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Business Ethics
Q:
Which statement about the legislative stage business should focus on to influence lawmaking and who should be the strategic focus is not correct?
(A) Business focuses on the floor action stage private voting members.
(B) Business focuses on the conference action stage pivotal voting members.
(C) Business focuses on the conference action stage majority voting members.
(D) Business focuses on the committee action stage pivotal voting members.
(E) Business does not focus on any part of the government process.
Q:
A bill can be stopped at any stage of the process, and one tactic used to delay or stop a vote is the ________.
(A) committee breaker
(B) stopping action
(C) pivotal voting
(D) filibuster
(E) framing
Q:
The method by which shareholders elect boards of directors is known as
a. distributive voting.
b. cumulative voting.
c. the proxy process.
d. direct balloting.
Q:
Employees are the people hired by the company to
a. oversee management.
b. work with the board to keep management in line.
c. do the actual work of operating the company.
d. set the course for the company to follow.
Q:
Government is needed to deal with social and environmental ills and to prevent business from doing harm to society.
(A) True
(B) False
Q:
The people hired by the board to run the company and operate it on a daily basis is
a. the employee council.
b. management.
c. administration.
d. headquarters.
Q:
Activists are effective at developing and implementing strategies that pressure business to change.
(A) True
(B) False
Q:
The group that is elected by shareholders to govern and oversee management is the
a. investment council.
b. board of directors.
c. board of trustees.
d. governing council.
Q:
As business develops nonmarket strategies, so do activists.
(A) True
(B) False
Q:
Shareholders are
a. owners of the corporation.
b. creditors of the corporation.
c. anyone who is affected by the corporation.
d. also employees of the corporation.
Q:
National Automobile Dealers Association (NADA) is a trade group.
(A) True
(B) False
Q:
The state-issued document that grants the corporation's right to exist and stipulating the basic terms of its existence is a(n)
a. certificate of legitimacy.
b. occupancy permit.
c. charter.
d. article of incorporation.
Q:
The Better Business Bureau is a peak interest group.
(A) True
(B) False
Q:
The method by which a firm is being governed, directed, administered, or controlled is
a. corporate governance.
b. management.
c. management by objectives.
d. management by decree.
Q:
Business interest groups can be classified into two types: professional and nonprofessional groups.
(A) True
(B) False
Q:
Business interest groups are part of the business market environment.
(A) True
(B) False
Q:
Which of the following is not a method of obtaining the micro level of legitimacy?
a. A company adapts its operations to conform to prevailing standards.
b. A company may seek to avoid detection that it is operating contrary to social norms.
c. A company may attempt to changes the public's values and norms.
d. A company may identify itself with other organization, people, or values.
Q:
Which statement about peak and trade interest groups is correct?
(A) Peaks have the disadvantage of members who have similar interests, which makes a unified advocacy easy.
(B) Peak, or umbrella, interest groups represent businesses from several industries on a broad range of general business interest issues.
(C) Peaks are larger in number and have the disadvantage of representing large numbers of companies and industries with large resources.
(D) Trade groups represent businesses on a broader range of industry, and there more trade than peak associations.
(E) Trade groups have the disadvantage of less unity of interest.
Q:
The macro level of legitimacy refers to the achievement and maintenance of legitimacy by
a. government.
b. private/public partnerships.
c. business as a whole.
d. individual businesses.
Q:
The ________ is a neutral third-party interest group that helps consumers and business maintain an ethical marketplace.
(A) National Federation of Independent Business
(B) Business Roundtable
(C) Better Business Bureau
(D) U.S. Chamber of Commerce
(E) Group in Behalf of Citizens
Q:
The micro level of legitimacy refers to achieving and maintaining legitimacy by conforming to societal expectations for
a. the business system as a whole.
b. public policy partnerships.
c. non-government organizations.
d. individual businesses.
Q:
The dynamic process by which business seeks to perpetuate its acceptance is called
a. advertising.
b. marketing.
c. legitimation.
d. embedding.
Q:
The __________ is a small and independent business advocate to government and serves as a key resource for its members.
(A) National Federation of Independent Business (NFIB)
(B) Business Roundtable
(C) Better Business Bureau
(D) U.S. Chamber of Commerce
(E) Group in Behalf of Citizens
Q:
Congruence between the organization's activities and society's expectations is called
a. alignment.
b. legitimacy.
c. social norms.
d. acceptability.
Q:
Which statements about nonmarket strategies businesses use against activists are correct?
(A) Both activists and businesses have seven strategies they commonly use against each other.
(B) Five of the strategies are the same: grassroots efforts, news media relations and advocacy advertising, coalitions, appeals to the government, and litigation.
(C) Activists are usually on the offensive, pressuring business and government for change, and business is on the defensive trying to maintain the status quo.
(D) Activists are usually on the defensive.
(E) Activists develop a grand strategy to use to pressure business.
Q:
In the grand scheme of things, the interests of the investing public are more important than those of the management team.
a. True
b. False
Q:
Which statements about strategies activists use against business interest groups are correct?
(A) Activista gain community public sentiment for being socially responsible as a proactive strategy.
(B) Activists give very positive stories to the news media about businesses.
(C) Activists rarely use coalitions or interest groups working together.
(D) Activists use demonstrations (picketing and rallies) to pressure business for change.
(E) Activists use boycotts to request that society stop doing business with a firm.
Q:
Managers have successfully lobbied Congress to make shareholder lawsuits very difficult to file.
a. True
b. False
Q:
Which statements about business interest groups are correct?
(A) They provide information to business, society, and government.
(B) They advocate for business but also present all stakeholders' side of the issue to society and government.
(C) They provide a variety of services to their members.
(D) They set mandatory standards for their members.
(E) Business interest groups also tend to provide far fewer services to their members.
Q:
Which of the following are true regarding the power that trade associations have?
(A) Unlike societal interest groups, business interest groups do not provide the interest group with revenues.
(B) Many organizations belong to both trade and peak groups.
(C) Few business do their own advocating.
(D) Most large businesses do their own advocating.
Q:
Most shareholder resolutions concern some aspect of executive compensation.
a. True
b. False
Q:
Which statement about societal and business interest groups are correct?
(A) Societal and business interest groups are similar in that both are nonprofit organizations representing their members and other stakeholders.
(B) Business interest group members are primarily business firms whereas societal members are individuals.
(C) They both get revenues from members.
(D) They both get revenues from selling products. However, business interest groups tend to provide more services to their members than societal interest groups, so they raise more revenue by selling products.
(E) None of these is correct.
Q:
Because of its theoretical role of authority over the CEO, it has always been the board's responsibility to get tough with the senior manager when needed.
a. True
b. False
Q:
Which statements about activists are correct?
(A) Activists rally support of society to take action that they would not have taken on their own to meet activists' special interests.
(B) Activists provide information about business activities to business, society, and government.
(C) Activists develop nonmarket agenda issues for business.
(D) Activists work with business to set voluntary standards and with the government to influence the development of laws and regulations.
(E) Activists work with government to ensure that companies provide customers with products they desire and can afford.
Q:
Practically speaking the corporate CEO often does the work the nominating committee should do.
a. True
b. False
Q:
_______are things that may happen, such as an event, problem, emergency, or expense that might arise somewhat unexpectedly.
(A) Multiplicities
(B) Contingencies
(C) Grand nonmarket strategies
(D) Lockouts
(E) Advocacy advertising
Q:
Audit committees arguably have the most responsibility of all board committees.
a. True
b. False
Q:
During the past forty years, corporate boards have become more diverse.
a. True
b. False
Q:
_________include donating, ignoring, opposing, negotiating, and working with activists.
(A) Marginalizing resources
(B) Dumbing down marketing techniques
(C) Global market strategies
(D) Activist negotiations
(E) Grand nonmarket strategies
Q:
Although initially, companies did not object to the compliance costs of Sarbanes-Oxley, after 10 years experience with the law, they now object strenuously
a. True
b. False
Q:
Of the eight strategies, ________ is a proactive strategy to help prevent activists from taking issues to business or for resolving them in the early stages.
(A) gaining public sentiment
(B) discouraging community involvement
(C) accessing information
(D) issue identification
(E) problem solving
Q:
There is some early evidence that the Sarbanes-Oxley Act has made little difference in the attention financial executives pay to shareholder reports.
a. True
b. False
Q:
________ include diverse organizations and interest groups working together temporarily for a common interest.
(A) Lobbyists
(B) Special interest groups
(C) Coalitions
(D) Appeals boards
(E) Litigation
Q:
Penalties under the Sarbanes-Oxley Act can include fines and prison terms.
a. True
b. False
Q:
Demonstrations _________.
(A) are the same thing as boycotts.
(B) are usually good for a company's image and community relationship.
(C) are hardly ever used by activist groups.
(D) can boost morale for company employees.
(E) drive customers away and hurt the corporate image.
Q:
Activists include societal interest groups, their members, and anyone interested in their causes.
