Question 1 (1 point)

Value creating reasons for diversification include all of the following, except:

Question 1 options:

Economies of scale

Financial economies

Market power

Economies of scope

Question 2 (1 point)

Conglomerates are firms using the following strategy:

Question 2 options:

Dominant business diversification strategy

Single business diversification strategy

Unrelated diversification strategy

Related linked diversification strategy

Question 3 (1 point)

____________ and ________________ are two ways diversification strategies can created value.

Question 3 options:

Diversifying employment risk, increasing managerial compensation

Organizational learning, increased proactiveness

Operational relatedness, corporate relatedness

Risk reduction, uncertainty avoidance

Question 4 (1 point)

Research indicates that highest performance is associated with:

Question 4 options:

Dominant business diversification strategy

Related constrained diversification strategy

Unrelated diversification strategy

Related linked diversification strategy

Question 5 (1 point)

Diversification strategy may be used to gain market power through the following mechanisms, except:

Question 5 options:

Multipoint competition

Gaining scale

Vertical integration

Restructuring of assets

Question 6 (1 point)

Often, diversification provides benefits to top-level managers but not to shareholders.

Question 6 options:

True

False

Question 7 (1 point)

Expanding a firms portfolio of businesses tends to increase top managers pay.

Question 7 options:

True

False

Question 8 (1 point)

Effectively, corporate-level strategies have to do with diversification.

Question 8 options:

True

False

Question 9 (1 point)

Structural arrangements where less than 70% of revenue comes from the dominant business, and all businesses share product, technological, and distribution linkages, are described by:

Question 9 options:

Related constrained diversification strategy

Unrelated diversification strategy

Dominant business diversification strategy

Related linked diversification strategy

Question 10 (1 point)

Risk reduction for firms and antitrust regulation are examples of:

Question 10 options:

Value-creating reasons for diversification

Value-neutral reasons for diversification

Value-reducing reasons for diversification

None of the above