Policy/strategy Exam 3
limited liability
A form of business ownership in which the owners are liable only up to the amount of their individual investments.
multidivisional structure
An organizational structure in which divisions are organized into separate profit centers
one of the disadvantages of GMs focus on its Chinese market is
Chinese government supported domestic car makers are able to initiate a cutthroat price war
cash cow
SBUs that compete in a low-growth market but hold considerable market share. Earning high and stable
acquisition
The taking over the control of one company by another.
which of the following companies geographic distance be the most relevant factor in deciding whether to trade with a target country
a firm that extracts and exports iron ore
site diversification strategy
a firm that is active in several different product markets
site specificity
a form of specialized assets, assets that are required to be co-located
serial acquisitions
a large firm involved in highly competitive market of high tech equipment, they are in a market with smaller firms that are constantly making new technology developments
multidomestic strategy
a strategy in which operating decisions are decentralized to each country to enhance local responsiveness
a primary advantage of organizing economic activity within firms is the blank
ability to coordinate highly complex tasks to allow for specialized division of labor
equity allowance
allow for the sharing of tacit knowledge. Therefore, the partners in it frequently exchange personnel to make the acquisition of tacit knowledge possible
real options perspective
approach to strategic decision making that breaks down a larger investment decision into a set of smaller decisions that are staged sequentially over time
location economies
benefits from locating value chain activities in the world's optimal geographies for a specific activity, wherever that may be
a firm pursuing a transnational strategy would believe that
best practices ideas and innovations should be diffused throughout the world
outside directors
board members who are not employees of the firm, but who are frequently senior executives from other firms or full-time professionals
greenfield venture
built up from the bottom
how does horizontal integration within an industry affect the surviving firms
by strengthening the bargaining power of the surviving firms vis a vis suppliers and buyers
when examining the core competence market matrix the most challenging diversification strategy occurs when firms attempt to combine new blank and blank.
core competencies and new markets
one way to foster ethical behavior in employees is to
create a control system that encourages desired values
downstream
distribution to customer
organizational inertia
firms resistance to change in the status quo
functional structure
focuses on efficiency and achieving scale economies by producing limited lines of products
a cost leadership strategy supports a blank and blank
functional and mechanistic structure
star
growing market, large
according to the perspective of shareholder capitalism shareholders in public stock companies
have the most legitimate claim on profits
Judging from the Disney-Pixar merger, which of these is an effective way to create shareholder value from a merger?
if they acquired company creates high quality products or services dont force it to mirror the management style of the acquiring company
why should managers using the M-form organizational structure to support a related-diversification strategy ideally concentrate decision making at the top of the organization
it allows a high level of integration
Ambiguity
making decisions without knowing all the facts
Principle-Agent Problem
managers hired to improve the firms profitability and ultimately the shareholders value will add to the overall costs if they pursue their own self interests
which of the following real world examples best exemplifies formalization
mcdonalds use of standard operating procedures across the world
Backward vertical integration
moving upstream in the industry value chain and purchasing a supplier
Blue Ocean
new market space where demand is being created and not fought over
ethics is
not synonymous with law
diversification discount
occurs when the stock price of a highly diversified firm is values less than the sum of all their strategic business unit
which of the following corresponds to the use of tacit knowledge
phil assembling a motorcycle from memory
when managers pursuit of strategies that define value creation too narrowly in public stock
reduces the trust of shareholders in the organization as a vehicle for value creation
vanessa just graduated from law school and wants to open her own law firm. Venessa should probably adapt a blank for the firm
simple structure
dog
small, isnt growing
A drawback involved in using cross-border strategic alliances to enter new foreign markets is that
some of the firms proprietary know how may be appropriated by the foreign partner
global standardization strategy
strategy attempting to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best-of-class capabilities reside at the lowest cost
up-stream
suppliers
during a joint venture a negotiation will transmit
tacit and explicit knowledge
Agency Theory
the analysis of how asymmetric information problems affect economic behavior
Adverse Selection
the problem of incomplete information - of choosing alternatives without fully knowing the details of available options
organizational culture
the set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization
why is it difficult to imitate the organizational culture of firms like southwest airlines and zappos?
their culture reflects complex relationships with their employees customers and suppliers
according to Michael porter which of the following is a problem with many publicly traded companies
they are defined value creation too narrowly in terms of financial performance
in a public stock company senior executives such as the CEO face agency problems when
they delegate authority of strategic business units to general managers
advantage of using foreign acquisitions or greenfield plants as a foreign entry mode
they reduce a firms exposure to loss of reputation
a question mark
unsteady may be growing
hostile takeover
when a firm does not want to be acquired
merger
when two or more companies join to form a single firm
