Question 1

Corporate strategy is the strategy that shapes the structure of the organization as an entity.

Accepted Answer

False

Question 2

Portfolio analysis helps corporate strategists to conceptualize the organization as a whole.

Accepted Answer

Portfolio analysis involves analyzing an organization's entire portfolio of products, services, business units, and investments. This holistic view helps corporate strategists to understand the organization as a whole and make strategic decisions based on the overall performance and potential of the portfolio.

Question 3

Growth strategy should be the firm's goal in the short and long terms.

Accepted Answer

A growth strategy may be suitable for some firms, but not all. Firms may prioritize other goals such as stability, profitability, or market penetration depending on their specific circumstances and long-term vision.

Question 4

Acquisitions and mergers are two opposite ways to exercise external growth of an organization.

Accepted Answer

Acquisitions and mergers are both strategies for an organization's external growth, not opposite ways. In a merger, two companies combine to form a new entity, while in an acquisition, one company purchases another.

Question 5

All acquisitions are hostile takeovers that are resisted by the acquired company.

Accepted Answer

Not all acquisitions are hostile. There are friendly acquisitions where the acquired company agrees to the takeover and cooperates in the process.

Question 6

A high-synergy enterprise is one in which employees cooperate for comparative advantage because the culture of the organization support such behavior.

Accepted Answer

The answer of A high-synergy enterprise is one in which...

Question 7

Diversification is an attempt by an organization to enter a new area altogether, but not to obtain a related product/service.

Accepted Answer

Diversification is an attempt by an organization to enter new markets or create new products that may be related or completely unrelated to the organization's existing markets or products, aiming to reduce risks by spreading interests.

Question 8

In 1970s, the Federal Communications Commission (FCC) established rules to relax the television networks ability to invest directly in most prime time programming.

Accepted Answer

In the 1970s, the Federal Communications Commission (FCC) established the Financial Interest and Syndication Rules, which limited the major television networks' ability to own the programming they aired in prime time, aiming to encourage competition and diversity in programming.

Question 9

Another name for concentric diversification strategy is conglomerate diversification strategy.

Accepted Answer

Concentric diversification strategy focuses on adding new products or services that are related to the existing business activities, often leveraging existing capabilities or markets, whereas conglomerate diversification strategy involves adding new, unrelated products or services, expanding into entirely different industries.

Question 10

Acculturation intends to segregate two or more presumably divergent cultures.

Accepted Answer

Acculturation refers to the process of adopting or incorporating aspects of a different culture into one's own, and typically involves the merging of different cultural traditions rather than segregation.

Question 11

Joint venture was the method applied when Sony and Ericsson came together to establish Sony-Ericsson. This helped Ericsson, previously a manufacturer of telecommunication equipment, to enter the mobile phone market.

Accepted Answer

This statement accurately describes the joint venture between Sony and Ericsson to create Sony-Ericsson.

Question 12

An example of 'rites of degradation' would be the loss of top managers from the acquired company.

Accepted Answer

Rites of degradation refer to the ways in which the acquiring company reduces or discredits the status of employees from the acquired company. Losing top managers would be an example of such a rite.

Question 13

Porter and Cooper present an acculturation model that is based on the extent to which organization members are satisfied with and value their existing culture, and the extent to which they perceive the other culture's attractiveness.

Accepted Answer

Porter and Cooper's acculturation model is not the correct attribution; instead, John Berry proposed the acculturation model based on the extent to which individuals maintain their native culture while interacting with the dominant or other cultures, focusing on assimilation, integration, separation, and marginalization strategies.

Question 14

Joint ventures are permanent combinations of two separate organizations.

Accepted Answer

Joint ventures are not necessarily permanent and can be formed for a specific project or period of time.

Question 15

Stability strategy is synonymous to a growth strategy, where consistency is the key driver.

Accepted Answer

Stability strategy is not synonymous to growth strategy. Stability strategy is a strategy where the organization aims to maintain its current operations and focus on improving efficiency and cost-effectiveness, rather than expanding and pursuing growth opportunities.

Question 16

There are two types of retrenchment strategies available, divestment and liquidation.

Accepted Answer

The two types of retrenchment strategies are divestment and downsizing, not liquidation.

Question 17

Liquidation happens when the organization actually sells one of its business units.

Accepted Answer

Liquidation refers to the process of closing a business and distributing its assets to claimants, typically after the company is unable to meet its financial obligations, rather than just selling one of its business units.

Question 18

Companies avoid using combinations of many strategies simultaneously in order to be successful.

Accepted Answer

Companies often use a combination of many strategies simultaneously in order to increase their chances of success.

Question 19

Portfolio analysis is only concerned with multi-product firms.

Accepted Answer

The answer of Portfolio analysis is only concerned with multi-product...

Question 20

BCG Matrix is a simple analytic technique, which seeks to examine the organization's portfolio along two dimensions: competitor's growth rate, and relative market share/competitive position.

Accepted Answer

BCG Matrix examines the organization's portfolio along two dimensions: market growth rate, and relative market share, not competitor's growth rate.

Quiz 5: Strategic Options - Corporate Level