SEVI 3013 UARK EXAM SET
QUESTIONS AND ANSWERS
potential downsides to reward systems - Answer--Individual actions are not related to
compensation; employees are rewarded for the wrong things
-Different business units have differing rewards systems
-Behavior reinforced within subcultures may reflect value differences in opposition to the
dominant culture
-Reward systems may lead to information hoarding, working at cross purposes
corporate governance - Answer-focuses on relationships among:
-shareholders
-Management (led by CEO)
-Board of directors
strategies for decline stage - Answer--Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - Answer-mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - Answer--horizontal relationships
-sharing tangible resources
-sharing intangible resources
, Unrelated Businesses - Answer--hierarchical relationships
-value creation derives from corporate office
-leveraging support activities
Economies of scope (related diversification) - Answer-cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - Answer-pooled negotiating power and vertical
integration
core competencies - Answer-Things a company does extremely well, which sometimes give it
an advantage over its competition
sharing activities - Answer-Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - Answer-the firm's ownership of its production of needed inputs or of the
channels by which it distributes its outputs
transaction cost perspective - Answer-every market transaction involves some transaction costs
parenting advantage - Answer-when it is more able than other firms to boost the combined
performance of its individual businesses through high-level guidance, general oversight, and
other corporate-level contributions.
Portfolio Management - Answer-involves a better understanding of the competitive position of
an overall portfolio or family of businesses
diversification can be accomplished via - Answer-- Mergers and acquisitions (and divestment)
- Pooling resources of other companies with a firms own resource base through strategic
alliances and joint ventures
- Internal development through corporate entrepreneurship and new venture development
QUESTIONS AND ANSWERS
potential downsides to reward systems - Answer--Individual actions are not related to
compensation; employees are rewarded for the wrong things
-Different business units have differing rewards systems
-Behavior reinforced within subcultures may reflect value differences in opposition to the
dominant culture
-Reward systems may lead to information hoarding, working at cross purposes
corporate governance - Answer-focuses on relationships among:
-shareholders
-Management (led by CEO)
-Board of directors
strategies for decline stage - Answer--Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - Answer-mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - Answer--horizontal relationships
-sharing tangible resources
-sharing intangible resources
, Unrelated Businesses - Answer--hierarchical relationships
-value creation derives from corporate office
-leveraging support activities
Economies of scope (related diversification) - Answer-cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - Answer-pooled negotiating power and vertical
integration
core competencies - Answer-Things a company does extremely well, which sometimes give it
an advantage over its competition
sharing activities - Answer-Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - Answer-the firm's ownership of its production of needed inputs or of the
channels by which it distributes its outputs
transaction cost perspective - Answer-every market transaction involves some transaction costs
parenting advantage - Answer-when it is more able than other firms to boost the combined
performance of its individual businesses through high-level guidance, general oversight, and
other corporate-level contributions.
Portfolio Management - Answer-involves a better understanding of the competitive position of
an overall portfolio or family of businesses
diversification can be accomplished via - Answer-- Mergers and acquisitions (and divestment)
- Pooling resources of other companies with a firms own resource base through strategic
alliances and joint ventures
- Internal development through corporate entrepreneurship and new venture development
