6th Edition Exam Questions Ch.12 Governance, Ethics, Models - Frank Rothaermel - Strategic Management 6e - Test Pack by Frank Rothaermel. DOCX document preview.

Back to Product

6th Edition Exam Questions Ch.12 Governance, Ethics, Models

Student name:__________

  1. Gary is a senior manager at a large, publicly traded corporation. He has access to insider information about the company profits, losses, mergers, and acquisitions. It is legally and ethically acceptable for him to have this information as long as he does not use it to buy or sell stocks and does not tell others to buy or sell stocks.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 01 Gary is a senior manager at a large, publicl...


  1. Alexi was a manager at Inquiry Inc. Instead of working full-time on Inquiry’s projects, she used Inquiry’s tools, employees, computers, and other resources to work on a research project that she hopes might help her start her own firm. This is an example of adverse selection.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 02 Alexi was a manager at Inquiry Inc. Instead ...


  1. One of the most challenging aspects of principal-agent problems is that firms have almost no defenses against them.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 03 One of the most challenging aspects of princ...


  1. Ruth owns and runs her own firm. She also serves on the boards of several companies. Although she does not work for these companies, she attends board meetings, analyzes information, and tries to act in the best interests of their shareholders. Ruth is an example of an outside director.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 04 Ruth owns and runs her own firm. She also se...


  1. It is up to auditors and board members to make certain that the financial statements that their firms release are correct and not misleading.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 05 It is up to auditors and board members to make certain tha...


  1. It can be difficult for shareholders of publicly traded companies to determine how much money those companies are making or losing because these companies use different accounting firms, and each accounting firm follows different rules.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > TF Qu. 06 It can be difficult for shareholders of publ...


  1. Corporate codes of conduct go beyond what the law requires, imposing higher standards of honesty and fairness.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Organizational Culture
Source : Chapter 12 Test Bank > TF Qu. 07 Corporate codes of conduct go beyond what th...


  1. Research indicates that most corporate ethics problems are caused by a few “bad apples” rather than an unethical culture.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Organizational Culture
Source : Chapter 12 Test Bank > TF Qu. 08 Research indicates that most corporate ethic...


  1. Corporate governance needs to address the issue of moral hazard, which describes the principal’s difficulty in ascertaining whether agents have put forth their best efforts.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Moral Hazard
Source : Chapter 12 Test Bank > TF Qu. 09 Corporate governance needs to address the...


  1. Executive compensation is an important element of corporate governance. Research has found that the rate of executive pay to average employee pay has been relatively stable over the last couple of decades.
    1. ______
  • true
  • false


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Governance Mechanisms
Source : Chapter 12 Test Bank > TF Qu. 10 Executive compensation is an important eleme...


  1. In the why, what, who, and how of business models framework, the why dimension asks, “why does the business model create value?”
    1. ______
  • true
  • false


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Strategic Group Models for Understanding Industry Rivals
Source : Chapter 12 Test Bank > TF Qu. 11 In the why, what, who, and how of business...


  1. Even though a firm chooses a business model at its founding, it may change that model later in the life of the firm.
    1. ______
  • true
  • false


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Strategic Group Models for Understanding Industry Rivals
Source : Chapter 12 Test Bank > TF Qu. 12 Even though a firm chooses a business...


  1. Maritza is trying to understand the relationship between what is legal and what is ethical. Tiffany explains that both of these terms are often synonymous in business. Your response is
    1. ______

Tiffany is correct; law and ethics are synonymous and should be used interchangeably in business.

Tiffany is correct; whatever is legal is always ethical in business.

Tiffany is incorrect; a manager’s actions can be legal but ethically questionable.

Tiffany is incorrect; there is no relationship between laws and ethics except when the board of directors approve an action.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 13 Maritza is trying to understand the relation...


  1. To help increase and maintain ethical values for future managers, a group of Harvard Business School students developed
    1. ______

an MBA oath that recognizes the role of business in society and its responsibilities beyond shareholders.

the triple-bottom-line framework to guide managers ethical decisions.

an ethical value chain that attempts to promote societal benefits.

a new way to examine business processes that meet the needs of the community.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 14 To help increase and maintain ethical values...


  1. Some argue that the global financial crisis of 2008 was worsened because large Fortune 500 companies did not practice effective
    1. ______

corporate governance.

external analysis.

balanced scorecard techniques.

co-opetition.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 15 Some argue that the global financial crisis ...


  1. Khalil is interested in building the centerpiece of his firm’s corporate governance, and so hires a________ that is made up of individuals from both inside and outside the firm.
    1. ______

strategy consultant

C-level suite team

board of directors

shareholders


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 16 Khalil is interested in building the cente...


  1. Blake is a newly elected board member of ABC Inc., a publicly traded stock. As a newly elected board member, Blake has a(n)________, which is a legal duty to act solely in another party’s interests.
    1. ______

moral code

ethical obligation

competitive advantage

fiduciary responsibility


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 17 Blake is a newly elected board member of...


  1. ________ are the board members who are part of the company’s senior management team appointed by shareholders to provide the board with necessary information pertaining to the company’s internal workings and performance.
    1. ______

Outside directors

Inside directors

Stockholders

Philanthropists


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 18 ________ are the board members who are part ...


  1. Jack is a board member of firm A but is not an employee of firm A; Jack is a senior executive from firm B. Jack can best be described as a(n)
    1. ______

outside director.

inside director.

shareholder.

philanthropist.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 19 Jack is a board member of firm A but is not ...


