Toyota and its suppliers have a relationship in which Toyota encourages suppliers to modernize their facilities and provides them with technical and financial assistance to do so. It also promotes longer-term contracts with suppliers and enables engineers in the supplier companies to have better communication with Toyota. This is an example of a(n)

Toyota and its suppliers have a relationship in which Toyota encourages suppliers to modernize their facilities and provides them with technical and financial...

McDonald's operates through a franchising system wherein the head office uses strategic and financial controls to ensure that the franchises are creating the greatest possible value. This is an example of a(n)

McDonald's operates through a franchising system wherein the head office uses strategic and financial controls to ensure that the franchises are creating...

Airlines have forged a number of complementary strategic alliances, in part because many airlines are not profitable. Some airlines participate in several alliances simultaneously. This tends to

Airlines have forged a number of complementary strategic alliances, in part because many airlines are not profitable. Some airlines participate in several...

Toyota heavily uses a strategic network of vertical relationships. Toyota enables engineers in supplier firms to communicate easily with companies with which Toyota has contracts for services. This results in the suppliers and Toyota (the strategic center firm) being more

Toyota heavily uses a strategic network of vertical relationships. Toyota enables engineers in supplier firms to communicate easily with companies with...

Ichabod Industries has a Latin American Division, a European Division, an Industrial Lubricants Division, and a Food Service Division. Ichabod Industries probably uses the ______ organizational structure.

Ichabod Industries has a Latin American Division, a European Division, an Industrial Lubricants Division, and a Food Service Division. Ichabod Industries...

The need for the organization to combine local responsiveness and efficiency is most critical in a _____ strategy.

The need for the organization to combine local responsiveness and efficiency is most critical in a _____ strategy.a. multidomesticb. transnationalc. globald....

Which of the following is NOT a preliminary task of the strategic center firm in a strategic network?

Which of the following is NOT a preliminary task of the strategic center firm in a strategic network?a. strategic outsourcingb. encouraging friendly rivalry...

It is easiest to identify the company that functions as the strategic center firm in

It is easiest to identify the company that functions as the strategic center firm ina. horizontal complementary strategic alliances.b. vertical complementary...

A multidomestic strategy would be associated with

A multidomestic strategy would be associated witha. high levels of coordination.b. informal coordination among units.c. many integrative mechanisms.d....

Galatea Foods was founded in Greece by Galatea Chronos in 1978, and the company spread rapidly through Western Europe. Ms. Chronos retains the office of CEO. The Spanish division is headed by her oldest son. The North European division is headed by her only daughter, and the French-Italian division is headed by Ms. Chronos' brother. This company probably uses the _____ strategy.

Galatea Foods was founded in Greece by Galatea Chronos in 1978, and the company spread rapidly through Western Europe. Ms. Chronos retains the office...

The primary disadvantage of the multidomestic strategy and worldwide geographic area structure relates to limited

The primary disadvantage of the multidomestic strategy and worldwide geographic area structure relates to limiteda. centralization.b. coordination across...

One of the primary disadvantages of the global strategy and worldwide product divisional structure is that

One of the primary disadvantages of the global strategy and worldwide product divisional structure is thata. it is difficult to achieve economies of scale.b....

In the competitive form of the multidivisional structure, the focus of headquarters is on all of the following EXCEPT

In the competitive form of the multidivisional structure, the focus of headquarters is on all of the following EXCEPTa. integration.b. performance appraisal.c....

TheLG Company has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the _____ structure.

TheLG Company has units operating in significantly different industries and uses financial controls to manage its portfolio. LG is most likely using the...

Implementing the multidomestic strategy requires decentralization to

Implementing the multidomestic strategy requires decentralization toa. facilitate the tailoring of products to the demand in local markets.b. develop...

A worldwide geographic area structure is an organizational form in which

A worldwide geographic area structure is an organizational form in whicha. multiple alliances across the globe link complementary businesses.b. standardized...

The fewest integrative devices are used in the _____ structure.

The fewest integrative devices are used in the _____ structure.a. simpleb. competitive multidivisionalc. SBUd. networkAnswer: competitive multid...

In the _____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets.

In the _____ structure hierarchy, the headquarters relies on strategic controls to set rate-of-return targets.A. cooperativeB. competitiveC. SBUAnswe...

The CEO of Transector, Inc., set a 6.5 percent rate-of-return target for all divisions for the past year. Now, at the end of the year, three of Transector's seven divisions have not met this rate-of-return goal. The division managers of these three under-performing divisions have all secretly contacted executive-placement firms to investigate openings at other firms, because they know their future at Transector is in jeopardy as financial performance is all-important at Transector. Transector probably uses the _____ structure.

The CEO of Transector, Inc., set a 6.5 percent rate-of-return target for all divisions for the past year. Now, at the end of the year, three of Transector's...

Megaline, Inc., with five divisions, follows the competitive form of the multidivisional structure. One division has not met the rate-of-return goals for the past year. Another division has exceeded the rate-of-return goals. The other three divisions met the rate-of-return goals. The headquarters office must decide where to allocate capital in the next year. Which scenario is the MOST likely?

Megaline, Inc., with five divisions, follows the competitive form of the multidivisional structure. One division has not met the rate-of-return goals...

The most centralized and most costly form of the multidivisional structure is the

The most centralized and most costly form of the multidivisional structure is thea. integrated.b. competitive.c. SBU.d. cooperative.Answer: coop...

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?

Which of the following multidivisional structures is CORRECTLY paired with the appropriate corporate-level strategy?a. competitive form with related-constrained...

A firm pursuing an unrelated diversification strategy will utilize a _____ structure.

