Strategy Theory and Practice 2nd

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 MULTIPLE CHOICE QUESTIONS
Chapter 6: Strategy and Alliances
Below are a number of multiple choice questions relevant to this chapter. There are two
to three variations on the same questions. Each question has four options; the correct
answer is written in the final column. Some questions are very simple, while others are
much more difficult; this should be taken into account when setting quizzes or exams.
Example of possible instruction to students:
For each of the following questions, read each question carefully and then choose the
answer you believe is most correct:
Question and options # Ans.
Pitelis defines a quasi-stable and durable, formal or informal 1 a
arrangement between two or more independent firms, aiming to
further the perceived interests of the parties involved as ___________.
a. Inter-firm cooperation
b. Subcontracting
c. Market exchange
d. a and b
Which of the following approaches address inter-firm collaboration? 2 a

a. The Industrial Organization (IO) approach

b. Institutional theory
c. Contingency theory
d. The Machiavellian approach

According to the Industrial Organization approach, firms cooperate 3 a

because of the incentive for ________.
a. Price collusion
b. Efficiency
c. Value
d. None of the above

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Coase argued that the existence of the firm, as an alternative to 4 a
market transactions, can be attributed to _______.
a. High market transaction costs
b. The benefits of a unified organizational cultural
c. Economies of scale
d. Economies of scope
For Penrose (1959), firms are superior to markets in terms of their 5 c
_________.
a. Management
b. Innovation
c. Endogenous creation of knowledge, innovation and value
d. None of the above
Firms collaborate in order to: 6 d
a. Access knowledge
b. Learn from each other
c. Overcome trade barriers
d. All of the above
According to Gulati, ___________ are defined as purposive linkages 7 d
between organizations that cover collaborations involving an
exchange, a co-development or a sharing relationship.
a. Franchise agreements
b. Copyright agreements
c. Intellectual property intangibles
d. Strategic alliances
Which of the following are types of strategic partnership? 8 d
a. Comprehensive alliances
b. Functional alliances
c. Production alliances
d. All of the above

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In a marketing alliance, two or more firms share ________________. 9 b
a. Production facilities
b. Marketing expertise
c. Advertising features
d. All of the above
A public–private partnership is a special type of alliance that involves 10 a
_________.
a. Private firms and government organizations
b. Listed public companies and unlisted private firms
c. Collusion and corruption for mutual self-interest
d. None of the above
For MNCs, which of the following may be reasons for establishing joint 11 c
ventures?

a. Reducing transaction costs

b. Reducing status hierarchies
c. Gaining knowledge
d. Sharpening brand image

According to Barney, which of the following mechanisms is important 12 c

in how firms create value?
a. Stock-picking
b. Competitive positioning
c. Capability-building
d. None of the above
Which of the following are typical problems for strategic alliances? 13 a
a. Inability to match resources and align cultures, decision-making
processes and systems
b. Inability to integrate different languages
c. Inability to agree shared goals
d. All of the above

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The ways in which alliance partners integrate their interests, use 14 c
combined resources and relate is called ___________?
a. Alliance synergy
b. Alliance management
c. Alliance governance
d. None of the above
__________ provides partners with more managerial control than 15 c
___________ by virtue of the establishment of an administrative
hierarchy that allows partners to exercise a right of control.
a. A contract/an informal agreement
b. Good will/a legal contract
c. Equity alliance/non-equity alliance
d. All of the above
Which of the following are routinely used to manage alliances? 16 a

a. Shared management agreement

b. Courts
c. Consultants
d. a and c only

What is a joint venture? 17 c

a. A long-term franchise agreement
b. The merger of two firms into a new legal entity
c. An entity owned by two or more parent firms that is legally
distinct from the parent firms
d. A long-term partnership agreement
How do joint ventures differ from mergers? 18 c
a. They don’t differ because they are the same thing
b. They are informal rather than formal agreements
c. The entity has access only to a limited set of each partner’s
activities or operations
d. There is more complexity with the former than the latter
What do firms need to consider when entering an alliance? 19 c

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a. Choose and integrate the alliance management team and team
members
b. Know when best to exit the partnership
c. The financial capacity of the partner firm
d. a and b
What are the strategic aspects of inter-organizational collaboration 20 d
that are important for partners to consider?
a. Assessing whether or not collaboration is a viable strategy to
gain access to important resources
b. Finding suitable partners and negotiating terms and conditions
c. Implementing governance structures, processes and policies
d. All of the above
________ are commonly defined as purposive linkages between 21 a
organizations that cover collaborations involving an exchange, a co-
development or a sharing relationship.
a. Strategic alliances
b. Networks
c. Joint ventures
d. Licensing agreements
Strategic alliances do NOT include: 22 d
a. Strategic supplier relationships
b. Joint ventures
c. Cross-licensing arrangements
d. Mergers and acquisitions
What is a defining feature of an alliance? 23 d
a. An alliance brings two or more individual organizations
together
b. An alliance requires these parties to be interconnected in some
way with resource dependencies
c. Interconnectedness involves reciprocal relations
d. All of the above
Which is NOT a key benefit a firm may seek to realize from engaging in 24 c
collaboration with other firms?

