Question at position 1 What type of agreement is defined as the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter?Joint ventureMergerAcquisitionContractual alliance

Question

Question at position 1 What type of agreement is defined as the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter?Joint ventureMergerAcquisitionContractual alliance

BlackTom AI · Accepted Answer

Restating the scenario helps frame the options: the question asks which type of agreement involves transferring the control of operations and management from one firm to another, with the former becoming a unit of the latter.
Option 1: Joint venture. A joint venture typically involves two or more firms forming a new, separate entity to pursue a business objective, sharing control and profits, but it does not usually entail one firm becoming a subsidiary or a unit of the other. This makes it inconsistent with the described transfer of control.
Option 2: Merger. A merger occurs when two firms combine to form a new company or one absorbs the other, resulting in a change in ownership and structure. However, the phrasing “the former becoming a unit of the latter” emphasizes a parent-subsidiary relationship rather than a full consolidation into a new entity, so this option is not an exact fit for the described transfer of control.
Option 3: Acquisition. An acquisition specifically involves one firm taking control over another, with the acquired firm becoming a subsidiary or part of the acquiring firm. This directly matches the idea of transferring control and the former becoming a unit of the latter, aligning with the given definition.
Option 4: Contractual alliance. A contractual alliance is a collaboration based on agreements without transferring control or management of operations, and typically keeps each party as an independent entity. This contradicts the concept of the former firm becoming a unit of the latter, making this option incorrect.
Overall, the reasoning above shows that the option describing transfer of control and subordinate integration best fits the provided definition, while the other options describe relationship structures that do not entail that specific transfer of control.

Question at position 1 What type of agreement is defined as the transfer of the control of operations and management from one firm to another with the former becoming a unit of the latter?Joint ventureMergerAcquisitionContractual alliance

View Explanation

Log in for full answers

Similar Questions

Question at position 17 Which of the following stakeholders has the most concern over short-term revenue falling during mergers and acquisitions? InvestorsTop managementMiddle managementCustomers

Question at position 6 In the context of acquisitions, the similarity in cultures, systems, and structures between firms is called _____.strategic fitacquisition premiumorganizational fitrelational capability

In class we discussed how Amazon acquired Kiva Systems to improve distribution efficiencies. We decided that it was best that Amazon should INTEGRATE Kiva.

Identifying the value proposition of an acquisition is a necessary, but not sufficient, condition to guarantee acquisition success due to the many challenges of post-acquisition integration (or lack of integration).

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler