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Exam 9: Strategic Control and Corporate Governance

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Question 21

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Conditions that must be met for principal-principal (PP) conflicts to occur include all of the following except

A) a dominant owner or group of owners who have interests that are distinct from minority shareholders.
B) legislation that protects the interests of minority shareholders.
C) a motivation for the controlling shareholders to exercise their dominant position to their advantage.
D) few formal (such as legislation or regulatory bodies) or informal constraints that discourage or prevent the controlling shareholders from exploiting their advantageous positions.

E) All of the above
F) A) and B)

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Question 22

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Single-loop learning,according to Chris Argyris,is most appropriate when the environment is ___________,goals and objective can be measured with a _________ of certainty,and there is ________ need for complex measures of performance.

A) stable; high level; little
B) unstable; low level; great
C) stable; low level; great
D) unstable; high level; little

E) B) and C)
F) A) and C)

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Question 23

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The risk of being acquired by hostile raiders is often referred to as the takeover constraint.

For firms competing in highly unstable and turbulent industries,traditional strategic controls are most appropriate.

According to the Business Roundtable,representing the largest U.S.corporations,the most important quality of a good board of directors is that they do not get involved in critiquing company strategies.

By takeover constraint,we mean

All organizations place the same emphasis on each type of control.

Sales quotas,operating budgets,and production schedules are examples of traditional controls.

Reward systems need to be aligned clearly with the organizational goals and objectives,as demonstrated by Marks and Spencer and their sustainability efforts.

Boundaries and constraints are just used to maintain order in an organization and have little effect on the strategic priorities of the organization.

Informational control is primarily concerned with whether or not the organization is doing the right things.

Rule-based controls are least appropriate in organizations with which one of the following characteristics?

Continuous monitoring is associated with many benefits including that changes in the competitive environment can be identified early,giving the organization better ability to respond accordingly.

Agency theory is concerned with the problem that arises when it is difficult or inexpensive for the principal to verify what the agent is actually doing.

In emerging economies and continental Europe,principal-principal conflicts are frequent.These consist of conflicts between controlling shareholders and executives.

Short-term objectives and action plans are types of boundaries that channel the efforts of employees toward goal accomplishment.

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

The collective sum of individual behaviors of the employees of an organization generally results in what is best for the organization; thus,individual rationality assures organizational rationality.

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

Which of the following is not one of the characteristics of reward and incentive systems?