Question 1

Forward integration occurs when a firm owns or controls the customers or distribution channels for its main products.

Accepted Answer

A) True 
 B)False  True

Question 2

In vertical integration,backward integration occurs when a firm:

Accepted Answer

A)  owns or controls the inputs it uses. 
B)  owns the distribution channels for its main products. 
C)  controls the primary activities involved. 
D)  controls the customers for its products. 
A)  owns or controls the inputs it uses. 
B)  owns the distribution channels for its main products. 
C)  controls the primary activities involved. 
D)  controls the customers for its products. A

Question 3

According to one key study,performance increases as firms change from related diversification to unrelated diversification.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following is the main motive for international diversification?

Accepted Answer

A)  Support failing businesses 
B)  Understand social values 
C)  Create strategic flexibility 
D)  Achieve economies of scale 
A)  Support failing businesses 
B)  Understand social values 
C)  Create strategic flexibility 
D)  Achieve economies of scale

Question 5

Why do managers pursue diversification strategies?

Accepted Answer

Managers seek to diversify their organiz

Question 6

Which of the following questions is addressed by the organizational design of a firm's corporate-level strategy?

Accepted Answer

A)  What markets and businesses will the firm compete in? 
B)  How will the business units of the firm be aligned? 
C)  What are the businesses to be acquired? 
D)  How will the resources of the firm be coordinated? 
A)  What markets and businesses will the firm compete in? 
B)  How will the business units of the firm be aligned? 
C)  What are the businesses to be acquired? 
D)  How will the resources of the firm be coordinated?

Question 7

In _____ diversification strategy,a firm pursues businesses that share a similar set of tangible and intangible resources.

Accepted Answer

A)  horizontal 
B)  single-product 
C)  unrelated 
D)  vertical 
A)  horizontal 
B)  single-product 
C)  unrelated 
D)  vertical

Question 8

The test a manager uses to determine the viability of international diversification involves _____ test.

Accepted Answer

A)  industry attractiveness 
B)  an ownership 
C)  cost of entry 
D)  a market power 
A)  industry attractiveness 
B)  an ownership 
C)  cost of entry 
D)  a market power

Question 9

Which of the following questions is addressed by an ownership test in determining the viability of international diversification?

Accepted Answer

A)  What markets and businesses will the firm compete in? 
B)  Should the firm license or sell its resources to a foreign firm? 
C)  How will the business units of the firm be aligned? 
D)  Should the firm vertically integrate with other companies? 
A)  What markets and businesses will the firm compete in? 
B)  Should the firm license or sell its resources to a foreign firm? 
C)  How will the business units of the firm be aligned? 
D)  Should the firm vertically integrate with other companies?

Question 10

Corporate advantage occurs when a firm maximizes its resources to build a competitive advantage across its various business units.

Accepted Answer

A) True 
 B)False

Question 11

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 12

In vertical integration,forward integration occurs when a firm:

Accepted Answer

A)  attempts to achieve economies of scope. 
B)  controls the customers for its main products. 
C)  owns or controls the inputs it uses. 
D)  generates sustainable cost savings. 
A)  attempts to achieve economies of scope. 
B)  controls the customers for its main products. 
C)  owns or controls the inputs it uses. 
D)  generates sustainable cost savings.

Question 13

Which of the following questions should be addressed by a manager to identify conditions that can create shareholder value?

Accepted Answer

A)  How will the activities of the firm be coordinated? 
B)  How will the business units of the firm be aligned? 
C)  How attractive is the industry? 
D)  How to organize resources? 
A)  How will the activities of the firm be coordinated? 
B)  How will the business units of the firm be aligned? 
C)  How attractive is the industry? 
D)  How to organize resources?

Question 14

The scope of a corporate-level strategy focuses on:

Accepted Answer

A)  the manner in which activities of the firm will be coordinated. 
B)  the relationship between business units. 
C)  the markets and businesses the firm will compete in. 
D)  the internal environment affecting a firm's business. 
A)  the manner in which activities of the firm will be coordinated. 
B)  the relationship between business units. 
C)  the markets and businesses the firm will compete in. 
D)  the internal environment affecting a firm's business.

Question 15

Which of the following is a reason why managers pursue diversification strategies?

Accepted Answer

A)  Increasing customer loyalty 
B)  The potential for gaining knowledge 
C)  The potential for personal gain 
D)  Improving employee commitment 
A)  Increasing customer loyalty 
B)  The potential for gaining knowledge 
C)  The potential for personal gain 
D)  Improving employee commitment

Question 16

_____ occurs when one corporation owns business units that make inputs for other business units in the same corporation.

Accepted Answer

A)  Globalization 
B)  Franchising 
C)  Vertical integration 
D)  International diversification 
A)  Globalization 
B)  Franchising 
C)  Vertical integration 
D)  International diversification

Question 17

_____ costs refer to the costs a firm incurs to coordinate activities between business units.

Accepted Answer

A)  Franchising 
B)  Administrative 
C)  Outsourcing 
D)  Transaction 
A)  Franchising 
B)  Administrative 
C)  Outsourcing 
D)  Transaction

Question 18

The management of an automobile manufacturing company signed a contract with a consultancy that provides recruitment services.Though the organization was performing this function on its own previously,the management felt that the consultancy would offer a better service.Which of the following alternatives to vertical integration has the management opted?

