Question 1

It is generally argued that the takeover constraint deters management from

Accepted Answer

A)   engaging in opportunistic behavior.
B)   considering acquiring other companies.
C)   declaring dividends.
D)   increasing the level of borrowing of a firm.E) B) and D)
F) All of the above

Question 2

While there are 20 percent more companies in the United States than the mid-1990s,the number of firms that are publicly traded on a major stock exchange has dropped 45 percent compared to 1995.Which of the following is one of the reasons why?

Accepted Answer

A)   Stock exchange fees are too high.
B)   Firm managers want more money for themselves.
C)   It lessens the threat of hostile takeovers.
D)   It permits managers the freedom to think shorter term.E) A) and B)
F) B) and C)

Question 3

The traditional approach to strategic control is interactive,while the contemporary approach to strategic control is sequential.

Accepted Answer

A) True 
 B)False

Question 4

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?

Accepted Answer

A)   culture
B)   rewards
C)   rules
D)   incentivesE) None of the above
F) C) and D)

Question 5

In emerging economies and continental Europe,firms often can be characterized by all the following except

Accepted Answer

A)   concentrated ownership.
B)   low family ownership and control.
C)   business group structures.
D)   weak legal protection for minority shareholders.E) None of the above
F) All of the above

Question 6

Rules and regulations,rather than culture or rewards,would be used for strategic control at which type of company?

Accepted Answer

A)   software developer
B)   stock brokerage firm
C)   manufacturer of mass produced products
D)   high tech research facilityE) All of the above
F) B) and C)

Question 7

For the maximum benefit of each part,a corporation is a mechanism created to allow different parties to contribute all the following except

Accepted Answer

A)   buildings.
B)   capital.
C)   expertise.
D)   labor.E) All of the above
F) B) and C)

Question 8

In trying to assure that managerial actions lead to shareholder value maximization,a risk can come about if the market value of a firm becomes less than its book value.The risk is

Accepted Answer

A)   it becomes an attractive takeover target.
B)   the firm will be delisted by the stock exchange.
C)   the Securities and Exchange Commission will not allow it to declare dividends until the market value exceeds the book value.
D)   the firm will be unable to service its debt.E) B) and C)
F) A) and B)

Question 9

Zappos and Amazon focus on customer service.What purpose does this serve in terms of attaining behavioral control?

Accepted Answer

A)   It uses culture to sustain their primary source of competitive advantage.
B)   It uses rewards and incentives to sustain corporate culture.
C)   It demonstrates to employees the importance of articulating explicit goals and objectives.
D)   It gives management more control over employees.E) A) and B)
F) A) and C)

Question 10

Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except

Accepted Answer

A)   a dominant owner or group of owners who have interests that are distinct from minority shareholders.
B)   legislation that protects the interests of minority shareholders.
C)   a motivation for the controlling shareholders to exercise their dominant position to their advantage.
D)   few formal (such as legislation or regulatory bodies)  or informal constraints that discourage or prevent the controlling shareholders from exploiting their advantageous positions.E) C) and D)
F) B) and D)

Question 11

Central to agency theory is the relationship between two primary players,the principals (stockholders)and agents (management).

Accepted Answer

A) True 
 B)False

Question 12

Effective short-term objectives should be ________ and ________.

Accepted Answer

A)   specific; measurable
B)   achievable; not challenging
C)   motivating; not limiting
D)   time defined; not limitingE) A) and D)
F) C) and D)

Question 13

If a board of directors is to be effective,it needs to allocate its scarce time to the ________ issues to which its members can add ________.

Accepted Answer

A)   most clear; capital
B)   most critical; value
C)   newest; information
D)   hardest; timeE) A) and D)
F) A) and C)

Question 14

Effectively implementing strategy requires manipulating three key control levers: culture,rewards,and boundaries.What are the compelling reasons for an increased emphasis on culture and rewards in a system of behavior controls?

Accepted Answer

There are two compelling reasons for an ...

Question 15

All the following are types of information that a firm is required to disclose except

Accepted Answer

A)   quarterly and annual filings of financial information.
B)   stock trading by insiders.
C)   details of new products under development.
D)   details of executive compensation packages.E) B) and C)
F) A) and B)

Question 16

When would single-loop control systems be most appropriate?

Accepted Answer

The traditional approach to strategic co...

