Chapter 2 434

Which of the following statements is true of the Level-5 leadership pyramid?

Each level of leadership builds upon the previous one in the pyramid.

Which of the following statements does the upper-echelons theory support?

Executives interpret situations through the lens of their unique perspectives, shaped by personal circumstances, values, and experiences.

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business?

They erode the implicit trust between the corporate world and society.

Which of the following groups is most likely to be considered a firm's internal stakeholder?

board members

According to the Level-5 leadership pyramid, the Level 2 manager is a(n)

contributing team member.

The board of directors of Best Digital Inc., a company that has a large product mix, has decided to get actively involved in research and development for the next three financial years. Budget for each business unit under the company will be allocated from the headquarters in proportion to its previous performance. The board has also decided to liquidate those units that have failed to perform so far. Which of the following strategies does this scenario best illustrate?

corporate strategy

Widgets Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Widgets Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _____ for the appliance manufacturing company.

external stakeholder

A firm's _____ is likely to fall by the wayside because of unpredictable events and turn into unrealized strategy.

intended strategy

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis?

legitmacy

Larry has been recently promoted to the position of a team lead at an insurance company. This promotion was based on his boss's assessment that Larry is capable of conveying the company's vision and mission to groups. As a result, he can guide groups to superior performance. From this scenario, we can say that Larry is currently at _____ of the Level-5 leadership pyramid.

level 4

According to the upper-echelons theory,

organizational outcomes reflect the values of the top management team.

The annual net profit after taxes for RSL Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit?

shareholders

Within the context of strategic management it is important to understand that black swan events in the past have demonstrated that

stakeholders can affect or be affected by a firm's actions.

_____ is best described as executives' use of power and influence to direct the activities of others when pursuing an organization's goals.

strategic leadership

Which of the following groups will not be considered a company's internal stakeholder?

suppliers