MGMT-485W Exam 2

human capital

"The ability to manage __________ may be the most critical of the strategic leader's skills."

Matrix

-Vertical differentiation: less -Horizontal differentiation: less -Each worker has 2 bosses; temporary teams -Costly, confusing, better coordination, creativity 1. Simple 2. Functional 3. Divisional 4. Multidivisional 5. Matrix

Functional

-Vertical differentiation: low -Horizontal differentiation: more -CEO, GMs, managers, workers -Many business functions 1. Simple 2. Functional 3. Divisional 4. Multidivisional 5. Matrix

Simple

-Vertical differentiation: lowest -Horizontal differentiation: lowest -One boss, few workers -One business function 1. Simple 2. Functional 3. Divisional 4. Multidivisional 5. Matrix

Divisional

-Vertical differentiation: more -Horizontal differentiation: even more -CEO, multiple GMs, managers, workers -Even more business functions 1. Simple 2. Functional 3. Divisional 4. Multidivisional 5. Matrix

Multidivisional

-Vertical differentiation: most -Horizontal differentiation: most -Corporate HQ staff 1. Simple 2. Functional 3. Divisional 4. Multidivisional 5. Matrix

self-dealing

A circumstance in which a manager is using company funds for his or her own personal consumption is called __________. 1. information manipulation 2. self-dealing 3. takeover constraint 4. greenmail

categorical imperative

A concept developed by the philosopher Immanuel Kant as an ethical guideline for behavior. In deciding whether an action is right or wrong, or desirable or undesirable, a person should evaluate the action in terms of what would happen if everybody else in the same situation, or category, acted the same way.

Give promotions to top performers who achieve by violating ethical principles

A firm that wants to ensure ethical behavior should NOT: 1. Use the hiring process to weed out job candidates without a strong sense of personal ethics 2. Assume that unethical job applicants will lie in interviews 3. Give promotions to top performers who achieve by violating ethical principles

Types of customers

A market structure groups employees into separate units based on: 1. Types of customers 2. Functions 3. Product lines 4. Geographic areas

less

A matrix structure has __________ horizontal differentiation.

less

A matrix structure has __________ vertical differentiation.

Related diversification

A multidivisional organization structure is especially appropriate for a firm with which strategy? 1. Combination 2. Outsourcing 3. Related diversification 4. Transnational

shares of the company's stock at a predetermined price at some point in the future.

A stock option is a right to buy: 1. shares of the company's stock at the stock's current price. 2. shares of the company's stock at half the stock's current price. 3. shares of the company's stock at a predetermined price at some point in the future. 4. bonds issued by the company.

good / doable

A successful strategy must be __________ and __________.

international

A(n) __________ strategy has centralized authority, and the corporate HQs show the host country GMs how to operate and run the business. Very centralized. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

transnational

A(n) __________ strategy is the hardest to organize, requires centralization and decentralization, has high costs, and strives for cost leadership and diffentiation. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

Principals

According to agency theory, stockholders are: 1. Principals 2. Agents 3. Either of these 4. Neither of these

Corruption

According to the text, a Chinese executive was sentenced to death by Chinese courts for: 1. Opportunistic exploitation 2. Substandard working conditions 3. Environmental degradation 4. Corruption

global standardization

Achieve economies of scale and scope in a(n) __________ strategy. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

Labor

Advanced factor endowments for a geographic area include all of the following EXCEPT: 1. Labor 2. Physical infrastructure 3. Managerial sophistication 4. Technological know-how

Standardization

All of the following are elements of organizational culutre EXCEPT: 1. Standardization 2. Values 3. Norms 4. Socialization

All of these

An accounting scandal is an example of: 1. Information manipulation 2. Ethical problems 3. Agency problems 4. All of these

Easier coordination of strategic activities

An advantage of centralization over decentralization is: 1. Easier coordination of strategic activities 2. Lower bureaucratic costs 3. Greater flexibility

Related diversification

An equitable reward system for division managers is hardest to set up in a firm with which corporate-level strategy? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

All of these

An example of on-the-job consumption is: 1. A lavish corporate headquarters building 2. A very high CEO pay package 3. A corporate jet 4. All of these

organizational ethics are embedded in corporate values of honesty and fairness along with employee responsibility

An integrity-based ethics program is one in which: 1. organizational ethics are embedded in corporate values of honesty and fairness along with employee responsibility 2. organizations seek to avoid legal sanctions and use the threat of detection and punishment to prevent lawbreaking 3. employees act on what is best for themselves as individuals 4. ethics are not clearly laid out for organizational employees

