Term
|
Definition
| The processes, policies, and laws that govern organizations to establish accountability and try to eliminate conflicts of interest associated with principle-agent problems |
|
|
Term
|
Definition
a group of individuals, either elected or appointed, that oversees the activities on an organization or corporation and formally represents the firm's shareholders
-Interest in the long-term well-being of the firm
-Bring prestige
-Bring resources
-"You're Fired!" |
|
|
Term
|
Definition
| individuals and groups that have an interest to stake a claim in an organization |
|
|
Term
|
Definition
|
|
Term
|
Definition
the interest of indivuals that act as agents to manage the company may not align with the interest of the firm's stockholders
-conflict of interest
-CEO vs. Firm
-Short term vs. long term |
|
|
Term
|
Definition
| When the CEO is also Chairman of the BOD |
|
|
Term
|
Definition
| members of the BOD that are generally employed inside of the organization |
|
|
Term
|
Definition
| Member of the BOD that are not employed by the organization |
|
|
Term
|
Definition
| approve financial objectives |
|
|
Term
|
Definition
| ensure compliance with law |
|
|
Term
|
Definition
| provide advice on strategic issues |
|
|
Term
|
Definition
| ensure the rights and interests of stakeholders |
|
|
Term
|
Definition
| monitor the CEO; Hire; fire; compensation |
|
|
Term
|
Definition
| Bring new connections to the local firm |
|
|
Term
|
Definition
a function of the competitive wages that other corporations would offer for a potential CEO's services
-Board will face considerable scrutiny from investor if CEO pay is out of line with industry norms |
|
|
Term
| CEO Compensation Generally Includes: |
|
Definition
Guaranteed salary
Cash bonus
Stock options |
|
|
Term
| Why do some CEO's command HUGE compensation |
|
Definition
-Tournament theory: who you've beaten to get the job
-Human Capital: What you know
-Social Capital: WHo you know
-Firm performance prior to appointment: how badly the fimr needs you |
|
|
Term
| CEO Compensation includes |
|
Definition
-Guaranteed Salary
-Cash Bonus
-Stock Options |
|
|
Term
|
Definition
| a company that is purchased through significant debt (purchased than taken off the stock market) |
|
|
Term
|
Definition
an individual or firm that purchases stock in another firm with the goal of an eventual takeover
-Increase shareholder value |
|
|
Term
|
Definition
an attempt to purchase a company that is strongly resisted by the targeted firm’s CEO and BOD
-increase shareholder value |
|
|
Term
|
Definition
defenses against takeover attempts
-Increase shareholder value |
|
|
Term
|
Definition
a firm that rescues a target firm by offering a friendly takeover so an alternative to a hostile one
-increase shareholder value |
|
|
Term
|
Definition
| an unfriendly firm forces a target company to repurchase a large block of stock at a premium to thwart a takeover attempt |
|
|
Term
|
Definition
| an attempt to make the firm’s stock unattractive to raiders by letter shareholder buy stock at a discount |
|
|
Term
|
Definition
| a financial package given to executives likely to lose their jobs after a takeover |
|
|
Term
| WHy DO shareholders matter? |
|
Definition
| Stakeholders cam make it either more difficult or easier to execute a strategy |
|
|
Term
|
Definition
| Obedience and punishment orientation (How can I avoid punishment?) |
|
|
Term
|
Definition
| Self-interest orientation (What's in it for me?) |
|
|
Term
|
Definition
| Interpersonal accord and harmony |
|
|
Term
|
Definition
| Authority and social order- maintaing orientation |
|
|
Term
|
Definition
| Social contract orientation |
|
|
Term
|
Definition
| Universal ethical principles |
|
|
Term
| CSP (Corporate Social Performance) |
|
Definition
| The degree to which a firm's actions honor ethical values that respect individuals, communities, and the natural environment |
|
|
Term
|
Definition
Community
Product quality/safety
Diversity
Employee Relations
Environmental
Corp. Governance |
|
|
Term
| Why do CEO's make bad decisions? |
|
Definition
1. Identify the problem
2. Establish decision criteria
3. Weigh decision criteria
4. Genereate alternatives
5. evaluate the alternatives
6. Choose the best alternatives
7. Implement the decision
8. Evaluate the decision |
|
|
Term
| Rational Decision making sounds great for CEO's, but... |
|
Definition
Many strategic decision are not presented in obvious ways
Assumptions of problem and alternative clarity
Assumptions of no time or cost constraints
Assumptions of accurate information |
|
|
Term
|
Definition
| Limited info + Limited Processing Capability + Limited Time |
|
|
Term
|
Definition
| bias occurs when individuals react to arbitrary or irrelevant numbers when setting financial or other numerical targets |
|
|
Term
|
Definition
| Bias occurs when more readily available info is incorrectly assessed to also be more likely |
|
|
Term
|
Definition
| bias occurs when individuals continue on a failing course of action even after it becomes clear that this may be a porr path to follow |
|
|
Term
| Fundamental Attribution Error |
|
Definition
| Occurs when good outcomes are attributed to personal characteristics but undesirable outcomes are attributed to external circumstances |
|
|
Term
|
Definition
| Bias occurs when mistakes seem obvious after they have already occurred |
|
|
Term
| Judgements about correlation and causality |
|
Definition
| bias occurs when individuals make inaccurate attributions about the causes of events |
|
|
Term
| Misunderstandings about sampling |
|
Definition
| bias occurs when individuals draw broad concolusions from small sets of observations instead of more reliable sources of information derived from large, randomly drawn samples |
|
|
Term
|
Definition
| Bias occurs when individuals are more confident in their abilities to predict an event than logic suggests is actually possible |
|
|
Term
| Representativeness and framing |
|
Definition
| bias occurs when the way information is presented alters the decision an individual will make |
|
|
Term
|
Definition
| occurs when individuals settle for the first acceptable alternative instead of seeking the best possible decision |
|
|
