Question 1

The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.

Accepted Answer

A)   many analysts fail to grasp the gravity of the problems facing a company
B)   sell recommendations generate lower commissions than buy recommendations
C)   the firms for which analysts work may have lucrative investment banking relationships with the firm
D)   analysts are often pressured by their superiors to overlook negative informationE) A) and B)
F) A) and C)

Question 2

In order to have effective board operations,firms need to cultivate engaged and committed boards.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are types of information that a firm is required to disclose except _____________.

Accepted Answer

A)   quarterly and annual filings of financial information
B)   stock trading by insiders
C)   details of new products under development
D)   details of executive compensation packagesE) B) and C)
F) A) and D)

Question 4

Which of the following is the primary drawback of traditional strategic control systems?

Accepted Answer

A)   They are only appropriate when the environment is stable and simple.
B)   Goals and objectives cannot be measured with a high level of certainty.
C)   They lead to complacency.
D)   They lack the flexibility needed to adjust to changes in the environment.E) A) and B)
F) B) and C)

Question 5

Rules and regulations are examples of ______________ and _____________.

Accepted Answer

A)   controls; behaviors
B)   controls; norms
C)   boundaries; behaviors
D)   boundaries; constraintsE) None of the above
F) A) and B)

Question 6

Auditors are appointed by the Securities and Exchange Commission to audit company financial statements.

Accepted Answer

A) True 
 B)False

Question 7

Informational controls involve the balance and alignment of the culture,rewards,and boundaries of a firm.

Accepted Answer

A) True 
 B)False

Question 8

In single loop learning,the assumptions,premises,goals,and strategies of the organization are continuously monitored,tested,and reviewed.

Accepted Answer

A) True 
 B)False

Question 9

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except _____________.

Accepted Answer

A)   the desire to get future auditing contracts from the company
B)   the desire to get consulting work from the company because most audit firms also do consulting work
C)   the fact that auditors are appointed by the firm
D)   the failure of U.S. audit firms to hire technically qualified professionalsE) None of the above
F) B) and C)

Question 10

Rewards systems that reinforce the core values of the organization and contribute to organizational cohesiveness are the least effective type.

Accepted Answer

A) True 
 B)False

Question 11

For young managers who see themselves as free agents,behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

Accepted Answer

A) True 
 B)False

Question 12

In emerging economies and continental Europe,firms often can be characterized by all of the following except _____________.

Accepted Answer

A)   concentrated ownership
B)   low family ownership and control
C)   business group structures
D)   weak legal protection for minority shareholdersE) None of the above
F) C) and D)

Question 13

For a reward system to be effective,it must be perceived as fair and equitable.

Accepted Answer

A) True 
 B)False

Question 14

Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.

Accepted Answer

A)   productive behavior
B)   counterproductive motivation
C)   counterproductive behavior
D)   motivated self-interestE) B) and D)
F) All of the above

Question 15

In choosing sides concerning CEO duality,two schools of thought exist.Which of the following would not be a consideration for the Agency Theory school of thought?

Accepted Answer

A)   CEO duality complicates the issue of CEO succession.
B)   CEO duality reinforces popular doubts about the legitimacy of the system as a whole.
C)   CEO duality can create conflicts of interest that can negatively affect the interests of the shareholders.
D)   Firm performance always is improved under CEO duality.E) A) and C)
F) B) and C)

Question 16

The late Sam Walton,founder of Walmart,used to give pep rallies at local Walmart stores.What purpose did this serve?

Accepted Answer

A)   It was used to remind employees of Walmart rules and regulations.
B)   It helped reinforce and sustain the Walmart culture.
C)   It demonstrated to employees the importance of articulating explicit goals and objectives.
D)   It made the Walmart reward system very explicit.E) A) and B)
F) B) and D)

Question 17

What is meant by the term market for corporate control? How does the market for corporate control act as an external control mechanism?

Accepted Answer

The term "market for corporate control" ...

Question 18

Central to agency theory is the relationship between two primary players,the principals (stockholders)and agents (management).

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements about action plans is true?

Accepted Answer

A)   Action plans, though specific, should permit a degree of autonomy to managers and not be constrained by budgets.
B)   Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.
C)   Action plans should not be constrained by a time frame in order to allow for modification.
D)   Although managers must be held accountable for implementing action plans, this accountability often erodes the managers' motivation to implement the plan on a timely basis.E) C) and D)
F) All of the above

Question 20

Principal-principal (PP)conflicts frequently result in expropriation,which is defined as activities to enrich minority shareholders to assure their support.

Accepted Answer

A) True 
 B)False

Exam 9: Strategic Control and Corporategovernance

Lack of a clear understanding of organizational goals and objectives is a probable cause of _____________.

Correct AnswerverifiedShow Answer

The reasons analyst recommendations are often more optimistic than warranted by an objective analysis of the facts include all of the following except that _____________.

Correct AnswerverifiedShow Answer

The late Sam Walton,founder of Walmart,used to give pep rallies at local Walmart stores.What purpose did this serve?

Correct AnswerverifiedShow Answer

Informational controls involve the balance and alignment of the culture,rewards,and boundaries of a firm.

Correct AnswerverifiedShow Answer

Central to agency theory is the relationship between two primary players,the principals (stockholders)and agents (management).

Correct AnswerverifiedShow Answer

In single loop learning,the assumptions,premises,goals,and strategies of the organization are continuously monitored,tested,and reviewed.

Correct AnswerverifiedShow Answer

For a reward system to be effective,it must be perceived as fair and equitable.

Correct AnswerverifiedShow Answer

Which of the following statements about action plans is true?

Correct AnswerverifiedShow Answer

Rewards systems that reinforce the core values of the organization and contribute to organizational cohesiveness are the least effective type.

Correct AnswerverifiedShow Answer

Which of the following is the primary drawback of traditional strategic control systems?

Correct AnswerverifiedShow Answer

In order to have effective board operations,firms need to cultivate engaged and committed boards.

Correct AnswerverifiedShow Answer

What is meant by the term market for corporate control? How does the market for corporate control act as an external control mechanism?

Correct AnswerAnswered by ExamLex AIThe term "market for corporate control" ...View AnswerShow Answer

In choosing sides concerning CEO duality,two schools of thought exist.Which of the following would not be a consideration for the Agency Theory school of thought?

Correct AnswerverifiedShow Answer

All of the following are types of information that a firm is required to disclose except _____________.

Correct AnswerverifiedShow Answer

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except _____________.

Correct AnswerverifiedShow Answer

Principal-principal (PP)conflicts frequently result in expropriation,which is defined as activities to enrich minority shareholders to assure their support.

Correct AnswerverifiedShow Answer

In emerging economies and continental Europe,firms often can be characterized by all of the following except _____________.

Correct AnswerverifiedShow Answer

Rules and regulations are examples of ______________ and _____________.

Correct AnswerverifiedShow Answer

For young managers who see themselves as free agents,behavioral controls such as rewards and culture can be an effective way to enhance organizational loyalty.

Correct AnswerverifiedShow Answer

Auditors are appointed by the Securities and Exchange Commission to audit company financial statements.

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
The term "market for corporate control" ...
View Answer

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Rules and regulations are examples of __ and _.

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