review questions chapter 10 & 11

Review Questions – chapter 10

What is corporate governance? What factors account for the considerable amount of attention corporate governance receives from several parties, including shareholder activists, business press writers, and academic scholars? Why is governance necessary to control managers’ decisions?

What is meant by the statement that ownership is separated from managerial control in the corporation? Why does this separation exist?

What is an agency relationship? What is managerial opportunism? What assumptions do owners of corporations make about managers as agents?

How is each of the three internal governance mechanisms—ownership concentration, boards of directors, and executive compensation—used to align the interests of managerial agents with those of the firm’s owners?

What trends exist regarding executive compensation? What is the effect of the increased use of long-term incentives on top-level managers’ strategic decisions?

What is the market for corporate control? What conditions generally cause this external governance mechanism to become active? How does this mechanism constrain top-level managers’ decisions and actions?

What is the nature of corporate governance in Germany, Japan, and China?

How can corporate governance foster ethical decisions and behaviors on the part of managers as agents?

Review Questions – chapter 11

What is organizational structure and what are organizational controls? What are the differences between strategic controls and financial controls? What is the importance of these differences?

What does it mean to say that strategy and structure have a reciprocal relationship?

What are the characteristics of the different functional structures used to implement the cost leadership, differentiation, integrated cost leadership/differentiation, and focused business-level strategies?

What are the differences among the three versions of the multidivisional (M-form) organizational structures that are used to implement the related constrained, the related linked, and the unrelated corporate-level diversification strategies?

What organizational structures are used to implement the multidomestic, global, and transnational international strategies?

What is a strategic network? What is a strategic center firm? How is a strategic center firm used in business-level, corporate-level, and international cooperative strategies?