MGT ch 12

T

15. To become a strategic leader, a person needs to become a highly capable individual first. True False

B

18. What best describes transferability of investor interests? A. Investors can give company stocks as a gift. B. Investors are allowed to trade stocks. C. Investors are allowed to participate in strategy formulation. D. Investors can be hired as employees.

A

19. What best describes the separation of ownership and control? A. Shareholders own stocks but do not run the company. B. Shareholders can freely trade the company stocks. C. Shareholders provide necessary information to the company. D. Managers control the company but may also have stock ownership

D

22. Two common features of the recent financial crisis are that management actions (1) affect the economic well-being of the globe and (2) _____________. A. Failure to implement strategy is unwise B. Organizational design is necessary C. Green technology is the future D. Must consider a variety of stakeholders

A

24. Which of the following statements about stakeholders is correct? A. Failure to consider stakeholders can damage the company's performance. B. Stakeholders is just another name for shareholders. C. Stakeholders are less important than shareholders. D. Stakeholders are the members in a company's supply chain.

C

26. ______ are the individuals or groups that can affect, or are affected by, a firm's actions. A. Shareholders B. The board of directors C. Stakeholders D. Top management

D

27. ________ is a theoretical framework that is concerned with how various stakeholders create and trade value. A. Shareholder theory B. Agency theory C. The groupthink model D. Stakeholder theory

D

28. Which of the following can be considered a firm's stakeholder? A. Customers B. Suppliers C. Financiers D. All of these

A

29. Which one of the following statements is NOT true? A. Increased trust among stakeholders will increase the transaction cost. B. Satisfied stakeholders are more cooperative and can increase a firm's value creation. C. Negative outcomes can be avoided if stakeholders are satisfied. D. Firms can build a stronger reputation through effective stakeholder management.

F

3. Strategic leadership is irrelevant when a firm pursues its goals. True False

B

30. The major theme of stakeholder theory is that _________. A. Stakeholders' interests are less important B. The relationship among stakeholders and the firm is a complex web and needs to be managed C. Stakeholders usually create problems for the firm D. Stakeholders are a key part of the firm's supply chain

D

31. A firm's effective stakeholder management can ___________. A. Reduce negative outcomes and risks B. Induce information inflow C. Build a strong reputation D. All of these

C

32. Effective management of the stakeholders can lead to greater organizational flexibility and __________. A. Credibility B. Core competence C. Adaptability D. Product quality

B

32. When an employee of a firm follows his or her own interests such as pursuing managerial perks when performing activities on behalf of the owner of the firm, a(n) _______________ problem occurs. A. Delegation excess B. Principal-agent C. Authority-excess D. Agent efficiency

B

33. Advantages to organizing economic activity within the firm ("make") include all of the following EXCEPT: A. The coordination of highly complex tasks. B. The principal-agent problem. C. Creating an internal community of knowledge. D. The ability to make command-and-control decisions

C

33. The three attributes of stakeholders are _________, legitimacy, and urgency. A. Competency B. Trust C. Power D. Control

C

34. One way to overcome the principal-agent problem is to: A. Flatten the organization. B. Micromanage the management team. C. Make managers owners through stock options. D. Increase the scope of management's responsibilities.

B

34. ________ is a decision tool with which managers can recognize, assess, and address the needs of different stakeholders. A. Shareholder analysis B. Stakeholder impact analysis C. SWOT analysis D. Financial impact analysis

A

35. Many companies incentivize employees through stock options. This practice is called __________. A. Employee stock ownership plans B. Corporate incentives C. Shareholder monitoring D. The upper-echelons theory

D

37. Walmart spent $288 million for education and environment protection. This is an example of what type of corporate social responsibility? A. Economic B. Legal C. Ethical D. Philanthropic

C

38. Information asymmetries occur when: A. Certain departments within the firm keep information from other departments. B. There are gaps in technological skills between employees of a firm. C. A firm transacts in the market with a seller who has better information about the product or service. D. All of these.

