Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not one of the characteristics of a contemporary control system?

Accepted Answer

A)   It is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans.
B)   It must focus on constantly changing information that is strategically important.
C)   It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
D)   It generates information that is important enough to demand regular and frequent attention.E) None of the above
F) B) and C)

Question 3

For firms competing in highly unstable and turbulent industries,traditional strategic controls are most appropriate.

Accepted Answer

A) True 
 B)False

Question 4

The primary participants in corporate governance,according to Monks and Minow,are the shareholders,board of directors,and employees.

Accepted Answer

A) True 
 B)False

Question 5

Chesapeake Energy set a goal to improve workplace safety.To reinforce this,one year it gave out over 8 million USD in safety bonuses to over 6000 employees for following safe work practices.This served to create

Accepted Answer

A)   happy employees because they got more free time.
B)   an effective reward and incentive program because it reinforced commitment to goals.
C)   a new mission statement for the company.
D)   an effective incentive program because employees worked harder.E) None of the above
F) A) and B)

Question 6

Most organizations with strong cultures and a sound system of rewards and incentives can eventually internalize boundaries rather than use explicit rules and regulations.Which of the following is not a technique for moving in that direction?

Accepted Answer

A)   Hire people who identify with the dominant values of the organization.
B)   Develop managerial role models.
C)   Minimize training and indoctrination.
D)   Align reward systems with organizational goals and objectives.E) All of the above
F) A) and B)

Question 7

Brent Beshore,CEO of adventur.es,a private investment firm,walks around the office every day thanking people for their contributions.What purpose does this serve in terms of attaining behavioral control?

Accepted Answer

A)   It reminds employees of adventur.es rules and regulations.
B)   It helps reinforce and sustain the adventur.es culture.
C)   It demonstrates to employees the importance of articulating explicit goals and objectives.
D)   It makes the adventur.es reward system very explicit.E) A) and B)
F) C) and D)

Question 8

External governance control mechanisms include all the following except

Accepted Answer

A)   auditors.
B)   analysts.
C)   competitors.
D)   media.E) A) and C)
F) A) and B)

Question 9

In contemporary control systems,data and information generated are best interpreted and discussed in online forums,in order to have traceability of the discussion.

Accepted Answer

A) True 
 B)False

Question 10

Research has shown that executives who have large holdings of stock in their firm are more likely to have diversification strategies more consistent with shareholder interests,like increasing long-term returns.

Accepted Answer

A) True 
 B)False

Question 11

Effective boundaries and constraints

Accepted Answer

A)   tend to inhibit efficiency and effectiveness.
B)   distract employees who are trying to focus on organizational priorities.
C)   minimize improper and unethical conduct.
D)   tend to limit organizational growth.E) A) and B)
F) B) and D)

Question 12

The board of directors is a group that has a ________ duty to ensure that the company is run consistently with ________ interests of the owners,or shareholders of a corporation and that acts as an ________ between the shareholders and management.

Accepted Answer

A)   legal; short-term; intermediary
B)   sworn; long-term; advisor
C)   fiduciary; long-term; intermediary
D)   formal; short-term; advisorE) C) and D)
F) A) and B)

Question 13

Which of the following statements about action plans is true?

Accepted Answer

A)   Action plans should permit a degree of autonomy to managers and not be constrained by budgets.
B)   Action plans must be specific so that managers have a clear understanding of the resource requirements necessary to implement the plan.
C)   Action plans should not be constrained by a time frame in order to allow for modification.
D)   Action plans should hold employees accountable for the implementation.E) B) and C)
F) A) and D)

Question 14

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all the following factors except the

Accepted Answer

A)   desire to get future auditing contracts from the company.
B)   desire to get consulting work from the company because most audit firms also do consulting work.
C)   fact that auditors are appointed by the firm.
D)   failure of U.S. audit firms to hire technically qualified professionals.E) B) and C)
F) A) and D)

Question 15

For young managers who see themselves as free agents,behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

Accepted Answer

A) True 
 B)False

Question 16

Takeover constraint describes

Accepted Answer

A)   constraints placed by the firm on raiders who want to take over the firm.
B)   legal constraints that limit the ability of the raiders to acquire a firm.
C)   provisions in the charter of a company that prevents it from attempting a takeover of other companies.
D)   the risk of being acquired by a hostile raider.E) B) and C)
F) A) and D)

Question 17

Which of the following is not a characteristic of effective reward and incentive systems?

