Question 1

A viable corporate strategy is to buy up a failing conglomerate and sell off the individual parts at a profit.

Accepted Answer

The answer of A viable corporate strategy is to buy...

Question 2

Goold et al (1994) have studied the potential added value that the corporate level can give to the business level in a multi-business firm. What term do they use to describe this added value
A) Transaction cost value
B) Transaction cost advantage
C) Parenting value
D) Parenting advantage

Accepted Answer

The answer of Goold et al (1994) have studied the...

Question 3

One of the key questions that a multibusiness firm needs to consider is the degree of relatedness between businesses in the firm. Ideally, the value that is generated should be more than the sum of the businesses - this is known as
A) diversification
B) synergy
C) optimization
D) satisficing

Accepted Answer

Synergy refers to the concept where the combined value and performance of two or more businesses is greater than the sum of the individual parts, which is what multibusiness firms aim for when considering relatedness between businesses.

Question 4

The theory of Transaction Cost Economics suggests that the multibusiness firm benefits in two major ways over standalone businesses. These can be categorized as scope advantages and
A) Knowledge advantages
B) Scale advantages
C) Cost advantages
D) Governance advantages

Accepted Answer

Transaction Cost Economics suggests that multibusiness firms benefit from governance advantages, which involve more efficient management and coordination of transactions within the firm compared to market transactions.

Question 5

In the language of the resource based view (RBV), the scope advantages that multibusinesses firms can theoretically benefit from can be described as
A) core competencies
B) core rigidities
C) path dependency
D) causal ambiguity

Accepted Answer

Core competencies refer to the unique strengths and abilities that a firm develops, which can be leveraged across different businesses to create scope advantages.

Question 6

Strategy in a multi-business firm is commonly known as
A) parenting strategy
B) conglomerate strategy
C) corporate strategy
D) portfolio strategy

Accepted Answer

Corporate strategy refers to the overarching strategy of a multi-business firm, guiding how the firm manages and coordinates its various business units to achieve overall objectives.

Question 7

Which of the following are primary concerns of corporate strategy?
A) What type of businesses should make up the portfolio
B) How should the firm achieve profitable growth
C) How should the business achieve competitive advantage in its market
D) How related should the businesses within the firm be

Accepted Answer

Corporate strategy focuses on the overall scope and direction of a corporation and how its various business operations work together to achieve particular goals. This includes decisions about the types of businesses in the portfolio (A), strategies for profitable growth (B), and the degree of relatedness among businesses (D). Competitive advantage in specific markets (C) is typically a concern of business-level strategy, not corporate strategy.

Question 8

The traditional 'U-form' organizational structure is organized around
A) Geographical areas
B) Product lines
C) Business functions
D) A combination of product line and geographical area

Accepted Answer

The 'U-form' or unitary form organizational structure is organized around business functions such as marketing, finance, and production.

Question 9

Which of the following writers studied the link between strategy and structure in the 1960s?
A) Milton Friedman
B) Abraham Maslow
C) Henry Mintzberg
D) Alfred Chandler

Accepted Answer

Alfred Chandler is known for his work on the relationship between strategy and structure, particularly through his book "Strategy and Structure" published in 1962.

Question 10

Which of the following is NOT an advantage of the M-form organizational structure?
A) It allows executives to concentrate on a specific business function
B) It enables executives to manage the strategy of an individual business unit
C) It frees executives from the day to day operations of a business unit
D) It allows the corporate level to see more clearly which business units are succeeding or failing

Accepted Answer

The M-form structure allows executives to manage and strategize for individual business units rather than focusing on specific business functions, which is more characteristic of a functional structure.

Quiz 8: Corporate Strategy: Adding Value in Multi-Business Firms

A viable corporate strategy is to buy up a failing conglomerate and sell off the individual parts at a profit.

Goold et al (1994) have studied the potential added value that the corporate level can give to the business level in a multi-business firm. What term do they use to describe this added value

One of the key questions that a multibusiness firm needs to consider is the degree of relatedness between businesses in the firm. Ideally, the value that is generated should be more than the sum of the businesses - this is known as

The theory of Transaction Cost Economics suggests that the multibusiness firm benefits in two major ways over standalone businesses. These can be categorized as scope advantages and

In the language of the resource based view (RBV) , the scope advantages that multibusinesses firms can theoretically benefit from can be described as

Strategy in a multi-business firm is commonly known as

Which of the following are primary concerns of corporate strategy?

The traditional 'U-form' organizational structure is organized around

Which of the following writers studied the link between strategy and structure in the 1960s?

Which of the following is NOT an advantage of the M-form organizational structure?