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SM CH2
| Question | Answer |
|---|---|
| What is a Company Mission? | The fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms. |
| Key components | specifies product or service, primary market, technology for production or delivery, concern for survival, philosophy, self-concept, concern for public image |
| Trends in Mission Components | sensitivity to customer wants, concerns for quality |
| Responsibilities of the Board of Directors | Establish and update company mission , Elect company’s top officers, including CEO ,Establish compensation levels of top officers ,Set company objectives and authorize managers to implement agreed on long-term strategies |
| Success Factors of Effective Boards of Directors | . Represent stockholders’ interests by monitoring actions of senior executives,Composed of 8 to 12 highly qualified members, Evaluate CEO’s performance on an annual basis, Pay special attention to composition |
| Concepts of Agency Theory | Involves separation of owners (principals) and managers (agents) of a firm , Involves delegation of decision-making authority by owners to managers |
| How Can Agency Problems Occur? | Moral hazard problem , Adverse selection |
| Potential Agency Relationship Problems | Executives pursue growth in company size rather than in earnings, Executives avoid risk , Executives act to protect their status |
| Solutions to the Agency Problem | Define agent’s responsibilities in a contract,Create teams of executives across different organizational units to focus on overall organizational performance |
| Why Should Managers be Concerned About Social Responsibility? | government threats to increase regulations, social policy for long term viability, company right to exist depends on the external envirorment |
| What are the 4 e's? | easy to go green, establish credibility, empower customers with decision, enlist support |
| What are cost benefits of being social responsible? | some activities are free of cost, some activities make saving inquiring into more porfit |
| What are the general benefits of social responsibility? | discouraging gov. regulations, improves image, attracts social responsibility investors |
Created by:
jnartig
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