  1. Industry analysts, auditors, and government regulators are examples of
    1. ______

inside board members.

outside board members.

external governance mechanisms.

internal governance mechanisms.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Governance Mechanisms
Source : Chapter 12 Test Bank > MC Qu. 20 Industry analysts, auditors, and government...


  1. Stephen is a mid-level manager for a high-tech start-up. His boss has just been asked him to perform an activity that may be unethical. To improve his ethical decision making, Stephen should
    1. ______

imagine whether he would feel comfortable explaining and defending the decision in public.

go forward with the decision without considering the ethical ramifications.

consider the ethical dilemma but base his actions on his short-term career goals.

call his previous employer or college instructor and ask for advice.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 21 Stephen is a mid-level manager for a high-te...


  1. Kendall, a loan officer, advises Vaughn to sign up for an exotic mortgage that turns out to be very expensive for him and probably not the best financial choice. This is an example of an action that
    1. ______

is legal and beneficial for Vaughn.

is legal but ethically questionable.

is illegal but meets most ethical norms.

is illegal and damaging for the company.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 22 Kendall, a loan officer, advises Vaughn...


  1. ________ is the term that describes the difficulty of the principal to ascertain whether the agent has really put forth a best effort.
    1. ______

Disparate treatment

Adverse selection

The agent issue

Moral hazard


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Moral Hazard
Source : Chapter 12 Test Bank > MC Qu. 23 ________ is the term that describes the diffi...


  1. Janelle hires Vanessa to perform a critical task in her organization. However, Vanessa has misrepresented her knowledge, skills, and abilities, and Janelle has no way of knowing whether Vanessa can indeed perform well. This is an example of
    1. ______

agency theory.

disparate treatment.

adverse selection.

ineffective corporate governance.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Agency Theory in Corporate Governance
Source : Chapter 12 Test Bank > MC Qu. 24 Janelle hires Vanessa to perform a critical...


  1. Which of the following descriptions best exemplifies adverse selection?
    1. ______

A manager cannot ascertain the contributions of individual team members in team production.

A research scientist uses the organization’s resources to conduct personal research.

An employee spends time on social networking sites during work hours.

An interview candidate lists his qualifications in chronological order.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 25 Which of the following descriptions best exe...


  1. Which of the following could most likely have prevented the accounting scandals of the early 2000s and the global financial crisis?
    1. ______

adopting a narrow shareholder perspective

separating economic interests and social needs

practicing effective corporate governance

adopting the principles of shareholder capitalism


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 26 Which of the following could most likely ...


  1. In public stock companies, which of the following expectations of principals is most likely to lead to principal-agent problems?
    1. ______

the expectation that the agent will follow the country’s laws and regulations

the expectation that the agent will go above and beyond the call of duty

the expectation that the agent will reconnect economic and social needs

the expectation that the agent will act in the principal’s best interest


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 27 In public stock companies, which of the foll...


  1. Which of the following is the source of the principal-agent problem in publicly traded companies?
    1. ______

the law of legal personality

the separation of ownership and control

limited liability for investors

transferability of investor ownership


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 28 Which of the following is the source of the ...


  1. Stratton Oakmont Inc. is a publicly traded company. The stockholders of this company delegate the authority to make decisions for the company to a CEO named Terry. The stockholders expect Terry to make decisions that will benefit the company. However, Terry begins to find ways to maximize his total compensation, which hinders Stratton Oakmont Inc.’s performance. This scenario reflects
    1. ______

value creation problems.

principal-agent problems.

inside director-outside director problems.

adverse selection problems.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 29 Stratton Oakmont Inc. is a publicly traded c...


  1. Martha received a tip from a close friend who is an executive manager of a publicly traded company called TelAmeriCorp Inc. The manager received some inside information about how to trade TelAmeriCorp stock to get a huge profit. He shared this information with Martha. This scenario is an example of
    1. ______

information asymmetry.

adverse selection.

stakeholder strategy.

shared value creation.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 30 Martha received a tip from a close friend wh...


  1. Jamila, the CEO of Yakyshyn Enterprises, reports to the board of directors appointed by the shareholders of Yakyshyn Enterprises. Based on shareholder suggestions, the board ties Jamila’s compensation to the performance of Yakyshyn Enterprises. Due to this pressure, Jamila begins devoting extra time to projects and undertakes other activities to ensure that she has job security and that she receives adequate compensation. The reasons why the board ties Jamila’s compensation to firm performance is to overcome
    1. ______

shareholder capitalism scenario.

inside director-outside director conflict.

fiduciary responsibility oversight.

the principal-agent problem.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 31 Jamila, the CEO of Yakyshyn Enterprises...


  1. Jordan is president of a medium-sized bank. What can Jordan do to lessen the chance of employees or board members taking part in insider trading?
    1. ______

forbid managers and executives from having access to private information

forbid board members from having access to private information

work with analysts and customer-facing employees to root out information asymmetry

create a strict code of ethics and explain that inside traders will be fired


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 32 Jordan is president of a medium-sized bank. ...


  1. The informational advantage that agents possess over principals is often based on the fact that
    1. ______

the information is extremely secure and protected from exposure to anyone outside the company.

public stock companies are characterized by information symmetry.

insiders are the first to learn about important developments before the information is released to the public.

agents are legally permitted to freely trade the information in exchange for benefits, unlike principals.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 33 The informational advantage that agents poss...


