Q&A Hero

Q: Corporate public policy takes place primarily at the corporate level of strategy.

Q: Sweatshop conditions are often compared to those of which other group of workers' conditions? A. Multinational corporations B. Graduate assistants C. Child laborers D. Migrant farmworkers

Q: There is a growing consensus that ethics should be a central component of strategic management.

Q: According to UNICEF, what percent of child labor is involved in the production of goods for export? A. 5% B. 25% C. 50% D. 75%

Q: Corporate public policy is a firm's posture or position regarding the public, social, global, and ethical aspects of stakeholders and corporate functioning.

Q: "Child Labor" refers, generally, to which of the following sets of practices? A. Working on farms doing chores before and after school for little or no pay. B. Working at a part-time job after school for minimum wage. C. Working in unsafe conditions often damaging to health for poor pay. D. Babysitting and/or mowing yards for neighbors for very little pay.

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. Explain Harry Markopolos' opinion regarding the SEC.

Q: According to the International Labor Office, what percentage of children between the ages of 10 and 14 are working (not only in Asia, but in parts of Western Europe, as well)? A. 25% B. 50% C. 75% D. 5%

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. Discuss the role of shareholder democracy in corporate governance.

Q: Which of the following is not a benefit of international outsourcing? A. Purchasing goods more cheaply B. Cheaper labor C. Closer controls on the manufacturing process D. Easier regulatory practices

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. Church groups are key members in the shareholder activist movement. One way that they gain access to corporate executives is by purchasing a small amount of stock and holding it a certain length of time (state laws usually dictate how much they need to buy and how long they need to hold it), which then allows them to introduce shareholder resolutions at stockholder meetings. Should small investors be able to wield influence like this, which arguably goes beyond their financial stake in the firm?

Q: Which of the following arguments assumes that some fair determination of comparable work is not only possible, but morally justifiable (and perhaps, morally required)? A. Equal pay for equal work B. Equal pay for equivalent work C. Equal pay for comparable work D. Equal pay for incompatible work

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. Should directors be held personally liable in cases of corporate misconduct?

Q: Which of the following would justify paying a professor of humanities a different amount that paying a professor of computer science if all other things like publications, class sizes, and the like were equal? A. Computer science is a harder discipline than the humanities. B. The humanities are harder disciplines than computer science. C. Professors of computer science tend to be paid more, and thus, it is reasonable to continue the practice. D. A professor of humanities is in less demand outside academia than a professor of computer science.

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. The textbook mentions that business as a whole rarely, if ever, addresses the issue of legitimacy at the macro level. Imagine that the Chamber of Commerce approaches you to design a campaign to assure its legitimacy with the public. What kinds of issues would you address?

Q: The United States government defines which of the following as the income level at which a family of four can be supported? A. the poverty level B. the minimum wage level C. the living wage level D. the welfare level

Q: Utilize the knowledge you have gained to respond to the following essay questions. Your answers should state your position and use logical arguments and content from this and other chapters in the textbook to support it. Forecast how society would change if business did lose its macro level of legitimacy.

Q: Which of the following is not an historical and potential consequence of unrestricted free markets? A. sweatshops B. living wages C. child labor D. unhealthy working environments

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Summarize the responsibilities that corporations should have toward their shareholders.

Q: Which of the following is the Marxist response to the notion of a just wage? A. A just wage is a wage that provides the worker with the means to live a prosperous life. B. A just wage is whatever the market will bear. C. Wages cannot ever by just because all wage labor involves exploitation. D. Wages can only be just if the wage is just compensation for the labor expended.

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Why are church groups particularly visible in the shareholder activist movement?

Q: Which of the following groups is not held accountable by the Sarbanes-Oxley Act? A. Corporate boards B. Management C. Shareholders D. Accountants

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. List the reasons that good candidates for corporate board positions are hard to find.

Q: Which of the following is not considered inside information? A. Trade secrets B. Company strategy C. Company plans D. Stock value

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Why is insider trading illegal and considered unethical? Isn't that exactly what financial markets are supposed to do--reward those who make good decisions?

Q: Until Ben Cohen retired as CEO of Ben & Jerry's, the cap on executive pay was which of the following? A. Twenty times that of the average worker B. Seven times that of the lowest paid worker C. Fourteen times that of the average worker D. Fifty times that of the lowest paid worker

Q: What is the term that refers to compensation given the family of a CEO in the event that he dies in office? A. the golden coffin B. the golden parachute C. the golden egg D. the golden will

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Why is the generous nature of CEO retirement packages particularly frustrating to the public?

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. What are the two main issues associated with CEO pay?

