Bus 195 Final Drake University

. If the U.S. dollar appreciates relative to foreign currency, what is likely to be the result for the U.S. company that has company branches abroad?

Profits will decrease, when measured in U.S. dollars.

. In managing the corporate portfolio, the BCG matrix would suggest that __________.

Question Marks can represent future Stars if their market share is increased

. A barrier-free organization creates successful relationships between internal and external constituencies and sometimes with competitors as well.

True

. A major disadvantage of adopting a divisional structure is the tendency for managers to focus on short-term objectives.

True

. A small firm with a simple structure often fosters creativity and individualism because of its informal atmosphere.

True

. According to the transaction cost perspective in analyzing vertical integration, every market transaction involves some transaction cost.

True

. Continuous monitoring enhances the ability of the organization to respond with speed and flexibility.

True

. Cutting prices or increasing marketing efforts are examples of tactical competitive actions.

True

. Different functional areas within an organization often have different reward systems.

True

. Economies of scope in a related diversification strategy result from the leveraging of core competencies and the sharing of activities such as production.

True

. Entrepreneurial competitive dynamics refers to a cycle of actions and responses between firms competing for the same customers.

True

. Entrepreneurial new entry is often perceived as a competitive threat because an existing firm is meeting most market needs, either directly or indirectly.

True

. For a reward system to be effective, it must be perceived as fair and equitable.

True

. Horizontal organization structures facilitate resource sharing and help to create a sense of common purpose.

True

. IBM leverages its competencies in computing technology to provide health care services. This is an example of a core competence being used across dissimilar businesses within the same corporation.

True

. Small businesses create the majority of new jobs in the U. S. economy.

True

. Strategic control systems, both informational and behavioral, are used to correct the performance and ultimate strategy of a firm.

True

. The acquisition of two or more counter-cyclical businesses is an example of using diversification to reduce risk.

True

. The matrix structure attempts to combine the advantages of the functional and product-oriented structure.

True

. The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

True

. The risk of being acquired by hostile raiders is often referred to as the takeover constraint.

True

. The term, angel investors, refers to private individuals who provide seed capital to young ventures.

True

. The traditional approach to strategic control relies on feedback from performance measurement to formulate strategy.

True

. The virtual organization is characterized by participating firms that pursue a collective strategy that enables them to cope with environmental uncertainty through cooperative efforts.

True

. Theodore Levitt, a marketing strategist, argued that people around the world are willing to sacrifice preferences in product features, functions, and design for lower prices and high quality.

True

. There are risks associated with the Bottom of the Pyramid strategy. One of them is that the new low-cost products that are developed may cannibalize the sales of the core products of the company using the strategy.

True

. To obtain venture capital financing, business founders often have to give up some ownership and control of their business.

True

. When considering the exporting decision, companies should consider that the ability to tailor their products to meet local market needs typically is very limited.

True

. Which of the following statements about venture capital is not true?

Venture capital is a form of public equity financing.

. In considering the decision to offshore, which of the following generally is not one of the hidden costs?

Wage deflation

. In order to minimize the temptation for managers to act in their own self-interest, governance mechanisms exist for implementation consideration. Which of the following is not a primary means for monitoring managerial behavior?

a board of directors that acts in the best interests of shareholders to create short-term value

. The phrase that best defines a virtual organization is _____________.

a continually evolving network of independent companies

. A strategy of related diversification requires most firms to organize around geographical areas or product lines. This type of organizational growth leads to ______________ structure.

a divisional

. The difference between a franchise contract and a licensing contract is that ___________.

a franchise contract is more specific and usually longer in duration

. If an international firm has a global strategy and a relatively low level of product diversity, the best choice for its organizational structure is ______________ structure.

a worldwide product division

. When launching a new venture, finding a way to begin doing business must ______________ generate cash flow, build credibility, attract good employees, and overcome the liability of newness.

quickly

. Strategic business unit (SBU) structures are best suited for corporations pursuing _____________, whereas holding company structures are best suited for companies with ______________ strategies.

related diversification; unrelated diversification

. Which of the following is not part of a good guideline list for managing strategic alliances?