A firm pursuing an unrelated diversification strategy will utilize a _____ structure.a. networkb. cooperative form multidivisionalc. competitive form...

In the _____ multidivisional structure there is complete independence among the firm's divisions.

In the _____ multidivisional structure there is complete independence among the firm's divisions.a. cooperativeb. matrixc. competitived. SBUAnswer:&n...

When a corporation pursues a related constrained diversification strategy, financial controls may not add value to strategy implementation efforts because it is difficult to

When a corporation pursues a related constrained diversification strategy, financial controls may not add value to strategy implementation efforts because...

A firm pursuing a related constrained diversification strategy would typically need all of the following EXCEPT

A firm pursuing a related constrained diversification strategy would typically need all of the following EXCEPTa. centralization of some organizational...

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus, Athena, and Hercules

Icarus Aviation, Athena Instrumentation, and Hercules Miniaturization are strategic business units of Olympia Industries. One can expect that Icarus,...

A private university is made up of various "schools," such as the School of Journalism, the School of Business, the School of Law, the School of Arts and Sciences, and so forth. The university is experiencing some financial problems, so the administration has decided to have each school of the university become a profit center. This scheme is somewhat parallel to the organizational structure.

A private university is made up of various "schools," such as the School of Journalism, the School of Business, the School of Law, the School of Arts...

The cooperative multidivisional firm

The cooperative multidivisional firma. establishes profit centers based on products or markets.b. has a flat organizational structure which broadens jobs...

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize strategic controls within their units' performance?

Which organizational structure will emphasize financial controls for headquarters' evaluation of operating units while the operating units will emphasize...

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?

Which of the following is a TRUE statement about implementing corporate-level strategies and effective organizational structures?a. Firms pursuing a related...

The _____ structure is an organizational structure that combines both functional specialization and business.

The _____ structure is an organizational structure that combines both functional specialization and business.A. worldwide geographic areaB. networkC....

The BEST multidivisional structure to use

The BEST multidivisional structure to usea. is the competitive form.b. is the SBU form.c. is the cooperative form.d. depends on the degree of diversification.Answer: depends...

Cisco's _____ corporate-level structure was useful in implementing its _____ business-level strategy.

Cisco's _____ corporate-level structure was useful in implementing its _____ business-level strategy.a. SBU form; integrated cost leadership-differentiationb....

Cisco used the _____ structure to implement its _____ strategy.

Cisco used the _____ structure to implement its _____ strategy.a. functional; cost leadership.b. SBU form of the multidivisional; related linkedc. cooperative...

Ortiz is a manager of BRS Corp. Ortiz's division did not meet financial targets this year. Ramirez, manager of another division, has indicated that Ortiz's division incurred significant costs which resulted in Ramirez's division setting record profits for the year. As a result, performance for BRS as a whole exceeded projections. Which pairing of organizational structures for BRS and bonus for Ortiz is most plausible?

Ortiz is a manager of BRS Corp. Ortiz's division did not meet financial targets this year. Ramirez, manager of another division, has indicated that Ortiz's...

The _____ structure is the most appropriate structure for implementing the integrated cost.

The _____ structure is the most appropriate structure for implementing the integrated cost.A. functionalB. multidivisionalC. strategic business unitA...

The _____ structure is best for implementing the related-constrained diversification strategy.

The _____ structure is best for implementing the related-constrained diversification strategy.a. functionalb. competitive form of the multidivisionalc....

Which of the following is NOT a variation of the multidivisional structure?

Which of the following is NOT a variation of the multidivisional structure?a. competitive formb. regional formc. cooperative formd. strategic business...

Typically, a successful firm pursuing a differentiation strategy will

Typically, a successful firm pursuing a differentiation strategy willa. have a very hierarchical structure.b. require a structure that is very formal.c....

Which of the following is a TRUE statement about organizational structures for implementing business-level strategies?

Which of the following is a TRUE statement about organizational structures for implementing business-level strategies?a. A cost leadership strategy requires...

Successful implementation of the differentiation strategy requires a structure that

Successful implementation of the differentiation strategy requires a structure thata. has specialized jobs.b. decentralizes decision making.c. focuses...

The integrated cost leadership/differentiation strategy is difficult to implement mostly because

The integrated cost leadership/differentiation strategy is difficult to implement mostly becausea. different primary and support activities are emphasized...

Successfully implementing a cost leadership strategy requires

Successfully implementing a cost leadership strategy requiresa. freedom from constraining rules.b. centralization of authority.c. communication between...

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices. She plans to compete on the basis of cost, offering the lowest processing cost per claim in her market area. Ms. Adams' company should

Agatha Adams founded Insurance Specialists to process medical claims for physicians' practices. She plans to compete on the basis of cost, offering the...

Walmart's effective strategy/structure configuration is

Walmart's effective strategy/structure configuration isa. cost leadership/functional.b. differentiation/functional.c. related constrained/multidivisional.d....

Firms seeking to differentiate particularly need support from the _____ and _____ functions.

Firms seeking to differentiate particularly need support from the _____ and _____ functions.a. finance; accountingb. engineering; operationsc. product...

Some experts consider the _____ structure to be one of the 20th century's most significant organizational.

Some experts consider the _____ structure to be one of the 20th century's most significant organizational.A. cooperativeB. multidivisionalC. function...

The three structural characteristics that differ among organizational structures include all of the following EXCEPT

The three structural characteristics that differ among organizational structures include all of the following EXCEPTa. centralization.b. formalization.c....

Which of the following is NOT associated with an organizational structure that supports a cost leadership strategy?

