Reference no: EM133424487

Questions

1. Conglomeration tends to provide all of the following EXCEPT:

economies of scale.

financial synergy.

economies of scope.

product-unrelated diversification.

2. To ensure the success of the M&A, managers need to make sure of all the following EXCEPT which one?

Address the concerns of multiple stakeholders

Seek organizational contrast and variety rather than organizational fit

Engage in adequate due diligence concerning strategic fit

Be willing to walk out when premiums are too high

3. A firm that focuses on a primary service is said to be pursuing what type of strategy?

Operational synergy

Single business

Product-related diversification

Product-unrelated diversification

4. Diversification premium is the same thing as:

conglomerate advantage.

measurement of firm performance.

diversification discount.

level of product diversification.

5. Which geographic diversification is most likely to reduce the liability of foreignness?

Beyond culturally neighboring countries

Extensive international scope

Beyond geographically neighboring countries

Culturally adjacent countries

6. Firm A, which is a gas and oil company, acquires a chemical company, a transportation company, and a financial services company. What type of M&As does this exemplify?

Conglomerate

Hostile

Horizontal

Vertical

7. To add maximum value, a product-related diversifier needs to:

switch to a product-unrelated diversification strategy.

focus primarily on geographic diversification.

evaluate division performance based on strict financial targets.

foster a centralized organizational structure with a cooperative culture.

8. Which of the following is TRUE regarding restructuring?

The two primary ways of restructuring are downsizing and upsizing.

Restructuring (downsizing) is used more often by acquiring firms than by seller firms.

Corporate restructuring is the primary tool for reducing firm size and scope.

Restructuring is easier in knowledge-intensive firms than capital-intensive firms.

9. As an organization becomes larger and more complex, adding more employees and using more complicated information systems, what should it expect to happen?

Bureaucratic costs will go up.

Economies of scale will be achieved.

Bureaucratic costs will go down.

Economies of scope will be achieved.

10. Among the industry-based considerations that motivate a firm to diversify is:

core competencies.

power of suppliers and buyers.

value as measured by risk reduction.

informal norms and cognitions.