Corporate Governance 2

Question 1

ENVIRONMENTAL UNCERTAINITY

Answer 1

The degree of complexity + the degree of change

Question 2

ENVIRONMENTAL UNCERTAINITY 2

Answer 2

Both a threat and opportuinity

Question 3

a threat

Answer 3

It hampers their ability to develop long range plans and to make strategic decisions to keep the corporation in equilibrium with its external environment.

Question 4

an opportunity

Answer 4

It creates a new playing field in which creativity and innovation can play a major part in strategic decisions.

Question 5

ENVIRONMENT of a BUSINESS

Answer 5

Societal environment

Task environment

Question 6

Societal environment

Answer 6

Economic forces
Technological forces
Political-legal forces
Sociocultural forces

Question 7

Economic forces

Answer 7

Regulate exchange of materials, money, energy and information …
Intrest rates, money supply, inflation rates, unemployment levels, energy availability, energy alternatives,

Question 8

Technological forces

Answer 8

Generate problem-solving inventions …

New products, internet availability, patent protection, lab to market transfer opportunities …..

Question 9

Political-legal forces

Answer 9

Allocate power; provide laws and regulations …

Environmental protection laws, tax laws, the stability of governments, …

Question 10

Sociocultural forces

Answer 10

Regulate values, mores, and customs of society …

Ageing of population, consumer activism, lifestyle changes, level of education

Question 11

Task environment

Answer 11

is typically the industry within which the firm operates;

Question 12

Elements or groups that directly affect a corporation and are affected by it

Answer 12

• Governments
  
  • Local Communities
  • Suppliers
  • Competitors
  • Customers
  • Creditors
  • Unions
  • Trade Associations

Question 13

Stakeholders

Answer 13

Stakeholders are any constituencies in an organization’s environment that are affected by the decisions and actions of that organization.

Question 14

Organizational Effectiveness

Answer 14

Organizational Effectiveness: Satisfying Stakeholders’ Goals and Interests

Question 15

Organizational Effectiveness:

Answer 15

Shareholders - Return on their investment
Customers - Product reliability and product value relative to their price
Managers/Employees - Compensation, working conditions, career prospects

Question 16

Allocating Rewards

Answer 16

Managers must decide how to allocate inducements to provide at least minimal satisfaction of the various stakeholder groups
Managers must also determine how to distribute “extra” rewards

Question 17

Why Manage Stakeholder Relationships?

Answer 17

Good stakeholder relationships can:
Positively affect organizational performance
Be recognized as “doing the right thing” and show corporate social responsibility
Create and reinforce a positive image of the organization among its stakeholders and community

Question 18

Industry Structure

Answer 18

Fragmented Industry

Consolidated Industry

Question 19

Fragmented Industry

Answer 19

Many small- and medium-sized companies compete for relatively small shares of the total market

Products are typically in early stages of product life cycle

Focus strategies are used

Question 20

Consolidated Industry

Answer 20

Domination by a few large companies

Emphasis on cost and service
Economies of scale
Regional and national brands
Slower growth over capacity
Knowledgeable buyers