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Management
Q:
In regard to managers and CSR, the following are true EXCEPT:
a. All sides of the CSR debate agree that managers have a unique and central role.
b. All sides of the CSR debate agree as to how managers should implement their role.
c. As a stakeholder group, managers are unique in terms of potential coordination.
d. Managers are positioned at the center of all the stakeholder relationships.
Q:
An example of a secondary stakeholder group is:
a. Social and environmental groups.
b. Suppliers.
c. Customers.
d. Governments.
Q:
An example of a primary stakeholder group is:
a. Media.
b. Social activists.
c. Environmental groups.
d. Employees.
Q:
Which of the following would NOT be considered an underlying motivation behind MNEs voluntary green practices?
a. Worldwide CSR pressures in general.
b. Requirements of MNE headquarters for worldwide compliance of higher CSR standards.
c. Host country laws and norms.
d. CSR demands made by customers in developed economies.
Q:
From a corporate governance perspective, MNEs are:
a. Doing nothing wrong by maximizing shareholder returns.
b. Shirking their domestic CSR when they devote resources overseas.
c. Foolish to focus on CSR.
d. None of the above.
Q:
There is agreement throughout society that:
a. Overseas expansion is good because it helps improve standards of living around the world.
b. A negative possibility of overseas expansion is that it may cause loss of jobs in the home country.
c. Firms should stick strictly to business within a country and not seek to impose their views of human rights on other countries that have different views.
d. Firms have a responsibility to do whatever is necessary to assure that the human rights that are respected in the home country are implemented in host countries.
Q:
Those who feel that firms that expand into emerging economies are failing their CSR responsibilities are most likely to claim that:
a. It potentially hurts corporate profits.
b. Shareholder returns are reduced.
c. Fails to provide employment to host countries.
d. Domestic employees and communities pay the price for the overseas expansion.
Q:
Although a code of conduct tangibly expresses values of an organization, seeing it as window dressing is the assessment of the:
a. Negative view.
b. Positive view.
c. Institutional view.
d. Instrumental view.
Q:
The participation of which of the following groups is essential in an accommodative strategy?
a. NGOs.
b. Managers.
c. Consumers.
d. Suppliers.
Q:
Those who are opposed to strong efforts toward CSR would use which of the following arguments?
a. Green taxes simply force firms to pay real costs that they otherwise place on others.
b. CSR externalizes an internality.
c. Tough environmental regulation leads to higher costs and reduced competitiveness.
d. Stringent environmental regulation will motivate firms to innovate.
Q:
All firms have a different combination of resources; therefore, from a resource-based perspective:
a. Studies that over-sample firms ready for CSR will find a negative relationship with economic performance.
b. Not every firms economic performance is likely to benefit from CSR.
c. A firms striving toward a high level of CSR will be economically beneficial to the firm.
d. Complementary assets will have no effect on the ability to fully utilize a firms CSR potential.
Q:
Numerous components within a firm, such as formal management control systems and informal relationships between managers and employees that may be especially relevant to CSR are often called:
a. Complementary assets.
b. Accommodative strategy.
c. Global sustainability.
d. Social issue participation.
Q:
A firm that participates in social causes not directly related to the management of its primary stakeholders is engaged in:
a. Secondary stakeholder groups.
b. Defensive strategy.
c. Social issue participation.
d. Global sustainability.
Q:
When looking at CSR as a threat or opportunity, which of the following is NOT true?
a. Energy-intensive and materials-intensive industries are more vulnerable to environmental scrutiny.
b. Labor-intensive industries are more likely to be challenged on fair labor practice grounds.
c. Some industries are immune from CSR.
d. Not all industries are equal in terms of their exposure to CSR challenges.
Q:
Buyers are best able to extract concessions from a firm in all of the following situations EXCEPT:
a. Organizing protests against the firms behavior that causes a drop in sales.
b. Using the threat of going to another source for the product.
c. When the buyer is in great difficulty such as an epidemic.
d. Supporting beneficial social programs.
Q:
If socially and environmentally conscious Firm A provides a unique differentiated products with few or no substitutes:
a. It may be able to extract substantial concessions from its managers.
b. Its bargaining power is likely to be substantial.
c. Its bargaining power will not change.
d. It lowers barriers to entry for other firms.
Q:
Which of the following is an accommodative CSR strategy?
a. Voluntarily go beyond what the regulations require.
b. Resist imposition of what seems unreasonable.
c. View CSR as worthwhile.
d. Actively participate in CSR policy discussion.
Q:
Which is NOT true about CSR?
a. Some CSR policies may reduce the firms value.
b. CSR policies may not pay off if common.
c. CSR that is embedded in people is easier to imitate.
d. It is difficult to prove a link between CSR and economic performance.
