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

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