Accepted Answer

A)  Franchising 
B)  Exporting 
C)  Outsourcing 
D)  Licensing 
A)  Franchising 
B)  Exporting 
C)  Outsourcing 
D)  Licensing

Question 19

Briefly explain the international scope test.

Accepted Answer

The test a manager can use to determine

Question 20

Which of the following statements is an advantage of related diversification strategy?

Accepted Answer

A)  Related diversification strategy allows a firm to maintain several businesses that are not connected in any way. 
B)  The sharing of resources is a key component of developing economies of scope and often increases a firm's competitive advantage. 
C)  Related diversification strategies often achieve financial economies through the restructuring of business units. 
D)  It can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time. 
A)  Related diversification strategy allows a firm to maintain several businesses that are not connected in any way. 
B)  The sharing of resources is a key component of developing economies of scope and often increases a firm's competitive advantage. 
C)  Related diversification strategies often achieve financial economies through the restructuring of business units. 
D)  It can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time.

Forward integration occurs when a firm owns or controls the customers or distribution channels for its main products.

In vertical integration,backward integration occurs when a firm:

According to one key study,performance increases as firms change from related diversification to unrelated diversification.

Which of the following is the main motive for international diversification?

Why do managers pursue diversification strategies?

Which of the following questions is addressed by the organizational design of a firm's corporate-level strategy?

In _____ diversification strategy,a firm pursues businesses that share a similar set of tangible and intangible resources.

The test a manager uses to determine the viability of international diversification involves _____ test.

Which of the following questions is addressed by an ownership test in determining the viability of international diversification?

Corporate advantage occurs when a firm maximizes its resources to build a competitive advantage across its various business units.

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

In vertical integration,forward integration occurs when a firm:

Which of the following questions should be addressed by a manager to identify conditions that can create shareholder value?

The scope of a corporate-level strategy focuses on:

Which of the following is a reason why managers pursue diversification strategies?

_____ occurs when one corporation owns business units that make inputs for other business units in the same corporation.

_____ costs refer to the costs a firm incurs to coordinate activities between business units.

Briefly explain the international scope test.

Which of the following statements is an advantage of related diversification strategy?

Introduction to Management

The Global Business Environment

Ethics and Corporate Social Responsibility

Introduction to Strategy

Business-Level Strategy

Organizational Design

Organizational Culture

Managing Human Capital

Performance Management

Organizational Change

Leadership in Organizations

Becoming a Leader: Knowing Yourself

Power and Influence

Decision Making

Conflict and Negotiation

Leading Teams

Motivation

Communication

Networking

Filters

Exam 6: Corporate-Level Strategy

Forward integration occurs when a firm owns or controls the customers or distribution channels for its main products.

In vertical integration,backward integration occurs when a firm:

According to one key study,performance increases as firms change from related diversification to unrelated diversification.

Which of the following is the main motive for international diversification?

Why do managers pursue diversification strategies?

Which of the following questions is addressed by the organizational design of a firm's corporate-level strategy?

In _____ diversification strategy,a firm pursues businesses that share a similar set of tangible and intangible resources.

The test a manager uses to determine the viability of international diversification involves _____ test.

Which of the following questions is addressed by an ownership test in determining the viability of international diversification?

Corporate advantage occurs when a firm maximizes its resources to build a competitive advantage across its various business units.

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

In vertical integration,forward integration occurs when a firm:

Which of the following questions should be addressed by a manager to identify conditions that can create shareholder value?

The scope of a corporate-level strategy focuses on:

Which of the following is a reason why managers pursue diversification strategies?

_____ occurs when one corporation owns business units that make inputs for other business units in the same corporation.

_____ costs refer to the costs a firm incurs to coordinate activities between business units.

Briefly explain the international scope test.

Which of the following statements is an advantage of related diversification strategy?

Introduction to Management

The Global Business Environment

Ethics and Corporate Social Responsibility

Introduction to Strategy

Business-Level Strategy

Organizational Design

Organizational Culture

Managing Human Capital

Performance Management

Organizational Change

Leadership in Organizations

Becoming a Leader: Knowing Yourself

Power and Influence

Decision Making

Conflict and Negotiation

Leading Teams

Motivation

Communication

Networking

Filters