Chapter 12—Making Alliances and Acquisitions Work

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 REF: p. 389
OBJ: 12.1 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 REF: p. 389
OBJ: 12.1 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 REF: p. 389
OBJ: 12.1 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

4. Strategic investments in an equity-based alliance …show more content…
399
OBJ: 12.2 NAT: AACSB: Tier 1 Technology; Tier 2 Information Technologies

26. Equity, learning and experience, relational capabilities, and organization are four factors that may influence alliance performance.

ANS: F PTS: 1 DIF: Moderate REF: p. 401
OBJ: 12.2 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 HRM and Group Dynamics

27. Regarding motives for acquisitions, synergistic motives add value while hubris and managerial motives reduce value.

ANS: T PTS: 1 DIF: Moderate REF: p. 403
OBJ: 12.3 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Creation of Value

28. Hubris refers to over-confidence in one's capabilities.

ANS: T PTS: 1 DIF: Moderate REF: p. 403
OBJ: 12.3 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Creation of Value

29. One of the drawbacks to acquisitions, compared to mergers, is that a firm gains both the mediocre areas of the target as well as the strong areas.

ANS: T PTS: 1 DIF: Moderate REF: p. 406
OBJ: 12.4 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Creation of Value

30. One strategy for successful managers is to value relational capabilities as much as equity and asset-heavy capabilities.

ANS: T PTS: 1 DIF: Easy REF: p. 407
OBJ: 12.5 NAT: AACSB: Tier 1 Reflective Thinking; Tier 2 Strategy

31. Engaging in thorough due diligence concerning both strategic and organizational fit is a wise strategy during the post acquisition phase.

ANS: F PTS: 1 DIF: Difficult REF: p. 408
OBJ: 12.5