Question 1

Which of the following is NOT one of the three broad categories in value creation in an alliance?

Accepted Answer

A)   Possibilities to use alliances as real options
B)   Controlling the direction of the firm s investments
C)   Reducing costs, risks, and uncertainties
D)   Accessing complementary assets and learning opportunitiesE) B) and C)
F) C) and D)

Question 2

A(n)  ____ is an investment in real operations as opposed to financial capital.

Accepted Answer

A)   Acquisition
B)   Merger
C)   Real option
D)   Foreign direct investmentE) B) and D)
F) C) and D) C

Question 3

Who benefits the most from the acquisition premium valued during an acquisition?

Accepted Answer

A)   The shareholders of the acquiring firm
B)   The shareholders of the target firm
C)   Neither benefit much
D)   Both benefit the sameE) C) and D)
F) A) and B) B

Question 4

Since integration within alliances is usually not as tight as acquisitions, antitrust authorities have a higher likelihood of approving alliances.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT one of the three drivers behind acquisitions?

Accepted Answer

A)   Synergistic
B)   Strategic fit
C)   Managerial motives
D)   HubristicE) A) and B)
F) B) and D)

Question 6

Engaging in thorough due diligence concerning both strategic and organizational fit is a wise strategy during the post-acquisition phase.

Accepted Answer

A) True 
 B)False

Question 7

Pay level is a common challenge in acquisitions. On average, Nomura employees received ____ their Lehman counterparts.

Accepted Answer

A)   Half the pay of
B)   Double the pay of
C)   The same pay as
D)   None of the aboveE) A) and D)
F) B) and C) A

Question 8

Why are M As and alliances often undertaken in isolation?

Accepted Answer

A)   Firms combined mergers, acquisitions, and alliance departments are often poorly managed
B)   M As let a firm stay focused on its own needs while alliances require a great deal of investment in the other company.
C)   In many firms, an M A group reports to CFO while a separate unit deals with alliances.
D)   An alliance usually satisfies shareholders of both organizations, precluding an acquisitionE) C) and D)
F) All of the above

Question 9

____ refers to a manager s overconfidence in his or her abilities.

Accepted Answer

A)   Hubris
B)   Relational capability
C)   Strategic fit
D)   Learning by doingE) A) and D)
F) A) and B)

Question 10

Organizational fit is slightly less important than strategic fit.

Accepted Answer

A) True 
 B)False

Question 11

Discuss the performance of acquisitions and if shareholders benefit.

Accepted Answer

The overall performance record for acqui...

Question 12

A(n)  ____ is a voluntary agreement of cooperation between firms.

Accepted Answer

A)   Equity-based alliance
B)   Strategic alliance
C)   Merger
D)   AcquisitionE) A) and B)
F) A) and C)

Question 13

Strategic investments in an equity-based alliance involve one partner investing in another, while cross-shareholding involves both partners investing in each other.

Accepted Answer

A) True 
 B)False

Question 14

What is the best strategy for finding success with mergers and alliances, using an institution-based view?

Accepted Answer

A)   Managers need to understand the rules of the game, including both legal regulation and the market environment.
B)   Managers need to pay attention to firms relational capabilities that often make or break relationships.
C)   Managers need to maintain a strong organizational structure.
D)   Managers should see the target in terms of value and not pay too high a premium.E) None of the above
F) A) and D)

Question 15

Regarding motives for acquisitions, synergistic motives add value while hubris and managerial motives reduce value.

Accepted Answer

A) True 
 B)False

Question 16

Equity alliance relationships tend to have less direct control over joint activities on a continual basis than the contractual relationships.

Accepted Answer

A) True 
 B)False

Question 17

Limitability between alliance partners has much more to do with integration, and limitability between acquisition members has to do with trust.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT one of the stages in the formation of alliances?

Accepted Answer

A)   The decision to cooperate or not to cooperate
B)   Deciding between contract or equity
C)   Learning by doing
D)   Specifying the relationshipE) A) and B)
F) B) and C)

Question 19

Overall, alliances have emerged as great instruments of real options because of their flexibility to sequentially scale up or scale down the investment.

Accepted Answer

A) True 
 B)False

Question 20

Around 70% of acquisitions reportedly fail.

Accepted Answer

A) True 
 B)False

Exam 11: Managing Global Competitive Dynamics

Which of the following is NOT one of the three broad categories in value creation in an alliance?

Correct AnswerverifiedShow Answer

A(n) ____ is an investment in real operations as opposed to financial capital.

Correct AnswerverifiedC

Who benefits the most from the acquisition premium valued during an acquisition?

Correct AnswerverifiedB

Since integration within alliances is usually not as tight as acquisitions, antitrust authorities have a higher likelihood of approving alliances.

Correct AnswerverifiedShow Answer

Which of the following is NOT one of the three drivers behind acquisitions?

Correct AnswerverifiedShow Answer

Engaging in thorough due diligence concerning both strategic and organizational fit is a wise strategy during the post-acquisition phase.

Correct AnswerverifiedShow Answer

Pay level is a common challenge in acquisitions. On average, Nomura employees received ____ their Lehman counterparts.

Correct AnswerverifiedA

Why are M As and alliances often undertaken in isolation?

Correct AnswerverifiedShow Answer

____ refers to a manager s overconfidence in his or her abilities.

Correct AnswerverifiedShow Answer

Organizational fit is slightly less important than strategic fit.

Correct AnswerverifiedShow Answer

Discuss the performance of acquisitions and if shareholders benefit.

Correct AnswerverifiedThe overall performance record for acqui...View AnswerShow Answer

A(n) ____ is a voluntary agreement of cooperation between firms.

Correct AnswerverifiedShow Answer

Strategic investments in an equity-based alliance involve one partner investing in another, while cross-shareholding involves both partners investing in each other.

Correct AnswerverifiedShow Answer

What is the best strategy for finding success with mergers and alliances, using an institution-based view?

Correct AnswerverifiedShow Answer

Regarding motives for acquisitions, synergistic motives add value while hubris and managerial motives reduce value.

Correct AnswerverifiedShow Answer

Equity alliance relationships tend to have less direct control over joint activities on a continual basis than the contractual relationships.

Correct AnswerverifiedShow Answer

Limitability between alliance partners has much more to do with integration, and limitability between acquisition members has to do with trust.

Correct AnswerverifiedShow Answer

Which of the following is NOT one of the stages in the formation of alliances?

Correct AnswerverifiedShow Answer

Overall, alliances have emerged as great instruments of real options because of their flexibility to sequentially scale up or scale down the investment.

Correct AnswerverifiedShow Answer

Around 70% of acquisitions reportedly fail.

Correct AnswerverifiedShow Answer

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The overall performance record for acqui...
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