BPS Ch 10 MC, BPS Ch 5 MC, BPS Ch 6 MC, BPS Ch 7 MC, BPS Ch 8 MC, BPS Ch 9 MC, BPS Ch 11 MC
Corporate governance is all of the following EXCEPT a. Mechanisms used to determine and control the strategic direction and performance of organizations. b. A means to establish and maintain harmony between owners and top managers whose interests may conflict. c. Ensuring that top managers' interests are aligned with the interests of stockholders. d. Resolve conflicts among corporate employees.
b
Corporate governance revolves around the relationship between which two parties? a. shareholders and the board of directors. b. shareholders and managers. c. the board of directors and managers. d. none of the these.
b
Firms with ______ market commonality and _____ resource similarity are direct and mutually acknowledged competitors. a. low; high b. low; low c. high; high d. high; low
c
German executives are not dedicated to the maximization of shareholder value to the degree that is the case for executives in the UK and U.S largely because a. the roles of CEO and chairperson of the board of directors are usually combined. b. large institutional investors control large blocks of stock. c. private shareholders and large institutional investors rarely have large ownership positions in firms. d. of the focus on stewardship-management in German firms rather than the financial performance focus of U.S. firms.
c
The separation between firm ownership and management creates a(n) ____ relationship. a. governance b. control c. agency d. dependent
c
Which of the following reasons would NOT explain the difficulty of determining appropriate executive compensation? a. The decisions made by top-level managers are typically complex and nonroutine. b. An executive's decisions often affect firm performance only over the long run. c. A number of factors intervene between top-level management decisions and firm performance (e.g., unpredictable economic, social, or legal changes). d. The compensation committee may not have comprehensive firm performance data.
d
Boards of directors are now becoming more involved in a. the strategic decision making process. b. selecting new CEOs. c. the firm's tax issues. d. governmental relations.
a
Broadly, the Dodd-Frank Wall Street Reform and Consumer Protection Act seeks to a. align financial institutions' actions with society's interests. b. increase the number of foreign firms listing on US stock exchanges. c. require CEOs to attest to the accuracy of their companies' financial reports. d. increase consumer protection in pharmaceutical products.
a
Competitive rivalry has the most effect on the firm's ____ strategies than the firm's other strategies. a. business-level b. corporate-level c. acquisition d. international
a
Historically, ____ have been at the center of German corporate governance structure. a. banks b. institutional shareholders c. public pension funds d. government agencies
a
The board of directors of CyberScope, Inc., is designing a stock option plan for its CEO that will motivate the CEO to increase the market value of the firm. Consequently, the board is a. setting the option strike price substantially higher than the current stock price. b. insuring that the strike price value of the options can be lowered if the organizational environment becomes more risky. c. having the stock option plan designed by insiders on the board of directors who are familiar with day-to-day operations of the firm. d. consulting accounting advisors to make sure that the plan transfers wealth to the CEO without immediately appearing on the balance sheet of CyberScope.
a
The chief disadvantage of being a first mover is the a. high degree of risk. b. high level of competition in the new marketplace. c. inability to earn above-average returns unless the production process is very efficient. d. difficulty of obtaining new customers.
a
The repurchase at a premium of the target firm's shares that were acquired by the aggressor firm in a hostile takeover in exchange for an agreement that the aggressor will no longer target the company for takeover is called a. greenmail. b. a standstill agreement. c. crossing the palm with silver. d. a poison pill.
a
The top management team at Sierra Infusion is concerned about the declining performance of firms in their industry. The team members are becoming concerned about the security of their jobs at Sierra Infusion. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for a. increased diversification of Sierra Infusion. b. the addition of outside directors to the board. c. increased shareholder participation in decision making. d. greater concentration on Sierra's core industry.
a
Which of the following is TRUE of trends in Japan's corporate governance structure? a. Compensation of CEOs in both private and public companies is being tied more closely to observable performance goals. b. Increased regulation in the financial sector has increased the cost of mounting hostile takeovers. c. Banks' influence over corporations is increasing. d. The gap in compensation between CEOs in public and private companies is increasing.