  1. Sergei is a manager at MasterBuilder Tools Inc. and is friends with the company’s CEO. This privilege gives Sergei the information that MasterBuilder Tools is in talks to take over a leading rival. Sergei buys stocks of MasterBuilder Tools with the expectation that its stocks will appreciate. But the deal falls through, and the stocks of MasterBuilder Tools depreciate in the following months. Are Sergei’s actions unethical? Why or why not?
    1. ______

Yes. It is unethical to trade stocks based on insider information, irrespective of the final outcome.

Yes. It is illegal and unethical for Sergei to possess any kind of insider information.

No. Sergei did not ask the CEO to disclose such information to him.

No. Sergei did not make any profits from trading stocks using this information.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 34 Sergei is a manager at MasterBuilder...


  1. Which of the following real-world scenarios best exemplifies information asymmetry in a public stock company?
    1. ______

Based on a tip-off by a Goldman Sachs employee, the Galleon Group sold its holdings in Goldman Sachs’ stocks prior to the announcement of missed earnings estimates.

GE knew that it could create a profitable venture out of producing green products, so it rolled out the Ecomagination strategy.

Mark Hurd, CEO of HP, was unaware of the sexual-harassment allegations, and the board’s demand for him to resign caught him by surprise.

Goldman Sachs followed through with the Abacus deal despite knowing its shortcomings.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 35 Which of the following real-world scenarios ...


  1. Shi-Hae is the ethics officer at Voltz Autos, a publicly traded company. She wants to make sure that on-the-job consumption at Voltz Autos stays within legal and ethical bounds. Which action should Shi-Hae and the Voltz Autos board of directors take?
    1. ______

Forbid high-cost items such as executive office decoration but permit lavish parties and celebrations because they are essential for morale.

Set strict limits on what executives can spend on office redecoration or work-related celebrations.

Do nothing. On-the-job consumption is a necessary part of hiring and retaining key executives.

Permit on-the-job consumption but cancel executive bonuses.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 57 Shi-Hae is the ethics officer at Voltz Autos...


  1. According to the agency theory,
    1. ______

conflicts that arise in corporations should be addressed in the legal realm.

corporations are more than a set of contracts between parties.

companies should focus on generating profits for stockholders.

principals and agents have interchangeable roles.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 37 According to the agency theory,


  1. In a public stock company, senior executives, such as the CEO, face agency problems when
    1. ______

they delegate authority of strategic business units to general managers.

they decide to get involved in the day-to-day operations of a company.

the board of directors possesses more information about the company than they do.

the firm designs work tasks, incentives, and employments that minimize opportunism.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 38 In a public stock company, senior executives...


  1. The root cause of the principal-agent problem between senior executives and lower-level employees can be explained by the
    1. ______

informational advantage of the lower-level employees.

higher number of lower-level employees than senior executives.

knowledge of employees regarding day-to-day tasks.

operational expertise of lower-level employees in concentrated areas of a particular field.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 39 The root cause of the principal-agent ...


  1. Subrat and James are customer service employees at National Digital Corp. In between calls, they spend time on TikTok and Instagram. The relaxed guidelines at National Digital allow them to do that. However, sometimes, they knowingly avoid answering calls or keep customers on hold, while they view content on their personal phones. Such behavior
    1. ______

is neither unlawful nor unethical; hence, Subrat and James cannot be reprimanded.

typically exemplifies the agency problem of adverse selection.

demonstrates the dangers of information asymmetry.

can be stopped by implementing performance incentives and strict control mechanisms.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 40 Subrat and James are customer service...


  1. Morgan accepts a job as head of human resources at an engineering firm and learns that the company believes teamwork is so important that it awards all raises and bonuses by splitting them equally within a team rather than presenting them to individual employees. What action should Morgan take regarding this program?
    1. ______

Expand the program to allow teams to make all hiring and firing decisions.

Make sure information asymmetry is corrected before the next round of raises.

Make sure the plan goes into place only after the company has corrected information asymmetry.

End the program because it encourages opportunistic employees to do little or no work.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 62 Morgan accepts a job as head of human...


  1. Domenick is a recent graduate who states that he has interned at a major accounting firm so that his value as a candidate for employment increases. A start-up recruits Domenick based on his stated credentials without verifying them. Two days into the job, Domenick’s team lead realizes that Domenick does not know much of what he claimed to know during the interview. This scenario best exemplifies
    1. ______

moral hazard.

adverse selection.

shared value creation.

corporate governance.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 63 Domenick is a recent graduate who states that...


  1. A company scientist at a biotechnology company decides to work on his own research project, hoping to eventually start his own firm, rather than on the project he was assigned. However, the company’s stockholders are unaware of this situation. This is an example of a(n)________ in the context of a principal–agent problem.
    1. ______

adverse selection

stakeholder strategy

moral hazard

shared value creation


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Analyze
Difficulty : 3 Hard
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 43 A company scientist at a biotechnology compa...


  1. At Gregarious Simulation Systems, a cross-functional team is formed to work on a project for a new client. The team consists of David and four other members. At most of the team’s presentations to senior management, David takes the lead and discusses project specifics with the management, while others chip in with additional information. At the completion of the project, David is recommended for promotion, while the other team members receive little recognition for their hard work. The reality is that David did very little actual work but spent some time compiling the project report based on different documents submitted by the others. This scenario at Gregarious Simulation Systems is a typical consequence of
    1. ______

moral hazard.

adverse selection.

shared value creation.

corporate governance.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 44 At Gregarious Simulation Systems, a cross-fu...


  1. Adverse selection in a public stock company occurs when
    1. ______

information asymmetry increases the likelihood of selecting inferior alternatives.

a firm’s work tasks, incentives, and employment contracts minimize opportunism by agents.

a principal is not aware of the context from which information from an agent is derived.

an agent manipulates information to benefit stockholders.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 45 Adverse selection in a public stock company ...


