1) Pre-emptive right is the obligation to purchase
new shares issued by the company to maintain
a shareholder’s percentage ownership in the
company.
FALSE
2) Goal congruence is the harmony and alignment
of goals of both the principal and the agent
which is consistent with the overall objectives
of the organization.
TRUE
3) The fundamental objectives of corporate
governance are improvement of shareholder
value and conscious consideration of the
interests of other stakeholders.
TRUE
4) Good corporate governance helps companies
operate more efficiently, mitigate risk, and
safeguard against mismanagement, and
improve access to capital that will fuel their
growth.
TRUE
5) According to Ambrose Bierce, a corporation is
an ingenious way of obtaining profit with little
individual responsibility.
FALSE
6) Most people believed that private ownership of
business is more ideal than government
ownership to achieve the best economic
decisions.
TRUE
7) Line authority is a vertical flow of authority
between specialists in advisory positions and
line management teams.
FALSE
8) Decentralization is always better than
centralization.
FALSE
9) The political environment in which a firm
operates has a negligible impact on a company's
international operating activities.
FALSE
10) Professional bureaucracy is best at mass
produced tasks and is characterized by many
layers of management and formal procedures.
FALSE
11) Many companies work on a rotating system so
that only a fraction of directors are up for
election each year which makes it much more
difficult for a complete board change to take
place due to a hostile takeover.
TRUE
12) The CEO is usually the singular organizational
position that is principally accountable in
carrying out strategic policies as established by
the board of directors.
TRUE
13) In some European countries, many directors
there feel that it is their primary responsibility
to protect the shareholders of a company first.
FALSE
14) A company which wants to set up an employee
stock ownership plan creates a trust to which it
makes annual contributions.
TRUE
15) The foundation of good corporate governance is
the intelligence of directors and senior
management.
FALSE
16) The rules dictating voting procedures and other
aspects of corporate governance for a
corporation are
THE ARTICLES OF INCORPORATION
17) The primary inside stakeholder of a corporation
SHAREHOLDERS
18) Which of the following would contribute to
information risk
- INAPPROPRIATE MANAGEMENT OVERRIDE
- UNSUITABLE CONTROL ENVIRONMENT
- LACK OF SINCERE MANAGEMENT
SUPERVISION
19) Which one is not a benefit of good governance?
REDUCTION OF CORPORATE VALUE
BENEFITS:
- IMPROVES MARKETABILITY
- REDUCE VULNERABILITY OF COMPANIES
- IMPROVES COMPANY’S CREDIBILITY
20) The basic premise on accountability is that
accountable organization will
- SET GOALS AND STANDARDS AGAINST
WHICH STRATEGY AND ASSOCIATED CAN
BE MEASURED AND EVALUATED
- SET A POLICY BASED ON BALANCE
UNDERSTANDING AND RESPONSE TO
MATERIAL STAKEHOLDERS ISSUES AND
CONCERNS
- DISCLOSED CREDIBLE INFORMATION
21) Which form of invested capital is subject to
most of the firm's business and financial risk?
EQUITY CAPITAL
22) Which one is/are part of corporate governance?
- BOD
- CEO
- CFO
23) Which one is among the incentives and
disincentives of agency under principal-agent
relationship?
- TAKEOVER THREAT
- THREAT OF BEING FIRED
- SHARE INCENTIVES
24) Agency costs refer to
THE COSTS THAT ARISE DUE TO CONFLICTS OF
INTEREST BETWEEN SHAREHOLDERS AND
MANAGERS
25) Which one is not the role of non-executive
director?
IMPLEMENTS INTERNAL CONTROL
ROLES:
- MONITORING OF PERFORMANCE
- AUDIT
- SETTING OF STRATEGY
26) One of the tasks for financial managers when
identifying projects that increase firm value is to
identify those projects where
BENEFITS ARE AT LEAST EQUAL TO THE
PROJECT’S COSTS
27) Forecasting and measuring organizations
performance is accomplished through
PLANNING AND CONTROL SYSTEMS
28) As a manager, you encountered an important
problem that seems almost impossible to solve.
Top management would likely suggest that you:
TRY USING DIFFERENT LENSES TO ANALYZE
THE PROBLEM AND DEVELOP STRATEGIES
29) As described the actions of the successful
manager as similar to a skilled carpenter using
the right tools for the job. Thus, a successful
manager must
POSSESS “A DIVERSE COLLECTION OF HIGH-
QUALITY IMPLEMENTS (I.E. FRAMES)” ALONG
WITH THE KNOWLEDGE OF WHEN AND HOW
TO USE THEM
30) It is argued that even the smartest managers
take foolish actions in decision making because
they
HAVE A PAROCHIAL AND DISTORTED VIEW OF
THE PROBLEM AT HAND
31) Lateral coordination is often achieved through
A CLEAR CHAIN OF COMMAND
32) Patriarchal organizations are characterized by a
DOMINANT FATHER FIGURE OR A RULER WITH
ALMOST UNLIMITED AUTHORITY AND POWER
33) When designing the structure of an
organization, creating roles, and units yields the
benefits of specialization but creates problems
of
COORDINATION AND CONTROL
34) The world that we perceive is for the most part
CONSTRUCTED INTERNALLY ON THE BASIS OF
INDIVIDUALS’ BELIEFS AND PERCEPTUAL
FILTERS
35) Are becoming more prevalent in fast moving
fields like biotechnology, where knowledge is so
complex and widely dispersed that
organizations find it impractical to exercise
initiatives alone
MATRIX STRUCTURES
36) When deciding how to coordinate work roles
and units in an organization it is best to
USE EITHER VERTICAL OR HORIZONTAL
COORDINATION BUT NOT BOTH
37) Which type of investor causes the most
problem for CEOs in developing strategic plans?
SHAREHOLDERS SEEKING SHORT-TERM GAINS
38) The chief contribution of Henry Mintzberg’s
conception of structural possibilities is
A DETAILED PRESCRIPTION OF HOW TO
STRUCTURE AN ORGANIZATION IN RESPONSE
TO DIFFERENT MISSIONS AND EXTERNAL
CHALLENGES TO ENVISION ORGANIZATIONS
AS WEBS OF INCLUSION
39) In the first three decades of the twentieth
century, working conditions were horrible and
dangerous, and abuses were common. Most
people of the time believed these abuses would
be rectified by
STRICT GOVERNMENT ACTION TO PUNISH THE
OFFENDERS
40) In the long run, the success of a company is
built on
LONG-TERM RELATIONSHIPS WITH
CUSTOMERS BUILT ON MUTUAL RESPECT AND
COOPERATION THAT LEAD S TO REPEAT
PURCHASING
41) In Henry Mintzberg’s conception structural
possibilities, the __________ is composed of
specialists, technicians and analysts who
standardize, measure, and inspect output and
procedures
TECHNO-STRUCTURE
42) When defining an organization’s structure, the
key consideration should involve
ALLOCATION OF RESPONSIBILITIES ACROSS
DIFFERENT UNITS AND MEMBERS, AS WELL AS
THE INTEGRATION OF THESE EFFORTS IN
PURSUIT OF COMMON GOALS
43) Employee’s commitment develop from
EMPLOYEES WHO BELIEVE THEIR FUTURE IS
TIED TO THAT OF THE ORGANIZATION AND
ARE WILLING TO MAKE PERSONAL SACRIFICES
FOR THE ORGANIZATION
44) Forecasting and measuring organizations
performance is accomplished through
PLANNING AND CONTROL SYSTEMS
45) What does the government encourage in order
to protect the consumer’s right to choose?
COMPETITION