MGMT 352 - EXAM #2 QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED GRADED A++
Parent-subsidiary
The ________________ relationship is the closest to a firm being fully integrated. In this
relationship, transaction costs typically arise from political turf battles between the
corporate office and the standalone business.
Economies of Scope
When it is cheaper for a firm to produce two or more outputs or services together rather
than separately through using the same resources and technology, then _________
occur.
Transaction Costs
The costs associated with the "make or buy" question when determining the scope of
the firm are:
Administrative Costs
_____________ such as paying salaries and setting up a shop floor are internal
transaction costs.
Principal Agent
When an employee of a firm follows his or her own interests such as pursuing
managerial perks when performing activities on behalf of the owner of the firm, a(n)
_______________ problem occurs.
A
, Which of the following is NOT related to horizontal integration?
A. It concerns the number of activities a firm participates in up and down the industry
value chain.
B. A type of strategy that improves a firm's strategic position in a single industry.
C. The process of acquiring and merging with competitors.
D. HP acquiring Compaq in 2002 is an example.
C
Horizontal integration can affect several of Porter's five forces for the surviving firms.
Which of the following would this include?
A. Increasing the threat of entry
B. Increasing rivalry among existing firms
C. Strengthening bargaining power vis-à-vis supplier and buyers
D. Increasing the threat of substitute products
Strategic Alliance
COMPLETE SOLUTIONS VERIFIED GRADED A++
Parent-subsidiary
The ________________ relationship is the closest to a firm being fully integrated. In this
relationship, transaction costs typically arise from political turf battles between the
corporate office and the standalone business.
Economies of Scope
When it is cheaper for a firm to produce two or more outputs or services together rather
than separately through using the same resources and technology, then _________
occur.
Transaction Costs
The costs associated with the "make or buy" question when determining the scope of
the firm are:
Administrative Costs
_____________ such as paying salaries and setting up a shop floor are internal
transaction costs.
Principal Agent
When an employee of a firm follows his or her own interests such as pursuing
managerial perks when performing activities on behalf of the owner of the firm, a(n)
_______________ problem occurs.
A
, Which of the following is NOT related to horizontal integration?
A. It concerns the number of activities a firm participates in up and down the industry
value chain.
B. A type of strategy that improves a firm's strategic position in a single industry.
C. The process of acquiring and merging with competitors.
D. HP acquiring Compaq in 2002 is an example.
C
Horizontal integration can affect several of Porter's five forces for the surviving firms.
Which of the following would this include?
A. Increasing the threat of entry
B. Increasing rivalry among existing firms
C. Strengthening bargaining power vis-à-vis supplier and buyers
D. Increasing the threat of substitute products
Strategic Alliance
