Deck 8: Strategy and Corporate Governance

Question 1

Which of the following comprises part of the nexus of institutions making up corporate governance?

A) criminal law
B) financial market regulation
C) wage regulation
D) none of these

Answer 1

B

Question 2

The debate concerning corporate governance was initiated by:

A) Burt & Means
B) Means & Sparks
C) Berle & Means
D) Bert & Means

Answer 2

C

Question 3

The debate about the nature of the corporation was initially dominated by issues of:

A) organization and management
B) ownership and control
C) plutocrats and proletarians
D) all of these

Answer 3

B

Question 4

How is the problem of ownership and control usually understood?

A) as an inability on the part of the owners to check the management of the corporation
B) as an inability on the part of trade unions to check the management of the corporation
C) as an inability on the part of the managers to manage the corporation
D) all of these

Question 5

What percentage of consolidated share holdings is generally enough to secure control in fragmented shareholding investments in a firm?

A) 1%
B) 4%
C) 10%
D) 40%

Question 6

Which of the following is an influential agenda-setting report on corporate governance?

A) the Lindt Report
B) the Carnegie Report
C) the Bourneville Report
D) the Cadbury report

Question 7

Germany is described as having which corporate governance form?

A) shareholder
B) stakeholder
C) neither shareholder nor stakeholder
D) both shareholder and stakeholder

Question 8

The dominant theory in corporate governance is ______.

A) RBV
B) KBV
C) agency theory
D) Marxist theory

Question 9

Agency theory has which two central actors?

A) manager/owner
B) principal/agent
C) agent/manager
D) agent/artist

Question 10

Which of the following mechanisms are designed to induce managers to maximize stock, and thus shareholder, value?

A) linking of CEO and top management team pay
B) linking of CEO and top management team pay to share performance
C) linking of CEO and top management team pay to innovation
D) all of these 1

Question 11

The cost of monitoring management is known as ______ in agency theory.

A) agency cost
B) agency control
C) agency effort
D) none of these

Question 12

Effective corporate governance is a major factor in building ______.

A) legitimacy
B) profits
C) market share
D) all of these

Question 13

What is a major problem with agency theory?

A) Agency theory is a set of abstractions with little empirical content.
B) Agency theory is not part of the RBV.
C) Agency theory ignores industry dynamics.
D) Agency theory is difficult for institutional investors to apply.

Question 14

What does the premise of agency theory fail to recognize?

A) Shareholdings may be owned by major institutional investors such as pension funds.
B) Owners and managers are not sharply separated and distinct entities because firms can grant managers stock options to avoid the so-called agency problem.
C) Owners can exert control over management by voting them out.
D) all of these

Question 15

According to research by Parker, boards dominated by their CEOs will be ______.

A) stronger
B) weaker
C) more efficient
D) more innovative

Question 16

Which of the following are problems with boards, according to your textbook?

A) ritualism
B) training
C) concentration of powers
D) all of these

Question 17

According to Pettigrew and McNulty, what effect do norms regarding board conduct have?

A) They limit the influence of outsiders to little more than an advisory role.
B) They limit attendance at annual general meetings.
C) They enable creditors to exert influence over board decision-making.
D) They enable part-time board members to exert influence during board meetings.

Question 18

According to Pettigrew and McNulty, part-time non-executive directors typically play what role?

A) giving corporate governance advice to the CEO
B) conducting due diligence on company accounts
C) initiating strategic proposals to management
D) checking strategic proposals put forward by management

Question 19

What does the 'small world' phenomenon mean in relation to corporate governance?

A) globalization
B) tightly networked boardroom social relations
C) that board members come from the same neighbourhood
D) none of these

Question 20

According to Fligstein and Choo, corporate governance systems arise from:

A) government choice
B) the needs of owners of capital to maximize profit
C) political and historical processes
D) stakeholder activism

Question 21

Which of the following is NOT a major model of comparative corporate governance?

A) shareholder capitalism
B) social capitalism
C) stakeholder capitalism
D) state capitalism

Question 22

Which country best exemplifies the shareholder capitalism model?

A) United States
B) Germany
C) Japan
D) China

Question 23

Which country best exemplifies the social democratic stakeholder capitalism model?

A) Austria
B) Germany
C) Japan
D) United Kingdom

Question 24

What is the Mittelstand?

A) an area of Germany known for innovation
B) a German opera
C) the German stock exchange
D) none of these

Question 25

Where would we find Chaebol?

A) Germany
B) Russia
C) South Korea
D) Singapore

Question 26

Where would we expect to find Keiretsu?

A) China
B) India
C) Japan
D) Philippines

Question 27

Keiretsu make up what percentage of listed Japanese companies?

A) 10%
B) 25%
C) 50%
D) 75%

Question 28

What is the name usually given to the rules, values and norms through which governance occurs?

A) code of control
B) code of corporate citizenship
C) the Koranic code
D) code of ethics

Question 29

What does Brunsson find is normal in organizations?

A) cheating
B) lying
C) hypocrisy
D) morality

Question 30

Corporate governance and codes of ethics are intended to ______ organizational members.

A) punish
B) reward
C) discipline
D) motivate

Question 31

What does your textbook think should be the relation between ethics, corporate governance and legal compliance:

A) integrated
B) clearly separate
C) reciprocal
D) none of these

Question 32

According to your textbook, a code of ethics should be developed through:

A) adherence to legal obligations
B) democratic participation by organizational members
C) advice from corporate lawyers
D) robust debate at board level

Question 33

The use of CSR reports by companies to make them 'look good' is often referred to as:

A) brownwashing
B) greenwashing
C) greening
D) browning

Question 34

In CSR performance, what is often measured is/are ______.

A) perceptions rather than actual performance
B) philanthropy rather than actual performance
C) ideals rather than actual performance
D) ideas rather than actual performance

Question 35

A socially responsible firm is expected to report a firm's social performance through:

A) audit
B) social impact analysis
C) social reporting
D) all of these

Question 36

A socially responsible firm should exceed expectations of minimal obligations by:

A) going above and beyond what is legally required in positive ways, in terms of worker and community welfare
B) hiring more people annually
C) increasing salaries
D) all of these

Question 37

According to Banerjee, what should corporate CSR codes include if the firm is to become socially responsible in more than just tokenistic ways?

A) extended liability to directors for corporate breaches of environmental and social laws
B) rights of redress for citizens and affected communities
C) sanctions against corporations for breaching their stated duties
D) all of these

Question 38

According to Banerjee, a socially responsible firm should offer:

A) provisions for stakeholders legally to challenge corporate decisions and legal aid mechanisms to provide public funds to support such challenges
B) community rights to resources, including indigenous people's rights over common property such as forests, fisheries and minerals
C) veto rights over developmental projects and against displacement
D) all of these

Question 39

Martinuzzi and Krumay define the aim of strategic CSR as the integration of CSR into:

A) central business decisions
B) central government policy
C) corporate governance codes of conduct
D) headquarters control of strategic business units