?? 1 Among the disadvantages of acquisitions are the expensive premiums that are

Question

?? 1 Among the disadvantages of acquisitions are the expensive premiums that are frequently paid to acquire a business. (True / False)



?? 2 According to the text, effective e-teams identified group members with a proper balance of technical and interpersonal skills. (True / False)


?? 3 Since electronic teams (e-teams) seldom meet face-to-face, it is not important for them to be concerned with how to combine individual contributions effectively. (True / False)



?? 4 Explicit knowledge is generally known to everyone in the firm and is not a critical concern of management. (True / False)

?? 5 Creation of new knowledge typically involves the continual interaction of explicit and tacit knowledge. (True / False)



?? 6 A potential pitfall of a focus strategy is that focusers can become too focused to satisfy buyer needs. (True / False)


?? 7 Firms that compete on overall cost leadership are vulnerable if all rivals share a common input or raw material that contributes a significant amount to total costs. (True / False)


?? 8 The experience curve concept suggests that production costs tend to decrease as production increases regardless of where an industry is at in its life cycle. (True / False)

?? 9 A successful differentiation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services. (True / False)



?? 10 Social capital is a source of strength to many firms. Firms leverage their social capital in an effort to create competitive advantages. A firm's social capital is based on:
1) An employee's individual abilities
2) The relationships among a firm's employees
3) A firm's allocation of financial resources
4) An individual's knowledge



?? 11 The use of information technology (e.g., e-mail) has increased in recent years in many organizations. This has helped to:
1) Communicate information efficiently
2) Make more effective use of time in every situation
3) Restrict social network growth
4) Create smaller social networks



?? 12 In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is the market in?
1) Introduction
2) Growth
3) Maturity
4) Decline

Explanation / Answer

Disadvanatges of economies of scale are; Diseconomies of scale if business becomes too large, which leads to higher unit costs.

Clashes of culture between different types of businesses can occur, reducing the effectiveness of the integration.

May need to make some workers redundant, especially at management levels – this may have an effect on motivation.

May be a conflict of objectives between different businesses, meaning decisions are more difficult to make and causing disruption in the running of the business.

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