MGMT 491 Exam 2 study guide PDF

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MGMT 491 Exam 2 Ch. 6-9, Cases 2-5 1. List the five modes of international entry and give a brief explanation of each. 2. List the three common forms of restructuring and give a brief explanation of each. (Quizlet: What is restructuring and what are its common forms?) Restructuring refers to changes in a firm's portfolio of businesses and/or financial structure. There are three general forms of restructuring: (1) Downsizing involves reducing the number of employees, which may include decreasing the number of operating units. (2) Downscoping entails divesting, spinning-off, or eliminating businesses that are not related to the core business. It allows the firm to focus on its core business. (3) A leveraged buyout occurs when a party (managers, employees, or an external party) buys all the assets of a (publicly traded) business, takes it private, and finances the buyout with debt. Once the transaction is complete, the company's stock is no longer publicly traded. 3. List and give a brief description of the three primary types of strategic alliances that differ based on the ownership agreement of the alliance. Quizlet: Describe and give examples of the three different types of strategic alliances. Identify the conditions under which each type is preferred. CONTRACTUAL ALLIANCE - cooperation between firms is managed directly through contracts, without cross-equity holdings or an independent firm being created - contract specifies what each party is to do in the alliance and what each party should receive if it fulfills its duty in the alliance Preferred When: -interdependence between partners is low(e.g. pooled) -it is easy to measure the contributions of each partner and write it in a contract --------------------------------------------------------------EQUITY ALLIANCE -cooperative contracts are supplemented by equity investments by one partner in the other partner -sometimes these equity investments are reciprocated -equity alliance-----The collaborating firms often supplement contracts with equity holdings in their alliance partners Preferred When: -interdependence between firms is moderate(e.g., sequential) -firms bring knowledge or difficult to measure contributions but each can perform their roles separately ---------------------------------------------------------------

JOINT VENTURE -cooperating firms combine resources to form an independent firm in which they invest -profits from this independent firm compensate partners for this investment -joint ventures----Is an alliance in which collaborating firms create and jointly own a legally independent company Preferred When: -interdependence between firms is very high (e.g., reciprocal) -firms bring knowledge or difficult-to-measure contributions that must be combined into a single organization to coordinate effectively...