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Making or Buying Strategy MCQ

1. Bounded rationality means:

We never have perfect knowledge and hence can never be perfectly rational

We are irrational by nature

We cannot be rational because we are forgetful

Gaining advantage by being economical with, or even distorting, what we take to be the truth

Answer

Correct Answer: We never have perfect knowledge and hence can never be perfectly rational

Note: This Question is unanswered, help us to find answer for this one

2. What is TCEs’ key question?

Whether transactions should be coordinated within a firm or across markets

Whether rationality is bounded enough

Whether to invest more in innovation

All of the above

Answer

Correct Answer: Whether transactions should be coordinated within a firm or across markets

Note: This Question is unanswered, help us to find answer for this one

3. TCE postulates that human actors are characterized by __, _ and ____.

Creativity/opportunism/strategic foresight

Bounded rationality/bounded business units/unbounded energy

Bounded rationality/opportunistic behaviour/feasible foresight

None of the above

Answer

Correct Answer: Bounded rationality/opportunistic behaviour/feasible foresight

Note: This Question is unanswered, help us to find answer for this one

4. The ‘father’ of TCE is:

Karl Marx

Hamish McTaggart

Ronald Coase

Henry Mintzberg

Answer

Correct Answer: Ronald Coase

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5. According to TCE, the boundary of the firm is _______.

Defined by real estate

Defined by geography

Defined by economic considerations concerning make or buy, internalizing or externalizing activities

None of the above

Answer

Correct Answer: Defined by economic considerations concerning make or buy, internalizing or externalizing activities

Note: This Question is unanswered, help us to find answer for this one

6. The alternative to market transactions in TCE is:

Barter

Gifts

Employment contracts

Potlatch

Answer

Correct Answer: Employment contracts

Note: This Question is unanswered, help us to find answer for this one

7. Outsourcing occurs when:

Activities that were previously undertaken by the firm are moved to outside suppliers

Firms take over sourcing things themselves that they previously bought

A firm undergoes innovation

None of the above

Answer

Correct Answer: Activities that were previously undertaken by the firm are moved to outside suppliers

Note: This Question is unanswered, help us to find answer for this one

8. Vertical integration occurs:

When a firm competes with another

When a firm outsources to another

When a firm moves into activities that were previously undertaken by a supplier or a customer

When a firm acquires or merges with another

Answer

Correct Answer: When a firm moves into activities that were previously undertaken by a supplier or a customer

Note: This Question is unanswered, help us to find answer for this one

9. Horizontal integration occurs:

When a firm competes with another

When a firm outsources to another

When a firm is dissolved

When a firm acquires or merges with another

Answer

Correct Answer: When a firm acquires or merges with another

Note: This Question is unanswered, help us to find answer for this one

10. Which of the following forms of governance does Transaction Costs Economics (TCE) consider?

Hierarchical

Diagonal

Linear

Triangular

Answer

Correct Answer: Hierarchical

Note: This Question is unanswered, help us to find answer for this one

Corporate Strategy MCQs | Topic-wise

MCQ on Futures of Strategic Management	MCQ on Going Global strategy
MCQ on Innovation strategy	MCQ on Introduction to Strategy
MCQ on Making or Buying Strategy	MCQ on Resources and Capabilities Strategy
MCQ on Strategic Change	MCQ on Strategic Cooperation and Alliances
MCQ on Strategy Processes	MCQ on Strategy and Organizational Politics
General Corporate Strategy MCQs

Making or Buying Strategy MCQ

1. Bounded rationality means:

2. What is TCEs’ key question?

3. TCE postulates that human actors are characterized by ______, _______ and ______.

4. The ‘father’ of TCE is:

5. According to TCE, the boundary of the firm is _______.

6. The alternative to market transactions in TCE is:

7. Outsourcing occurs when:

8. Vertical integration occurs:

9. Horizontal integration occurs:

10. Which of the following forms of governance does Transaction Costs Economics (TCE) consider?

3. TCE postulates that human actors are characterized by __, _ and ____.