All Weeks - Ungraded Assessment ACS

This ungraded assessment contains questions from all five weeks.
Please choose
whether the following are true or false.
1. A company is said to be backward integrated if it manufactures its own components,

instead of getting them manufactured elsewhere.
a) True
b) False
2. Firm resources, market positions and coordination mechanisms are the cornerstones of
competitive advantage.
a) True
b) False
3. The major drawback of greenfield expansion into a foreign country is that it is time
consuming.
a) True
b) False
4. The strategic recommendation for businesses classified as ‘question marks’ is to

continue investing in these businesses, as they generate a lot of cash.
a) True
b) False
5. Multi-point or multi-market contact reduces competition in an industry.

a) True
b) False
6. Related diversification refers to the firm’s entry into new products leveraging its current
activities and existing capabilities.
a) True
b) False
7. Firms tend to be vertically integrated when asset specificity is low.

a) True
b) False
8. When we say a firm is born-global, it operates a business model that addresses

international markets right at the venturing stage.
a) True
b) False
9. Managerial hubris is when managers become overconfident about their managerial

capabilities.
a) True
b) False
10. Mergers and acquisitions are faster alternatives to greenfield expansions.

a) True
b) False
11. In order to grow in industries with high barriers to entry, acquirers typically focus on
target firms that fill gaps in their product market portfolios.
a) True
b) False
12. A key to restructuring and turning around of target firms is the identification and
exploitation of synergies.
a) True
b) False
13. Given the asymmetry of incentives between managers and shareholders, mergers that
satisfy managerial aspirations of growth at the cost of shareholders, destroy value.
a) True
b) False
14. Exporting is a viable internationalization option for small firms that may not be able to
undertake the other entry modes.
a) True
b) False
15. Firms can improve their performance by increasing the scope of operations and
achieving economies of scope.
a) True
b) False
16. The emergence of a single standard in an industry benefits all the firms.
a) True
b) False
17. The social setting created by alliances increases rivalry.

a) True
b) False
18. Moral hazard occurs when a company overstates its capabilities and resources to another
company during the alliance process.
a) True
b) False
19. Transaction-specific assets hold little value elsewhere.

a) True
b) False
20. Detailed contracts can be used to reduce transactional risks.

a) True
b) False
21. A portfolio approach can help a firm identify gaps and the need for further alliances.
a) True
b) False
22. The value creation for firms through mergers and acquisitions are similar for both the
acquirer and the target firm.
a) True
b) False
23. Technical economies of scale refer to the reduction in costs of search, negotiations and
contracting.
a) True
b) False
24. Managerial entrenchment leads to a situation where managers make decisions that
benefit them than those that benefit shareholders.
a) True
b) False
25. A focused or dominant business firm largely attempts to leverage both operational and
corporate relatedness in its diversification strategy.
a) True
b) False
26. When forming a joint venture, businesses should consider if they would be better off
focusing on reducing transaction costs rather than buying each other’s assets.
a) True
b) False
27. The benefits that firms get through diversification generally apply to alliances as well.
a) True
b) False
28. In the CAGE framework, C stands for “corporate”.

a) True
b) False
29. According to Khanna and Palepu, business groups are unlikely to succeed in countries
where there are no institutional voids and the economy is well - developed.
a) True
b) False
30. In order to achieve economies of scale, firms can enter into alliances and combine
some parts of the operations with their partners.
a) True
b) False
31. Firms can shape the competitive environments through alliances by increasing
barriers to entry.
a) True
b) False
32. Moral hazard often occurs in the case of complementary alliances, where the two
firms bring different resources to the table.
a) True
b) False
33. Advantage arising out of operating synergies typically provide a higher advantage
than when intangible resources are shared.
a) True
b) False
34. Operational relatedness refers to sharing of resources and capabilities across

businesses.
a)True
b) False
35. Empirical evidence suggests that when firms are vertically integrated for transactions
that involve high asset specificity, they tend to have better performance.
a) True
b) False
36. Adverse selection, moral hazard and hold-up are the reasons why acquisitions fail.
a) True
b) False
37. Complementarity, low employee turnover rate and escalation of commitment are the
most important factors that can help choose a partnering firm.
a) True
b) False
ANSWERS:
1) True
2) False
3) True
4) False.
5) True
6) True
7) False
8) True
9) True
10) True
11) True
12) True
13) True
14) True
15) True
16) False
17) False
18) False
19) True
20) True
21) True
22) False
23) False
24) True
25) True
26) True
27) True
28) False
29) True
30) True
31) True
32) False
33) False
34) False
35) True
36) False
37) False

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This ungraded assessment contains questions from all five weeks.

1. A company is said to be backward integrated if it manufactures its own components,

4. The strategic recommendation for businesses classified as ‘question marks’ is to

5. Multi-point or multi-market contact reduces competition in an industry.

7. Firms tend to be vertically integrated when asset specificity is low.

8. When we say a firm is born-global, it operates a business model that addresses

9. Managerial hubris is when managers become overconfident about their managerial

10. Mergers and acquisitions are faster alternatives to greenfield expansions.

17. The social setting created by alliances increases rivalry.

19. Transaction-specific assets hold little value elsewhere.

20. Detailed contracts can be used to reduce transactional risks.

28. In the CAGE framework, C stands for “corporate”.

34. Operational relatedness refers to sharing of resources and capabilities across

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