relying primarily on a contract to make the joint venture work

. Entrepreneurial firms that pursue a low-cost leadership strategy use all of the following to achieve lower costs except _____________.

extensive investment in order to achieve economies of scale

. Internal development may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through __________ and __________ can provide.

mergers; acquisitions

. Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.

motivated self-interest

. The best example of a tactical action that a company might use in response to a competitive attack is to _____________.

offer price discounts and rebates

. The term golden parachute refers to _________.

pay given to executives fired because of a takeover

. The majority of entrepreneurial start-ups are financed through monies from _____________.

personal savings and the contributions of family and friends

. In large organizations, a strategy of diversification requires a need to reorganize around ______________ or _____________.

product lines; geographic markets

. Which of the following is not a primary source of financing for entrepreneurial start-ups?

public equity

. According to author, Jeffrey Pfeffer, which of the following is not an advantage of teams?

Teams interact so closely and therefore coordination and integration becomes unnecessary.

. Which of the following is NOT one of the characteristics of reward and incentive systems?

They represent a poor means of influencing the culture of an organization.

. Coca-Cola, Ford Motor Company, H. J. Heinz, Nike, and Procter and Gamble are working together to develop plant-based plastics. Each company brings its own competency to the table. This collaboration is an example of a _____________.

virtual organization

. A __________ is a business in which a multinational company owns 100 percent of the stock.

wholly owned subsidiary

. The downsides or limitations of mergers and acquisitions include all of the following EXCEPT:

It is a slow means to enter new markets and acquire skills and competences.

. All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix EXCEPT:

It takes a dynamic view of competition that can lead to overly complex analyses.

. If a company is considering optimizing the physical location for every activity in the value chain, which of the following is not a possible strategic advantage for that decision?

Life-cycle enhancement

. A focus strategy must not include elements of differentiation and overall cost leadership in order to be successful.

False

. A franchise generally expires after a few years, whereas a license is designed to last into perpetuity.

False

. A global startup typically benefits from lower communication, coordination, and transportation costs.

False

. A major disadvantage of the matrix structure is that it duplicates the use of specialized personnel, equipment, and facilities.

False

. A multi-domestic strategy would likely include the use of high volume, centralized production facilities to maximize economies of scale.

False

. According to studies by Rugman and Verbeke, most of the 500 largest companies in the world are global.

False

. All diversification moves, including those involving mergers and acquisitions, erode performance.

False

. Among the advantages of acquisitions are the expensive premiums that are frequently paid to acquire a business.

False

. An advantage of a firm entering into a strategic alliance is that it does not have to share the wealth with its partners.

False

. An oil refinery secures land leases and develops its own drilling capacity to ensure a constant supply of crude oil. This is an example of forward integration.

False

. Arbitrage opportunities in global financial markets are more attractive to local companies than global corporations, because they enable them to buy in huge volume and therefore increase their bargaining power with suppliers.

False

. As investors, venture capitalists rarely provide any help or services to entrepreneurial firms other than financing.

False

. Because of the Small Business Administration and government regulations, small businesses are rarely allowed to bid on government contracts.

False

. Benefits derived from horizontal and hierarchical relationships are mutually exclusive.

False

. Choosing which new entry strategy is best depends on competitive financial and marketplace considerations with the greatest opportunities most likely to be in existing markets, rather than in new markets.

False

. Co-opetition, where competitors work together behind the scenes, is a form of illegal tacit collusion.

False

. Cooper Industries has followed a successful strategy of related diversification. There are few similarities in the products it makes or the industries in which it competes.

False

. Expanding the global presence of a firm does not automatically increase its scale of operations.

False

. Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics?

Grid dimensions are based on external environments and internal capabilities/market positions.

. According to the text, which of the following might does not make it difficult for entrepreneurial firms to effectively pursue a strategy of differentiation?

Incumbent firms are constantly seeking opportunities to specialize in market niches.

