Question 1

Which would be more characteristic of conglomerates?
a. "Putting one's eggs in one basket."
b. "Putting one's eggs in similar baskets."
c. "Putting one's eggs in different baskets."
d. A and B above.
e. B and C above.

Accepted Answer

The answer of Which would be more characteristic of conglomerates?
a....

Question 2

Research regarding the relationship between product diversification and firm performance indicates that:
a. Performance may increase as firms shift from single business strategies to product-related diversification.
b. Performance may decrease as firms change from product-related to -unrelated.
c. The linkage between diversification and performance is inverted U shaped.
d. "Putting your eggs in similar baskets," has emerged as a balanced way to both reduce risk and leverage synergy.
e. All of the above.

Accepted Answer

The answer of Research regarding the relationship between product diversification...

Question 3

Product-related diversification involves all of the following except:
a. A single business strategy.
b. Entries into activities that are related to a firm's existing markets and/or activities.
c. The emphasis is on economies of scale rather than scope.
d. Increases in competitiveness.
e. Synergy.

Accepted Answer

The answer of Product-related diversification involves all of the following...

Question 4

Corporate scope is shaped by:
a. Industry conditions.
b. Firm capabilities.
c. Institutional constraints.
d. Opportunities in both developed and emerging economies.
e. All of the above.

Accepted Answer

The answer of Corporate scope is shaped by:
a. Industry conditions.
b....

Question 5

In combining product and geographic diversification, which is not one of the four possible combinations?
a. Anchored replicators.
b. Multinational replicators.
c. Far-flung conglomerates.
d. Classic replicators.
e. Classic conglomerates.

Accepted Answer

The answer of In combining product and geographic diversification, which...

Question 6

Which is one motive for M&A which does not necessarily increase shareholder value?
a. Synergistic.
b. Hubris.
c. Performance.
d. A and C above.
e. None of the above.

Accepted Answer

The answer of Which is one motive for M&A which...

Question 7

Which is not true regarding geographic diversification and firm performance?
a. U-shaped relationship at low level of internationalization.
b. Initially a negative effect of international expansion on performance.
c. Affected by the liability of foreignness.
d. Inverted-U shape at moderate to high levels of internationalization.
e. Positive only at high levels of internationalization.

Accepted Answer

The answer of Which is not true regarding geographic diversification...

Question 8

Diversification premium is the same thing as:
a. Conglomerate advantage.
b. Diversification discount.
c. Conglomerate disadvantage.
d. Level of product diversification.
e. Measurement of firm performance.

Accepted Answer

The answer of Diversification premium is the same thing as:
a....

Question 9

Diversification can pay off in all of the following situations except:
a. Risk is spread over several product or country) markets.
b. Core resources are leveraged.
c. The art of post-acquisition integration has been mastered.
d. Commonly shared industry skills are used.
e. Firms are organized to minimize the costs.

Accepted Answer

The answer of Diversification can pay off in all of...

Question 10

To ensure the success of the M&A, managers need to make sure of all the following except:
a. Be willing to walk out when premiums are too high.
b. Engage in adequate due diligence concerning strategic fit.
c. Seek organizational contrast and variety rather than organizational fit.
d. Address the concerns of multiple stakeholders.
e. Recognize that that integration management is a fulltime job.

Accepted Answer

The answer of To ensure the success of the M&A,...

Question 11

Which is true of relatedness?
a. Measurement of product relatedness is no longer debatable.
b. A "product-related" firm will be considered related regardless of the measure used.
c. Some argue that product relatedness refers specifically to the visible product linkages.
d. Relatedness can be a common underlying dominant logic that connects various businesses in a diversified firm.
e. Product-unrelated conglomerates are not linked by institutional relatedness.

Accepted Answer

The answer of Which is true of relatedness?
a. Measurement of...

Question 12

At its core, diversification is essentially driven by all of the following except:
a. Economic benefits.
b. Bureaucratic costs.
c. Synergy.
d. Less complicated information systems.
e. MEB.

Accepted Answer

The answer of At its core, diversification is essentially driven...

Question 13

The following managerial motives for conglomerations do not benefit shareholders except:
a. Norms.
b. Reducing managers' employment risk.
c. Organizational stability.
d. Pursuing power, prestige, and income.
e. Empire building.

Accepted Answer

The answer of The following managerial motives for conglomerations do...

Question 14

Select the best choice: a company that is engaged in oil production, pipelines and tankers, refining, and gasoline stations has engaged in ______________ expansion.
a. Horizontal
b. Vertical
c. Conglomerate
d. Friendly M&A
e. Hostile M&A

Accepted Answer

The answer of Select the best choice: a company that...

