Question 1

A criticism of stock-based compensation plans is that

Accepted Answer

A) they discourage empire building. 
B) they induce managers to focus on the short term. 
C) managers do not like them. 
D) they dilute stockholders' equity. 
E) they are publicly reported and therefore not subject to abuse. 
A) they discourage empire building. 
B) they induce managers to focus on the short term. 
C) managers do not like them. 
D) they dilute stockholders' equity. 
E) they are publicly reported and therefore not subject to abuse. D

Question 2

Agency theory would not be useful in understanding the relationship between

Accepted Answer

A) a CEO and his or her top management team. 
B) top-level executives and middle managers. 
C) managers at the same organizational level. 
D) stockholders and the CEO. 
E) lower-level managers and the workers they supervise. 
A) a CEO and his or her top management team. 
B) top-level executives and middle managers. 
C) managers at the same organizational level. 
D) stockholders and the CEO. 
E) lower-level managers and the workers they supervise. C

Question 3

Members of the board of directors are supposed to be agents for

Accepted Answer

A) stockholders. 
B) employees. 
C) executive officers. 
D) customers. 
E) suppliers. 
A) stockholders. 
B) employees. 
C) executive officers. 
D) customers. 
E) suppliers. A

Question 4

Internal stakeholders of a company include

Accepted Answer

A) unions. 
B) customers. 
C) the board of directors. 
D) suppliers. 
E) local communities. 
A) unions. 
B) customers. 
C) the board of directors. 
D) suppliers. 
E) local communities.

Question 5

Critics of Tyco,who claimed that the company was engaging in "accounting tricks," were later vindicated when the criticism was shown to have some validity.

Accepted Answer

A) True 
 B)False

Question 6

A stakeholder impact analysis would include which of the following steps?

Accepted Answer

A) Identification of stakeholders 
B) Identification of stakeholders' interests and concerns 
C) Assessment of the likelihood that a stakeholder will file discrimination charges against the company 
D) Identification of stakeholders and their interests and concerns 
E) Analysis of ethics violations 
A) Identification of stakeholders 
B) Identification of stakeholders' interests and concerns 
C) Assessment of the likelihood that a stakeholder will file discrimination charges against the company 
D) Identification of stakeholders and their interests and concerns 
E) Analysis of ethics violations

Question 7

Explain the principles of agency theory,including the issues it addresses.What are some effective ways to deal with agency problems,as implied or stated by agency theory?

Accepted Answer

Agency theory addresses situations where

Question 8

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Accepted Answer

A) True 
 B)False

Question 9

The quest to maximize a company's profitability should be constrained by

Accepted Answer

A) law. 
B) managers. 
C) ethical obligations. 
D) CEOs. 
E) all of these choices. 
A) law. 
B) managers. 
C) ethical obligations. 
D) CEOs. 
E) all of these choices.

Question 10

If CEOs use their position to invest corporate funds in perks that enhance their status,they are engaging in illegal behavior.

Accepted Answer

A) True 
 B)False

Question 11

A union and the general public are examples of internal stakeholders.

Accepted Answer

A) True 
 B)False

Question 12

Attaining future profit growth may require investments that reduce the current rate of profitability.

Accepted Answer

A) True 
 B)False

Question 13

The basic principles of agency theory are

Accepted Answer

A) relatively straightforward. 
B) somewhat obtuse. 
C) of limited use in explaining the relationship between senior managers and stakeholders. 
D) slanted in favor of managers as opposed to stakeholders. 
E) mostly theoretical in nature. 
A) relatively straightforward. 
B) somewhat obtuse. 
C) of limited use in explaining the relationship between senior managers and stakeholders. 
D) slanted in favor of managers as opposed to stakeholders. 
E) mostly theoretical in nature.

Question 14

Although stockholders are legal owners,CEOs do not always pursue stockholders' interests.CEOs can pursue their own interests because

Accepted Answer

A) they can use their authority over corporate funds to satisfy their desires for status,power,and income. 
B) they have the ability to initiate a leveraged buyout. 
C) an outside director will not have knowledge of inside operations if he or she chairs the board. 
D) stockholders are the weakest stakeholder group because they are removed from operations. 
E) stockholder meetings are not required. 
A) they can use their authority over corporate funds to satisfy their desires for status,power,and income. 
B) they have the ability to initiate a leveraged buyout. 
C) an outside director will not have knowledge of inside operations if he or she chairs the board. 
D) stockholders are the weakest stakeholder group because they are removed from operations. 
E) stockholder meetings are not required.

