Exam questions

2. A study of 330,000 employees found that ethical lapses in the workplace are most often caused by problems _______, rather than individual unethical behavior.
[removed]    a. with bonus and commission structures
[removed]    b. associated with quality and safety regulations
[removed]    c. in the corporate culture, including corporate beliefs and value systems
[removed]    d. with personal moral values
[removed]    e. in finance and accounting

Q3. Effective shareholder activism could include all of the following activities except
[removed]    a. using grassroots campaigns, such as letter writing.
[removed]    b. defacing company property.
[removed]    c. attending annual meetings.
[removed]    d. engaging in dialogue with management.
[removed]    e. submitting shareholder resolutions.

Q4. On what basic precept is the shareholder model of corporate governance founded?
[removed]    a. The maximization of wealth for investors and owners
[removed]    b. Everyone should contribute to social welfare
[removed]    c. Supply and demand found in the marketplace
[removed]    d. The customer is always right
[removed]    e. The problem created when ownership and control are not separated

Q5. Which of the following is the best way for a stakeholder to gain legitimacy?
[removed]    a. Insisting that your group's interests are extremely important to society in general
[removed]    b. Letting the media know the horrible things the company has done so that the rest of the world will know
[removed]    c. Making claims that you feel are reasonable, regardless of the view of other stakeholders
[removed]    d. Exploring the issue from a variety of perspectives and then communicating your desires for change in a respectful manner
[removed]    e. Committing acts of violence to show the company and the community that you are serious

Q6. Issues related to fairness and honesty may arise because business is sometimes regarded as a
[removed]    a. contest, with the most ethical firm 'winning.'
[removed]    b. war, requiring surprise attacks, guerrilla warfare, and other warlike tactics to win the battle for consumers' dollars.
[removed]    c. game governed by the rules of society.
[removed]    d. contest, with the most profitable firm 'winning.'
[removed]    e. game governed by its own rules, rather than those of society.

Q7. Who are the principals and agents of a corporation?
[removed]    a. Owners and executives, respectively
[removed]    b. Customers and managers, respectively
[removed]    c. Stockholders and employees, respectively
[removed]    d. Managers and employees, respectively
[removed]    e. Employees and stockholders, respectively

Q8. How is corporate governance best defined?
[removed]    a. A system of decentralized mechanisms that assists a firm in meeting its goals
[removed]    b. The extent to which the content of workplace decisions is aligned with a firm's stated strategic direction
[removed]    c. The exercise of control and authority by those in mid-management positions
[removed]    d. The formal system of accountability and control for organizational decisions and resources
[removed]    e. The philosophy that a board or CEO holds regarding accounting methods

Q9. Overall, evidence supports that social responsibility
[removed]    a. negatively affects a firm's performance because it increases costs and reduces profits.
[removed]    b. is unrelated to the performance of a business.
[removed]    c. is good for a firm's reputation, but has little effect on performance.
[removed]    d. works well in theory, but is hard to implement in business.
[removed]    e. is positively associated with return on investment, return on assets, and sales growth.

Q10. When just one business provides a good or service in a particular market, what results?
[removed]    a. Lower prices due to that company's efficiency
[removed]    b. Deregulation
[removed]    c. Oligopoly
[removed]    d. Trust
[removed]    e. Monopoly

Q11. According to Kohlberg's model, moral development
[removed]    a. is focused primarily on each individual's needs.
[removed]    b. depends mostly on the first few years of a person's life.
[removed]    c. can be defined as six unrelated stages that a person progresses through.
[removed]    d. differs for each individual, resulting in no universal values.
[removed]    e. is accelerated by gaining education and experience in resolving conflicts.

Q12. Many claimed that Microsoft's dominance in the computer operating systems market violated which corporate social responsibility?
[removed]    a. Ethical
[removed]    b. Economic
[removed]    c. Environmental
[removed]    d. Legal
[removed]    e. Philanthropic

Q13. The ________ model represents the current view of the relationship between a firm and the groups that both affect and are influenced by the firm.
[removed]    a. output
[removed]    b. society
[removed]    c. shareholder
[removed]    d. input
[removed]    e. stakeholder

Q14. Developing a code to aid employees in their decision making is an example of an activity for which type of social responsibility?
[removed]    a. Governance
[removed]    b. Ethical
[removed]    c. Economic
[removed]    d. Philanthropic
[removed]    e. Legal

Q15. Which act is the principal tool employed by the federal government to prevent businesses from restraining trade and monopolizing markets?
[removed]    a. Anti-Monopoly Act
[removed]    b. Federal Trade Commission Act
[removed]    c. Sherman Antitrust Act
[removed]    d. Roosevelt Antitrust Act
[removed]    e. Clayton Antitrust Act

Q16. What aspect of corporate culture relates to an organization's expectations about appropriate conduct?
[removed]    a. Ethical climate
[removed]    b. Values
[removed]    c. Regulations
[removed]    d. Significant others
[removed]    e. Organizational climate