Which of the following is NOT associated with an organizational structure that supports a cost leadership strategy?a. centralizationb. specializationc....

___ is the degree to which rules and procedures govern work.

___ is the degree to which rules and procedures govern work.a. Formalizationb. Centralizationc. Specializationd. UnificationAnswer: Formalizat...

____ is the degree to which decision-making authority is retained at higher managerial levels.

____ is the degree to which decision-making authority is retained at higher managerial levels.a. Formalizationb. Centralizationc. Specializationd. Un...

The multidivisional structure was initially designed to produce three major benefits over the functional form. Which of the following is NOT one of the three benefits?

The multidivisional structure was initially designed to produce three major benefits over the functional form. Which of the following is NOT one of the...

Jumbo Industrial Supply has grown from a one-location firm with a restricted product line to a multi-state organization with numerous product lines and a large sales staff. Sales have doubled every year for the last three years. It currently has a simple structure with Jared Smith, the owner-manager, making all major decisions. Jumbo is probably now experiencing or will soon experience

Jumbo Industrial Supply has grown from a one-location firm with a restricted product line to a multi-state organization with numerous product lines and...

The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative response to

The noted business historian Alfred Chandler viewed the multidivisional structure as an innovative response toa. an emerging professional management philosophy.b....

Functional structures work best for firms for all of the following strategies EXCEPT

Functional structures work best for firms for all of the following strategies EXCEPTa. cost leadership strategy.b. differentiation strategy.c. related...

Leslie is a newly graduated certified public accountant with a specialty in corporate tax. She wishes to join an organization (not an accounting firm) that will allow her to concentrate on corporate tax and become deeply proficient in this area. Leslie should look for a position in a firm with a _____ structure.

Leslie is a newly graduated certified public accountant with a specialty in corporate tax. She wishes to join an organization (not an accounting firm)...

One disadvantage of the functional structure is that

One disadvantage of the functional structure is thata. career paths and professional development are limited.b. dual reporting relationships blur lines...

Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?

Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?a. increasing diversificationb. coordination...

Alfred Chandler found that firms grow in a predictable pattern and that the firm's growth patterns determine its structural form. Which form corresponds to the FINAL stage in Chandler's theory?

Alfred Chandler found that firms grow in a predictable pattern and that the firm's growth patterns determine its structural form. Which form corresponds...

Andermeyer Jewelers, which specializes in high-end jewelry, has been in existence since the 1870s and has served generations of wealthy families. Owned and managed by the Andermeyer family since its founding, it has never had more than 20 designers and jewelers in its shop. Andermeyer Jewelers should use the _____ structure.

Andermeyer Jewelers, which specializes in high-end jewelry, has been in existence since the 1870s and has served generations of wealthy families. Owned...

Typically, an organization using a simple structure would be

Typically, an organization using a simple structure would bea. large.b. small.c. of any size if the firm is privately held.d. a family-owned-and-managed...

In most cases, the focus strategy is best managed using a _____ structure.

In most cases, the focus strategy is best managed using a _____ structure.a. simpleb. functionalc. multidivisionald. verticalAnswer: sim...

The benefits of a simple structure include all of the following EXCEPT

The benefits of a simple structure include all of the following EXCEPTa. ease of coordination within the organization.b. the lack of a need for sophisticated...

One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing so

One reason why a long-tenured top-level manager may hesitate to conclude the firm's structure is a problem is that doing soa. indicates to competitors...

Strategic controls allow corporate-level managers to

Strategic controls allow corporate-level managers toa. evaluate business-level performance on objective criteria.b. concentrate on day-to-day corporate...

Financial controls are most important in the _____ strategy.

Financial controls are most important in the _____ strategy.a. single businessb. related constrainedc. unrelated diversifiedd. vertical complementaryAnswer: unrelated...

____ controls are objective criteria that allow corporate managers to evaluate the returns earned by individual business units.

____ controls are objective criteria that allow corporate managers to evaluate the returns earned by individual business units.A. ManagerialB. FinancialC....

A firm's _____ specifies the work to be done and how to do it given the firm's strategy or strategies.

A firm's _____ specifies the work to be done and how to do it given the firm's strategy or strategies.a. structureb. controlsc. cultured. strategyAns...

Structural stability affects the organization's ability to

Structural stability affects the organization's ability toa. resist organizational inertia.b. cope with uncertainty about cause-and-effect relationships...

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers because

Selecting the organizational structure and controls that effectively implement the chosen strategy is a challenge for managers becausea. firms must be...

Organizational structure

Organizational structurea. specifies the firm's formal reporting relationships, procedures, controls, and authority and decision-making processes.b. specifies...

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used a functional structure. Five years ago, the company branched into online publishing and small-batch printing in addition to its regular large-batch operations. Both new businesses are significantly different in technology and marketing from each other and from Ball's traditional business. Despite the hiring of experienced professionals in these new endeavors, performance continues to be poor and is affecting Ball's overall performance. Which of the following statements is TRUE?

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used...

The opportunity maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences in all EXCEPT

The opportunity maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences...

One disadvantage of developing effective monitoring systems to manage a strategic alliance is that

One disadvantage of developing effective monitoring systems to manage a strategic alliance is thata. firms will have to accept greater risks.b. trust...

In managing cooperative strategies, research indicates that _____ can be a capability that is valuable, rare,

In managing cooperative strategies, research indicates that _____ can be a capability that is valuable, rare,a. stabilityb. trustworthinessc. Internet...