a
Which pair of firms has the LEAST resource similarity? a. Small, family-owned Italian restaurant; Olive Garden b. Target; Wal-Mart c. HP; Dell d. FedEx; UPS
a
____ and ____ describe the situation in which organizations are direct competitors and are fully aware of the competition. a. High market commonality, high resource similarity b. High market commonality, low resource similarity c. Low market commonality, high resource similarity d. Low market commonality, low resource similarity
a
____ relates to the gains or losses a firm will experience if it attacks a rival or responds to an attack by a rival. a. Motivation b. Awareness c. Responsiveness d. Ability
a
According to the Chapter 10 Opening Case, Apple's _______ recently used that firm's succession plan to appoint Tim Cook CEO following Steve Job's resignation. a. stockholders b. board of directors c. employees d. CEO
b
Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. Which of the following statements is most likely to be TRUE? a. Agency costs at Amos Ball are high. b. If research findings are valid, Amos Ball, Inc., will perform better if a family member is CEO than if an outsider is CEO. c. At Amos Ball, the opportunity for managerial opportunism is high. d. The functions of risk-bearing and decision-making are separate at Amos Ball.
b
As ownership of the corporation is diffused, shareholders' ability to monitor managerial decisions a. increases. b. decreases. c. remains constant. d. is eliminated.
b
Both ____ and ____ affect the awareness and motivation of a firm to undertake actions and responses. a. first-mover advantages, corporate size b. market commonality, resource similarity c. management capabilities, competitive analysis d. speed of management decisions, management actions
b
Canon's desktop copiers and Apple's iPhone are examples of _____________ that are ________ rivalry battles with competitors (Chapter 5 Opening Case). a. incremental innovations; winning b. disruptive innovations; winning c. new products; intensifying d. disruptive innovations; reducing
b
Compared to managers, shareholders prefer a. safer strategies with greater diversification for the firm. b. riskier strategies with more focused diversification for the firm. c. safer strategies with more focused diversification for the firm. d. riskier strategies with greater diversification for the firm.
b
Corporate governance is important to nations because a. shareholders want large stock returns. b. firms seek to invest in nations with national governance standards that are acceptable to them. c. company boards have lobbied for strong governance. d. The United States requires that other nations adopt its governance practices.
b
Generally, a board member who is a source of information about a firm's day-to-day activities is classified as a(an) ____ director. a. lead independent b. inside c. related d. encumbered
b
In contrast to managers' desires, shareholders usually prefer that free cash flows be a. used to diversify the firm. b. returned to them as dividends. c. used to reduce corporate debt. d. re-invested in additional corporate assets.
b
In general, compared with firms which compete in only one market, among firms which face one another in multiple markets there is a. similar competitive rivalry. b. less competitive rivalry. c. more competitive rivalry. d. no competitive rivalry.
b
In the U.S., the fundamental goal of business is to a. ensure customer satisfaction. b. maximize shareholder wealth. c. provide job security. d. generate profits.
b
International Food Services (IFS) has a contract with the Marines to supply meals for its troops in Afghanistan and other foreign assignments. As a means of increasing profits, IFS has used substandard ingredients in these meals and has consistently lied about this practice during quality investigations by the Marines. Who is ultimately responsible for the corporate climate that resulted in this wrongdoing? a. the director of food service for IFS b. the board of directors of IFS c. the employees directly involved in the wrongdoing d. the head of contract services for the Marines
b
James Abercrombie has a thriving consulting firm specializing in training boards of directors in decision-making skills. Mr. Abercrombie has had striking success in reducing conflict and hostility among directors and allowing boards to develop more cohesiveness. Mr. Abercrombie is considering expanding his consulting practice overseas. Which of the following statements is most likely to be TRUE? a. Mr. Abercrombie will have a large market in Japan because the culture highly values consensus decision making. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. c. German firms will not be interested in Mr. Abercrombie's services because the German system of decision-making is based on authority and few conflicts emerge. d. Mr. Abercrombie should find significant need for his services in companies in transitional economies.
b
Managers may decide to invest ____ in products that are not associated with the firm's current lines of business to increase the firm's level of diversification and decrease their employment risk. a. unsubstantial profits b. free cash flows c. marginal profits d. frozen assets
b
On the whole there are more competitive responses to a. strategic actions than to tactical actions. b. tactical actions than to strategic actions. c. buyer pressures than to supplier pressures. d. the demands of the top management team than to industry structural pressures.
b
Ownership concentration is determined by both a. the number of stockholders and the parties they represent. b. the number of stockholders and total percentage of shares they own. c. the number of outside directors and the parties they represent. d. the number of outside directors and total percentage of shares they own.
b
Research suggests that a firm with greater multimarket contact is _______ likely to initiate and attack, and _____ likely to respond aggressively when attacked. a. more; more b. less; more c. less; less d. more; less
b
Research suggests that the activism of institutional investors such as TIAA-CREF and CalPERS a. increases shareholder value significantly. b. may not have a direct effect on firm performance. c. is so aggressive that boards of directors have become overly cautious. d. has weakened the effect of other governance mechanisms.
