The Likelihood of a Strategic Alliance Producing Synergy and Innovation

question 10

Multiple Choice

The likelihood of a strategic alliance producing synergy and innovation is increased by

• A) the emergence of path dependence between the alliance partners.
• B) the equality of the resources that the two organizations contribute.
• C) the similarity of the corporate and national cultures of the organization.
• D) the extent to which the knowledge stocks of each organization are integrated.

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Definitions:

ROCE

Return on Capital Employed; a measure of a company's profitability in relation to its capital, indicating how efficiently capital is being utilized to generate profits.

After Tax Cost

The net cost of an investment or financing option after taking into account the effects of taxes.

Financial Leverage

Applying borrowed resources to escalate the potential profits of an investment.

EPS

Earnings Per Share, a measure of a company's profitability that divides its net profit by the number of outstanding shares.