Q17. Under the historical and traditional views of business, who was considered to be a stakeholder?
[removed]    a. Owners, customers, employees, business partners, the community, the government, and special-interest groups
[removed]    b. Owners and customers
[removed]    c. Society in general
[removed]    d. Owners
[removed]    e. Owners, customers, employees, and business partners

Q18. If employees believe that salary decisions are fair and consistent for all job categories, what type of justice exists?
[removed]    a. Interactional
[removed]    b. Distributive
[removed]    c. Utilitary
[removed]    d. Ethical
[removed]    e. Procedural

Q19. According to reports published in Business Week and other sources, the best boards of directors
[removed]    a. are not compensated.
[removed]    b. are found in Japanese and European countries.
[removed]    c. are generally more independent and more active than other boards.
[removed]    d. rarely own stock in the company.
[removed]    e. rate high on independence but low on innovation.

Q20. Which of the following best describes the stakeholder model of corporate governance?
[removed]    a. The primary focus of this model is social welfare, to the exclusion of economic welfare.
[removed]    b. A company has responsibilities to many stakeholders including investors, employees, suppliers, government agencies, and the community.
[removed]    c. A company's primary responsibility is to maximize the wealth of its most important stakeholder, the owners.
[removed]    d. The stakeholder model is a more restrictive approach than the shareholder model approach to corporate governance.
[removed]    e. Because corporations have many managers and resources, it is possible to equally and fully address the needs of all stakeholders.

Q21. Why was there little reason to focus on corporate governance in the late 1800s and early 1900s?
[removed]    a. The stakeholders in organizations had the same views about decision making, so there was little need for governance mechanisms.
[removed]    b. The government tightly controlled industries during this time period thereby making a company's attempt at governance futile.
[removed]    c. There were no social, safety, or environmental problems at this time, so governance mechanisms were unnecessary.
[removed]    d. In most companies, the owner made the strategic decisions about the business, so little governance was needed.
[removed]    e. Companies followed all laws, so there was little need for governance mechanisms.

Q22. Which stakeholder is the primary focus of the shareholder model of corporate governance?
[removed]    a. Investors
[removed]    b. Community
[removed]    c. Employees
[removed]    d. Suppliers
[removed]    e. Customers

Q23. An ethical issue is a problem, situation, or opportunity
[removed]    a. that harms consumers.
[removed]    b. requiring society to choose among several actions that must be evaluated as right or wrong.
[removed]    c. requiring an individual or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical.
[removed]    d. requiring an individual or organization to choose between harming consumers or the environment and earning more profits.
[removed]    e. that harms the environment.

Q24. In the 1990s, employees turned to a more holistic approach to work and life, characterized by all of the following, except
[removed]    a. finding a balance between work and personal responsibilities and time.
[removed]    b. an interest in human and intellectual capital.
[removed]    c. a decrease in dual-working parent families.
[removed]    d. employee volunteerism in the community.
[removed]    e. trust in the workplace.

Q25. Which of the following is least likely to be considered destructive or unfair competition?
[removed]    a. Stealing competitors' trade secrets
[removed]    b. Using a 'bait and switch' method for selling products to customers
[removed]    c. Collaborating with a competitor to establish prices so that each firm can ensure a certain level of profit
[removed]    d. Obtaining information through competitive intelligence
[removed]    e. Lowering prices significantly in an effort to drive competitors out of a market, and then raising prices afterwards

Q26. What is the main argument presented by proponents of complete deregulation?
[removed]    a. Less government intervention would allow business markets to work more effectively.
[removed]    b. Regulations hamper competition because they level the playing field.
[removed]    c. Regulations are simply too confusing.
[removed]    d. Regulations lower prices to an unfair level that hinders firm profitability.
[removed]    e. There are no benefits received from regulations, only enormous costs.

Q27. How can a company align the interests of owners with managers through executive compensation?
[removed]    a. By significantly reducing executive pay across the board
[removed]    b. By setting executive compensation at a level equal to the industry average
[removed]    c. By linking compensation to company performance and achievement of goals
[removed]    d. By basing salaries on seniority with the company in order to increase longevity
[removed]    e. By capping executive compensation at ten times that of the lowest paid employee

Q28. The implementation of an ethics program
[removed]    a. will be the same from organization to organization, as there is little need to tailor any aspect of the program.
[removed]    b. is primarily directed at training top managers and developing compensation plans that will insure top managers are ethical.
[removed]    c. will not be successful unless the chief executive officer (CEO) is using a transactional leadership approach.
[removed]    d. translates a plan of action into operational terms and establishes a means by which organizational ethical performance will be monitored, controlled, and improved.
[removed]    e. starts with training and ends with the development of a code of conduct.