  1. Layla is the CEO of a financial services firm. What action should she take to be sure the firm avoids moral hazards?
    1. ______

She should closely monitor the behavior and performance of new employees to be certain that they have the skills they claimed to have in interviews.

Layla must increase hiring and develop influential relationships with government officials so that the firm will be considered “too big to fail.”

She must create a plan in which government agencies or a consortium of other financial services firms will assume any future debts of the company.

Layla should define undue risk-taking, institute strict auditing of loans, and make it clear that the company will fire employees who lend recklessly.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 46 Layla is the CEO of a financial services....


  1. Gordon’s role in providing inside information to Pearson Specter Litt for the benefit of Pearson Specter Litt’s stockholders and himself is an example of
    1. ______

shareholder capitalism.

adverse selection.

shared value creation.

moral hazard.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 47 Gordon’s role in providing inside info...


  1. Greg is the president of a technology firm that has recently gone public. What action, if any, should Greg take to build the confidence of his new shareholders?
    1. ______

Greg needs to focus on the company’s earnings because that is what shareholders care about.

He should find out whether the majority of his shareholders want long-term steady growth or short-term spikes in the stock price.

He should discourage pension funds from investing because they are interested in safety at the expense of growth.

He should make the company stock available only to hedge funds so he will have the freedom to take risks as the firm expands.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 48 Greg is the president of a technology firm t...


  1. Which of the following is true of the board of directors in a public stock company?
    1. ______

Votes at shareholder meetings determine whose representatives are appointed to the board of directors.

Because shareholders generally have uniform interests, the composition of the board is generally a unanimous decision.

The board of directors acts as a facilitator to convey interests of the stockholders to the management without any real authority.

The functions of the board of directors are limited to ensuring the hiring and firing of CEOs.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 49 Which of the following is true of the board ...


  1. Carla recently became a board member of a firm that has a history of reckless actions by senior employees. Which task would be appropriate for Carla to undertake to help safeguard the company’s financial health?
    1. ______

Request and review a copy of the firm’s risk assessment plan, if such a plan exists.

Take part in the annual reviews of employees in the financial department.

Draft and circulate a statement that the firm’s board members serve at the pleasure of the CEO.

Determine how to postpone or evade the firm’s compliance with local, regional, and national regulations.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 50 Carla recently became a board member of a fi...


  1. Shareholders of public companies need to appoint a board of directors to represent their interests because
    1. ______

ownership and control are separated in a public company.

they want to limit the amount of money they can lose.

the board of directors itself is made up of shareholders.

the shareholders want to control day-to-day operations.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 51 Shareholders of public companies need to app...


  1. Beasea is a senior manager for the Wildwood Furniture Company. Because of her experience, she has been appointed to the board of Woodworks Inc., even though she does not work for this firm. She also serves on the boards of several other companies. Beasea is a(n)________ for Wildwood Furniture and a(n)________ for Woodworks Inc.
    1. ______

CEO; COO

COO; CEO

outside director; inside director

inside director; outside director


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 52 Beasea is a senior manager for the...


  1. The board of directors of a public stock company consists of
    1. ______

managers appointed by the owners of a company to run its day-to-day operations.

individuals who formally represent the firm’s shareholders and oversee the work of executives.

the legal owners of a publicly traded company that was purchased in a leveraged buyout.

employees of a company who belong to the senior management and directly report to the CEO of the firm.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 53 The board of directors of a public stock com...


  1. What do we call the board members who are part of a company’s senior management team appointed by shareholders to provide the board with necessary information pertaining to the company’s internal workings and performance?
    1. ______

investors

outside directors

inside directors

auditors


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 54 What do we call the board members who are pa...


  1. Globex Inc. has a board of directors that consists of seven members. Which of the following is most likely an accurate statement about Globex’s board of directors?
    1. ______

Globex’s board of directors ensures the firm’s compliance with laws and regulations but does not conduct risk assessments.

Globex’s board of directors provides guidance for the firm’s CEO but does not monitor the firm’s corporate actions.

Globex’s board of directors oversees the firm’s succession plan but does not evaluate the firm’s CEO.

Globex’s board of directors has a minority number of inside directors, and it evaluates the firm’s strategic initiatives.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 55 Globex Inc. has a board of directors that co...


  1. Larry is a board member at Entertainment 720 Inc. He is also a senior executive of the firm. The board is chaired by Denise Carrows, the CEO of Umbrella Corp. According to this scenario, Larry
    1. ______

cannot serve on the board of any other organization.

is more likely than Denise to take care of stockholder interests.

is an inside director of Entertainment 720.

can use information from board meetings to trade stocks of Entertainment 720.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 56 Larry is a board member at Entertainment 720...


  1. Ghada is the CEO of Black Mesa Inc., a publicly traded company. The shareholders want Ghada on the board of directors despite her recent appointment as the CEO. This decision of the shareholders is most likely because Ghada is
    1. ______

a board member of a major client.

more likely than other board members to take care of the stockholders.

also the CEO of other companies.

likely to provide the board with valuable inside information.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 57 Ghada is the CEO of Black Mesa Inc., a public...


  1. General Electric’s board has only one inside director, John Flannery, GE’s CEO, who also acts as chairperson of the board. This is known as duality. Which of the following statements represents the best argument for this duality in GE?
    1. ______

A CEO is likely to be more responsible because they are setting their own performance targets.

