BUS 498 Final P3 (11,12)

Which of the following real-world examples best exemplifies a shared value creation framework? Uber's use of technology to prevent law enforcement from monitoring its drivers GE's strategy of developing multiple products for the same purpose and altering its products to suit the culture of different countries HP's decision to ask its CEO, Mark Hurd, to resign after he was accused of sexual harassment GE's Ecomagination strategy that focuses on providing cleaner and efficient sources of energy while generating billions in revenues

GE's ecomagination strategy that focuses on providing cleaner and efficient sources of energy while generating billions in revenues

In terms of the key features of organic organizations, which of the following firms is most likely to have an organic structure? Merton Inc., a retail chain, which implements a rigid division of labor Meridian Inc.., a clothing company, which aims to produce clothes at lower prices Icebox, a software development firm, which focuses on building innovative productsCorrect Underscore, a publishing company, where decision power is concentrated at the top

Icebox, a software development firm, which focuses on building innovative products

Why did the San Francisco's Metro Transit Authority (MTA) order Uber to cease and desist?

MTA argued that uber was being a taxi service without proper licensing

How is the characteristic of separation of legal ownership and management control disadvantageous to publicly traded companies?

Managers tasked to make decisions on behalf of shareholders might pursue their personal interests

MegaValu Inc. is a publicly traded company that specializes in manufacturing consumer electronics. Which of the following best exemplifies the implementation of a shared value creation framework at MegaValu Inc.? MegaValu's employees work in shifts to adhere to the 8-hour work day rule. MegaValu's products are developed in a high-tech R&D facility based in Texas. MegaValu uses recycled materials to create its commercially successful products. MegaValu has a customer reward program for its most loyal customers.

MegaValu uses recycled materials to create it commercially successful products

In __________, the stockholders are the legal owners of the company who delegate decision-making authority to professional managers.

Public Stock Companies

Which of the following is true of public stock companies? There exists an implicit contract based on trust between society and the public stock company. Public stock companies are not required to disclose financial statements. The public stock company is not an important institutional arrangement in developing economies. Society expects public stock companies to add value to society by making profits for shareholders.

There exists an implicit contract based on trust between society and the public stock company

Which of the following descriptions best exemplifies adverse selection? A manager cannot ascertain the contributions of individual team members in team production. A research scientist uses the organization's resources to conduct personal research. An employee spends time on social networking sites during work hours. An interview candidate lists his qualifications in chronological order.

a managger cannot ascertain the contributions of individual team members in team production

In terms of agency theory, which of the following is an agency problem? shared value adverse selection corporate social responsibility stakeholder strategy

adverse selection it occurs when info asymmetry increases chance of selecting inferior alternatives

Which of the following is one of the implications of information asymmetry between principals and agents? The information comes to all stakeholders simultaneously, which is disadvantageous to the stockholders. Principals tend to be better informed than the agents, and thus will avoid delegating decision-making authority to their agents. Outsiders, such as shareholders, are the first to learn about important developments, before the information is released to the employees. Agents can pass on the information to select principals who can trade stocks based on this information.

agents can pass on info to select principles who can trade stocks based on this info

In public stock companies, inside directors

are appointed by shareholders to provide the board with necessary company information.

A leveraged buyout (LBO)

changes the ownership structure of a company from public to private.

recommended guideline for the composition of a board of directors to implement corporate governance?

close to 2/3s of board of directors should consist of outside directors

What, according to Greg Smith, was the cause for the change in ethical climate within Goldman Sachs?

company went public and began looking at clients and itself as counter parties to a transaction

Which of the following is a benefit of a high degree of formalization in an organization?

consistent results

According to agency theory,

corporations are viewed as a set of legal contracts between different parties

Inkwell is a pen manufacturing company based in Massachusetts. Inkwell's main area of operation is Massachusetts, and it has a stronghold over the market. It employs a robust production system, which helps it sell pens at exceptionally low prices. In this scenario, which of the following strategies is Inkwell most likely using? ambidextrous strategy differentiation strategy integration strategy cost-leadership strategyCorrect

cost leadership strat

Strategic business units (SBUs) in a company that uses an unrelated-diversification strategy are in direct competition with each other because

each SBU is evaluated as a standalone, profit and loss center

Which of the following factors has led to a shift toward open innovation? the decreasing supply and mobility of skilled workers the decreasing availability of external options to commercialize ideas the exponential growth of venture capitalCorrect the increasing capability of internal suppliers

exponential growth of venture capital

A tightly coupled system of strategy and structure is prone to break apart when

external and internal shifts put pressure on the system

Why was Yahoo's CEO, Jerry Yang, forced out in 2008?

