Global Business International Edition 3rd 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, and strategic distributors.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Knowledge

2. Contractual alliances involve sharing of ownership.

ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Comprehension

3. Cross-shareholding is based on financial interest between the firms.

ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Comprehension

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

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Knowledge

5. Licensing is a form of equity-based alliance.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Knowledge

6. Strategic investments in an equity-based alliance involve one partner investing in another.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Knowledge

7. Cross-border mergers are more common than acquisitions.

ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Comprehension

8. Mergers and acquisitions represent the largest proportion of foreign direct investment (FDI) flows.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Knowledge

9. Antitrust authorities provide easy approvals for both alliances and acquisitions with less intervention.

ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Comprehension

10. Formal government policies regarding entry mode requirements are generally becoming more conservative.

ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Analytic
STA: DISC: Legal Responsibilities KEY: Bloom’s: Comprehension

11. The informal institution-based view that stresses on the cognitive pillar is centered on the internalized taken-for-granted values and beliefs that guide firm behavior.

ANS: T PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Analytic
STA: DISC: Legal Responsibilities KEY: Bloom’s: Comprehension

12. Acquisition premium is the difference between the acquisition price and the market value of the acquiring firm.

ANS: F PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 11-2 NAT: BUSPROG: Analytic STA: DISC: Strategy
KEY: Bloom’s: Comprehension