MGT 6655 QUIZ 2
QUESTIONS AND ANSWERS | 2026 UPDATE | 100% CORRECT
Graduate Strategic Management: Corporate Strategy, Global Expansion, Innovation &
Governance
Comprehensive Quiz 2 Practice Review — 50 Questions | 2026|2027 Aligned
June 2026
Georgia Institute of Technology — Scheller College of Business
DISCLAIMER: This document is intended solely for academic review purposes. It does not guarantee any specific
examination outcome and is not affiliated with any official university assessment materials.
,MGT 6655 Quiz 2 — Practice Review 2026 | Georgia Institute of Technology
Table of Contents
Section 1: Corporate Strategy & Diversification (Q1–Q10)
Diversification types, BCG matrix, vertical integration, transaction costs,
parenting advantage, synergies, and strategic alliances (Q1–Q10)
Section 2: Mergers, Acquisitions & Global Expansion (Q11–Q20)
M&A; value creation, defensive tactics, due diligence, CAGE framework,
global strategies, entry modes, and emerging-market multinationals (Q11–Q20)
Section 3: Innovation & Technology Strategy (Q21–Q30)
Disruptive innovation, S-curve, platform ecosystems, ambidexterity, open
innovation, absorptive capacity, IP protection, and technology adoption lifecycle
(Q21–Q30)
Section 4: Corporate Governance & ESG (Q31–Q40)
Agency problems, governance mechanisms, ESG integration, stakeholder theory,
ethical dilemmas, and competitive dynamics (Q31–Q40)
Section 5: Applied Strategic Analysis & Synthesis (Q41–Q50)
Value chain reengineering, dynamic capabilities, scenario planning,
declining-industry strategy, coopetition, and dynamic strategic planning
(Q41–Q50)
— 2 —
, MGT 6655 Quiz 2 — Practice Review 2026 | Georgia Institute of Technology
Section 1: Corporate Strategy & Diversification
Diversification types, BCG matrix, vertical integration, transaction costs, parenting advantage,
synergies, and strategic alliances (Q1–Q10)
Q1. Which of the following best describes the primary source of operational value creation in
related diversification?
A. Financial economies through the creation of an efficient internal capital market
B. Economies of scope via the sharing of activities or transfer of core competencies
across business units [CORRECT]
C. Reduction of managerial employment risk through portfolio balancing
D. Exploitation of market power through mutual forbearance with competitors
Correct Answer: B
Rationale: Related diversification creates value primarily through economies of scope (sharing
resources, capabilities, or activities across business units); financial economies and risk
reduction are more characteristic of unrelated diversification and do not inherently create
operational shareholder value.
Q2. According to the BCG Growth-Share Matrix, a business unit with a low market growth rate
but a high relative market share is classified as a "Cash Cow." What is the recommended
strategic action for this unit?
A. Build (invest heavily to gain market share)
B. Hold (maintain market share to generate steady cash flow) [CORRECT]
C. Harvest (minimize investment to maximize short-term cash flow)
D. Divest (sell or liquidate the business unit immediately)
Correct Answer: B
Rationale: Cash cows should be "held" to maintain their dominant position and generate reliable cash
flow to fund "Stars" or "Question Marks"; building is unnecessary in low-growth markets, and
harvesting/divesting is reserved for "Dogs" or fading cash cows.
Q3. A software company decides to acquire a cloud hosting provider to secure its
infrastructure and reduce dependency on third-party vendors. This strategic move is an example
of:
A. Forward vertical integration
B. Backward vertical integration [CORRECT]
C. Horizontal integration
D. Conglomerate diversification
Correct Answer: B
Rationale: Acquiring a supplier or moving upstream in the value chain to control inputs is backward
vertical integration; forward integration would involve acquiring a distributor or retailer, and
horizontal integration involves acquiring a direct competitor.
Q4. Which concept explains why a firm might choose to keep a strategically critical activity
in-house (hierarchy) rather than outsource it (market), even if an external vendor can perform
it at a lower direct cost?