The Microsoft/Nokia alliance that had hundreds of pages to specify each partner's responsibilities would be closest to the _____ approach to managing cooperative ventures. In contrast, the Renault/Nissan alliance

The Microsoft/Nokia alliance that had hundreds of pages to specify each partner's responsibilities would be closest to the _____ approach to managing...

In practice, the cost minimization strategy can be more expensive than the opportunity maximization strategy. Which of the following is a way in which the cost minimization strategy is less expensive than the opportunity minimization strategy?

In practice, the cost minimization strategy can be more expensive than the opportunity maximization strategy. Which of the following is a way in which...

The two basic approaches to successfully manage cooperative strategic alliances involve _____ and _____.

The two basic approaches to successfully manage cooperative strategic alliances involve _____ and _____.a. cost minimization; opportunity maximizationb....

Amylin Pharmaceuticals has an alliance with Eli Lilly & Co. to produce diabetes drugs. Lilly, however, recently signed an alliance agreement with another company to also produce diabetes drugs. As a result, Amylin sued Lilly for breech of the alliance agreement. Which of the following risks of cooperative strategies discussed in the chapter is most likely occurring here?

Amylin Pharmaceuticals has an alliance with Eli Lilly & Co. to produce diabetes drugs. Lilly, however, recently signed an alliance agreement with...

DDD Partners, a U.S. business consulting firm is considering a cooperative alliance with an Indian business consulting firm that has a wide practice in the Middle East and Asia. DDD has some European clients, but it sees the Middle East and Asia as growth opportunities. It hopes to learn how to navigate the different cultures and business practices in this part of the world from its alliance with the Indian firm. DDD's greatest risk here is that the Indian firm will

DDD Partners, a U.S. business consulting firm is considering a cooperative alliance with an Indian business consulting firm that has a wide practice in...

Which of the following is NOT a risk for firms engaged in cooperative strategies?

Which of the following is NOT a risk for firms engaged in cooperative strategies?a. misrepresentation of a partner's competenciesb. partner acts opportunisticallyc....

Greentech, Inc., is a bioengineering firm specializing in food crops. It is considering a cooperative alliance with an Asian agribusiness firm, AsiaFoods, to jointly produce improved crops for the Asian market. The risks that Greentech should consider before entering this alliance include all of the following EXCEPT:

Greentech, Inc., is a bioengineering firm specializing in food crops. It is considering a cooperative alliance with an Asian agribusiness firm, AsiaFoods,...

Which of the following statements is TRUE?

Which of the following statements is TRUE?a. Most cooperative strategies are successful if the basic agreements are well written and include appropriate...

Dynamic alliance networks work best in industries

Dynamic alliance networks work best in industriesa. characterized by frequent product innovations and short product life cycles.b. that are mature and...

Stable alliance networks will most often

Stable alliance networks will most oftena. be used to enhance a firm's internal operations.b. appear in mature industries where demand is relatively constant...

In a cross-border alliance, the local partner is often a useful source of information about

In a cross-border alliance, the local partner is often a useful source of information abouta. sources of capital.b. the strengths of the foreign firm's...

Legitimately, a firm may pursue an international strategic alliance for all of the following reasons EXCEPT

Legitimately, a firm may pursue an international strategic alliance for all of the following reasons EXCEPTa. to enhance the compensation packages of...

McDonald's, Hilton International, and Subway all heavily rely on the _____ strategy.

McDonald's, Hilton International, and Subway all heavily rely on the _____ strategy.a. transnationalb. network cooperativec. cross-border alliancesd....

FrameCo, a maker of commercial greenhouses, has just extricated itself from a failing cooperative alliance with another firm. The expected synergies never were achieved, and FrameCo lost most of its investment. The top management of FrameCo should

FrameCo, a maker of commercial greenhouses, has just extricated itself from a failing cooperative alliance with another firm. The expected synergies never...

The collaboration between Volvo Aero (a subsidiary of Sweden's AB Volvo) and U.S.-based Pratt & Whitney to produce a new jet engine would be characterized as a(n)

The collaboration between Volvo Aero (a subsidiary of Sweden's AB Volvo) and U.S.-based Pratt & Whitney to produce a new jet engine would be characterized...

The primary responsibility of the franchisor, such as McDonald's or Hilton International is to

The primary responsibility of the franchisor, such as McDonald's or Hilton International is toa. learn about the brand and technology from the franchisee.b....

Which of the following statements is FALSE?

Which of the following statements is FALSE?a. Franchising is most appropriate in fragmented industries.b. Franchising provides corporate growth with less...

In the franchising strategy, the most important competitive advantage for the franchisee is the franchisor's

In the franchising strategy, the most important competitive advantage for the franchisee is the franchisor'sa. brand name.b. capital resources.c. access...

A businessperson in Atlanta who wishes to develop a luxury pet kennel approaches the owner of the highly successful Pet Resort and Day Spa in Houston to see if the owner is interesting in franchising the Pet Resort brand. The Atlanta businessperson's goal is to

A businessperson in Atlanta who wishes to develop a luxury pet kennel approaches the owner of the highly successful Pet Resort and Day Spa in Houston...

The cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler's Illinois factory is a(n) _____ alliance because it allows the firms to share resources and capabilities across multiple functions.

The cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler's Illinois factory is a(n) _____ alliance because it allows the firms...

Firms entering into synergistic strategic alliances expect to attain

Firms entering into synergistic strategic alliances expect to attaina. technological complexity.b. economies of scope.c. monopolistic market power.d....

The Renault Nissan alliance discussed in the Opening Case is an example of a _____

The Renault Nissan alliance discussed in the Opening Case is an example of a _____a. joint ventureb. synergistic alliancec. horizontal complementary allianced....

