71. What type of strategy is used by a firm that focuses on what it does best within established markets?
A. Concentration
B. Internal growth
C. External growth
D. Divestment
With “concentration” strategy, a company attempts to focus on what it does best within its established markets and can be thought of as “sticking to its knitting.”
72. What type of strategy attempts to expand a company’s resources or to strengthen its market position through acquiring or creating new businesses?
A. Internal growth strategy
B. Diversification growth strategy
C. External growth strategy
D. Expansion growth strategy
The “external growth” strategy attempts to expand a company’s resources or to strengthen its market position through acquiring or creating new businesses.
73. Which one of the following is NOT an internal growth strategy?
A. Vertical integration
B. Market development
C. Joint venture
D. Innovation
Companies attempting to integrate vertically or horizontally or to diversify are exhibiting an “external growth” strategy, usually through mergers or acquisitions.
74. Firms that seek to scale down their operations are following a(n):
A. concentration strategy.
B. internal growth strategy.
C. external growth strategy.
D. divestment strategy.
A “divestment,” or downsizing, strategy is one made up of retrenchment, divestitures, or liquidation. These strategies are observed among companies facing serious economic difficulties and seeking to pare down their operations.
75. Company Z’s appraisals tend to be more behavioral because the company environment is more certain and the behaviors necessary for effective performance are established. Which strategy is this company following?
A. Concentration strategy
B. Internal growth strategy
C. External growth strategy
D. Divestment strategy
Appraisals in concentration strategy tend to be more behavioral because the environment is more certain, and the behaviors necessary for effective performance tend to be established through extensive experience.
76. For companies following a(n) _____ strategy, joint ventures require extensive training in conflict resolution techniques because of the problems associated with combining people from two distinct organizational cultures.
A. concentration
B. internal growth
C. external growth
D. divestment
Joint ventures require extensive training in conflict resolution techniques because of the problems associated with combining people from two distinct organizational cultures.
77. The most prevalent HR problem for firms facing external growth strategies is:
A. hiring the right people.
B. standardizing practices across the organization.
C. finding the right companies to purchase.
D. determining the fair-market price of acquisitions.
Many HRM programs face problems in integrating and standardizing practices across the company’s businesses since all the options for external growth consist of acquiring or developing new businesses, and these businesses often have distinct cultures.
78. Some companies now heavily weigh a firm’s _____ before embarking on a merger or acquisition.
A. operational efficiency
B. human capital
C. culture
D. infrastructure
According to a report by the Conference Board, “people issues” may be one of the major reasons that mergers do not always live up to expectations.
79. Downsizing is likely to result in:
A. increased employee trust and commitment.
B. avoidance of a takeover.
C. increased innovation.
D. compensation plans tied to company performance.
Companies going through downsizing often develop compensation programs that tie the individual’s compensation to the company’s success.
80. Which of the following desired outcomes of downsizing is most likely to be achieved?
A. Increased market share
B. Reduced expenses
C. Increased productivity
D. Reduced bureaucracy
According to the table 2.3 Effects of Downsizing on Desired Outcomes, reduced expenses is the most likely desired outcome of downsizing to be achieved.
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