80). What is this strategy​ called? A. Divestiture B. Vertical integration C. Restructuring D. Retrenchment E. Reengineering

A. Divestiture

Which of​ Porter's generic strategies means producing products and services that fulfill the needs of small groups of​ consumers? A. Focus B. Differentiation C. Cost leadership D. Initiator E. Being a​ first-mover

A. Focus

Gaining ownership or increased control over distributors or retailers is called​ what? A. Forward integration B. Vertical integration C. Market penetration D. Market development E. Backward integration

A. Forward integration

What is the name of the strategy that involves selling off land and buildings to raise needed​ cash, pruning product​ lines, closing marginal​ businesses, closing obsolete​ factories, automating​ processes, reducing the number of​ employees, and instituting expense control​ systems? A. Retrenchment B. Liquidation C. Divestiture D. Bankruptcy E. Reengineering

A. Retrenchment

A benefit of outsourcing is cost restructuring. Is the following statement​ true? Outsourcing changes the balance of fixed costs to variable costs by moving the firm more to variable​ costs; outsourcing also makes variable costs more predictable. A. Yes B. Sometimes C. Usually D. Possibly E. No

A. Yes

Why do many U.S. companies plan to reshore in 2016dash-​2017? A. A desire to get products to market faster and respond rapidly to customer orders B. Higher transportation and warehousing costs C. Improved quality and protection of intellectual property D. A and C E. ​A, B, and C

D. A and C