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Strgc Mgmt Ch 10 & 11
Test 2
57
Management
Undergraduate 4
11/02/2010

Additional Management Flashcards

 


 

Cards

Term

 

 

the set of mechanisms used to manage they relationship among stakeholders, and to determine and control the strategic direction and performance of organizations

??

Definition

 

 

corporate governance

Term

 

 

firms ___ are treated as key stakeholders because they are the firms legal oweners

??

Definition

 

 

 

shareholders

Term

 

 

 

Shareholder value is reflected in _____

??

Definition

 

 

 

the prices of stock

Term

 

 

Two key issues family owned businesses face as they begin to grow

??

Definition

 

 

 

1. may not have access to all needed skills to manage the growing firm and maximize its returns

2. may need outside capital

Term

 

 

relationships between business owners and decision making specialist hired to manage principals operations and maximize returns on investment

??

Definition

 

 

agency relationships

Term

 

 

seeking self interest

??

Definition

 

 

managerial opportunism

Term

 

 

What are two manager benefits that product diversification can result in that owners don't enjoy

??

Definition

 

 

1. increase in size of firm

2. firm portfolio diversification which can reduce top executives employment risk

Term

 

 

resources remaining after a firm has invested in all projects that have positive net present values within its current businesses

??

Definition

 

 

firms free cash flow

Term

 

 

What is the difference in free cash flow to managers and stakeholders

??

Definition

 

 

managers- means diversify

stakeholders - means distribution as dividends

Term

 

 

What costs are included under Agency costs

(4)

??

Definition

 

 

1. incentive costs

2. monitoring costs

3. enforcement costs

4. individual financial losses

 

Term

 

 

Who are considered Large Block Shareholders

??

Definition

 

 

shareholders owning a concentration of atleast 5% of a corporations issued shares

Term

 

 

financial institutions such as stock mutual funds and pension funds that control large block positions

??

Definition

 

 

institutional owners

Term

 

 

a group of shareholder elected individuals whos primary responsibility is to act in the owners interests by formally monitoring and controlling the corporations top level executives

??

Definition

 

 

 

board of directors

Term

 

 

Three Director classifications

??

Definition

 

 

1. insider

2. related outsider

3. outsider

Term

 

 

historically the BOD is dominated by ___ managers

??

Definition

 

 

inside

Term

 

 

governance mechanism that seeks to align the interests of top managers and owners through salaries, bonuses, long term incentive compensation, such as stock rewards and stock options

??

Definition

 

 

 

executive compensation

Term

 

 

external governance mechanism consisting of a set of potential owners seeking to acquire undervalued firms and earn above average returns on their investments

??

Definition

 

 

market for corporate control

Term

 

 

When does the market for corporate control become effective

??

 

 

Definition

 

 

 

when a firms internal controls fail

Term

 

 

what are the major activity for managerial defense tactics

??

Definition

 

 

Hostile takeovers

Term

 

 

What is the trend in other countries regarding corporate governance

??

Definition

 

 

uniform governance structures are evolving moving closer to the U.S. corporate governance model

Term

 

 

Which group of stakeholders are the most important served by the board of directors

??

Definition

 

 

capital market stakeholders (shareholders)

Term

 

 

board member who is a source of info of a companies day to day operations is a ___ director

??

Definition

 

 

inside

Term

 

 

 

Ownership concentration is determined by what two things?

Definition

 

 

the number of stockholders and the percentage of share they own

Term

 

 

a takeover defense wherein perfered stock in the merged firm is offered to shareholders at a highly attractice rate of exchange

??

 

 

Definition

 

 

 

poison pill

Term

 

 

an agency relationship exists when one party delegates ____ to a second party

??

Definition

 

 

decision making responsibility

Term

 

 

repurchase of stock that have been acquired by the aggressor at a premium in exchange for an agreement that the aggressor will no longer target the company for takeover

??

Definition

 

 

greenmail

Term

 

 

specifies the firms formal reporting relationships, procedures, controls, authority, and decision making processes

??

Definition

 

 

structure

Term

 

____ says work that needs to be done and how to do it

??