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a. Reducing risk
b. Entering new markets more easily
c. Preserving brand identity
d. Obtaining new knowledge
Alliances can help partners control ______ because they imply that 25 a
two or more organizations work together and share, for example,
investment in crucial technologies.
a. Risk
b. Employees
c. Infrastructure
d. Technology
Collaborating with local partners can help firms to: 26 d
a. Surmount regulations regarding entry modes that are imposed
by the host government
b. Obtain essential information about local customers, distribution
networks and suppliers
c. Circumvent legal obligations
d. a and b
_______ from alliance partners can help build capabilities within the 27 a
alliance and be transferred to other parts of the organization.
a. Learning
b. Copying
c. Buying
d. a and b
The _________ strength of alliance partners can result in synergies 28 c
that allow for more efficient and effective use of resources and,
thereby, provide a source for competitive advantage.
a. Reciprocal
b. Opposing
c. Complementary
d. Mutual
Alliances between firms that are also competitors in another sphere is 29 b
an example of:

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a. Synergy
b. Co-opetition
c. Cooperation
d. Organic networks

A firm can grow through which of the following means: 30 d

a. Organically through internal investment
b. By purchasing necessary assets and capabilities through
acquisitions
c. By collaborating with one or more firms through strategic
alliances
d. All of the above
A key criterion that makes a firm choose ‘to ally’ is: 31 a
a. The shortage of critical resources within the current reach of
the firm
b. Its orientation towards marketing to non-customers
c. Its strategic foresight
d. b and c above
Which of the following is a factor that is necessary to consider when 32 d
entering alliances?
a. Lack of necessary internal capabilities and assets
b. Unavailability of needed resources for purchase in the open
marketplace
c. High cost or risk associated with purchasing a firm
d. All of the above
Which of the following factors is NOT typically listed as a factor in 33 b
developing collaborative strategies?
a. Speed
b. Opinion of employees
c. Risk
d. Access to capital
In the last few decades, ________ has been a preferred way for many 34 a
organizations to deal with a lack of knowledge about foreign local

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environments and entry into such markets.
a. Collaboration
b. Takeover
c. Acquisition
d. Merger
Equity alliances: 35 d
a. Involve the creation of a separate, new organizational entity
b. Do not create a new entity
c. Are associated with greater control
d. a and c
Non-equity alliances: 36 c
a. Involve contractual agreements
b. Refer to any form of cooperative relationship between two or
more firms
c. a and b
d. Are not based on contractual agreements
Which of the following is an example of an equity alliance: 37 a
a. Joint venture
b. Long-term supply relationship
c. Licensing arrangement
d. Distribution agreement
Which of the following is NOT an example of a non-equity alliance: 38 a
a. Joint venture
b. Long-term supply relationship
c. Licensing arrangement
d. Distribution agreement
Alliances can be classified according to their strategic rationale. Which 39 d
of the following are types of strategic rationale for alliances:
a. A sales alliance
b. A solution-specific alliance
c. A geographic alliance

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d. All of the above
Competency traps lead firms to fall unconsciously into: 40 d
a. Adherence to routines
b. Denial of the need for change
c. Relying on past successful processes
d. All of the above
The network form of organization can be defined as: 41 a
a. A collection of two or more actors engaged in repeated and
enduring exchange relations with one another, but that lacks a
legitimate organizational authority to resolve disputes that
may arise during exchange
b. Casual relations between people who know each other and do
business together
c. A collection of individual organizations that are all owned by
the same parent company
d. All of the above
A network co-evolution approach argues that: 42 a
a. Networks shape institutions but institutions sculpt networks
and direct their growth
b. Networks develop through distinct stages from embryo to
organism
c. Networks evolve from a chrysalis
d. All of the above
Digitally networked economies have been seen as increasing: 43 d

a. Monopoly capitalism
b. The sharing economy
c. Post capitalism
d. All of the above

Alliancing success depends on which of the following factors? 44 a

a. Creating an alliance designer culture
b. Having the right machine tools

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c. Tight legal control of the contract conditions
d. All of the above

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