. In 2005 , Plum Organics entered the market with organic baby food and snack foods for children. It now has over 20 products and is listed at number 63 on the Inc. 500 list of fastest growing private companies. It used which new entry strategy in 2005 ?

adaptive

. Which of the following is an advantage of a divisional type of organizational structure?

an enhanced ability to respond quickly to changes in the external environment

. Behavioral controls are aspects of strategic change that involve finding the appropriate ______________ and ______________ among the culture, rewards, and boundaries of the firm.

balance; alignment

. Effective short-term objectives should ______________ and _____________.

be specific; measurable

. Rules and regulations are examples of ______________ and _____________.

boundaries; constraints

. Which of the following is not a risk associated with a global strategy?

The pressures for local adaptation may elevate the cost structure of the firm.

. Which of the following is the primary drawback of traditional strategic control systems?

They lack the flexibility needed to adjust to changes in the environment.

. According to author Jeffrey Pfeffer, the advantages of teams are that employees control themselves, develop more creative solutions to problems, and permit the absorption of administrative tasks previously performed by specialists.

True

. Action plans permit a degree of autonomy for managers who sometimes must modify activities to achieve the desired outcome.

True

. An advantage of international expansion is that it can enable a firm to optimize the location of every activity in its value chain.

True

. As firms grow, owner managers often need to hire functional specialists to handle the increased information-processing burden.

True

. Because new ventures typically are small, they usually do not have high economies of scale relative to competitors.

True

. CalPERS, the California Public Employees Retirement System, manages over 240 billion dollars in assets. As an example of shared activism, they review all short- and long-term performance figures for each of the firms in which they invest and request changes in the governance structure of those firms, when they feel the firm is not responsive to their concerns.

True

. Central to agency theory is the relationship between two primary players, the principals (stockholders) and agents (management).

True

. For a core competency to create value and provide a viable basis for synergy among the businesses in a corporation it must at least create superior customer value and it must be difficult to imitate.

True

. For young managers who see themselves as free agents, behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

True

. In a global strategy a firm operates all of its businesses under a single common strategy, regardless of location.

True

. In order to have effective board operations, firms need to cultivate engaged and committed boards.

True

. In recent years, many high tech firms such as Priceline.com have suffered from the negative impact of uncontrolled growth.

True

. Increasing international exchange in goods and services can run into the difficulty of having one offer that meets the needs of customers at differing income levels.

True

. Many acquisitions ultimately result in divestiture.

True

. Market commonality refers to the extent to which competitors are vying for the same customers in the same markets.

True

. Modular companies can achieve rapid growth because they do not require large investments in fixed assets.

True

. Multinational firms following a transnational strategy strive to optimize the trade-offs associated with efficiency, local adaptation, and learning.

True

. Offshoring takes place when a firm decides to shift an activity that they were previously performing in a domestic location to a foreign location.

True

. One disadvantage of a functional structure is that differences in functional orientation may impede organization coordination and communication.

True

. One of the criteria for a core competence is that the different businesses in the corporation must be similar in at least one important way related to the core competence.

True

. One of the most critical roles of the board of directors is to create incentives that align the interests of the CEO and top executives with the interests of shareholders.

True

. One of the risks of outsourcing is a loss of cross-functional skills.

True

. One of the risks of vertical integration is that there may be problems associated with unbalanced capacities along the value chain of a firm.

True

. Opportunity recognition is the process of identifying, selecting, and developing entrepreneurial opportunities.

True

. PepsiCo successfully captured the Indian market by using a joint venture strategy.

True

. Reasons for acquisition failure include: ineffective integration of the acquisition, too high of a premium paid for the common stock of the target company, or inability to understand how the assets of the acquired firm would fit with the lines of business of the existing company.

True

. Refinements or extensions of existing strategies are often referred to as tactical actions.

True

. Rule-based controls are appropriate in organizations, where most of the employees are unskilled.

True

. Sales quotas, operating budgets, and production schedules are examples of traditional controls.

True

. Shared activities among businesses in a corporation do not always have a positive effect on a differentiation strategy of a corporation.

True

. Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment.

True

. Similar businesses working together or the affiliation of a business with a strong parent can strengthen the bargaining position of a company relative to suppliers and customers.

True

. The Sarbanes-Oxley Act of 2002 requires that CEOs and CFOs of publicly listed companies must reveal off-balance-sheet finances and vouch for the accuracy of information provided.

