Corporate Governance Style and Theoretical Bases

Question 1

Both management and the board do not have much say in the company’s strategic management process. The board is reactive while waiting for management to bring proposals to it.

Answer 1

Chaos Management Style

Question 2

There is a highly involved executive management and an uninvolved board of directors. The board exist as rubber stamp that are dominated by CEO and top management teams.

Answer 2

Entrepreneurial Management

Question 3

the board is involved in making the strategic decisions while management focuses on operations. The board is dominated by shareholders who are reluctant to delegate strategic issues to management.

Answer 3

Marionette Management

Question 4

The board are highly involved and work closely on the organization’s strategic issue. The board has active committees that focus on different aspects of management. The ideal form of board management working relationship.

Answer 4

Partnership Management

Question 5

sees society as consisting of social contracts among and between members of society and where they live in. Companies are art of society and have contractual obligation to contribute toward its betterment. They should be accountable to the community because they draw resources in it.

Answer 5

Social Contract Theory

Question 6

managers are trusted stewards of the shareholder. Their motives are aligned with those of the business and to that extent their actions will always be for the corporate good.

Answer 6

Stewardship Theories

Question 7

the effect that organizations or businesses should not only exist to achieve financial returns for its shareholders but for the benefit of internal and external stakeholders.
- it addresses the needs for moral and values in the conduct of business.
- it was a response to Friedman (1970) stockholder theory.

Answer 7

Stockholder Theory