the obligation of board members to closely monitor and evaluate top management.

Kohlberg’s three levels are as follows:

1.      The preconventional level: This level is characterized by a concern for self. Small children and others who have not progressed beyond this stage evaluate behaviors on the basis of personal interest – avoiding punishment or quid pro quo.

2.      The conventional level: This level is characterized by considerations of society’s laws and norms. Actions are justified by an external code of conduct.

3.      The principled level: This level is characterized by a person’s adherence to an internal moral code. An individual at this level looks beyond norms or laws to find universal values or principles.

·         ROI is very sensitive to depreciation policy. ROI can be increased by writing down the value of assets through accelerated depreciation.

·         It can discourage investment in new facilities or the upgrading of old ones. Older plants with depreciated assets have an advantage over newer plants in earning a higher ROI.

·         It provides an incentive for division managers to set transfer prices for goods sold to other divisions as high as possible and to lobby for corporate policy favoring in-house transfers over purchases from other firms.

·         Managers tend to focus more on ROI in the short-run over its use in the long-run. This provides an incentive for goal displacement and other dysfunctional consequences.

·         ROI is not comparable across industries which operate under different conditions of favorability.

·         It is influenced by the overall economy and will tend to be higher in prosperity and lower in a recession.

a collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another. Corporate culture fulfills several important functions in an organization:

1.      Conveys a sense of identity for employees

2.      Helps generate employee commitment to something greater than themselves

3.      Adds to the stability of the organization as a social system.

4.      Serves as a frame of reference for employees to use to make sense of organizational activities and to use as a guide for appropriate behavior.

a management technique in which modern communication enables project team members living in one country to pass their work to team members in another time zone so that the project is continually being advanced.

a marketing strategy in which a company charges a high price whole a product is novel and competitors are few.

a marketing pricing strategy to obtain dominant market share by using low price.

a growth strategy under which a firm makes 100% of its key supplies internally and completely controls its distributors.

the transfer of profits from a foreign subsidiary to a corporation’s headquarters.

 In order to establish and maintain a company’s distinctive competence.

the consensually accepted standards of behavior for an occupation, trade, or profession.

TQM has four objectives:

1.      Better, less variable quality of the product and service

2.      Quicker, less variable response in processes to customer needs

3.      Greater flexibility in adjusting to customers’ shifting requirements

4.      Lower cost through quality improvement and elimination of non-value-adding work.

the inclusion of a corporation’s workers on its board of directors.

the purchase of a company that is completely absorbed by the acquiring corporation.

 a business unit that uses money but contributes to revenues only indirectly.