Adverse Selection in a Strategic Alliance Is Likely Only When

question 40

Multiple Choice

Adverse selection in a strategic alliance is likely only when

• A) it is difficult or costly to observe the resources or capabilities that a partner brings to an alliance.
• B) a potential partner can easily see the resources and capabilities that a firm is bringing to an alliance.
• C) it is difficult or costly to know how competitors will react to the strategic alliance.
• D) there are significant transaction-specific assets devoted to the alliance.

---

Definitions:

Decentralized

A system of management or governance that distributes power away from a central authority and more towards individual units or locations.

Downsizing

The planned reduction of a company's workforce to improve efficiency, reduce costs, or become more competitive.

Productivity

The efficiency at which a person, company, or system can convert inputs into useful outputs.

Self-Managing Team

A group of workers who manage their daily duties under little to no supervision.