Question 1

An industry whose products can be easily substituted faces more threats from other firms currently not in the same industry.

Accepted Answer

A) True 
 B)False

Question 2

​The optimum level for a firm's diversification is where:

Accepted Answer

A)   ​Marginal bureaucratic costs are greater than marginal economic benefit.
B)   ​Marginal economic benefit is less than marginal bureaucratic costs.
C)   ​Total bureaucratic costs equal marginal economic benefits.
D)   ​Marginal bureaucratic costs equal marginal economic benefits.E) A) and B)
F) All of the above

Question 3

High entry barriers often result in green-field entries as opposed to acquisitions.

Accepted Answer

A) True 
 B)False

Question 4

​What is the difference between strategic fit and organizational fit?

Accepted Answer

​Inadequate screening and failure to ach...

Question 5

Not all product-related diversifiers outperform product-unrelated diversifiers.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true of relatedness?

Accepted Answer

A)   Measurement of product relatedness is no longer debatable.
B)   A "product-related" firm will be considered related regardless of the measure used.
C)   Product-unrelated conglomerates are not linked by institutional relatedness.
D)   Relatedness can be a common underlying dominant logic that connects various businesses in a diversified firm.E) B) and C)
F) A) and D)

Question 7

​Firm A is operating in a sunset industry;what is its most prudent strategic move?

Accepted Answer

A)   ​Engage in vertical acquisitions.
B)   ​Diversify out of the industry.
C)   ​Acquire its rivals.
D)   ​None of the above.E) B) and D)
F) B) and C)

Question 8

To ensure the success of the M&A,managers need to make sure of all the following EXCEPT:

Accepted Answer

A)   Be willing to walk out when premiums are too high.
B)   Engage in adequate due diligence concerning strategic fit.
C)   Seek organizational contrast and variety rather than organizational fit.
D)   Address the concerns of multiple stakeholders.E) A) and B)
F) All of the above

Question 9

Product-related diversification involves all of the following EXCEPT:

Accepted Answer

A)   A single business strategy.
B)   Synergy.
C)   The emphasis is on economies of scale rather than scope.
D)   Increases in competitiveness.E) B) and C)
F) A) and C)

Question 10

Corporate scope is shaped by:

Accepted Answer

A)   Industry conditions.
B)   Firm capabilities.
C)   Institutional constraints.
D)   All of the above.E) A) and B)
F) B) and C)

Question 11

​Which of the following statements is TRUE?

Accepted Answer

A)   ​Diversification creates value in all circumstances.
B)   ​Diversification can create value by leveraging certain core competencies and capabilities.
C)   ​Compared with diversified firms,non-diversified single-business firms are better able to spread risk.
D)   ​Firms that undertake acquisitions have mastered the art of post-acquisition integration.E) A) and D)
F) C) and D)

Question 12

Operational synergy involves economies of scale.

Accepted Answer

A) True 
 B)False

Question 13

Select the best choice: a company that is engaged in oil production,pipelines and tankers,refining,and gasoline stations has engaged in ______________ expansion.

Accepted Answer

A)   Horizontal
B)   Vertical
C)   Hostile M&A
D)   Friendly M&AE) A) and B)
F) A) and C)

Question 14

​Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

Accepted Answer

A)   ​It wants learning opportunities without long-term commitment.
B)   ​It wants greater control of day-to-day operations.
C)   ​It wishes to engage in a long-term enduring relationship.
D)   ​It wishes to consolidate market power,reduce risks,and leverage economies of scope.E) A) and B)
F) A) and C)

Question 15

​Firms that excel in postacquisition integration tend to possess hard-to-imitate capabilities.

Accepted Answer

A) True 
 B)False

Question 16

​Compared with acquisitions,alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

Accepted Answer

A) True 
 B)False

Question 17

Diversification discount is the situation when unrelated-product diversification enables conglomerate units to beat stand-alone rivals.

Accepted Answer

A) True 
 B)False

Question 18

​Traits such as goals,experiences,and behaviors of a target firm that complement those of the acquiring firm lead to good organizational fit.

Accepted Answer

A) True 
 B)False

Question 19

Diversification is beneficial for all of the following situations EXCEPT:

Accepted Answer

A)   Risk is spread over several (product or country) markets.
B)   Core resources are leveraged.
C)   The art of post-acquisition integration has been mastered.
D)   Commonly shared industry skills are used.E) A) and C)
F) B) and C)

Question 20

​Which of the following is true of mergers?

Accepted Answer

A)   ​A new legal entity is established.
B)   ​A target firm becomes a unit of the acquiring firm.
C)   ​Control of assets is turned over from one firm to its partner.
D)   ​Mergers are much more common than acquisitions.E) All of the above
F) B) and C)

Exam 9: Diversifying, acquiring, and Restructuring

​The optimum level for a firm's diversification is where:

Correct AnswerverifiedShow Answer

Product-related diversification involves all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Not all product-related diversifiers outperform product-unrelated diversifiers.

Correct AnswerverifiedShow Answer

Corporate scope is shaped by:

Correct AnswerverifiedShow Answer

​Firms that excel in postacquisition integration tend to possess hard-to-imitate capabilities.

Correct AnswerverifiedShow Answer

​Firm A is operating in a sunset industry;what is its most prudent strategic move?

Correct AnswerverifiedShow Answer

​Traits such as goals,experiences,and behaviors of a target firm that complement those of the acquiring firm lead to good organizational fit.

Correct AnswerverifiedShow Answer

Select the best choice: a company that is engaged in oil production,pipelines and tankers,refining,and gasoline stations has engaged in ______________ expansion.

Correct AnswerverifiedShow Answer

​What is the difference between strategic fit and organizational fit?

Correct Answerverified​Inadequate screening and failure to ach...View AnswerShow Answer

An industry whose products can be easily substituted faces more threats from other firms currently not in the same industry.

Correct AnswerverifiedShow Answer

Diversification is beneficial for all of the following situations EXCEPT:

Correct AnswerverifiedShow Answer

​Which of the following is true of mergers?

Correct AnswerverifiedShow Answer

Diversification discount is the situation when unrelated-product diversification enables conglomerate units to beat stand-alone rivals.

Correct AnswerverifiedShow Answer

​Compared with acquisitions,alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

Correct AnswerverifiedShow Answer

​Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

Which of the following is true of relatedness?

Correct AnswerverifiedShow Answer

High entry barriers often result in green-field entries as opposed to acquisitions.

Correct AnswerverifiedShow Answer

To ensure the success of the M&A,managers need to make sure of all the following EXCEPT:

Correct AnswerverifiedShow Answer

​Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

Correct AnswerverifiedShow Answer

Operational synergy involves economies of scale.

Correct AnswerverifiedShow Answer

The optimum level for a firm's diversification is where:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Firms that excel in postacquisition integration tend to possess hard-to-imitate capabilities.

Correct Answer
verified

Firm A is operating in a sunset industry;what is its most prudent strategic move?

Correct Answer
verified

Traits such as goals,experiences,and behaviors of a target firm that complement those of the acquiring firm lead to good organizational fit.

Correct Answer
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Correct Answer
verified

What is the difference between strategic fit and organizational fit?

Correct Answer
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Inadequate screening and failure to ach...
View Answer

Correct Answer
verified

Correct Answer
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Which of the following is true of mergers?

Correct Answer
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Correct Answer
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Compared with acquisitions,alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

Correct Answer
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Which of the following statements is TRUE?

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Which of the following is the most likely reason Firm A would decide to forgo an acquisition and pursue an alliance instead?

Correct Answer
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Correct Answer
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