Corporate Strategy EXAM #2

Corporate Strategy EXAM #2

B AD 4013: Corporate Strategy EXAM #2 – Review Sheet Exam 

Format 25 Multiple choice questions (2 points each – total 50 points) 3 Essay questions (50 points) One (1) required question and select 2 out of 4 essays questions. TOTAL 100 points Exam Topics: “Old” material Introduction to Corporate Strategy • Understand what does the industrial organization (IO) model of above-average returns argue. Business level vs. Corporate level strategy • Understand the differences between these two concepts Corporate-level Strategy – diversification • Describe the concepts of related and unrelated diversification and explain the curvilinear relationship between diversification and performance. “New” material Corporate-level Strategy – diversification [mergers and acquisitions] (You do not have to study the methods of corporate valuation.) • Discuss reasons firms use an acquisition strategy to achieve strategic competitiveness (define and • describe the construct of “market power”) • Describe problems that work against developing a competitive advantage using an acquisition strategy. • What is due diligence • Define the restructuring strategy (the difference between downsizing, downscoping, and LBO) • Understand the risks of strategic alliances (you should learn the terms: holdup, adverse selection, moral hazard) International strategies • Describe the four-international corporate-level strategies: international, multinational, global, and transnational. • What are the factors favoring Global vs. Multinational Strategies? • Understand and explain the different international entry strategies. • What is the role of culture and what are the dimensions of culture? (Hofstede’s framework) • What are some of the risks linked to the international business strategies? Strategy Implementation: Corporate Governance • What is corporate governance? • Define and explain the “agency problem”? (agency theory) • What are the mechanisms that are used to find a solution to the agency problem? (i.e., describe the internal and external governance mechanisms) • What is the role of CEO? What is CEO duality? • What is the relationship between CEO pay and performance? • What is the relationship between CEO pay and firm size? • Sarbanes-Oxley Act (know what it is and what is its purpose) Page 2 of 2 Strategy Implementation: Corporate Culture and Leadership • What is corporate culture, why is it important, and how is a company’s culture perpetuated? • What is strong culture? Weak culture? Adaptive culture? • What are some factors causing corporate culture to evolve? • Explain the difference between separation, integration, deculturation, and assimilation. You should also be familiar with the main issues confronting the companies discussed during each case analysis we discussed since the mid-term exam. In addition, you should know how to define (explain, describe) the concepts introduced during lectures. Questions from the articles: Hamel, G., Doz, Y., and Prahalad, C. (1989) “Collaborate with your competitors and win” • According to Hamel, Doz, and Prahalad, what four principles are followed by companies that benefit the most from collaboration? • What are the conditions under which collaboration can be beneficial to both companies (at least for a period of time)? Ghemawat, P. (2001) “Distance Still Matters: The Hard Reality of Global Expansion” (CAGE Analysis) • According to Ghemawat what are the four dimensions of distance (when talking about the distance between two countries)? (describe and discuss each of these dimensions) • Why does Ghemawat consider these dimensions to be very important in terms of evaluating a market’s relative attractiveness? Llarcker, D. and Tayan, B. (2011) “Seven myth of corporate governance” • If given one of the myths of corporate governance you should be able to explain (i.e., talk about) it. Schwartz (2013) “Developing and sustaining an ethical corporate culture” • This article argues that three key elements must exist if the illegal or unethical activity within an organization is to be minimized through developing an ethical corporate culture. What are the three key elements?