b
Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. A majority of the directors are concerned that while Mr. Leagreet has been responsible for the firm's earning above-average returns, he has been displaying a tendency toward personal extravagance at the firm's expense. In order to limit Mr. Leagreet's power, the board of directors plans to a. elect an insider as the lead director. b. appoint another individual as chairperson of the board of directors. c. require Mr. Leagreet to personally certify the firm's financial reports. d. reduce the size of the stock option package provided to Mr. Leagreet.
b
The CEO of Skyco, a publicly-traded company that has been earning below-average returns, has been publicly criticized by shareholders for persuading the board of directors to give her interest-free loans, for having the company purchase and furnish a lavish apartment in Paris for her personal use on her twice-yearly trips there, and for excessive stock options. The CEO's behavior may be indication of a. reasonably compensating a CEO. b. a weak board of directors. c. the laxity of institutional investors. d. the difference in risk propensity between owners and managers.
b
The New York Stock Exchange requires that the audit committee be a. available to comment to external analysts. b. headed by outside directors. c. liable for any illegal actions by the top management team. d. made up of CPAs with auditing experience.
b
A competitive action can be one of two types, either ____ or ____. a. aggressive, defensive b. quality-based, cost-based c. strategic, tactical d. market-based, resource-based
c
Agency costs reflect all of the following EXCEPT ____ costs. a. monitoring b. enforcement c. opportunity d. incentive
c
All of the following are consequences of the Sarbanes-Oxley Act EXCEPT a. a decrease in foreign firms listing on U.S. stock exchanges. b. internal auditing scrutiny has improved and there is greater trust in financial reporting. c. an increased number of IPOs (initial public offerings) are expected. d. Section 404 creates excessive costs for firms.
c
All of the following are correct about the Chapter 10 Strategic Focus about Rio Tinto EXCEPT: a. The firm's size and complexity have increased the difficulty of achieving effective corporate governance. b. Large-block stockholders exerted influence on both strategic and operating decisions at the company. c. Rio Tinto recognized by large-block shareholders for its effective use of CEO pay as a corporate governance mechanism. d. Rio Tinto has been criticized for having poor governance because it has given executives generous rewards for hitting unchallenging targets.
c
Which of the following is FALSE about corporate governance in China? a. The Chinese governance system may be tilting towards the Western model. b. With increasing frequency, the compensation of top executives of Chinese companies is closely related to prior and current financial performance of the firm. c. The state still uses direct and/or indirect controls to influence the strategies employed by most firms. d. Firms with higher state ownership tend to have lower market value and more volatility in those values over time.
c
Which of the following is an example of a strategic action? a. a "two movies for the price of one" campaign by Blockbuster Video b. use of product coupons by a local grocer c. entry into the European market by Home Depot d. fare increases by Southwest Airlines
c
Which of the following is an example of a tactical action? a. Wal-Mart's launch of Sam's Club stores. b. Continental Airlines exit from a hub airport in Denver. c. Netflix beginning to offer music DVDs in addition to movies. d. Dell's launch of a new line of high performance, custom-made PCs.
c
Which of the following statements is FALSE? a. First movers tend to take higher risks than second and later movers. b. First movers tend to have significantly higher revenues than second movers. c. First movers have lower survival rates than second and late movers. d. First movers tend to have more organizational slack than later movers.
c
Competition in the global automobile producer industry is characterized by________________ (Chapter 5 Strategic Focus) a. lack of awareness and motivation. b. high market commonality and low resource similarity. c. high market commonality and high resource siimilarity. d. reduced rivalry, especially in the production of fuel efficient cars.
c
Competitive dynamics refers to the a. circumstances in which competitors are aware of the degree of their mutual interdependence resulting from market commonality and resource similarity. b. set of competitive actions and competitive responses the firm takes to build or defend its competitive advantages and to improve its market position. c. total set of actions and responses taken by all firms competing within a market. d. ongoing set of competitive actions and competitive responses between competitors as they maneuver for advantageous market position.
c
Complete the following: In small firms, managers often own a ____ percentage of the firm, which means there is ____ separation between ownership and managerial control. a. small; small b. small; large c. large; small d. large; large
c
Firms with few competitive resources are more likely to a. not respond to competitive actions. b. respond quickly to competitive actions. c. delay responding to competitive actions. d. respond to strategic actions, but not to tactical actions.
