1. What characteristics make resources valuable?

2. What is hold-up and when will it be more likely to arise?

3. Why is achieving coordination easier under vertical integration than under market transactions?






4. Give three examples of economies of scope.






5. Discuss the following sentence: When strong economies of scope are present, expanding product
scope is always the best solution.






6. What is the winners curse? How will it affect recruiting workers from other firms or acquiring
other businesses?






7. Why would partners fail to cooperate in a strategic alliance?







8. Discuss how the selection of the partner and management of the relationship can help to alleviate
the cooperation issue in alliances.






9. Do stars matter more than organisations? If they do, will firms be able to appropriate the value
created by their star workers?






10. When will a firm manage to reap economic profits?






11. What is corporate strategy? How is it different from business strategy?






12. Why would Google enter the ultra-fast cable network business?






13. Why does GAP outsource all its manufacturing?









14. What are economies of scale and how do they affect the make-or-buy decision?






15. What is the measurement problem in organisations?






16. Why would incentives be stronger across firms than within firms?






17. Why does Zara vertically integrate a large part of its manufacturing?






18. What does contract incompleteness mean? Why would contracts be incomplete?






19. What are market transaction costs? When do they arise?






20. What is design interconnectedness? How does it affect the make-or-buy decision?







21. Why was the computer industry vertically integrated prior to the arrival of the
microprocessor?






22. If you were working at the procurement department of a large aerospace company,
what parts would you procure from external companies and what parts would you decide to
produce in-house?






23. Define relation-specific asset and provide three examples.






24. What is Williamsons fundamental transformation?






25. Why do floating power plants exist, given that they are less efficient than land based
power plants?






26. Why do TV series actors successfully manage to renegotiate their contracts?






27. Can the concept of hold-up explain why Zara is vertically integrated?





28. What conditions must a resource meet in order to justify diversification?






29. What is the New Toy Effect? How is it related to the issue of bounded rationality?






30. Why would agency costs be higher in multi-divisional organisations? 31. Why would
internal capital markets work better than external capital markets?






32. What is the Boston Consulting Group Portfolio Management Theory?






33. How would the wisdom of applying the Boston Consulting Group Portfolio Management
Theory be affected by a countrys legal and institutional setting?






34. Give an example of a setting where internal capital markets have proved quite effective
and explain the reasons why this may have been the case.










35. What is the diversification discount?






36. Why would external capital markets work better than internal capital markets?






37. What is a business group? Are there different types of business groups?






38. In what type of countries are business groups more prevalent? Why?






39. Is there evidence that business groups are efficient in their reallocation of resources?






40. What is tunneling? In which types of countries do you think it would be more common?






41. Give four examples of conflicts of interest between workers and shareholders.







42. Explain why workers in companies with stronger corporate cultures are more motivated.






43. Explain why workers in companies with stronger corporate cultures are delegated more
decisions.






44. Explain why workers in companies with stronger corporate cultures are monitored less
by their superiors.






45. Explain why workers in companies with stronger corporate cultures are less willing to
experiment.






46. Explain why workers in companies with stronger corporate cultures are less willing to
question received wisdom.






47. Explain whether the fact that workers in companies with stronger corporate cultures are
more coordinated with each other is a good thing.









48. Explain whether the fact that workers in companies with weaker corporate cultures are
less coordinated with each other is a good thing.






49. Is a strong corporate culture a good thing? Explain why it is difficult to answer this
question conclusively.






50. Explain why (according to James March) organisations do not always take the optimal
decisions.






51. Describe briefly three types of inefficiencies arising from the combination of conflicts of
interest and strategic communication in organisations.






52. What is cheap talk? Give an example.






53. What is signal jamming? Give an example.






54. What is the strategic withholding of verifiable information? Give an example.




55. What actions can an organisation undertake to mitigate the inefficiencies arising from
strategic communication of information?






56. State five reasons to delegate decision-making power to subordinates.






57. Why does delegation leverage the human capital of higher-skilled workers?






58. Why would employees with decision-making power be willing to work for less money?






59. Why would employees with decision-making power be more motivated?






60. Why would organisations with vacancies at the top levels want to delegate decision-
making power to workers at the bottom?






61. Can formal authority be delegated in a firm?





62. How can real authority be delegated in a firm?






63. What is the difference between an organisational U-Form and M-Form?






64. Why is an organisational M-Form associated with stronger delegation?






65. According to existing empirical evidence (Acemoglu et al., 2007), what type of firms
decentralise more? Does this make sense?






