STRATMGMT - CHAPTER 8 Flashcards by Carla Mae Razon

This are group of individuals that oversees the activities of an organization or corporation

Board of Directors

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TRUE OR FALSE: Effective boards may help bring prestige and important resources to the organization

TRUE

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TRUE OR FALSE: Efficient boards may help bring prestige and important resources to the organization

FALSE (Efficient-effective)

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Generally agreed, they are the key stakeholders of most corporations

Shareholders of the company’s stock

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TRUE OR FALSE: The possibility of conflicts of interest is considerable in public corporations.

TRUE

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TRUE OR FALSE: The possibility of conflicts of interest is considerable in private corporations

FALSE (private-public)

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This occurs when the interests of the individuals that manage the company may not align with the interest of the owners

Agency Problem

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TRUE OR FALSE: The composition of the board is critical because the dynamics of the board play an important part in resolving the agency problem.

TRUE

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TRUE OR FALSE: The composition of the board is crucial because the dynamics of the board play an important part in resolving the agency problem.

FALSE (crucial-critical)

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TRUE OR FALSE: The composition of the board is critical because the dynamics of the board play an important part in resolving the agency conflict.

FALSE (conflict-problem)

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This refers to a situation in which the CEO is also the chairman of the board of directors

CEO duality

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This has also been known to create a bitter divide within a corporation

CEO duality

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It is a function of the competitive wages that other corporations would offer for a potential CEO’s services

CEO compensation

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TRUE OR FALSE: CEO pay is positively correlated with the size of the firms

TRUE

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TRUE OR FALSE: The bigger the firm, the higher the CEO’S compensation

TRUE

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CEO compensation generally includes what?

Guaranteed salary
Cash bonus
Stock Options

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This provides another valuable source of CEO compensation

Perks

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The term perks is derived from the word?

Perquisite

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This word refers to the special privileges, or rights, as a function of one’s position

Perquisite

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This occurs when a publicly traded company is purchased and then taken off the stock market

Leveraged Buyout

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This are individuals or firms that hopes to conduct a takeover

Corporate Raiders

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Dubbed as an unsolicited takeover attempt

Hostile takeover

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This kind of knight entered when another firm that may be more favorable to existing management enters the picture as an alternative buyer

White Knight

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How many stages moral development has?

6 stages

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What are the three levels wherein the six stages were grouped?

1. Preconventional 2. Conventional 3. Postconventional

This level of moral development is very egocentric in nature and tied with persona concerns

Preconventional

egocentric in nature

Preconventional level

What stage is is wherein individuals focus on the direct consequences that their actions will have

Stage 1

Direct Consequences

Stage 1

What stage is it wherein right or wrong is defined by the reward stage

Stage 2

In this level of moral development, morality is judged by comparing individuals' actions with the expectations of society

Conventional Level

In this stage, individuals are conformity driven and act with the goal of fulfilling social roles

Stage 3

What stage is it wherein parents encourage their children to be good boys and girls

Stage 3

In these stage, the importance of obeying laws, social conventions, or other forms of authority to aid in maintaining a functional society is encouraged

Stage 4

This level occurs when morality is more than simply following social rules or norms.

Postconventional Level

What is the other term for postconventional level?

Principled level

This stage considers different values and opinions

Stage 5

TRUE OR FALSE: Laws are viewed as social contracts that promote the greatest good for the greatest number of people.

TRUE

TRUE OR FALSE: Laws are viewed as legal contracts that promote the greatest good for the greatest number of people.

FALSE (legal-social)

In this stage, moral reasoning is based on universal ethical principles

Stage 6

At this stage, laws are grounded in the idea of right and wrong

Stage 6

idea of civil disobedience

Stage 6

TRUE OR FALSE: Significant criminal penalties now exist for white-collar crimes

TRUE

Refers to which a business is created with a goal of bettering both business and sociey

Concept of Social Entrepreneurship

Occurs when a commitment to individuals, communities, and the natural environment is valued alongside the goal of creating economic value

Corporate Social Performance

This provides ratings on numerous strengths and concerns for each firm along a number of dimensions

KLD Database

TRUE OR FALSE: A firm's CSP rating is lowered when a firm is involved in tax controversies or other negative actions that affect the community

TRUE

TRUE OR FALSE: A firm's CSP rating increases when a firm is involved in tax controversies or other negative actions that affect the community

FALSE (increases-lowered)

TRUE OR FALSE: CSP diversity strengths are scored positively when the company is known for promoting women and minorities, especially for board membership and the CEO position

TRUE

TRUE OR FALSE: CSP diversity strengths are scored negatively when the company is known for promoting women and minorities, especially for board membership and the CEO position

FALSE (negatively-positively)

This dimension of CSP gauges potential strengths such as notable union relations, profit sharing and employee stock-option plans, etc

Employee Relations Dimension

This dimension records strengths by examining engagement in recycling, preventing pollution, or using alternative energies

Environmental Dimension

This exist when a firm has an established or recognized quality program

Product Quality/Safety Strength

These strengths are evident when lower levels of compensation for top management and board members exist

Corporate governance strengths

founder of social psychology

Kurt Lewin

One powerful environmental influence that can be seen in organizations today is based on?

