Question 1

To diagnose the sources of a firm's poor financial performance,it is useful to:

Accepted Answer

A) Focus on the firm's cash flow statement rather than its income statement and balance sheet 
B) Concentrate on sales growth and market share rather than profit data 
C) Adopt a forward-looking approach through analyzing share price performance rather than looking at backward-looking accounting statements 
D) Disaggregate overall return on capital into its component items 
A) Focus on the firm's cash flow statement rather than its income statement and balance sheet 
B) Concentrate on sales growth and market share rather than profit data 
C) Adopt a forward-looking approach through analyzing share price performance rather than looking at backward-looking accounting statements 
D) Disaggregate overall return on capital into its component items D

Question 2

The Balanced Scorecard is a technique of performance management that establishes and monitors four dimensions of performance:

Accepted Answer

A) Financial,strategic,operational,and ethical performance 
B) Financial,customer,internal,and learning/innovation performance 
C) Profit,sales,productivity,and asset management performance 
D) Shareholder,customer,employee,supplier,and social performance 
A) Financial,strategic,operational,and ethical performance 
B) Financial,customer,internal,and learning/innovation performance 
C) Profit,sales,productivity,and asset management performance 
D) Shareholder,customer,employee,supplier,and social performance B

Question 3

Consumer surplus is equal to :

Accepted Answer

A) The amount consumers pay for a product 
B) The difference between the amount consumers would be willing to pay for a product and what they actually pay 
C) The difference between the sales value of a firm's output and the direct costs of producing it 
D) The amount consumers pay for a product adjusted for the social costs and benefits of the product. 
A) The amount consumers pay for a product 
B) The difference between the amount consumers would be willing to pay for a product and what they actually pay 
C) The difference between the sales value of a firm's output and the direct costs of producing it 
D) The amount consumers pay for a product adjusted for the social costs and benefits of the product. B

Question 4

The value of a real option can be calculated using:

Accepted Answer

A) The Black-Scholes option pricing model 
B) Binomial options pricing model 
C) Discounted cash flow analysis 
D) (a)or (b) 
A) The Black-Scholes option pricing model 
B) Binomial options pricing model 
C) Discounted cash flow analysis 
D) (a)or (b)

Question 5

Estimating a firm's future cash flows is a fairly straightforward task.

Accepted Answer

A) True 
 B)False

Question 6

A major difficulty in selecting performance targets for a firm is that performance goals tend to be long term,but effective monitoring must be short term.

Accepted Answer

A) True 
 B)False

Question 7

The principal difference between accounting profit and economic profit is:

Accepted Answer

A) Accounting profit is distorted by the arbitrary treatment of depreciation and unusual items 
B) Accounting profit includes both economic profit and the normal return on capital to the providers of equity capital 
C) Economic profit is cash flow based and is,hence,less subject to manipulation that accounting profit 
D) Economic profit is endorsed by economists who tend to be more rigorous than accountants. 
A) Accounting profit is distorted by the arbitrary treatment of depreciation and unusual items 
B) Accounting profit includes both economic profit and the normal return on capital to the providers of equity capital 
C) Economic profit is cash flow based and is,hence,less subject to manipulation that accounting profit 
D) Economic profit is endorsed by economists who tend to be more rigorous than accountants.

Question 8

If a firm to pursue stakeholder interests rather than shareholder interests,it means that it maximizes value received by all stakeholders rather than the value received by shareholders alone.

Accepted Answer

A) True 
 B)False

Question 9

Maximizing profit over the life of the firm bears no relationship to the goal of maximizing shareholder value.

Accepted Answer

A) True 
 B)False

Question 10

In new product development,a "phases and gates" approach means that:

Accepted Answer

A) A firm's market is divided into specific segments (or "phases")linked by "gates" which allow synergies to be exploited 
B) A firm's product development relies on time segments that must be linked through gates 
C) The process is divided into consecutive stages,at the end of each a decision is made as to whether to continue to the next stage of development 
D) The product is divided into separate modules where the interface between them are viewed as gates 
A) A firm's market is divided into specific segments (or "phases")linked by "gates" which allow synergies to be exploited 
B) A firm's product development relies on time segments that must be linked through gates 
C) The process is divided into consecutive stages,at the end of each a decision is made as to whether to continue to the next stage of development 
D) The product is divided into separate modules where the interface between them are viewed as gates

Question 11

In most continental European countries,company law requires boards of directors to ensure that their companies operate primarily in the interests of shareholders,while in most English-speaking countries are required to take account of employees,society,and the interests of the company as a whole.

Accepted Answer

A) True 
 B)False

Question 12

Because profit is defined by accounting rules and measured in financial statements,profit maximization is an unambiguous performance goal for a firm.

Accepted Answer

A) True 
 B)False

Question 13

The main problems in implementing stakeholder value maximization are:

Accepted Answer

A) Adjudicating conflicts between different stakeholders 
B) The propensity for customers and employees to be even more short-term oriented than shareholders 
C) The difficulties of quantifying value creation and creating a governance system to manage the trade-offs among the interests of different stakeholders. 
D) The legal obligation of boards of directors to operate companies in the interests of their shareholders. 
A) Adjudicating conflicts between different stakeholders 
B) The propensity for customers and employees to be even more short-term oriented than shareholders 
C) The difficulties of quantifying value creation and creating a governance system to manage the trade-offs among the interests of different stakeholders. 
D) The legal obligation of boards of directors to operate companies in the interests of their shareholders.

Question 14

The biggest problem in designing a performance management system arises as a result of:

Accepted Answer

A) The tendency for performance management systems to be based entirely on financial targets 
B) A performance management system needs short-term indicators to monitor performance,yet the ultimate goal is to enhance the long-term performance of the firm 
C) Performance targets are always ineffective because individuals will "game the system" 
D) The personal interests of organizational members need to be taken into account 
A) The tendency for performance management systems to be based entirely on financial targets 
B) A performance management system needs short-term indicators to monitor performance,yet the ultimate goal is to enhance the long-term performance of the firm 
C) Performance targets are always ineffective because individuals will "game the system" 
D) The personal interests of organizational members need to be taken into account

Question 15

If a firm is to achieve superior profit performance,it is essential that profitability targets are set for managers.If managers focus on the drivers of profitability rather than profitability itself,their efforts will be diffused.

Accepted Answer

A) True 
 B)False

Question 16

In relation to the social responsibilities of firms,leading economists and management theorists:

Accepted Answer

A) Agree that CSR is an essential "moral imperative" 
B) Have fundamental disagreements about the justification for CSR 
C) Believe that the capitalist system would operate better if all firms adopted CSR 
D) Regard most firms' CSR initiatives as primarily exercises in public relations 
A) Agree that CSR is an essential "moral imperative" 
B) Have fundamental disagreements about the justification for CSR 
C) Believe that the capitalist system would operate better if all firms adopted CSR 
D) Regard most firms' CSR initiatives as primarily exercises in public relations

Question 17

For a firm to survive over the long term it must:

Accepted Answer

A) Pay a satisfactory level of dividends to its shareholders 
B) Create customer loyalty,that can then be converted into profit through increasing prices 
C) Earn as rate of return that covers its cost of capital 
D) Balance the interests of all its stakeholders. 
A) Pay a satisfactory level of dividends to its shareholders 
B) Create customer loyalty,that can then be converted into profit through increasing prices 
C) Earn as rate of return that covers its cost of capital 
D) Balance the interests of all its stakeholders.

Question 18

"Value" refers to the estimated monetary worth of a product or asset.

Accepted Answer

A) True 
 B)False

Question 19

Michael Porter and Mark Kramer's notion of "shared value" reconceptualizes CSR (corporate social responsibility)by emphasizing:

Accepted Answer

A) CSR as a value creating activity 
B) CSR as a source of legitimacy for a company 
C) CSR a means of transferring value from shareholders to less fortunate members of society 
D) CSR as a counterweight to greed and amorality among managers and investors. 
A) CSR as a value creating activity 
B) CSR as a source of legitimacy for a company 
C) CSR a means of transferring value from shareholders to less fortunate members of society 
D) CSR as a counterweight to greed and amorality among managers and investors.

Question 20

Every business enterprise has a distinct purpose,however,common to all businesses is the goal of:

Accepted Answer

A) Satisfying customers 
B) Creating value 
C) Satisfying stakeholders 
D) Maximizing shareholder value. 
A) Satisfying customers 
B) Creating value 
C) Satisfying stakeholders 
D) Maximizing shareholder value.

To diagnose the sources of a firm's poor financial performance,it is useful to:

The Balanced Scorecard is a technique of performance management that establishes and monitors four dimensions of performance:

Consumer surplus is equal to :

The value of a real option can be calculated using:

Estimating a firm's future cash flows is a fairly straightforward task.

A major difficulty in selecting performance targets for a firm is that performance goals tend to be long term,but effective monitoring must be short term.

The principal difference between accounting profit and economic profit is:

If a firm to pursue stakeholder interests rather than shareholder interests,it means that it maximizes value received by all stakeholders rather than the value received by shareholders alone.

Maximizing profit over the life of the firm bears no relationship to the goal of maximizing shareholder value.

In new product development,a "phases and gates" approach means that:

In most continental European countries,company law requires boards of directors to ensure that their companies operate primarily in the interests of shareholders,while in most English-speaking countries are required to take account of employees,society,and the interests of the company as a whole.

Because profit is defined by accounting rules and measured in financial statements,profit maximization is an unambiguous performance goal for a firm.

The main problems in implementing stakeholder value maximization are:

The biggest problem in designing a performance management system arises as a result of:

If a firm is to achieve superior profit performance,it is essential that profitability targets are set for managers.If managers focus on the drivers of profitability rather than profitability itself,their efforts will be diffused.

In relation to the social responsibilities of firms,leading economists and management theorists:

For a firm to survive over the long term it must:

"Value" refers to the estimated monetary worth of a product or asset.

Michael Porter and Mark Kramer's notion of "shared value" reconceptualizes CSR (corporate social responsibility)by emphasizing:

Every business enterprise has a distinct purpose,however,common to all businesses is the goal of:

The Concept of Strategy

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

A : The Sources and Dimensions of Competitive Advantage

B :The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers, Acquisitions, and Alliances

Current Trends in Strategic Management

Filters

Exam 2: Goals, Values, and Performance

To diagnose the sources of a firm's poor financial performance,it is useful to:

The Balanced Scorecard is a technique of performance management that establishes and monitors four dimensions of performance:

Consumer surplus is equal to :

The value of a real option can be calculated using:

Estimating a firm's future cash flows is a fairly straightforward task.

A major difficulty in selecting performance targets for a firm is that performance goals tend to be long term,but effective monitoring must be short term.

The principal difference between accounting profit and economic profit is:

If a firm to pursue stakeholder interests rather than shareholder interests,it means that it maximizes value received by all stakeholders rather than the value received by shareholders alone.

Maximizing profit over the life of the firm bears no relationship to the goal of maximizing shareholder value.

In new product development,a "phases and gates" approach means that:

In most continental European countries,company law requires boards of directors to ensure that their companies operate primarily in the interests of shareholders,while in most English-speaking countries are required to take account of employees,society,and the interests of the company as a whole.

Because profit is defined by accounting rules and measured in financial statements,profit maximization is an unambiguous performance goal for a firm.

The main problems in implementing stakeholder value maximization are:

The biggest problem in designing a performance management system arises as a result of:

If a firm is to achieve superior profit performance,it is essential that profitability targets are set for managers.If managers focus on the drivers of profitability rather than profitability itself,their efforts will be diffused.

In relation to the social responsibilities of firms,leading economists and management theorists:

For a firm to survive over the long term it must:

"Value" refers to the estimated monetary worth of a product or asset.

Michael Porter and Mark Kramer's notion of "shared value" reconceptualizes CSR (corporate social responsibility)by emphasizing:

Every business enterprise has a distinct purpose,however,common to all businesses is the goal of:

The Concept of Strategy

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

A : The Sources and Dimensions of Competitive Advantage

B :The Sources and Dimensions of Competitive Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Vertical Integration and the Scope of the Firm

Global Strategy and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Managing the Multibusiness Firm

External Growth Strategies: Mergers, Acquisitions, and Alliances

Current Trends in Strategic Management

Filters