1- Which type of company scenario represents concentrated ownership and control?
| | a. Ownership is dispersed among many small shareholders. | |
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| | b. A family owns and controls the firm. | |
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| | c. Majority owners run the firm. | |
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| | d. Founders completely own and control the firm. | |
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2-In companies with a separation of ownership and control, control is largely in the hands of whom?
3-Which components are considered to be the tripod of corporate governance?
| | a. principals, owners, agents | |
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| | b. principals, agents, managers | |
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| | c. agents, board of directors, owners | |
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| | d. owners, managers, board of directors |
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4-What are the members of the board of directors responsible for?
| | a. development of markets | |
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| | d. retention of customers |
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5-Which of the following is an example of an external governance mechanism?
| | a. managers' compensation | |
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| | b. the board dismisses the CEO | |
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| | c. management stock options | |
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6-Which of the following is characteristic of corporate governance systems in the U.S. and U.K.?
| | a. weak internal, weak external | |
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| | b. strong internal, weak external | |
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| | c. strong internal, strong external | |
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| | d. weak internal, strong external |
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7-What does the stewardship theory suggest?
| | a. maximize the managers' own utility functions | |
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| | b. expropriate shareholders | |
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| | c. safeguard shareholders' interests | |
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| | d. get involved in related transactions |
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8-Why should firms develop firm-specific capabilities to differentiate on governance dimensions?
| | a. suppliers will increase productivity | |
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| | b. product prices will be lower | |
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| | c. the capabilities are hard to imitate | |
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| | d. all firms have these capabilities |
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9-Which type of connection illustrates an example of an agency relationship?
| | a. shareholders and professional managers | |
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| | b. first- and second-generation family owners | |
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| | c. the local government and firm managers | |
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| | d. majority shareholders and minority shareholders |
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10-Which of the following sources are available to international firms to finance their operations and growth?
11-Which view states that formal and informal elements of firms influence governance and financing?
12-Which of the following aspects of globalization have a bearing on corporate governance?
| | a. foreign portfolio investment | |
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| | b. organizational culture | |
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13-What are the most valuable, rare, and hard-to-imitate firm-specific resources?
| | a. financial reporting processes | |
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| | b. lean manufacturing operations | |
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| | c. custom design equipment | |
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| | d. managerial human capital |
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14-What do global convergence advocates argue?
| | a. Agency theory supports stewardship theory. | |
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| | b. Firms will be forced to adopt globally best practices. | |
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| | c. Laws have rarely been effectively enforced against foreign firms. | |
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| | d. Firms do not necessarily adopt U.S. governance norms. |
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15-What is expropriation?
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| | b. activities that enrich controlling shareholders at the expense of minority shareholders | |
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| | c. employing individuals from different countries | |
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| | d. selling too much stock |
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16-When does CEO duality occur?
| | a. when the CEO is following two different visions | |
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| | b. when the CEO is the head of two different companies | |
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| | c. when the CEO represents two different countries on the board | |
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| | d. when the CEO and the chair of the board of directors are the same person |
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17-A firm focuses on shareholders' willingness to work with managers by voicing their concerns. Which type of governance mechanism is this?
18-What do savvy managers need to be able to do related to corporate governance?
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| | b. benchmark foreign firms | |
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| | d. change executive compensation |
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19-All EXCEPT which of the following is an example of an agency problem?
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| | b. research and development costs | |
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| | c. low-risk short-term investments | |
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| | d. on-the-job consumption |
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20-What does the inactive versus active family firm internationalization debate argue?
| | a. Large family firms are reluctant to seek equity. | |
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| | b. Large family firms tend to not seek out shareholders. | |
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| | c. Small family firms tend to avoid risk. | |
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| | d. Small family firms tend to detach from initial mission. |
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