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1 | |
Individual investors are reliant on upon the corporation's managers to |
| | A) | diversify the stockholder's investments in order to reduce risk. |
| | B) | achieve risk reduction at a lower cost than stockholders could obtain on their own. |
| | C) | maximize short-term returns in the form of dividends. |
| | D) | add value to their investments in a way that the stockholders could not accomplish on their own. |
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2 | |
One of the primary advantages of diversification is sharing core competencies. In order for diversification to be most successful, it is important that |
| | A) | the methods of production are the same. |
| | B) | the similarity required for sharing core competencies must be in the value chain, not in the product. |
| | C) | the products use similar distribution channels. |
| | D) | the target market is the same, even if the products are very different. |
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3 | |
Vertical integration may be beneficial when |
| | A) | flexibility is reduced, providing a more stationary position in the competitive environment. |
| | B) | the minimum efficient scales of two corporations are different. |
| | C) | lower transaction costs and improved coordination are vital and achievable through vertical integration. |
| | D) | various segregated specializations will be combined. |
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4 | |
When a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures, it is called___________. |
| | A) | restructuring |
| | B) | leveraging core competencies |
| | C) | uncreasing market power |
| | D) | parenting |
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5 | |
In the BCG (Boston Consulting Group) Matrix, a business that has a low market share in an industry set apart by high market growth is termed a |
| | A) | star. |
| | B) | cash cow. |
| | C) | question mark. |
| | D) | dog. |
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6 | |
Denoted in the Boston Consulting Group Portfolio management technique, a "cash cow, refers to a business that has |
| | A) | relatively low market share and low market growth. |
| | B) | low market growth and relatively high market share. |
| | C) | relatively low market share and high market growth. |
| | D) | high market growth and relatively high market share. |
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7 | |
As stated by Michael Porter: "There's a tremendous allure to _______________. It's the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front page story, and create excitement in markets." |
| | A) | mergers and acquisitions |
| | B) | strategic alliances and joint ventures |
| | C) | internal development |
| | D) | differentiation strategies |
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8 | |
All of the following are guiding principles for managing strategic alliances except |
| | A) | establishing a clear understanding between partners. |
| | B) | not shortchanging your partner. |
| | C) | relying primarily on a contract to make the joint venture work. |
| | D) | working hard to ensure a collaborative relationship between partners. |
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9 | |
"Golden parachutes" signifies |
| | A) | pay given to executives fired because of a takeover. |
| | B) | a clause requiring that huge dividend payments be made upon takeover. |
| | C) | financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it. |
| | D) | managers of a firm involved in a hostile takeover approaching a third about acquisition. |
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2002 A McGraw-Hill Online Learning Centre