Compared to diversification that is grounded in

53.
Compared to diversification that is grounded in intangible resources,
diversification based on financial resources only is more visible to competitors
and thus more imitable and less likely to create value on a long-term basis.
a.
True
b.
False
54.
Research shows that increased firm size and greater levels of diversification
are correlated with increased executive compensation.
55.
If managers diversify a firm in a way that does not produce value, the firm
risks capital market intervention.
56.
Golden parachutes protect managers from the negative consequences of
over-diversifying a firm.
57.
Without strict governance mechanisms, the majority of executives will act in
their own self-interest rather than acting as positive stewards of firm
resources.
a.
True
b.
False

58.
The use of poison pills increases the chance that a poorly performing firm will
be taken over.
59.
Knowing that their firms could be acquired if they are not managed
successfully encourages executives to use value- creating diversification
strategies.
60.
Corporate-level strategy is concerned with ____ and how to manage these
businesses.
61.
The ultimate test of the value of a corporate-level strategy is whether the:
a.
corporation earns a great deal of money.
b.
top management team is satisfied with the corporation's performance.
c.
businesses in the portfolio are worth more under the management of
the company in question than they would be under any other
ownership.
d.
businesses in the portfolio increase the firm's financial returns.