Mana 4322 exam 3
Informational control - answer- "doing the right things"
-ongoing process of organizational learning
-focuses on changing information-continuous monitoring, testing, review
-influencing behavior by providing information, knowledge, or guidelines
behavioral control - answer= focused on implementation —"doing things right."
• Influences the actions of employees via:
- Culture
- Rewards
- Boundaries
organizational culture - answer is a system of:
- Shared values (what is important).
- Beliefs (how things work)
• shapes a firm's people, organizational structures, and control systems
• produces behavioral norms(the way we do things around here)
Organizational culture sets implicit boundaries regarding - answer-dress
-ethical matters
-the way an organization conducts its business
Reward systems & incentive programs: - answer-Powerful means of influencing an
organization's culture
-Focusing efforts on high-priority tasks
-Motivating individual & collective task performance
-Can be an effective motivator & control mechanism
Potential downsides to reward systems - answer-Individual actions are not related to
compensation; employees are rewarded for the wrong things
-Different business units have differing rewards systems
-Behavior reinforced within subcultures may reflect value differences in opposition to the
dominant culture
-Reward systems may lead to information hoarding, working at cross purposes
boundaries and constraints - answer-focusing individual efforts on strategic priorities
-providing short-term objectives and action plans to channel employee efforts
-Setting specific, measurable objectives, including aspecific time horizon for attainment -
Making them achievable, yet challenging enough to motivate
• Holding individual managers accountable forimplementation.
, What constitutes corporate governance? - answer-focuses on relationships among 3
sets of participants in determining the direction and performance of corporations:
- Shareholders
- Management (led by the CEO)
- Board of Directors.
Board of Directors - answer- Become active, critical participants
- Discuss forward-looking strategic issues
- Evaluate CEOs against high performance standards
- Practice direct or independence
-oversee company management and make strategic decisions on behalf of
shareholders
Shareholders - answerhave rights and mechanisms to participate in key decisions, such
as electing directors, approving major transactions, and receiving relevant information
about the company's performance.
Management (led by CEO) - answer-executes company strategy, achieving its
objectives, and day-to-day operations
-drives strategic direction
-manages operation
-mitigates risk
-ensures compliance
-takes initiatives to promote sustainable business performance and long-term value
creation
Internal control mechanisms of corporate governance: CEO - answerUnity of command:
(in favor of) duality:
- Provides clear focus
- Eliminates confusion and conflict
- Enhances a firm's responsiveness
- Enables quick decisions based on first-hand knowledge
• Agency theory: (in favor of) separation.- Safeguards against corruption or
incompetence.- Removes conflict of interest, especially regarding CEOsuccession.
Internal Corporate Governance Mechanisms: Shareholder Activism - answer-
shareholders have rights
-- To sell stock, vote the proxy, bring suit for damages, get information
• Collectively, shareholders have power.
- To direct the course of corporations, file shareholder actionsuits, demand key issues
be brought up for proxy votes.
• Institutional investors can be aggressive.
- By pressuring the firm to change leadership or undertakestrategic actions such as
stock buy-back or selloff.
Informational control - answer- "doing the right things"
-ongoing process of organizational learning
-focuses on changing information-continuous monitoring, testing, review
-influencing behavior by providing information, knowledge, or guidelines
behavioral control - answer= focused on implementation —"doing things right."
• Influences the actions of employees via:
- Culture
- Rewards
- Boundaries
organizational culture - answer is a system of:
- Shared values (what is important).
- Beliefs (how things work)
• shapes a firm's people, organizational structures, and control systems
• produces behavioral norms(the way we do things around here)
Organizational culture sets implicit boundaries regarding - answer-dress
-ethical matters
-the way an organization conducts its business
Reward systems & incentive programs: - answer-Powerful means of influencing an
organization's culture
-Focusing efforts on high-priority tasks
-Motivating individual & collective task performance
-Can be an effective motivator & control mechanism
Potential downsides to reward systems - answer-Individual actions are not related to
compensation; employees are rewarded for the wrong things
-Different business units have differing rewards systems
-Behavior reinforced within subcultures may reflect value differences in opposition to the
dominant culture
-Reward systems may lead to information hoarding, working at cross purposes
boundaries and constraints - answer-focusing individual efforts on strategic priorities
-providing short-term objectives and action plans to channel employee efforts
-Setting specific, measurable objectives, including aspecific time horizon for attainment -
Making them achievable, yet challenging enough to motivate
• Holding individual managers accountable forimplementation.
, What constitutes corporate governance? - answer-focuses on relationships among 3
sets of participants in determining the direction and performance of corporations:
- Shareholders
- Management (led by the CEO)
- Board of Directors.
Board of Directors - answer- Become active, critical participants
- Discuss forward-looking strategic issues
- Evaluate CEOs against high performance standards
- Practice direct or independence
-oversee company management and make strategic decisions on behalf of
shareholders
Shareholders - answerhave rights and mechanisms to participate in key decisions, such
as electing directors, approving major transactions, and receiving relevant information
about the company's performance.
Management (led by CEO) - answer-executes company strategy, achieving its
objectives, and day-to-day operations
-drives strategic direction
-manages operation
-mitigates risk
-ensures compliance
-takes initiatives to promote sustainable business performance and long-term value
creation
Internal control mechanisms of corporate governance: CEO - answerUnity of command:
(in favor of) duality:
- Provides clear focus
- Eliminates confusion and conflict
- Enhances a firm's responsiveness
- Enables quick decisions based on first-hand knowledge
• Agency theory: (in favor of) separation.- Safeguards against corruption or
incompetence.- Removes conflict of interest, especially regarding CEOsuccession.
Internal Corporate Governance Mechanisms: Shareholder Activism - answer-
shareholders have rights
-- To sell stock, vote the proxy, bring suit for damages, get information
• Collectively, shareholders have power.
- To direct the course of corporations, file shareholder actionsuits, demand key issues
be brought up for proxy votes.
• Institutional investors can be aggressive.
- By pressuring the firm to change leadership or undertakestrategic actions such as
stock buy-back or selloff.
