BSG Final Exam QUESTIONS WITH CORRECT
ANSWERS 2025/2026
When using business-level and corporate-level cooperative strategies, a
firm's primary intent is to develop strategic alliances that
a. enhance the firm's reputation in the marketplace.
b. are long-lived.
c. will reduce the firm's political risk.
d. create a competitive advantage. - correct answer d. create a
competitive advantage.
In a(an) ____ the firms involved own equal shares of a newly-created
venture.
a. equality-based strategic alliance
b. non-equity strategic alliance
c. joint venture
d. equity strategic alliance - correct answer c. joint venture
A state-wide alliance of independent hospitals has formed in order to
do group purchasing of medical supplies. Group purchasing allows the
hospital alliance to negotiate lower prices with suppliers because of the
large quantity of materials ordered. This is an example of the advantage
of ____ resulting from an alliance.
a. explicit collusion.
b. economies of scale.
,c. opportunistic behavior.
d. distribution opportunities. - correct answer b. economies of scale.
Firms entering into synergistic strategic alliances expect to attain
a. technological complexity.
b. economies of scope.
c. monopolistic market power.
d. learning curve efficiencies - correct answer b. economies of scope.
The top management team at Sierra Infusion is concerned about the
declining performance of firms in their industry. The team members are
becoming concerned about the security of their jobs at Sierra Infusion.
At a meeting over dinner, the top management team agrees to go to
the board of directors with a proposal for
a. increased diversification of Sierra Infusion.
b. the addition of outside directors to the board.
c. increased shareholder participation in decision making.
d. greater concentration on Sierra's core industry. - correct answer a.
increased diversification of Sierra Infusion.
The separation between firm ownership and management creates a(n)
____ relationship.
a. governance
b. control
c. agency
, d. dependent - correct answer c. agency
A primary objective of corporate governance is to
a. determine and control the strategic direction of an organization,
so that the top executives are focused on maximizing corporate profits.
b. ensure that the interests of top-level managers are aligned with
the interests of shareholders.
c. lobby legislators to pass laws that are aligned with the
organization's interests.
d. resolve conflicts among corporate employees. - correct answer b.
ensure that the interests of top-level managers are aligned with the
interests of shareholders.
Which of the following is NOT an internal governance mechanism?
a. the board of directors
b. ownership concentration
c. executive compensation
d. the market for corporate control - correct answer d. the market for
corporate control
A major conflict of interest between top executives and owners, is that
top executives wish to diversify the firm in order to ____, while owners
wish to diversify the firm to ____.
a. generate free cash flows, reduce the risk of total firm failure
ANSWERS 2025/2026
When using business-level and corporate-level cooperative strategies, a
firm's primary intent is to develop strategic alliances that
a. enhance the firm's reputation in the marketplace.
b. are long-lived.
c. will reduce the firm's political risk.
d. create a competitive advantage. - correct answer d. create a
competitive advantage.
In a(an) ____ the firms involved own equal shares of a newly-created
venture.
a. equality-based strategic alliance
b. non-equity strategic alliance
c. joint venture
d. equity strategic alliance - correct answer c. joint venture
A state-wide alliance of independent hospitals has formed in order to
do group purchasing of medical supplies. Group purchasing allows the
hospital alliance to negotiate lower prices with suppliers because of the
large quantity of materials ordered. This is an example of the advantage
of ____ resulting from an alliance.
a. explicit collusion.
b. economies of scale.
,c. opportunistic behavior.
d. distribution opportunities. - correct answer b. economies of scale.
Firms entering into synergistic strategic alliances expect to attain
a. technological complexity.
b. economies of scope.
c. monopolistic market power.
d. learning curve efficiencies - correct answer b. economies of scope.
The top management team at Sierra Infusion is concerned about the
declining performance of firms in their industry. The team members are
becoming concerned about the security of their jobs at Sierra Infusion.
At a meeting over dinner, the top management team agrees to go to
the board of directors with a proposal for
a. increased diversification of Sierra Infusion.
b. the addition of outside directors to the board.
c. increased shareholder participation in decision making.
d. greater concentration on Sierra's core industry. - correct answer a.
increased diversification of Sierra Infusion.
The separation between firm ownership and management creates a(n)
____ relationship.
a. governance
b. control
c. agency
, d. dependent - correct answer c. agency
A primary objective of corporate governance is to
a. determine and control the strategic direction of an organization,
so that the top executives are focused on maximizing corporate profits.
b. ensure that the interests of top-level managers are aligned with
the interests of shareholders.
c. lobby legislators to pass laws that are aligned with the
organization's interests.
d. resolve conflicts among corporate employees. - correct answer b.
ensure that the interests of top-level managers are aligned with the
interests of shareholders.
Which of the following is NOT an internal governance mechanism?
a. the board of directors
b. ownership concentration
c. executive compensation
d. the market for corporate control - correct answer d. the market for
corporate control
A major conflict of interest between top executives and owners, is that
top executives wish to diversify the firm in order to ____, while owners
wish to diversify the firm to ____.
a. generate free cash flows, reduce the risk of total firm failure
