Question 1

A firm that provides a variety of similar goods and/or services is known as a(n) __________-business firm.

Accepted Answer

A firm that provides a variety of similar goods and/or services is known as a related-business firm, as it operates in related market segments or industries.

Question 2

The divisions of Solomon Sons Limited generally operate in the same or similar markets, use similar technologies, share common distribution channels and benefit from common strategic assets. Solomon Sons is a(n) __________-business firm.

Accepted Answer

Solomon Sons Limited is a related-business firm because its divisions operate in similar markets, use similar technologies, and share common strategic assets, indicating a related diversification strategy.

Question 3

A firm that provides diverse products (goods and/or services) to many different markets is known as a(n) __________-business firm.

Accepted Answer

An unrelated-business firm is one that operates in multiple industries that are not necessarily linked to one another, offering a wide range of products or services to various markets without a core focus on a single market or product line.

Question 4

A __________ is a firm that consists of distinct companies that have little or no relation to each other in terms of goods, services, or customers served.

Accepted Answer

A conglomerate is a large corporation composed of diverse companies operating in various industries, which are usually unrelated to each other. This structure allows the corporation to reduce risks by diversifying its investments and operations.

Question 5

Many North American firms have backed away from conglomerate diversification by selling off __________.

Accepted Answer

Many North American firms have moved away from conglomerate diversification, which involves owning a variety of businesses that don't necessarily relate to one another, by selling off their unrelated businesses. This strategy aims to focus more on their core operations or related sectors where they have more expertise and potentially better synergies.

Question 6

Jeff Immelt, CEO of General Electric, says that __________ is the most important part of his job.

Accepted Answer

Jeff Immelt, as CEO of General Electric, emphasized the importance of developing and motivating people as a crucial part of his job, highlighting the significance of leadership in fostering growth and innovation within the company.

Question 7

Jeff Immelt, the CEO of GE, contends:

Accepted Answer

Jeff Immelt, as CEO of GE, emphasized the multifaceted role of size in a corporation. He believed that size could be leveraged for greatness, acknowledged that size coupled with complexity could lead to bureaucracy, and also recognized that size might provide a buffer against failure. These views collectively reflect a nuanced understanding of how scale impacts organizational dynamics.

Question 8

GE is made up of six primary businesses, including all of the following except ________.

Accepted Answer

GE Education is not one of GE's primary businesses. The company's main segments include GE Commercial Finance, GE Infrastructure, and GE Healthcare, among others, but not education.

Question 9

__________-level planning and strategy guides the overall direction of firms having more than one line of business.

Accepted Answer

Corporate-level planning and strategy guide the overall direction of firms that operate in more than one line of business, focusing on the organization as a whole and its various business units, rather than on the specifics of any one product or market.

Question 10

Corporate strategies focus on all of the following except __________.

Accepted Answer

Corporate strategies typically focus on the types of businesses a firm wants to engage in, ways to acquire or divest businesses, and the allocation of resources among those businesses. They do not focus on developing corporate entropy, which refers to disorder or randomness within the organization.

Question 11

A(n) __________ is a division or subsidiary of a firm that provides a distinct product or service and often has its own mission and goals.

Accepted Answer

A strategic-business unit (SBU) is a division or subsidiary within a firm that provides a distinct product or service and typically has its own mission, goals, and strategies, operating somewhat independently from the parent company's other divisions.

Question 12

Which of the following statements is not true concerning SBUs?

Accepted Answer

Corporate-level managers oversee and guide the overall direction of the company, but the planning and strategy development for each Strategic Business Unit (SBU) are typically the responsibility of managers who are directly involved with that specific SBU. These managers are more familiar with the unique challenges and opportunities of their SBU, allowing for more tailored and effective strategic planning.

Question 13

__________ is not a common growth strategy.

Accepted Answer

The answer of __________ is not a common growth strategy.
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Question 14

__________ occurs when a company enters the business of its suppliers, usually to control component quality, on-time delivery, or stable prices.

Accepted Answer

Backward integration occurs when a company acquires or merges with its suppliers to control the production of its raw materials or inputs, aiming to improve efficiency, reduce costs, or ensure the quality and timely delivery of components.

Question 15

Texas Union Gas and Electric provides utilities for three counties. The company recently started drilling its own gas wells in order to gain control over price and availability of product for its pipelines. Texas Union is following a strategy of __________.

Accepted Answer

Backward integration refers to a company expanding its role to fulfill tasks formerly completed by businesses up the supply chain, in this case, drilling its own gas wells to supply its pipelines, rather than relying on external suppliers.

Question 16

When a company enters the businesses of its customers, it is involved in __________.

Accepted Answer

Forward integration is when a company moves downstream in its production process into activities that are closer to the end consumer, effectively entering the businesses of its customers.

Question 17

Stevens Ranch, a cattle ranch and commercial feedlot operation located along Interstate Highway 40 in Arkansas, opened a restaurant to serve its high quality beef to travelers. This decision characterizes __________ integration.

Accepted Answer

Forward integration occurs when a company expands its activities to include control of the direct distribution or supply of its products, in this case, Stevens Ranch moving into the restaurant business to serve its beef directly to consumers.

Question 18

__________ integration occurs when a company acquires a competitor to consolidate and extend its market share.

Accepted Answer

Horizontal integration occurs when a company acquires or merges with a competitor operating at the same level of the supply chain, aiming to consolidate market share and reduce competition.

Question 19

Newman Printing, Inc. is growing by purchasing established printing companies. Newman is following a strategy of __________.

Accepted Answer

Horizontal integration is a strategy where a company acquires or merges with other companies in the same industry at the same stage of production. Newman Printing, Inc. is expanding by purchasing established printing companies, which means it is growing within its own industry, making it a case of horizontal integration.

Question 20

The _________ strategy is an alternative to traditional forms of backward, forward, and horizontal integration.

Accepted Answer

An alliance strategy involves partnering with other companies to achieve objectives, which is different from traditional integration strategies like backward, forward, and horizontal integration.

Quiz 7: Planning and Control