Q29. Which of the following internal control mechanisms would be the most difficult for a small company to implement?
[removed]    a. Requiring all employees to take one week of vacation a year
[removed]    b. Limiting access to valuable inventory to as few employees as possible
[removed]    c. Having several employees involved with each transaction, decision, or organizational issue
[removed]    d. Screening potential employees before hiring
[removed]    e. Developing a code of conduct addressing ethical and legal issues

Q30. ______ prohibit(s) employment discrimination on the basis of race, national origin, color, religion and gender.
[removed]    a. Americans with Disabilities Act
[removed]    b. Equal Employment Opportunity Commission
[removed]    c. Affirmative Action programs
[removed]    d. International Employment Rights Treaty
[removed]    e. Title VII of the Civil Rights Act of 1964

Q31. Which type of investor causes the most problem for CEOs in developing strategic plans?
[removed]    a. Institutional investors
[removed]    b. Shareholders willing to sacrifice short-term gains for long-term income
[removed]    c. Global investors who don't understand the business
[removed]    d. Employees who own stock
[removed]    e. Shareholders seeking short-term gains

Q32. Organizational crises are characterized by all of the following except
[removed]    a. routine problems occurring in business.
[removed]    b. a threat to a company's high-priority goals.
[removed]    c. far-reaching events.
[removed]    d. being a surprise to a company's membership.
[removed]    e. the need for swift action.

Q33. Social investing is best defined as
[removed]    a. a strategy to fund social entrepreneurs.
[removed]    b. the sole use of environmental criteria to determine the best companies in which to invest.
[removed]    c. the integration of social and ethical criteria into the investment decision-making process.
[removed]    d. the most profitable approach to investing in public companies.
[removed]    e. a strategy to ensure short-term return on investments.

Q34. Which of the following best describes the Better Business Bureau (BBB)?
[removed]    a. The BBB is a federal government agency that helps resolve problems between businesses and consumers.
[removed]    b. The BBB is a published list of companies to avoid doing business with due to their poor business practices.
[removed]    c. The BBB is a state agency that helps resolve problems between businesses and consumers.
[removed]    d. The BBB is a network of agencies that assesses financial penalties against unethical businesses.
[removed]    e. The BBB is a self-regulatory association that helps resolve problems between businesses and consumers.

Q35. In the United States, the major role that society delegates to government is to
[removed]    a. keep prices of products low so that all consumers can purchase convenience and luxury goods.
[removed]    b. provide laws based on the Constitution and Bill of Rights and enforce laws through the judicial system.
[removed]    c. create more jobs.
[removed]    d. encourage larger companies to conduct business in many other countries.
[removed]    e. encourage competition by providing economic support to smaller companies in order to be competitive with powerful companies.

Q36. Which of the following statements is false concerning how a company should communicate after a crisis?
[removed]    a. The communication after a crisis is usually not handled in a completely effective or ineffective manner.
[removed]    b. It is better to wait until the company has a complete understanding of the crisis so that stakeholders will not be led astray by partial information.
[removed]    c. If a company is slow to respond, stakeholders may feel as though the company does not care about their needs or is not remorseful about the crisis.
[removed]    d. Crisis events are often chaotic, so management may begin the crisis response with a degree of ambiguity.
[removed]    e. The company should communicate how it plans to resolve the crisis.

Q37. The Pet Food Institute, the Tobacco Institute, and the American Booksellers Association are all examples of
[removed]    a. trade unions.
[removed]    b. special-interest groups.
[removed]    c. trade associations.
[removed]    d. umbrella organizations.
[removed]    e. PACs.

Q38. To which of the following forms of business can the concept of social responsibility be applied?
[removed]    a. Any form of business from a sole proprietorship to a large corporation
[removed]    b. All forms of corporations
[removed]    c. All businesses except those with less than 50 employees
[removed]    d. Large, public corporations
[removed]    e. Small, privately held corporations

Q39. Administrative spending for federal regulatory agencies, which is used as a measurement of regulatory costs, has
[removed]    a. decreased because companies have been much more responsible at self-regulation, and less federal spending is needed.
[removed]    b. remained relatively steady throughout the past couple of decades.
[removed]    c. decreased in the past years as more of the burden of regulation is shifted to the state agencies.
[removed]    d. increased steadily over the years as the world of business has continued to grow and become more complex.
[removed]    e. increased in the past years because states have been ineffective with their regulations and the burden has shifted to federal agencies

Q39. Administrative spending for federal regulatory agencies, which is used as a measurement of regulatory costs, has
[removed]    a. decreased because companies have been much more responsible at self-regulation, and less federal spending is needed.
[removed]    b. remained relatively steady throughout the past couple of decades.
[removed]    c. decreased in the past years as more of the burden of regulation is shifted to the state agencies.
[removed]    d. increased steadily over the years as the world of business has continued to grow and become more complex.
[removed]    e. increased in the past years because states have been ineffective with their regulations and the burden has shifted to federal agencies.

Q40. Companies with less than 100 employees account for about ____ percent of total employment in the United States.
[removed]    a. 40
[removed]    b. 50
[removed]    c. 10
[removed]    d. 60
[removed]    e. 70