Q:
Using the five forces model, which will likely result in a higher level of CSR?
a. A highly concentrated industry.
b. Substitutes that are superior to existing products and costs are reasonable.
c. Socially and environmentally conscious suppliers with standardized products that have multiple substitutes.
d. No monitoring program for all supplier factories.
Q:
When faced with growing demands for greater CSR, firms in more concentrated industries initially will:
a. Make first-move game-changing new products.
b. Collaborate with each other to find solutions.
c. Resist pressures to change.
d. None of the above.
Q:
Which of the following is NOT considered a driving force in the CSR school?
a. The gap between the haves and have-nots has widened.
b. Waves of disasters and scandals have characterized the business world.
c. What CSR critics describe as greed is often translated as incentive in the vocabulary of free market advocates.
d. Managers are unique among stakeholders in that they are the only group positioned at the center of these relationships.
Q:
Which of the following statements sums up Michael Porters view on the importance of creating shared value?
a. Creating shared value involve creating economic value in a way that also creates value for society by addressing its needs and challenges.
b. A free market system that takes the pursuit of self-interest and profits as its guiding light may fail public interest completely.
c. Shareholders are more important that stakeholders.
d. The thorny issue is whether all stakeholders other than shareholders have an equal right to bargain for a fair deal.
Q:
Which of the following statements comes closest to expressing the idea of CSR?
a. The business of business is business.
b. The social responsibility of business is to increase its profits.
c. The purpose of a firm is to serve as a vehicle for coordinating stakeholder interests.
d. If social welfare rather than profit maximization is the focus of firms, they will become socialist organizations.
Q:
Because the operations of multinational enterprises can be bewilderingly complex, even before the goals of CSR are thrown in, firms looking for global sustainability must first:
a. Identify primary and secondary stakeholders.
b. Focus on the details rather than the big picture.
c. Drill down to make CSR drivers simple.
d. Prioritize its goals.
Q:
A firm that strives to meet the needs of the present without compromising the ability of future generations to meet their needs is focused on the goal of:
a. Managing to something other than the bottom line.
b. Primary stakeholders.
c. Community involvement.
d. Global sustainability.
Q:
According to the textbook, the key goal for CSR is:
a. Customer support.
b. Global sustainability.
c. Community involvement.
d. Profitability.
Q:
When it comes to CSR issues, managers have historically:
a. Viewed CSR as the answer to integrating strategic issues.
b. Put CSR on the back burner.
c. Argued in favor of strict environmental regulations.
d. Felt their efforts in promoting the interests all stakeholders was imperative.
Q:
Those who advocate CSR:
a. Conduct their debate within the constraints of capitalism.
b. Argue that a humane capitalism is an oxymoron and unattainable.
c. Argue that the concepts justice and fairness are simply matters of opinion.
d. Argue that the most important stakeholder is the stockholder.
Q:
Free market advocates tend to do all of the following EXCEPT:
a. Argue that the social responsibility of business is to increase its profits, which leads to efficient capital and product markets.
b. Argue that all stakeholders have an equal right to bargain for a fair deal.
c. Believe that the first and foremost stakeholder group is shareholders.
d. Argue that if firms attempt to attain social goals, managers will lose their focus on profit maximization.
Q:
The CSR debate centers on the question:
a. Why does the firm exist?
b. Why is resource management important?
c. What laws are needed to control the firms behavior?
d. What can be done to prevent unreasonable profits?
Q:
Secondary stakeholder groups are:
a. Constituents on whom the firm relies for its continuous survival and prosperity.
b. Those who influence or affect the corporation.
c. Influenced or affected by the corporation.
d. Not engaged in transactions with the corporation and are not essential for its survival.
Q:
NGOs have the ability to:
a. Affect firms practices.
b. Influence firms management.
c. Impact legislation.
d. All of the above.
Q:
CSR tends to be the least concerned with improving:
a. Global sustainability.
b. Shareholder wealth maximization.
c. Rising levels of population.
d. Inequity.
Q:
A narrow focus on CSR sees it as integral to profit maximization, rather than separate from profit maximization.
a. True
b. False
Q:
Managers who treat CSR as a nuisance, involving regulation, added costs, and liability are overestimating the potential business opportunities associated with CSR.
a. True
b. False
Q:
Most MNEs reportedly outperform local firms in environmental management by voluntarily following green practices.
a. True
b. False
Q:
Expanding overseas often comes at the expense of domestic employees and communities, who are primary stakeholders.
a. True
b. False
Q:
The idea that MNEs should not interfere in the domestic political affairs of the host country has been enshrined in a number of codes of MNE but CSR advocates have stressed the necessity for MNEs to engage in actions that often constitute political activity.
a. True
b. False
Q:
Although framed in a domestic versus overseas context, the heart of this debate boils down to the foundational thorny point that frustrates CSR advocates: In a capitalist society, the shareholdersotherwise known as capitalistsare the ones who matter at the end of the day.
a. True
b. False
Q:
How does understanding corporate governance help in answering the four fundamental questions of strategy?
