Chapter 9 Multiple Choice Questions | Global Strategic Management by Philippe Lasserre

1. Which types of value creation in mergers and acquisitions are long term (choose both that apply)?

Tax shield Enlarged markets Transfer of technology Price/earnings ratio leverage Disposal of assets

2. What is ‘due diligence’ in an acquisition?

The prior negotiation of a strategic plan among partners The evaluation of the target’s real capabilities and financial standing A solid legal contract A market assessment

3. In the asset value method of calculating the value of a firm, the problems are (choose both that apply):

Valuation being made in local currency The value of any property is a function of the real estate market in the country Intangible assets are difficult to evaluate There is no similar business in the country for comparison

4. Which of these are side-effects of a lack of post-acquisition integration plan (choose both that apply):

Anxiety is not reduced amongst acquisition workforce Actions and decisions are not understood by acquisition workforce or by buyer’s employees Bureaucratic wrangles Improvisation without central direction Discouragement of front-line staff

5. The symbiosis mode of integration is:

A technique based on the consolidation of financial resources The rapid implementation of functional synergies The practice of using integration teams A practice that implements the needed synergies progressively

6. What is the role of ‘integration teams’ in mergers and acquisitions?

To discuss and propose concrete solutions to operational aspects To make sure that long-term synergies will be attained To arrange cross-cultural training To appoint the right people at the right place

7. What is the difference between ‘quick wins’ and ‘winning spirals’?

No difference Quick wins generate a winning spiral Quick wins is a short-term definition, and winning spiral is the strategic accumulation of successes over time Winning spiral is due to strategic decisions not to short-term quick successes

Chapter 9: Global Mergers and Acquisitions