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40 Cards in this Set

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35. (p. 319) 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.
A
36. (p. 319) The primary drawback of "traditional" strategic control systems is
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.
D
37. (p. 319) For businesses facing complex and turbulent business environments
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.
B
38. (p. 321) Contemporary approaches to strategic control rely primarily on
A. feedback controls.
B. single-loop learning.
C. double-loop learning.
D. comparative learning.
C
39. (p. 319-321) Informational control systems ask
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 organization's environment a necessary and sufficient condition for success?
B
40. (p. 321) The benefits of continuous monitoring include
A. enhancing the organization's ability to respond with speed and flexibility.
B. replacing the time-consuming process of organizational learning.
C. dramatically altering the organization's response to its competitive environment.
D. all of these.
A
40. (p. 321) The benefits of continuous monitoring include
A. enhancing the organization's ability to respond with speed and flexibility.
B. replacing the time-consuming process of organizational learning.
C. dramatically altering the organization's response to its competitive environment.
D. all of these.
C
40. (p. 321) The benefits of continuous monitoring include
A. enhancing the organization's ability to respond with speed and flexibility.
B. replacing the time-consuming process of organizational learning.
C. dramatically altering the organization's response to its competitive environment.
D. all of these.
B
43. (p. 323) Complete the following sentence: "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
A
44. (p. 323-324) All of the following are examples of how organizational culture exerts behavioral control EXCEPT
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.
D
45. (p. 324) 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's rules and regulations.
B. It helped reinforce and sustain Walmart's culture.
C. It demonstrated to employees the importance of articulating explicit goals and objectives.
D. It made Walmart's reward system very explicit.
B
46. (p. 324) Which of the following is NOT one of the characteristics of reward and incentive systems?
A. They represent a poor means of influencing an organization's culture.
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.
A
46. (p. 324) Which of the following is NOT one of the characteristics of reward and incentive systems?
A. They represent a poor means of influencing an organization's culture.
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.
D
48. (p. 325) 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.
C
49. (p. 325) All of the following are characteristics of effective reward and incentive systems EXCEPT
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.
B
50. (p. 325) The causes of counterproductive behavior in organizations include
A. lack of a clear understanding of organizational goals and objectives.
B. motivated self-interest.
C. outright malfeasance.
D. all of these.
D
51. (p. 325-326) 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.
C
51. (p. 325-326) 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.
A
53. (p. 326) 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.
B
54. (p. 325) Rules and regulations are examples of
A. implicit controls.
B. informational controls.
C. cultural norms.
D. boundaries and constraints.
D
55. (p. 328) Cadbury Schweppes has a policy that all payments, no matter how unusual, are recorded in the company's books. This rule is
A. overly cumbersome.
B. aimed at encouraging managers to make better budgetary decisions.
C. directed at protecting client confidentiality.
D. designed to minimize improper and unethical conduct.
D
56. (p. 329) Which of the following approaches to behavioral strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy?
A. culture
B. rewards
C. boundaries
D. all of these are equally important
C
56. (p. 329) Which of the following approaches to behavioral strategic control should be utilized least in an organization in which there is a great need for innovation and a high degree of autonomy?
A. culture
B. rewards
C. boundaries
D. all of these are equally important
C
58. (p. 328) Rule-based controls are most appropriate in organizations with all of the following characteristics EXCEPT
A. environments are stable and predictable.
B. employees are highly skilled and independent.
C. consistency in product and service.
D. the risk of malfeasance is extremely high.
B
59. (p. 328) 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
C
60. (p. 329-330) 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 organization's dominant values.
B. Develop managerial role models.
C. Minimize training and indoctrination.
D. Align reward systems with organizational goals and objectives.
C
61. (p. 330) The primary participants in corporate governance are all of the following EXCEPT
A. the shareholders.
B. key stakeholders such as financial institutions.
C. the management (led by the chief executive officer).
D. the board of directors.
B
62. (p. 336) Intel's exemplary corporate governance practices include all of the following EXCEPT
A. a mix of inside and outside directors.
B. all outside directors to assure objectivity in decision-making.
C. board presentations and access to employees.
D. formal evaluation of officers.
B
63. (p. 339) CEO duality refers to a situation in which
A. the CEO formulates and implements strategies.
B. the CEO serves as both the CEO and the chair of the board of directors.
C. the CEO is responsible for acting as CEO and serving on the compensation committee.
D. the CEO is responsible for acting as CEO and Chief Operating Officer (COO).
B
64. (p. 340) External governance control mechanisms include all of the following EXCEPT
A. auditors.
B. analysts.
C. competitors.
D. the market for corporate control.
C
65. (p. 341) If the market value of a firm becomes less than its book value,
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.
A
66. (p. 341) By takeover constraint, we mean
A. constraints placed by the firm on raiders who want to takeover 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.
D
67. (p. 341) It is generally argued that the takeover constraint
A. deters management from engaging in opportunistic behavior.
B. deters management from considering acquiring other companies.
C. deters management from declaring dividends.
D. deters management from increasing a firm's level of borrowing.
A
68. (p. 341) 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.
D
69. (p. 342) The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of a firm's prospects include all of the following EXCEPT
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 or tone down their criticisms of the firms they analyze.
B
70. (p. 342) 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.
C
71. (p. 344) 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.
B
72. (p. 345) In principal-principal conflicts (conflicts between controlling shareholders and minority shareholders), the ownership (of equity) is
A. widely dispersed (5-20% is considered "concentrated ownership").
B. controlled almost completely by management.
C. concentrated; often greater than 50% of equity is controlled by controlling shareholders.
D. often held by employee stock ownership programs.
C
73. (p. 345) Conditions for principal-principal (PP) conflicts (conflicts between controlling shareholders and minority shareholders) 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.
B
74. (p. 345) Expropriation of minority shareholders means that
A. minority shareholders must sell their shares upon demand.
B. minority shareholders cannot own shares in foreign firms.
C. minority shareholders do not receive dividends.
D. minority shareholders are adversely affected by the actions of controlling shareholders.
D