BUSA 4900 Exam 2 Quiz Questions
Which of the following best illustrates an equity alliance?
A contractual agreement that provides Ocia Pharma Inc. the exclusive rights to distribute the drugs of Marvel Pharma Inc. in the Asian market
If the board of directors at GE decides to pursue a stakeholder strategy, should they change the ecomagination strategy?
No, they should not change the strategy because the strategy already helps them save costs while generating huge revenues
Disney's "Wedding Banned," a romantic comedy about a divorced couple trying to prevent their daughter from getting married, was axed in the advanced production stage despite several marquee stars (Robin Williams, Anna Faris, and Diane Keaton). Which of the following statements best explains why this happened? A. The purchasing power of the U.S. audience had reduced drastically. B. There was a feeling that the movie was against traditional American values regarding marriage. C. The movie was a copy of an already existing French movie. D. There were perceptions that this movie would not succeed outside of the American market.
There were perceptions that this movie would not succeed outside of the American market
Vibgyor Inc., a manufacturer of smartphones, has entered into a 15-year partnership with a software company to develop sophisticated operating systems and innovative mobile applications for its cell phones. This would mean that both the companies will have to mutually share their resources, knowledge, and capabilities to develop a superior product. What is the relationship between Vibgyor and the software company best referred to as in this scenario? A. an acquisition B. a strategic alliance C. a leveraged buyout D. a proprietorship
a strategic alliance
Why do shareholders of public companies need to appoint a board of directors to represent their interests? A. because of the separation of ownership and control B. because employees of a company cannot be shareholders C. because the board of directors itself is made up of shareholders D. because they want tighter control over day-to-day operations of a company
because of the separation of ownership and control
When a firm does not have the resource required for pursuing a growth strategy, and if the resource in question is not easily tradable, the implication for the strategist is most likely to:
consider an outright acquisition
When the market for photo film negatives declined with the arrival of digital cameras, Momento Films Inc., a manufacturer of film negatives, bought out most of its rivals that were planning to exit. This allowed the company to get rid of all the excess capacity and acquire a monopolistic market power in the declining industry. Which of the following strategies has Momento Films adopted in this scenario? A. harvest strategy B. maintain strategy C. consolidated strategy D. differentiation strategy
consolidated strategy
GM's insistence on sticking to a bureaucratic culture combined with its M-form structure and its subsequent failure to adapt to changing customer preferences for more fuel-efficient cars, produce higher quality, and create innovative designs best exemplifies A. decentralization. B. founder imprinting. C. groupthink. D. core rigidity.
core rigidity
Which of the following statements is true of a multidomestic strategy?
firms frequently use a multidomestic strategy when entering host countries with large and/or idiosyncratic local markets
McDonald's uses detailed standard operating procedures throughout the world to ensure product quality. This implies that McDonald's has a high degree of
formalization
A typical college of business has several areas such as management, marketing, finance, accounting, MIS, and so on. This is an example of an ___________ structure.
functional
Which of the following statements is NOT true of tacit knowledge?
it is regularly shared between partners in a non-equity alliance
How did Apple plan to attack Amazon's stronghold in the e-reader market? A. It orchestrated a web of strategic alliances with major publishing houses. B. It directly imitated Amazon's Kindle product technology. C. It acquired startup publishing houses prior to launching its iPad product. D. It sold e-books at prices lesser than that of Amazon.
it orchestrated a web if strategic alliances with major publishing houses
In the context of the long tail phenomenon, what does the short head represent?
it represents products that appeal to the largest segment of the market with homogenous tastes
are best described as situations in which both partners in a strategic alliance are motivated to form an alliance for learning, but the rate at which the firms learn may vary
learning races
In Eli Lilly's Office of Alliance Management, the alliance champion is primarily responsible for:
making sure that an alliance fits within the firm's existing alliance portfolio and corporate-level strategy
FlyOne Airway's decision to acquire TrueGear Fuels Inc. proved to be ill-fated because its managers had overestimated their abilities and skills. They believed that they had the skills to manage such diversified businesses and create additional shareholder value. However, the acquisition failed to create the anticipated synergies because the managers' capabilities were restricted to the airlines industry. What does this scenario best illustrate? A. Managerial empathy B. Managerial feasibility C. Managerial hubris D. Managerial capitalism
managerial hubris
A few efficient and strong firms in the laptop industry have remained and emerged successful from the shakeout stage. Which of the following stages of the industry life cycle will they move to next? A. growth stage B. introduction stage C. maturity stage D. decline stage
maturity stage
It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity because:
the horizontal integration activity has the potential to reduce competitive intensity in an industry
is a situation in which transactions are likely not to take place because there are only a few buyers and sellers who have difficulty finding each other
thin markets
An ____ arises out of the combination of high pressure for local responsiveness and high pressure for cost reductions.
transnational strategy
Which of the following globalization strategies requires managers working in multinational enterprises (MNEs) to remember to think globally, but act locally?
transnational strategy
Which of the following is true of the board of directors in a public stock company?
votes at shareholder meetings determine whose representatives are appointed to the board of directors
While Cisco Systems has been successful in selecting and buying both big and small technology ventures, HP had to write off some of its recent technology acquisitions. Which of the following statements best explains this scenario?
Acquisition and integration capabilities were not equally distributed across firms
Which of the following is not included within the types of strategic alliances?
Acquisitions
W.L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE_TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfaction, retention, and creativity?
An extremely formalized organizational culture
Which of the following is regarded as the most internal of control mechanisms?
Business ethics
How does horizontal integration within an industry affect the surviving firms?