Definition

 

 

 

structure

Term

 

 

who was the pioneer that found organizations change their structures when inefficiencies force them to do so

??

Definition

 

 

 

Alfred Chandler

Term

 

 

guide the use of strategy, indicate how to compare actual results with expected results and suggest corrective actions to take when the difference is unacceptable

??

Definition

 

 

 

organizational controls

Term

 

 

largely subjective criteria intended to verify that the firm is using appropriate strategiesfor the conditions in the external environment and the companies competitive advantages

??

Definition

 

 

strategic controls

Term

 

 

objective criteria use to measure firms performance against previously established quantitative standards

??

Definition

 

 

financial controls

Term

 

 

a firm using a simple structure tends to be ____

??

Definition

 

 

 

small

Term

 

 

ceo and limited number of corporate staff make all decisions, with funcitonal line managers in dominant organizational areas

??

Definition

 

 

functional strategy

Term

 

 

one of the greatest discoveries of the 21st century

??

Definition

 

 

 

multidivisional (m-form) structure

Term

 

 

 

3 structural characteristics that drive different forms of organizational structures

??

Definition

 

 

1. specialization

2. centralization

3. formalization

Term

 

 

cost leadership strategy matches the ___ Structure

??

Definition

 

 

 

functional

Term

 

 

the differentiation strategy matches the ____ structure

??

Definition

 

 

 

functional

Term

 

 

3 forms of structure for the integrated cost leadership/differentiation strategy

??

Definition

 

 

 

1. cooperative

2. SBU

3. Competitive

Term

 

 

organizational structure using horiztonal integration to bring about interdivisional cooperation

??

Definition

 

 

cooperative structure

Term

 

 

what strategy matches cooperative structure

??

Definition

 

 

related constrained strategy

Term

 

 

what strategy matches the SBU structure

??

Definition

 

 

 

related linked strategy

Term

 

 

firms that share fewer resources/assets amoung their businesses concentrating on the transfer of knowledge and competencies among the businesses

??

Definition

 

 

related linked strategy

Term

 

 

multidivisional organization structure with three levels to support the implementation diversificiation strategy

??

Definition

 

 

SBU form

Term

 

 

the competitive structure matches what strategy

??

 

 

Definition

 

 

unrelated diversification

Term

 

 

organizational structure in which the firms divisions are completely independent

??

Definition

 

 

 

competitive form

Term

 

 

 

three primary international strategies

??

Definition

 

 

 

1. worldwide geographic area strategy

2. worldwide product divisional strategy

3. combination to implement transnational strategy

Term

 

 

intl strategy in which strategic and operating decisions are decentralized to the SBU in each country to allow units to taylor products to local markets

??

Definition

 

 

multi domestic strategy

Term

 

 

organizational structure emphasizing national interest and facilitates efforts to satisfy local or cultural differences

??

Definition

 

 

worldwide geographic area 

Term

 

 

intl strategy whereby firm offers standardizes products across country markets with the competitive strategy being dictated by the home office

??

 

 

Definition

 

 

global strategy

Term

 

 

organizational structure with centralized decision making authority in the WW division headquaters to coordinate and integrate decisions and actions among divisional business units

??

Definition

 

 

worldwide product divisional structure

Term

 

 

international structure that emphasizes economies of scale

??

Definition

 

 

ww product divisional structure

Term

 

international strategy through which the firm seeks to achieve both global efficiency and local responsivness; usually implemented through global matrix structure and hybrid global design

??

Definition

 

 

transnational strategy

Term

 

 

building a shared vision and invidiual commitment through an integrated network

??

Definition

 

 

flexible coordination

Term

 

 

org structure in which characterisitics and mechanisms are drawn from both the worldwide geographic area and product divisional structure

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Definition

 

 

 

combination structure

Term

 

 

the controls most important in the ___ strategy are financial controls

??

Definition

 

unrelated diversified

Term

 

 

3 benefits of multidivisional structure

??

Definition

 

 

1. facilitation of comparison between division

2. more accurate monitoring of performance of each business

3. stimulating managers of poorly performing divisions to look for ways to improve performance

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