c
First movers are a. entrepreneurs who lead in the establishment of new industries. b. firms that are first to exit a declining industry. c. firms that take an initial competitive action. d. individuals who move frequently as employment opportunities change in a locale.
c
Given the demands for greater accountability and improved performance, which of the following is NOT a voluntary change many boards of directors have initiated? a. moving toward having directors from different backgrounds b. strengthening the internal management and accounting control systems c. compensating directors with stock options rather than with fixed remuneration d. establishing and using formal processes to evaluate the board's performance
c
Hilliard Pharmaceuticals and Ahrens Vitamins, Inc., have high market commonality, both geographically and in the market segments in which they compete. Hilliard, the number two firm in the industry, has undertaken a major strategic attack upon Ahrens, the market leader. Which of the following statements is most likely to be TRUE? a. Ahrens will not respond aggressively since this is a strategic move and not a tactical action. b. As the market leader, Ahrens has little to fear from an attack by Hilliard and will not expend organizational slack on a major response. c. Ahrens will respond aggressively because of the high multimarket contact between Hilliard and Ahrens. d. Ahrens will respond after a long delay as the nutrition supplement industry is a slow-cycle industry.
c
If the market for corporate control were efficient as a governance device, then only ____ would be targets for takeovers. a. firms with unethical top executives b. firms earning above-average returns c. poorly-performing firms d. over-valued firms
c
In the Chapter 10 Strategic Focus, all of the following are issues in executive compensation EXCEPT: a. Many CEOs are rewarded for short-term rather than long-term performance. b. CEO pay is frequently not tied to performance. c. The Dodd-Frank Act stipulates that stockholders have no say in the compensation packages of top executives. d. When using stock options as part of executive compensation, it is recommended that those options cannot be exercised for five years to avoid opportunistic behavior by executives.
c
In the U.S., a firm's key stakeholder(s) is(are) the a. government. b. executives. c. shareholders. d. customers.
c
Institutional owners are a. shareholders in the large institutional firms listed on the New York Stock Exchange. b. banks and other lending institutions that have provided major financing to the firm. c. financial institutions such as mutual funds and pension funds that control large-block shareholder positions. d. prevented by the Sarbanes-Oxley Act from owning more than 50% of the stock of any one firm.
c
Intensified rivalry within an industry results in a. increased hiring across the industry. b. increased total revenues across the industry. c. decreased average profitability across the industry. d. increased entries into the industry.
c
Managerial employment risk is the a. risk that managers will behave opportunistically. b. risk undertaken by managers to earn stock options. c. managers' risk of job loss, loss of compensation, and/or loss of reputation. d. risk managers will not find a new top management position if they should be dismissed.
c
One means that is considered to improve the effectiveness of outside directors is a. mandating that all outside directors be drawn from government or academia rather than industry. b. requiring that outside directors be former executives of the firm. c. requiring outside directors to own significant equity stakes in the firm. d. requiring that outside directors be truly objective by having no ownership interest in the firm.
c
Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. What circumstances would most likely have initiated this proposal? a. ATP has been the initiator of several hostile takeovers in the last two years. b. The board has been successful in reducing the percentage of CEO pay that is composed of stock options. c. The CEO/Chairperson of the board has been suspected of opportunistic behavior. d. The firm is traded on the New York Stock Exchange and must change its corporate governance to comply with the NYSE's new rules.
c
The market for corporate control may not be as efficient as previously thought as recent findings suggest that those firms targeted for takeover by active corporate raiders are a. usually on the verge of bankruptcy. b. typically under-performing their industry. c. often performing above their industry averages. d. always outperforming their industry.
c
Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. a. greater experience in a wider range of industries, lessening of managerial employment risk b. the manager frequently invests in the acquired firm which allows him or her extensive profits, the manager can frequently buy excess assets divested by the acquired firm c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities d. the opportunity for higher compensation through firm growth, a reduction in managerial employment risk
d
A hostile takeover defense wherein the target firm makes its stock less attractive to a potential acquirer is called a. greenmail. b. a standstill agreement. c. crossing the palm with silver. d. a poison pill.
d
A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. a. generate free cash flows, reduce the risk of total firm failure b. increase the price of the firm's stock, increase the dividends paid out from free cash flows c. reduce the risk of total firm failure, reduce their total portfolio risk d. reduce their employment risk, increase the company's value
d
Usually, large-block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. a. 5 b. 25 c. 50 d. 75
a
Managers in the U.S. receive ____ compensation than managers in the rest of the world. a. equivalent b. higher c. lower d. more variable
b
A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. This may lead to all of the following EXCEPT a. high executive turnover. b. increased diversification of the firm. c. excessive management compensation. d. reduction in R&D expenditure.
