97 test bank for strategic management and business policy globalization innovation and sustainability 14th edition wheelen

97 Test Bank for Strategic Management and Business Policy Globalization Innovation and Sustainability 14th Edition Wheelen Multiple Choice Questions - Page 1 More than ________ of outsid

97 Test Bank for Strategic Management and Business Policy Globalization Innovation and Sustainability 14th Edition Wheelen

Multiple Choice Questions - Page 1

More than of outside directors surveyed said that they had been named as part of a lawsuit against the

1. A) lower-level operating employee

2 B) president of the corporation

3 C) vice-president of operational units

4 D) chief executive officer

5 E) vice-president of functional units

An agency problem can occur when

1. A) the desires and objectives of the owners and agents conflict

2 B) it is difficult or expensive for the owners to verify what the agent is actually doing

3 C) the owners and agents have different attitudes toward risk

4 D) executives do not select risky strategies because they fear losing their jobs if the strategy fails

5 E) all of the above

According to the text, most publicly owned large

corporations today tend to have boards with what degree of involvement in the strategic management process?

1. A) The board is charged by law to act with due care

2 B) If a director or the board as a whole fails to act with due care and, as a result, the corporation is in some way harmed, the careless director or directors can be held personally liable for the harm done

3 C) Director liability insurance is often needed to attract people to become

members of boards

4 D) Directors must be aware of the needs of various constituent groups to balance all their interests

5 E) all of the above

The theory which states that problems arise in corporations because top management no longer is willing to bear the brunt of their decisions unless they own a substantial

amount of stock in the corporation is called

1. A) codetermination

2 B) agency theory

3 C) interlocking management theory

4 D) strategic leadership theory

5 E) ownership theory

The relationship among the board of directors, top

management, and shareholders is referred to as

1. A) corporate synergy

2 B) corporate management

A highly involved board does all of the following EXCEPT

1. A) tends to be very active

2 B) provides advice when necessary

3 C) keeps management alert

4 D) takes their tasks of initiating and determining strategy very seriously

5 E) manage the every day operations of the organization.

The percentage of directors of small, publicly held U.S corporations which are outsiders is approximately

1. A) to lend credence to the decisions of the executive committee

2 B) dictated solely by legal requirements

3 C) to act as representatives for public identification

4 D) to closely monitor the actions of management

5 E) insulated from legal judgments because management actually makes the decisions

Catalyst-level board of directors typically

1. A) are less involved than active participation boards

2 B) take leading roles in establishing and modifying the company mission, objectives, and strategy

3 C) are involved in a limited degree of key decision making

4 D) are held to a greater degree of legal responsibility

5 E) experience more financial success than less involved boards

Outside directors are defined as

1. A) those individuals who scan the external environment

2 B) individuals on the board who are not employed by the board's corporation

3 C) those individuals with public relations responsibilities

4 D) board members who are also officers or executives employed by the corporation

5 E) individuals who organize and coordinate politically focused activities

Which of the following regions is the most globalized region

of the world in terms of boards of directors with most

companies having one or more non-national directors?

2 B) is the inclusion of a corporation's employees on its board

3 C) occurs when one or more individuals on one board also serve on other boards

4 D) is present when all board members are also employed by the corporation

5 E) occurs when minority shareholders concentrate their votes

A study by Korn/Ferry found that of U.S boards of directors had at least one ethnic minority member in 2007

What percentage of the 100 largest companies listed in 2011 had boards of directors with at least one woman member?

Which of the following is NOT a task of the board of

directors in strategic management?

1. A) with a larger board.

2 B) with the addition of insiders on the board

3 C) with the addition of outsiders on the board

4 D) with a smaller board

5 E) with a well-compensated board

What percentage of public corporations have periodic board meetings devoted primarily to the review of overall strategy?

1. A) affiliated directors

2 B) family directors

3 C) retired directors

4 D) management directors

5 E) interlocked directors

The requirements of a board of directors vary significantly

by country and by state; however, there is a developing

consensus as to what the major responsibilities should be Which of the following is NOT one of the responsibilities?

