Madm 760 chapter 6 quiz ACTUAL UPDATED QUESTIONS AND CORRECT
ANSWERS
T/F The first step in formulating an organization's strategy False
is analysis of the functional strategies
T/F Firms often seek to reduce risk by operating in a False
single industry.
T/F Every healthy firm should pursue a retrenchment False
strategy from time to time.
T/F As opposed to external growth, internal growth False
enables the firm to grow more quickly.
T/F A merger is a form of a acquisition whereby one firm False
purchases another, often with a combination of cash and
stock
T/F A firm is engaging in horizontal related diversification True
when it acquires a business outside of its present scope
of operation, but with similar or related core
competencies.
T/F The firm's key capabilities and collective learning skills True
that are fundamental to its strategy, performance, and
long term profitability are known as core competencies.
T/F Synergy occurs when the combination of two True
organizations results in higher effectiveness and
efficiency than would otherwise be generated by them
separately.
T/F A strategic alliance occurs when two or more firms True
agree to share the costs, risks, and benefits associated
with pursuing new business opportunities.
T/F A firm may choose stability over growth for reasons True
associated with product quality.
T/F A large competitor may choose the stability strategy True
to avoid prosecution for monopolistic practices.
, T/F A turnaround includes such actions as eliminating True
unprofitable outputs and reassessing the firm's product
lines and customer groups.
T/F Divestment is the strategy of last resort, and False
terminates the business unit by selling its assets.
T/F According to the BCG matrix, a star is a business unit False
with a low market share, but high growth potential.
T/F Under an international licensing agreement, a foreign True
licensee purchases the rights to produce a company's
products and or use its technology in the licensee's
country for a negotiated fee structure.
The first step in strategy formulation is B
a. the corporate strategy.
b. the corporate profile.
c. the functional strategy.
d. the business strategy.
Which of the following is not a corporate profile option? D
a. Operate in unrelated industries.
b. Operate in related industries.
c. Operate in a single industry.
d. All of the above are corporate profile options.
Which of the following options is commonly viewed as A
risk averse?
a. Operate in unrelated industries.
b. Operate in related industries.
c. Operate in a single industry.
d. None of the above.
Which of the following places "all eggs in one basket?" C
a. Operate in unrelated industries.
b. Operate in related industries
c. Operate in a single industry.
d. None of the above.
Which of the following relies heavily on the development D
of synergy?
a. Operate in two unrelated industries.
b. Operate in three or more unrelated industries.
c. Operate in a single industry.
d. None of the above.
ANSWERS
T/F The first step in formulating an organization's strategy False
is analysis of the functional strategies
T/F Firms often seek to reduce risk by operating in a False
single industry.
T/F Every healthy firm should pursue a retrenchment False
strategy from time to time.
T/F As opposed to external growth, internal growth False
enables the firm to grow more quickly.
T/F A merger is a form of a acquisition whereby one firm False
purchases another, often with a combination of cash and
stock
T/F A firm is engaging in horizontal related diversification True
when it acquires a business outside of its present scope
of operation, but with similar or related core
competencies.
T/F The firm's key capabilities and collective learning skills True
that are fundamental to its strategy, performance, and
long term profitability are known as core competencies.
T/F Synergy occurs when the combination of two True
organizations results in higher effectiveness and
efficiency than would otherwise be generated by them
separately.
T/F A strategic alliance occurs when two or more firms True
agree to share the costs, risks, and benefits associated
with pursuing new business opportunities.
T/F A firm may choose stability over growth for reasons True
associated with product quality.
T/F A large competitor may choose the stability strategy True
to avoid prosecution for monopolistic practices.
, T/F A turnaround includes such actions as eliminating True
unprofitable outputs and reassessing the firm's product
lines and customer groups.
T/F Divestment is the strategy of last resort, and False
terminates the business unit by selling its assets.
T/F According to the BCG matrix, a star is a business unit False
with a low market share, but high growth potential.
T/F Under an international licensing agreement, a foreign True
licensee purchases the rights to produce a company's
products and or use its technology in the licensee's
country for a negotiated fee structure.
The first step in strategy formulation is B
a. the corporate strategy.
b. the corporate profile.
c. the functional strategy.
d. the business strategy.
Which of the following is not a corporate profile option? D
a. Operate in unrelated industries.
b. Operate in related industries.
c. Operate in a single industry.
d. All of the above are corporate profile options.
Which of the following options is commonly viewed as A
risk averse?
a. Operate in unrelated industries.
b. Operate in related industries.
c. Operate in a single industry.
d. None of the above.
Which of the following places "all eggs in one basket?" C
a. Operate in unrelated industries.
b. Operate in related industries
c. Operate in a single industry.
d. None of the above.
Which of the following relies heavily on the development D
of synergy?
a. Operate in two unrelated industries.
b. Operate in three or more unrelated industries.
c. Operate in a single industry.
d. None of the above.
