Question 1 – The framework to understand how businesses meet their economic, legal, ethical and philanthropic responsibilities is developed around the assumption that social responsibility is a:
-requirement by federal law.
-theory, with little relevance to business practice.
-specific set of rules and guidelines.
-result that does not need further attention.
Question 2 – An employee for Acme, Inc., has been asked to carry out an assignment that she believes is questionable. This situation can be classified as:
-an ethical issue.
-a violation of law.
Question 3 – Companies with less than 100 employees account for about ____ percent of total employment in the United States.
Question 4 – The outcomes associated with positive stakeholder relationships are:
-unlikely to have an effect on the firm’s reputation.
-both long-term and short-term in nature.
-always long-term in nature.
-of minimal importance to the operation of the firm.
-mostly short-term in nature.
Question 5 – When Hormel Foods implemented an Internet-based procurement system, Hormel’s relationships with its suppliers were affected in all of the following ways except:
-by increased dependency on Hormel’s business in order to justify the cost outlays.
-by making Hormel’s suppliers more attractive to other food companies, which would increase the prices the suppliers could charge.
-through tangible investments such as equipment, tools, and software.
-through the suppliers’ evaluation to ensure that Hormel was worth the investment.
-through intangible investments such as time, effort, and trust.
Question 6 – Toll-free hotlines that companies set up to give employees a place to report misconduct are associated with which aspect of ethics programs?
-Communicating standards and procedures via ethics training programs
-Consistently enforcing standards, codes, and punishments
-Establishing systems to monitor and enforce ethical standards
-Continuously improving the program
-Establishing codes of conduct that are reasonably capable of detecting and preventing misconduct
Question 7 – Which of the following statements is false concerning how a company should communicate after a crisis?
-The communication after a crisis is usually not handled in a completely effective or ineffective manner.
-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.
-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.
-Crisis events are often chaotic, so management may begin the crisis response with a degree of ambiguity.
-The company should communicate how it plans to resolve the crisis.
Question 8 – Corporate governance requires a system of _________ similar to the distribution of power between the executive, legislative, and judiciary branches of the U.S. government.
-goals and values
-priorities and divisions
-decision making authorities
-division of labor
-checks and balances
Question 9- By banning the importation of goods made by children under the age of 15 through indentured or forced labor, the U.S. government exercised which type of power?
Question 10 – Communication is important in keeping a firm on its ethical course because:
-top executives must enforce overall ethical standards within the organization.
-issues such as price collusion and bribery must be decided on a decentralized basis.
-employees must learn when unethical behavior is appropriate to maximize profits.
-the moral philosophies of employees are always consistent with the moral philosophies of top management.
-centralization may reduce the opportunity for unethical conduct.
Question 11 – According to Kohlberg’s model, moral development:
-is focused primarily on each individual’s needs.
-depends mostly on the first few years of a person’s life.
-can be defined as six unrelated stages that a person progresses through.
-differs for each individual, resulting in no universal values.
-is accelerated by gaining education and experience in resolving conflicts.
Question 12 – Shareholder resolutions:
-may prompt a company to change its practices.
-are regulated by the Federal Trade Commission.
-can only be developed by large, institutional investors.
-may be brought to a proxy vote by any stakeholder.
-are the least effective type of shareholder activism.
Question 13 – Implementing social responsibility on a global level is complex because:
-regional alliances, like NAFTA and APEC, have their own expectations and standards.
-employees speak many languages and some information is hard to translate.
-global companies are rarely subject to local laws and regulations.
-consumers in most countries do not care about social responsibility.
-of the need to balance economic responsibility with other responsibilities.
Question 14- Which act is the principal tool employed by the federal government to prevent businesses from restraining trade and monopolizing markets?
-Federal Trade Commission Act
-Sherman Antitrust Act
-Roosevelt Antitrust Act
-Clayton Antitrust Act
Question 15 – Those groups to whom a company is responsible are collectively known as:
-employees and customers.
-very important people.
Question 16 – Which of the following is not a method that the Federal Trade Commission (FTC) uses to influence business activities?
-The FTC can file criminal charges against companies that break antitrust laws.
-The FTC can seek civil penalties against an offending company.
-The FTC can issue a formal complaint stating that a firm is in violation of the law.
-The FTC helps to resolve complaints and issues rulings on areas of emerging concern in business.
-The FTC can issue a cease-and-desist order that requires a company to stop engaging in a specified illegal behavior.
Question 17- The implementation of an ethics program:
-will be the same from organization to organization, as there is little need to tailor any aspect of the program.
-is primarily directed at training top managers and developing compensation plans that will insure top managers are ethical.
-will not be successful unless the chief executive officer (CEO) is using a transactional leadership approach.