A _____ is a strategy in which firms share some of their resources and capabilities to create economies

A _____ is a strategy in which firms share some of their resources and capabilities to create economiesb. synergistic strategic alliancec. diversifying...

Why are alliances in the airline industry unstable?

Why are alliances in the airline industry unstable?a. Unstable industries make for unstable alliances.b. The potential for firms to take opportunistic...

A _____ cooperative strategy helps the firm diversify in terms of products offered, markets served, or both.

A _____ cooperative strategy helps the firm diversify in terms of products offered, markets served, or both.a. corporate-levelb. business-levelc. national-leveld....

____ strategic alliances have stronger focus on value creation than do _____ alliances.

____ strategic alliances have stronger focus on value creation than do _____ alliances.a. competition reducing; complementaryb. complementary; competition...

For the purpose of diversification, a corporate-level cooperative strategy may be preferable to a merger or acquisition for all the following reasons EXCEPT

For the purpose of diversification, a corporate-level cooperative strategy may be preferable to a merger or acquisition for all the following reasons...

In the United States, cooperative strategies to reduce competition may result in _____ if they are explicit.

In the United States, cooperative strategies to reduce competition may result in _____ if they are explicit.a. increased tax liabilitiesb. litigationc....

The risks of being accused of collusion are MOST likely under what type of alliance?

The risks of being accused of collusion are MOST likely under what type of alliance?a. equity-based vertical complementary allianceb. equity-based horizontal...

Reduction of competition can be accomplished through all of the following EXCEPT

Reduction of competition can be accomplished through all of the following EXCEPTa. predatory alliances.b. explicit collusion.c. tacit collusion.d. mutual...

The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages, and special services, such as airport transportation and spa privileges. When one hotel makes adjustments in prices or offerings, the other hotels follow suit. It is possible that these hotels are

The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages,...

Mutual forbearance is

Mutual forbearance isa. illegal in the United States.b. a type of competition-reducing strategy.c. a variety of risk-sharing by firms in highly fragmented...

The fact that the prices consumers pay for branded breakfast cereals are above the prices that would exist if there were true competition suggests that the cereal manufacturers are engaging in

The fact that the prices consumers pay for branded breakfast cereals are above the prices that would exist if there were true competition suggests that...

A manufacturer of specialty jams and jellies has decided to ally itself with an orchard and vineyard growing rare strains of fruit. This is a(n) _____ strategy.

A manufacturer of specialty jams and jellies has decided to ally itself with an orchard and vineyard growing rare strains of fruit. This is a(n) _____...

___ are LEAST likely to involve potential or current competitors.

___ are LEAST likely to involve potential or current competitors.a. Mutual forbearance strategiesb. Tacit collusion strategiesc. Horizontal complementary...

Smith Commercial Lighting, Inc., which sells lighting for factories and businesses, has entered into an alliance with Revelation Lighting, Inc., a retailer of home decor lighting, in order to expand into the trend of using industrial-type lighting in non-traditional style homes. Smith has invested 40 percent and Revelation has invested 60 percent into the new operation. This is an example of a(n)

Smith Commercial Lighting, Inc., which sells lighting for factories and businesses, has entered into an alliance with Revelation Lighting, Inc., a retailer...

Firms in _____ markets cooperate to pool resources and gain market power.

Firms in _____ markets cooperate to pool resources and gain market power.a. slow-cycleb. standard-cyclec. fast-cycled. hyper-cycleAnswer: standa...

The two types of complementary strategic alliances are

The two types of complementary strategic alliances area. vertical and horizontal.b. macro and micro.c. outsourcing and insourcing.d. network and complementary.Answer: vertical...

All of the following are business-level cooperative strategic alliances EXCEPT

All of the following are business-level cooperative strategic alliances EXCEPTa. synergistic strategic alliances.b. uncertainty reduction strategic alliances.c....

A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. This is an example of the advantage of _____ resulting from an alliance.

A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance...

Firms in a standard-cycle market may form alliances in order to

Firms in a standard-cycle market may form alliances in order toa. take advantage of opportunities in emerging market countries.b. more quickly distribute...

U.S. Steel and Nucor (the two remaining major players in the U.S. steel industry) have been forming alliances as a _____ market.

U.S. Steel and Nucor (the two remaining major players in the U.S. steel industry) have been forming alliances as a _____ market.a. fast-cycleb. standard-cyclec....

A relatively young firm has developed a method of transferring photographic images of surface textures onto any type of hard surface. This potentially has a huge market in the home-decorating field as well as any hard surface that is typically painted, such as car bodies. The type of alliance partner this firm would be searching for would be one with

A relatively young firm has developed a method of transferring photographic images of surface textures onto any type of hard surface. This potentially...

The alliance between Nokia and Microsoft calls for Nokia to transition its smartphone portfolio to Microsoft's _____ to speed up development.

The alliance between Nokia and Microsoft calls for Nokia to transition its smartphone portfolio to Microsoft's _____ to speed up development.a. slow-cycle...

A nonequity strategic alliance exists when

A nonequity strategic alliance exists whena. two firms join together to create a new company.b. two or more firms have a contractual relationship to share...

Burgess Corp. manufactures a line of heavy construction equipment. The company has announced a contractual relationship with FS Electronics whereby FS will supply Burgess with advanced GPS navigation and guidance systems. These systems will be an option on all bulldozers, dump trucks, and road graders Burgess produces. What type of alliance is this?

Burgess Corp. manufactures a line of heavy construction equipment. The company has announced a contractual relationship with FS Electronics whereby FS...

