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 organizations' ability to gain economies of scale.
B.   It may increase administrative costs.
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.   Increasing inventory
B.   Networking
C.   Internal expansion
D.   Acquisition and/or merger
Question #3
Transfer pricing is used to
A.   charge frequent customers for non-price services
B.   charge for goods and services within a company
C.   align goals across vertically integrated companies
D.   provide feedback on company profitability
Question #4
A "most favored nation" clause does which of the following?
A.   It gives the holder valuable business knowledge.
B.   It guarantees the lowest price.
C.   It contributes to higher levels of competition among organizations.
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.   Lower administrative costs
B.   Greater market power
C.   Increased consumer access
D.   Greater efficiencies
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.   enter a market most rapidly
D.   ensure the continuity of an established, profitable product
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.   Emotional integration
B.   Social integration
C.   Component integration
D.   Operational integration
Question #10
Which of the following is an example of horizontal expansion?
A.   An insurance company acquiring a physician group practice
B.   A hospital acquiring an HMO
C.   A pharmaceutical company acquiring a medical supply company
D.   An academic medical center acquiring a specialized hospital
Question #11
Related diversification involves adding new products for an existing customer base or
A.   adding new services for a geographic niche
B.   expanding an existing warehouse or factory
C.   entering a new business with similar technologies
D.   expanding internationally
Question #12
Which of the following is not a component of transaction cost economics?
A.   Frequency of exchange
B.   Number of suppliers or buyers
C.   Interlocking boards
D.   Cost of writing and enforcing contracts

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