Obtaining Technology: Implementation

MULTIPLE CHOICE

     1.   The four critical elements to implementing a strategy of technology acquisition include all of the following except:

a.
Integration
b.
Alliances
c.
Leadership
d.
Execution
e.
Alignment

ANS:  B                    PTS:   1

     2.   In banking what percentage of the customer base is typically lost during the implementation of a merger?

a.
3
b.
5
c.
7
d.
12
e.
15

ANS:  E                    PTS:   1

     3.   The key questions the firm should ask during the blending of technology that has been obtained through external means include all of the following except:

a.
How will the external effort to obtain innovation capability or technology affect customers?
b.
How does the organization keep short-term commitments while the internal chaos of blending takes place?
c.
How do priorities change following the externally focused activity?
d.
How can managers maximize individual wealth opportunities?
e.
Where is the primary focus of the organization during the process of obtaining technology externally?

ANS:  D                    PTS:   1

     4.   All of the following are a trap that impacts decisions on whom and what to delegate responsibilities in the merger except:

a.
Trap of compromise
b.
Trap of misplaced beliefs
c.
Trap of financial miscalculations
d.
Trap of system superiority
e.
Trap of not blending

ANS:  C                    PTS:   1

     5.   The trap of misplaced beliefs is characterized by:

a.
Losing the bidding battle for the assets the firm wants to acquire
b.
Using non-objective reasons for choosing the systems to be used
c.
Believing that keeping systems from both organizations in tact is the best way to utilize the new technologies
d.
Losing focus on the reason for making the alliance or acquisition in the first place
e.
Believing that incongruent systems will eventually find their way to harmony

ANS:  D                    PTS:   1

     6.   Autoadjudication is concerned with:

a.
Automobile insurance
b.
Automatic claim payment for insurance companies
c.
Paying speeding tickets on line
d.
Paying utility bills on line
e.
Automatic filing of taxes

ANS:  B                    PTS:   1

     7.   Cisco’s compound growth between 1989 and 1999 was ____ per year.

a.
21 percent
b.
47 percent
c.
77 percent
d.
89 percent
e.
98 percent

ANS:  D                    PTS:   1

     8.   All of the following are elements of Cisco’s system for the acquisition of technology focused firms except:

a.
Strong due diligence
b.
Focus on all new management since the old managers are the ones that caused the problems
c.
A “buddy” system matches key employees of the acquired firm with key employees in Cisco
d.
Conversion of existing systems to Cisco’s systems to advantage of economies of scale
e.
Ninety days to complete integration of acquired firm into Cisco

ANS:  B                    PTS:   1

     9.   In a blended firm, culture typically takes one of the following forms except:

a.
Separate cultures
b.
Dominate culture
c.
New culture
d.
Multiple cultures
e.
Accelerating culture

ANS:  E                    PTS:   1

   10.   Key expectations should take priority in the integration effort except in which area?

a.
Service/product continuity
b.
Cost structures
c.
External administrative services
d.
Productivity
e.
Information systems alternatives

ANS:  C                    PTS:   1

   11.   The three elements that need to be considered in integration are:

a.
Due diligence, shared lessons, and blended structures and cultures
b.
Due diligence, training and development, and shared lessons
c.
Shared lessons, training and development, and fit
d.
Training and development, fit, and due diligence
e.
Speed, synergies, and diligence

ANS:  A                    PTS:   1

   12.   The most critical decision making issue for a technology firm when integrating two entities is:

a.
What accounting system to use?
b.
What IT system to use?
c.
How will individuals be treated?
d.
How fast will the organizations be blended?
e.
How much money is spent?

ANS:  C                    PTS:   1

   13.   As a result of the merger of AOL-Time Warner the newly combined firm’s stock dropped over 70% between 2001 and 2003 because:

a.
The CEOs position was split between the two previous CEOs
b.
AOL employees wanted to emulate Time-Warner employees and they did not have the skills
c.
The total stock market declined that much
d.
Both firms were not the leaders in their industry, so each lost out in their market domain
e.
The two firms never truly integrated and hostilities between them grew diminishing the strength of the firm

ANS:  E                    PTS:   1

   14.   Cultural differences in integrating international alliances can be found at the ____ levels.

a.
Division and country
b.
Country and employee
c.
Individual, company, country
d.
Company, employee, and division
e.
Employee groups

ANS:  C                    PTS:   1

   15.   In sharing lessons learned, the lessons that should be remembered include all of the following except:

a.
Analyze and understand who knows what
b.
Develop a systematic way to share knowledge
c.
Be sure that no information is lost across the lines of the alliance – this prevents loss of competitive advantage
d.
Take time to be sure that learning and know-how are shared
e.
Remember, knowledge and information exist at all levels of the organization

ANS:  C                    PTS:   1

   16.   The characteristics of related technology acquisition include:

a.
Less uncertainty and low organizational impact
b.
More uncertainty and strategic implications
c.
Firm-wide impact and major restructuring
d.
Less uncertainty and more restructuring
e.
Multiskilled teams and external alignment

