Chapter 9—Cooperative Strategy
TRUE/FALSE
1. A cooperative strategy is a strategy in which one or more firms work together to achieve a common
purpose.
ANS: T PTS: 1 DIF: Easy REF: 246
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
2. The use of a cooperative strategy is an alternative to acquisition.
ANS: T PTS: 1 DIF: Easy REF: 246
OBJ: 09-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
3. A competitive advantage developed through a cooperative strategy is often called a corresponding
advantage.
ANS: F PTS: 1 DIF: Easy REF: 247
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
4. Although growing in popularity with small and medium-sized firms because they can gain economies
of scale, large companies tend to avoid strategic alliances.
ANS: F PTS: 1 DIF: Medium REF: 247
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
5. If a large Asian cosmetics firm was to engage in a 50-50 partnership with a large American chemical
company to form a new company focused on creating advanced skin care products, this would be
considered a joint venture.
ANS: T PTS: 1 DIF: Medium REF: 247
OBJ: 09-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
6. Strategic alliances are cooperative strategies between firms that combine their resources and
capabilities to create a competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 247 | 249
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
, Rubin: Strategic & systems skills
7. Nonequity strategic alliances exist when two or more firms join together to create an independent
firm.
ANS: F PTS: 1 DIF: Medium REF: 249
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
8. Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share
of the joint venture than do the remaining partner(s).
ANS: F PTS: 1 DIF: Medium REF: 249
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
9. Cooperation in slow-cycle markets is extremely rare because these industries are declining.
ANS: F PTS: 1 DIF: Medium REF: 251 (Table 9.1)
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
10. Firms in slow-cycle markets can use cooperative strategies in the transition to more competitive
markets.
ANS: T PTS: 1 DIF: Medium REF: 251
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
11. Acquisitions are the most common cooperative strategy used in standard-cycle markets.
ANS: F PTS: 1 DIF: Medium REF: 251
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
12. Firms in standard-cycle markets seek to gain economies of scale through cooperative alliances.
ANS: T PTS: 1 DIF: Easy REF: 252
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
13. Horizontal complementary strategic alliances are designed so that each partner realizes equal
benefits from equal investments in the alliance.
, ANS: F PTS: 1 DIF: Medium REF: 252-253
OBJ: 09-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
14. A cooperative agreement between a hotel chain and a casino operator would be viewed as a
horizontal complementary strategic alliance because as separate entities, the two firms would
compete for the same customer.
ANS: F PTS: 1 DIF: Hard REF: 253
OBJ: 09-03 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
15. Using business-level strategic alliances to hedge against risk and uncertainty is most common in the
slow-cycle markets.
ANS: F PTS: 1 DIF: Hard REF: 256
OBJ: 09-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
16. Collusion is a form of cooperative strategy.
ANS: T PTS: 1 DIF: Easy REF: 256-257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
17. Tacit collusion is not explicitly illegal in the United States even though it results in higher prices for
consumers.
ANS: T PTS: 1 DIF: Medium REF: 256-257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
18. Mutual forbearance is a form of explicit collusion between firms in which competitors avoid attacking
rivals they meet in multiple markets.
ANS: F PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
19. Cooperative strategies may involve firms who are competitors.
ANS: T PTS: 1 DIF: Easy REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
, 20. Horizontal business-level strategic alliances have greater probability of creating sustainable
competitive advantage than do vertical business-level strategic alliances.
ANS: F PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
21. The advantages of alliances designed to respond to competition and to reduce uncertainty are more
temporary than those developed through complementary, such as vertical and horizontal, strategic
alliances.
ANS: T PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
22. An alliance can be used to test whether the partners would benefit from a future merger.
ANS: T PTS: 1 DIF: Medium REF: 258
OBJ: 09-04 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
23. Synergistic strategic alliances focus on economies of scope rather than economies of scale.
ANS: T PTS: 1 DIF: Easy REF: 259
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
24. Franchising is most attractive in concentrated industries.
ANS: F PTS: 1 DIF: Easy REF: 259-260
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
25. The primary responsibility of the franchisor is to transfer capital to the franchisee.
ANS: F PTS: 1 DIF: Medium REF: 259-260
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
26. The probability of alliance success is increased when partnering firms internalize successful alliance
experiences.
ANS: T PTS: 1 DIF: Medium REF: 260
OBJ: 09-04 TYPE: knowledge
TRUE/FALSE
1. A cooperative strategy is a strategy in which one or more firms work together to achieve a common
purpose.