Generational Differences

Enumerate the four generations of workers

1. Traditionalists 2. Baby Boomers 3. Generation X 4. Generation Y

TRUE OR FALSE: Effective management of these four different generations involves a realization of their differences and preferred communication styles

TRUE

This generation is born between 1925 and 1946

Traditionalists

Great Depression

Traditionalists

Dubbed as the "The Greatest Generation"

Traditionalists

This generation values personal communication, loyalty, and hierarchy, and is resistant to change

Traditionalists

This group makes up roughly 5 percent of the workforce

Traditionalists

The generation born between 1946 and 1964 are called

Baby Boomers

corresponding with a papulation "boom"

Baby Boomers

College graduates should be aware that this group makes up the majority of the workforce and view face time as an important contribution to a successful work environment.

Baby Boomers

This generation wants to be in office activities and values recognition is important to achieving cohesiveness between generations

Baby Boomers

This generation are born between 1965 and 1980

Generation X

Marked by an X symbolizing their unknown nature

Generation X

Members of this generation price flexibility in their jobs and dislike the feeling that they are being micromanaged

Generation X

desire for independence

Generation X

"What's in it for me?"

Generation X

Another term for Generation Y is?

Millennials

This generation is highlighted by positive attributes such as the ability to embrace technology

Generation Y

This group prizes job and life satisfaction highly, so making the workplace an enjoyable environment is key in managing them

Generation Y

This generation is viewed as needing more feedback than previous groups

Generation Y

needing more feedback

Generation Y

"Trophy Kids"

Generation Y

TRUE OR FALSE: Understanding generational differences can provide valuable insight into the perspectives that shape the behaviors of individuals born at different periods of time.

TRUE

The process of rational involves?

1. Problem Identification 2. Establishment and weighing of decision criteria 3. Generation and Evaluation of alternatives 4. Selection of the best alternative 5. Decision implementation 6. Decision Evaluation

TRUE OR FALSE: In reality, decision making is not rational because there are limits on our ability to collect and process information.

TRUE

TRUE OR FALSE: In reality, decision making is rational because there are limits on our ability to collect and process information.

FALSE (rational-not rational)

This bias occurs when individuals react to arbitrary or irrelevant numbers when setting financial or other numerical targets.

Anchoring and adjustment bias

This bias occurs when more readily available information is incorrectly assessed to be more likely.

Availability Bias

readily available information

Availability Bias

Occurs when individuals continue on a failing course of action even after it becomes clear that this may be a poor path to follow.

Bias of escalation of commitment

This occurs when good outcomes are attributed to personal characteristics but undesirable outcomes are attributed to external circumstances.

Fundamental Attribution Error

This bias occurs when mistakes seem obvious after they have already occured.

Hindsight bias

This bias is often seen when second-guessing failed plays on the football field

Hindsight Bias

TRUE OR FALSE: Judgments about correlation and causality can lead to problems when individuals make inaccurate attributions about the causes of events.

TRUE

Enumerate the three necessary things to determine cause-or why on element affects another

1. Correlation 2. Temporal order 3. Ruling out other potential causes

This expression means "all things being equal or constant"

Ceteris Paribus

the basis of many economic models

Ceteris Paribus

This bias occurs when individuals are more confident in their abilities to predict an event than logic suggests is actually possible

Overconfidence bias

This bias occurs when managers use stereotypes of similar occurrences when making judgments or decisions

Representativeness bias

may lead to discriminatory behaviors

Representativeness bias

This bias occurs when the way information is presented alters the decision an individual will make

Framing bias

TRUE OR FALSE: Poor framing frequently occurs in companies because employees are often reluctant to bring bad news to CEOs

TRUE

This occurs when individuals settle for the first acceptable alternative instead of seeking the best possible (optimal) decision

Satisficing

TRUE OR FALSE: Poor framing rarely occurs in companies because employees are often reluctant to bring bad news to CEOs

FALSE (rarely-frequently)

TRUE OR FALSE: Poor framing rarely occurs in companies because employees are often reluctant to bring bad news to CEOs

FALSE (rarely-frequently)