-translates a plan of action into operational terms and establishes a means by which organizational ethical performance will be monitored, controlled, and improved.
-starts with training and ends with the development of a code of conduct.
Question 18 – Which of the following statements best describes the current trends in corporate governance?
-Businesses are moving towards a stakeholder orientation with looser corporate governance.
-Businesses are gravitating towards the stakeholder orientation because the costs involved are decreasing.
-Most companies are already using a shareholder orientation with formal governance.
-Companies are turning to a shareholder orientation with a more informal corporate governance system.
-Forces are driving businesses toward the stakeholder orientation and more formal governance.
Question 19 – Which stakeholder is the primary focus of the shareholder model of corporate governance?
Question 20- When Nine West Group was found to have violated antitrust laws, they were required to do all of the following except:
-pay millions of dollars in fines.
-stop including manufacturer’s suggested retail prices in product sales literature.
-stop fixing dealer prices.
-satisfy record keeping provisions to ensure future compliance.
-not threaten to limit supplies to dealers that adopt their own resale prices.
Question 21 – Which of the following is not one of the keys to successful ethics training addressed in chapter 5?
-Help employees understand the ambiguity inherent in ethical situations
-Make employees aware that their actions can define the company’s ethical posture
-Give employees a means to address ethical issues
-Provide specific evidence of punishment for an employee who committed an ethical infraction
-Eliminate the belief that unethical behavior is ever justified
Question 22 – In the workplace, _____ provide(s) the greatest influence on employee (un)ethical behavior.
-personal moral values
-company policies and procedures
-peers and coworkers
-religion and family upbringing
Question 23 – Which of the following is the best description of the possible legal ramifications of poor business conduct?
-It is important to have an organizational mechanism for resolving all questionable issues.
-Legal issues are usually cut and dry since the law has either been violated or has not been violated.
-Legal issues brought by stakeholders outside of the organization are almost always resolved within the organization.
-Ethical issues rarely become so important that they reach the courtroom for resolution.
-The most cost effective way to resolve disputes is through the court system.
Question 24 – How is corporate governance best defined?
-A system of decentralized mechanisms that assists a firm in meeting its goals
-The extent to which the content of workplace decisions is aligned with a firm’s stated strategic direction
-The exercise of control and authority by those in mid-management positions
-The formal system of accountability and control for organizational decisions and resources
-The philosophy that a board or CEO holds regarding accounting methods
Question 25 – About how many consumers said they would be likely to switch to brands associated with a good cause, if price and quality were equal? WHICH SURVEY ?
-Less than 5 percent
Question 26 – Which of the following best describes the rationale of the input-output model?
-This model involves a two-way relationship with the firm’s stakeholders.
-In order to create final products or output, an organization must have several different inputs.
-The customer receives most of the value because investors, suppliers, and employees are compensated at a reasonable level.
-Open communication between employees and management creates the input-output flow in an organization.
-A company basically produces at a level equal to the amount of input received from investors, suppliers, and employees.
Question 27 – Which of the following does not describe the treatment of stakeholders on a worldwide basis?
-As more businesses enter the global market, they encounter the complexity of balancing stakeholders relationships with other business operations and decisions.
-A company’s treatment of domestic stakeholders is generally the same as that of foreign stakeholders.
-Large and progressive companies in most economically developed nations have embraced the stakeholder model.
-The incident at Union Carbide in Bhopal, India, made a compelling case for building relationships with nondomestic stakeholders.
-The importance of stakeholders varies rather dramatically from country to country.
Question 28 – Overall, evidence supports that social responsibility:
-negatively affects a firm’s performance because it increases costs and reduces profits.
-is unrelated to the performance of a business.
-is good for a firm’s reputation, but has little effect on performance.
-works well in theory, but is hard to implement in business.
-is positively associated with return on investment, return on assets, and sales growth.
Question 29 – How can a company align the interests of owners with managers through executive compensation?
-By significantly reducing executive pay across the board
-By setting executive compensation at a level equal to the industry average
-By linking compensation to company performance and achievement of goals
-By basing salaries on seniority with the company in order to increase longevity
-By capping executive compensation at ten times that of the lowest paid employee
Question 30- Organizational crises are characterized by all of the following except:
-routine problems occurring in business.
-a threat to a company’s high-priority goals.
-being a surprise to a company’s membership.
-the need for swift action.
Question 31 – Which of the following internal control mechanisms would be the most difficult for a small company to implement?
-Requiring all employees to take one week of vacation a year
-Limiting access to valuable inventory to as few employees as possible
-Having several employees involved with each transaction, decision, or organizational issue
-Screening potential employees before hiring
-Developing a code of conduct addressing ethical and legal issues
Question 32 – The ________ model represents the current view of the relationship between a firm and the groups that both affect and are influenced by the firm.
