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Takeover constraint describes


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.

E) A) and C)
F) None of the above

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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.

E) A) and B)
F) A) and C)

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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 unit across the board of directors and managers of a company.
D) CEO duality slows down decision making.

E) A) and D)
F) B) and C)

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Brent Beshore,CEO of adventur.es,a private investment firm,walks around the office every day thanking people for their contributions.What purpose does this serve in terms of attaining behavioral control?


A) It reminds employees of adventur.es rules and regulations.
B) It helps reinforce and sustain the adventur.es culture.
C) It demonstrates to employees the importance of articulating explicit goals and objectives.
D) It makes the adventur.es reward system very explicit.

E) A) and B)
F) A) and 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.

E) B) and D)
F) A) and B)

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Tesco was forced to restate its earnings for the first half of 2014 to 431 million USD because senior managers in the U.K.food business had booked income early and delayed the booking of costs in order to improve appearances of financial performance.This scandal results from ________ and ________.


A) poor environment;management systems
B) poor governance;control
C) external environmental factors;internal environmental factors
D) leadership;financial systems

E) A) and B)
F) C) and D)

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Individual and institutional shareholders have the same rights that include all the following except


A) right to sell stock.
B) 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.

E) C) and D)
F) B) and C)

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The best way to minimize improper and unethical conduct is to ________ and ________.


A) set boundaries;constraints
B) establish standards;guidelines
C) develop policies;regulations
D) design sanctions;guidelines

E) B) and C)
F) All of the above

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Many institutional investors are aggressive in protecting and enhancing their investments.They are shifting from ________ to owners.They are assuming the role of ________ shareholders and rigorously analyzing issues of corporate governance.In the process,they are reinventing systems of corporate monitoring and accountability.


A) sellers;part-time
B) investors;full-time
C) investors;part-time
D) traders;permanent

E) A) and D)
F) All of the above

Correct Answer

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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.

E) A) and D)
F) All of the above

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Explain why control systems are necessary for strategy implementation.

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Strategic control is the process of moni...

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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.

E) All of the above
F) A) and D)

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For young managers who see themselves as free agents,behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

A) True
B) False

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The board of directors is a group that has a ________ duty to ensure that the company is run consistently with ________ interests of the owners,or shareholders of a corporation and that acts as an ________ between the shareholders and management.


A) legal;short-term;intermediary
B) sworn;long-term;advisor
C) fiduciary;long-term;intermediary
D) formal;short-term;advisor

E) C) and D)
F) B) and D)

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

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

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Sales quotas,operating budgets,and production schedules are examples of traditional controls.

A) True
B) False

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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

E) B) and C)
F) None of the above

Correct Answer

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External governance control mechanisms include all the following except


A) auditors.
B) analysts.
C) competitors.
D) media.

E) C) and D)
F) A) and C)

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

A) True
B) False

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For firms competing in highly unstable and turbulent industries,traditional strategic controls are most appropriate.

A) True
B) False

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