Question 1

Which of the following is a description of the governance chain?

Accepted Answer

A)   The governance chain describes the reporting relationships between managers and their subordinates.
B)   The governance chain concerns how the HR department looks after its employees.
C)   The chain represents the linkage between current government legislation and the actions of an organisation.
D)   The chain represents all groups that have influence on an organisation's purposes either through ownership or management. D

Question 2

Which of the following is not a weakness of the Japanese model of governance?

Accepted Answer

A)   Financial speculation
B)   Weak accountability
C)   Very long term industrial strategy
D)   Secretive and sometimes corrupt governance procedures C

Question 3

Which of the following is not one of the corporate social responsibility stances?

Accepted Answer

A)   Laissez- faire
B)   Forum for stakeholder interaction
C)   Enlightened self- interest
D)   Shaper of society
E)   Stakeholder- focused E

Question 4

Which of the following important issues that affect the management of strategy are highlighted by the governance chain? Choose all that apply.

Accepted Answer

A)   Which management structure will lead to greatest production efficiency?
B)   How can financial beneficiaries ensure scrutiny and control?
C)   Who are the shareholders?
D)   Who are executives responsible to?
E)   How can production costs be minimised?

Question 5

Which of the corporate social responsibility stances involves a championing leadership style, involvement of the board and the development of organisation- wide monitoring, and and proactive relationship with stakeholders?

Accepted Answer

A)   Shaper of society
B)   Laissez- faire
C)   Enlightened self- interest
D)   Forum for stakeholder interaction

Question 6

In organisations where innovation and flexibility are important, managers need to be very clear about the few, over- arching objectives. What term is used for these objectives?

Accepted Answer

A)   Mission
B)   Simple rules
C)   Targets
D)   Vision

Question 7

Useful indicators of internal stakeholder power are:

Accepted Answer

A)   Commercial success and profitability
B)   The status of the individual or group; available resources; symbols of power
C)   A senior position in the organisation
D)   The status of the individual or group; the claim on resources; representation in powerful positions; symbols of power

Question 8

What do you understand by the term 'corporate social responsibility'?

Accepted Answer

A)   It refers to an organisation that is more accountable to its board of directors.
B)   It refers to an organisation that is more responsive to the needs of their various stakeholder groups.
C)   It refers to an organisation that acts in a responsible manner in relation to the social, economic and environmental impacts of its actions and decisions.
D)   It refers to an organisation that takes more responsibility for the social interaction of their employees.

Question 9

Which of the following is not a reason for the increasing importance of corporate governance?

Accepted Answer

A)   The need to separate ownership and management
B)   The incidence of scandals such as Enron and Parmalat
C)   The business ethics of the organisation
D)   The need to make organisations visibly accountable to a wide range of stakeholders

Question 10

Which three types of stakeholder is it useful to consider in terms of how they might affect the success or failure of a strategy?

Accepted Answer

A)   Stakeholders from outside and from inside the organisation
B)   Stakeholders from the public sector, from the private sector and from the not- for- profit sector
C)   Stakeholders from the market environment, from the economic environment and from the technological environment
D)   Stakeholders from the market environment, from the socio- political environment and from the technological environment

Question 11

Which of the following is not one of the major expectations influencing organisational purpose?

Accepted Answer

A)   Corporate governance
B)   Business ethics
C)   Government policy
D)   Stakeholders
E)   Cultural context

Question 12

What term is used for the underlying principles that guide an organisation's strategy?

Accepted Answer

A)   Aims
B)   Core values
C)   Mission
D)   Vision

Question 13

Which of the following is not a strength of the Anglo- Saxon governance system?

Accepted Answer

A)   Extensive internationalisation
B)   Dynamic market orientation
C)   Fluid capital investment
D)   Short- termism

Question 14

Which framework has been used to give more rights to individual consumers of public services?

Accepted Answer

A)   Local government regulations
B)   Audit Commission
C)   Annual reports
D)   Best value framework

Question 15

Which of the following are reasons why the governance chain typically operates imperfectly? Choose all that apply.

Accepted Answer

A)   There is unequal division of power between different players in the chain.
B)   Agents may act in their own self interest.
C)   Legislative requirements make the sharing of information impracticable.
D)   Identical information must be made available to all players.
E)   There is a lack of clarity about who the final beneficiaries are?

Question 16

Which of the following are reasons why corporate governance has become an increasingly important issue for organisations? Choose all that apply.

Accepted Answer

A)   Decreased power for middle managers.
B)   The occurrence of corporate scandals in the late 1990s.
C)   The need for increased accountability to wider stakeholder interests.
D)   The separation of ownership and management control of organisations.

Question 17

Which of the following is not a source of power within an organisation?

Accepted Answer

A)   Formal power
B)   Basic technological skills
C)   Charismatic leadership
D)   Negotiating skills

Question 18

Which of the following is not an example of a stakeholder?

Accepted Answer

A)   Lending institution
B)   Customer
C)   Competitor
D)   Employee
E)   Shareholder

Question 19

Which of the corporate social responsibility stances involves supportive leadership, the development of systems of ensure good practice, and and interactive relationship with stakeholders?

Accepted Answer

A)   Laissez- faire
B)   Shaper of society
C)   Forum for stakeholder interaction
D)   Enlightened self- interest

Question 20

Since the expectations of stakeholder groups differ, it is normal for conflict to exist regarding the importance of many aspects of strategy.

Accepted Answer

A) True 
 B)False

Exam 4: Governance and Stakeholders