Question 1

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

Accepted Answer

A)   Goals conflict between principals and agents.
B)   Verification of actual agency activity is expensive and difficult to obtain.
C)   Principals and agents have differing attitudes toward risk.
D)   Stockholders and management align with external stakeholders.E) A) and D)
F) All of the above

Question 2

The corporate governance premium is smaller for firms in countries with sound corporate governance practices compared to countries with weaker corporate governance standards.

Accepted Answer

A) True 
 B)False

Question 3

According to a 2012 article published in The Economist,managerial actions to improve company control systems do not need to consider employee perceived reception of these actions.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements about action plans is true?

Accepted Answer

A)   Action plans should permit a degree of autonomy to managers and not be constrained by budgets.
B)   Action plans must be specific so that managers will have a clear understanding of the resource requirements necessary to implement the plan.
C)   Action plans should not be constrained by a time frame in order to allow for modification.
D)   Management accountability often erodes their motivation to implement the plan on a timely basis.E) All of the above
F) A) and C)

Question 5

For a reward system to be effective,it must be perceived as fair and equitable.

Accepted Answer

A) True 
 B)False

Question 6

In contemporary control systems,data and information generated are best interpreted and discussed in online forums,in order to have traceability of the discussion.

Accepted Answer

A) True 
 B)False

Question 7

When subcultures emerge that have shared values opposite from the dominant culture of an organization

Accepted Answer

A)   organizational cohesiveness increases.
B)   information is shared rather than hoarded.
C)   individuals begin working at cross purposes.
D)   individuals gain insights into overarching goals and objectives.E) B) and C)
F) A) and D)

Question 8

Rule-based controls are appropriate in organizations,where most of the employees are unskilled.

Accepted Answer

A) True 
 B)False

Question 9

The traditional approach to strategic control is interactive,while the contemporary approach to strategic control is sequential.

Accepted Answer

A) True 
 B)False

Question 10

In emerging economies and continental Europe,firms often can be characterized by all of the following except

Accepted Answer

A)   concentrated ownership.
B)   low family ownership and control.
C)   business group structures.
D)   weak legal protection for minority shareholders.E) B) and D)
F) C) and D)

Question 11

Rules and regulations are examples of ______________ and _____________.

Accepted Answer

A)   controls; behaviors
B)   controls; norms
C)   boundaries; behaviors
D)   boundaries; constraintsE) A) and C)
F) None of the above

Question 12

The organizational reward system is typically a weak method for motivating employees.

Accepted Answer

A) True 
 B)False

Question 13

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except the

Accepted Answer

A)   desire to get future auditing contracts from the company.
B)   desire to get consulting work from the company because most audit firms also do consulting work.
C)   fact that auditors are appointed by the firm.
D)   failure of U.S. audit firms to hire technically qualified professionals.E) None of the above
F) B) and D)

Question 14

Strategic control systems,both informational and behavioral,are used to correct the performance and ultimate strategy of a firm.

Accepted Answer

A) True 
 B)False

Question 15

Informational controls involve the balance and alignment of the culture,rewards,and boundaries of a firm.

Accepted Answer

A) True 
 B)False

Question 16

Continuous monitoring,in the contemporary approach,is beneficial because

Accepted Answer

A)   it reduces time lags.
B)   it increases the time it takes to detect changes in the competitive environment.
C)   organizational flexibility is reduced.
D)   organization response time is increased.E) All of the above
F) None of the above

Question 17

For businesses facing complex and turbulent business environments,which of the following is true?

Accepted Answer

A)   Goals and objectives that are uncertain prevent opportunism.
B)   Traditional strategic controls are usually inappropriate.
C)   Complacency about predetermined milestones can prevent adaptability.
D)   Detailed plans are needed to maintain order.E) None of the above
F) A) and B)

Question 18

Once a strong and healthy organizational culture has been established,it becomes self-sustaining.

Accepted Answer

A) True 
 B)False

Question 19

Continuous monitoring enhances the ability of the organization to respond with speed and flexibility.

Accepted Answer

A) True 
 B)False

Question 20

Rewards systems that reinforce the core values of the organization and contribute to organizational cohesiveness are the least effective type.

Accepted Answer

A) True 
 B)False

Exam 9: Strategic Control and Corporate Governance

Informational controls involve the balance and alignment of the culture,rewards,and boundaries of a firm.

Correct AnswerverifiedShow Answer

In contemporary control systems,data and information generated are best interpreted and discussed in online forums,in order to have traceability of the discussion.

Correct AnswerverifiedShow Answer

Rule-based controls are appropriate in organizations,where most of the employees are unskilled.

Correct AnswerverifiedShow Answer

Agency theory is concerned with resolving two problems that can occur in agency relationships.Which of the following is not one of those problems?

Correct AnswerverifiedShow Answer

For a reward system to be effective,it must be perceived as fair and equitable.

Correct AnswerverifiedShow Answer

The traditional approach to strategic control is interactive,while the contemporary approach to strategic control is sequential.

Correct AnswerverifiedShow Answer

The corporate governance premium is smaller for firms in countries with sound corporate governance practices compared to countries with weaker corporate governance standards.

Correct AnswerverifiedShow Answer

Continuous monitoring enhances the ability of the organization to respond with speed and flexibility.

Correct AnswerverifiedShow Answer

For businesses facing complex and turbulent business environments,which of the following is true?

Correct AnswerverifiedShow Answer

Rules and regulations are examples of ______________ and _____________.

Correct AnswerverifiedShow Answer

Strategic control systems,both informational and behavioral,are used to correct the performance and ultimate strategy of a firm.

Correct AnswerverifiedShow Answer

Which of the following statements about action plans is true?

Correct AnswerverifiedShow Answer

When subcultures emerge that have shared values opposite from the dominant culture of an organization

Correct AnswerverifiedShow Answer

Continuous monitoring,in the contemporary approach,is beneficial because

Correct AnswerverifiedShow Answer

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except the

Correct AnswerverifiedShow Answer

Rewards systems that reinforce the core values of the organization and contribute to organizational cohesiveness are the least effective type.

Correct AnswerverifiedShow Answer

According to a 2012 article published in The Economist,managerial actions to improve company control systems do not need to consider employee perceived reception of these actions.

Correct AnswerverifiedShow Answer

The organizational reward system is typically a weak method for motivating employees.

Correct AnswerverifiedShow Answer

In emerging economies and continental Europe,firms often can be characterized by all of the following except

Correct AnswerverifiedShow Answer

Once a strong and healthy organizational culture has been established,it becomes self-sustaining.

Correct AnswerverifiedShow Answer

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Rules and regulations are examples of __ and _.

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