1. A) effective board leadership including the processes, makeup and output of the board

2 B) strategy of the organization

3 C) risk vs initiative and the overall risk profile of the organization

4 D) becoming directly involved in managerial decisions

60 Free Test Bank for Strategic Management and

Business Policy Globalization Innovation and

Sustainability 14th Edition Wheelen Multiple Choice Questions - Page 2

All of the following are true of overconfident CEOs EXCEPT

1. A) overconfident CEOs tend to charge ahead with mergers and acquisitions even though they are aware that most acquisitions destroy shareholder value

2 B) overconfident CEOs view their company as undervalued by outside investors

3 C) overconfident CEOs are more likely to do deals that diversify their firm's lines ofbusinesses

4 D) the overconfidence of CEOs may lead to hubris

5 E) overconfident CEOs were less likely to make an acquisition when they could avoid selling new stock to finance them

The New York Stock Exchange (NYSE) requires corporations

to have

1. A) a majority of the board be outsiders

2 B) cumulative voting

3 C) at least one employee director as a representative on the board

4 D) at least two outside directors providing stockholder representation

5 E) an audit committee composed entirely of independent, outside members

According to the text, which of the following is NOT a typical standing committee of boards of directors?

1. A) audit committee

2 B) compensation committee

3 C) executive committee

4 D) nominating committee

5 E) public relations committee

According to a survey of 156 large corporations, in what percentage of the firms were strategies first proposed in business units and then sent to headquarters for approval?

1. A) has not been a popular approach in the United Kingdom

2 B) creates a balance of power when the CEO is also Chair of the Board

3 C) has lost popularity in the United States since 2003

4 D) has no involvement in the CEO's evaluation

5 E) totally replaces the CEO position

Which of the following is NOT a key characteristic of

transformational executive leaders?

1. A) The CEO presents a role for others to identify with and to follow

2 B) The CEO communicates high performance standards for all employees.

3 C) The CEO demonstrates confidence in the employees' abilities to meet the expressed high standards

4 D) The CEO energizes the board to formulate strategy

5 E) The CEO articulates a strategic vision for the corporation

According to the text, one of the primary responsibilities of top management in strategic management is

1. A) ensuring that day-to-day operations are efficient and well run

2 B) providing executive leadership

3 C) balancing the budget

4 D) managing the short-term planning process

5 E) making all important decisions

The U.S Clayton Act and Banking Act of 1933

1. A) promote interlocking directorates by U.S companies to foster better

communications and working relationships

2 B) prohibit acts or contracts tending to create a monopoly

3 C) prevent unfair practices in interstate commerce

4 D) promote racial parity on the board of directors

5 E) prohibit interlocking directorates by U.S companies competing in the same industry

The percentage of CEOs of the 100 largest companies who also serve as chairman of the board is

1. A) willing to challenge management when necessary

2 B) expertise on global business issues

3 C) understands the firm's key technologies and processes

4 D) available for outside meetings to advise management

5 E) willing to always agree with executive decisions.

Under what circumstances does an INDIRECT interlocking directorate exist?

1. A) when both management and the board establish corporate strategic

management

2 B) when a corporation's employees are included on its board

3 C) when one or more individuals on one board also serve on a board of a second firm

4 D) when all board members are also employed by the corporation

5 E) when two corporations have directors who serve on the board of a third firm

The role of the board of directors in the strategic

management of the corporation is likely to

1. A) be more active in the future

2 B) be less active in the future

3 C) be nonexistent as planning departments take over

4 D) remain the same

5 E) shift more toward managing daily operations

Which of the following is NOT descriptive of interlocking directorates?

1. A) Interlocking directorates occur because large firms have a large impact on other corporations

2 B) Interlocking directorates are more common in small, family-owned companies

3 C) Interlocking directorates are a useful method for gaining inside information about an uncertain environment

4 D) Interlocking directorates occur in about 20% of the 1000 largest US firms

5 E) Interlocking directorates provide objective expertise about a firm's strategy

Under what circumstances does a DIRECT interlocking

directorate exist?