All of these

An organizational culture that emphasizes ethical behavior can be seen in: 1. A code of ethics 2. Values included in the mission statement 3. The behavior of leaders 4. The reward system 5. All of these

executive directors

Another term for insiders is: 1. executive directors 2. non-executive directors

non-executive directors

Another term for oustiders is: 1. executive directors 2. non-executive directors

All of these

As decision makers, managers and executives would make more ethical decisions if they had to: 1. Compare their decisions to the company's code of ethics 2. Announce each decision publicly to the affected parties 3. Reveal each decision to friends, family, and respected others 4. All of these

Transnational

Bartlett and Ghoshal are most closely associated with which strategy? 1. Global standardization 2. Localization 3. Transnational 4. International

Technological know-how

Basic factor endowments for a geographic area include all the following EXCEPT: 1. Technological know-how 2. Land 3. Capital 4. Labor

Taller than a functional structure

Because of the corporate headquarters staff, a multidivisional structure is: 1. Taller than a functional structure 2. Flatter than a functional structure 3. No different from a functional structure

Wholly owned subsidiaries

Besides exporting, which entry mode protects the firm's proprietary technology the best? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

All of these

Blockholders hold so much stock that: 1. They care very much how the company is doing 2. They lack liquidity; can't sell and move quickly 3. They can demand better information 4. All of these

horizontal information processing

Communicating sideways or within the same level of the hierarchy is an example of:

vertical information processing

Communicating up and down the chain of command is an example of:

less

Companies with large-block share holders and institutional owners have __________ diversification.

low

Cost leadership strategies have __________ interdependence of functions.

global standardization

Customers are willing to accept a standard version of the product or service in exchange for the lowest possible price in a(n) __________ strategy. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

Local responsiveness

Differences in customer tastes and preferences; in infrastructure and traditional practices; and in distribution channels create pressures for: 1. Host government demands 2. Cost reductions 3. Location economies 4. Local responsiveness

high

Differentiation strategies have __________ interdependence of functions.

wholly owned subsidiaries

Domestic company decides to do everything by itself in a foreign country 1. exporting 2. licensing 3. franchising 4. joint ventures 5. wholly owned subsidiaries

egoism

Donald believes that ethical behavior is anything that provides the maximum benefit for himself. What ethical system does Donald subscribe to? 1. egoism 2. relativism 3. capitalism 4. utilitarianism

shakeout

During which stage of the Industry Product Life Cycle do industries look to international markets to keep growing sales? 1. embryonic 2. growth 3. shakeout 4. maturity

localization/multidomestic

Each product and/or service is significantly different for each country in a(n) __________ strategy. Very decentralized. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

Unethical

Environmental degradation is: 1. Unethical 2. Always illegal 3. Both of these

All of these

Ethics are widely accepted moral principals that apply to the behavior of: 1. Individuals 2. Professionals 3. Organizations 4. All of these

a code of rules or principles to live by

Ethics are: 1. the vision of the organization 2. a code of rules or principles to live by 3. the mission of the organization 4. the laws in a given country

All of these

Ethics officers do things like: 1. Ethics training 2. Ethics auditing 3. Confidentially investigating complaints from employees 4. All of these

$1 million

Federal law set a cap of __________ on fixed salary as a corporate tax deduction.

Opportunistic exploitation

Forcing one party to change the terms of a long-term contract to favor the other party is called: 1. Information manipulation 2. Opportunistic exploitation 3. Anticompetitive behavior 4. Self-dealing

Flatter

Generally we prefer heirarchies that are: 1. Flatter 2. Taller 3. The height of the hierarchy doesn't matter

Selfish managerial motives

Hewlett-Packard's acquisition of Autonomy, as described in the closing case, illustrates a pitfall of M&A that I named but didn't lecture in the previous module. Which pitfall is it? 1. Poor coordination/integration of operations after the acquisition 2. Inability to achieve operating synergies 3. Inadequate screening of target 4. Heavy debt 5. Selfish managerial motives

Let groups know that everyone will be held responsible for outcomes

How can leaders fix "groupthink"?

