WorksheetsFamily Business Governance
Total questions: 10
Worksheet time: 10mins
Agency theory refers to
providing value to all the company's stakeholders
the directors acting to ensure the best interest of the shareholders are being met
corporations providing value by combining the key factors of production in a manner than markets cannot
the directors existing to provide companies with the access to resources that they could not gain through market or management links
Which of the following problems may exist in family firms in agency theory based on behavioral dimension
I Misaligned shareholder objectives or opportunistic behavior of diversion of resources
II Establishing mechanisms that check opportunistic behavior
III Controlling family dynamics and conflicts
IV Relationships among family managers
II and III
III and IV
I and IV
All of above
Following are Chaudhry family business restaurant EXCEPT
Taj Mahal
Punjab
Rajwali Restaurant
Le Maharajah
Which of the following describe about Salman?
I Completed Diploma in Hotel Management in Manchester Business School
II Financial expert with five years of Audit and Finance experience of Pakistani banking industry
III University professor of teaching research and consultancy
IV Once said family business as Dhaba
II and III
III and IV
I and IV
All of above
For sustainable growth of family business, the new CEO Borraz presented two option which is acquire more land to grow in Muslim-populated and start a cruise-based hotel
True
False
What is the theory that can relates with this case EXCEPT
Agency theory
Stewardship theory
Family stress theory
Stakeholder theory
Chairman hires Mobeen Khan in the corporate board without any process for hiring a director. Why?
Trust worth employee of Chaudhry Family
Having a bachelor in Accounting and Finance from the University of Bordeaux
Avoid any conflict in the meeting and refuses Mobeen’s resignation
He is an advisory member of the family’s board
Agency cost in the family business such as
Free riding by family members
Entrenchment of ineffective managers
More difficult to punish poor performance
All of above
What is the pitfall to avoid in family business succession?
Refusing to accept outside help
Not establishing clear goals and objectives
Failure to plan for transitions
All of above
How did we define a Family business?
I Involves 2 or more members of a family that controls the majority of the ownership of the business
II The business honors/influenced by family's values
III One of the goals of the business is to provide financial support for the family
IV There is the possibility of ownership being passed down from one generation to another
II and III
III and IV
I and IV
All of above
