Global Business International Edition 2nd Edition by Mike Peng – Test Bank

Chapter 11—Alliances and Acquisitions

TRUE/FALSE

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

ANS: F PTS: 1 DIF: Easy OBJ: 11.1
NAT: AACSB: Tier 1 Analytic; Tier 2 Creation of Value

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

ANS: T PTS: 1 DIF: Moderate OBJ: 11.1
NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

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

ANS: F PTS: 1 DIF: Moderate OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Easy OBJ: 11.1
NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

5. Acquisitions are more common than mergers.

ANS: T PTS: 1 DIF: Easy OBJ: 11.1
NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

6. Many firms establish alliances with competitors.

ANS: T PTS: 1 DIF: Easy OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Moderate OBJ: 11.1
NAT: 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: F PTS: 1 DIF: Moderate OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Moderate OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Moderate OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Easy OBJ: 11.1
NAT: 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: T PTS: 1 DIF: Moderate OBJ: 11.1
NAT: AACSB: Tier 1 Diversity; Tier 2 HRM and Strategy