TEST 1 Review - 1 Characteristics of a staggered board P.53...

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1. Characteristics of a staggered board? P.53 A board on which directors serve terms of more than one year so that only a portion of the board of directors stands for election each year. 2. Agency theory is based on what idea?p.49 That problems arise in corporations because the agents (top management) are not willing to bear responsibility for their decisions unless they own a substantial amount of stock in the corporation. 3. Triggering events for strategic change?p.24 A triggering event is something that acts as a stimulus for a change in strategy, such as: New CEO: By asking a series of embarrassing questions, a new CEO cuts through the veil of complacency and forces people to question the very reason for the corporation’s existence. External intervention: A firm’s bank suddenly refuses to approve a new loan or suddenly demands full payment on an old one. A key customer complains about a serious product defect. 1. Threats if a change in ownership: Another firm may initiate a takeover by buying a company’s common stock. 2. Performance gap: A performance gap exists when performance does not meet expectations. Sales and profits either are no longer increasing or may even be falling. 3. Strategic inflection point: Coined by Andy Grove, past-CEO of Intel Corporation, a strategic inflection point is what happens to a business when a major change takes place due to the introduction of new technologies, a different regulatory environment, a change in customers’ values, or change in what customer’s prefer. 4. To evaluate strategic position a firm must ask what questions?p.6 1. Where is the organization now? (Not where do we hope it is!+) 2. If no changes are made, where will the organization be in one year? Two years? Five years? Ten years? Are the answers acceptable? 3. If the answers are not acceptable, what specific actions should management undertake? What are the risks and payoffs involved? 5. The emphasis of strategic management?p.5 The study of strategic management emphasizes the monitoring and evaluating of external opportunities and threats in light of a corporation’s strengths and weaknesses.
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6. What is the difference between Strategic formulation and strategic implementation?p.21 Strategic formulation is a development of long-range plans for the effective management of environmental opportunities and threats, in light of corporate strengths and weaknesses (SWOT). Strategic implementation is a process by which strategies and policies are put into action through the development of programs, budgets, and procedure. The process might involve changes within the overall culture, structure, and/or management system of the entire organization. 7.
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TEST 1 Review - 1 Characteristics of a staggered board P.53...

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