Firms participate in strategic alliances for all the following reasons EXCEPT to

Firms participate in strategic alliances for all the following reasons EXCEPT toa. create value that they could not develop by acting independently.b....

The global airline industry is one in which

The global airline industry is one in whicha. national political interests prevent airlines from making international alliances.b. the fast-cycle nature...

A strategic alliance in which the partners own different percentages of the new company they have formed is called a(n)

A strategic alliance in which the partners own different percentages of the new company they have formed is called a(n)a. equity strategic alliance.b....

Meredith Inc. is a manufacturer of art supplies. The company has announced plans to enter into an equity strategic alliance with JaZz Paper to develop a line of specialty papers for use with a line of specialty paints Meredith manufactures. Which of the following would be the accurate interpretation of this announcement?

Meredith Inc. is a manufacturer of art supplies. The company has announced plans to enter into an equity strategic alliance with JaZz Paper to develop...

Japanese telecom NTT DoCoMo Inc. and Chinese Internet search operator Baidu Inc. established an alliance to distribute games and other mobile-phone content. Baidu will own 80 percent of this collaboration with DoCoMo holding the remaining 20 percent. This collaborative arrangement is an example of a(n)

Japanese telecom NTT DoCoMo Inc. and Chinese Internet search operator Baidu Inc. established an alliance to distribute games and other mobile-phone content....

Hewlett-Packard licenses some of its intellectual property through strategic alliances. Which of the following is correct about this relationship?

Hewlett-Packard licenses some of its intellectual property through strategic alliances. Which of the following is correct about this relationship?a. This...

BPM Corp. is a manufacturer of radar systems for regional-sized jet aircraft. The company has announced plans to enter into a joint venture with J3 Composites, a producer of advanced composite materials. The announced venture will produce a new, combined product consisting of the radar unit and protective composite cover. Which of the following ownership arrangements would be most typical for a joint venture?

BPM Corp. is a manufacturer of radar systems for regional-sized jet aircraft. The company has announced plans to enter into a joint venture with J3 Composites,...

Moon Flower cosmetics company executives are aware that their Asian customer base is interested in advanced skin care treatments beyond Moon Flower's traditional herbal and organic compounds. Moon Flower and a large American chemical company are in discussions to create a 50-50 partnership in a new firm, which would create skin care treatments based on innovative chemical formulations that would be marketed both in Asia and in the United States. Beyond being a cross-border alliance, this partnership can be called a(n)

Moon Flower cosmetics company executives are aware that their Asian customer base is interested in advanced skin care treatments beyond Moon Flower's...

Fujitsu Siemens Computers is a legally independent company of which Fujitsu and Siemens each own 50 percent. This collaboration is an example of a _____, which is effective at transferring _____.

Fujitsu Siemens Computers is a legally independent company of which Fujitsu and Siemens each own 50 percent. This collaboration is an example of a _____,...

When using cooperative strategies, firms most frequently develop strategic alliances that

When using cooperative strategies, firms most frequently develop strategic alliances thata. enhance the firm's reputation in the marketplace.b. are long-lived.c....

The use of strategic alliances

The use of strategic alliancesa. is unlikely to yield success if partnering firms are headquartered in the same country.b. may be too restrictive to facilitate...

In a(n) _____ , two or more firms create a legally independent company to share some of their resources.

In a(n) _____ , two or more firms create a legally independent company to share some of their resources.a. non-equity strategic allianceb. joint venturec....

Which type of strategic alliance is best at passing tacit knowledge between firms?

Which type of strategic alliance is best at passing tacit knowledge between firms?a. primary cooperative strategic alliancesb. joint venturesc. equity...

A strategy in which firms work together to achieve a shared objective is a

A strategy in which firms work together to achieve a shared objective is aa. functional-level strategy.b. business-level strategy.c. corporate-level strategy.d....

A cooperative strategy

A cooperative strategya. is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive...

Within the Renault Nissan alliance , both Renault and Nissan have each formed _____ strategic alliances at the business-unit level with other companies.

Within the Renault Nissan alliance , both Renault and Nissan have each formed _____ strategic alliances at the business-unit level with other companies.a....

After a leveraged buyout, _____ typically occur(s).

After a leveraged buyout, _____ typically occur(s).a. selling of assetsb. further rounds of acquisitionsc. due diligenced. private synergyAnswer: selling...

A leveraged buyout refers to

A leveraged buyout refers toa. a firm restructuring itself by selling off unrelated units of the company's portfolio.b. a firm pursuing its core competencies...

The term "leverage" in leveraged buyouts refers to the

The term "leverage" in leveraged buyouts refers to thea. firm's increased concentration on the firm's core competencies.b. amount of new debt incurred...

Whole-firm LBOs tend to result in all the following negative outcomes EXCEPT

Whole-firm LBOs tend to result in all the following negative outcomes EXCEPTa. large debt and increased financial risk.b. failure to invest in R&D.c....

____ is often used when the acquiring firm paid too high a premium to acquire the target firm.

____ is often used when the acquiring firm paid too high a premium to acquire the target firm.a. Management buyoutb. Leveraged buyoutc. Downscopingd....

____ refers to a divestiture, spin-off, or some other means of eliminating businesses that are unrelated to a firm's core business.

____ refers to a divestiture, spin-off, or some other means of eliminating businesses that are unrelated to a firm's core business.A. Hostile takeoversB....

An investor is analyzing two firms in the same industry. She is looking for long-term performance from her investment. Both firms are basically identical except one firm is involved in substantial downsizing and the other firm is undertaking aggressive downscoping. The investor should invest in the

An investor is analyzing two firms in the same industry. She is looking for long-term performance from her investment. Both firms are basically identical...

