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MGMT449 CH9 – Flashcards

Donna Chou
8 July 2022
question
Behavioral controls are aspects of strategic change that involve finding the appropriate __________ and _________ among the culture, rewards, and boundaries of the firm.
answer
balance; alignment
question
The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?
answer
Action plans are submitted by lower level managers.
question
Which of the following is the primary drawback of traditional strategic control systems?
answer
They lack the flexibility needed to adjust to changes in the environment.
question
For businesses facing complex and turbulent business environments, which of the following is true?
answer
Traditional strategic controls are usually inappropriate.
question
Contemporary approaches to strategic control rely primarily on _____________.
answer
double-loop learning
question
Informational control systems are concerned with which of the following?
answer
Is the organization doing the right things?
question
Continuous monitoring, in the contemporary approach, is beneficial because _____________.
answer
it reduces time lags
question
Which of the following is NOT one of the characteristics of a contemporary control system?
answer
It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
question
Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.
answer
informational control
question
As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional.
answer
boundaries and constraints
question
Which of the following is not an example of how organizational culture exerts behavioral control?
answer
Culture sets explicit boundaries.
question
The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve?
answer
It helped reinforce and sustain the Walmart culture.
question
Which of the following is NOT one of the characteristics of reward and incentive systems?
answer
They represent a poor means of influencing the culture of an organization
question
Individual rationality ____________ organizational rationality
answer
does not always guarantee
question
When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.
answer
individuals begin working at cross purposes
question
Which of the following is not a characteristic of effective reward and incentive systems?
answer
The structure is fixed to assure employees of consistency.
question
Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.
answer
motivated self-interest
question
Effective boundaries and constraints _____________.
answer
minimize improper and unethical conduct
question
Effective short-term objectives should ______________ and _____________.
answer
be specific; measurable
question
Which of the following statements about action plans is true?
answer
Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.
question
Rules and regulations are examples of ______________ and _____________.
answer
boundaries; constraints
question
The best way to minimize improper and unethical conduct is to ______________ and ___________.
answer
set boundaries; constraints
question
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?
answer
rules
question
Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by____________.
answer
designing effective reward systems
question
Rule-based controls are least appropriate in organizations with which one of the following characteristics?
answer
Employees are highly skilled and independent.
question
Rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?
answer
manufacturer of mass produced products
question
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?
answer
Minimize training and indoctrination.
question
The primary participants in corporate governance do not include _____________.
answer
the financial institutions
question
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?
answer
a board of directors that acts in the best interests of shareholders to create short-term value
question
Individual and institutional shareholders have the same rights that include all except one of the following. Which one is not a shareholder right?
answer
the right to bring suit for damages, if the economy declines
question
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?
answer
Dismissal for poor performance is not an option.
question
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?
answer
Percentage of the directors that are independent has increased.
question
CEO duality refers to a situation in which the _____________.
answer
CEO serves as both the CEO and the chair of the board of directors
question
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?
answer
CEO duality slows down decision-making.
question
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?
answer
Firm performance always is improved under CEO duality.
question
External governance control mechanisms include all of the following except _____________.
answer
competitors
question
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 _____________.
answer
it becomes an attractive takeover target
question
A takeover constraint, we mean _____________.
answer
the risk of being acquired by a hostile raider
question
It is generally argued that the takeover constraint deters management from _____________.
answer
engaging in opportunistic behavior
question
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 _____________.
answer
the failure of U.S. audit firms to hire technically qualified professionals
question
The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.
answer
sell recommendations generate lower commissions than buy recommendations
question
All of the following are types of information that a firm is required to disclose except ____________.
answer
details of new products under development
question
In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________.
answer
low family ownership and control
question
In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is _____________.
answer
concentrated
question
Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________.
answer
legislation that protects the interests of minority shareholders
question
Expropriation of minority shareholders means that minority shareholders _____________.
answer
are adversely affected by the actions of controlling shareholders
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question
Behavioral controls are aspects of strategic change that involve finding the appropriate __________ and _________ among the culture, rewards, and boundaries of the firm.
answer
balance; alignment
question
The traditional approach to strategic control is sequential. Which of the following is not one of the steps in the sequence?
answer
Action plans are submitted by lower level managers.
