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Strategic Management Theory and Practice 4th Edition Parnell Test Bank 1
Strategic Management Theory and Practice 4th Edition Parnell Test Bank 1
Resource
*a. True
b. False
2. Goals are verifiable and specific, and are developed so that management can measure
performance.
a. True
*b. False
3. Creditors and suppliers typically share the same goals for the organization.
a. True
*b. False
4. Social responsibility refers to an individual’s responsibility to make business decisions that are
legal, honest, moral, and fair.
a. True
*b. False
5. The utilitarian view of ethics suggests that anticipated outcomes and consequences should be
the primary considerations when evaluating an ethical dilemma.
Parnell, Strategic Management: Theory and Practice 4e Instructor
Resource
*a. True
b. False
6. Adverse selection exists when the parties in an arrangement do not share equally in the risks
and benefits.
a. True
*b. False
7. A situation in which a firm’s managers fail to act in the best interest of the shareholders is
known as the stakeholder dilemma.
*a. True
b. False
8. The triple bottom line refers to the notion that firms must maintain and improve social and
ecological performance in addition to economic performance.
*a. True
b. False
9. Over the past several decades, the composition of the typical board has shifted from one
controlled by insiders to one controlled by outsiders.
a. True
*b. False
10. When additional insiders are added to outsider-dominated boards, CEO dismissal is more likely
when corporate performance declines.
a. True
*b. False
Parnell, Strategic Management: Theory and Practice 4e Instructor
Resource
11. When additional outsiders are added to insider-dominated boards, outsiders are more likely to
pressure for corporate restructuring when performance is poor.
*a. True
b. False
12. Many companies limit the number of board memberships their own board members may hold.
*a. True
b. False
13. Any purchase of a controlling quantity of shares of a firm by an individual, a group of investors,
or another organization is known as a leveraged buyout (LBO).
a. True
*b. False
14. Corporate takeovers have been promoted as a system of checks and balances for firm
management.
*a. True
b. False
15. Corporate takeovers have been supported because of their ability to reduce the debt of
acquired firms.
a. True
*b. False
16. Individuals or groups who are affected by or can influence an organization’s operations are
called
Parnell, Strategic Management: Theory and Practice 4e Instructor
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a. shareholders.
*b. stakeholders.
c. organizational constituencies.
17. The desired ends toward which efforts are directed comprise
b. the mission.
b. the mission.
*a. The company should provide high quality products and services at the most reasonable prices
possible.
b. The company should maintain a healthy financial posture and a policy of on-time payment of
debt
d. The company should provide goods and services with minimum environmental costs, increase
employment opportunities, and contributing to social and charitable causes.
a. The company should provide high quality products and services at the most reasonable prices
possible.
b. The company should maintain a healthy financial posture and a policy of on-time payment of
debt.
d. The company should provide goods and services with minimum environmental costs, increase
employment opportunities, and contributing to social and charitable causes.
a. are synonymous.
22. The idea that business firms should serve both society and the financial interests of the
shareholders is known as
c. managerial ethics.
23. Which view of ethics suggests that decisions should be based on existing norms of behavior,
including cultural, community, or industry factors?
a. rights view
b. cultural view
c. religious view