Both of these

How do stockholders receive a return on their investment in a company? 1. Dividends 2. Stock price appreciation 3. Both of these 4. None of these

All of these

How does a company make profits grow? 1. Do business in a fast-growing industry 2. Attack competitors and take some of their market share 3. Horizontally integrate 4. Expand either internationally or by vertical integration or diversification 5. All of these

Both of these

How does a multidivisional structure reduce bureaucratic costs? 1. Using self-contained divisions to reduce the need to coordinate some value chain activities across business units 2. Using a separate corporate headquarters staff to better control divisions 3. Both of these

All of these

If CEOs revealed full information to stockholders, what would probably happen? 1. Rivals would learn the firm's strategic secrets. 2. Stockholders wouldn't have time to consume all the information. 3. The problem of information asymmetry would be solved 4. All of these

Transnational

If a firm faces high pressures for cost reductions and high pressures for local responsiveness, what multinational strategy applies? 1. Global standardization 2. Localization 3. Transnational 4. International

Global standardization

If a firm faces high pressures for cost reductions and low pressures for local responsiveness, what multinational strategy applies? (Refer to figure 8.4 if you are stuck). 1. Global standardization 2. Localization 3. Transnational 4. International

Localization

If a firm faces low pressures for cost reductions and high pressures for local responsiveness, what multinational strategy applies? 1. Global standardization 2. Localization 3. Transnational 4. International

International

If a firm faces low pressures for cost reductions and low pressures for local responsiveness, what multinational strategy applies? 1. Global standardization 2. Localization 3. Transnational 4. International

low

If cost pressures are __________, foreign customers find the product or service valuable and are willing and able to pay the price.

low

If pressures for local responsiveness are __________, foreign customers will accept a fairly worldwide version of the product or service and will not demand that it be changed to fit each country's tasts of aesthetics.

exporting

If the home country is the best location for the firm's CCs, __________ is a good choice.

deontological

Ignoring the means and focusing only on the goals violoates __________ reasoning.

2

In a matrix structure, each employee has __________ bosses.

Bosses

In a matrix structure, employees report directly to two: 1. Product lines 2. Bosses 3. Geographic areas 4. Types of customers

All of these

In a multidivisional structure each division: 1. Must meet its own profitability goals 2. Is treated like a profit center 3. Competes with other divisions for resources 4. All of these

Corporate-level strategy

In a multidivisional structure the corporate headquarters staff does mostly: 1. Business-level strategy 2. Corporate-level strategy

Both of these

In a multidivisional structure, duplication of functions (value chain activities) in each division is a(an): 1. Advantage because it reduces the need to coordinate functions across business units 2. Disadvantage because it makes the multidivisional structure expensive to operate 3. Both of these

All value chain activities necessary for the division's business-level strategy

In a multidivisional structure, how many activities of the value chain are placed in each division? 1. At least three primary activities 2. Only support activities 3. All value chain activities necessary for the division's business-level strategy 4. None

Agent

In a parent-babysitter scenario, the babysitter would be the: 1. Principal 2. Agent 3. Either of these 4. Neither of these

owners / managers

In agency theory, the principals are the __________ and the agents are the __________. 1. managers / owners 2. owners / managers 3. managers / Board of Directors 4. Board of Directors / managers

The agents

Information asymmetry is a problem in corporations. Which party has the superior information about the situation? 1. The principals 2. The agents 3. Neither--information asymmetry is not a problem

operational controls

Informational or Operational Controls? -controlling inputs (HRM recruitment) -controlling processes (rules and procedures) -controlling results (annual performance)

informational controls

Informational or Operational Controls? -strategic surveillance -premise control -implementation control -special alert control

Top managers in the company

Inside directors are: 1. Top managers in the company 2. Unnecessary on a board 3. Biased toward the principals 4. All of these

Unrelated diversification

Integrating roles are least likely to be needed in a firm with which corporate-level strategy? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

joint ventures

Legal contract between 2 or more firms from different countries 1. exporting 2. licensing 3. franchising 4. joint ventures 5. wholly owned subsidiaries

short-term

Long-Term or Short-Term? -functional, tactical, and many goals -set by middle and lower managers -negotiated with higher-up managers

long-term

Long-Term or Short-Term? -strategic and few goals -set by CEO or TMT -negotiated with stakeholders

The inducements that stockholders get in exchange for their contributions to the corporation carry more risk than the inducements that other stakeholders get in exchange for their contributions.

Look at Figure 11.1. Stockholders are different from other stakeholders because: 1. The inducements that stockholders get in exchange for their contributions to the corporation carry more risk than the inducements that other stakeholders get in exchange for their contributions. 2. Stockholders cannot be members of any other stakeholder group, but individuals can be members of multiple non-stockholder groups. For example, an employee can also be a customer; a supplier can also be a creditor.