Question 15

Sources of operation synergy:
a. Technologies.
b. Marketing.
c. Manufacturing.
d. All of the above.
e. None of the above.

Accepted Answer

The answer of Sources of operation synergy:
a. Technologies.
b. Marketing.
c. Manufacturing.
d....

Question 16

Which of the following is true regarding M&As?
a. As many as 70 percent of M&As reportedly fail.
b. On average, the acquiring firms' performance improves after acquisitions.
c. Target firms, after being acquired and becoming internal units, often perform better than when they were independent, stand-alone firms.
d. The only identifiable losers are the shareholders of target acquired) firms.
e. The outstanding success of M&As is due to pre- and post acquisition phases.

Accepted Answer

The answer of Which of the following is true regarding...

Question 17

Conglomeration tends to provide all of the following except:
a. Product-unrelated diversification.
b. Financial synergy.
c. Economies of scale.
d. Economies of scope.
e. Internal capital market.

Accepted Answer

The answer of Conglomeration tends to provide all of the...

Question 18

Which geographic diversification is most likely to reduce the liability of foreignness?
a. Culturally adjacent countries.
b. Extensive international scope.
c. Beyond geographically neighboring countries.
d. Beyond culturally neighboring countries.
e. All of the above

Accepted Answer

The answer of Which geographic diversification is most likely to...

Question 19

Sources of operational synergy include:
a. Technologies.
b. Marketing.
c. Manufacturing.
d. All of the above.
e. None of the above.

Accepted Answer

The answer of Sources of operational synergy include:
a. Technologies.
b. Marketing.
c....

Question 20

Which is true regarding restructuring?
a. There are two primary ways of restructuring namely downsizing and upsizing.
b. A rising level of competition within an industry normally prevents restructuring.
c. Corporate restructuring is not widely embraced around the world.
d. Restructuring is one of the first things to consider when trying to improve profitability.
e. Restructuring is easier in knowledge-intensive firms than capital intensive firms.

Accepted Answer

The answer of Which is true regarding restructuring?
a. There are...

Quiz 9: Diversifying, Acquiring, and Restructuring

Which would be more characteristic of conglomerates? a. "Putting one's eggs in one basket." b. "Putting one's eggs in similar baskets." c. "Putting one's eggs in different baskets." d. A and B above. e. B and C above.

Product-related diversification involves all of the following except: a. A single business strategy. b. Entries into activities that are related to a firm's existing markets and/or activities. c. The emphasis is on economies of scale rather than scope. d. Increases in competitiveness. e. Synergy.

Corporate scope is shaped by: a. Industry conditions. b. Firm capabilities. c. Institutional constraints. d. Opportunities in both developed and emerging economies. e. All of the above.

In combining product and geographic diversification, which is not one of the four possible combinations? a. Anchored replicators. b. Multinational replicators. c. Far-flung conglomerates. d. Classic replicators. e. Classic conglomerates.

Which is one motive for M&A which does not necessarily increase shareholder value? a. Synergistic. b. Hubris. c. Performance. d. A and C above. e. None of the above.

Diversification premium is the same thing as: a. Conglomerate advantage. b. Diversification discount. c. Conglomerate disadvantage. d. Level of product diversification. e. Measurement of firm performance.

At its core, diversification is essentially driven by all of the following except: a. Economic benefits. b. Bureaucratic costs. c. Synergy. d. Less complicated information systems. e. MEB.

The following managerial motives for conglomerations do not benefit shareholders except: a. Norms. b. Reducing managers' employment risk. c. Organizational stability. d. Pursuing power, prestige, and income. e. Empire building.

Select the best choice: a company that is engaged in oil production, pipelines and tankers, refining, and gasoline stations has engaged in ______________ expansion. a. Horizontal b. Vertical c. Conglomerate d. Friendly M&A e. Hostile M&A

Sources of operation synergy: a. Technologies. b. Marketing. c. Manufacturing. d. All of the above. e. None of the above.

Conglomeration tends to provide all of the following except: a. Product-unrelated diversification. b. Financial synergy. c. Economies of scale. d. Economies of scope. e. Internal capital market.

Which geographic diversification is most likely to reduce the liability of foreignness? a. Culturally adjacent countries. b. Extensive international scope. c. Beyond geographically neighboring countries. d. Beyond culturally neighboring countries. e. All of the above

Sources of operational synergy include: a. Technologies. b. Marketing. c. Manufacturing. d. All of the above. e. None of the above.