Deck 5: Organization Mission Direction

Question 1

Individuals or groups who are affected by or can influence an organization's operations are called

A)shareholders.
B)stakeholders.
C)organizational constituencies.
D)None of the above.

Answer 1

B

Question 2

Over the past several decades,the composition of the typical board has shifted from one controlled by insiders to one controlled by outsiders.

Answer 2

False

Question 3

Which of the following might represent the goals of customers?

A)The company should provide high quality products and services at the most reasonable prices possible.
B)The company should maintain a healthy financial posture and a policy of on-time payment of debt
C)The company should produce a higher-than-average return on equity.
D)The company should provide goods and services with minimum environmental costs,increase employment opportunities,and contributing to social and charitable causes.

Answer 3

A

Question 4

Many companies limit the number of board memberships their own board members may hold.

Question 5

The desired ends toward which efforts are directed comprise

A)the organization's goals.
B)the mission.
C)the organization's objectives.
D)None of the above.

Question 6

Objectives are specific,often quantified,versions of goals.

Question 7

The utilitarian view of ethics suggests that anticipated outcomes and consequences should be the primary considerations when evaluating an ethical dilemma.

Question 8

The triple bottom line refers to the notion that firms must maintain and improve social and ecological performance in addition to economic performance.

Question 9

When additional insiders are added to outsider-dominated boards,CEO dismissal is more likely when corporate performance declines.

Question 10

Goals are verifiable and specific,and are developed so that management can measure performance.

Question 11

Adverse selection exists when the parties in an arrangement do not share equally in the risks and benefits.

Question 12

Social responsibility refers to an individual's responsibility to make business decisions that are legal,honest,moral,and fair.

Question 13

The competing priorities of an organization's stakeholders are known as

A)the organization's goals.
B)the mission.
C)the organization's objectives.
D)None of the above.

Question 14

Which of the following might represent the goals of shareholders?

A)The company should provide high quality products and services at the most reasonable prices possible.
B)The company should maintain a healthy financial posture and a policy of on-time payment of debt.
C)The company should produce a higher-than-average return on equity.
D)The company should provide goods and services with minimum environmental costs,increase employment opportunities,and contributing to social and charitable causes.

Question 15

When additional outsiders are added to insider-dominated boards,outsiders are more likely to pressure for corporate restructuring when performance is poor.

Question 16

Corporate takeovers have been supported because of their ability to reduce the debt of acquired firms.

Question 17

Any purchase of a controlling quantity of shares of a firm by an individual,a group of investors,or another organization is known as a leveraged buyout (LBO).

Question 18

Creditors and suppliers typically share the same goals for the organization.

Question 19

A situation in which a firm's managers fail to act in the best interest of the shareholders is known as the stakeholder dilemma.

Question 20

Corporate takeovers have been promoted as a system of checks and balances for firm management.

Question 21

The CEO also serving as chair of the board is known as

A)corporate domain.
B)corporate governance.
C)corporate congruence.
D)None of the above.

Question 22

When outsiders are added to insider-dominated boards,

A)CEO dismissal is less likely when performance is poor.
B)insiders are more likely to press for corporate restructuring.
C)insiders are likely to retain their relative influence on the management of the firm.
D)None of the above.

Question 23

Which group of investors typically wields the greatest influence on the management of firms?

A)blockholders
B)institutional investors
C)private shareholders
D)the CEO

Question 24

Identify the two perspectives on the agency problem.Should this be a major concern in most U.S.firms? Why or why not.

Question 25

Discuss the two opposing perspectives on firm social responsibility.

Question 26

The attractiveness of downsizing is consistent with which agency perspective?

A)Management serves its own interests.
B)Management and stockholders share the same interests.
C)Management pursues the interests of the stakeholders.
D)None of the above.

Question 27

A common suggestion to align the goals of managers with those of the stockholders is to pursue

A)stock options.
B)liberal vacation leave.
C)lower salaries.
D)None of the above.

Question 28

Identify six common perspectives on managerial ethics.What is your perspective,and why?

Question 29

The preoccupation with firm growth is consistent with which agency perspective?

A)Management serves its own interests.
B)Management and stockholders share the same interests.
C)Management pursues the interests of the stakeholders.
D)None of the above.

Question 30

The attractiveness of diversification is consistent with which agency perspective?

A)Management serves its own interests.
B)Management and stockholders share the same interests.
C)Management pursues the interests of the stakeholders.
D)None of the above.

Question 31

A situation in which a firm's managers fail to act in the best interest of the shareholders is known as

A)management ineffectiveness.
B)the agency problem.
C)managerial goal incongruity.
D)None of the above.

Question 32

Which view of ethics suggests that decisions should be based on existing norms of behavior,including cultural,community,or industry factors?

A)rights view
B)cultural view
C)religious view
D)None of the above.

Question 33

Corporate takeovers

A)often receive substantial criticism.
B)are widely supported as necessary.
C)can increase debt for a firm.
D)All of the above.

Question 34

A purchase of a controlling quantity of shares of a firm by an individual,a group of investors,or another organization is known as a

A)leveraged buyout.
B)takeover.
C)stock option.
D)None of the above.

Question 35

The idea that business firms should serve both society and the financial interests of the shareholders is known as

A)the corporate charter.
B)the corporate dilemma.
C)managerial ethics.
D)None of the above.

Question 36

Social responsibility and managerial ethics

A)are synonymous.
B)are related,but different concepts.
C)are relative easy to assess.
D)None of the above.

Question 37

Do boards of directors serve the interest of the shareholders? Explain.

Question 38

Over the past several decades,the composition of the typical board has shifted from

A)one controlled by insiders to one controlled by outsiders.
B)one controlled by outsiders to one controlled by insiders.
C)one controlled by insiders to one controlled by government agencies.
D)None of the above.

Question 39

The CEO also serving as chair of the board is known as

A)a rubber stamp mentality.
B)corporate governance.
C)CEO duality.
D)executive leadership.

Question 40

What is the difference between takeovers and leveraged buyouts? Are either good for U.S.firms or the economy?