failed to implement necessary strategic changes after yyahoo lost its competive advantage

Sam Walton was responsible for Walmart's cost-leadership strategy that continues to guide the company to this day. His influence on the organization's culture is best described as

founder imprinting

In order to implement a cost-leadership strategy effectively, a _________ structure is preferred in a firm.

functional and mechanistic

Which of the following is a characteristic of a mechanistic organization? low formalization flat hierarchy decentralization high degree of specialization

high degree of specialization

_____ seek to define and direct employee behavior through a set of codified rules and standard procedures.

input controls

Which of the following exemplifies the organic nature of W. L. Gore's organizational structure? Its employees exhibit lower levels of entrepreneurial behaviors and innovation. It avoids the use of virtual teams. It has no formal chain of command or standard operating procedures.Correct Its employees are not allowed to review each other during performance appraisals.

it has no formal chain of command or standard operating procedures

Which of the following is a shortcoming of the matrix structure?

its implementation is difficult due to significant organizational complexity and increased admin costs

One disadvantage of a functional structure is that it

lacks effective communication channels across departments

Shane owns shares of Vegan Pizza Inc., a food and beverages company. The company's financial situation takes a turn for the worse and ends up in severe debt. Despite owning shares of Vegan Pizza, Shane is not responsible for bringing more money into the company to get it out of its debt. Which characteristic of public stock companies does this scenario best exemplify?

limited liability for investors

Why is strategy implementation referred to as the "graveyard of strategy"?

managers fail to implement a chose strategy successfully despite extensive analyysis of bus enviornment

Why do firms' strategies often follow their structures instead of the other way around?

managers tend to consider strats that do not change existing organizational structures

Which of the following is instrumental in creating a tightly coupled system of strategy and structure in an organization?

managers that achieve a mastery of the firms current environment

Since W. L. Gore's core competency is innovation, a(n) ________ would most likely be detrimental to its efforts.

mechanistic structure

Alexander works for Salamon Telecommunications Inc., a large corporation. His work requires him to travel extensively and, as a result, he spends much time working remotely. Taking advantage of the situation, Alexander often works on personal projects instead of company projects. Salamon Telecommunications has difficulty checking on Alexander's work because he has no supervision in many of the places where he travels. This scenario exemplifies a(n)

moral hazard

Over time, 3M has relied on the results-only-work-environment (ROWE) framework and has morphed into a highly science-driven innovation company. At 3M, employees are encouraged to spend 15 percent of their time on projects of their own choosing. If any of these projects look promising, 3M provides financing through an internal venture-capital fund and other resources to further develop their commercial potential. This real-world scenario best illustrates

output controls which seek to guide employee behavior by defining expeted results (outputs) but leave the means to those results open to individuals

Which of the following best indicates that W. L. Gore & Associates has an informal and decentralized organizational structure? It prevents its associates from becoming shareholders in the company. It determines its employees' levels of compensation on the basis of their boss's evaluations. It is consistently ranked among the top 100 of the best companies to work for. It prefers face-to-face communication over e-mail and does not have an organizational chart.

prefers face to face communication over email and does not have an organizational chart

Which of the following is a problem that corporate governance seeks to address?

principal agent problem which can occur any time an agent performs activities on behalf of a principal. This problem can arise whenever a principal delegates decision making to agents with expectation they will act in the principles best interest

Which of the following best exemplifies information asymmetry at Amber Narwhal Inc., a publicly traded software development firm? The lower-level employees at Amber Narwhal are often unaware of what happens in boardroom meetings. The new CEO of Amber Narwhal implements a new strategy that focuses on social initiatives. The shareholders of Amber Narwhal subscribe to Milton Friedman's views of capitalism, while the agents subscribe to Michael Porter's views. The board of directors at Amber Narwhal makes significant structural changes to the organization and waits several weeks before issuing a press release about it.

the board make significant structural changes and waits several weeks before issuing a press release about it

One of the major differences between inside directors and outside directors of a company is that outside directors are more likely to be full-time professionals at the company. provide the board with information regarding the company's performance. watch out for the interests of the shareholders of the company. align interests with the management and CEO of the company.

watch out for the interests of the shareholders of the company

Michael Porter is in favor of the shared value creation framework because he believes that it

will not only allow companies to gain and sustain a competitive advantage but will reshape capitalism and its relationship to society