franchising

Market transaction, legal contract to use a firm's brand name or trademark in exchange for fees; FOR SERVICES 1. exporting 2. licensing 3. franchising 4. joint ventures 5. wholly owned subsidiaries

exporting

Market transaction, legal contract, easiest and carries lowest risks 1. exporting 2. licensing 3. franchising 4. joint ventures 5. wholly owned subsidiaries

licensing

Market transaction, legal transaction to make and distribute a firm's product in exchange for royalties; FOR GOODS 1. exporting 2. licensing 3. franchising 4. joint ventures 5. wholly owned subsidiaries

teleological reasoning

Moral argument is placed in a results-oriented or consequentialist terms where the consequences of an act determines its morality. If good outweighs the bad, it is the right thing to do. 1. telelogical reasoning 2. deontological reasoning

deontological reasoning

Moral argument that states the results don't matter. An action is ethical if the decision maker's intentions are good or right or fair or just. 1. telelogical reasoning 2. deontological reasoning

All of these

Moral courage is important for: 1. Executives 2. All levels of managers 3. Employees 4. Individuals 5. All of these

weak

Organizations with a cost leadership strategy typically have __________ organizational culture.

strong

Organizations with a differentiation strategy typically have __________ organizational culture.

strong

Organizations with a global strategy typically have __________ organizational culture.

weak

Organizations with a multidomestic strategy typically have __________ organizational culture.

strong

Organizations with a related diversification strategy typically have __________ organizational culture.

medium to strong

Organizations with a transnational strategy typically have __________ organizational culture.

medium

Organizations with a vertical integration strategy typically have __________ organizational culture.

medium

Organizations with an international strategy typically have __________ organizational culture.

weak

Organizations with an unrelated diversification strategy typically have __________ organizational culture.

Not employed full-time by the company

Outside directors are: 1. Not employed full-time by the company 2. Unnecessary on a board 3. Biased toward the agents 4. All of these

All of these

Principals put governance mechanisms in place to: 1. Control agents 2. Monitor the behavior of agents 3. Align incentives between principals and agents 4. All of these

global standardization

Production processes and value chains are split up across countries with the cheapest and most favorable locations in a(n) __________ strategy. 1. international 2. localization/multidomestic 3. global standardization 4. transnational

internal succession

Promotes continuity, morale, firm-specific knowledge. 1. internal succession 2. external succession

heterogenous team

Promotes innovation and strategic change. 1. heterogeneous team 2. homogeneous team

external succession

Promotes new ideas, board oversight. 1. internal succession 2. external succession

homogeneous team

Promotes teamwork and cohesiveness. 1. heterogeneous team 2. homogeneous team

implementation control

Purpose: assess early stages of strategy rollout Nature: structured, monitor milestones 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

special alert control

Purpose: crisis management Nature: structured, centralized 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

strategic surveillance

Purpose: detect potential O+T for firm Nature: general, unfocused 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

premise control

Purpose: monitor assumptions of a strategic plan Nature: very structured 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

Both of these

Pursuit of profitability and profit growth often leads to corporate behavior that is: 1. Illegal 2. Unethical 3. Both of these 4. None of these

Reengineering

Redesigning business processes to improve performance is called: 1. Strategy implementation 2. Eliminating bureaucratic costs 3. Restructuring 4. Reengineering

Strategic control systems

Refer to Figure 12.1. Which element of the figure provides incentives for employees and feedback about performance? 1. Organizational culture 2. Organizational design 3. Organizational structure 4. Strategic control systems

marketing

Regardless of the MNC strategy, __________ takes on the look of the host country.

high

Related diversification strategies have __________ interdependence of functions.

quantitative

Rewards for cost leadership strategies are __________ based.

qualitative

Rewards for differentiation strategies are __________ based.

qualitative

Rewards for related diversification strategies are __________ based.

quantitative

Rewards for unrelated diversification strategies are __________ based.

quantitative and qualitative

Rewards for vertical integration strategies are __________ based.

Both of these

Self-dealing is: 1. An ethical problem 2. An agency problem 3. Both of these 4. None of these

financial

Setting unrealistic __________ goals is the driver of many ethical transgressions on the part of subordinates.

All of these

Strong corporate governance is supposed to: 1. Make corporations more ethical 2. Suppress self-dealing 3. Minimize information manipulation 4. All of these

McKinsey 7-S Framework

Structure, Strategy, Systems, Style, Staff, Skills, Superordinate goals

TRUE

T/F: A functional organization structure is conducive to building a strong, cohesive organizational culture.

TRUE

T/F: Acconting shenanigans led to the Sarbanes-Oxley Act of 2002.

FALSE (everyone looks to the CEO for leadership)

T/F: CEOs can delegate business ethics and corporate social responsibility to others.

TRUE

T/F: Companies use global expansion to increase profitability and profit growth.

TRUE

T/F: Global expansion increases the size of the market for a firm's goods or services.

