Chapter5

Which of the following statements referring to the term corporate governance are correct?

a. The term corporate governance refers to the sets of mechanisms and processes that help ensure that companies are directed and managed to create value for their owners while concurrently fulfilling responsibilities to other stakeholders

b. The Anglo-American system focuses on the primacy of stakeholders as the beneficiaries of fiduciary duties

c. The Continental European/Japanese system has a broader concern also for the rights of other shareholders

d. The Continental European/Japanese system has a broader concern also for rights of other stakeholders

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and d) are correct

h. Statements a), b) and c) are correct

Which of the following statements referring to Corporate Governance are correct?

a. The term corporate governance refers to the sets of mechanisms and processes that help ensure that companies are directed and managed to create value for their owners while concurrently fulfilling responsibilities to other stakeholders

b. There are two corporate governance orientations: Anglo-American system and Continental/Japanese system

c. Anglo-American system focuses on the primacy of shareholders as the beneficiaries of fiduciary duties

d. The Continental European/Japanese system has a broader concern also for rights of other stakeholders

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and b) are correct

h. Statements a) and c) are correct

Which of the following elements does the duty of the board directors consist of (to foster long-term success)?

a. Duty of care

b. Duty of loyalty

c. Duty of good faith

d. Duty not to “waste”

e. All of the above-named elements

f. None of the above-named elements

g. Elements a) and b)

h. Elements a), b) and c)

Which of the following statements are correct?

a. Boards of directors have a responsibility of safeguarding the equity investors’ interests by ensuring that management seeks to maximize the value of the shareholders’ stakes in the corporation

b. Boards of directors have a responsibility of protecting the interests of other corporate stakeholders by ensuring that the employees in the corporation act in a legally and socially responsible manner

c. The duty of the boards of directors consists of duty of care, loyalty, good faith and duty not to “waste”

d. Boards must ensure that they are independent of management

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements c) and d) are correct

h. Statements a), b) and d) are correct

Which of the following factors influence both, the decision of the MCS and its effectiveness?

a. Environmental Certainty

b. Environmental Uncertainty

c. Organizational Strategy

d. Multinationality

e. All of the above-named factors

f. None of the above-named factors

g. Factors a), c) and d)

h. Factors b), c) and d)

Which of the following effects does uncertainty have on MCSs?

a. Uncertainty makes action controls difficult to use

b. Uncertainty makes result controls more difficult to use

c. Uncertainty makes result controls more difficult to use because it causes employees to bear risk

d. Uncertainty makes result controls more difficult to use because it increases the complexity of the management task

e. All of the above-named statements are effects

f. None of the above-named effects

g. Effects c) and d)

h. Effects a), b) and d)

Which of the following statements are correct?

a. Corporate strategy (diversification strategy) defines how a strategic business unit chooses to compete in its industry and tries to achieve a competitive advantage relative to its competitors b. Business strategy (competitive strategy) determines what business it wants to be in and how resources should be allocated among those businesses

c. Two primary diversification strategies are cost leadership and differentiation strategy

d. Two primary competitive strategies are cost leadership and differentiation strategy

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements a), b) and d) are correct

Which of the following statements are correct?

a. Corporate strategy (diversification strategy) determines what business it wants to be in and how resources should be allocated among those businesses

b. Business strategy (competitive strategy) defines how a strategic business unit chooses to compete in its industry and tries to achieve a competitive advantage relative to its competitors c. Two primary diversification strategies are cost leadership and differentiation strategy

d. Two primary competitive strategies are cost leadership and differentiation strategy

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements a), b) and d) are correct

Which of the following statements are correct?

a. Factors that affect MCS choices across Countries are National Culture, Local Institutions and Local Business Environments

b. Effects of the National Culture is that people from different cultures are likely to have different preferences for, and reactions to, management controls

c. Effects of Local Institutions means that corporate governance regulations, employment law and contract law, as well as banking systems and governance interventions vary significantly across cultures

d. Business environments differ significantly across countries

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements a), b) and d) are correct

Which of the following statements are correct?

a. Factors influencing the setting of the “best” MCS are environmental uncertainty, organizational strategy and multinationality

b. Factors that affect MCS choices across Countries are National Culture, Local Institutions and Local Business Environments

c. Factors that affect MCS choices across countries are environmental uncertainty, organizational strategy and multinationality

d. Factors influencing the setting of the “best” MCS are national culture, local institutions and local business environment

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and b) are correct

h. Statements c) and d) are correct

Which of the following dimensions are the cultural dimensions according to Geert and Hofstede? a. Individualism that is, whether individuals see themselves primarily as an individual or as part of a group b. Power Distance

Which of the following statements referring to local business environments are correct?

a. In countries where the governments have greater powers and tend to use them more frequently, business risk is higher

b. Inflation and fluctuations in inflation, which affect the relative values of currencies, create financial risk

c. When employees are not highly educated, decision-making structures are usually more centralized, and MCS tend to be more focused on action controls rather than results controls

d. Personnel mobility is one of the significant characteristics of local business environments that differs significantly across countries

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements a), b) and d) are correct

Which of the following statements referring to local business environments are correct?

a. In countries where the governments have greater powers and tend to use them more frequently, business risk is lower

b. Inflation and fluctuations in inflation, which affect the relative values of currencies, alleviate financial risk

c. When employees are not highly educated, decision-making structures are usually more decentralized, and MCS tend to be more focused on action controls rather than results controls d. Personnel mobility is one of the significant characteristics of local business environments that differs significantly across countries

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and d) are correct

h. Statements a), b) and c) are correct

Which of the following statements referring to the organizational strategy are correct?

a. Corporate strategy defines how a strategic business unit chooses to compete in its industry and tries to achieve a competitive advantage relative to its competitors

b. Corporate strategy is also called competitive strategy

c. Business strategy determines what business the organization wants to be in and how resources should be allocated among those businesses

d. Business strategy is also called diversification strategy

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and b) are correct

h. Statements a) and c) are correct

Which of the following statements referring to cost leadership strategy are correct?

a. Cost leadership strategy is one of the primary competitive strategies

b. Cost leadership strategy involves offering of relatively standardized, undifferentiated products

c. Cost leadership strategy pursuits cost reductions

d. Cost leadership strategy pursuits generation of volume to exploit economies of scale and to move down the learning curve

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a) and c) are correct

h. Statements b) and d) are correct

Which of the following statements referring to the four cultural dimensions (Geert and Hofstede) are correct?

a. Individuals from an individualistic culture tend to place their self-interests ahead those of the group and prefer interpersonal conflict resolution over conflict suppression

b. Power distance dimension relates to the extent to which members of a society accept that institutional or organizational power is distributed equally

c. Individuals who score high in uncertainty avoidance feel comfortable when the situation they face is ambiguous

d. Masculinity dimension relates to the preference for modesty and quality of life

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements b), c) and d) are correct

Which of the following statements referring to the four cultural dimensions (Geert and Hofstede) are correct?

a. The Individualism dimension of national culture relates to individuals’ self-concept that is, whether individuals see themselves primarily as an individual or as part of a group.

b. The power distance dimension relates to the extent to which members of a society accept that institutional or organizational power is distributed unequally

c. Individuals who score high in uncertainty avoidance feel uncomfortable when the situation they face is ambiguous

d. The masculinity dimension relates to the preference for achievement, assertiveness and material success

e. All of the above-named statements are correct

f. None of the above-named statement is correct

g. Statements a), b) and c) are correct

h. Statements b), c) and d) are correct