study guide

Topics: Mergers and acquisitions, Corporate finance Pages: 25 (4390 words) Published: February 23, 2014
Chapter 12—Making Alliances and Acquisitions Work

TRUE/FALSE

1.Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, strategic distributors, and licensing/franchising.

ANS:FPTS:1DIF:EasyREF:p. 389
OBJ:12.1NAT:AACSB: Tier 1 Analytic; Tier 2 Creation of Value

2.A joint venture (JV) is a form of equity-based alliance.

ANS:TPTS:1DIF:ModerateREF:p. 389
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

3.A licensing is a form of equity-based alliance.

ANS:FPTS:1DIF:ModerateREF:p. 389
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

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

ANS:TPTS:1DIF:EasyREF:p. 389
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

5.Acquisitions are more common than mergers.

ANS:TPTS:1DIF:EasyREF:p. 389
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

6.Many firms establish alliances with competitors.

ANS:TPTS:1DIF:EasyREF:p. 390
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

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

ANS:TPTS:1DIF:ModerateREF:p. 391
OBJ:12.1NAT:AACSB: Tier 1 Analytic; Tier 2 Legal Responsibilities

8.Formal government policies regarding entry mode requirements for new firms are generally becoming more conservative.

ANS:FPTS:1DIF:ModerateREF:p. 391
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Legal Responsibilities

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

ANS:TPTS:1DIF:ModerateREF:p. 392
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Creation of Value

10.One of the disadvantages of having strategic alliances is the potential of partner opportunism.

ANS:TPTS:1DIF:ModerateREF:p. 392
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Creation of Value

11.It is important for managers to have collaborative relationship skills since alliances are more about collaboration than pure competition.

ANS:TPTS:1DIF:EasyREF:p. 394
OBJ:12.1NAT:AACSB: Tier 1 Diversity; Tier 2 HRM and Strategy

12.The "imitability" of an alliance is based on the trust and understanding between the partners.

ANS:TPTS:1DIF:ModerateREF:p. 394
OBJ:12.1NAT:AACSB: Tier 1 Diversity; Tier 2 HRM and Strategy

13.Learning race is a situation in which alliance partners do not want to learn from each other.

ANS:FPTS:1DIF:ModerateREF:p. 394
OBJ:12.1NAT:AACSB: Tier 1 Diversity; Tier 2 HRM and Strategy

14.Around 70% of acquisitions reportedly fail.

ANS:TPTS:1DIF:ModerateREF:p. 394
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Operations Management

15.Imitability between alliance partners has much more to do with integration, and imitability between acquisition members has to do with trust.

ANS:FPTS:1DIF:ModerateREF:p. 394
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

16.Alliances are better than acquisitions in situations that require a high degree of integration.

ANS:FPTS:1DIF:ModerateREF:p. 395
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 HRM and Group Dynamics

17.Alliances, as real options, may be more suitable under a high level of uncertainty, and acquisitions are preferable when the level of uncertainty is low.

ANS:TPTS:1DIF:ModerateREF:p. 393
OBJ:12.1NAT:AACSB: Tier 1 Reflective Thinking; Tier 2 Environmental Influence

18.Learning by doing is the most effective way to learn complex...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • ACC 561 Week 1-6 Entire Course ALL Study Guides Essay
  • ACC 492 Weeks 1 – 5 All Individual and Team Study Guides Research Paper
  • [BUNDLE] HRM 531 Week 1 – 6 All Team and Individual Study Guides Essay
  • Essay on Study
  • Composition Guide Essay
  • Essay about Literacy Narrative Guide
  • Apa Reference Guide Essay
  • Report on Irish Girl Guides Essay

Become a StudyMode Member

Sign Up - It's Free