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

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