81. Diversification into many unrelated areas is an example of:
A. Risk management
B. Good management
C. Uncertainty reduction
D. Sustainability
Answer
C. Uncertainty reduction
82. Corporate governance is concerned with:
A. Executive remuneration, disclosure of information, auditing and accounting procedures, and organizations’ management structures
B. Elections to the board of directors
C. Relationships with national governments
D. Corporate-level strategy
Answer
C. Relationships with national governments
83. The principal-agent problem is concerned with:
A. Procurement
B. Appropriation of shareholders’ investment by a firm’s managers
C. How to control a firm’s distributors and dealers
D. Corporate social responsibility
Answer
D. Corporate social responsibility
84. The Six Forces framework is based on the principle of:
A. Resource-based view
B. Conduct – structure – performance
C. Econometrics
D. Structure – conduct – performance
Answer
A. Resource-based view
85. In the Six Forces, the ‘threat of new entrants’ relates to:
A. Barriers to entry
B. Substitutes
C. Switching costs
D. Buyer power
Answer
D. Buyer power
86. An industry characterized by irregular patterns of stability, rapid technological change, high uncertainty and global competition can be described as:
A. Hypercompetitive
B. Hyperactive
C. Atypical
D. Co-optive
Answer
D. Co-optive
87. In the context of environmental analysis, ‘munificence’ means:
A. The extent to which resources are freely available to support firms in an industry and enable them to grow
B. The extent to which it is diverse
C. The extent to which it is stable or turbulent
D. The extent to which the industry follows the conventional life-cycle stages
Answer
C. The extent to which it is stable or turbulent
88. A ‘market driven’ firm will typically:
A. Develop new products and then find someone to sell them to
B. Define the target market and produce products that will satisfy those customers’ needs
C. Operate in a product-oriented fashion
D. Suffer from market-myopia
Answer
B. Define the target market and produce products that will satisfy those customers’ needs
89. Segmentation is a way of:
A. Subdividing markets
B. Subdividing industries
C. Differentiating products
D. Subdividing organizations into departments
Answer
A. Subdividing markets
90. A B2C market is:
A. Business to commercial
B. Business to consumer
C. Business to contract
D. Business to corporate
Answer
D. Business to corporate
91. Segmentation is a compromise between two ideals: mass marketing and:
A. Customization
B. Uniformity
C. Innovation
D. Convergence of tastes
Answer
B. Uniformity
92. Porter’s generic strategies are:
A. Low price, differentiation, focus
B. Cost leadership, differentiation, cost focus, focus differentiation
C. Price leadership, differentiation, focus
D. Low cost, differentiation, focus differentiation
Answer
B. Cost leadership, differentiation, cost focus, focus differentiation
93. A strategic decision can be distinguished from other types of decisions by three factors, theseare magnitude, time-scale and:
A. Commitment
B. Riskiness
C. Impact
D. Longevity
Answer
B. Riskiness
94. ‘Influence’ is defined as the ability to ___ someone to something they wouldnot otherwise have done.
A. Intimidate
B. Force
C. Order
D. Persuade
Answer
A. Intimidate
95. The authors believe there are three tests that can be applied to judge whether astrategy is ‘good’. These are:
A. Fit, distinctiveness, sustainability
B. Fit, internal resources, external environment
C. Distinctiveness, internal resources, fit
D. Sustainability, distinctiveness, external environment
Answer
B. Fit, internal resources, external environment
96. According to Porter, dealing with the paradox of premature commitment versus notenough commitment involves some kind of:
A. Trade-off
B. Lock-in
C. Lock-out
D. Diversification
Answer
C. Lock-out
97. Which of the following industries is least likely to follow the conventional life-cyclemodel?
A. Software development
B. Coal mining
C. Insurance broking
D. Hairdressing
Answer
A. Software development
98. Brandenburger and Nalebuff added a sixth force to Porter’s Five Forces. It is knownas:
A. The threat of substitutes
B. The power of complementors
C. Seller power
D. Government regulation
Answer
A. The threat of substitutes
99. A situation in which the joint moves of two firms can determine how much money eachfirm can make or lose can be explained using the story of:
A. The Trojan Horse
B. The Icarus Paradox
C. The Prisoner’s Dilemma
D. The Icarus Dilemma
Answer
D. The Icarus Dilemma
100. According to Porter, if an organization does not follow either a cost leadership strategy or adifferentiation strategy they are:
