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 decrease organizations' ability to gain economies of scale.
D.   It may increase administrative costs.
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 frequent customers for non-price services
B.   align goals across vertically integrated companies
C.   provide feedback on company profitability
D.   charge for goods and services within a company
Question #4
A "most favored nation" clause does which of the following?
A.   It gives the holder valuable business knowledge.
B.   It contributes to higher levels of competition among organizations.
C.   It guarantees the lowest price.
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.   increase company profits most rapidly
B.   obtain the most talented individuals in a market
C.   ensure the continuity of an established, profitable product
D.   enter a market most rapidly
Question #7
Hospitals' markets and large insurance companies' markets
A.   frequently are quite different
B.   include many of the same competitors
C.   almost always overlap and are similar
D.   rarely overlap
Question #8
Which entity has been identified as having the role of virtual integrator in healthcare?
A.   A new governmental regulator
B.   The nurse case manager
C.   The primary care physician
D.   The insurance company
Question #9
Which is not one of the types of integration discussed in the text?
A.   Emotional integration
B.   Social integration
C.   Operational integration
D.   Component 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 insurance company acquiring a physician group practice
D.   An academic medical center acquiring a specialized hospital
Question #11
Related diversification involves adding new products for an existing customer base or
A.   entering a new business with similar technologies
B.   expanding internationally
C.   expanding an existing warehouse or factory
D.   adding new services for a geographic niche
Question #12
Which of the following is not a component of transaction cost economics?
A.   Number of suppliers or buyers
B.   Interlocking boards
C.   Frequency of exchange
D.   Cost of writing and enforcing contracts

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