Question 33 – On what basic precept is the shareholder model of corporate governance founded?
-The maximization of wealth for investors and owners
-Everyone should contribute to social welfare
-Supply and demand found in the marketplace
-The customer is always right
-The problem created when ownership and control are not separated
Question 34 – Which of the following is not a recommended step for changing the ethical culture of an organization?
-Avoid the use of informal systems to communicate expectations
-Avoid the perception of hidden agendas
-State your position, philosophy or belief
-Implement communications and education strategies
-Reinforce the policy through measurements and rewards
Question 35 – The Sarbanes-Oxley Act was enacted to:
-eliminate the need for the Federal Sentencing Guidelines for Organizations.
-extend the provisions of the Clayton Act.
-reduce most white-collar crime to misdemeanors.
-restore stakeholder confidence and provide a new standard of ethical behavior for business.
-determine the scope of punishments for executives at Enron and WorldCom.
Question 36 – Which of the following is not normally considered a primary stakeholder?
Question 37 – Developing a code to aid employees in their decision making is an example of an activity for which type of social responsibility?
Question 38 – _____ leadership is best suited for higher levels of ethical commitment among employees and strong stakeholder support for an ethical climate.
Question 39 – The most basic of business ethical standards:
-have been uniformly implemented through every firm’s ethics code.
-include developing trust in all business relationships.
-are centered around the mutual desire to protect the environment.
-have been codified as laws and regulations.
-demonstrate a company’s desires to address the needs of society.
Question 40 – In the “bad apple-bad barrel” analogy, :
-a code of conduct is not taken seriously as a key component of an ethics program.
-the code of conduct is used to solve all ethical dilemmas faced in the workplace.
-“bad apples” refer to an unethical corporate culture.
-no one has the right to label some conduct as unethical.
-“bad apples” are people who will always do things in their own self-interest regardless of organizational standards of conduct.
Question 41 – When a company is denying responsibility and doing less than is required with a particular stakeholder, it is engaged in a(n) _____ strategy.
Question 42 – What is the purpose of the Organisation for Economic Co-operation and Development’s (OECD) Corporate Governance Principles?
-To override individual countries’ practices and implement identical policies throughout the forum’s members
-To place most of the responsibility for corporate governance on the company’s managers
-To outline an optimal system of corporate governance techniques that every developed country should strive to duplicate
-To ensure the members of boards of directors are carefully selected to protect the interests of all stakeholders
-To formulate minimum standards of fairness, accountability, transparency, and responsibility in business practice
Question 43 – Which of the following was not an action taken by Ford Motor Company in an effort to manage its reputation?
-Suspending production at several plants to free up more replacement tires after the Bridgestone/Firestone tire problems
-Highlighting its commitment to quality in the company’s advertising
-Publicly ridiculing Bridgestone/Firestone for its poor quality tires and refusing to replace the bad tires with more from the same manufacturer
-Using advertising to assure its customers it would replace all recalled tires
-Pressuring Bridgestone/Firestone to resolve the crisis as quickly as possible
Question 44 – If employees believe that salary decisions are fair and consistent for all job categories, what type of justice exists?
Question 45 – After poor service, the second top reason consumers gave for avoiding or refusing to buy from certain companies was:
-dislike of advertising theme.
Question 46 – What organization is dedicated to socially responsible investing policies at colleges and universities?
-Student Alliance to Reform Corporations
-Higher Education Alliance for Social Investing
-Students Against Social Deterioration
-Keep America Beautiful
-Colleges for Responsible Investing
Question 47 – Which of the following statements best reflects a strategic approach to creating and maintaining an ethical corporate culture?
-“Reducing unethical behavior is a business goal no different from increasing profits.”
-“Our code of conduct is window-dressing.”
-“Hiring and promoting good, ethical managers will automatically produce an ethical organization.”
-“A decentralized approach to decision-making produces the most ethical corporate culture.”
-“People are raised with strong personal values and should use them at work to resolve ethical conflict.”
Question 48 – To generate a measurement of the costs of regulation, economists generally classify regulations as:
-ethical or legal.
-economic or social.
-safety-related or environment-related.
-state or national.
-standardized or industry-specific.
Question 49 – An “outside director” on a company’s board of directors:
-can only serve on one board at a time.
-has valuable expertise, but limited vested interest in the firm before assuming the role.
-worked for the company in the past, but is now retired or with another firm.
-cannot chair the board’s audit or compensation committee.
-is unlikely to bring a diverse or unique perspective to board discussions and decisions.
Question 50 – Which moral classification considers a decision right or acceptable if it accomplishes a desired result such as pleasure, knowledge, career growth, or utility?