Compared with downsizing, _____ has (have) a more positive effect on firm performance.

Compared with downsizing, _____ has (have) a more positive effect on firm performance.a. reconfiguringb. downscopingc. leveraged buyoutsd. acquisitio...

Ambrose is a scientist working for a pharmaceutical company. His company was acquired by a rival pharmaceutical company, and now it is involved in downsizing and downscoping. Ambrose is concerned about his job security, since he is actively involved in amateur sports in his community and does not wish to disrupt his current lifestyle. Ambrose's job will be most likely to be secure if

Ambrose is a scientist working for a pharmaceutical company. His company was acquired by a rival pharmaceutical company, and now it is involved in downsizing...

Magma, Inc., acquired Vulcan, Inc., 3 years ago. Effective integration of the two companies' culture was never achieved, and the two firms' assets were not complementary. It is very likely that Magma will

Magma, Inc., acquired Vulcan, Inc., 3 years ago. Effective integration of the two companies' culture was never achieved, and the two firms' assets were...

Which of the following is NOT one of the three main restructuring strategies?

Which of the following is NOT one of the three main restructuring strategies?a. realigningb. downsizingc. downscopingd. leveraged buyoutsAnswer: ...

A friendly acquisition

A friendly acquisitiona. raises the price that has to be paid for a firm.b. enhances the complementarity of the two firms' assets.c. facilitates the integration...

____ typically result(s) in the acquiring firm being able to prevent valuable human resources in the acquired firm from leaving.

____ typically result(s) in the acquiring firm being able to prevent valuable human resources in the acquired firm from leaving.A. Friendly acquisitionsB....

Which of the following is NOT an attribute of a successful acquisition?

Which of the following is NOT an attribute of a successful acquisition?a. The acquiring firm has a large amount of financial slack.b. The acquired and...

Typically, in a failed acquisition, the organization will

Typically, in a failed acquisition, the organization willa. restructure.b. go into bankruptcy.c. focus on building private synergy.d. increase integr...

The strategy of Citigroup under CEO Sanford Weill was to create a "financial supermarket" where customers shop for a variety of financial services within the same company. This strategy was executed via a series of acquisitions but ultimately failed. This situation was the result of

The strategy of Citigroup under CEO Sanford Weill was to create a "financial supermarket" where customers shop for a variety of financial services within...

All of the following were results of Citigroup's acquisition strategy EXCEPT

All of the following were results of Citigroup's acquisition strategy EXCEPTa. overly diversified.b. a much smaller, though global, business financial...

One problem with becoming too large is that large firms

One problem with becoming too large is that large firmsa. tend to have less market power.b. have less potential for economies of scale.c. become attractive...

Thomas is an upper-middle level manager for a firm that has been actively involved in acquisitions over the last 10 years. The firm has grown much larger as a result. Thomas has been dismayed to find that recently the managerial culture of the firm has been turning more and more to controls.

Thomas is an upper-middle level manager for a firm that has been actively involved in acquisitions over the last 10 years. The firm has grown much larger...

Which of the following is NOT a result of over-diversification?

Which of the following is NOT a result of over-diversification?a. Executives do not have a rich understanding of all of the firm's business units.b. Managers...

Evidence suggests that firms using acquisitions as a substitute for internally developed innovations

Evidence suggests that firms using acquisitions as a substitute for internally developed innovationsa. are able to offset the loss of research and development...

When managers become overly focused on making acquisitions, it is

When managers become overly focused on making acquisitions, it isa. because the skills of top executives are better used in making acquisitions than they...

Private synergy

Private synergya. occurs in most related acquisitions and allows firms to see increased returns.b. is frequently achieved in conglomerates.c. is not easy...

The expenses incurred by firms trying to create synergy through acquisition are called _____ costs.

The expenses incurred by firms trying to create synergy through acquisition are called _____ costs.a. differentiationb. diversificationc. transactiond....

Transaction costs include all of the following EXCEPT

Transaction costs include all of the following EXCEPTa. charges from investment bankers who complete due diligence for the acquiring firm.b. the loss...

The use of high levels of debt in acquisitions has contributed to

The use of high levels of debt in acquisitions has contributed toa. the increase in above-average returns earned by acquiring firms.b. an increased risk...

____ are unsecured obligations that are not tied to specific assets for collateral.

____ are unsecured obligations that are not tied to specific assets for collateral.a. Bearer bondsb. No-load stocksc. Penny stocksd. Junk bondsAnswer: Junk...

Caterpillar's payment of a 32 percent premium for the acquisition of Bucyrus in 2011 and subsequent need to issue more stock illustrates the acquisition problem of

Caterpillar's payment of a 32 percent premium for the acquisition of Bucyrus in 2011 and subsequent need to issue more stock illustrates the acquisition...

Which of the following statements is FALSE?

Which of the following statements is FALSE?a. Synergy resulting from an acquisition generates gains in shareholder wealth beyond what they could achieve...

Without effective due diligence the

Without effective due diligence thea. acquiring firm is likely to overpay for an acquisition.b. firm may miss its opportunity to buy a well-matched company.c....

Due diligence includes all of the following activities EXCEPT assessing

Due diligence includes all of the following activities EXCEPT assessinga. differences in firm cultures.b. tax consequences of the acquisition.c. the level...

Pappelbon Enterprises recently acquired a chain of convenience stores offering both fuel and food. Pappelbon is now surprised and dismayed to find that the gas pumps have been poorly maintained and will need to be replaced at considerable expense. Each of the following statements accurately reflect this EXCEPT

Pappelbon Enterprises recently acquired a chain of convenience stores offering both fuel and food. Pappelbon is now surprised and dismayed to find that...

