Question 1

According to Jack Welch,the advantages of focus that single business companies possess are outweighed the advantage that multibusiness companies possess in terms of their ability to share the ideas from many different sources.

Accepted Answer

Jack Welch, the former CEO of General Electric, was a proponent of the idea that multibusiness companies have a significant advantage over single business companies due to their ability to share ideas, resources, and innovations across diverse business units, thereby creating a more robust and innovative organization.

Question 2

The strategic planning systems of multibusiness corporations have been criticized for the fact that they do not make strategy.

Accepted Answer

Strategic planning systems in multibusiness corporations are often criticized because they tend to focus more on financial planning and budgeting rather than on the formulation and creation of new strategies. This can lead to a lack of innovative strategic direction.

Question 3

A key challenge for the strategic planning systems of large corporations is reconciling top-down strategic leadership with bottom-up strategy initiatives.

Accepted Answer

Large corporations often have a centralized strategic planning system that is led by top executives. However, this can sometimes conflict with bottom-up strategy initiatives, such as ideas and suggestions from lower-level employees or individual departments. Balancing these two approaches can be a challenge for strategic planning systems of large corporations.

Question 4

Typically,a common corporate identity and well-established corporate systems means that there are few barriers to transferring best practices between business units within a company.

Accepted Answer

The answer of Typically,a common corporate identity and well-established corporate...

Question 5

4,In a holding company,such as Berkshire Hathaway,the corporate headquarters is closely involved in strategic decision making in the individual subsidiaries.

Accepted Answer

In a holding company like Berkshire Hathaway, the corporate headquarters typically allows individual subsidiaries to operate independently and make their own strategic decisions, focusing instead on broad oversight and investment decisions.

Question 6

The mechanisms through which the corporate headquarters exercises control over individual businesses can be classified into "input control" and "output control." Performance management systems represent a form of "input control."

Accepted Answer

Performance management systems are typically considered a form of "output control" because they focus on measuring and managing the outcomes or results of business activities, rather than controlling the inputs or resources that go into the production process.

Question 7

Increasingly,the corporate headquarters of multibusiness companies are being divided into two parts: that which exerts financial and strategic control over the businesses and that which provided common services to the businesses.

Accepted Answer

This statement is true. Multibusiness companies are often structured in a way that separates the corporate functions of financial and strategic control from the functions of providing operational services to the individual businesses within the company. This can allow for more efficient and effective management of the company as a whole.

Question 8

"Restructuring" is a corporate strategy that involves acquiring companies then intervening to cut costs,divest assets,revise competitive strategies,and adjust financial structure.

Accepted Answer

This statement describes the common process of a corporate restructuring strategy.

Question 9

The Ashridge portfolio display is distinguished by the fact that it takes account of fit between each business and the corporate owner.

Accepted Answer

The statement is true. The Ashridge portfolio display includes evaluating the fit between each business and the corporate owner.

Question 10

The axes of the BCG and GE/McKinsey business portfolio matrixes represent the two fundamental sources of profitability for a business: the attractiveness of its industry and its competitive advantage.

Accepted Answer

The axes of both the BCG and GE/McKinsey matrices represent industry attractiveness and competitive advantage.

Question 11

.The GE/McKinsey portfolio planning matrix is less sophisticated than the BCG growth-share matrix,but is easier to apply.

Accepted Answer

The GE/McKinsey portfolio planning matrix is more sophisticated than the BCG growth-share matrix, offering a more nuanced approach to evaluating business units by considering industry attractiveness and business unit strength, rather than just market growth rate and market share.

Question 12

Within a multidivisional company,"portfolio management" involves managing the linkages among the businesses in order to exploit the synergies between them.

Accepted Answer

The answer of Within a multidivisional company,"portfolio management" involves managing...

Question 13

Implementing corporate strategy mainly involves the relationships between the corporate headquarters and the individual businesses.

Accepted Answer

Corporate strategy involves the overall direction and goals of the entire corporation, which are then implemented through the individual businesses. Therefore, the relationships between the corporate headquarters and the individual businesses are crucial in implementing and executing the corporate strategy.

Question 14

Sharing resources and activities between business units can often impose costs which exceed the value of the synergies gained.

Accepted Answer

Sharing resources and activities between business units can lead to additional coordination, communication, and integration costs, which may offset the benefits of synergies. Thus, the statement is true.

Question 15

The closer the linkages between the business units of a multibusiness corporation,the more involved must corporate management be in coordinating across the businesses.

Accepted Answer

When the linkages between the business units of a multibusiness corporation are closer, there is a higher degree of interdependence between the units. This requires a more involved role of corporate management to ensure coordination across businesses and effective utilization of resources. Therefore, the statement is true.

Question 16

Multibusiness corporations with close linkages between their businesses tend to have smaller corporate headquarters than multibusiness corporations with more independent businesses.

Accepted Answer

The answer of Multibusiness corporations with close linkages between their...

Question 17

For conglomerate companies (companies that comprise unrelated businesses)portfolio management is likely to be more important source of value creation than in a diversified company that comprises closely-related businesses.

Accepted Answer

The answer of For conglomerate companies (companies that comprise unrelated...

Question 18

The benefits and the costs from extending (or reducing)corporate scope are critically dependent upon how corporate strategy is implemented.

Accepted Answer

The benefits and costs of extending or reducing corporate scope can be influenced by how corporate strategy is implemented. For example, expanding into new markets could bring benefits such as increased revenue and market share, but if it is done without proper planning or resources, it could also lead to increased costs and decreased profitability. On the other hand, reducing corporate scope could result in cost savings, but if it leads to reduced market share or missed opportunities, it could also have negative consequences. Therefore, the implementation of corporate strategy is critical in determining the success or failure of extending or reducing corporate scope.

Question 19

In large multibusiness,multinational companies shared service organizations are almost always located close to their corporate headquarters.

Accepted Answer

Shared service organizations within large multibusiness, multinational companies are often located in various global locations to take advantage of cost efficiencies, talent availability, and local market expertise, rather than being situated close to corporate headquarters.

Question 20

Most multibusiness companies have a dual planning process: strategic planning focuses on the short and medium term,financial planning on the medium to long term

Accepted Answer

Strategic planning typically focuses on the long term and sets the overall direction for the company, while financial planning often focuses on the short to medium term, managing the company's financial resources and budgeting.

Quiz 13: Implementing Corporate Strategy: Managing the Multibusiness Firm