Week 6: Quiz 5

What does an employment contract accomplish?

Common mechanism to achieve desired goals

The balanced scorecard is particularly important in difficult economic times because:

Financial measures may be distorted

Put simply, transfer pricing is a management tool for assigning a "price" to internally transferred goods (or services) in order to simulate the marketplace, thus encouraging managers to make decisions that are in the best interest of the:

Firm as a whole.

What is not a term used for a strategic business unit (SBU)?

Function

The process by which managers at all levels in the firm gain information about the performance of tasks within the firm and judge that performance against pre-established criteria is:

Performance measurement

Companies use the balanced scorecard to describe strategy in detail through the use of a cause-and-effect diagram which is also known as a(n):

Strategy Map.

What is an example of information asymmetry?

The manager generally possesses information that top management does not have.

What is a common characteristic of Strategic business units (SBU) in practice?

They use little or no nonfinancial information

The principal-agent economic model applied to employment contracts includes two of the following management performance aspects:

Uncertainty and lack of observability