Question 15

External stakeholders of a company include

Accepted Answer

A) unions. 
B) the board of directors. 
C) executive officers. 
D) stockholders. 
E) employees. 
A) unions. 
B) the board of directors. 
C) executive officers. 
D) stockholders. 
E) employees.

Question 16

A major goal of most publicly held companies is the maximization of stockholder wealth.

Accepted Answer

A) True 
 B)False

Question 17

CEO compensation packages are most frequently criticized because of their

Accepted Answer

A) apparent lack of relationship to company performance. 
B) life insurance benefits. 
C) features. 
D) cost to the company. 
E) lack of motivation. 
A) apparent lack of relationship to company performance. 
B) life insurance benefits. 
C) features. 
D) cost to the company. 
E) lack of motivation.

Question 18

Pursuing strategies that maximize the long-run profitability and profit growth of a company benefits which group(s)of stakeholders?

Accepted Answer

A) Employees 
B) Creditors 
C) Charitable organizations in the local community 
D) The general public 
E) All of these choices 
A) Employees 
B) Creditors 
C) Charitable organizations in the local community 
D) The general public 
E) All of these choices

Question 19

Which of the following is not a governance mechanism used to align the interests of managers and stockholders?

Accepted Answer

A) Stockholder meetings 
B) The board of directors 
C) Stock-based compensation schemes 
D) The mission statement 
E) Takeover constraints 
A) Stockholder meetings 
B) The board of directors 
C) Stock-based compensation schemes 
D) The mission statement 
E) Takeover constraints

Question 20

A company's stockholders provide a company with

Accepted Answer

A) emotional and intellectual support. 
B) risk capital. 
C) free advertising. 
D) advice on new product lines. 
E) a code of ethics. 
A) emotional and intellectual support. 
B) risk capital. 
C) free advertising. 
D) advice on new product lines. 
E) a code of ethics.

A criticism of stock-based compensation plans is that

Agency theory would not be useful in understanding the relationship between

Members of the board of directors are supposed to be agents for

Internal stakeholders of a company include

Critics of Tyco,who claimed that the company was engaging in "accounting tricks," were later vindicated when the criticism was shown to have some validity.

A stakeholder impact analysis would include which of the following steps?

Explain the principles of agency theory,including the issues it addresses.What are some effective ways to deal with agency problems,as implied or stated by agency theory?

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

The quest to maximize a company's profitability should be constrained by

If CEOs use their position to invest corporate funds in perks that enhance their status,they are engaging in illegal behavior.

A union and the general public are examples of internal stakeholders.

Attaining future profit growth may require investments that reduce the current rate of profitability.

The basic principles of agency theory are

Although stockholders are legal owners,CEOs do not always pursue stockholders' interests.CEOs can pursue their own interests because

External stakeholders of a company include

A major goal of most publicly held companies is the maximization of stockholder wealth.

CEO compensation packages are most frequently criticized because of their

Pursuing strategies that maximize the long-run profitability and profit growth of a company benefits which group(s)of stakeholders?

Which of the following is not a governance mechanism used to align the interests of managers and stockholders?

A company's stockholders provide a company with

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters

Exam 11: Corporate Performance, Governance, and Business Ethics

A criticism of stock-based compensation plans is that

Agency theory would not be useful in understanding the relationship between

Members of the board of directors are supposed to be agents for

Internal stakeholders of a company include

Critics of Tyco,who claimed that the company was engaging in "accounting tricks," were later vindicated when the criticism was shown to have some validity.

A stakeholder impact analysis would include which of the following steps?

Explain the principles of agency theory,including the issues it addresses.What are some effective ways to deal with agency problems,as implied or stated by agency theory?

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

The quest to maximize a company's profitability should be constrained by

If CEOs use their position to invest corporate funds in perks that enhance their status,they are engaging in illegal behavior.

A union and the general public are examples of internal stakeholders.

Attaining future profit growth may require investments that reduce the current rate of profitability.

The basic principles of agency theory are

Although stockholders are legal owners,CEOs do not always pursue stockholders' interests.CEOs can pursue their own interests because

External stakeholders of a company include

A major goal of most publicly held companies is the maximization of stockholder wealth.

CEO compensation packages are most frequently criticized because of their

Pursuing strategies that maximize the long-run profitability and profit growth of a company benefits which group(s)of stakeholders?

Which of the following is not a governance mechanism used to align the interests of managers and stockholders?

A company's stockholders provide a company with

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate-Level Strategy: Related and Unrelated Diversification

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters