Policy/strategy Exam 3

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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


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