TRUE

T/F: Global expansion lowers costs through economies of scale, more productive use of PP&E, and greater bargaining power over suppliers.

TRUE

T/F: In a functional organization structure, the head of each business function (R&D, marketing, materials management, etc.) reports to the CEO.

FALSE

T/F: Insiders are compensated for being on a board.

TRUE

T/F: It's important for rewards to be linked to strategic control systems.

TRUE

T/F: Location economies refer to the economic benefits of performing a value chain activity in the best geographic location.

TRUE

T/F: Members of the board of directors are elected by stockholders

TRUE

T/F: Most blockholders are institutional investors.

TRUE

T/F: Most institutional investors are not blockholders.

TRUE

T/F: Organizational culture acts as a control.

TRUE

T/F: Outsiders are compensated for being on a board.

FALSE

T/F: Stock options are not the reason for inflated executive pay packages; thus, stock options are not controversial.

FALSE

T/F: There's no such thing as governance mechanisms inside a company.

comparative advantage

The Dominican Republic has a _________ _________ over New England in growing bananas.

no material relationship

The SEC requires a majority of directors to be independent, that is, having ________________________ with the listed company.

Stock-based compensation

The best way to motivate the CEO to behave in the stockholders' best interest is: 1. The board of directors 2. Stock-based compensation 3. Financial statements and audits 4. The takeover constraint

related diversification

The corporate-level strategy that creates the highest shareholder value is __________.

The CEO

The dominant member of a corporate board is usually: 1. The CEO 2. The main outside director 3. The board secretary

immoral

The goal of __________ decision making in business is profitability at any price.

operational

The main purpose of _________ controls is to make sure things get done right.

informational

The main purpose of __________ controls is to make sure the right things get done.

Product-team structure

The most recent innovation in organizational structures is the: 1. Product-team structure 2. Geographic structure 3. Functional structure 4. Matrix structure

shareholders

The purpose of governance controls, in America, is to make sure that executives of publicly-owned corporations diligently pursue whose interests? 1. stakeholders 2. stockholders 3. shareholders

Hard to balance

The relationship between profitability and profit growth is: 1. Linear 2. Simple 3. Hard to balance

All of these

The takeover constraint is: 1. What can happen if a firm's market value falls too low 2. Associated with corporate raiders 3. The risk of being taken over by another company 4. All of these

top managers should articulate and model ethical behaviors

To make sure ethical issues are considered in business decisions: 1. companies should eliminate the principal-agent approach 2. companies should have a no-layoff policy 3. top managers should articulate and model ethical behaviors 4. top managers should generously grant stock options

low

Unrelated diversification strategies have __________ interdependence of functions.

Substandard working conditions

Use of sweatshop labor illustrates: 1. Opportunistic exploitation 2. Substandard working conditions 3. Environmental degradation 4. Corruption

medium

Vertical integration strategies have __________ interdependence of functions.

1. cheaper resources 2. expand new markets 3. competitive rivalry

What are the 3 motivations to internationalize?

joint ventures and wholly owned subsidiaries

What are the only 2 foreign entry modes that Multinational Companies are concerned with?

Both of these

What is a stock option? 1. The right to purchase stock at a certain point in the future for a set price 2. The most common pay-for-performance compensation 3. Both of these 4. None of these

firm size

What is the best predictor of CEO compensation?

Exporting

What is the first entry mode for most manufacturers seeking global expansion? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

a stock grant conveys immediate ownership of the stock, whereas a stock option provides merely the right to buy the stock at a certain price at some point in the future

What's the difference between a stock grant and a stock option?

more

When individuals feel personally responsible, they make __________ ethical decisions.

strategic business units

When it comes to multidivisional structures, __________ suits only related diversification. 1. standard multidivisional structure 2. strategic business units 3. holding company

holding company

When it comes to multidivisional structures, __________ suits only unrelated diversification. 1. standard multidivisional structure 2. strategic business units 3. holding company

standard multidivisional structure

When it comes to multidivisional structures, __________ suits vertical integration or related diversification. 1. standard multidivisional structure 2. strategic business units 3. holding company

less

When no one feels personally responsible for an action, we see _________ ethical decisions.

