Firms in China that have higher state ownership have been shown to have more volatility and lower market value, in part because government-mandated social goals take precedence over shareholder returns

Both top executives and owners of the firm wish to diversify the firm to reduce risk

Awareness by top managers of the existence of external investors in the form of individuals (e.g., Carl Icahn) and groups (e.g., hedge funds) often positively influences them to align their interests with the firm’s shareholders

KorniCo. is considering possible strategies to defend against a hostile takeover. They have narrowed it down to four options. Because of pressure from shareholders, they need to adopt a strategy that is shown to have a positive effect on shareholder wealth. Based on that criterion, which of the following should they choose?

Research shows that structure has a more important influence on strategy than the reverse

The experience that results from long tenure in a firm is known to extend the breadth of an executive’s knowledge base

A centralized structure does not provide information from local stores that would be useful in changing its technology quickly. This example illustrates the effect of structure on strategy

The three internal corporate governance mechanisms are ownership concentration, board of directors, and the market for corporate control

The market for corporate control is composed of individuals and firms that buy ownership positions in or purchase all of potentially undervalued corporations typically for the purpose of forming new divisions in established companies or merging two previously separate firms

An organization engaging in strategic entrepreneurship focuses on identifying opportunities that it can exploit through innovations