Chapter 10 I
What is corporate governance?
the set of mechanisms used to manage the relationships among stakeholders and to determine and control the strategic direction and performance of organizations
What is Managerial opportunism?
the seeking of self-interest with guile (i.e., cunning or deceit).
What is organizational structure?
specifies the firm’s formal reporting relationships, procedures, controls, and authority and decision-making processes.
What is organizational control?
it guides the use of strategy, indicate how to compare actual results with expected results, and suggest corrective actions to take when the difference is unacceptable
What does ROI mean?
Name 3 internal governance mechanisms used in the modern corporation
1.Ownership concentration
2.The board of directors
3.Executive compensation
Define Free cash flow.
the cash remaining after the firm has invested in all projects that have positive net present value within its current businesses
What are the three major types of organizational structures
1.Simple
2.Functional
3.Multidivisional
Name the two types of organizational controls used to support the implementation of a strategy
1.Strategic controls
2.Financial controls
What kind of strategy did Baidu use ?
differentiation strategy
What role do Principals play in agency relationships?
Principals establish governance and control mechanisms to prevent agents from acting opportunistically.
What are the 3 concepts/values that affect German and Japanese attitudes towards corporate governance
1.Obligation
2.Family
3.Consesus
What are the 2 possible combination structures that result from implementing the transnational strategy
1.A global matrix structure
2.A hybrid global design
Name the 3 benefits of M-form structure
1.It enabled corporate officers to more accurately monitor the performance of each business, which simplified the problem of control.
2.It facilitated comparisons between divisions, which improved the resource allocation process.
3.It stimulated managers of poorly performing divisions to look for ways of improving performance.
According to our talk with Sr.Microsoft Global Manager Kevin, what is the best way to overcome challenges with global teams?
Overcommunicate
The management board, which controls all the functions of strategy and management, is known as the______.
Vorstand
As the equity held in state- owned enterprise in China has gradually declined the percentage of _____ has ___
private firms, grown (increased)
The______ ________ _________ decentralizes the firm’s strategic and operating decisions to business units in each country so that product characteristics can be tailored to local preferences.
multi domestic strategy
What are the limitations of the global matrix design?
What was Baidu's core business offering?
Home grown internet search engine
Explain the difference in concentration of ownership for both public and private German firms
In private German firms, the owner and manager may be the same individual.
In publicly traded German corporations, a single shareholder is often dominant.
What role does a "poison pill" play in a hostile takeover?
Its a defense, a firm can use by making the stock less attractive to a potential acquirer.
Choosing the firm’s strategy and structure should be committed to matching each strategy with a structure that provides what 2 concepts
1.The stability needed to use current competitive advantages
2.The flexibility required to develop future advantages
Name 4 characteristics of the differentiation form of the functional structure
Relatively complex and flexible reporting relationships
Frequent use of cross-functional product development teams
A strong focus on marketing and product R & D rather than manufacturing and process R & D
•A development-oriented culture and flatter structure in which employees try to find ways and frequently exchange ideas about how to further differentiate current products and develop new, highly differentiated products
Decentralized decision-making responsibility and authority
Low specialization of jobs
Few formal rules and procedures
What is the primary goal of all firms
To achieve above average returns