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MGMT 468 Chp 9
Terms in this set (94)
The two central aspects of strategic control are ______ control and ______ control.
The ______ approach to strategic control is sequential.
Which of the following statements are true about the traditional approach to strategic control?
It is also referred to as "single-loop" learning.
It is often tied to an annual planning cycle.
It is based on a feedback loop comparing performance to a predetermined goal.
The traditional approach is the most appropriate approach when ______.
the objectives can be measured, goals are simple, and the environment is stable
Informational and behavioral control are two types of control in the ______ approach to strategic control.
Informational control and behavioral control are two central aspects of ______ control.
Which of the following are part of the traditional approach sequence? (Check all that apply.)
Strategies are formulated and goals are set by top management.
Performance is measured against the predetermined set of goals.
Strategies are implemented.
In the traditional approach to strategic control, control is based on ______.
comparing actual performance to a predetermined goal
Which of the following statements regarding informational control are correct? (Check all that apply.)
It deals with internal environment and the external strategic context.
It considers assumptions that create the foundation for an organization's strategy.
It reviews goal and strategies in the context of the current environment.
Which of the following are appropriate conditions for using the traditional approach to strategic control? (Check all that apply.)
Goals and objectives can be measured with certainty.
The environment is relatively simple.
The environment is stable.
The two types of strategic control in the contemporary approach are ______.
informational and behavioral
The role of ______ control is to challenge the organization's beliefs and goals and to continuously monitor, test, and review strategies.
Effective contemporary controls systems focus on ______.
constantly changing information
Culture, rewards, and boundaries are key "levers" of ______ controls.
The control system that addresses the assumptions that form the foundation of the organization is ______ control.
In today's complex competitive environment with weakened employee loyalties, the two levers of behavioral control that are the most effective are culture and
Blank 1: rewards or reward
The control process that continuously updates and challenges assumptions that underlie the organization's strategy is ______ control.
The set of unwritten standards of acceptable behavior in an organization is called organizational .
Which of the following are characteristics of a contemporary control system? (Check all that apply.)
The data generated are best interpreted and discussed in face-to-face meetings.
The control system should spur ongoing discussion about underlying data and assumptions.
The focus is on information that changes and may have strategic importance.
True or false: A strong culture can be a primary source of competitive advantage.
The three elements of behavioral control are culture, rewards, and ______.
Which of the following is an effective technique for maintaining organizational culture?
What are reasons for emphasizing culture and rewards in a system of behavior controls? (Check all that apply.)
The competitive environment is complex and unpredictable.
Organizations are downsizing and faced with an increasing need to coordinate across boundaries.
There are no long-term contracts between the organization and its key employees.
A system of shared values and beliefs that shape a company's people, organizational structure, and control systems to produce behavioral norms is ______.
Which of the following statements are true regarding the role that culture plays? (Check all that apply.)
Employees who buy into a positive culture are less likely to exhibit selfish behavior.
A strong culture can be more effective than the traditional rewards-and-threats system.
Culture can lead to employees who are more engaged in their job and in the company as a whole.
Which of the following statements about creating and maintaining a strong organizational culture are true? (Check all that apply.)
A strong commitment by leaders is critical to maintaining a strong organizational culture.
A strong organizational culture takes time to cultivate.
Storytelling is a way to reinforce an organization's culture.
Which of the following are reasons incentives can go wrong in a company? (Check all that apply.)
They may cause issues between organizational departments due to differing goals.
They may lead to a dysfunctional outcome if the reward is too closely tied to an individual's work.
They can demotivate employees if compensation is not directly related to their actions.
Enhanced cohesion and reinforcement of basic core values are part of an effective ______ system.
A system that focuses and motivates employee efforts on high-priority tasks is called a ______ system.
Which of the following would be the most likely to motivate employees to perform well on the job?
Being given the opportunity to lead a project
Boundaries and constraints play a valuable role in focusing ______.
a company's strategic priorities
Which of the following result from differences in reward systems across organizational units? (Check all that apply.)
The hoarding of information
Employees who work at cross-purposes
A loss of cohesiveness
Which one of the following is an attribute of effective short-term objectives?
Be specific and measurable
Which of the following are characteristics of an effective reward system? (Check all that apply.)
Enhances cohesion and commitment to goals
Perceived as "fair and equitable"
Reinforces basic core values.
For stable organizations with a largely unskilled workforce and a need to provide a consistent product or service, -based controls are the most important.
Policies that specify who gets praised and recognized and why is called the system.
The type of behavior control used in an organization is often based on internal and ______ controls.
Which of the following statements about rewards systems are correct? (Check all that apply.)
Employees feel rewarded when given new responsibilities.
Employees respond well to managerial praise and financial rewards.
Employees often respond better over the long-term to nonfinancial motivators.
Which of the following statements regarding controls in a bureaucratic organization are correct? (Check all that apply.)
Controls depend on employees following a formalized set of rules and regulations.
Employees are expected to complete their tasks in a specific manner.
Rules that specify behaviors that are acceptable and unacceptable are called ______.
boundaries and constraints
Managers can reduce the need for organizational rules and regulations by hiring the right people, providing training, developing management role models, and creating ______ systems.
Which of the following statements regarding short-term objectives and actions plans are true? (Check all that apply.)
Action plans play a critical role in implementing strategies.
Organizations enhance their performance when objectives are difficult, yet achievable.
Short-term objectives should be specific, measurable, attainable, and challenging.
______ governance is when shareholders, management, and the board of directors work together to align their goals.
Rule-based controls are most appropriate for organizations that have which of the following? (Check all that apply.)
Stable and predictable environments
Great need for consistency in product and services
Unskilled and interchangeable employees
Which of the following is the most likely to lead to superior financial performance of a company?
Good corporate governance
Managers consider both external and internal factors to determine how to achieve appropriate control over the individuals who work for the organization.
In a(n) ______, shareholders have limited liability as well as limited involvement with the businesses' operation.
In a bureaucratic organization, ______.
desired behaviors can be specified in a detailed manner
Agency theory is concerned with ______.
verifying agents' performance
Which of the following are steps that organizations can take to evolve the organization from boundaries to rewards and culture? (Check all that apply.)
Hire the right people.
Make training an important part of the organization.
Develop a reward system that is clearly aligned with organizational goals.
Shareholder activism and an involved and committed board of directors are mechanisms of ______.
The relationship between various participants, including shareholders and management, in determining the direction and performance of corporations is called ______.
Which of the following has a fiduciary duty to ensure that the company is run consistently with the long-term interests of the business owners or shareholders and to act as an intermediary between the shareholders and management?
The board of directors
Which of the following statements are true regarding the role that good corporate governance plays on the decision to invest in companies? (Check all that apply.)
Positive governance practices often lead to superior financial performance.
The premium is larger for firms in countries where corporate governance is highly valued.
Major institutions often choose to purchase stock of companies known for their good corporate governance practices.
Which of the following are attributes of an effective board of directors? (Check all that apply.)
Directors rigorously evaluate senior managers, the company's strategic plan, and new senior management hires.
Directors are actively involved.
Directors provide strong oversight.
A mechanism created to allow for different parties to contribute capital, expertise, and labor for the benefit of each party is called a(n) _______.
Which of the following actions can have a positive influence on the dynamics of the boards of directors?
Choosing directors who have time to dedicate to their duties on the board
Bringing in the right expertise on the board
______ deals with the relationship between principals (owners) and their agents (managers/employees).
Actions by large shareholders to protect their interests when they feel they are not receiving value maximization is called ______.
Two means of monitoring the behavior of managers through corporate governance mechanisms are through a committed board of directors and ______.
Which of the following are ways that a board of directors can incentivize managers to make decisions that are in the company's shareholders' interest? (Check all that apply.)