By strengthening the bargaining power of the surviving firms via-a-vis suppliers and buyers
Leila is a graduate student pursuing a course in international business. Presented with the case of HP's "soap opera," Leila wonders whether it was the right decision to ask the CEO of HP, Mark Hurd, to step down after he was accused of sexual harassment. Having a strong inclination toward Michael Porter's idea of value creation, Leila is most likely to conclude that: A. HP was wrong in asking Mark to step down because it did not consider the profit dip that would affect its shareholders. B. HP was right in asking Mark to step down because it has a greater obligation toward society. C. HP was wrong in asking Mark Hurd to step down because he was responsible for an almost 90 percent appreciation of the company's stock. D. HP was right in asking Mark Hurd to step down because agents, unlike principals, are disposable.
HP was right in asking Mark to step down because it has a greater obligation toward society
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
Which of the following statements is true of an international strategy?
It enables firms to leverage their home-based core competencies in foreign markets
Which of the following best describes groupthink?
It is a situation in which opinions coalesce around a leader without individuals critically challenging and evaluating that leader's opinions and assumptions.
Which of the following statements is true of organizational culture?
It is better for founder CEOs to create a relevant culture, structure, and strategy in the early stages
In emerging economies, the LCD television industry is in that phase of the industry life cycle in which the previously increasing market demand becomes limited. The competitive intensity within the industry is high, and inefficient firms have begun to exit the industry. This has allowed only a few major companies to come out as cost leaders and hold the shrinking market. Which of the following stages of the industry life cycle is the LCD television industry currently in?
Shakeout stage
Which of the following statements best supports the view that GE's ecomagination strategy is in line with the Shared Value Creation framework?
The ecomagination strategy allows GE to produce "green" products while increasing revenue and competitive advantage
Which of the following statements accurately brings out the distinction between introduction and growth stages of the industry life cycle?
There is more strategic variety in the growth stage when compared to the introduction stage
When large, incumbent firms buy start-up companies, the transaction is generally described as a(n)
acquisition
Which of the following is true of W.L. Gore & associates, which has a lattice organizational form?
all employees are empowered to speak to all other employees in the organization
In Eli Lilly's office of Alliance Management, the _________is a senior, corporate-level executive responsible for high-level support and oversight.
alliance champion
Which of the following is an observable feature in the globalization 3.0 stage?
based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world
The ______ is the centerpiece of corporate governance is composed of inside and outside members.
board of directors
Elc Inc. is an electronic appliances manufacturer that has many strategic business units (SBUs), among which, Television and Computers share a close relationship. These SBUs have to fight each other for R&D funding because there is a combined amount set aside for these two units. However, they share technological findings with each other and work together to ensure that their combined output is better that of the other SBUs. Such a relationship between SBUs in a business is referred to as _____. A. competition B. co-opetition C. exploitation D. exploration
co-opetition
is best described as cooperation by competitors to achieve a strategic objective
co-opetition
Intel's Celeron chip and Atom chip are initiatives to A. introduce a new product in a new market to extend its leadership. B. guard the company against disruptive innovation by protecting the low end of the market. C. stall its own disruption strategies and wait for its rivals to introduce disruptive forces. D. target that section of the market that is not particularly price sensitive.
guard the company against disruptive innovation by protecting the low end of the market
The global-standardization strategy arises out of the combination of:
high pressure for cost reductions and low pressure for local responsiveness
Adverse selection in a public stock company occurs when:
information asymmetry increases the likelihood of selecting inferior alternatives
is best described as the commercialization of any new product, process, or the modification and recombination of existing ones.
innovation
Serena is the CEO of Pedalo Inc., a publicly traded company. The shareholders want Serena on the board of directors despite her recent appointment as the CEO. This decision of the shareholders is most likely because Serena A. is a board member of a major client. B. is more likely than other board members to take care of the stockholders. C. is also the CEO of other companies. D. is likely to provide the board with valuable inside information.
is likely to provide the board with valuable inside information
What did Microsoft do to gain a foothold in the online search and advertising market dominated by Google?
it entered into a strategic alliance with Yahoo
Amiware Inc., a manufacturer of ceramic cookware, has entered into a contractual agreement with Micoware Inc. The agreement involves vertical strategic alliances connecting different parts of the industry value chain. This arrangement between the two companies best illustrates a(n) A. joint venture. B. acquisition. C. non-equity alliance. D. greenfield venture.
non-equity alliance
An____ occurs when firms enter into a partnership based on contractual agreements, which results in vertical strategic alliances, that connect different parts of the industry value chain.
non-equity alliance
is best described as a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for a specified time period in exchange for public disclosure of the underlying idea
patent
For a firm pursuing a global-standardization strategy, which of the following bases of competition becomes its primary weapon? A. product differentiation B. superior customer service C. local responsiveness D. price
price
Which of the following statements accurately describes social entrepreneurs?
social entrepreneurs are those who consider financial, ecological, and social metrics to evaluate their firm's performance
Employees learn about an organization's culture through the process of
socialization
Which of the following is a major issue at the forefront of CEO compensation in recent years?
the absolute size of the CEO pay package compared with the pay of the average employee
In a non-equity alliance, which of the following types of information would firms most likely share?
the documented information about the material composition of a product
The success of the Pixar-Disney strategic alliance demonstrated that A. Disney was in desperate need of Pixar's graphic display systems. B. the two entities' complementary assets matched. C. it was easier for the alliance partners to reduce the value gap created. D. the companies were effectively managing an unrelated diversification strategy.
the two entities' complementary assets matched
Which of the following is an advantage of non-equity alliances?
they are flexible and easy to initiate and terminate
Which of the following is a drawback faced by multinational enterprises (MNEs) pursuing an international strategy?
they are highly affected by exchange rate fluctuation