a
Ambrose Bierce, the CEO of DictionAry, has been paid a lump sum amounting to three years' salary because DictionAry has been bought in a hostile takeover by its main competitor. Ambrose received a. a golden parachute. b. a poison pill. c. greenmail. d. a silver handshake.
a
An agency relationship exists when one party delegates a. decision making responsibility to a second party. b. financial responsibility to employees. c. strategy implementation actions to functional managers. d. ownership of a company to a second party.
a
The board of directors of CamCell, Inc., wishes to design a CEO compensation plan that will align the personal interests of the CEO with the interests of the shareholders in long-term firm performance. The board wishes the CEO to take more short-term risks in order to achieve potentially higher long-term returns. Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. CamCell is presently searching for a new CEO. Which of the following statements is true? a. This plan will be very attractive in luring candidates for the CEO position. b. CamCell may have to over-compensate its CEO in order to offset the personal risk a CEO would undertake under this plan. c. Institutional investors disapprove of long-term executive incentive plans and they may sell their blocks of stock in CamCell. d. This type of plan is likely to cause the CEO to underinvest in R&D in order to boost CamCell's long-term profitability.
b
The larger the resources of a firm taking a competitive action compared with the resources of the other firms in the industry, the ____ the response will be of these other firms. a. more fragmented b. slower c. larger d. more tactical
b
The longer the focus of managerial incentive compensation, the greater the ____ top-level managers. a. earnings potential for b. risks borne by c. incentives for d. potential tax burden for
b
The market for corporate control serves as a means of governance when a. the firm is overpriced in the market. b. internal controls have failed. c. the corporation has greatly exceeded performance expectations. d. the top management team's interests and the owners' interests are aligned.
b
US-owned automobile companies have recently (2011) bolstered their fuel efficient offerings in part due to __________________ (Chapter 5 Strategic Focus) a. the high exit barriers in the industry. b. knowing what had to be done and having the motivation to do it which came from the overlapping market commonality and resource similarity between global competitors. c. low market commonality which prevented retaliation from competitors in key markets. d. reduced rivalry in the segment of the industry producing fuel efficient cars.
b
Wal-Mart initially used a focused cost leadership strategy to compete only in small communities by using sophisticated logistics systems and efficient purchasing practices to gain a competitive advantage. The response of local competitors was _______ because they __________. a. rapid; were nimble and flexible b. slow; lacked the ability to marshal resources c. rapid; perceived gains from responding to Wal- Mart's attack d. rapid; had the resources and flexibility compete against Wal-Mart
b
What is the main lesson learned from investor Carl Icahn's bid to purchase Clorox Co.? a. Boards will only defend against takeover attempts if their companies are performing poorly. b. The situation demonstrates two possibilities. First, Clorox was underperforming and the market for corporate control disciplined managers to improve performance. The second possibility was that investors sometimes take over companies that are performing well. c. Boards commonly make mistakes in rejecting takeover bids as shown in the case of Icahn's bid for Clorox Co. d. Clorox was clearly underperforming and Icahn's bid was a good example of the efficiency of the market for corporate control.
b
Which of the following statements is about corporate governance in Germany is FALSE? a. The Vorstand (management board) of a German corporation makes decisions about strategy and management. b. The Vorstand is elected by the firm's employees. c. Employees, union members, and shareholders appoint members to the Aufsichsrat (the supervisory tier of the board). d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock
b
____ is an important influence in Japanese corporate governance structures. a. Innovation b. Consensus c. Competition d. Individualism
b
According to the Chapter 10 Opening Case, all of the following would aspects of corporate governance EXCEPT a. creating value for shareholders b. developing a succession plans for CEOs c. signaling to the global community that a nation's business infrastructure is consistent with global standards d. maximization of CEO compensation
d
According to the Chapter 5 Opening Case, in the video-on-demand market, Apple's iTunes service ________________. a. is shielded from competition by Apple's superior technology b. is an example of an incremental innovation c. has no current rivals d. might be disrupted by Walmart's Vudu video streaming service
d
Agricultural Chemicals, Inc., was the target of a hostile takeover six months ago. The CEO and the top executives successfully fended off the takeover and are concentrating on strategies to improve the performance of the firm. Which of the following is most likely to be TRUE? a. Hostile takeover attempts are so common that they do not reflect negatively on the firm's performance. They are more a function of general market conditions. b. The fact that a hostile takeover has occurred is proof that the firm was under-performing. c. Research shows that once a hostile takeover has been defeated, the firm is safe from other hostile takeover attempts for many years. d. The CEO and top executives should not consider their jobs secure.