Output control

When the general manager of a division gets a bonus if the division's quarterly OPM exceeds 8%, this is a form of: 1. Standardization 2. Personal control 3. Output control 4. Behavior control

joint ventures and wholly owned subsidiaries

Which 2 foreign entry modes require foreign direct investment (FDI)?

exporting, licensing, and franchising

Which 3 foreign entry modes are market transaction?

increase coordination potential

Which coordination approach? improving vertical and horizontal information processing, adding managers, letting employees make decisions 1. basic management techniques 2. increase coordination potential 3. reduce the need for coordination

basic management techniques

Which coordination approach? managerial hierarchy, standarization of rules and policies, works best with a simple structure 1. basic management techniques 2. increase coordination potential 3. reduce the need for coordination

reduce the need for coordination

Which coordination approach? set up independent units, use up slack resources, multidivisional structure 1. basic management techniques 2. increase coordination potential 3. reduce the need for coordination

Unrelated diversification

Which corporate-level strategy is the easiest and cheapest to manage? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

Related diversification

Which corporate-level strategy needs the strongest organizational culture as a control? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

Related diversification

Which corporate-level strategy requires the least financial controls? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

Related diversification

Which corporate-level strategy requires the most integration between divisions? 1. Vertical integration 2. Related diversification 3. Unrelated diversification

Organizational structure

Which element of the figure involves grouping tasks, functions, and divisions; allocating authority and responsibility; and integration and integrating mechanisms? 1. Organizational culture 2. Organizational design 3. Organizational structure 4. Strategic control systems

Franchising

Which entry mode allows a foreign company to use a trademark? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

Wholly owned subsidiaries

Which entry mode has the highest overall costs? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

Exporting

Which entry mode has the highest transportation costs? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

Licensing

Which entry mode involves royalty payments? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

Joint ventures with local firms

Which entry mode provides the deepest knowledge about the foreign country? 1. Exporting 2. Licensing 3. Franchising 4. Joint ventures 5. Wholly owned subsidiaries

Microsoft's bundling of Internet Explorer to Windows

Which illustrates anticompetitive behavior? 1. Nike's use of sweatshop labor 2. Tobacco companies' suppression of research linking smoking to cancer 3. Microsoft's bundling of Internet Explorer to Windows 4. None of these

Teams

Which integrating mechanism is most complex? 1. Direct contact 2. Liaison roles 3. Teams 4. Tie - all are equally complex

Both of these

Which is true? 1. Stockholders have to place some trust in agents. 2. Some agents are not trustworthy. 3. Both of these

amoral

Which kind of decision maker would look for loopholes that would allow them to do what they want to do? 1. moral 2. immoral 3. amoral

liaison role

Which lateral relations? a person is designated in each unit as the official person for coordinating with other units at the same level of the organization 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

integrator role

Which lateral relations? expensive, full-time role, attends to coordination of two units, not a member of either unit 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

managerial linking role

Which lateral relations? expensive, has more authority than the managers of the units being coordinated 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

matrix structure

Which lateral relations? highest bureaucratic costs, most coordination required; only used if necessary 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

team

Which lateral relations? permanent, used for heavy coordination, more expensive 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

direct contact

Which lateral relations? simplest, fastest, cheapest; individuals involved communicate and coordinate their activities 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

task force

Which lateral relations? temporary, individuals from different deparments meet regularly and at designated time until an assignment is complete; disbanded upon completion 1. direct contact 2. liaison role 3. task force 4. team 5. integrator role 6. managerial linking role 7. matrix structure

holding company

Which multidivisional structure? a company whose primary business is owning a controlling share of stock in other companies 1. standard multidivisional structure 2. strategic business units 3. holding company

strategic business units

Which multidivisional structure? goals are mixed between subjective and objective, and based on corporation, SBU, and divisional performance 1. standard multidivisional structure 2. strategic business units 3. holding company

holding company

Which multidivisional structure? goals are objective, quantifiable, and based on division's performance 1. standard multidivisional structure 2. strategic business units 3. holding company

strategic business units

Which multidivisional structure? groups of divisions with similar products, markets, technology, and/or geographic territories 1. standard multidivisional structure 2. strategic business units 3. holding company

standard multidivisional structure

Which multidivisional structure? heavy coordination, cooperative sharing, rewards are subjective, necessity for tight links among divisions 1. standard multidivisional structure 2. strategic business units 3. holding company

standard multidivisional structure

Which multidivisional structure? major goals are subjective, strategic, and based on corporation's performance; minor goals are objective, financial, and based on division's performance 1. standard multidivisional structure 2. strategic business units 3. holding company

holding company

Which multidivisional structure? small but important corporate HQ staff, instead of businesses and divisions they have a portfolio of investments, divisions are cash cows, no coordination between divisions 1. standard multidivisional structure 2. strategic business units 3. holding company

strategic business units

Which multidivisional structure? tallest structure, adds layer of management, high degree of coordination required inside SBUs, low degree of coordination required across SBUs 1. standard multidivisional structure 2. strategic business units 3. holding company