Research shows that about _____ percent of mergers and acquisitions are successful.

Research shows that about _____ percent of mergers and acquisitions are successful.a. 20b. 40c. 60d. 80Answer: ...

Problems associated with acquisitions include all of the following EXCEPT

Problems associated with acquisitions include all of the following EXCEPTa. managers overly focused on acquisitions.b. integration difficulties.c. large...

The factors that lead to poor long-term performance by acquisitions include all of the following EXCEPT firms

The factors that lead to poor long-term performance by acquisitions include all of the following EXCEPT firmsa. with insufficient diversification.b. having...

The _____ phase is probably the single most important determinant of shareholder value creation in mergers and

The _____ phase is probably the single most important determinant of shareholder value creation in mergers anda. pre-acquisition negotiationsb. pre-acquisition...

When a firm is overly dependent on one or more products or markets, and the intensity of rivalry in that market is intense, the firm may wish to _____ by making an acquisition.

When a firm is overly dependent on one or more products or markets, and the intensity of rivalry in that market is intense, the firm may wish to _____...

The fastest and easiest way for a firm to diversity its portfolio of businesses is through acquisition because

The fastest and easiest way for a firm to diversity its portfolio of businesses is through acquisition becausea. of barriers to entry in many industries.b....

Sales of watches among teenagers and twenty-somethings are declining rapidly as this age group uses cellphones, iPods, and other devices to tell time. A company that specializes in selling inexpensive watches to this age group may wish to consider in order to develop new products other than watches.

Sales of watches among teenagers and twenty-somethings are declining rapidly as this age group uses cellphones, iPods, and other devices to tell time....

Each of the following is a rationale for acquisitions EXCEPT

Each of the following is a rationale for acquisitions EXCEPTa. achieving greater market power.b. overcoming significant barriers to entry.c. increasing...

A manager in your company is proposing the acquisition of Taylor Company, which has developed a new, innovative product instead of a strategy of developing new products in-house. All of the following arguments are correct EXCEPT

A manager in your company is proposing the acquisition of Taylor Company, which has developed a new, innovative product instead of a strategy of developing...

Entering new markets through acquisitions of companies with new products is not risk-free, especially if acquisition becomes a substitute for

Entering new markets through acquisitions of companies with new products is not risk-free, especially if acquisition becomes a substitute fora. market...

Compared to internal product development, acquisitions allow

Compared to internal product development, acquisitions allowa. immediate access to innovations in mature product markets.b. more accurate prediction of...

Research has shown that the more _____ , the greater is the probability that an acquisition will be successful.

Research has shown that the more _____ , the greater is the probability that an acquisition will be successful.a. related the acquired and acquiring firms...

According to the Chapter 7 Strategic Focus, China's recent approach to acquisitions has been to focus on hard assets (e.g., mineral deposits or R&D facilities) instead of established branded products because

According to the Chapter 7 Strategic Focus, China's recent approach to acquisitions has been to focus on hard assets (e.g., mineral deposits or R&D...

Managers perceive internal product development as a high-risk activity and tend to choose acquisitions because approximately _____ percent of innovations are imitated within 4 years after patents are obtained.

Managers perceive internal product development as a high-risk activity and tend to choose acquisitions because approximately _____ percent of innovations...

Internal product development is often viewed as

Internal product development is often viewed asa. carrying a high risk of failure.b. the only reliable method of generating new products for the firm.c....

Cross-border acquisitions are primarily made to

Cross-border acquisitions are primarily made toa. reshape the firm's competitive scope.b. reduce the cost of new product development.c. take advantage...

The presence of barriers to entry in a particular market will generally make acquisitions _____ as an entry strategy.

The presence of barriers to entry in a particular market will generally make acquisitions _____ as an entry strategy.a. less likelyb. more likelyc. prohibitived....

SpeakEasy, a U.S. software company that specializes in voice-recognition software, wishes to rapidly enter the growing technical translation software market. This market is dominated by firms making highly differentiated products. To enter this market, SpeakEasy would be best served if it considers a(an)

SpeakEasy, a U.S. software company that specializes in voice-recognition software, wishes to rapidly enter the growing technical translation software...

Cross-border acquisitions are critical to U.S. firms competing internationally

Cross-border acquisitions are critical to U.S. firms competing internationallya. if they are to develop differentiated products for markets served.b....

The acquisition of Sun Microsystems (a computer hardware producer) by Oracle Corporation (a software firm) is an example of a(n)

The acquisition of Sun Microsystems (a computer hardware producer) by Oracle Corporation (a software firm) is an example of a(n)a. vertical acquisition.b....

Horizontal, vertical, and related acquisitions to build market power

Horizontal, vertical, and related acquisitions to build market powera. are likely to undergo regulatory review and analysis by financial markets.b. are...

Baby Doe's, a designer and manufacturer of children's clothing, has decided to purchase a retail chain specializing in children's clothing. This purchase is a(n)

Baby Doe's, a designer and manufacturer of children's clothing, has decided to purchase a retail chain specializing in children's clothing. This purchase...

Manny Inc. recently completed the purchase of its primary supplier. Manny intends to begin expanding the market to which the suppliers' products are sold. This purchase is a(n)

Manny Inc. recently completed the purchase of its primary supplier. Manny intends to begin expanding the market to which the suppliers' products are sold....

A primary reason for a firm to pursue an acquisition is to

A primary reason for a firm to pursue an acquisition is toa. avoid increased government regulation.b. achieve greater market power.c. exit a hyper-competitive...