SEVI 3013 PRACTICE EXAM
QUESTIONS WITH CORRECT ANSWERS
Outsiders - Answer-Individuals who are independent of the firm in terms of day-to-day
operations and other relationships
Executive compensation - Answer-a governance mechanism that seeks to align the
interests of managers and owners through salaries, bonuses, and long-term incentives
such as stock awards and options.
hostile takeover - Answer-acquisition of a target company by an acquiring firm that is
accomplished not by coming to an agreement with the target company's management
but by going directly to the company's shareholders or fighting to replace management
in order to get the acquisition approved
_________ __________ __________ ensure that the interests of all stakeholders are
served - Answer-Effective governance mechanisms
strategic competitiveness results when firms are governed in ways that permit at least
minimal satisfaction of: - Answer-- Capital market stakeholders (e.g., shareholders)
- Product market stakeholders (e.g., customers and suppliers)
- Organizational stakeholders (e.g., managerial and non-managerial employees)
Organizational structure - Answer-specifies the firm's formal reporting relationships,
procedures, controls, and authority and decision-making processes
Structural stability - Answer-provides the capacity the firm requires to consistently and
predictably manage its daily work routines
Structural flexibility - Answer-makes it possible for the firm to identify opportunities and
then allocate resources to pursue them as a way of being prepared to succeed in the
future
Strategic controls - Answer-largely subjective criteria intended to verify that the firm is
using appropriate strategies for the conditions in the external environment and the
company's competitive advantages
Financial controls - Answer-largely objective criteria used to measure the firm's
performance against previously established quantitative standards
functional structures used to implement business-level strategies. - Answer-1. Simple
2. Functional
3. Multidivisional
, Simple Organizational Structure - Answer-structure in which the owner-manager makes
all major decisions and monitors all activities, while the staff serves as an extension of
the manager's supervisory authority.
functional organizational structure - Answer-consists of a chief executive officer and a
limited corporate staff, with functional line managers in dominant organizational areas
such as production, accounting, marketing, R & D, engineering, and human resources.
multidivisional organizational structure - Answer-consists of a corporate office and
operating divisions, each operating division representing a separate business or profit
center in which the top corporate officer delegates responsibilities for day-to-day
operations and business-unit strategy to division managers.
three versions of the multidivisional (M-form) structure to implement different
diversification strategies - Answer-1. Cooperative form
2. Strategic Business Unit Form
3. Competitive form
cooperative form - Answer-an M-form structure in which horizontal integration is used to
bring about interdivisional cooperation
strategic business unit (SBU) form is an M-form consisting of 3 levels - Answer-1.
Corporate headquarters
2. Strategic business units (SBU's)
3. SBU divisions
Competitive form - Answer-an M-form structure characterized by complete
independence among the firm's divisions which compete for corporate resources
three international strategies - Answer-Multidomestic Strategy Global Strategy
Transnational Strategy
Multidomestic Strateg - Answer-decentralizes the firm's strategic and operating
decisions to business units in each country so that product characteristics can be
tailored to local preferences.
global strategy - Answer-one through which the firm offers standardized products across
country markets.
transnational strategy - Answer-calls for the firm to combine the multi domestic
strategy's local responsiveness with the global strategy's efficiency.
The transnational strategy is often implemented through two possible combination
structures: - Answer-1. A global matrix structure
2. A hybrid global design
QUESTIONS WITH CORRECT ANSWERS
Outsiders - Answer-Individuals who are independent of the firm in terms of day-to-day
operations and other relationships
Executive compensation - Answer-a governance mechanism that seeks to align the
interests of managers and owners through salaries, bonuses, and long-term incentives
such as stock awards and options.
hostile takeover - Answer-acquisition of a target company by an acquiring firm that is
accomplished not by coming to an agreement with the target company's management
but by going directly to the company's shareholders or fighting to replace management
in order to get the acquisition approved
_________ __________ __________ ensure that the interests of all stakeholders are
served - Answer-Effective governance mechanisms
strategic competitiveness results when firms are governed in ways that permit at least
minimal satisfaction of: - Answer-- Capital market stakeholders (e.g., shareholders)
- Product market stakeholders (e.g., customers and suppliers)
- Organizational stakeholders (e.g., managerial and non-managerial employees)
Organizational structure - Answer-specifies the firm's formal reporting relationships,
procedures, controls, and authority and decision-making processes
Structural stability - Answer-provides the capacity the firm requires to consistently and
predictably manage its daily work routines
Structural flexibility - Answer-makes it possible for the firm to identify opportunities and
then allocate resources to pursue them as a way of being prepared to succeed in the
future
Strategic controls - Answer-largely subjective criteria intended to verify that the firm is
using appropriate strategies for the conditions in the external environment and the
company's competitive advantages
Financial controls - Answer-largely objective criteria used to measure the firm's
performance against previously established quantitative standards
functional structures used to implement business-level strategies. - Answer-1. Simple
2. Functional
3. Multidivisional
, Simple Organizational Structure - Answer-structure in which the owner-manager makes
all major decisions and monitors all activities, while the staff serves as an extension of
the manager's supervisory authority.
functional organizational structure - Answer-consists of a chief executive officer and a
limited corporate staff, with functional line managers in dominant organizational areas
such as production, accounting, marketing, R & D, engineering, and human resources.
multidivisional organizational structure - Answer-consists of a corporate office and
operating divisions, each operating division representing a separate business or profit
center in which the top corporate officer delegates responsibilities for day-to-day
operations and business-unit strategy to division managers.
three versions of the multidivisional (M-form) structure to implement different
diversification strategies - Answer-1. Cooperative form
2. Strategic Business Unit Form
3. Competitive form
cooperative form - Answer-an M-form structure in which horizontal integration is used to
bring about interdivisional cooperation
strategic business unit (SBU) form is an M-form consisting of 3 levels - Answer-1.
Corporate headquarters
2. Strategic business units (SBU's)
3. SBU divisions
Competitive form - Answer-an M-form structure characterized by complete
independence among the firm's divisions which compete for corporate resources
three international strategies - Answer-Multidomestic Strategy Global Strategy
Transnational Strategy
Multidomestic Strateg - Answer-decentralizes the firm's strategic and operating
decisions to business units in each country so that product characteristics can be
tailored to local preferences.
global strategy - Answer-one through which the firm offers standardized products across
country markets.
transnational strategy - Answer-calls for the firm to combine the multi domestic
strategy's local responsiveness with the global strategy's efficiency.
The transnational strategy is often implemented through two possible combination
structures: - Answer-1. A global matrix structure
2. A hybrid global design