True

. When sharing activities across business units, a company can attain the highest cost savings when it acquires another from the same industry in the same country.

True

. When the U.S. currency appreciates against other currencies, it becomes more expensive for American companies that have branch operations overseas, when they declare foreign profits in the United States.

True

. Within a worldwide market, the most effective strategies are neither purely multi-domestic nor purely global.

True

. What is the name of the practice that many modular organization use to grow?

outsourcing

. According to the text, corporate restructuring includes

capital restructuring, asset restructuring, and management restructuring

. Which of the following is NOT one of the three characteristics of entrepreneurial leadership mentioned by the text?

clarifying job responsibilities

. If a firm outsources some parts of its value chain in order to reduce costs and increase quality and at the same time engages in multiple alliances to penetrate new markets, this is a example of a firm using a ______________ of organizational types.

combination

. A global start-up faces many management challenges including _____________.

communication and coordination across time zones

. Which of the following approaches to behavioral strategic control would be the least appropriate for an organization in which there is a great need for innovation and a high degree of autonomy?

rules

. Important advantages of a holding company structure include _____________.

savings in personnel and overhead expenses associated with a small corporate office

. The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.

sell recommendations generate lower commissions than buy recommendations

. Diversification initiatives include all of the following except ___________________.

shareholder development

. Generally speaking, the opportunity recognition process consists of two phases of activity. They are ______________ and _____________.

discovery; evaluation

. Contemporary approaches to strategic control rely primarily on _____________.

double-loop learning

. When an opportunity is attractive long enough for it to be successfully developed and deployed, it is said to be _____________.

durable

. It is generally argued that the takeover constraint deters management from _____________.

engaging in opportunistic behavior

. Amazon is an example of a company that used the differentiation strategy to enter the market. The differentiation features included _____________.

exceptional customer service

. The form of entry strategy into international operations that offers the lowest level of control for the domestic corporation would be _________.

exporting

. Which of the following describes the most typical order of entry into foreign markets?

exporting, licensing, franchising, joint venture, and wholly owned subsidiary

. Which of the following types of international firms are most likely to benefit from a global strategy as opposed to a multi-domestic strategy?

firms in industries that have much value added in research and design or manufacturing

. When an organization with a simple structure increases its sales revenue and volume of outputs, it is most likely to develop a ______________ structure.

functional

. Which of the following is not a common source of new business opportunities?

future work

. Virtual organizations ______________ whereas modular organizations _____________.

give up part of their strategic control; retain full strategic control

. When firms expand into global markets, they are faced with the choice of reducing costs and/or adapting to the local market. When high pressures exist to lower costs, companies should choose a __________ or __________ in order to compete in the global marketplace.

global strategy; transnational strategy

. The antitakeover tactic, _______, is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

greenmail

. Square provides a means for small businesses to process credit and debit card sales without signing up for a traditional credit card arrangement of monthly fees and minimum charges. It used which new entry strategy to enter the market initially?

imitative

. Which of the following is a reason for the rise in regional expansion?

increase in the number of trading blocs and free trade zones

. When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.

individuals begin working at cross purposes

. Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.

informational control

. Which would be the appropriate strategy for companies to use to compete in the global marketplace if the marketplace pressure is for lower costs with little pressure for local adaptation?

international strategy

. In trying to assure that managerial actions lead to shareholder value maximization, a risk can come about if the market value of a firm becomes less than its book value. The risk is _____________.

it becomes an attractive takeover target

. Continuous monitoring, in the contemporary approach, is beneficial because _____________.

it reduces time lags

. Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________.

legislation that protects the interests of minority shareholders

. Multinational firms are constantly faced with the dilemma of choosing between _______ and __________.

local adaptation; global integration

. According to the text, new ventures launched by entrepreneurial teams are more likely to be successful than ventures launched by _____________.

lone wolf entrepreneurs

. Which of the following is NOT a strategic risk of outsourcing?

loss of non-vital functions

. In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________.

low family ownership and control

. A simple structure is characterized by _____________.

low specialization and high centralization

. According to the study by OReilly and Tushman, effective ambidextrous structures had all of the following attributes except _____________.

managerial efforts were highly focused on revenue enhancement

. Aircraft makers Boeing and Airbus have a high degree of ______________ because they make very similar products and have many buyers in common.

market commonality

. Which of the following refers to a situation where a company has a high concentration of its business in a particular industry market?

market dependence

. Complicated working relationships, intense power struggles, and excessive reliance on group processes are disadvantages of which type of organizational structure?

matrix

. Contemporary strategic controls involve comparing actual performance to predetermined goals.

