Corporate Governance And Business Ethics

This question bank verified by Studydeets

Questions Bank

What Is Strategy
Strategic Leadership: Managing the Strategy Process
External Analysis: Industry Structure, Competitive Forces, and Strategic Groups
Internal Analysis: Resources, Capabilities, and Core Competencies
Competitive Advantage, Firm Performance, and Business Models
Business Strategy: Differentiation, Cost Leadership, and Blue Oceans
Business Strategy: Innovation, Entrepreneurship, and Platforms
Corporate Strategy: Vertical Integration and Diversification
Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
Global Strategy: Competing Around the World
Organizational Design: Structure, Culture, and Control
Corporate Governance and Business Ethics

All Questions

Question 1

Free

Multiple Choice

Which of the following occurrences was NOT an event that facilitated HP's sordid "soap opera"?

Choose correct answer/s

Patricia Dunn, then chairman of the board, launched a covert investigation where she conducted surveillance on HP's board members, selected employees, and some journalists.

Mark Hurd, newly appointed CEO, oversaw large-scale layoffs and a pay cut for all remaining employees as he reorganized the company.

Jodie Fisher, an independent contractor, worked as a hostess at HP-sponsored events and personally ensured that Mr. Hurd spent time with the most important clients.

Leo Apotheker, who came to HP after being let go from SAP, proposed a new corporate strategy for HP.

Check answer

Question 2

Free

Multiple Choice

What was Leo Apotheker's role in the downfall of HP's market value?

Choose correct answer/s

Mr. Apotheker leaked sensitive internal information to an online magazine.

Mr. Apotheker was involved in a sexual harassment lawsuit with Jodie Fisher, an independent contractor.

Mr. Apotheker appointed Meg Whitman as the interim head of HP.

Mr. Apotheker was instrumental in acquiring the overvalued British software company Autonomy.

Check answer

Question 3

Free

Multiple Choice

Which of the following statements is true of shareholders in a public stock company?

Choose correct answer/s

They directly supervise and coordinate the manufacture of products and delivery of services.

They are granted a charter of incorporation by the state and legally own company stock.

They are the centerpiece of corporate governance.

They are appointed by a board of directors to oversee the company's management.

Check answer

Question 4

Free

Multiple Choice

What does "limited liability for investors" imply in a public stock company?

Choose correct answer/s

Shareholders are liable for their invested capital and personal wealth and not for any other investments made.

Shareholders who provide the risk capital are liable only to the capital specifically invested.

Shareholders are liable for all the decisions made by the board of directors of the company.

Shareholders have financial but not legal responsibilities toward the public stock company.

Check answer

Question 5

Free

Multiple Choice

Jamiro Inc.is a public stock company.Which of the following statements about the company best illustrates the fact that its investors have limited liability?

Choose correct answer/s

Employees of Jamiro are legally permitted to invest their capital in the company's stock.

Employees of Jamiro are also the owners of the company.

Shareholders of Jamiro are responsible to the company only for the capital they have invested.

Shareholders of Jamiro are not permitted to trade their company stock at the New York Stock Exchange (NYSE).

Check answer

Question 6

Multiple Choice

Which of the following is a characteristic of a public stock company?

Choose correct answer/s

Shareholders who provide risk capital are liable for all losses incurred by the company.

Investor ownership cannot be transferred easily between investors.

Legal personality allows a firm's continuation beyond the founder or the founder's family.

In publicly traded companies, professional managers are the legal owners of the company.

To unlock the question

Question 7

Multiple Choice

Roman owns shares in a company called Copnay Telecom Inc.The company's financial performance has been declining over the past few months, and the value of its stock has been decreasing.Roman wants to proactively cut his losses and therefore sells his shares.Jeremy, a trading enthusiast, buys shares in Copnay Telecom because he believes that the share prices cannot go anywhere but up.Which of the following characteristics of a public stock company does this scenario best exemplify?

Choose correct answer/s

Separation of legal ownership and management control

Legal personality

Limited liability for investors

Transferability of investor ownership

To unlock the question

Question 8

Multiple Choice

Hoptin Inc.is a public stock company.Which of the following best exemplifies the legal personality of the company?

Choose correct answer/s

Rosa can legally sell shares of Hoptin in the stock market.

John is a shareholder of Hoptin but does not have any managerial duties.

Kevin, an employee at Hoptin, is not responsible for any losses that Hoptin incurs.

Jessi Hoptin, the company's founder, died a few years ago, yet the company is doing well.

To unlock the question

Question 9

Multiple Choice

What best describes transferability of investor ownership in a public stock company?

Choose correct answer/s

Investors can give out company stocks as a gift.

Investors are allowed to trade shares of stocks.

Investors are allowed to participate in strategy formulation.

