1. All of the following are ways to encourage top managers to act in the best interests of the shareholders except:

       Board independence might encourage it, although the evidence is inconclusive

       Including close personal friends of the CEO on the board of directors

       Incentive compensation

       Government regulation

       Threat of a hostile takeover

2. Which of the following is least likely to be a source of sustainable competitive advantage? (Points : 5)

       A unique and valuable relationship with an important stakeholder

       A computer program

       An organization's culture

       An organization's reputation

       A well-known and respected brand

3. In Collin’s (Good to Great) leadership skills hierarchy, the skill that comes right after becoming a capable individual is:

       Becoming an organizer

       Becoming an effective leader  

       Becoming a team player

       Becoming a transformational leader

       Becoming a super star

4. What are the probable implications of a firm neglecting its knowledge and learning resources?

       It will become weaker financially 

       Its general organizational resources will become weaker  

       Its physical resources will become weaker

       Its human resources will become weaker

       All of the above

5. The Sarbanes-Oxley Act of 2002:

       Provides requirements regarding independence of corporate auditors

       Requires that financial records be kept for at least five years

       Requires the CEO to personally certify the corporation's financial reports

       Was partially a response to large corporate scandals

       All of the above

6. A realized competitive advantage becomes sustainable when: (Points : 5)

       It is unique, valuable, and based on strong financial resources

       It involves all of the functional areas of the organization

       It is based on a resource or capability that is difficult to imitate by competitors and there is no readily available substitute

       It is based on the quality of the organization’s products and services

7. Board members can play important strategic roles in organizations such as providing advice to managers with regard to strategies and strategic direction.

       True  

       False  

8. The labels a firm uses for its written statements of strategic direction are just as important as the elements they contain.

       True  

       False  

9. Human resource management is a basic activity in the value chain.

       True  

       False  

10. Effective training programs can be a source of competitive advantage.

       True  

       False  

11. Agency problems occur when an agent sacrifices his or her own interests for the benefit of the organization.

       True  

       False  

12. It has been suggested that the business definition question should include not only “What is our business?” but also “What was our business?”

       True  

       False  

13. An organization’s human resources, physical resources, financial resources, knowledge and learning resources, and general organizational resources are highly interconnected.

       True  

       False  

14. Tacit knowledge can be communicated with precision through written means.

       True  

       False  

15. Sustainable development is defined as growth that is sustainable because there are so many available resources that they will virtually never run out.

       True  

       False  

16. The traditional view of leaders in organizations is that they set direction, make the important decisions, and rally the followers.

       True  

       False