Question 17

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

Accepted Answer

A)   Goals conflict between principals and agents.
B)   Verification of actual agency activity is expensive and difficult to obtain.
C)   Principals and agents have differing attitudes toward risk.
D)   Stockholders and management align with external stakeholders.E) A) and B)
F) None of the above

Question 18

In order to minimize the temptation for managers to act in their own self-interest,governance mechanisms exist for implementation consideration.Which of the following is not a primary means for monitoring managerial behavior?

Accepted Answer

A)   a board of directors that acts in the best interests of shareholders to create short-term value
B)   shareholder activism in which owners view themselves as shareowners
C)   a board of directors that acts in the best interests of shareholders to create long-term value
D)   managerial incentives to align management interests with those of the stockholdersE) B) and C)
F) C) and D)

Question 19

Discuss several actions that can have a positive influence on board of director dynamics as the board works to both oversee and advise management.

Accepted Answer

The actions include: (1)building the rig...

Question 20

Behavioral controls are aspects of strategic change that involve finding the appropriate ________ and ________ among the culture,rewards,and boundaries of the firm.

Accepted Answer

A)   balance; alignment
B)   measure; balance
C)   alignment; balance
D)   measure; outcomeE) C) and D)
F) None of the above

Exam 9: Strategic Control and Corporate Governance

Zappos and Amazon focus on customer service.What purpose does this serve in terms of attaining behavioral control?

Correct AnswerverifiedShow Answer

Discuss several actions that can have a positive influence on board of director dynamics as the board works to both oversee and advise management.

Correct AnswerverifiedThe actions include: (1)building the rig...View AnswerShow Answer

All the following are types of information that a firm is required to disclose except

Correct AnswerverifiedShow Answer

In emerging economies and continental Europe,firms often can be characterized by all the following except

Correct AnswerverifiedShow Answer

Effective short-term objectives should be ________ and ________.

Correct AnswerverifiedShow Answer

Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

For the maximum benefit of each part,a corporation is a mechanism created to allow different parties to contribute all the following except

Correct AnswerverifiedShow Answer

The traditional approach to strategic control is interactive,while the contemporary approach to strategic control is sequential.

Correct AnswerverifiedShow Answer

When would single-loop control systems be most appropriate?

Correct AnswerverifiedThe traditional approach to strategic co...View AnswerShow Answer

Behavioral controls are aspects of strategic change that involve finding the appropriate ________ and ________ among the culture,rewards,and boundaries of the firm.

Correct AnswerverifiedShow Answer

In order to minimize the temptation for managers to act in their own self-interest,governance mechanisms exist for implementation consideration.Which of the following is not a primary means for monitoring managerial behavior?

Correct AnswerverifiedShow Answer

It is generally argued that the takeover constraint deters management from

Correct AnswerverifiedShow Answer

If a board of directors is to be effective,it needs to allocate its scarce time to the ________ issues to which its members can add ________.

Correct AnswerverifiedShow Answer

Central to agency theory is the relationship between two primary players,the principals (stockholders)and agents (management).

Correct AnswerverifiedShow Answer

In trying to assure that managerial actions lead to shareholder value maximization,a risk can come about if the market value of a firm becomes less than its book value.The risk is

Correct AnswerverifiedShow Answer

Effectively implementing strategy requires manipulating three key control levers: culture,rewards,and boundaries.What are the compelling reasons for an increased emphasis on culture and rewards in a system of behavior controls?

Correct AnswerverifiedThere are two compelling reasons for an ...View AnswerShow Answer

Rules and regulations,rather than culture or rewards,would be used for strategic control at which type of company?

Correct AnswerverifiedShow Answer

While there are 20 percent more companies in the United States than the mid-1990s,the number of firms that are publicly traded on a major stock exchange has dropped 45 percent compared to 1995.Which of the following is one of the reasons why?

Correct AnswerverifiedShow Answer

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

Correct AnswerverifiedShow Answer

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The actions include: (1)building the rig...
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Effective short-term objectives should be and .

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Correct Answer
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Correct Answer
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Correct Answer
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The traditional approach to strategic co...
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Behavioral controls are aspects of strategic change that involve finding the appropriate and among the culture,rewards,and boundaries of the firm.

Correct Answer
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Correct Answer
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Correct Answer
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If a board of directors is to be effective,it needs to allocate its scarce time to the issues to which its members can add .

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Correct Answer
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Correct Answer
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Correct Answer
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There are two compelling reasons for an ...
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Correct Answer
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Correct Answer
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