66. What should CEOs of large diversified firms do?






67. What is a CEO vision? How does it restrict managers choices?






68. What type of constraints did Alfred Sloan impose on the choices of the divisional
managers of General Motors?





69. What is the difference between a merger and an acquisition?






70. Do M&As create value? For whom?






71. Where were the synergies in the DaimlerChrysler merger expected to come from?






72. What biases affect managerial decisions?






73. Why would synergies be difficult to implement following a merger?






74. Why would managers in an acquired firm be less motivated following an acquisition?






75. Why would managers in an acquired firm be monitored more following an acquisition?








76. Why would managers in an acquired firm be delegated less decision-making power
following an acquisition?






77. Why would managers in an acquired firm be very likely to leave following an acquisition?






78. Describe briefly why culture clash (with culture being interpreted as language) could
arise following a merger.






79. Outline eight steps that management can follow to prepare adequately for a merger.






80. Describe briefly how the type and intensity of integration required depends on the
characteristics of a merger.






81. Outline briefly a few of the cultural issues arising in the DaimlerChrysler merger.





82. Should the speed of integration be as high as possible in a merger?





83. What is a strategic alliance? Provide examples.






84. Does exploiting economies of scope require setting a strategic alliance? And vice versa?






85. When is a strategic alliance optimal?






86. What are the obstacles to learning from another company in an alliance?






87. Describe briefly what lean production is.






88. Why would GM require an alliance to learn lean production?






89. What were GM and Toyota hoping to learn from the NUMMI alliance?







90. Why do alliances require cooperation?





91. Describe briefly three types of lack of cooperative behavior in alliances.






92. Illustrate the issue of lack of cooperation in alliances using the Prisoners Dilemma.






93. Would we expect to see a lot of vertical integration in the automobile industry? Why?






94. Does higher asset specificity necessarily imply higher transaction costs in the automobile
industry?






95. What type of cooperative actions should the supplier and the automaker undertake in
the automobile industry?






96. What metrics do we have to know that Toyota is more efficient than GM in dealing with
its suppliers?







97. Use the Prisoners Dilemma to explain why long-term horizons can alleviate the problem
of lack of cooperative behavior in alliances.






98. Use the Prisoners Dilemma to explain why trust between the partners can alleviate the
problem of lack of cooperative behavior in alliances.






99. Use the Prisoners Dilemma to explain why complementarity between the partners can
alleviate the problem of lack of cooperative behavior in alliances.






100. Use the Prisoners Dilemma to explain why equity stakes can alleviate the problem of
lack of cooperative behavior in alliances.






101. Are cooperative alliances flexible? Explain why or why not.







102. Use the Prisoners Dilemma to explain why transparency between the partners can
alleviate the problem of lack of cooperative behavior in alliances.








103. Explain why partners positions in the previous network of alliances can affect the
prospects for cooperative behavior in a biotech alliance.






104. In what ways is innovation different from other production activities?






105. How should the allocation of power be different in organisations devoted to innovation
activities?






106. How should the workers compensation be different in organisations devoted to
innovation activities?






107. Why should innovation be located (or not) in corporate R&D laboratories?





108. Why should innovation be located (or not) in start-up firms?






109. Why should innovation be organized through strategic alliances in the biotech
industry?






110. What is the main incentive problem in the trucking industry? How was it affected by
the arrival of new technologies?






111. What is the main coordination problem in the trucking industry? How was it affected
by the arrival of new technologies?






112. What is the main incentive problem in the trucking industry? How was it affected by
the ownership of the truck?






113. What is the main coordination problem in the trucking industry? How was it affected
by the ownership of the truck?







114. What is the main incentive to vertically integrate in the airline industry?






115. What is the main disincentive to vertically integrate in the airline industry? 116. Why
would routes serving cities with high rain fall be more likely to be vertically integrated?








117. Why would routes serving cities where the airline has its hub be more likely to be
vertically integrated?






118. Why would longer routes be more likely to be vertically integrated?






119. What dimensions of the dealers production process are more difficult to govern
contractually?






120. Should contracts between automobile manufacturers and dealers provide unlimited
rights to the manufacturers?





121. Why should contracts between automobile manufacturers and dealers provide more rights to
the manufacturers when the networks are larger?






122. Why should contracts between automobile manufacturers and dealers provide more rights to
the manufacturers when the cars are more expensive?






123. Why should contracts between automobile manufacturers and dealers provide more rights to
the manufacturers when the relationship is longer-lived?






124. Why do corporate lawyers charge by the hour worked?






125. Why do corporate lawyers typically work in teams?






126. Why are corporate law firms profit-sharing?




127. What is the logic of the up-or-out rule in law firms?






128. Why do partners own clients in corporate law firms?






129. What is the logic of the salaried partner figure?






130. Why are associates paid through a fixed salary plus a potential small bonus?







131. Why are promotions based on subjective evaluations rather than objective measures
(such as the average number of hours billed in the previous years) by an associate?






132. Why are associates in law firms highly motivated even if their yearly bonus is a relatively small
fraction of their salary?






133. Why are partners in law firms highly motivated even under the profit-sharing rule?






134. Why are R&D activities in the firm in the biotech industry particularly risky?






135. Why is the biotech industry particularly subject to design interconnectedness?






136. Why did no new major pharmaceutical company emerge in the 30 years prior to 1976?





137. Why do biotech start-ups need to monetize their intellectual property through alliances with
established pharmaceutical firms?






138. Why are established pharmaceutical firms willing to collaborate with biotech firms?






139. Why do biotech start-up firms find it difficult to raise capital in public markets?





140. In what ways is venture capital well suited to the biotech industry? In what ways is it not?






141. Why do established pharmaceutical firms currently control the downstream in the industry but
not the upstream?





142. Do alliances achieve integration in the biotech industry?