International

Which multinational strategy is appropriate when environmental pressures are easiest? 1. Global standardization 2. Localization 3. Transnational 4. International

Transnational

Which multinational strategy looks the most like a combination business-level strategy, seeking both cost and differentiation advantages? 1. Global standardization 2. Localization 3. Transnational 4. International

Global standardization

Which multinational strategy looks the most like a cost leadership business-level strategy (described in Module 4)? 1. Global standardization 2. Localization 3. Transnational 4. International

Localization

Which multinational strategy looks the most like a differentiation business-level strategy (described in Module 4) with different product offerings for different countries? 1. Global standardization 2. Localization 3. Transnational 4. International

Localization

Which multinational strategy relies on customization of the product/service to national tastes, traditions, and preferences? 1. Global standardization 2. Localization 3. Transnational 4. International

Global standardization

Which multinational strategy relies on economies of scale, location economies, and standardized products/services? 1. Global standardization 2. Localization 3. Transnational 4. International

Transnational

Which multinational strategy requires a firm to (1) drive down costs, (2) respond to local preferences, and (3) transfer CCs and DCs across countries? 1. Global standardization 2. Localization 3. Transnational 4. International

Transnational

Which multinational strategy works best with a global matrix structure? 1. Global standardization 2. Localization 3. Transnational 4. International

Localization

Which multinational strategy works best with a worldwide area structure? 1. Global standardization 2. Localization 3. Transnational 4. International

Both of these

Which multinational strategy works best with a worldwide product divisional structure? 1. Global standardization 2. International 3. Both of these

The volume of world merchandise trade

Which of the following have risen in the last 50 years? 1. The volume of world merchandise trade 2. Regulations preventing foreign companies from doing business in most countries 3. Average tariffs in advanced nations 4. Barriers to international trade and investment

Develop targets for divisional managers

Which of the following is NOT a responsibility of the Board of Directors? 1. Minimize opportunism on the part of executives 2. Develop targets for divisional managers 3. Monitor corporate strategy decisions and ensure that they are consistent with stockholder interests 4. Hire, fire, and compensate the CEO

Self-dealing

Which of the following is NOT a root cause of unethical behavior? 1. Lack of a personal ethical code that values integrity 2. An organizational culture that emphasizes profits regardless of the costs 3. Self-dealing 4. Unethical leadership

Stock-based compensation schemes for executives can align management and stockholder interests

Which of the following statements is true in the context of stock-based compensation? 1. Critics deny that stock-based compensations motivate managers to improve company performance 2. Stock options usually result in information asymmetry 3. Granting more stock options results in an increase in stockholder equity 4. Stock-based compensation schemes for executives can align management and stockholder interests

An international division

Which organization structure do firms typically adopt when they first expand internationally? 1. An international division 2. A worldwide area structure 3. Worldwide product divisions 4. A global matrix

Both of these

Which stakeholders have mixed feelings about a firm's profitability and profit growth? 1. Suppliers 2. Customers 3. Both of these 4. None of these

All of these

Which stakeholders want profitability and profit growth at a firm? 1. Employees 2. Creditors 3. Stockholders 4. All of these

Multidivisional

Which structure keeps the business-level strategy close to the customer, has high bureaucratic costs, and is hard to achieve economies of scope?

superordinate goals and shared values

Which wheel of the McKinsey 7-S Framework is the organizational culture?

The founder

Who has the greatest imprint on an organization's culture? 1. Managers at every level of hte hierarchy 2. The founder 3. The product champion 4. Functional-level managers mostly

greed

Why would smart bankers take on too much risk? Why would unqualified borrowers be given big mortgages? Why would the credit ratings agencies vouch for junk financial instruments? Why would Wall Street trade complicated securities that they didn't understand?

Information asymmetry

__________ is a situation where an agent has more knowledge about resources he or she is managing than the principal has. 1. Self-dealing 2. Greenmail 3. Information asymmetry 4. On-the-job consumption

golden parachute

a very large severance package for the CEO and/or the top management team; can induce poor-performing executives to leave

utilitarianism

an ethical form of reasoning the goal of society should be to bring about the greatest happiness for the greatest number of people

Information Asymmetry

an imbalance of relevant information such that one party has superior knowledge about what is going on

bonus

an incentive to improve short-term performance; a conditional payment determined by meeting certain pre-determined performance targets

ethics ombudsperson

an official given the responsibility of corporate conscience who hears and investigates ethics complaints and informs top management of potential ethics issues

