Which of the Following Statements Is False

question 22

Multiple Choice

Which of the following statements is false?

• A) An active takeover market is part of the system through which the threat of dismissal is maintained.
• B) When internal governance systems such as ownership, compensation, board oversight, and shareholder activism fail, the one remaining way to remove poorly performing managers is by mounting a hostile takeover.
• C) Likely because hostile takeovers and internal governance systems are substitute mechanisms, researchers have found that boards are less likely to fire managers for poor performance during active takeover markets than they are during lulls in takeover activity.
• D) The effectiveness of the corporate governance structure of a firm depends on how well protected its managers are from removal in a hostile takeover.

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Definitions:

Compromise Mechanism

A strategy used in conflict resolution where each party gives up something to reach a mutually acceptable solution.

Identification

A compromise mechanism whereby an individual patterns his or her behavior after another’s.

Patterns Behavior

The repeated actions or reactions exhibited by individuals or groups in response to certain stimuli or situations.

Cross-Functional Team

A group of people from different departments or areas within an organization working together towards a common goal.