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.   It may decrease organizations' ability to gain economies of scale.
C.   Problems increase as the number of different companies controlled increases.
D.   It may increase administrative costs.
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.   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 allows a company to set up a preferred provider list.
B.   It gives the holder valuable business knowledge.
C.   It guarantees the lowest price.
D.   It contributes to higher levels of competition among organizations.
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.   obtain the most talented individuals in a market
B.   increase company profits most rapidly
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.   almost always overlap and are similar
B.   frequently are quite different
C.   include many of the same competitors
D.   rarely overlap
Question #8
Which entity has been identified as having the role of virtual integrator in healthcare?
A.   The primary care physician
B.   A new governmental regulator
C.   The insurance company
D.   The nurse case manager
Question #9
Which is not one of the types of integration discussed in the text?
A.   Emotional integration
B.   Component integration
C.   Operational integration
D.   Social 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.   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.   Cost of writing and enforcing contracts
B.   Frequency of exchange
C.   Interlocking boards
D.   Number of suppliers or buyers

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