Product Team Structure

an organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his or her direct subordinates

matrix structure

an organizational structure in which managers try to achieve tight coordination between functions, particularly R&D, production, and marketing

egoism

an unethical form of reasoning that is self-centered, fixated on greed

white knights

another investor who could acquire the target firm instead of the corporate raider; typically pay more and treat management/employees better after the acquisition

amoral

assume ethics does not apply to MGMT decisions, unaware 1. moral 2. immoral 3. amoral

organizational culture

assumptions, beliefs, and shared values that dictate what is normal behavior for everyone who works in a company

transnational

combination of cost leadership and differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

comparator

compares current performance to standard 1. sensor 2. comparator 3. regulator

moral

conform to ethical and professional standards 1. moral 2. immoral 3. amoral

global standardization

cost leadership 1. international 2. localization/multidomestic 3. global standardization 4. transnational

immoral

deliberately contrary to accepted ethical principles 1. moral 2. immoral 3. amoral

sensor

detects current performance 1. sensor 2. comparator 3. regulator

localization/multidomestic

differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

implementation control

establishing and monitoring milestones that must be met if a strategy rollout is to be successful 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

institutional owners

financial institutions such as mutual funds and pension funds that control large-block shareholder positions

operational controls

forms of controls based on pre-set objectives, specific performance targets, measuring performance, negative feedback loops, meant to achieve continuous progress

strategic surveillance

general alertness for any opportunity or threat from the external environment that could affect the internal workings of the firm; more informal 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

comparative advantage

getting access to low-cost factor markets like land, labor, and capital

transnational

high cost pressures, high pressures for geographic differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

global standardization

high cost pressures, low pressures for geographic differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

Board Busyness

holding three or more corporate directorships

poison pill

if one shareholder buys enough stock, other shareholders have the right to buy additional shares at a deep discount; discourages corporate raiders because it dilutes their ownership stake

Related Outsiders

individuals not involved with the firm's day-to-day operations, but who have a relationship with the company

localization/multidomestic

low cost pressures, high pressures for geographic differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

international

low cost pressures, low pressures for geographic differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

regulator

makes appropriate corrections 1. sensor 2. comparator 3. regulator

special alert control

management actions undertaken to thoroughly, and often very rapidly, reconsider a firm's strategy because of a sudden, unexpected event 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

negative feedback loop

measures a performance against a standard; if not up to standard, its goal is to narrow the gap between the performance and the standard

international

not cost leadership or differentiation 1. international 2. localization/multidomestic 3. global standardization 4. transnational

staggered board elections

only allowing directors to serve 3-year terms, so that only 1/3 of the directors are up for election each year; can slow down a potential takeover because corporate raiders cannot change all the board members in a single year

Related Outsiders

prior executives of the firm, family, close associates, friends of insiders, representatives from a firm's largest supplier or buyer, founders or former executives of companies acquired by the firm...these are all examples of:

values

priorities that have considerable importance and meaning to the members of a culture 1. assumptions 2. values 3. norms

Corporate Governance

refers to the processes and mechanisms by which companies are directed and controlled at the top

stock options

rights to buy a certain number of shares of stock at a specified price

norms

standards of behavior 1. assumptions 2. values 3. norms

stock grants

stock given to employee as compensation/part of compensation

self-dealing

taking advantage of an executive position to serve self-interest above the interest of shareholders

integration

the coordination of the separate parts of an organization after division of labor (differentiation)

universalism

the ethical form stating that all people should uphold certain values that society needs to function

horizontal differentiation

the formal division of the organization into subunits

vertical differentiation

the location of decision-making responsibilities within a structure, referring to centralization or decentralization, and also the number of layers in a hierarchy, referring to whether an organizational structure is tall or flat

informational controls

the most complex control processes; done at the highest levels by CEO or TMT; largely subjective

strike price

the price at which the stock or commodity underlying a call option (such as a warrant) or a put option can be purchased (called) or sold (put) during a specified period

socialization

the process by which people learn customs and values of their culture

takeover constraint

the risk of being acquired by another company

premise control

the systematic recognition and analysis of assumptions upon which a strategic plan is based, to determine if those assumptions remain valid in changing circumstances and in light of new information; more formal 1. strategic surveillance 2. premise control 3. implementation control 4. special alert control

greenmail

to prevent a takeover, the target company buys back its own stock from a corporate raider at a substantial premium; in exchange the raider agrees not to acquire the company for a period of time

large-block shareholders (blockholder)

typically own at least 5 percent of a company's issued shares; have enough clout to force companies to make changes; can be any legal entity

assumptions

underlying beliefs that members of a culture take for granted 1. assumptions 2. values 3. norms

underwater

when the stock price is higher than the market price at the future time when the option can be used