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.   Problems increase as the number of different companies controlled increases.
B.   It may decrease top executives' ability to understand their business.
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.   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 frequent customers for non-price services
D.   charge for goods and services within a company
Question #4
A "most favored nation" clause does which of the following?
A.   It contributes to higher levels of competition among organizations.
B.   It gives the holder valuable business knowledge.
C.   It allows a company to set up a preferred provider list.
D.   It guarantees the lowest price.
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.   rarely overlap
C.   almost always overlap and are similar
D.   frequently are quite different
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.   A new governmental regulator
D.   The nurse case manager
Question #9
Which is not one of the types of integration discussed in the text?
A.   Operational integration
B.   Emotional integration
C.   Social integration
D.   Component integration
Question #10
Which of the following is an example of horizontal expansion?
A.   An insurance company acquiring a physician group practice
B.   An academic medical center acquiring a specialized hospital
C.   A pharmaceutical company acquiring a medical supply company
D.   A hospital acquiring an HMO
Question #11
Related diversification involves adding new products for an existing customer base or
A.   adding new services for a geographic niche
B.   entering a new business with similar technologies
C.   expanding an existing warehouse or factory
D.   expanding internationally
Question #12
Which of the following is not a component of transaction cost economics?
A.   Cost of writing and enforcing contracts
B.   Number of suppliers or buyers
C.   Interlocking boards
D.   Frequency of exchange

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