False

. Transaction costs include all of the following costs EXCEPT

agency costs

. Rule-based controls are least appropriate in organizations with which one of the following characteristics?

Employees are highly skilled and independent.

. Southwest Airlines began its no frills, no meals strategy in the late 1960s as a direct assault on the major carriers of the day. What type of competitive action does this represent?

A tactical action because it is a refinement of an existing strategy.

. Which of the following is NOT a disadvantage of the barrier-free form of organization?

Additional integration issues result is a slower response to market changes.

. CEO duality refers to a situation in which the _____________.

CEO serves as both the CEO and the chair of the board of directors

. Which of the following is not an example of how organizational culture exerts behavioral control?

Culture sets explicit boundaries.

. Shareholders rely on CEOs to adopt policies and strategies that maximize the value of their shares. To motivate CEOs to maximize the value of their companies, boards of directors can consider all of the following options except one. Which one is it?

Dismissal for poor performance is not an option.

. Firms can eliminate political instability and adverse government actions risks by: competing in a range of geographic markets, developing stakeholder coalitions, cultivating relationships with key influences, and including key public/private stakeholders in their boards.

False

. Founders using a pioneering new entry strategy look for opportunities to capitalize on proven market successes.

False

. High levels of environmental awareness in Denmark have led to a decline in Danish industrial competitiveness in the international marketplace.

False

. In a barrier-free organization, differences in skills, authority, and talent disappear.

False

. In emerging economies and continental Europe, principal-principal conflicts are frequent. These consist of conflicts between controlling shareholders and executives.

False

. Informational controls involve the balance and alignment of the culture, rewards, and boundaries of a firm.

False

. Jack Welch, former CEO of GE, believes that all internal and external organizational boundaries should vanish completely.

False

. Market power refers to cost savings from leveraging core competencies or sharing activities among the businesses in a corporation.

False

. Outsourcing in noncore functions of modular companies offers the advantage of decreased overall costs, but the company will be unable to focus on scarce resources in the areas where it holds competitive advantage.

False

. Portfolio management should be considered as the primary basis for formulating corporate- level strategies.

False

. Procter and Gamble used communities of practice and human resource practices to help it achieve effective collaboration and integration across its different business units. This effort resulted in the successful development of the Crest Whitestrips product and is an example of good use of boundary-constrained organizational design.

False

. Research shows that the vast majority of acquisitions result in value creation rather than value destruction.

False

. Reverse innovation occurs when a company develops a product that meets the needs of a developed country and then adapts it to the needs of the developing country.

False

. Smell-O-Vision created an invention that would pump odors into movie theatres. It did not make it to market. This was an attempt to be an adaptive entry strategy.

False

. Stock analysts generally issue more sell recommendations than buy recommendations.

False

. The Michael Porter Diamond of National Advantage is a framework that explains why countries foster successful multinational corporations based on factor endowments and demand conditions only.

False

. The collective sum of individual behaviors of the employees of an organization generally results in what is best for the organization; thus, individual rationality assures organizational rationality.

False

. The evaluation phase of opportunity recognition occurs when an entrepreneur has an insight about a new business venture, often based on prior knowledge.

False

. The majority of entrepreneurial firms are started with financing from venture capitalists and banks.

False

. The need to attain economies of scale encourages multinational firms to operate under a multi-domestic strategy.

False

. The strategic business unit (SBU) and holding company structure are variants of the functional form of structure.

False

. The strategy and structure of a firm change as the firm increases in size, diversifies into new product markets, and limits its geographic scope.

False

. The structure of a firm typically has almost no effect on its strategy.

