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

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