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.   Problems increase as the number of different companies controlled increases.
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.   Increasing inventory
C.   Networking
D.   Internal expansion
Question #3
Transfer pricing is used to
A.   charge frequent customers for non-price services
B.   provide feedback on company profitability
C.   charge for goods and services within a company
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 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.   Increased consumer access
B.   Greater efficiencies
C.   Greater market power
D.   Lower administrative costs
Question #6
Entering a market by acquisition enables an organization to
A.   obtain the most talented individuals in a market
B.   ensure the continuity of an established, profitable product
C.   enter a market most rapidly
D.   increase company profits most rapidly
Question #7
Hospitals' markets and large insurance companies' markets
A.   frequently are quite different
B.   almost always overlap and are similar
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 nurse case manager
B.   A new governmental regulator
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.   Operational integration
B.   Social integration
C.   Emotional integration
D.   Component integration
Question #10
Which of the following is an example of horizontal expansion?
A.   A pharmaceutical company acquiring a medical supply company
B.   An academic medical center acquiring a specialized hospital
C.   An insurance company acquiring a physician group practice
D.   A hospital acquiring an HMO
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.   expanding an existing warehouse or factory
D.   entering a new business with similar technologies
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.   Cost of writing and enforcing contracts
D.   Interlocking boards

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