D

39. ______ is a framework that helps firms recognize the public expectation that society has of a business at a given point in time. A. Core competence B. Stakeholder impact C. Corporate governance D. Corporate social responsibility

C

41. Corporate social responsibility has four components: economic, legal, ethical, and __________ responsibilities. A. Trust B. Control C. Philanthropic D. Social

C

43. Corporate social responsibility has four components: ______, legal, ethical, and philanthropic responsibilities. A. Trust B. Control C. Economic D. Social

A

44. Investors expect a firm to make a profit while governments expect a firm to pay taxes. This is the ________ responsibility of a firm. A. Economic B. Legal C. Ethical D. Value-driven

A

48. Which one of the following statements is in agreement with the approach espoused by Nobel laureate Milton Friedman? A. The only social responsibility of business is to increase its profits. B. Corporate social responsibility is vital to a firm's success. C. Corporate social responsibility is universal across the world. D. Corporate social responsibility should not include NGOs.

B

49. Which one of the following statements is true? A. Corporate social responsibility should focus only on making profits. B. Corporate social responsibility helps firms gain competitive advantage. C. Corporate social responsibility is universal across the world. D. Corporate social responsibility should not include NGOs.

F

5. The combination of ownership and control is one attractive characteristic of a public company. True False

D

50. Porter and Kramer offer a shared value framework for corporate social responsibility. Which of the following is NOT one of the focal points they recommend in this framework? A. Firms should create regional clusters. B. Firms need to expand customers to nonconsumers. C. The value chain of the firm should include partners such as NGOs. D. Firms need to focus new business in the BRIC nations.

B

51. Regarding the empirical evidence connecting corporate social responsibility and firm performance, the text notes there have been a variety of studies performed to look at this question. Which ONE of the following most accurately describes what has been found? A. CSR has been shown to strongly cause improved firm performance. B. There is a positive relationship but the causality is murky. C. Strong firm performance has been shown to strongly cause improved CSR by the firm. D. Prior research has not shown a connection between CSR and firm performance

F

6. Stakeholders impact analysis is a tool used to quantify which specific stakeholders have the largest financial impact on the firm. True False

T

7. Corporate social responsibility (CSR) includes economic, legal, ethical, and philanthropic responsibilities. True False

C

70. ______ is the phenomenon by which corporate control can be shifted to competitors/investors, encouraging management to operate the firm differently. A. Managerialism B. Employee stock ownership plans C. The market for corporate control D. A compensation package

C

71. Which of the following national governments uses state-directed capitalism to influence a company's ownership and operations? A. Germany B. France C. China D. The United States

B

76. The behaviors and styles of executives that influence others to achieve organizational goals are called ___________. A. Strategic analysis B. Strategic leadership C. Ethical behavior D. The board of directors

D

79. The task of managing an overall enterprise and influencing key organizational outcomes is referred to as __________. A. Managerial discretion B. Stakeholder analysis C. Management by objectives D. Strategic leadership

F

8. The pyramid of corporate social responsibility (CSR), shown in Exhibit 12.4, symbolizes that the firm needs to fulfill its responsibilities in a step-by-step sequential fashion. True False

B

80. All of the following are examples of a leader's interpersonal roles EXCEPT ________. A. Liaison B. Monitor C. Leader D. Figurehead

C

81. All of the following are examples of a leader's informational roles EXCEPT _______. A. Monitor B. Spokesperson C. Entrepreneur D. Disseminator

C

82. Which of the following best describes the leader's role of disseminator? A. The executive taps into a network of contracts to collect information. B. The executive passes necessary information on to external stakeholders. C. The executive passes necessary information on to internal stakeholders. D. The executive designs the firm's strategy.

B

83. Which of the following best describes the leader's role of spokesperson? A. The executive taps into a network of contracts to collect information. B. The executive passes necessary information on to external stakeholders. C. The executive passes necessary information on to internal stakeholders. D. The executive designs the firm's strategy.

D

84. Which of the following best describes the leader's role of negotiator? A. The executive taps into a network of contracts to collect information. B. The executive passes necessary information on to external stakeholders. C. The executive passes necessary information on to internal stakeholders. D.The executive represents the company when having talks with major internal and external stakeholders.