ANS: T PTS: 1 DIF: Easy REF: 246
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
2. The use of a cooperative strategy is an alternative to acquisition.
ANS: T PTS: 1 DIF: Easy REF: 246
OBJ: 09-01 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
3. A competitive advantage developed through a cooperative strategy is often called a corresponding
advantage.
ANS: F PTS: 1 DIF: Easy REF: 247
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
4. Although growing in popularity with small and medium-sized firms because they can gain economies
of scale, large companies tend to avoid strategic alliances.
ANS: F PTS: 1 DIF: Medium REF: 247
OBJ: 09-01 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
5. If a large Asian cosmetics firm was to engage in a 50-50 partnership with a large American chemical
company to form a new company focused on creating advanced skin care products, this would be
considered a joint venture.
ANS: T PTS: 1 DIF: Medium REF: 247
OBJ: 09-02 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
6. Strategic alliances are cooperative strategies between firms that combine their resources and
capabilities to create a competitive advantage.
ANS: T PTS: 1 DIF: Medium REF: 247 | 249
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff &
, Rubin: Strategic & systems skills
7. Nonequity strategic alliances exist when two or more firms join together to create an independent
firm.
ANS: F PTS: 1 DIF: Medium REF: 249
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
8. Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share
of the joint venture than do the remaining partner(s).
ANS: F PTS: 1 DIF: Medium REF: 249
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
9. Cooperation in slow-cycle markets is extremely rare because these industries are declining.
ANS: F PTS: 1 DIF: Medium REF: 251 (Table 9.1)
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
10. Firms in slow-cycle markets can use cooperative strategies in the transition to more competitive
markets.
ANS: T PTS: 1 DIF: Medium REF: 251
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
11. Acquisitions are the most common cooperative strategy used in standard-cycle markets.
ANS: F PTS: 1 DIF: Medium REF: 251
OBJ: 09-02 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
12. Firms in standard-cycle markets seek to gain economies of scale through cooperative alliances.
ANS: T PTS: 1 DIF: Easy REF: 252
OBJ: 09-02 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
13. Horizontal complementary strategic alliances are designed so that each partner realizes equal
benefits from equal investments in the alliance.
, ANS: F PTS: 1 DIF: Medium REF: 252-253
OBJ: 09-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
14. A cooperative agreement between a hotel chain and a casino operator would be viewed as a
horizontal complementary strategic alliance because as separate entities, the two firms would
compete for the same customer.
ANS: F PTS: 1 DIF: Hard REF: 253
OBJ: 09-03 TYPE: application
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Managing strategy & innovation
15. Using business-level strategic alliances to hedge against risk and uncertainty is most common in the
slow-cycle markets.
ANS: F PTS: 1 DIF: Hard REF: 256
OBJ: 09-03 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Managing strategy & innovation
16. Collusion is a form of cooperative strategy.
ANS: T PTS: 1 DIF: Easy REF: 256-257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
17. Tacit collusion is not explicitly illegal in the United States even though it results in higher prices for
consumers.
ANS: T PTS: 1 DIF: Medium REF: 256-257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
18. Mutual forbearance is a form of explicit collusion between firms in which competitors avoid attacking
rivals they meet in multiple markets.
ANS: F PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Ethics | Management: Ethical Responsibilities | Dierdorff & Rubin: Foundational skills
19. Cooperative strategies may involve firms who are competitors.
ANS: T PTS: 1 DIF: Easy REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
, 20. Horizontal business-level strategic alliances have greater probability of creating sustainable
competitive advantage than do vertical business-level strategic alliances.
ANS: F PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
21. The advantages of alliances designed to respond to competition and to reduce uncertainty are more
temporary than those developed through complementary, such as vertical and horizontal, strategic
alliances.
ANS: T PTS: 1 DIF: Medium REF: 257
OBJ: 09-03 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
22. An alliance can be used to test whether the partners would benefit from a future merger.
ANS: T PTS: 1 DIF: Medium REF: 258
OBJ: 09-04 TYPE: comprehension
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
23. Synergistic strategic alliances focus on economies of scope rather than economies of scale.
ANS: T PTS: 1 DIF: Easy REF: 259
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
24. Franchising is most attractive in concentrated industries.
ANS: F PTS: 1 DIF: Easy REF: 259-260
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence |
Dierdorff & Rubin: Strategic & systems skills
25. The primary responsibility of the franchisor is to transfer capital to the franchisee.
ANS: F PTS: 1 DIF: Medium REF: 259-260
OBJ: 09-04 TYPE: knowledge
NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Rubin:
Strategic & systems skills
26. The probability of alliance success is increased when partnering firms internalize successful alliance
experiences.
ANS: T PTS: 1 DIF: Medium REF: 260
OBJ: 09-04 TYPE: knowledge