False

. The success of an adaptive new entrant can be limited, if the value proposition is perceived as being unique.

False

. The trend towards worldwide markets makes it easier to predict where competitors will spring up.

False

. Typically, intense rivalry in domestic markets does not force firms to look outside their national boundaries for new markets.

False

. Typically, the least risky method of entry into a foreign market is through the establishment of a wholly owned foreign subsidiary so that the parent organization can maintain a high level of control.

False

. When a firm has international operations, choosing the most appropriate structure depends upon the extent of international expansion, the type of strategy, and the degree of market diversity.

False

. When firms diversify into unrelated businesses, the primary potential benefits are horizontal relationships, i.e., businesses sharing tangible and intangible resources.

False

. With regard to factor conditions, the pool of resources that a firm (or nation) has is much more important than the speed and efficiency with which these resources are deployed.

False

. With unrelated diversification, potential benefits can be gained from vertical or hierarchical relationships; that is, the creation of synergies from the interaction of the corporate office with outside stakeholders.

False

. In choosing sides concerning CEO duality, two schools of thought exist. Which of the following would not be a consideration for the Agency Theory school of thought?

Firm performance always is improved under CEO duality.

. Most organizations with strong cultures and a sound system of rewards and incentives can eventually internalize boundaries rather than use explicit rules and regulations. Which of the following is not a technique for moving in that direction?

Minimize training and indoctrination.

. PepsiCo leads Coca-Cola in the Indian market. Why?

PepsiCo formed a joint venture with two Indian companies to introduce its products under their label.

. Which of the following is an advantage of a functional type of organizational structure?

Pooling of specialists enhances coordination and control.

. When using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and has minimal or negative cash flow would be known as a __________.

Star

. ______________ provide(s) a key avenue for growth for many young and small firms through partnering to obtain resources and/or expand into new markets.

Strategic alliances

. Which of the following is not a reason for merger and acquisition failures?

The acquisition leads to value creation.

. Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are known as _________________.

core competencies

. Elements of a multidomestic strategy may facilitate the competitive advantage of cost leadership by __________.

decreased shipping and transportation costs inherent in local production

. Creating value within business units can happen when the corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures. This is known as ________.

parenting

. Which of the following is NOT a common new entry strategy according to the text?

proactive new entry

. The new entry strategy that a firm choses is dependent upon the ______________ and the ______________ of the new business concept.

riskiness; innovativeness

. Firms following a global strategy strive to offer __________ products and services as well as locate manufacturing, Research and Development, and marketing activities in a limited number of locations.

standardized

. Verizon Wireless and ILS Technology have a _________ whereby Verizon integrates technology developed by ILS to improve its machine-to machine (M2M) data transmission systems. M2M systems allow firms to securely transmit data to and from various devices.

strategic alliance

. An organization such as ConAgra that has dozens of different divisions with similar products will probably have the greatest success with which form of organization structure?

strategic business unit structure

. Rivalry is intense in nations with conditions of __________ consumer demand, __________ supplier bases, and __________ new entrant potential from related industries.

strong; strong; high

. When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present.

stronger competitive

. Generally speaking, discussions of the relationship between strategy and structure strongly imply that _____________.

structure follows strategy

. Which of the factors below has not made the software services industry in India extremely competitive on a global scale?

tax and antitrust legislation that protects the dominant players in the industry

. Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that _____________.

the similarity required for sharing core competencies must be in the value chain, not in the product

. Effective ambidextrous organizations have alignment, which means that _____________.

there is a clear sense of how value is being created in the short-term and how activities are properly integrated and coordinated

. Which of the following is not one of the reasons a company might launch new competitive actions?

to find new sources of raw materials

. High pressure for local adaptation combined with high pressure for lower costs would suggest what type of international strategy?

transnational strategy

. Which of the following is a disadvantage of a transnational strategy?

unique managerial challenges in fostering knowledge transfer

. Software Tech, Inc., a company in the computer software industry, invests heavily in Research and Development, and product design. Thus, most of its value is added ________.

upstream

. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________.

using related diversification to achieve value by integrating vertically in order to acquire market power

. Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with ___________.

vertical integration