d
All of the following are areas covered by the Dodd-Frank Wall Street Reform and Consumer Protection Act EXCEPT a. consumer protection b. CEO compensation c. regulation of derivatives d. retirement accounts
d
All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT a. defense tactics are usually beneficial for the executives of the target firm. b. defense tactics are opposed by institutional investors. c. defense tactics vary in their effectiveness as a defense to takeovers. d. defense tactics make the costs of a takeover lower.
d
Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT a. bonuses. b. long-term incentives such as stock options. c. salary. d. penalties for inadequate firm performance.
d
In Japan, the principal source of the active monitoring of large companies comes from a. boards of directors. b. stock brokerage companies. c. the government. d. banks.
d
In general, firms are more aware of competitors who have similar resources and who a. have low market dependence. b. are late movers. c. have low market commonality. d. compete against the firm in multiple markets.
d
Japanese keiretsu are a. management structures related to total quality management systems. b. company unions, which are a type of governance system. c. the banks owing the largest shares of stock in the firm. d. a system of cross-shareholding among firms.
d
Monitoring by shareholders is usually accomplished through a. management consultants. b. government auditors. c. the firm's top managers. d. the board of directors.
d
Multimarket competition occurs when firms a. sell different products to the same customer. b. have a high level of awareness of their competitors' strategic intent. c. simultaneously enter into an attack strategy. d. compete against each other in several geographic or product markets.
d
Rapid-Built Homes specializes in low-cost prefabricated, modular homes that can be erected in a matter of days anywhere in the country. Rapid-Built focuses on entire subdivisions of homes developed by real estate speculators. ModernModular Homes (ModMod) specializes in modular homes designed by architects which can be built anywhere in the country. The buyers usually build the home themselves from kits on their own lots. ModMod sells fewer than 100 house kits per year. ModMod is run by two professors of architecture as a sideline business. According to the "Framework of Competitive Analysis," we can say that Rapid-Built and ModMod a. are direct mutually-acknowledged competitors. b. have high resource similarity. c. have high market commonality. d. are probably not engaged in intense competitive rivalry.
d
Research suggests that boards of directors perform better if a. the CEO is also the chairperson of the board of directors. b. the board includes employees as voting members. c. the board is homogenous in composition. d. outside directors own significant equity in the organization.
d
The CEO and Chairman of the board of directors Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. The directors are all outsiders, experienced, and run their own successful firms. The CEO/Chair genuinely seeks their greater involvement. What would you recommend? a. Requiring that the directors own stock in the company. b. Establish a formal process to evaluate the board's performance. c. Electing an lead director. d. All of these choices would increase involvement.
d
The governance mechanism most closely connected with deterring unethical behaviors by holding top management accountable for the corporate culture is a. ownership concentration. b. the market for corporate control. c. executive compensation systems. d. the board of directors.
d
The interests of multinational corporations' shareholders may be best served when there is a. a uniform compensation plan for all corporate executives, U.S. and foreign alike. b. executive compensation that is primarily based on long-term performance. c. elevation of foreign executive compensation to U.S. levels. d. a variety of compensation plans for executives of foreign subsidiaries.
d
The ownership of major blocks of stock by institutional investors have resulted in all of the following EXCEPT a. making CEOs more accountable for their performance b. challenges to the decisions of boards c. focusing attention on ineffective boards of directors d. a direct effect on firm performance
d
Which of the following is NOT an internal governance mechanism? a. the board of directors b. ownership concentration c. executive compensation d. the market for corporate control
d
Which of the following is a FALSE statement about corporate governance? a. Governance is used to establish order between parties whose interests may be in conflict. b. Corporate governance mechanisms sometimes fail to monitor and control top managers' decisions. c. Corporate governance mechanisms can be in conflict with one another. d. Corporate governance is best achieved with a board of directors with strong ties to management.
d
Which of the following is the most strategic action by Wal-Mart? a. Aggressive pricing to ensure they are a price leader b. Aggressively pricing toys and electronics during the holiday season c. Aggressively pricing school-related items in the back-to-school season d. Entering a new foreign market
d
