MGMT 425 CORRECT FINALS ANSWERS AND
QUESTIONS SET A+
✔✔ALFRED Chandler found that firms grow in a predictable pattern; that the firm's
growth patterns determine its structural form. Which form corresponds to the FINAL
stage in Chandler's theory?
a. functional
b. simple
c. vertically integrated
d. multidivisional - ✔✔D
✔✔STRATEGIC controls allow corporate-level managers to:
a. evaluate business-level performance on objective criteria.
b. concentrate on day-to-day corporate operations.
c. assess the performance of employees and managers in each business unit.
d. examine the fit between what the firm might do and what it can do. - ✔✔D
✔✔THE Structural changes at Kellogg which aligned performance incentives with
business units and made compensation of managers "consequential" is most consistent
with the _______________ structure.
a. functional
b. multidivisional cooperative structure
c. multidivisional competitive structure
d. worldwide product divisional - ✔✔C
✔✔WHICH of the following is TRUE?
a. Organizations tend to change structure too frequently which erodes their competitive
advantage.
b. Large organizations can retain a simple structure as long as they have a focus
strategy.
c. Flexibility in structure is more important than stability.
d. Strategy has a more important influence on structure, than structure has on strategy.
- ✔✔D
,✔✔IN the past, Sony's decentralized product divisions have:
a. encouraged competition and innovation through an entrepreneurial spirit.
b. have fostered innovation through cooperation among divisions.
c. motivated its divisions to share core competencies with one another.
d. historically made heavy use of integrative devices. - ✔✔A
✔✔INTERNATIONALLY diversified firms:
a. earn greater returns on innovation than firms operating only in domestic markets.
b. are more likely to produce below-average returns for investors in the long run.
c. may need to decrease international activities when domestic profits are poor.
d. are generally unable to achieve high levels of synergy because of differences in
cultures. - ✔✔A
✔✔A Nation's competitiveness depends on the capacity of its industry to
_____________ and thereby maintain its competitive advantage.
a. diversify internationally
b. have access to critical resources
c. protect its proprietary capabilities
d. Innovate - ✔✔D
✔✔WHICH of the following is NOT one of the advantages associated with international
diversification?
a. reduction of overall risk
b. ease of coordination
c. economies of scale
d. stabilization of returns - ✔✔B
✔✔WHEN a firm initially becomes internationally diversified, its returns:
a. remain stable.
b. decrease.
c. become more variable.
d. increase. - ✔✔B
✔✔THE Decision of what entry mode to use is primarily based on all of the following
factors EXCEPT:
a. the industry's competitive conditions.
b. the country's situation and government policies.
c. the worldwide economic situation.
d. the firm's unique set of resources, capabilities, and core competencies. - ✔✔C
✔✔If intellectual property rights in an emerging economy are not well-protected, the
number of firms in the industry is rapidly growing, and the need for global integration is
high, is the preferred entry mode.
a. Exporting
,b. strategic alliance
c. wholly-owned subsidiary
d. Licensing - ✔✔C
✔✔WHICH of the following is an advantage associated with greenfield ventures?
a. governmental support and subsidies in the host country
b. the lower cost of this type of venture
c. the level of control over the firm's technology, marketing and distribution
d. the lower level of risks involved - ✔✔C
✔✔THE Means of entry into international markets that offers the greatest control is:
a. licensing.
b. acquisitions.
c. joint ventures.
d. greenfield ventures. - ✔✔D
✔✔WHICH of the following is NOT a disadvantage of international acquisitions?
a. They are very expensive and often require debt financing.
b. The acquiring firm has to deal with the regulatory requirements of a host country.
c. Merging the acquired and acquiring firm is difficult.
d. It is the slowest way to enter a new market. - ✔✔D
✔✔IN Situations where there is high uncertainty, where cooperation is needed, and
where strategic flexibility is important, ____________ are most likely to succeed.
a. licensing strategies
b. strategic alliances
c. Acquisitions
d. new wholly owned subsidiaries - ✔✔B
✔✔ONE of the primary reasons for failure of cross-border strategic alliances is:
a. the incompatibility of the partners.
b. conflict between legal and business systems.
