3/30/2015

Oxford University Press | Online Resource Centre | Chapter 12

Henry: Understanding Strategic Management 2e

Chapter 12

Results

You have answered 0 out of 15 questions correctly.

Your percentage score is 0%.
Question 1
According to Cadbury (2002), corporate governance is an issue of power and:
You did not answer the question.
Correct answer:
b) Accountability
Feedback:
Corporate governance is required to ensure that the managers of an organization do not act in their own self-interest.
Page reference: 392

Question 2
The OECD argues that corporate governance problems arise because:
You did not answer the question.
Correct answer:
a) Ownership and control is separated
Feedback:
This is known as the 'principle-agent problem'.
Page reference: 393

Question 3
The Institute of Chartered Accountants in England and Wales considers argue that one particular stakeholder group should have primacy over all
other groups. Which stakeholder group are they referring to?
You did not answer the question.
Correct answer:
c) Shareholders
Feedback:
This is because it is shareholders' money at stake.
Page reference: 394

Question 4
An organization that is owned by shareholders but managed by agents on their behalf is conventionally known as the modern:

http://global.oup.com/uk/orc/busecon/business/henry2e/01student/mcqs/ch12/?view=Standard

1/4

3/30/2015

Oxford University Press | Online Resource Centre | Chapter 12

You did not answer the question.

Correct answer:
b) Corporation
Feedback:
The modern corporation has a number of attributes that have led to its spread and acceptance.
Page reference: 395

Question 5
The modern corporation has four characteristics. These are limited liability, legal personality, centralized management and:
You did not answer the question.
Correct answer:
d) Transferability
Feedback:
It is a feature of the modern corporation that shareholders can sell their shareholding when they wish. This makes the level of risk associated
with investing in a corporation more acceptable.
Page reference: 395

Question 6
What makes a corporation distinct from a partnership?
You did not answer the question.
Correct answer:
a) If the members of a corporation die, the corporation remains in existence providing it has capital
Feedback:
This is known as 'legal personality'. In contrast, a partnership does not have a legal personality.
Page reference: 396

Question 7
The term 'asymmetry of information' means information in a corporation is:
You did not answer the question.
Correct answer:
c) Not equally transparent to all stakeholders
Feedback:
Asymmetry of information occurs when the managers have access to more information than some of the owners who may be widely
dispersed.
Page reference: 398

Question 8
The view that sees profit maximization as the main objective is known as:
You did not answer the question.
Correct answer:
http://global.oup.com/uk/orc/busecon/business/henry2e/01student/mcqs/ch12/?view=Standard

2/4

3/30/2015

Oxford University Press | Online Resource Centre | Chapter 12

a) Shareholder theory
Feedback:
The opposing view is stakeholder theory which has the view that corporations' role in society goes beyond just making a profit.
Page reference: 398

Question 9
Who is the most famous exponent of shareholder theory?
You did not answer the question.
Correct answer:
c) Milton Friedman
Feedback:
Milton Friedman argues that managers who run a corporation for social good are being irresponsible with shareholders' money.
Page reference: 398

Question 10
The key protagonist of stakeholder theory is:
You did not answer the question.
Correct answer:
b) R. E Freeman
Feedback:
Stakeholder theory does not give primacy to shareholders.
Page reference: 405

Question 11
Where an organization takes into account the effect its strategic decisions have on society, this is known as:
You did not answer the question.
Correct answer:
d) Corporate social responsibility
Feedback:
CSR is an umbrella term for the ethical behaviour of an organization with respect to all of its stakeholders. More and more organizations are
becoming aware of the need to act in a manner that goes beyond the legal minimum obligation.
Page reference: 406

Question 12
Which intervention resulted from the Enron scandal?
You did not answer the question.
Correct answer:
b) The Sarbannes-Oxley Act
Feedback:
http://global.oup.com/uk/orc/busecon/business/henry2e/01student/mcqs/ch12/?view=Standard

3/4

3/30/2015

Oxford University Press | Online Resource Centre | Chapter 12

The Sarbannes-Oxley Act went further than codes of conduct. Some companies are having difficulty adhering to the stipulations of the Act.
Page reference: 415

Question 13
Executive pay in the UK was reviewed by:
You did not answer the question.
Correct answer:
a) The Greenbury Committee
Feedback:
The Greenbury report was in response to concerns over excessively high levels of executive pay. These executives were popularly referred to
as 'fat cats'.
Page reference: 416

Question 14
Kakabadse and Kakabadse (2001) argue that existing corporate governance models in general are:
You did not answer the question.
Correct answer:
b) Increasing social inequalities
Feedback:
These authors represent the stakeholder view. They argue that corporate governance issues need to be debated at the level of society, rather
than at the level of the corporation.
Page reference: 423

Question 15
In Japan, some corporations operate within the philosophy of 'kyosei'. The term 'kyosei' means:
You did not answer the question.
Correct answer:
c) Living and working for the common good
Feedback:
The kyosei way of running a corporation reflects stakeholder theory rather than shareholder theory. It sees business as being part of society.
Page reference: 405

Copyright Oxford University Press, 2015. All Rights Reserved.

http://global.oup.com/uk/orc/busecon/business/henry2e/01student/mcqs/ch12/?view=Standard

4/4