ST MGN MT QUIZES 3 EXAM
QUESTIONS AND ANSWERS GRADED A+
2025/2026
Corporate governance is: - ANS c. the set of mechanisms used to manage the relationships
among stakeholders and to determine and control the strategic direction and performance of
organizations.
Which of the following statements about the recent global emphasis on corporate governance
is NOT true? - ANS d. The recent global emphasis on corporate governance stems mainly
from the need to give shareholders more power in organizations.
Over the past three years, Simcom's board of directors has become increasingly concerned
about the top-level managers' reliance on external acquisitions, as opposed to internal product
innovations. They are discussing the possibility of replacing the CEO. Their decision to exercise
corporate governance is primarily motivated by concerns over - ANS d. strategic direction.
The Carter family has been the successful owner of a manufacturing company for more than 50
years. The company has always performed better than expected and was projected to grow for
years to come. To help with this growth, the Carters decided to hire a CEO who is not from the
family, the first time in its history. After the hire, the performance of the company shifted for the
worse, and there is now a separation of ownership and managerial control. What is the best
next step? - ANS c. The Carters should appoint a family member as CEO, as research shows
that family-owned firms perform better when a member of the family is the CEO.
1 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
, Managerial opportunism occurs when managers: - ANS b. make decisions to satisfy their own
self-interests.
What is an agency relationship? - ANS d. A situation in which one party delegates decision-
making responsibility to a second party for compensation
Susan is worried that her company's poor performance is reflecting badly on her performance
as CEO. She thinks she may lose her position, receive a cut to her salary, or be seen by her peers
as incompetent and ineffective. What is another term for Susan's concerns? - ANS a.
Managerial employment risk
Greg is the CEO of a leading company in the consumer packaged goods industry. He is trying to
grow his company for personal gain and wealth. However, Greg sees that his company has an
opportunity to break into the chemical industry. He has decided to invest free cash flow into
acquiring small chemical companies that have the potential for growth if funded properly.
Shareholders are not happy because they are concerned about: - ANS b. overdiversification.
What is the definition of ownership concentration? - ANS b. The number of large-block
shareholders and the total percentage of the firm's shares they own
After a recent round of share releases, many individuals bought up shares and reduced the
number of large-block shareholders. The company's managers recently had the luxury of
performing without much interference or monitoring by their shareholders. The managers are
now engaging in risky strategic tactics that may not be in the best interest of shareholders.
What type of ownership does this company have? - ANS c. Diffuse ownership
An institution that holds 15 percent of shares in a company in order to be a powerful
governance mechanism is an example of a(n): - ANS b. institutional owner.
2 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS GRADED A+
2025/2026
Corporate governance is: - ANS c. the set of mechanisms used to manage the relationships
among stakeholders and to determine and control the strategic direction and performance of
organizations.
Which of the following statements about the recent global emphasis on corporate governance
is NOT true? - ANS d. The recent global emphasis on corporate governance stems mainly
from the need to give shareholders more power in organizations.
Over the past three years, Simcom's board of directors has become increasingly concerned
about the top-level managers' reliance on external acquisitions, as opposed to internal product
innovations. They are discussing the possibility of replacing the CEO. Their decision to exercise
corporate governance is primarily motivated by concerns over - ANS d. strategic direction.
The Carter family has been the successful owner of a manufacturing company for more than 50
years. The company has always performed better than expected and was projected to grow for
years to come. To help with this growth, the Carters decided to hire a CEO who is not from the
family, the first time in its history. After the hire, the performance of the company shifted for the
worse, and there is now a separation of ownership and managerial control. What is the best
next step? - ANS c. The Carters should appoint a family member as CEO, as research shows
that family-owned firms perform better when a member of the family is the CEO.
1 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
, Managerial opportunism occurs when managers: - ANS b. make decisions to satisfy their own
self-interests.
What is an agency relationship? - ANS d. A situation in which one party delegates decision-
making responsibility to a second party for compensation
Susan is worried that her company's poor performance is reflecting badly on her performance
as CEO. She thinks she may lose her position, receive a cut to her salary, or be seen by her peers
as incompetent and ineffective. What is another term for Susan's concerns? - ANS a.
Managerial employment risk
Greg is the CEO of a leading company in the consumer packaged goods industry. He is trying to
grow his company for personal gain and wealth. However, Greg sees that his company has an
opportunity to break into the chemical industry. He has decided to invest free cash flow into
acquiring small chemical companies that have the potential for growth if funded properly.
Shareholders are not happy because they are concerned about: - ANS b. overdiversification.
What is the definition of ownership concentration? - ANS b. The number of large-block
shareholders and the total percentage of the firm's shares they own
After a recent round of share releases, many individuals bought up shares and reduced the
number of large-block shareholders. The company's managers recently had the luxury of
performing without much interference or monitoring by their shareholders. The managers are
now engaging in risky strategic tactics that may not be in the best interest of shareholders.
What type of ownership does this company have? - ANS c. Diffuse ownership
An institution that holds 15 percent of shares in a company in order to be a powerful
governance mechanism is an example of a(n): - ANS b. institutional owner.
2 @COPYRIGHT 2026 ALLRIGHTS RESERVED.
