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Exam 9: Strategic Control and Corporate Governance

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Question 61

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Which of the following approaches to behavioral strategic control would be the least appropriate for an organization in which there is a great need for innovation and a high degree of autonomy?

A) culture
B) rewards
C) rules
D) incentives

E) C) and D)
F) None of the above

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Question 62

Multiple Choice

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CEO duality refers to a situation in which the CEO

A) formulates and implements strategies.
B) serves as both the CEO and the chair of the board of directors.
C) is responsible for acting as CEO and serving on the compensation committee.
D) is responsible for acting as CEO and Chief Operating Officer (COO) .

E) A) and B)
F) All of the above

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Question 63

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CalPERS,the California Public Employees Retirement System,manages over 240 billion dollars in assets.As an example of shared activism,they review all short- and long-term performance figures for each of the firms in which they invest and request changes in the governance structure of those firms,when they feel the firm is not responsive to their concerns.

Sound governance practices always leads to superior financial performance.

Behavioral controls involve the ability to respond effectively to environmental change.

The Sarbanes-Oxley Act of 2002 stipulates that executives of a firm will still be able to sell their shares in the firm when other employees cannot.

The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that

Individual and institutional shareholders have the same rights that include all of the following except

The business media is a significant external control mechanism.

Expropriation of minority shareholders means that minority shareholders

In choosing sides concerning CEO duality,two schools of thought exist.Which of the following would not be a consideration for the agency theory school of thought?

External governance control mechanisms include all of the following except

Agency theory is concerned with the problem that arises when the goals of the agents conflict with those of the surrounding community members.

Unexpected events have little effect on short-term objectives because short-term objectives are not changeable.

In building strong reward and incentives,it is vital to have good managerial role models.

As firms downsize,a control system based on rewards and culture becomes dysfunctional.