The CEO might be able to influence the board through setting the meeting agendas.

The CEO possesses invaluable inside information that can help them lead the board effectively.

Any CEO will suggest board appointees who will function as strategic allies.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 58 General Electric’s board has only one ...


  1. Aperture Science is a publicly traded manufacturer of home electronics. Based on what you have read, which of these actions would be wisest for Aperture Science’s board of directors to take to be sure that the company’s new CEO is as motivated as possible?
    1. ______

Encourage the CEO to take all of her compensations in stock options, which will motivate her to keep the stock price high.

Offer the largest bonus possible to prevent the CEO from leaving to go a rival firm.

Link the CEO’s pay to her performance but avoid high-powered incentives that may cause reckless behavior.

Encourage her to emulate Warren Buffett and to take a lower salary than she might command elsewhere.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 59 Aperture Science is a publicly traded manufa...


  1. Which of the following is a common result of a hostile takeover of a company?
    1. ______

The new owner sells the company in pieces.

The new owner keeps the company intact.

The new owner keeps the board of directors of the company the same.

The new owner enhances the reputations of the company’s management.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 60 Which of the following is a common result of...


  1. Because of poor management, the stock price of Rearden Steel Inc. falls, and many investors sell their shares. Soon Rearden Steel becomes the target of a hostile takeover, during which Dildred buys enough shares to exert control over the firm. In this scenario, Dildred performs the role of a(n)
    1. ______

inside director.

outside director.

corporate raider.

corporate consultant.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 61 Because of poor management, the stock price ...


  1. Which of the following is a major issue at the forefront of CEO compensation in recent years?
    1. ______

a comparison of the performance of the organization before and after the CEO’s tenure

the performance of the CEO as an employee versus the performance as a board member

the absolute size of the CEO pay package compared with the pay of the average employee

a comparison of the compensation of senior management hired during and before the CEO’s tenure


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 62 Which of the following is a major issue at t...


  1. Which of the following scenarios best exemplifies a leveraged buyout of a microchip manufacturer, Sirius Cybernetics Corp.?
    1. ______

The owner of another company buys all the outstanding shares of Sirius Cybernetics Corp. in order to take it private.

A private equity firm, All Things Inc., buys a large number of shares of Sirius Cybernetics Corp.in order to publicly trade it under a new name.

Sirius Cybernetics Corp. sells all its shares and declares bankruptcy.

Sirius Cybernetics Corp. buys back a large amount of its own shares from the stock market.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 63 Which of the following scenarios best exempl...


  1. What are poison pills?
    1. ______

Shareholders use them to prevent the founder of a company from taking the company private through a leveraged buyout.

They are unspecified conditions in the contract between stakeholders in an organization.

Companies use them in a bid to perform a hostile takeover of competing firms.

They are defensive provisions that kick in should a buyer reach a certain level of share ownership.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > MC Qu. 64 What are poison pills?


  1. What helps notions such as fairness, honesty, and reciprocity to be codified into law?
    1. ______

The notions are synonymous with law.

The notions differ to some degree in different cultures around the globe.

The notions are universal norms.

The notions are characteristics inherited by each person irrespective of the culture.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 65 What helps notions such as fairness, honesty...


  1. Ethics is
    1. ______

not synonymous with law.

impossible to codify into law.

universal and cannot differ between cultures.

the minimum acceptable standard in business practice.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 66 Ethics is


  1. A bank, Seaside, offers a customer a personal loan. In which of the following circumstances will this decision most likely be considered unethical?
    1. ______

The bank knows that the customer will be unable to pay the loan if the interest rate rises.

The bank is not aware of the investments made by the customer.

The bank has the financial statements of the customer, but it is not aware of each source of income.

The bank is depending on the customer to pay back the loan before term completion.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 67 A bank, Seaside, offers a customer a persona...


  1. Which of the following is true of the codes of conduct of an organization?
    1. ______

They detail how the organization expects an employee to behave and to represent the company in business dealings.

They are a reiteration of the laws pertaining to business dealings in a corporate environment.

They are a guide to determine what is lawful and what is unlawful.

They help the board of directors and the CEO implement shareholder capitalism.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 68 Which of the following is true of the codes ...


  1. Which of the following best supports the fact that Dieselgate was unethical when entering the U.S. market?
    1. ______

Dieselgate manipulated “triple A” bond ratings to entice investors.

VW made no effort to ascertain the stability of the automobile market, even though it had the resources and time to do so.

The engineers installed “defeat devices” that altered the concentration of harmful emissions when EPA regulators tested the vehicles.

The VW CEO misled investors by spending $50 million on lavish, corporate parties.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 69 Which of the following best supports the fac...


  1. Sean was recently hired at an up-and-coming firm that has a history of ethics violations. Which action is best for him to take if he wants to determine whether the firm is now acting ethically?
    1. ______

Observe executives at the company and see whether they model ethical behavior and demand it of others.

Research the results of the ethics violations. If the perpetrators were fired or jailed, then the rest of the company is sound.

Check the company’s mission statement to make sure that it guarantees respect and integrity.

Ignore the alleged ethics violations because there is no one standard of ethical behavior.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 70 Sean was recently hired at an up-and-coming ...


  1. Three months ago, Colin became a board member at Hooli, a publicly traded company. Two weeks ago, the board members discovered that Hooli’s CEO is facing a lawsuit from a family member who accuses the CEO of theft. Based on what you have read, to what ethical standard should Colin and the other board members hold the CEO?
    1. ______

They should hold her to the same ethical standards that they would expect of any Hooli employee—no more, no less.

