ST MGN MT Quizes 3

Christopher is the CEO of a firm that another company is trying to acquire. The success of Christopher's company has declined dramatically over recent years. Christopher knows that the acquisition could help save the shareholders and other stakeholders from the turmoil that would ensue if the company went bankrupt. However, this is Christopher's only line of income for his family. He decides to defend his company from being taken over to help secure his position. Which defense strategy would you recommend be implemented that would benefit all stakeholders?

c. Golden parachute

Target is a company that focuses on reasonable prices for goods that are of high quality, unlike its competitors. Walmart has a focus on cutting costs to save as much money as possible for its customers and has historically not focused on quality. Target has grown due to which strategy?

b. Integrated cost leadership/differentiation strategy

What are the concepts that affect attitudes toward corporate governance in Japan?

b. Obligation, family, consensus

Ross is the newly appointed CEO of an automobile manufacturer. While analyzing the business, he recognizes a competitive advantage his company could achieve if the organizational structure could change very quickly. What is a challenge the new CEO will have to overcome for this change to happen?

b. Organizational inertia

What will happen, in theory, if a company is able to align its strategy and structure?

b. Performance will improve.

Which of the following is NOT a form of executive compensation?

b. Stock performance

All of the following describe reasons that firms should select structures carefully EXCEPT:

b. Structure ensures success.

What are the benefits of having strong corporate governance?

c. It encourages top-level managers to be strategically competitive.

A company's strategy is misguided due to poor reporting on how to enhance performance and maintain a competitive edge. Which aspect of structure is this company missing?

c. Organizational controls

A company is being accused of polluting the environment through its manufacturing process. The company agrees that this is a problem but does not have the expertise or capital to investigate and produce a solution. What would you recommend for this company?

c. Partner horizontally with environmentally conscious organizations

Who are seen as the most significant stakeholders in the United States?

c. Shareholders

The Carter family has been the successful owner of a manufacturing company for more than 50 years. The company has always performed better than expected and was projected to grow for years to come. To help with this growth, the Carters decided to hire a CEO who is not from the family, the first time in its history. After the hire, the performance of the company shifted for the worse, and there is now a separation of ownership and managerial control. What is the best next step?

c. The Carters should appoint a family member as CEO, as research shows that family-owned firms perform better when a member of the family is the CEO.

Corporate governance is:

c. the set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations.

Jordan Brady just purchased an additional 2,000 shares of Singleton Inc., which means he now possesses about 6 percent of the firm's issued shares. This makes Jordan a(n):

d. large-block shareholder.

Over the past three years, Simcom's board of directors has become increasingly concerned about the top-level managers' reliance on external acquisitions, as opposed to internal product innovations. They are discussing the possibility of replacing the CEO. Their decision to exercise corporate governance is primarily motivated by concerns over

d. strategic direction.

Calming Hotels, Inc. has opened two more hotels near the state park. The owner believes that he is not working as efficiently as he did when he had only one hotel. All of the management and maintenance tasks are not completed in a thorough and timely manner. Which of the following could be a cause associated with his company's growth?

b. The growth in sales has caused issues that the previous structure can no longer handle

What is the definition of ownership concentration?

b. The number of large-block shareholders and the total percentage of the firm's shares they own

Melissa is the CEO of her company and has to make a business decision. She is faced with a scenario in which she can please one group of stakeholders, or all of them minimally. What is Melissa's most likely action?

b. To please as many stakeholders as possible, because if stakeholders are not minimally satisfied, they will give support to another company

Why are corporate governance mechanisms important to foreign investors?

b. To protect their investments

Kevin is on the board of directors of a local company and has become concerned with a situation that came to his attention. The board is considering electing the current CEO as chair of the board. Does Kevin have a reason for concern?

b. Yes, as the CEO will not be able to be forced out if his or her performance becomes unacceptable.

A company that has alliances with its suppliers and aids them in becoming modern and sustainable is an example of:

b. a vertical alliance.

All of the following are the result of new changes to the organizational structure at McDonald's EXCEPT:

b. cleaner facilities.

An institution that holds 15 percent of shares in a company in order to be a powerful governance mechanism is an example of a(n):

b. institutional owner.

Managerial opportunism occurs when managers:

b. make decisions to satisfy their own self-interests.

Donna is the retired CEO of a large hospital chain. Although her former employer never did business with MediScan, a medical device manufacturing firm, she has been asked to sit on MediScan's board of directors. In this context, Donna is a(n):

b. outsider.

Shareholder activists are very unhappy with a certain board of directors' recent pattern of decisions. The activists believe they need to be given more decision-making capabilities, have their voices heard, and have the opportunity to nominate another board member. What should the shareholder activists propose?

a. A proxy vote

What is a simple structure?

a. A structure in which the owner-manager makes all major decisions and monitors all activities while the staff serves as an extension of the manager's supervisory authority

What is the market for corporate control?

a. An external governance mechanism that is active when a firm's internal governance mechanisms fail

What is a distributed strategic network?

a. An organizational structure used to manage international cooperative strategies

What is the main reason why bribery is a major issue for governments, especially countries with emerging economies?

a. Bribery tends to limit entrepreneurial activity that could help a country's economy grow.