Through structured salaries, bonuses, and stock options to provide rewards for superior performance over a long-term horizon
By dismissing poor performing CEOs and other senior managers
By requiring CEOs become substantial owners of company stock
The board of directors functions as a "go between" for the ______.
owners and controllers of the corporation
The leadership structure where the CEO acts as both the chief executive officer and the chair of the board of directors is called CEO ______.
Which of the following duties are primary responsibilities of a board of directors? (Check all that apply.)
Evaluate senior managers' performance.
Take control of the management succession process.
Rigorously scrutinize strategic plans.
Which of the following are components of the unity-of-command perspective on CEO duality? (Check all that apply.)
A CEO can act more efficiently and effectively when holding both positions.
A CEO has a clear focus on both objectives and operations.
Confusion and conflict is eliminated between the CEO and chairman.
True or false: Research of boards of directors shows that simple restrictions, such as a requirement that a majority of the board members be outside directors, is enough to make the operations of the board effective.
Which of the following are ways in which institutional investors are engaging in shareholder activism?
They act aggressively to protect and enhance their investments.
Which of the following is the agency theory perspective on CEO duality?
There should be a separation of power between the CEO and the chairman.
True or false: A corporation's board of directors has little control over the amount bonuses and stock options that the corporation's CEO receives for his or her performance.
Which of the following are external governance control mechanisms? (Check all that apply.)
market for corporate control
banks and analysts
Which of the following statements about CEO duality is true?
It is one of the most controversial issues in corporate governance.
Which of the following are examples of how managers can exhibit opportunistic behavior? (Check all that apply.)
Engaging in on-the-job consumption by spending large sums on executive luxuries
Taking on excessive product-market diversification through corporate acquisitions
True or false: Unity-of-command advocates believe that a CEO can act more efficiently and effectively when holding the positions both of CEO and chairman of the board.
______ is one external mechanism that provides a solution to opportunistic behavior by managers.
The market for corporate control
The risk of being acquired by a hostile raider is often referred to as the ______ and deters opportunistic behavior by management.
The theory perspective on CEO duality is based on the separation of power.
Which of the following statements about external auditors are true? (Check all that apply.)
They often have lucrative consulting contracts with the firms they audit.
They often fail to catch accounting irregularities.
Government regulatory bodies, auditors, public activists, and the media are all ______ governance control mechanisms.
______ are external control mechanisms that ensure that the firm's finances are in order and loan covenants are being followed.
Banks and analysts
One form of opportunistic behavior that managers exhibit is engaging in excessive product-market , which reduces their employment risk.
Which of the following provides external oversight of companies?
government regulatory bodies
Which of the following is an external control mechanism in which shareholders dissatisfied with a firm's management sell their shares?
Market for corporate control
Which of the following has an indirect role as an external control mechanism?
The takeover constraint refers to the risk of being acquired by which of the following?
A hostile raider
Principal—principal conflicts are conflicts between controlling shareholders and ________ shareholders.
______ are independent, certified professionals who verify the firm's books of accounts to unearth financial irregularities and ensure good accounting practices.
Which of the following is the best description of the expropriation of minority shareholders?
When controlling shareholders have personal gains that exceed their losses from their firm's lowered performance.
Which of the following statements about stock analysts are true? (Check all that apply.)
They conduct ongoing studies of the firms they follow.
They are often more optimistic than they should be and do not often make "sell" recommendations.
They make recommendations to their clients to buy, hold, or sell.
Public corporations must disclose financial information to government bodies such as the Securities and Exchange Commission.
Business groups are particularly dominant in which of the following?
In emerging economies
An example of the role that public activists have played as an external control mechanism is pressuring companies to refuse to deal in valuable minerals known as minerals, which rebel groups trade to buy weapons.
Conflicts between controlling shareholders and minority shareholders are called principal-______ conflicts.
When controlling shareholders conduct activities that enrich the controlling shareholders at the expense of the minority shareholders, they are engaging in ______.
expropriation of minority shareholders
A set of firms that, though legally independent, are bound together by informal and formal ties and are accustomed to taking coordinated action are known as ______.
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