They must hold her to the highest ethical standards because the leaders of publicly traded companies must withstand intense public scrutiny.

If the board members determine that the CEO is not a “bad apple,” then they should give her their full support.

The board members must wait until the lawsuit results in a settlement or a guilty verdict.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 71 Three months ago, Colin became a board membe...


  1. One way to foster ethical behavior in employees is to
    1. ______

avoid codifying organizational culture.

create a control system that encourages desired values.

view clients as counter parties to transactions.

align the vision statement of the organization with its informal culture.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 72 One way to foster ethical behavior in employ...


  1. Which of the following is an implication for the strategist in the context of corporate governance and a company’s success?
    1. ______

Very few corporate-governance mechanisms can be effective in addressing the principal-agent problem.

Effective corporate governance and solid business ethics are critical to gaining and sustaining competitive advantage.

Leading by ethical example often has a lesser effect on employee behavior than words do.

A firm that restricts its responsiveness to stockholders (and no other stakeholders) and keeps them committed to its vision will be successful.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Strategic Implications of Crossing-the-Chasm
Source : Chapter 12 Test Bank > MC Qu. 73 Which of the following is an implication for...


  1. Kate is the CEO of a firm. She has an opportunity to increase the competitive advantage of her company but is not sure if accepting the opportunity is ethical. Which of the following questions would help her decide if accepting the opportunity is ethical?
    1. ______

What are the chances that her decision to accept the opportunity will be made public?

How much profit would be made if she decided to accept the opportunity?

How would the media report her decision to accept the opportunity if it were to become public?

How long lasting would the competitive advantage be if she decided to accept the opportunity?


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 74 Kate is the CEO of a firm. She has an opport...


  1. A mortgage loan officer persuades unsuspecting consumers to sign up for exotic mortgages, such as option ARMs. These mortgages offer borrowers the choice to pay less than the required interest, which is then added to the principal while the interest rate can adjust upward. Because of this setup, many borrowers are unable to repay the mortgage once the interest rates go up. Which of the following phrases best describes this scenario?
    1. ______

legal but not ethical

ethical but not legal

legal and ethical

neither legal nor ethical


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 75 A mortgage loan officer persuades unsuspecti...


  1. The name for an agreed-upon code of conduct in business, based on societal norms, is
    1. ______

fiduciary responsibilities.

poison pills.

strategic business points.

business ethics.


Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > MC Qu. 76 The name for an agreed-upon code of conduct ...


  1. The professional social media website LinkedIn allows its users to create their profiles for free, but it charges a premium price for additional services. This is an example of a________ business model.
    1. ______

subscription-based

peer-to-peer

crowdsourcing

freemium


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Business Models: Putting Strategy into Action
Source : Chapter 12 Test Bank > MC Qu. 77 The professional social media website LinkedIn...


  1. Fresher Corp. produces electric bathroom fragrance diffusers and sells the electric device at a market rate price. However, they lock their clients into a two-year agreement to purchase the perfume refills solely from them on a monthly basis. Which of the following business models does this best illustrate?
    1. ______

subscription-based

peer-to-peer

crowdsourcing

freemium


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Business Models: Putting Strategy into Action
Source : Chapter 12 Test Bank > MC Qu. 78 Fresher Corp. produces electric bathroom...


  1. The translation of strategy into action primarily takes place in a firm’s
    1. ______

mission statement.

executive summary.

business model.

code of conduct.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 79 The translation of strategy into action...


  1. During the process of formulating an effective business model, a firm’s managers should first
    1. ______

transform their strategy of how to compete into a blueprint of actions and initiatives.

implement their strategy at corporate, strategic business unit, and functional levels.

implement their blueprint of actions and initiatives through structures, processes, culture, and procedures.

evaluate the firm’s strategy already in effect and take corrective actions if necessary.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 80 During the process of formulating an...


  1. You are the founder of Newex Surfboards, and you are considering methods of gaining and sustaining a competitive advantage. Which of the following changes has the best chance of quickly creating a sustainable advantage?
    1. ______

devoting significant resources to researching and developing new products that will be more durable than competitors’ products

automating the manufacturing process to reduce production costs

allowing customers to upload their own image designs and help assemble the finished product at retail locations

switching to a just-in-time inventory system to reduce inventory costs


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 81 You are the founder of Newex Surfboards...


  1. ________ is a business model in which the manufacturer sets a fixed price on a product, but the retailer is free to set its own price.
    1. ______

Agency

Freemium

Bundling

Wholesale


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 82 ________ is a business model in which...


  1. Sonron Media sells books to libraries by having salespeople meet with potential customers to give them a sales pitch for the company’s product line. When a salesperson makes a sale, they get a predetermined percentage commission based on the value of the books sold. This type of business model is called
    1. ______

an agency.

bundling.

wholesale.

a freemium.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 83 Sonron Media sells books to libraries...


  1. Which of the following scenarios best illustrates bundling?
    1. ______

Yearin Inc. sells its electric toothbrushes for a low cost, but charges a high price for replacement brushes.

CondaxMedia Inc. sells its cloud computing network by having customers pay for the service as they use it.

Isdom Inc. sells its basic TV channels for free but charges high prices for any channels that customers add on later.

Warephase Inc. sells seed packages, in which a person can buy a package of three types of seeds at a discounted price compared to buying the seeds individually.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 84 Which of the following scenarios...


  1. Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a(n)________ technique.
    1. ______

offshoring

crowdsourcing

peer-to-peer

ultra-low cost


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 85 Threadless allows customers to submit...