What should the CEO of a company suggest to another CEO if their companies have a very similar product but do not share the same market?

a. Create a horizontal alliance so that each firm can compete better in its respective market

What are some of the largest factors for a firm when it demands continuous product innovation?

a. Interpreting and taking action on often ambiguous information

Susan is worried that her company's poor performance is reflecting badly on her performance as CEO. She thinks she may lose her position, receive a cut to her salary, or be seen by her peers as incompetent and ineffective. What is another term for Susan's concerns?

a. Managerial employment risk

A company consists of a corporate office and operating divisions. Each operating division represents a separate business or profit center in which the top corporate officer delegates responsibilities for day-to-day operations and business-unit strategy to division managers. What type of structure does this company have?

a. Multidivisional structure

Which organizational structure has been deemed "the best"?

a. None

Which of the following statements about the German two-tiered board structure is true?

a. Proponents of the German structure suggest that it helps prevent corporate wrongdoing and rash decisions by "dictatorial CEOs."

Greg is the CEO of a leading company in the consumer packaged goods industry. He is trying to grow his company for personal gain and wealth. However, Greg sees that his company has an opportunity to break into the chemical industry. He has decided to invest free cash flow into acquiring small chemical companies that have the potential for growth if funded properly. Shareholders are not happy because they are concerned about:

b. overdiversification.

What is organizational structure?

c. A firm's formal reporting relationships, including procedures, controls, authority, and decision-making processes

Which is an alternate definition for "poison pill"?

c. A strategy whereby a company decides to increase the number of overall shares, which will both dilute the hostile company's shares and increase the cost of the company overall, making the company less appealing to take over

Clark has a business and is in need of a functional structure. His strategy is to sell as much as possible and spend the least amount of capital as possible. He wants his employees to be compensated when they can find cost-cutting tactics. What type of functional structure would you recommend Clark implement?

c. Cost leadership

After a recent round of share releases, many individuals bought up shares and reduced the number of large-block shareholders. The company's managers recently had the luxury of performing without much interference or monitoring by their shareholders. The managers are now engaging in risky strategic tactics that may not be in the best interest of shareholders. What type of ownership does this company have?

c. Diffuse ownership

James is a consultant who helps guide businesses in their growth. His current client has previously streamlined its supply chain by acquiring a few of its suppliers. This is an attempt to increase cost efficiency and control. After a few years of growth, the client's performance has plateaued. What is James likely to recommend?

c. Diversification through products or business

A firm that measures its success by performance standards that are previously established is one that has high:

a. financial controls.

A company's structure should be aligned with:

a. its strategy.

What is the definition of a functional structure?

d. A chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas

What is an agency relationship?

d. A situation in which one party delegates decision-making responsibility to a second party for compensation

What is the cooperative form?

d. An M-form structure in which horizontal integration is used to bring about interdivisional cooperation

Which of the following structures is used by Visa credit cards, which coordinates bank affiliated credit cards and transactions in Asia Pacific, Canada, Europe, Latin America and United States regions?

d. Distributed strategic network

Which of the following is a market-based measure?

d. Economic value added

What is one risk companies could be vulnerable to if participating in a horizontal alliance?

d. Government action due to collusion

_____ has _____ success as a hostile takeover defense strategy and _____ effects on shareholder wealth.

d. Greenmail; medium; negative

Acer, the electronics company, is always behind the technological curve. When products are ready to hit the market, the trend has already passed and it continues to lose market share. What change to its organizational structure might you recommend to counteract this trend?

d. Increasing structural flexibility

A company is thinking about changing its organizational structure to gain a competitive edge on a consumer trend. This new consumer behavior is very profitable, and the company sees the revenue that can stem from it. However, there is research stating that the trend may not last forever and could be a "fad." Changing the structure to accommodate this new behavior may have which of the following consequences?

d. Limiting future strategies

A company is part of a keiretsu in Japan. Its leaders are worried about the company's financial viability and ask for help from other members of the keiretsu. Why would other participants of the keiretsu feel the need to aid the failing company?

d. Members of the keiretsu are seen as family, which commands attention and allegiance.

Do German firms face agency problems to the same degree as U.S. firms?

d. No, many German firms are managed and owned by the same individual.

What is the proper order of changing corporate strategy and corporate structure?

d. Simultaneously changing strategy and structure

Which of these terms describes largely subjective criteria intended to verify that a firm is using appropriate strategies for the conditions in the external environment and that the company will maintain a competitive advantage?

d. Strategic controls

Why is it challenging for firms using international strategies to effectively use executive compensation as a mechanism for corporate governance?

d. The diversity and complexity of compensation plans across a corporation

Which of the following statements about the recent global emphasis on corporate governance is NOT true?

d. The recent global emphasis on corporate governance stems mainly from the need to give shareholders more power in organizations.

All of the following are characteristics that account for how functional organizational structures handle the differences in their matching strategies EXCEPT:

d. differentiation.