A. Hybrid
B. Stuck in the middle
C. Typical
D. No frills
Answer
C. Typical
101. Subsidiaries consider regional environment for policy / Strategy formulation is known as
A. Polycentric Approach
B. Regiocentric Approach
C. Ethnocentric Approach
D. Geocentric Approach
Answer
B. Regiocentric Approach
102. According to this theory the holdings of a country’s treasure primarily in the form ofgold constituted its wealth.
A. Gold Theory
B. Ricardo Theory
C. Mercantilism
D. Hecksher Theory
Answer
C. Mercantilism
103. Which is not an Indian Multinational Company?
A. Unilever
B. Asian Paints
C. Piramal
D. Wipro
Answer
A. Unilever
104. Globalization refers to:
A. Lower incomes worldwide
B. Less foreign trade and investment
C. Global warming and their effects
D. A more integrated and interdependent world
Answer
D. A more integrated and interdependent world
105. All the following statements are correct except:
A. Case studies examine specific mergers and look for firm specific examples of merger benefits.
B. Stock market studies tend to suggest that most of the stock market gains from merger accrue to shareholders of target firms.
C. Financial and accounting studies typically conclude that mergers benefit shareholders
D. Case studies, the stock market and financial accounting based studies typically conclude that mergers are not always a good idea.
Answer
C. Financial and accounting studies typically conclude that mergers benefit shareholders
106. All of the following examples are hypothetical cases of horizontal growth except:
A. Coca Cola and Pepsi Cola merge
B. Manchester United and Manchester City merge
C. British Airways and Easyjet merge
D. Ford and Michelin merge
Answer
D. Ford and Michelin merge
107. In 90’s the global management perception was based on
A. Standardization v/s adaptation
B. Globalization v/s localization
C. Global integration v/s Local Responsiveness
D. Local responsiveness
Answer
C. Global integration v/s Local Responsiveness
108. Which of the following is an advantage of turnkey projects?
A. Can earn a return on knowledge asset
B. Will not create a competitor
C. Tight control of operations
D. All the above
Answer
A. Can earn a return on knowledge asset
109. CISF pricing includes the following
A. Commission is paid to the agent involved in the transaction
B. Cost of the goods exported
C. Freight & Insurance charges for the goods exported
D. All of the above
Answer
D. All of the above
110. Vertical mergers are those in which the participants are
A. In the same industry.
B. In different industries
C. In different phases of the value chain
D. None of the above.
Answer
C. In different phases of the value chain
111. Which of the following are commonly cited reasons for M&As?
A. Synergy
B. Market power
C. Strategic realignment
D. All of the above
Answer
D. All of the above
112. A merger is a combination of businesses in which
A. Two businesses combine to form a new business.
B. The participants are necessarily comparable in size, competitive position, Profitability, and market capitalization.
C. One of the two firms becomes a wholly owned subsidiary of the other firm.
D. None of the above.
Answer
D. None of the above.
113. All of the following are common motives for a merger or acquisition except for
A. Operating synergy.
B. Financial synergy.
C. Raising the cost of capital.
D. Buying undervalued assets.
Answer
C. Raising the cost of capital.
114. Buyers can exercise high bargaining power over their suppliers if
A. The volume they buy accounts for a large percentage of their suppliers sales.
B. There are few buyers in the market.
C. They have many suppliers to choose from.
D. There is a high concentration of suppliers.
Answer
A. The volume they buy accounts for a large percentage of their suppliers sales.
115. The generic competitive strategies are
A. Overall Cost Leadership
B. Cost Focus
C. Differentiation and Focused Differentiation
D. All the above
Answer
D. All the above
116. Synergy’ can best be explained by which of the sums below?
A. 2+2=5.
B. 2+2=4.
C. 2-2=1.
D. 2-2=0.
Answer
A. 2+2=5.
117. A likely consequence of rationalization is:
A. Lower number of employees
B. Lower revenues
C. Higher costs
D. Price decrease
Answer
C. Higher costs
118. A likely consequence of merger and acquisition is:
A. Lower revenues
B. Price increase
C. Higher costs
D. Price decrease
Answer
B. Price increase
119. The agreement signed by Ranbaxy Laboratory and Bayer AG of Germany in the year 1999 is an example of
A. Subsidiary
B. Joint venture
C. Strategic International Alliance
D. License agreement
Answer
C. Strategic International Alliance
120. When the transaction is of high value, complex In nature and more technical ___ method of export sales contract is used.
A. Performa invoice
B. Purchase order
C. Sales contact
D. None of the above
Answer
C. Sales contact