  1. Nam-zim sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is Nam-zim implementing?
    1. ______

subscription-based

razor–razor blade

pay-as-you-go

direct sales


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 86 Nam-zim sells its e-book readers at the...


  1. Treequote Industries has produced a new technology that will monitor the soil moisture in a user’s garden and send a notification to an app on the user’s phone when it is time to water their plants. The goal of this inexpensive technology is to entice users to purchase Treequote’s more expensive automated watering system, so that they can trigger the watering process from the app on their phones. Which business model is most likely to help Treequote Industries accomplish its goals?
    1. ______

agency

wholesale

pay-as-you-go

freemium


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 87 Treequote Industries has produced a new...


  1. Bioplex requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?
    1. ______

razor–razor blade

pay-as-you-go

subscription-based

freemium


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 88 Bioplex requires its members to pay...


  1. A defining characteristic of the pay-as-you-go business model is that the
    1. ______

users pay for only the services they consume.

users pay for access to a product or service whether they use it during the payment term or not.

initial product is often sold at a loss in order to drive demand for complementary goods.

the basic features of a service are provided free of charge, but the user must pay for premium services.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 89 A defining characteristic of the pay...


  1. West State Utilities is an energy provider that charges its customers $0.05 per kilowatt hour for electricity use. So, if a customer uses 500 kilowatt hours during the billing period, the company charges them $25.00. Which of the following business models does this best illustrate?
    1. ______

razor–razor blade

subscription-based

pay-as-you-go

freemium


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 90 West State Utilities is an energy...


  1. Dontechi is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?
    1. ______

subscription-based

freemium

pay-as-you-go

razor–razor blade


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 91 Dontechi is a file hosting service...


  1. Hottechi Laminate has developed a new customer-oriented business model. Rather than maintain a network of showrooms across the country, the business will now let customers choose several styles that interest them from an online site, and will ship samples of each of the styles to the customer to test in their home free of charge. Once they have settled on a tile choice, Hottechi Laminate will send a representative to their home to schedule installation. The company has determined that busy middle-class customers will value the convenience of the new model, which allow them to upgrade the look of their homes without spending time browsing showrooms. The new model will be created by selling the old showrooms and shifting resources to the new online site and regional offices for sales personnel. What question remains for Hottechi Laminate to ask in order to put its strategy into action?
    1. ______

Why does the business model create value?

What activities need to be performed to create and deliver the offerings to consumers?

How are the offerings to the customers created?

Who are the main stakeholders who will be performing the activities?


Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 92 Hottechi Laminate has developed a new...


  1. The________ is a business-model innovation in which companies can obtain a large(r) part of their revenues by selling a small number of units from among almost unlimited choices.
    1. ______

Pareto principle

razor-razor blade model

long-tail concept

crowdsourcing process


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 93 The ________ is a business-model innovation...


  1. Which of the following strategies might result in the long-tail phenomenon?
    1. ______

selling a product at a loss to drive demand for complementary goods

combining unlimited selection with algorithmic recommendations

discounting bundled products with negatively correlated demand

blending the razor-razor blade model with the subscription model


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 94 Which of the following strategies might...


  1. Traditionally, 80 percent of sales in a given product category come from what part of the distribution curve?
    1. ______

short head

mid slope

Pareto point

long tail


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Remember
Difficulty : 1 Easy
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 95 Traditionally, 80 percent of sales in...


  1. In a distribution curve, where are all the bestsellers, popular titles, and hits to be found?
    1. ______

short head

mid slope

Pareto point

long tail


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 96 In a distribution curve, where are...


  1. Karena owns a mid-priced clothing store that offers seasonal tops, bottoms, outerwear, and shoes in the most popular sizes and styles. The products in Karena’s store represent the________ of the distribution curve.
    1. ______

short head

mid slope

Pareto point

long tail


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 97 Karena owns a mid-priced clothing store...


  1. Which of the following companies has leveraged the long-tail concept?
    1. ______

Suburban Square is a big box retailer that features Halloween decorations, candy, and costumes in a seasonal department each fall.

Boo-tique is a pop-up retailer that operates each fall in an otherwise empty mall space selling Halloween costumes and accessories.

Howloween World is an online marketplace selling most of its items from a vast inventory of specialty costumes, wigs, and props.

Second Street is a thrift store that creates a special Halloween-themed section in October highlighting items suitable for costume use.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Apply
Difficulty : 3 Hard
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 98 Which of the following companies has...


  1. Which of the following problems can be overcome by leveraging the long tail?
    1. ______

buyer inertia

poison pills

thin markets

rising costs


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 99 Which of the following problems...


  1. What is the important strategic trade-off that the long-tail business model solves?
    1. ______

It increases the number of users paying for access even if they do not use the product or service during the payment term.

It provides an opportunity to capture consumers who value one of the products but who have little interest in the second.

It allows companies to create demand for replacement parts while taking only a small loss on the sale of the initial product.

It lowers space, inventory, and distribution costs while enabling firms to match unique consumer preferences to supply.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 100 What is the important strategic trade...


  1. Netflix is an example of a company that
    1. ______

focuses on the short head, producing a few high-impact blockbuster movies and then leveraging them into billion-dollar franchises.

leverages the long tail, with its personalized recommendation algorithm combined with producing a large quantity of low-budget content.

merges the razor–razor blade model with the subscription model, subsidizing a high-end device when you sign up for a lengthy service plan.

combines the long-tail concept with crowdsourcing, leveraging user input from idea generation and design to marketing and distribution.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 101 Netflix is an example of a company...


