Theories of Corporate Governance

“Argued that stakeholder ideas are fundamentally flawed, strongly advocating the ownership rights perspective.” The statements above are mentioned by

• Turnbull (1997)

• Smith and Hasnas (1999)

• Peter Senge (2000)

• Sternberg (2000)

The theory recognizes that companies generate profits and increase shareholder wealth only by satisfying stakeholder needs and responding to their interests.

• True

• False

"To understand how human beings can be motivated to contribute to the achievement of the goals of organizational principals" is the purpose of

• Stakeholder Theory

• Stewardship Theory

• Managerial Hegemony Theory

• Political Theory

Stewardship Theory holds that company owners hires agents to serve their interest

• True

• False

The management dominates the business organizations resulted ineffective BOD. Factors:

• Directors had a low dependence on the management.

• No influence of inside directors on outside directors.

• The board's lack of detachment is a result management's control over the selection of outside board members.

• Director could possess the same amount of information and knowledge about the business with the management.

Class hegemony explains that directors view and perceive themselves as an elite set of people at the top of the company and they will recruit or appoint other directors who are of the same caliber and can align with them.

• True

• False

Who are the persons behind the resource dependency theory?

• Freeman and Reed

• Mallette and Fowler

• Jeffrey Pfeffer and Gerald R. Salancik

• Meyer and Rowan

How the company could minimize dependency?

• Fund Raising

• Involve in open market

• Collaborate with competitor

• Strategic Planning

According to (DiMaggio and Powell, 1983), complementary perspective in that it suggests that the imitation of practices.

• True

• False

Institutional Theory should be viewed as a complement to

• Political Theory

• Resource Dependence Theory

• Agency Theory

• Stakeholder Theory