MGMT449 CH9 – 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.
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balance; alignment
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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?
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Action plans are submitted by lower level managers.
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Which of the following is the primary drawback of traditional strategic control systems?
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They lack the flexibility needed to adjust to changes in the environment.
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For businesses facing complex and turbulent business environments, which of the following is true?
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Traditional strategic controls are usually inappropriate.
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Contemporary approaches to strategic control rely primarily on _____________.
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double-loop learning
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Informational control systems are concerned with which of the following?
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Is the organization doing the right things?
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Continuous monitoring, in the contemporary approach, is beneficial because _____________.
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it reduces time lags
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Which of the following is NOT one of the characteristics of a contemporary control system?
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It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
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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 _____________.
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informational control
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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.
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boundaries and constraints
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Which of the following is not an example of how organizational culture exerts behavioral control?
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Culture sets explicit boundaries.
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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?
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It helped reinforce and sustain the Walmart culture.
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Which of the following is NOT one of the characteristics of reward and incentive systems?
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They represent a poor means of influencing the culture of an organization
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Individual rationality ____________ organizational rationality
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does not always guarantee
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When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.
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individuals begin working at cross purposes
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Which of the following is not a characteristic of effective reward and incentive systems?
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The structure is fixed to assure employees of consistency.
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Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.
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motivated self-interest
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Effective boundaries and constraints _____________.
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minimize improper and unethical conduct
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Effective short-term objectives should ______________ and _____________.
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be specific; measurable
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Which of the following statements about action plans is true?
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Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.
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Rules and regulations are examples of ______________ and _____________.
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boundaries; constraints
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The best way to minimize improper and unethical conduct is to ______________ and ___________.
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set boundaries; constraints
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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?
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rules
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Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by____________.
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designing effective reward systems
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Rule-based controls are least appropriate in organizations with which one of the following characteristics?
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Employees are highly skilled and independent.
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Rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?
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manufacturer of mass produced products
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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?
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Minimize training and indoctrination.
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The primary participants in corporate governance do not include _____________.
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the financial institutions
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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?
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a board of directors that acts in the best interests of shareholders to create short-term value
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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?
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the right to bring suit for damages, if the economy declines
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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?
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Dismissal for poor performance is not an option.
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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?
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Percentage of the directors that are independent has increased.
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CEO duality refers to a situation in which the _____________.
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CEO serves as both the CEO and the chair of the board of directors
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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?
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CEO duality slows down decision-making.
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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?
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Firm performance always is improved under CEO duality.
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External governance control mechanisms include all of the following except _____________.
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competitors
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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 _____________.
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it becomes an attractive takeover target
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A takeover constraint, we mean _____________.
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the risk of being acquired by a hostile raider
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It is generally argued that the takeover constraint deters management from _____________.
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engaging in opportunistic behavior
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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 _____________.
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the failure of U.S. audit firms to hire technically qualified professionals
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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 _____________.
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sell recommendations generate lower commissions than buy recommendations
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All of the following are types of information that a firm is required to disclose except ____________.
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details of new products under development
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In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________.
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low family ownership and control
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In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is _____________.
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concentrated
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Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________.
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legislation that protects the interests of minority shareholders
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Expropriation of minority shareholders means that minority shareholders _____________.
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are adversely affected by the actions of controlling shareholders