ANS:  A                    PTS:   1

   17.   After a technology based merger or acquisition, trust is built through:

a.
Putting into place the systems of the acquiring firm as quickly as possible
b.
Consistency and open communications
c.
Clear documentation and consistency
d.
Open communications and revamping of procedures
e.
Clear organizational hierarchy definitions

ANS:  B                    PTS:   1

   18.   It is estimated that ____ percent of problems implementing an acquisition are related to people/relationship issues.

a.
5
b.
10
c.
25
d.
35
e.
50

ANS:  E                    PTS:   1

   19.   Some examples of operation issues that can emerge during the implementation of newly acquired technology include all of the following except:

a.
Lack of understanding of each other’s product/processes
b.
Underestimating the transaction costs
c.
Too much documentation
d.
Incompatible technology
e.
More engineering/debugging work needed than anticipated

ANS:  C                    PTS:   1

   20.   The consulting firm A.T. Kearney estimates that ____ percent of the benefits of joining two firms together are obtained in the first year.

a.
25
b.
45
c.
65
d.
85
e.
100

ANS:  D                    PTS:   1

   21.   In determining what to do if an issue is of low critical importance but high urgency then the firm ____.

a.
Must do it but do it later – i.e. schedule it
b.
Must do it now – i.e. immediate attention
c.
Forget about it – i.e. wasting time
d.
You make the call – i.e. do it if time allows
e.
None of these choices

ANS:  D                    PTS:   1

   22.   According to McCreight and Company an alliance implementation effort should include all of these except:

a.
Meet with all executives in the partnering firms
b.
Define gaps in management talent
c.
Leave intact the current organizational structure
d.
Set implementation milestones measures of interim success
e.
Consider developing specialized reward systems

ANS:  C                    PTS:   1

   23.   The reasons that training and development are so important in the execution of an alliance or merger/acquisition include:

a.
There is an evolution of cultural norms that necessitate changes in policies and procedures
b.
The new employees need to learn the cultural norms of the larger partner to enhance blending
c.
Changes in reporting relationships need to be understood so old interpersonal connections are not disruptive to the goals of the new entity
d.
The manager needs to indicate that the “ship is rising on the rising tide”
e.
T&D lessens the need for meetings and explanations that are unnecessary

ANS:  A                    PTS:   1

   24.   The losses an employee can feel during integration typically can include all of the following except:

a.
status
b.
network of informal relationships
c.
understanding of the future
d.
prior pay level
e.
understanding of what their individual job entails

ANS:  D                    PTS:   1

   25.   The key to helping an employee understand how they fit into the new combined organization and where it is going is ____.

a.
Employing a hierarchical organizational structure
b.
Through the firm’s training and development
c.
Through the firm’s reward structure
d.
Indicated by the CEO in their personal statements
e.
Not a critical issue

ANS:  B                    PTS:   1

   26.   GE Capital has learned a number of different lessons in seeking to blend individuals. These lessons include all of the following except:

a.
Blending is an issue where the firm can take it time to begin
b.
Dedicate recourses to the integration
c.
Integrate operations by focusing on outcomes
d.
Integrate culture by focusing on outcomes
e.
Communicate strategically with straightforward messages

ANS:  A                    PTS:   1

   27.   To facilitate team building the leadership of the combined firm should:

a.
Celebrate success loudly and ignore failures
b.
Celebrate success loudly and work to learn from failures
c.
Set clear objectives and ignore failures
d.
Celebrate goal attainment and then move on
e.
Hide all negative outcomes as long as possible so that a positive atmosphere with grow

ANS:  B                    PTS:   1

   28.   One solution to overcome personality conflicts is to:

a.
Develop a master plan
b.
Emphasize team building
c.
Use peer review
d.
Develop a work breakdown
e.
Develop overall budgets

ANS:  B                    PTS:   1

   29.   A key implementation method to overcome potential conflict from the integration of two firms is ____.

a.
Developing a schedule and sticking to it
b.
Firing those individuals who are not supportive of the integration
c.
Forming teams from different functional areas from both firms
d.
Having the CEO be clear that conflict will not tolerated
e.
Bringing in a new top management team

ANS:  C                    PTS:   1

   30.   To execute a plan for the acquisition of technology the management should keep in mind all of the following except:

a.
The process is challenging
b.
There are no conquering heroes
c.
Success is likely so growth should be planned
d.
There are new roles to be learned and polished
e.
People issues are critical to building synergies

ANS:  C                    PTS:   1

   31.   The building of synergies typically concerns:

a.
Marketing accounts
b.
Financial operations like insurance
c.
Manufacturing operations like equipment
d.
People issues
e.
Accurate recognition of the potential possible

ANS:  D                    PTS:   1

   32.   Changes in the policies and procedures of a firm after two entities are integrated frequently results in ____.

a.
Confusion
b.
New organizational structures
c.
New CEO
d.
New board of directors
e.
New policy manuals

ANS:  B                    PTS:   1

   33.   The presence of rewards:

a.
Indicates where the support of management during the integration process
b.
Is an expense that is necessary to control at all times
c.
Should be lower after the integration
d.
Is not a major concern for merging firms
e.
Should always focus on quality input/output ratio

ANS:  A                    PTS:   1

   34.   The people issues involved in building fit include all of the following except:

a.
Talent is lost of mismanaged
b.
Power and politics become the driving force
c.
Defensive actions and motivations take over because of fear
d.
There is a failure to send a consistent message
e.
CEOs must be dismissed

ANS:  E                    PTS:   1

   35.   One of the positive effects of politics on merger outcomes is:

a.
It can help mobilize opinions and opinion leaders
b.
It externalizes a firm’s problems
c.
It helps to find the person who should be the scapegoat
d.
It helps creates schisms
e.
It promotes favoritism

ANS:  A                    PTS:   1

TRUE/FALSE

     1.   The evaluation of requirements for the key activities in the integration effort should consider the amount of knowledge transfer required, the degree of integration necessary, and the speed of the integration necessary.

