Question 1

Which of the following is not a principal/agent relationship?

Accepted Answer

A)  Shareholders/Company CEO 
B)  Shareholders/Company employees 
C)  Company/Hired counsel 
D)  Carmaker/Auto part supplier 
E)  Shareholder/IRS auditors of a company 
A)  Shareholders/Company CEO 
B)  Shareholders/Company employees 
C)  Company/Hired counsel 
D)  Carmaker/Auto part supplier 
E)  Shareholder/IRS auditors of a company

Question 2

How are the coordination problems that exist around the construction of a new home generally solved?

Accepted Answer

A)  Pricing 
B)  Software 
C)  Bureaucracy 
D)  Contractor 
E)  Markets 
A)  Pricing 
B)  Software 
C)  Bureaucracy 
D)  Contractor 
E)  Markets

Question 3

Which of the following is least likely a technique firms can use to mitigate the free-rider problem?

Accepted Answer

A)  Firms can reduce the repeated interactions among team members so that actions depend less on what other members may have done in the past 
B)  Firms can keep teams small 
C)  Firms can allow employees to work together for long periods 
D)  Firms can structure teams so that their members can monitor one another's actions 
E)  Firms can use future periods of interaction and let natural team dynamics of peer pressure and social isolation take place as punishment for team members who have failed to contribute in the past 
A)  Firms can reduce the repeated interactions among team members so that actions depend less on what other members may have done in the past 
B)  Firms can keep teams small 
C)  Firms can allow employees to work together for long periods 
D)  Firms can structure teams so that their members can monitor one another's actions 
E)  Firms can use future periods of interaction and let natural team dynamics of peer pressure and social isolation take place as punishment for team members who have failed to contribute in the past

Question 4

Which of the following terms best describes the principle stating that when allocating effort among a variety of tasks,employees will tend to exert more effort toward those tasks that are rewarded?

Accepted Answer

A)  Effort allocation principle 
B)  Premium principle 
C)  Compensation principle 
D)  Risk-reward principle 
E)  Multitask principle 
A)  Effort allocation principle 
B)  Premium principle 
C)  Compensation principle 
D)  Risk-reward principle 
E)  Multitask principle

Question 5

What term best refers to a wage payment made to an agent that exceeds his opportunity cost of working and discourages the agent from shirking?

Accepted Answer

A)  Living wage 
B)  Efficiency wage 
C)  Minimum wage 
D)  Efficiency payment 
E)  Termination wage 
A)  Living wage 
B)  Efficiency wage 
C)  Minimum wage 
D)  Efficiency payment 
E)  Termination wage

Question 6

Which of the following terms describes a phenomenon whereby individuals ignore their own information about the best course of action and instead simply do what everyone else is doing?

Accepted Answer

A)  Relative performance 
B)  Absolute performance 
C)  Herding 
D)  Risk sharing 
E)  Pay-for-performance 
A)  Relative performance 
B)  Absolute performance 
C)  Herding 
D)  Risk sharing 
E)  Pay-for-performance

Question 7

What term best describes how a firm performs based on a comparison to another firm in its peer set within an industry?

Accepted Answer

A)  Absolute performance 
B)  Comparative performance 
C)  Proportional performance 
D)  Performance measurement 
E)  Relative performance 
A)  Absolute performance 
B)  Comparative performance 
C)  Proportional performance 
D)  Performance measurement 
E)  Relative performance

Question 8

What type of organizational structure is typically used in planning courses for an MBA program?

Accepted Answer

A)  Centralized 
B)  Decentralized 
C)  Authoritarian 
D)  Top-down 
E)  Lottery 
A)  Centralized 
B)  Decentralized 
C)  Authoritarian 
D)  Top-down 
E)  Lottery

Question 9

Which of the following management actions reflects agency problems due to the fact that information held by the agent is hard to observe?

Accepted Answer

A)  Enriching managers themselves even if shareholders do not benefit 
B)  Avoiding risky strategic initiatives even if shareholders view them as "reasonable" 
C)  Paying for services that seem excessive to the shareholders 
D)  Pumping up the firm's short-run performance even if shareholders are harmed in the long-run 
E)  Giving work a mediocre effort so managers do not have to work excessive hours 
A)  Enriching managers themselves even if shareholders do not benefit 
B)  Avoiding risky strategic initiatives even if shareholders view them as "reasonable" 
C)  Paying for services that seem excessive to the shareholders 
D)  Pumping up the firm's short-run performance even if shareholders are harmed in the long-run 
E)  Giving work a mediocre effort so managers do not have to work excessive hours

Which of the following is not a principal/agent relationship?

How are the coordination problems that exist around the construction of a new home generally solved?

Which of the following is least likely a technique firms can use to mitigate the free-rider problem?

Which of the following terms best describes the principle stating that when allocating effort among a variety of tasks,employees will tend to exert more effort toward those tasks that are rewarded?

What term best refers to a wage payment made to an agent that exceeds his opportunity cost of working and discourages the agent from shirking?

Which of the following terms describes a phenomenon whereby individuals ignore their own information about the best course of action and instead simply do what everyone else is doing?

What term best describes how a firm performs based on a comparison to another firm in its peer set within an industry?

What type of organizational structure is typically used in planning courses for an MBA program?

Which of the following management actions reflects agency problems due to the fact that information held by the agent is hard to observe?

The Power of Principles: an Historical Perspective

Economies of Scale and Scope

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Strategy and Structure

Environment, power, and Culture

Filters

Exam 12: Performance Measurement and Incentives

Which of the following is not a principal/agent relationship?

How are the coordination problems that exist around the construction of a new home generally solved?

Which of the following is least likely a technique firms can use to mitigate the free-rider problem?

Which of the following terms best describes the principle stating that when allocating effort among a variety of tasks,employees will tend to exert more effort toward those tasks that are rewarded?

What term best refers to a wage payment made to an agent that exceeds his opportunity cost of working and discourages the agent from shirking?

Which of the following terms describes a phenomenon whereby individuals ignore their own information about the best course of action and instead simply do what everyone else is doing?

What term best describes how a firm performs based on a comparison to another firm in its peer set within an industry?

What type of organizational structure is typically used in planning courses for an MBA program?

Which of the following management actions reflects agency problems due to the fact that information held by the agent is hard to observe?

The Power of Principles: an Historical Perspective

Economies of Scale and Scope

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Strategy and Structure

Environment, power, and Culture

Filters