Accepted Answer

A)   Performance measures are clear and highly visible.
B)   The structure is fixed to assure employees of consistency.
C)   The compensation system is perceived as fair and equitable.
D)   Objectives are well understood, and broadly accepted.E) None of the above
F) All of the above

Question 18

Double-loop learning in the contemporary approach to strategic control means that the organizational assumptions,premises,goals and strategies are occasionally monitored,tested,and reviewed.

Accepted Answer

A) True 
 B)False

Question 19

Rules and regulations are examples of ________ and ________.

Accepted Answer

A)   controls; behaviors
B)   controls; norms
C)   boundaries; behaviors
D)   boundaries; constraintsE) None of the above
F) A) and B)

Question 20

The traditional approach to strategic control relies on feedback from performance measurement to formulate strategy.

Accepted Answer

A) True 
 B)False

Exam 9: Strategic Control and Corporate Governance

The board of directors is a group that has a ________ duty to ensure that the company is run consistently with ________ interests of the owners,or shareholders of a corporation and that acts as an ________ between the shareholders and management.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For young managers who see themselves as free agents,behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

Correct AnswerverifiedShow Answer

Rules and regulations are examples of ________ and ________.

Correct AnswerverifiedShow Answer

Effective boundaries and constraints

Correct AnswerverifiedShow Answer

External governance control mechanisms include all the following except

Correct AnswerverifiedShow Answer

Research has shown that executives who have large holdings of stock in their firm are more likely to have diversification strategies more consistent with shareholder interests,like increasing long-term returns.

Correct AnswerverifiedShow Answer

Which of the following statements about action plans is true?

Correct AnswerverifiedShow Answer

Most organizations with strong cultures and a sound system of rewards and incentives can eventually internalize boundaries rather than use explicit rules and regulations.Which of the following is not a technique for moving in that direction?

Correct AnswerverifiedShow Answer

The traditional approach to strategic control relies on feedback from performance measurement to formulate strategy.

Correct AnswerverifiedShow Answer

Which of the following is not one of the characteristics of a contemporary control system?

Correct AnswerverifiedShow Answer

Brent Beshore,CEO of adventur.es,a private investment firm,walks around the office every day thanking people for their contributions.What purpose does this serve in terms of attaining behavioral control?

Correct AnswerverifiedShow Answer

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all the following factors except the

Correct AnswerverifiedShow Answer

Double-loop learning in the contemporary approach to strategic control means that the organizational assumptions,premises,goals and strategies are occasionally monitored,tested,and reviewed.

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of effective reward and incentive systems?

Correct AnswerverifiedShow Answer

Takeover constraint describes

Correct AnswerverifiedShow Answer

In contemporary control systems,data and information generated are best interpreted and discussed in online forums,in order to have traceability of the discussion.

Correct AnswerverifiedShow Answer

The primary participants in corporate governance,according to Monks and Minow,are the shareholders,board of directors,and employees.

Correct AnswerverifiedShow Answer

Chesapeake Energy set a goal to improve workplace safety.To reinforce this,one year it gave out over 8 million USD in safety bonuses to over 6000 employees for following safe work practices.This served to create

Correct AnswerverifiedShow Answer

For firms competing in highly unstable and turbulent industries,traditional strategic controls are most appropriate.

Correct AnswerverifiedShow Answer

The board of directors is a group that has a duty to ensure that the company is run consistently with interests of the owners,or shareholders of a corporation and that acts as an between the shareholders and management.

Correct Answer
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Rules and regulations are examples of and .

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