(A) True
(B) False
Q:
The issue at the heart of the Sarbanes-Oxley Act is protection for whistle-blowers.
a. True
b. False
Q:
_________ raise more revenue than _________ groups through membership products and services.
(A) Societal interest groups, business interest groups
(B) Operations groups, finance groups
(C) Finance groups, Chambers of Commerce groups
(D) Business interest groups, societal interest groups
(E) Societal interest groups, benevolent order groups
Q:
Research has shown that golden parachutes have had no effect on senior managers' resistance to takeover attempts.
a. True
b. False
Q:
_________ are nonprofit organizations comprised of groups of firms joined together to advocate their interest on issues.
(A) Societal interest groups
(B) Chambers of Commerce
(C) Business interest groups
(D) Peak interest groups
(E) None of these
Q:
The Say on Pay movement evolved from concerns over low executive compensation.
a. True
b. False
Q:
________ is a consumer advocate to the government.
(A) Public Citizen
(B) The Consumer Federation of America
(C) Center for Public Integrity
(D) Watchdog
(E) Common Cause
Q:
Wages have grown faster than CEO salaries over the past decade.
a. True
b. False
Q:
_________is an advocate for the public interest in the political process, holding elected leaders accountable.
(A) Public Citizen
(B) The Consumer Federation of America
(C) Center for Public Integrity
(D) Watchdog
(E) Common Cause
Q:
Much of the blame for corporate scandals like Enron and WorldCom can be placed on the audit committees of the boards of directors.
a. True
b. False
Q:
Since litigation can be very expensive, it is commonly used as a scare tactic.
(A) True
(B) False
Q:
The major condition of modern corporations that contributes to the corporate governance problem is the separation of ownership from control.
a. True
b. False
Q:
Unlike activists, business rarely appeal to the government.
(A) True
(B) False
Q:
Shareholders' control is manifested primarily in the right to select the CEO of the company.
a. True
b. False
Q:
Businesses should take a stakeholder management approach to strategy formulation and implementation.
(A) True
(B) False
Q:
The purpose of corporate governance is a direct outgrowth of the question of legitimacy.
a. True
b. False
Q:
Activists use information strategies (outside sources, experts, and stakeholder support) to tell their side of the issue.
(A) True
(B) False
Q:
The corporate system as a whole rarely addresses the idea of social legitimacy.
a. True
b. False
Q:
The larger the grassroots efforts, the more pressure there is on the government to investigate and on the business to voluntarily change its practices.
(A) True
(B) False
Q:
Business, by virtue of its place in society, has an inherent right to exist.
a. True
b. False
Q:
Watchtower is an association of chief executive officers of leading U.S. corporations that serves as a business advocate to government.
(A) True
(B) False
Q:
Some analysts believe that business's social legitimacy is fragile.
a. True
b. False
Q:
What is media bias?
Q:
An interest or share in something is referred to as a(n)
a. option.
b. ownership position.
c. stake.
d. bond.
Q:
_______ buy products from business, and _______use business products.
(A) Consumers, advocates
(B) Strategists, advocates
(C) Customers, consumers
(D) Philanthropists, customers
(E) Consumers, customers
Q:
Which of the following statements is accurate?
a. Stockholders are the same thing as stakeholders.
b. All stakeholders are stockholders.
c. Stakeholders are a subset of stockholders.
d. Every stockholder is a stakeholder.
Q:
When businesses give and lend their resources, including products and services, to help the community, it is referred to as _________.
(A) advocacy advertisements
(B) collaborative partnerships
(C) diversity links
(D) in-kind contributions
(E) reciprocity
Q:
Business organizations must address the legitimate needs and expectations of stakeholders because
a. it is required by law.
b. it is the right thing to do.
c. stakeholders force them to.
d. they will need to, in order to be successful in the long run.
Q:
______ is the government's ability to take private property for government use.
(A) Community involvement
(B) Corporate stewardship
(C) Corporate interaction
(D) Government intervention
(E) Eminent domain
Q:
Some authors indicate that the corporate model needs redefinition because of all the following except
a. Business size
b. Socioeconomic power
c. Inadequacy of the ownership model and its implications
d. Responsiveness
Q:
Which statement about the business–community interrelationship is not correct?
(A) Community is everywhere in the world that a business sells its products and affects stakeholders.
(B) Business needs community support with infrastructure, transportation systems, and public safety.
(C) The community needs business for economic development, products, jobs, and tax revenues.
(D) Community can include cyber communities on the Internet.
(E) Having a good corporate reputation for being socially responsible does helps with community relations.
Q:
For sustainable development to become a reality, which approach offers the best opportunity for this to happen?
a. Socioeconomic
b. Stakeholder
c. Shareholder
d. Organizational
Q:
Advocacy stories support a position or course of action; they are commonly editorials.
(A) True
(B) False
Q:
Most lawsuits regarding product liability make it to court.
(A) True
(B) False
Q:
The key to effective stakeholder management is in its implementation.
a. True
b. False