question
Which of the following is the primary drawback of traditional strategic control systems?
answer
They lack the flexibility needed to adjust to changes in the environment.
question
For businesses facing complex and turbulent business environments, which of the following is true?
answer
Traditional strategic controls are usually inappropriate.
question
Contemporary approaches to strategic control rely primarily on _____________.
answer
double-loop learning
question
Informational control systems are concerned with which of the following?
answer
Is the organization doing the right things?
question
Continuous monitoring, in the contemporary approach, is beneficial because _____________.
answer
it reduces time lags
question
Which of the following is NOT one of the characteristics of a contemporary control system?
answer
It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
question
Top managers at ABC Company meet every Friday to review daily operational reports and year to date data. This is an example of _____________.
answer
informational control
question
As firms simultaneously downsize and face the need for increased coordination across organizational boundaries, a control system based primarily on ______________ is dysfunctional.
answer
boundaries and constraints
question
Which of the following is not an example of how organizational culture exerts behavioral control?
answer
Culture sets explicit boundaries.
question
The late Sam Walton, founder of Walmart, used to give pep rallies at local Walmart stores. What purpose did this serve?
answer
It helped reinforce and sustain the Walmart culture.
question
Which of the following is NOT one of the characteristics of reward and incentive systems?
answer
They represent a poor means of influencing the culture of an organization
question
Individual rationality ____________ organizational rationality
answer
does not always guarantee
question
When subcultures emerge that have shared values opposite from the dominant culture of an organization _____________.
answer
individuals begin working at cross purposes
question
Which of the following is not a characteristic of effective reward and incentive systems?
answer
The structure is fixed to assure employees of consistency.
question
Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.
answer
motivated self-interest
question
Effective boundaries and constraints _____________.
answer
minimize improper and unethical conduct
question
Effective short-term objectives should ______________ and _____________.
answer
be specific; measurable
question
Which of the following statements about action plans is true?
answer
Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.
question
Rules and regulations are examples of ______________ and _____________.
answer
boundaries; constraints
question
The best way to minimize improper and unethical conduct is to ______________ and ___________.
answer
set boundaries; constraints
question
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?
answer
rules
question
Most successful organizations minimize the need for explicit rules, regulations, and other boundaries by____________.
answer
designing effective reward systems
question
Rule-based controls are least appropriate in organizations with which one of the following characteristics?
answer
Employees are highly skilled and independent.
question
Rules and regulations, rather than culture or rewards, would be used for strategic control at which type of company?
answer
manufacturer of mass produced products
question
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?
answer
Minimize training and indoctrination.
question
The primary participants in corporate governance do not include _____________.
answer
the financial institutions
question
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?
answer
a board of directors that acts in the best interests of shareholders to create short-term value
question
Individual and institutional shareholders have the same rights that include all except one of the following. Which one is not a shareholder right?
answer
the right to bring suit for damages, if the economy declines
question
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?
answer
Dismissal for poor performance is not an option.
question
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?
answer
Percentage of the directors that are independent has increased.
question
CEO duality refers to a situation in which the _____________.
answer
CEO serves as both the CEO and the chair of the board of directors
question
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?
answer
CEO duality slows down decision-making.
question
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?
answer
Firm performance always is improved under CEO duality.
question
External governance control mechanisms include all of the following except _____________.
answer
competitors
question
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 _____________.
answer
it becomes an attractive takeover target
question
A takeover constraint, we mean _____________.
answer
the risk of being acquired by a hostile raider
question
It is generally argued that the takeover constraint deters management from _____________.
answer
engaging in opportunistic behavior
question
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 _____________.
answer
the failure of U.S. audit firms to hire technically qualified professionals
question
The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.
answer
sell recommendations generate lower commissions than buy recommendations
question
All of the following are types of information that a firm is required to disclose except ____________.
answer
details of new products under development
question
In emerging economies and continental Europe, firms often can be characterized by all of the following except _____________.
answer
low family ownership and control
question
In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is _____________.
answer
concentrated
question
Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except _____________.
answer
legislation that protects the interests of minority shareholders
question
Expropriation of minority shareholders means that minority shareholders _____________.
answer
are adversely affected by the actions of controlling shareholders
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