1. A) when both management and the board establish corporate strategic

management

2 B) when a corporation's employees are included on its board

3 C) occurs when two firms share a director or when an executive of one firm sits onthe board of a second firm

4 D) when all board members are also employed by the corporation

5 E) when two corporations have directors who serve on the board of a third firm

The concept of the lead director originated in

1. A) the United Kingdom

2 B) the United States

1. A) top-down strategic planning

2 B) bottom-up strategic planning

3 C) horizontal strategic planning

4 D) concurrent strategic planning

5 E) composite strategic planning

Which of the following is NOT a trend in corporate

governance expected to continue?

1. A) Institutional investors are becoming active on boards

2 B) Boards are getting more involved in shaping company strategy

3 C) Boards are getting larger

4 D) Shareholders are demanding that directors and top managers own more than token amounts of stock in the corporation

5 E) Outside directors are taking charge of annual CEO evaluations

Which of the following is NOT one of the four major issues researched by the S & P Corporate governance Scoring

System?

1. A) ownership structure and influence

2 B) research and development initiatives

3 C) financial stakeholder rights and relations

4 D) financial transparency and information disclosures

5 E) board structure and processes

A staggered board

1. A) increases the chances of a hostile takeover

2 B) has only a portion of the board stand for election each year

3 C) makes it easier for shareholders to curb a CEO's power

4 D) is seen in less than 50% of U.S boards

5 E) all of the above

Which of the following provides an example of a

transformational leader?

1. A) Phil Knight at Nike has energized his corporation and commanded respect

2 B) Louis Gerstner proposed a new vision for IBM to change its business model from computer hardware to services

3 C) Microsoft CEO, Steve Ballmer, crawled under tables to plug in PC monitors anddiagnosed problems with an operating system

4 D) Verizon Communications CEO Ivan Seidenberg showed his faith in his people

by letting his key managers handle important projects and represent the company

in public forums

5 E) all of the above

A description of what the company is capable of becoming is referred to as

The function of a nominating committee is to

1. A) find board members who have compatible viewpoints with management

2 B) find outside board members for election by the stockholders

3 C) search for internal employees who would provide valuable insight into the working operations of the corporation

4 D) search for candidates who could bring prestige to the board

5 E) find inside board members for election by the stockholders

In implementing the Sarbanes-Oxley Act, the SEC required in

2003 that a company disclose

1. A) the number of insiders on their PR committee

2 B) if it has adopted a code of ethics that applied to the CEO and the CFO

3 C) the CEO's pay

4 D) the CFO's pay

5 E) all of the above

Which of the following is a trend in corporate governance?

1. A) Boards are getting less involved in shaping corporate strategy

2 B) Shareholders are demanding that directors and top managers own less stock inthe company

3 C) Boards are establishing mandatory retirement ages for board members

4 D) Boards are getting larger

5 E) Boards are looking for fewer members with international experience

For many large corporations the typical strategic planning staff has just fewer than how many people?

1. A) it is being increasingly criticized because of the potential for conflict of interest

2 B) it endangers the ability to properly oversee top management

3 C) it is separated by law in Germany, the Netherlands, and Finland.

4 D) it is more popular in American corporations than firms in the United Kingdom

5 E) firms with a dual chair/CEO role have significantly better stock performance

When calculating a "deserved pay" for CEOs based upon earnings growth and shareholder return, financial research firm Obermatt found that

1. A) there is a negative correlation between CEO pay and company performance

2 B) there is a positive correlation between CEO pay and company performance

3 C) there is no correlation between CEO pay and company performance

4 D) CEO pay packages were rejected by 90% of shareholders

5 E) most compensation systems were aligned with the interests of shareholders

The average LARGE, publicly held U.S corporation has around

The Sarbanes-Oxley Act was designed to protect

1. A) retired workers from losing their pensions

2 B) CEOs from losing their golden parachutes

3 C) CEO salary increases

4 D) shareholders from the excesses and failed oversight of firms

5 E) corporations from misguided whistleblowers

True - False Questions

The majority of outside directors are active or retired CEOs and COOs of other corporations

1. True

2 False

The SEC requires that the audit, nominating and

compensation committees are staffed entirely by outside directors

1. True

2 False

Population theory states that problems arise in corporations because the agents (top management) are not willing to bear responsibility for their decisions unless they own a

substantial amount of stock in the corporation

1. True

2 False

Society increasingly expects corporate boards to balance the economic goal of profitability with the social needs of society