Question 1

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?

Accepted Answer

A)  CEO duality complicates the issue of CEO succession.
B)  CEO duality reinforces popular doubts about the legitimacy of the system as a whole.
C)  CEO duality can create conflicts of interest that can negatively affect the interests of the shareholders.
D)  Firm performance typically improves under CEO duality.

Question 2

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)  incentives

Question 3

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.

Question 4

Discuss the differences between informational control and behavioural control and when each is appropriate.

Accepted Answer

Adapting to and anticipating both intern...

Question 5

Which of the following is not an example of how organizational culture exerts behavioral control?

Accepted Answer

A)  Culture helps maintain control by creating behavioral norms.
B)  Culture generates unwritten standards of acceptable behavior.
C)  Culture encourages individual identification with the organization and its objectives.
D)  Culture sets explicit boundaries.

Question 6

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;time

Question 7

Single-loop learning,according to Chris Argyris,is most appropriate when the environment is ________,goals and objective can be measured with a ________ of certainty,and there is ________ need for complex measures of performance.

Accepted Answer

A)  stable;high level;little
B)  unstable;low level;great
C)  stable;low level;great
D)  unstable;high level;little

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The traditional approach to strategic control is sequential.Which of the following is not one of the steps in the sequence?

Accepted Answer

A)  Action plans are submitted by lower level managers.
B)  Performance is measured against the predetermined goal.
C)  Strategies are implemented.
D)  Strategies are formulated and top management sets goals.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

When would single-loop control systems be most appropriate?

Accepted Answer

The traditional approach to strategic co...

Question 12

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.

Question 13

Strategic control systems,both informational and behavioral,are used to correct the performance and ultimate strategy of a firm.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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.

Question 16

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 17

The power of shareholders has intensified in recent years because of the

Accepted Answer

A)  decreasing influence of large institutional investors.
B)  increasing influence of large institutional investors.
C)  decline in the number of interested institutional investors.
D)  increasing influence of small individual investors.

Question 18

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.

Question 19

The primary participants in corporate governance do not include the

Accepted Answer

A)  shareholders.
B)  financial institutions.
C)  management (led by the chief executive officer) .
D)  board of directors.

Question 20

Informational control is primarily concerned with whether the organization is doing the right things.

Accepted Answer

A) True 
 B)False

Exam 9: Strategic Control and Corporate Governance

Discuss the differences between informational control and behavioural control and when each is appropriate.

Correct AnswerverifiedAdapting to and anticipating both intern...View AnswerShow Answer

It is generally argued that the takeover constraint deters management from

Correct AnswerverifiedShow Answer

Which of the following is not an example of how organizational culture exerts behavioral control?

Correct AnswerverifiedShow Answer

The power of shareholders has intensified in recent years because of the

Correct AnswerverifiedShow Answer

Single-loop learning,according to Chris Argyris,is most appropriate when the environment is ________,goals and objective can be measured with a ________ of certainty,and there is ________ need for complex measures of performance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Informational control is primarily concerned with whether the organization is doing the right things.

Correct AnswerverifiedShow Answer

When would single-loop control systems be most appropriate?

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

The primary participants in corporate governance do not include the

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

Strategic control systems,both informational and behavioral,are used to correct the performance and ultimate strategy of a firm.

Correct AnswerverifiedShow Answer

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?

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

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

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

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

Correct AnswerverifiedShow Answer

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

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

The traditional approach to strategic control is sequential.Which of the following is not one of the steps in the sequence?

Correct AnswerverifiedShow Answer

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Adapting to and anticipating both intern...
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Single-loop learning,according to Chris Argyris,is most appropriate when the environment is ,goals and objective can be measured with a of certainty,and there is need for complex measures of performance.

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The traditional approach to strategic co...
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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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