Q:
Are managers (agents) opportunistic?
Q:
Choose one of the aspects of the comprehensive model of corporate governanceindustry-based, resource-based, or institution-based considerationsand how those factors influence the overall model.
Q:
Describe the difference between the market for corporate control and the market for private equity.
Q:
When is it best for a board of directors to use a carrot as a governance mechanism, and when is it better to use a stick?
Q:
What is the potential relationship between concern about a board dominated by insiders and concern about excess executive pay?
Q:
Can interlocking directorates lead to unfair market advantages and investor exploitation? How?
Q:
Are there potential issues involving economic power and national sovereignty in the dominant stock ownership position of institutional investors?
Q:
At this present time, what do you see happening in regard to privatization of SOEs?
Q:
You are the founder of a firm that appears to have significant long-term growth potential. Right now you and your family own 100% of the firms shares and you are trying to figure out whether to keep things that way. How might you do that? Should you do that?
Q:
The likelihood of the same managers, managing the same assets, performing more effectively and reducing the level of principal-agent conflicts, is greater when:
a. Informal rules are taken out of the mix.
b. Based on CEO duality.
c. Operating under the market for corporate control.
d. Private equity is involved.
Q:
The view that private ownership is superior to state ownership in economic policy making is known as the:
a. Beijing Consensus.
b. Washington Consensus.
c. Moral hazard.
d. Stewardship theory.
Q:
In order to tap into a larger pool of capital, Firm A _______ its shares on the stock exchanges in two foreign countries.
a. Cross-lists.
b. Tunnels.
c. Diffuses.
d.
Q:
Which are NOTamong the aspects of globalization?
a. Contact with different governance norms.
b. FPI investors demand more protection.
c. The focus on governance has been replaced by a focus on shareholder value.
d. The global diffusion of best practices.
Q:
Institution-based considerations in governance include all of the following EXCEPT:
a. Formal institutional framework.
b. International experience of senior executives.
c. Impact of informal norms and values.
d. Lack of legal protection and its impact regarding large shareholders in emerging economies.
Q:
In recent years, the increased prevalence of shareholder capitalism is the result of:
a. The global diffusion of best practices.
b. The impact of globalization.
c. The rise of capitalism.
d. All of the above.
Q:
In countries that have weak formal legal and regulatory institutions, concentrated ownership and control:
a. Minimizes the occurrence of principal-principal conflicts.
b. Mostly benefits minority shareholders.
c. Minimizes the occurrence of principal-agent conflicts.
d. Are likely to become more diffuse.
Q:
In light of industry-based considerations, governances practices need to:
a. Follow universal best practices.
b. Increase the number of outside directors for firms in high-growth turbulent industries.
c. Create a fit with the nature of the firms industry.
d. Move toward CEO duality in slow-growth stable industries.
Q:
Industry-based considerations regarding corporate governance include all of the following EXCEPT:
a. Having more outside directors on the board is often regarded as having a negative impact on performance because of their lack of understanding as compared to insiders.
b. In industries characterized by rapid innovation requiring significant R&D investments (such as information technology), outside directors may have a negative impact on firm performance.
c. Research finds that for firms in low-growth, stable industries, no relationship exists between inside management ownership and firm performance.
d. In industries experiencing great turbulence, the presence of a single leader may allow a faster and more unified response to changing events.
Q:
Three decades of privatization suggest all of the following EXCEPT:
a. Privatization to insiders helps improve the performance of small firms.
b. In large corporations privatization to insiders, without external governance pressures, is hardly conducive for needed restructuring.
c. Outside ownership and control, preferably by blockholders, funds, foreigners, and/ or banks, are more likely to facilitate restructuring.
d. When outside investors such as institutional investors do come in, they fail to assert their power.
Q:
Which of the following is true of AngloAmerican corporate governance systems but not true of GermanJapanese systems?
a. It is bank-oriented and network-based.
b. It relies mostly on exit-based external systems.
c. It could be described as stakeholder capitalism.
d. It is a highly developed successful economy.
Q:
The label of __________ has been applied to management focus on stock prices based on the view that the purpose of firms is to serve the economic interests of shareholders.
a. Shareholder capitalism.
b. Stewardship theory.
c. CEO duality.
d. Governance package.
Q:
Following the notion of a board of directors providing carrots and sticks for a firms management, which of the following would be considered a stick?
a. Pay for performance.
b. Stock options.
c. CEO dismissal.
d. Golden parachutes.
