HEA 478 - Strategic Management in Healthcare » Fall 2021 » Chapter 4 Quiz

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Question #1
Potential problems of unrelated diversification include all but which of the following?
A.   It may decrease top executives' ability to understand their business.
B.   Problems increase as the number of different companies controlled increases.
C.   It may increase administrative costs.
D.   It may decrease organizations' ability to gain economies of scale.
Question #2
Which of the following is not a generally accepted method by which organizations accomplish growth?
A.   Increasing inventory
B.   Networking
C.   Acquisition and/or merger
D.   Internal expansion
Question #3
Transfer pricing is used to
A.   charge frequent customers for non-price services
B.   provide feedback on company profitability
C.   charge for goods and services within a company
D.   align goals across vertically integrated companies
Question #4
A "most favored nation" clause does which of the following?
A.   It guarantees the lowest price.
B.   It allows a company to set up a preferred provider list.
C.   It contributes to higher levels of competition among organizations.
D.   It gives the holder valuable business knowledge.
Question #5
Research has suggested that which of the following is the greatest benefit hospitals have gained through horizontal integration?
A.   Greater efficiencies
B.   Greater market power
C.   Lower administrative costs
D.   Increased consumer access
Question #6
Entering a market by acquisition enables an organization to
A.   enter a market most rapidly
B.   obtain the most talented individuals in a market
C.   increase company profits most rapidly
D.   ensure the continuity of an established, profitable product
Question #7
Hospitals' markets and large insurance companies' markets
A.   almost always overlap and are similar
B.   rarely overlap
C.   frequently are quite different
D.   include many of the same competitors
Question #8
Which entity has been identified as having the role of virtual integrator in healthcare?
A.   The primary care physician
B.   The insurance company
C.   The nurse case manager
D.   A new governmental regulator
Question #9
Which is not one of the types of integration discussed in the text?
A.   Component integration
B.   Social integration
C.   Operational integration
D.   Emotional integration
Question #10
Which of the following is an example of horizontal expansion?
A.   A pharmaceutical company acquiring a medical supply company
B.   An academic medical center acquiring a specialized hospital
C.   A hospital acquiring an HMO
D.   An insurance company acquiring a physician group practice
Question #11
Related diversification involves adding new products for an existing customer base or
A.   expanding internationally
B.   entering a new business with similar technologies
C.   adding new services for a geographic niche
D.   expanding an existing warehouse or factory
Question #12
Which of the following is not a component of transaction cost economics?
A.   Number of suppliers or buyers
B.   Cost of writing and enforcing contracts
C.   Frequency of exchange
D.   Interlocking boards

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