MANA CH. 9 – Flashcards
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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. A. balance; alignment B. measure; balance C. alignment; balance D. measure; outcome
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A
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The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence? 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.
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A
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Which of the following is the primary drawback of traditional strategic control systems? A. They are only appropriate when the environment is stable and simple. B. Goals and objectives cannot be measured with a high level of certainty. C. They lead to complacency. D. They lack the flexibility needed to adjust to changes in the environment.
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D
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For businesses facing complex and turbulent business environments, which of the following is true? A. Goals and objectives that are uncertain prevent opportunism. B. Traditional strategic controls are usually inappropriate. C. Complacency about predetermined milestones can prevent adaptability. D. Detailed plans are needed to maintain order.
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B
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Contemporary approaches to strategic control rely primarily on _____________. A. feedback controls B. single-loop learning C. double-loop learning D. comparative learning
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C
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Informational control systems are concerned with which of the following? A. Is the organization doing things right? B. Is the organization doing the right things? C. Are rules and regulations being followed as information is processed? D. Is the environment of the organization a necessary and sufficient condition for success?
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B
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Continuous monitoring, in the contemporary approach, is beneficial because _____________. A. it reduces time lags B. it increases the time it takes to detect changes in the competitive environment C. organizational flexibility is reduced D. organization response time is increased
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A
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Which of the following is NOT one of the characteristics of a contemporary control system? 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.
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C
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Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________. A. behavioral control B. informational control C. strategy formulation D. strategy implementation
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B
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As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional. A. boundaries and constraints B. culture and rewards C. organizational loyalty D. innovation and risk taking
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A
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Which of the following is not an example of how organizational culture exerts behavioral control? 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.
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D
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The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve? A. It was used to remind employees of Walmart rules and regulations. B. It helped reinforce and sustain the Walmart culture. C. It demonstrated to employees the importance of articulating explicit goals and objectives. D. It made the Walmart reward system very explicit.
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B
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Which of the following is NOT one of the characteristics of reward and incentive systems? A. They represent a poor means of influencing the culture of an organization. B. They focus efforts on high priority tasks. C. They motivate high levels of individual and collective task performance. D. They represent an effective control mechanism.
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A
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Individual rationality ______________ organizational rationality. A. is a good indicator of B. will ensure C. is often the opposite of D. does not always guarantee
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D
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When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________. A. organizational cohesiveness increases B. information is shared rather than hoarded C. individuals begin working at cross purposes D. individuals gain insights into overarching goals and objectives
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C
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Which of the following is not a characteristic of effective reward and incentive systems? 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.
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B
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Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________. A. productive behavior B. counterproductive motivation C. counterproductive behavior D. motivated self-interest
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D
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Effective boundaries and constraints _____________. 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
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C
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Effective short-term objectives should ______________ and _____________. A. be specific; measurable B. be achievable; not challenging C. be motivating; not limiting D. be time defined; not limiting
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A
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Which of the following statements about action plans is true? A. Action plans, though specific, should permit a degree of autonomy to managers and not be constrained by budgets. B. Action plans must be specific so that managers will 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. Although managers must be held accountable for implementing action plans, this accountability often erodes the managers' motivation to implement the plan on a timely basis.
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B
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Rules and regulations are examples of ______________ and _____________. A. controls; behaviors B. controls; norms C. boundaries; behaviors D. boundaries; constraints
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D
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The best way to minimize improper and unethical conduct is to ______________ and _____________. A. develop policies; regulations B. establish standards; guidelines C. set boundaries; constraints D. design sanctions; guidelines
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c
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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
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C
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Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by _____________. A. posting written statements of the organizational goals and objectives B. discouraging the formation of subcultures that isolate work groups C. designing effective reward systems D. encouraging employees to see themselves as free agents
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C
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Rule-based controls are least appropriate in organizations with which one of the following characteristics? A. Environments are stable and predictable. B. Employees are highly skilled and independent. C. There is consistency in product and service. D. The risk of malfeasance is extremely high.
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B
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Rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company? A. software developer B. stock brokerage firm C. manufacturer of mass produced products D. high tech research facility
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C
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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? A. Hire people that 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.
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C
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The primary participants in corporate governance do not include _____________. A. the shareholders B. the financial institutions C. the management (led by the chief executive officer) D. the board of directors
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B
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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? 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 stockholders
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A
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Individual and institutional shareholders have the same rights that include all except one of the following. Which one is not a shareholder right? A. the right to sell stock B. the right to vote the proxy C. the right to bring suit for damages, if the economy declines D. certain residual rights following the liquidation of the company, once creditors and claimants are paid
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C
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Shareholders rely on CEOs to adopt policies and strategies that maximize the value of their shares. To motivate CEOs to maximize the value of their companies, boards of directors can consider all of the following options except one. Which one is it? A. Boards can require that the CEOs become substantial owners of company stock. B. Salaries, bonuses, and stock options can be structures to provide rewards for superior performance. C. Salaries can be structured to provide penalties for poor performance. D. Dismissal for poor performance is not an option.
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D
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Boards of directors have responded to financial crises, corporate scandals, regulator obligations, and investor requests for structural changes. In looking at the 2011 Harvard Business Review study of the changes in configuration of boards since 1987, which change has been brought about by government legislation? A. Percentage of boards that have an average age of 64 or older has increased. B. Average pay for directors has increased. C. Percentage of boards with 12 or fewer members has increased. D. Percentage of the directors that are independent has increased.
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D
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CEO duality refers to a situation in which the _____________. A. CEO formulates and implements strategies B. CEO serves as both the CEO and the chair of the board of directors C. CEO is responsible for acting as CEO and serving on the compensation committee D. CEO is responsible for acting as CEO and Chief Operating Officer (COO)
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B
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In choosing sides concerning CEO duality, two schools of thought exist. Which of the following would not be a consideration for the Unity of Command school of thought? A. One person holding both roles will be able to act more efficiently and effectively. B. CEO duality provides smoother strategic decision making. C. CEO duality creates unity across the board of directors and managers of a company. D. CEO duality slows down decision-making.
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D
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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? 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 always is improved under CEO duality.
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D
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External governance control mechanisms include all of the following except _____________. A. auditors B. analysts C. competitors D. media
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C
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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 _____________. 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 once again exceeds the book value D. the firm will be unable to service its debt
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A
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The takeover constraint refers to _____________. 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
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D
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It is generally argued that the takeover constraint deters management from _____________. A. engaging in opportunistic behavior B. considering acquiring other companies C. declaring dividends D. increasing the level of borrowing of a firm
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A
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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 of the following factors except _____________. A. the desire to get future auditing contracts from the company B. the desire to get consulting work from the company because most audit firms also do consulting work C. the fact that auditors are appointed by the firm D. the failure of U.S. audit firms to hire technically qualified professionals
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D
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The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________. A. many analysts fail to grasp the gravity of the problems facing a company B. sell recommendations generate lower commissions than buy recommendations C. the firms for which analysts work may have lucrative investment banking relationships with the firm D. analysts are often pressured by their superiors to overlook negative information
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B
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All of the following are types of information that a firm is required to disclose except _____________. 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
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C
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In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________. A. concentrated ownership B. low family ownership and control C. business group structures D. weak legal protection for minority shareholders
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B
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In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is _____________. A. widely dispersed B. controlled almost completely by management C. concentrated D. often held by employee stock ownership programs
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C
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Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________. 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
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B
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Expropriation of minority shareholders means that minority shareholders _____________. A. must sell their shares upon demand B. cannot own shares in foreign firms C. do not receive dividends D. are adversely affected by the actions of controlling shareholders
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D