Q:
Which of the following make up a governance package?
a. Internal Mechanisms + External Mechanisms.
b. Carrots to motivate managers such as stock options.
c. The market for private equity.
d. The Market for Corporate Control.
Q:
Which of the following would be considered a benefit to having inside directors on a board of directors?
a. Greater independence from managerial influence
b. Greater first-hand knowledge about the firm.
c. More effective control of managers.
d. None of the above.
Q:
The service aspect of the role that boards of directors perform is to:
a. Challenge managerial decisions.
b. Advise the CEO.
c. Protect shareholder interests.
d. Rubber stamp managerial actions.
Q:
In recent years, CEO duality has:
a. Is no longer allowed for firms operating in the United States.
b. Increased from 12% in 2002 to 48% in 2010.
c. Become a less common practice among firms around the world.
d. Decreased based on conclusive research evidence showing it is less effective than nonduality.
Q:
Many firms operate under the assumption that _____________ can better safeguard shareholder interests.
a. Inside directors.
b. Outside directors.
c. Interlocking directors.
d. Management members of the board.
Q:
Boards of directors perform all of the following EXCEPT:
a. Day-to-day operations .
b. Service.
c. Resource acquisition functions.
d. Control.
Q:
Which of the following supports the idea that CEO duality can be effective?
a. Unity of command is increased by two leaders.
b. CEO duality provides a continuity that tends to reduce top-level conflicts.
c. CEOs appreciate close scrutiny by a board chairperson.
d. It is easier to recruit capable individuals for a CEO position if the role of chairperson is not tied to job expectations.
Q:
Which of the following is true regarding CEO duality?
a. From an agency theory standpoint, if the board is to supervise agents such as the CEO, it seems imperative that the board be chaired by the same individual.
b. In US firms with CEO duality, the trend now is to appoint a lead independent director, who chairs the sessions held by outside directors that do not involve company executives.
c. A corporation led by two top leadersa board chairperson and a CEOwill at least have unity of command and experience less top-level conflict.
d. Firms around the world are being pressured to combine the two top jobs..
Q:
Which of the following is true in regard to outside directors?
a. The trend around the world is to introduce fewer outside directors.
b. In the United States, less than a half century ago, most boards were made up entirely or largely of outside directors.
c. Many U.S. firms are now favoring a board that is entirely made of people who are insiders due the need for people who can understand the increasing complexity of MNEs.
d. Academic research has failed to empirically establish a link between the outsider/insider ratio and firm performance.
Q:
Managers from a controlling family who divert resources from the firm for family or personal use have engaged in:
a. Stewardship.
b. Expropriation.
c. CEO duality.
d. Cross-listing.
Q:
An example of a principalprincipal conflict would be one between:
a. Principals and agents.
b. Shareholders and managers.
c. Board of directors and managers.
d. Controlling shareholders and minority shareholders.
Q:
The primary reason that agency problems persist is:
a. Poor stewardship on the part of principals.
b. Poor delegation on the part of agents.
c. Information asymmetries.
d. None of the above.
Q:
In regard to family ownership, all of the following are true EXCEPT:
a. Most small firms in the world are owned and controlled by families.
b. The vast majority of large corporations throughout continental Europe, Asia, Latin America, and Africa no longer feature concentrated family ownership and control.
c. Family ownership and control may provide better incentives for the firm to focus on long-run performance.
d. Such ownership may also minimize the conflict between owners and professional managers typically encountered in widely owned firms.
Q:
Which of the following is true regarding large institutional investors?
a. They include professionally managed mutual funds and pension pools.
b. They own about 25 percent of the stock in major corporations.
c. They are less likely to exercise shareholder rights than smaller investors.
d. Their ability to dump the stock is unlimited.
Q:
Most large, publicly traded UK corporations are now characterized by all of the following except:
a. Diffused ownership.
b. Numerous small shareholders.
c. A separation of ownership and control.
d. Corporate managers who own a majority of the stock.
Q:
Diffused ownership is the opposite of concentrated ownership, and is more common in:
a. The United States and United Kingdom.
b. South America.
c. Asia.
d. Africa.
Q:
The defense of private equity includes all of the following points except:
a. While private equity results in job cuts, the same might happen if targets were acquired by public firms.
b. It would not be rational for private buyers to destroy their prize therefore they attempt to avoid doing that.
c. Their record as corporate citizens is no more barbaric than that of public firms.
d. The actions of U.S. private equity firms have enhanced the image of the U.S. and capitalism around the world.
Q:
As the opening case points out on the negative side, private equity firms have been accused of all of the following EXCEPT:
a. Increasing the income inequality between financiers and the rest of us.
b. Stripping assets from previously high-performing firms.
c. Internationally, causing shock in countries suddenly facing the full rigor of Anglo-American private equity.
d. Placing CSR ahead of all rational economic decisions.