A. The experience curve effect
B. Transaction cost economics and the risk of hold-up due to asset specificity [CORRECT]
C. The learning curve phenomenon
— 3 —
QUESTIONS AND ANSWERS | 2026 UPDATE | 100% CORRECT
Graduate Strategic Management: Corporate Strategy, Global Expansion, Innovation &
Governance
Comprehensive Quiz 2 Practice Review — 50 Questions | 2026|2027 Aligned
June 2026
Georgia Institute of Technology — Scheller College of Business
DISCLAIMER: This document is intended solely for academic review purposes. It does not guarantee any specific
examination outcome and is not affiliated with any official university assessment materials.
,MGT 6655 Quiz 2 — Practice Review 2026 | Georgia Institute of Technology
Table of Contents
Section 1: Corporate Strategy & Diversification (Q1–Q10)
Diversification types, BCG matrix, vertical integration, transaction costs,
parenting advantage, synergies, and strategic alliances (Q1–Q10)
Section 2: Mergers, Acquisitions & Global Expansion (Q11–Q20)
M&A; value creation, defensive tactics, due diligence, CAGE framework,
global strategies, entry modes, and emerging-market multinationals (Q11–Q20)
Section 3: Innovation & Technology Strategy (Q21–Q30)
Disruptive innovation, S-curve, platform ecosystems, ambidexterity, open
innovation, absorptive capacity, IP protection, and technology adoption lifecycle
(Q21–Q30)
Section 4: Corporate Governance & ESG (Q31–Q40)
Agency problems, governance mechanisms, ESG integration, stakeholder theory,
ethical dilemmas, and competitive dynamics (Q31–Q40)
Section 5: Applied Strategic Analysis & Synthesis (Q41–Q50)
Value chain reengineering, dynamic capabilities, scenario planning,
declining-industry strategy, coopetition, and dynamic strategic planning
(Q41–Q50)
— 2 —
, MGT 6655 Quiz 2 — Practice Review 2026 | Georgia Institute of Technology
Section 1: Corporate Strategy & Diversification
Diversification types, BCG matrix, vertical integration, transaction costs, parenting advantage,
synergies, and strategic alliances (Q1–Q10)
Q1. Which of the following best describes the primary source of operational value creation in
related diversification?
A. Financial economies through the creation of an efficient internal capital market
B. Economies of scope via the sharing of activities or transfer of core competencies
across business units [CORRECT]
C. Reduction of managerial employment risk through portfolio balancing
D. Exploitation of market power through mutual forbearance with competitors
Correct Answer: B
Rationale: Related diversification creates value primarily through economies of scope (sharing
resources, capabilities, or activities across business units); financial economies and risk
reduction are more characteristic of unrelated diversification and do not inherently create
operational shareholder value.
Q2. According to the BCG Growth-Share Matrix, a business unit with a low market growth rate
but a high relative market share is classified as a "Cash Cow." What is the recommended
strategic action for this unit?
A. Build (invest heavily to gain market share)
B. Hold (maintain market share to generate steady cash flow) [CORRECT]
C. Harvest (minimize investment to maximize short-term cash flow)
D. Divest (sell or liquidate the business unit immediately)
Correct Answer: B
Rationale: Cash cows should be "held" to maintain their dominant position and generate reliable cash
flow to fund "Stars" or "Question Marks"; building is unnecessary in low-growth markets, and
harvesting/divesting is reserved for "Dogs" or fading cash cows.
Q3. A software company decides to acquire a cloud hosting provider to secure its
infrastructure and reduce dependency on third-party vendors. This strategic move is an example
of:
A. Forward vertical integration
B. Backward vertical integration [CORRECT]
C. Horizontal integration
D. Conglomerate diversification
Correct Answer: B
Rationale: Acquiring a supplier or moving upstream in the value chain to control inputs is backward
vertical integration; forward integration would involve acquiring a distributor or retailer, and
horizontal integration involves acquiring a direct competitor.
Q4. Which concept explains why a firm might choose to keep a strategically critical activity
in-house (hierarchy) rather than outsource it (market), even if an external vendor can perform
it at a lower direct cost?
A. The experience curve effect
B. Transaction cost economics and the risk of hold-up due to asset specificity [CORRECT]
C. The learning curve phenomenon
— 3 —