c. security concerns and terrorism.
d. high debt financing. - ✔✔A
✔✔HOST countries with emerging economies may encourage local firms to engage in
strategic alliances with firms from developing countries because:
a. assets from the investing foreign company can be nationalized later.
b. disruption to the host-country's economy will be minimal
c. there will be less cultural conflict than in licensing arrangements.
d. the host-country firm gains access to the foreign firm's technology. - ✔✔D
✔✔WHICH of the following is NOT a typical disadvantage of licensing?
a. little control over the marketing of the products
, b. licensees may develop a competitive product after the license expires
c. lower potential returns than the use of exporting or strategic alliances
d. incompatibility of the licensing partners - ✔✔D
✔✔A Licensing agreement:
a. results in two firms agreeing to share the risks and the resources of a new venture.
b. is best way to protect proprietary technology from future competitor.
c. allows a foreign firm to purchase the rights to manufacture and sell a firm's products
within a host country.
d. can be greatly impacted by currency exchange rate fluctuations. - ✔✔C
✔✔THE Problems associated with exporting include:
a. merging corporate cultures.
b. a partner's incompatibility.
c. difficulty in negotiating relationships.
d. high transportation costs. - ✔✔D
✔✔THE Choices that a firm has for entering the international market include all of the
following EXCEPT:
a. exporting.
b. licensing.
c. leasing.
d. acquisition. - ✔✔C
✔✔A U.S. manufacturer of adaptive devices for persons with disabilities is considering
expanding internationally. It is a fairly small company, but it is looking for growth
opportunities. This company should primarily consider the option of
a. licensing.
b. exporting.
c. a strategic alliance.
d. a greenfield venture. - ✔✔B
✔✔MOST Firms enter international markets sequentially, introducing their
_________________ first.
a. most innovative products
b. largest and strongest lines of business
c. most generic products, which will be more likely to generate universal product
demand
d. products customized to the region - ✔✔B
✔✔A Firm may narrow its focus to a specific region of the world:
a. because that market is most different from its domestic market and so represents an
unexploited "greenfield opportunity" for its products.
b. in order to obtain greater economies of scale.
QUESTIONS SET A+
✔✔ALFRED Chandler found that firms grow in a predictable pattern; that the firm's
growth patterns determine its structural form. Which form corresponds to the FINAL
stage in Chandler's theory?
a. functional
b. simple
c. vertically integrated
d. multidivisional - ✔✔D
✔✔STRATEGIC controls allow corporate-level managers to:
a. evaluate business-level performance on objective criteria.
b. concentrate on day-to-day corporate operations.
c. assess the performance of employees and managers in each business unit.
d. examine the fit between what the firm might do and what it can do. - ✔✔D
✔✔THE Structural changes at Kellogg which aligned performance incentives with
business units and made compensation of managers "consequential" is most consistent
with the _______________ structure.
a. functional
b. multidivisional cooperative structure
c. multidivisional competitive structure
d. worldwide product divisional - ✔✔C
✔✔WHICH of the following is TRUE?
a. Organizations tend to change structure too frequently which erodes their competitive
advantage.
b. Large organizations can retain a simple structure as long as they have a focus
strategy.
c. Flexibility in structure is more important than stability.
d. Strategy has a more important influence on structure, than structure has on strategy.
- ✔✔D
,✔✔IN the past, Sony's decentralized product divisions have:
a. encouraged competition and innovation through an entrepreneurial spirit.
b. have fostered innovation through cooperation among divisions.
c. motivated its divisions to share core competencies with one another.
d. historically made heavy use of integrative devices. - ✔✔A
✔✔INTERNATIONALLY diversified firms:
a. earn greater returns on innovation than firms operating only in domestic markets.
b. are more likely to produce below-average returns for investors in the long run.
c. may need to decrease international activities when domestic profits are poor.
d. are generally unable to achieve high levels of synergy because of differences in
cultures. - ✔✔A
✔✔A Nation's competitiveness depends on the capacity of its industry to
_____________ and thereby maintain its competitive advantage.
a. diversify internationally
b. have access to critical resources
c. protect its proprietary capabilities
d. Innovate - ✔✔D
✔✔WHICH of the following is NOT one of the advantages associated with international
diversification?