  1. Rascal Interactive produces a few high-impact blockbuster video games and then leverages them through spinoffs, merchandise, and licensing. Rascal is focused on
    1. ______

the short head.

the long tail.

bundling

disruption.


Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-07 Explain the long-tail concept and how it can be used as a business model i
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > MC Qu. 102 Rascal Interactive produces a few high...


  1. How does the separation of ownership and control in public stock companies present a problem? Provide an example of this problem from your reading in this class, your reading outside of class, or your own experience.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 103 How does the separation of ownership and con...


  1. What is the connection between Rajat Gupta and insider trading?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 104 What is the connection between Rajat Gupta a...


  1. How do principal–agent problems cascade down the hierarchy in an organization? Describe an example of principal–agent problems. The example can be from your reading in this class, your reading outside of class, or your own experience.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 105 How do principal–agent problems cascad...


  1. Discuss the agency problem of adverse selection.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 106 Discuss the agency problem of adverse select...


  1. Describe moral hazard with an example.





Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 107 Describe moral hazard with an example.


  1. Describe moral hazard in the context of the principal–agent relationship. Use an example.





Question Details
AACSB : Reflective Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 12-02 Apply agency theory to explain why and how companies use governance mechan
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 108 Describe moral hazard in the context of the ...


  1. Describe the role of inside directors as part of a company’s board of directors.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : Corporate Governance
Source : Chapter 12 Test Bank > SA Qu. 109 Describe the role of inside directors as par...


  1. Describe the role of outside directors as part of a company’s board of directors.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > SA Qu. 110 Describe the role of outside directors as pa...


  1. Why is board independence critical to effectively fulfilling a board’s governance responsibilities?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > SA Qu. 111 Why is board independence critical to effect...


  1. Describe the arguments for and against the CEO of a company serving as the chair of the board of directors.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-03 Evaluate the board of directors as the central governance mechanism for pu
Topic : The Role of the Board of Directors in Corporate Governance
Source : Chapter 12 Test Bank > SA Qu. 112 Describe the arguments for and against the C...


  1. What is the benefit of granting stock options as part of a compensation package in a public stock company?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 113 What is the benefit of granting stock option...


  1. How does the market for corporate control work? Provide at least one example. The example can be from your reading in this class, your reading in other classes, or your own experience.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 114 How does the market for corporate control wo...


  1. How does a leveraged buyout affect a public company?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 115 How does a leveraged buyout affect a public ...


  1. What usually happens if a hostile takeover attempt is successful?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-04 Evaluate other governance mechanisms.
Topic : Organizational Design and Competitive Advantage
Source : Chapter 12 Test Bank > SA Qu. 116 What usually happens if a hostile takeover a...


  1. Law and ethics are not synonymous. Elaborate on this statement with the help of an example.





Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Evaluate
Difficulty : 3 Hard
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > SA Qu. 117 Law and ethics are not synonymous. Elaborate...


  1. How can top management foster ethical behavior in employees? Provide an example that you have read about or that comes from your own experience.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > SA Qu. 118 How can top management foster ethical behavi...


  1. How can a manager decide whether a decision is ethical?





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > SA Qu. 119 How can a manager decide whether a decision ...


  1. Discuss the implications for strategic leaders in the context of corporate governance and sustained competitive advantage.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > SA Qu. 120 Discuss the implications for strategic...


  1. Explain what is meant with the concept of bad apples versus bad barrels as it relates to organizational ethics in a firm.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 12-05 Explain the relationship between strategy and business ethics.
Topic : Ethical Behavior in Business Strategies
Source : Chapter 12 Test Bank > SA Qu. 121 Explain what is meant with the concept of ba...


  1. Describe what corporate governance is and the benefits it provides organizations.





Question Details
AACSB : Ethics
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 12-01 Explain the role of corporate governance.
Topic : Corporate Governance
Source : Chapter 12 Test Bank > SA Qu. 122 Describe what corporate governance is and th...


  1. Explain how business models put strategy into action.





Question Details
AACSB : Analytical Thinking
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 1 Easy
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : The Importance of a Viable Business Model
Source : Chapter 12 Test Bank > SA Qu. 123 Explain how business models put strategy...


  1. Explain how the razor–razor blade business model works and provide an example of a firm that uses this model.





Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 3 Hard
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Business Models: Putting Strategy into Action
Source : Chapter 12 Test Bank > SA Qu. 124 Explain how the razor–razor blade...


  1. Explain the difference between a business strategy and a business model.





Question Details
AACSB : Knowledge Application
Accessibility : Keyboard Navigation
Bloom's : Understand
Difficulty : 2 Medium
Learning Objective : 12-06 Use the business model framework to put strategy into action.
Topic : Business Models: Putting Strategy into Action
Source : Chapter 12 Test Bank > SA Qu. 125 Explain the difference between a business...


Document Information

Document Type:
DOCX
Chapter Number:
12
Created Date:
Aug 21, 2025
Chapter Name:
Chapter 12 Governance, Ethics, Models
Author:
Frank Rothaermel

Connected Book

Frank Rothaermel - Strategic Management 6e - Test Pack

By Frank Rothaermel

Test Bank General
View Product →

$24.99

100% satisfaction guarantee

Buy Full Test Bank

Quick Navigation

Preview Document Info Connected Book Recommendations

Benefits

Immediately available after payment
Answers are available after payment
ZIP file includes all related files
Files are in Word format (DOCX)
Check the description to see the contents of each ZIP file
We do not share your information with any third party