Investors can be hired as employees.

To unlock the question

Question 10

Multiple Choice

Mario founded Tapoz Communications Inc.in 1993.Ten years later, the company went public.Despite Mario's death in 2005, the company reported a 75 percent increase in revenue in 2006.Which of the following characteristics of a publicly traded company does this scenario best exemplify?

Choose correct answer/s

Transferability of investor ownership

Legal personality

Limited liability for investors

Separation of legal ownership and management control

To unlock the question

Question 11

Multiple Choice

Which of the following statements best supports the separation of ownership and control in publicly traded companies?

Choose correct answer/s

Shareholders are liable only for the capital they invest and not for their personal wealth.

Shareholders can freely trade the company stocks.

Shareholders own stocks but do not run the company.

Managers control the company but may also have stock ownership.

To unlock the question

Question 12

Multiple Choice

According to Michael Porter, which of the following is a problem with many publicly traded companies?

Choose correct answer/s

Shareholders of publicly traded companies do not have a legitimate claim on profits.

Many publicly traded companies have defined value creation too narrowly in terms of financial performance.

There is no transferability of stock ownership in publicly traded companies.

The legal owners of publicly traded companies also make management decisions for the company.

To unlock the question

Question 13

Multiple Choice

What is the result of managers' pursuit of strategies that define value creation too narrowly in public stock companies?

Choose correct answer/s

It gives the managers greater control of the performance of the organization in the long term.

It reduces the trust of shareholders in the organization as a vehicle for value creation.

It helps companies increase firm profits by creating shared value.

It enables companies to create social value by addressing society's needs but prevents them from creating economic value for shareholders.

To unlock the question

Question 14

Multiple Choice

Rehman is a firm believer in Milton Friedman's view of a firm's social obligations.With which of the following statements is Rehman most likely to agree?

Choose correct answer/s

Businesses can use their resources to create profit as long as they do so within the rules of the game.

Firms should not go beyond their economic responsibility to increase profits.

Firms should define value creation more narrowly in terms of financial performance.

Businesses should engage in open and free competition without deception or fraud, only as long as their competitors do so.

To unlock the question

Question 15

Multiple Choice

According to the perspective of shareholder capitalism, _____ .

Choose correct answer/s

shareholders in public stock companies are restricted from buying shares of two competing companies

shareholders in public stock companies have the most legitimate claim on profits

shareholders in public stock companies have significant decision-making power

shareholders in public stock companies have unlimited financial liability

To unlock the question

Question 16

Multiple Choice

Leila is a graduate student pursuing a course in international business.Presented with the case of HP's "soap opera," Leila wonders whether it was the right decision to ask the CEO of HP, Mark Hurd, to step down after he was accused of sexual harassment.Having a strong inclination toward Michael Porter's idea of value creation, Leila is most likely to conclude that:

Choose correct answer/s

HP was wrong in asking Mark to step down because it did not consider the profit dip that would affect its shareholders.

HP was right in asking Mark to step down because it has a greater obligation toward society.

HP was wrong in asking Mark Hurd to step down because he was responsible for an almost 90 percent appreciation of the company's stock.

HP was right in asking Mark Hurd to step down because agents, unlike principals, are disposable.

To unlock the question

Question 17

Multiple Choice

Which of the following real-world events would act as the most likely deterrent against adopting a purely stakeholder strategy approach to business?

Choose correct answer/s

The nonsustainable debt levels incurred by sovereign governments to fund social programs

The financial crisis in Europe brought about by money lenders seeking to make quick money

The collapse of the economy in the U.S. brought about by the housing crisis

The rise of GDP in countries that do not believe in Milton Friedman's philosophy

To unlock the question

Question 18

Multiple Choice

Creating economic value for shareholders while also creating social value is known as creating _____ .

Choose correct answer/s

a social market economy

shareholder capitalism

shared value

stakeholder strategy

To unlock the question

Question 19

Multiple Choice

Which of the following perspectives best supports the Shared Value creation framework?

Choose correct answer/s

Markets are more often than not defined by societal needs rather than economic needs.

Failing to create value for society almost always reflects on the bottom line.

A firm's competitive advantage depends on pitting economic and societal needs in a trade-off.

Externalities such as pollution, wasted energy, and costly accidents actually create internal costs.

To unlock the question

Question 20

Multiple Choice

Which of the following statements best supports the view that GE's ecomagination strategy is in line with the Shared Value creation framework?

Choose correct answer/s

The ecomagination strategy is the brainchild of the founder of the company.

The ecomagination strategy helps GE spend more on research and development than other similar companies.

The ecomagination strategy generated $3 billion in revenues for GE during 2012.

The ecomagination strategy allows GE to produce "green" products while increasing revenue and competitive advantage.

To unlock the question