a. reduction of overall risk
b. ease of coordination
c. economies of scale
d. stabilization of returns - ✔✔B
✔✔WHEN a firm initially becomes internationally diversified, its returns:
a. remain stable.
b. decrease.
c. become more variable.
d. increase. - ✔✔B
✔✔THE Decision of what entry mode to use is primarily based on all of the following
factors EXCEPT:
a. the industry's competitive conditions.
b. the country's situation and government policies.
c. the worldwide economic situation.
d. the firm's unique set of resources, capabilities, and core competencies. - ✔✔C
✔✔If intellectual property rights in an emerging economy are not well-protected, the
number of firms in the industry is rapidly growing, and the need for global integration is
high, is the preferred entry mode.
a. Exporting
,b. strategic alliance
c. wholly-owned subsidiary
d. Licensing - ✔✔C
✔✔WHICH of the following is an advantage associated with greenfield ventures?
a. governmental support and subsidies in the host country
b. the lower cost of this type of venture
c. the level of control over the firm's technology, marketing and distribution
d. the lower level of risks involved - ✔✔C
✔✔THE Means of entry into international markets that offers the greatest control is:
a. licensing.
b. acquisitions.
c. joint ventures.
d. greenfield ventures. - ✔✔D
✔✔WHICH of the following is NOT a disadvantage of international acquisitions?
a. They are very expensive and often require debt financing.
b. The acquiring firm has to deal with the regulatory requirements of a host country.
c. Merging the acquired and acquiring firm is difficult.
d. It is the slowest way to enter a new market. - ✔✔D
✔✔IN Situations where there is high uncertainty, where cooperation is needed, and
where strategic flexibility is important, ____________ are most likely to succeed.
a. licensing strategies
b. strategic alliances
c. Acquisitions
d. new wholly owned subsidiaries - ✔✔B
✔✔ONE of the primary reasons for failure of cross-border strategic alliances is:
a. the incompatibility of the partners.
b. conflict between legal and business systems.
c. security concerns and terrorism.
d. high debt financing. - ✔✔A
✔✔HOST countries with emerging economies may encourage local firms to engage in
strategic alliances with firms from developing countries because:
a. assets from the investing foreign company can be nationalized later.
b. disruption to the host-country's economy will be minimal
c. there will be less cultural conflict than in licensing arrangements.
d. the host-country firm gains access to the foreign firm's technology. - ✔✔D
✔✔WHICH of the following is NOT a typical disadvantage of licensing?
a. little control over the marketing of the products
, b. licensees may develop a competitive product after the license expires
c. lower potential returns than the use of exporting or strategic alliances
d. incompatibility of the licensing partners - ✔✔D
✔✔A Licensing agreement:
a. results in two firms agreeing to share the risks and the resources of a new venture.
b. is best way to protect proprietary technology from future competitor.
c. allows a foreign firm to purchase the rights to manufacture and sell a firm's products
within a host country.
d. can be greatly impacted by currency exchange rate fluctuations. - ✔✔C
✔✔THE Problems associated with exporting include:
a. merging corporate cultures.
b. a partner's incompatibility.
c. difficulty in negotiating relationships.
d. high transportation costs. - ✔✔D
✔✔THE Choices that a firm has for entering the international market include all of the
following EXCEPT:
a. exporting.
b. licensing.
c. leasing.
d. acquisition. - ✔✔C
✔✔A U.S. manufacturer of adaptive devices for persons with disabilities is considering
expanding internationally. It is a fairly small company, but it is looking for growth
opportunities. This company should primarily consider the option of
a. licensing.
b. exporting.
c. a strategic alliance.
d. a greenfield venture. - ✔✔B
✔✔MOST Firms enter international markets sequentially, introducing their
_________________ first.
a. most innovative products
b. largest and strongest lines of business
c. most generic products, which will be more likely to generate universal product
demand
d. products customized to the region - ✔✔B
✔✔A Firm may narrow its focus to a specific region of the world:
a. because that market is most different from its domestic market and so represents an
unexploited "greenfield opportunity" for its products.
b. in order to obtain greater economies of scale.
