Exam 12: Making Alliances and Acquisitions Work

The combination of operations and management of two firms to establish a new legal entity is called a(n)_____.

At which stage in the formation of alliance must a firm decide whether to take a contract or an equity approach?

The degree of tacitness is low in non-equity-based alliances.

The three potential motives for alliances are synergistic,hubristic,and managerial motives.

The "imitability" of an alliance is based on the trust and understanding between the partners.

Equity alliance relationships tend to have less direct control over joint activities on a continual basis than contractual relationships.

In the context of acquisitions,synergistic motives destroy value while hubris and managerial motives add value.

During the first stage of alliance formation,a firm decides whether growth can be achieved strictly through market transactions,acquisitions,or alliances.

Licensing is a form of equity-based alliance.

Every alliance or acquisition decision is driven by imitation.

Describe how partners in an alliance can combat opportunism.

The act of investigating prior to signing contracts is called _____.

Cross-shareholding is based on financial interest between the firms.

Importance of direct organizational monitoring and control is low in equity-based alliances.

In the context of the motives for acquisition,from a resource-based view,the most important _____ rationale is to leverage superior resources.

In a non-equity-based alliance,which of the following should be high for possible upgrading to equity-based relationships?

The alliance dissolution is a four-step process.

Cross-border mergers are more common than acquisitions.