1. Which description is an example of corporate strategyformulation/implementation?

Group of answer choices

Prime Music has begun to establish itself by focusing on what may be a vast part of the audience for streaming music: casual listeners and families.

Apple introduced iPad Pro, aiming at business users.

Chuck Robbinsa, a new CEO of Cisco Systems which is a networking equipment announced that the company would embrace the cloud service.

Uber attempts to disrupt traditional transportation industry by introducing a new business model in the market.

2. Which one is not true about strategic renewal and innovation in business?

Group of answer choices

Major changes in technology or customer demand can cause a company to fundamentally alter aspects of its strategy and organization.

Innovators dilemma is a situation that only successful incumbent companies that have enough resources can satisfy picky customers in a niche market.

Major change can make the core competence of a company useless.

Strategic renewal includes the process, content, and outcome of refreshment or replacement of attributes that have the potential to substantially affect its long-term prospects in a company.

Major transformations in the strategic renewal process involve change in business model, technological base, and organizational structure.

3. Which one is not true about agency theory?

Group of answer choices

To mitigate agency problems, a company uses equity-based compensations (such as stock options) that align interests of shareholders and a CEO.

Agency costs are the salary and/or fees that a principal pays to an agent when the principal asks the agent to do tasks on behalf of the principal.

It is technically impossible to monitor moral hazard perfectly because of information asymmetry.

Moral hazard occurs when an agent takes more risks at the expense of a principal.

Agency problems occurs when there is a conflict of interests. For example, a decision that is favorable to a principal may not be favorable to an agent. In such situation, the agent is less likely to make the decision.

Which one is not true about M&A (merger and acquisition)?

Group of answer choices

4. When managers believe that the company can significantly perform better with the target companys resources, they pursue M&As.

Firms pursue M&As when the target company has unique resources such as brand, patent, and copyright.

M&A may increase the acquirers market power.

Firms may prefer M&A to internal development when internal development is too costly.

M&As are mostly more cost-effective than internal development because organic growth takes too much time.