ANS:  T                    PTS:   1

     2.   The most critical aspect of implementation when acquiring technology externally is integration.

ANS:  T                    PTS:   1

     3.   The acquiring firm should always impose its culture on the acquired firm so that the acquisition can progress quickly.

ANS:  F                    PTS:   1

     4.   In an unrelated acquisition restructuring is often required.

ANS:  T                    PTS:   1

     5.   International alliances are no more complex than are domestic alliances.

ANS:  F                    PTS:   1

     6.   The AOL-Time Warner merger is a prime example of how to conduct a successful integration of two firms.

ANS:  F                    PTS:   1

     7.   All issues are equally important as a firm seeks to implement the acquisition of technology or technology related firm.

ANS:  F                    PTS:   1

     8.   Execution of people related issues is the key to successful cultural blending during the implementation process.

ANS:  T                    PTS:   1

     9.   In the integration of two firms there is little need for most employees to know how they fit into the change and where the organization is going.

ANS:  F                    PTS:   1

   10.   The joining of two firms is an immediate concern and there is little reason to worry about it over the long term.

ANS:  F                    PTS:   1

   11.   The absence of resources for an integration shows that the firm does not think integration is important.

ANS:  T                    PTS:   1

   12.   One of the operational issues that arises in the effort to build trust is transition costs are underestimated.

ANS:  T                    PTS:   1

   13.   If the firm has planned properly, the building of fit typically occurs very quickly with little time and effort necessary.

ANS:  F                    PTS:   1

   14.   Politics only has a negative impact on merger outcomes.

ANS:  F                    PTS:   1

   15.   Political influence is a power that can not be brokered when considering integration.

ANS:  F                    PTS:   1

SHORT ANSWER

     1.   What are the four traps a firm can fall into as they seek to delegate responsibility of a given area to one party or another?

ANS: 

·
trap of compromise – one person each side
·
trap of misplaced beliefs – loose focus from obtaining technology to other issues like gaining market share
·
trap of system superiority – believing your system is superior without regard to the evidence
·
trap of not blending – allowing the organizations to stay separate and not blending them

PTS:   1

     2.   Cisco’s system of acquisitions for technology or technology focused firms includes what?

ANS: 

·
Strong due diligence.
·
One third of top management fills the slots in the new firm.
·
Buddy system that matches employees of acquired firm with Cisco employees.
·
Customization of each integration effort.
·
Conversion of existing system in acquired firm to Cisco’s.
·
Ninety days to full integration.

PTS:   1

     3.   What are the key three elements in integration? How should they work together?

ANS: 

·
due diligence
·
shared lessons
·
blended structures and cultures

PTS:   1

     4.   The sharing of knowledge in the organization should be guided by what four lessons?

ANS: 

·
Analyze and understand who know what.
·
Develop a systematic way to share knowledge.
·
Take time to be sure that learning and know how are shared.
·
Remember knowledge and information exist at all levels and should be shared with who can use it.

PTS:   1

     5.   Discuss the typical characteristics of related versus unrelated acquisitions.

ANS: 

·
Related

–
Low uncertainty

–
Low organizational impact
·
Unrelated

–
Strategic

–
High uncertainty

–
Wide firm impact

PTS:   1

     6.   The path toward a successful implementation of an acquisition in a technological setting should include what steps?

ANS: 

·
defined goal which specifies desired business results
·
potential alternatives for achieving the goal identified
·
once method is selected enabling technologies should be evaluated
·
after identifying the appropriate technologies a plan is developed to integrate the technologies into one system
·
specifications tied to desired business results are tested by users
·
employee participation is part of every phase of implementation process
·
the ability of employees to adopt to the new technology should be accessed
·
training programs are developed to address any areas of weakness
·
communication programs regarding the changes needed are fully developed and used
·
behaviors supportive of the new process are rewarded and negative behaviors result in negative consequences
·
every component of the organization is analyzed and restructured if necessary to support the new technologies

PTS:   1

     7.   McCreight and Company checklist for implementation of an alliance includes what major points?

ANS: 

·
Establish and communicate a change vision by putting together a team that looks at nitty gritty of implementation.
·
Meet and evaluate all the key executives in the partnering firms.
·
Define gaps in management talent.
·
Set implementation milestones and measure so interim success.
·
Install a sound organization structure and management process.
·
Consider developing specialized reward systems to reinforce the alliance activities.

PTS:   1