Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
30 Cards in this Set
- Front
- Back
A firm has implemented a strategy of limited corporate diversification when all or most of its |
TRUE |
|
Shared activities can increase the revenues in diversified firms' businesses, and failure to exploit shared activities across businesses can lead to out-of-control costs. |
TRUE |
|
A firm's dominant logic is a common way of thinking about strategy across different businesses. |
TRUE |
|
The businesses within a diversified firm always gain cost-of-capital advantages by being part of |
FALSE |
|
The only two economies of scope that do not have the potential for generating positive returns |
TRUE |
|
When the value of the products or services a firm sells increases as a function of the number of business that the firm operates in, ________ are said to exist. |
C) economies of scope |
|
Currently, most scholars believe that exploiting economies of scope through corporate |
C) increased a firm's market value. |
|
If all of a firm's businesses share the same core competencies, then that firm has implemented a |
C) related-constrained |
|
________ exists when two or more diversified firms simultaneously compete in multiple B) Dynamic cooperation D) Dynamic competition |
C) Multipoint competition |
|
When diversified firms use the revenues from profitable businesses to subsidize the operations C) dynamic D) monopoly |
B) predatory |
|
Tacit collusion exists when firms coordinate their pricing decisions not by directly |
TRUE |
|
When potential cooperative partners misrepresent the skills, abilities, and other resources that they will bring to an alliance, this is a form of cheating known as adverse selection. |
TRUE |
|
Moral hazard occurs when partners in an alliance possess high-quality resources and |
TRUE |
|
Research on international joint ventures suggests that the existence of transaction-specific investments in their relationships makes these agreements relatively immune to holdup |
FALSE |
|
When there is low uncertainty about the future value of an exchange, an alliance will be |
FALSE |
|
A(n) ________ exists whenever two or more independent organizations cooperate in the |
A) strategic alliance |
|
A firm's ability to learn is known as its B) absorptive capacity. D) competitive position. |
B) absorptive capacity. |
|
Strategic alliances are particularly valuable in facilitating market entry and exit when the value B) moderate. C) low. D) uncertain. |
D) uncertain. |
|
Consistent with a real options perspective, firms in new and uncertain environments are likely to B) develop few strategic alliances. D) develop numerous strategic alliances |
D) develop numerous strategic alliances |
|
Adverse selection in a strategic alliance is likely only when
|
B) it is difficult or costly to observe the resources or capabilities that a partner brings to an alliance. |
|
To be economically valuable, links between bidding and target firms must meet the same criteria as diversification strategies. |
TRUE |
|
One of the main reasons why bidding firms do not obtain competitive advantages from |
TRUE |
|
Strategy researchers have found that in mergers and acquisitions, the more strategically related |
TRUE |
|
When acquiring a publicly traded firm a bidder has to release all the information it has about the potential value of that target in combination with itself. |
FALSE |
|
The market for corporate control is the market that is created when multiple firms actively seek |
TRUE |
|
The difference between the current market price of a target firm's shares and the price a potential |
B) acquisition premium |
|
Which of the following is a source of diversification economies? |
D) Portfolio management |
|
________ economies are achieved by the ability of firms to dictate prices by exerting market |
C) Pecuniary |
|
Which one of the following is not one of the reasons that Jensen and Ruback listed as to why bidding firms might want to engage in merger and acquisition strategies? |
A) To expand individual managers' power within an organization |
|
Wealthy individuals who provide capital to entrepreneurs to help them grow their businesses are known as |
D) business angels. |