30 Questions
What did Sony's management organization do to mirror U.S. firms' practices?
Delegated implementation to executive officers while the board focused on decision-making and strategic supervision
What was the response to Sony's move to mirror U.S. firms' practices?
It was well-received by business journalism and prompted many other Japanese firms to follow suit
Which of the following is NOT a unique feature of the traditional Japanese model of corporate governance?
CEO compensation strongly linked to firm size and performance
What did the Japanese government initiative in 2014 aim to achieve?
Increasing the influence of institutional investors in firms' governance
What was the traditional approach to CEO compensation in the Japanese model of corporate governance?
CEO pay was salary-centric and not strongly linked to firm size or performance
Which of the following was a key feature of the traditional Japanese model of corporate governance?
Trading-ties-based corporate groups (e.g., a horizontally structured keiretsu through the main banks or a vertically structured keiretsu)
What strategic move did Olympus make to redirect its focus towards its core medical equipment sector?
Divested its imaging division to a U.S.-based firm
Despite global M&A activity experiencing a decline, which region remained at the forefront of M&A investments?
The United States and Japan
What prompted a re-evaluation of the insular and conservative structure of Japanese corporate governance?
Economic challenges in the 1990s
When did the shift in corporate decision-making in Japanese firms begin?
Early 2000s
What change in corporate governance reform allowed 'large' firms in Japan to adopt a U.S.-style corporate structure?
Introduction of a flexible approach
What aspect of Japanese corporate culture was likely influenced by the deepening investment ties between Japan and the United States?
All of the above
What was the primary focus of corporate directors and executives during the managerialist era?
Guiding the corporation in the interests of a wide range of stakeholders
What was the primary reason for the challenges faced by managerial capitalism in the early 1970s?
Poor stock market performance
What was the philosophical approach of the managerialist era, as described in the text?
Managerial capitalism
What did the text suggest was the potential for during the managerialist era?
Managerial self-interest
What did the text suggest was the outcome of the managerialist era?
Positive outcomes, with American corporations leading global markets and generating employment opportunities
What did the text suggest was the role of legal frameworks during the managerialist era?
They discouraged personal financial gain at the expense of the corporation
What is the primary goal of shareholder primacy theory?
Enhancing shareholder wealth
Why did economic theorists criticize the passive role of dispersed shareholders in public corporations?
To reduce agency costs
What belief forms the basis for shareholder primacy theory?
Shareholders are ultimate authorities
What did the rise of the Chicago School of economists in the 1970s lead to regarding corporate governance?
Favored maximizing shareholder wealth
According to Milton Friedman, what is the primary social responsibility of a business?
Increase profits
What argument justifies shareholder primacy theory based on corporate profits?
Efficiency is measured by stock price
Which of the following is likely to occur as Japanese corporations prioritize ESG considerations?
Increased transparency and disclosure practices
What change is anticipated in executive compensation structures for Japanese companies?
Compensation will be tied to performance metrics aligned with strategic objectives
Which of the following statements best describes the potential convergence of Japanese and U.S. corporate governance standards?
A gradual convergence is likely due to cross-involvement of governance practices
What is the primary driver for the anticipated changes in Japanese corporate governance practices?
Influence of American shareholders and global trends
Which of the following statements is NOT supported by the information provided in the text?
Japanese corporations have fully established an environment to be stakeholders in their companies
Based on the information provided, what can be inferred about the future direction of Japanese corporate governance?
It will incorporate elements from both Japanese and U.S. models
Test your knowledge on the evolution of corporate governance from a focus on managerial self-interest to considering the interests of various stakeholders. Explore the concepts of managerial capitalism and managerialism.
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