Q: At its height, the compensation of top executives at large companies was, on average, how much higher than the pay of the average worker? A. 7 times greater B. 20 times greater C. Over 700 times greater D. Over 300 times greater

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Why are inside directors seen as problematic in corporate governance?

Q: In the Diamond Shamrock and Occidental Petroleum Corporation deal, which of the following best describes the actions of Ivan Boesky and Michael Milken? A. They shared inside information with intent to make a significant profit, but because of actions that neither foresaw, they lost money. B. They shared inside information with the intent to make significant profit, but were found out and thus doomed the deal. C. They traded inside information with intent to make significant profit, and, after the deal went through, both made substantial profits. D. They traded insider information with intent to make significant profit, but decided that it was improper and so did not take advantage of the information.

Q: Martha Stewart was charged with which of the following? A. Making an insider trade. B. Lying in connection with making an alleged insider trade. C. Failing to disclose the financial position of her company. D. Obstructing justice by not providing proper documentation of workplace safety.

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. What is the difference between an owner and an investor?

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. What is the primary problem inherent in management control of the firm?

Q: Which of the following is a moral basis for disclosure of corporate information? A. Each person has the right to know those actions of others that could benefit him. B. Each person has the right to any information about a company he desires. C. Each person has the right to enter a transaction fairly and thus is required to inform others of his intent. D. Each person has the right to know those actions of others that will serious and adversely affect him.

Q: Which of the following was an employee complaint in the Enron case? A. At the same time top executives were selling their stock, the same executives were encouraging employees to buy the stock. B. During the period of the stock's collapse, Enron employees were encouraged to sell their stocks. C. While top executives were buying stock in the company, they were encouraging employees to sell their stocks. D. Top management was encouraging employees to hold their stocks because they felt the stock would rebound.

Q: Provide a short answer to each of these questions. Be sure to fully explain your answer. Describe how the separation of ownership and control came about.

Q: The fact that company information should be made at regular and frequent intervals and should contain information that might affect the investment decisions of shareholders is contained in the concept of A.full disclosure. B.transparency. C.open door reporting. D.both full disclosure and transparency.

Q: Which of the following was a result of the Enron failure? A. The Rescue Bill B. The Employee Compensation Act C. The Sarbanes-Oxley Act D. The Corporate Democracy Act

Q: Which of the following is not a part of the "Triple Bottom Line?" A. The financial bottom line B. The environmental bottom line C. The social/ethical bottom line D. The human resources bottom line

Q: One of the main ways in which shareholder activists communicate their concerns to management is through A.the Internet. B.blogging. C.advertisements in mass media outlets. D.shareholder resolutions.

Q: Shareholder activism A.was started by the counter culture during the 1960s. B.has been around for more than sixty years. C.is lead by the Roman Catholic church. D.relies on large institutional investors to introduce most of the shareholder resolutions.

Q: Which of the following is one of the moral responsibilities of management? A. Management is responsible to the board. B. Management is responsible to the workers. C. Management is responsible to maximize profits. D. Management is responsible to the shareholders.

Q: Boards are now being tougher on CEOs for all of the following reasons except A.increasing diversity on boards. B.competitive economic conditions. C.rising vigilance of outside directors. D.increasing power of large institutional investors.

Q: Which of the following is not true about the moral responsibilities of management? A. Management is responsible to the board. B. Management is responsible to the workers. C. Management is responsible to maximize profits. D. Management is responsible to the shareholders.

Q: The board committee that is responsible for responding to social issues is the A.ethics committee. B.public policy committee. C.community interface committee. D.rapid response committee.

Q: Which of the following is the general obligation derived from the system of free enterprise that covers the wide range of issues from just compensation to truth in advertising to providing the quality of goods or services that one represents oneself as providing? A. the obligation to be fair in the transactions in which it engages B. the obligation not to undermine the freedom and values of the system C. the obligation to do no harm D. the obligation to live up to the contracts into which one enters freely

Q: The board's compensation committee has responsibility for A.setting directors' pay scales. B.making sure that all employees are paid a fair wage. C.evaluating executive performance and recommending terms and conditions of employment. D.determining what bonuses should be paid and to whom.

Q: Which of the following is the general obligation derived from the system of free enterprise that is sometimes called the "moral minimum"? A. the obligation to be fair in the transactions in which it engages B. the obligation not to undermine the freedom and values of the system C. the obligation to do no harm D. the obligation to live up to the contracts into which one enters freely

Q: The practice of obtaining critical information from within a company and then using that information for one's own financial gain is A.arbitrage. B.programmed trading. C.insider trading. D.hedging.

Q: Which of the following is the general obligation derived from the system of free enterprise that restricts bribery? A. the obligation to be fair in the transactions in which it engages B. the obligation not to undermine the freedom and values of the system C. the obligation to do no harm D. the obligation to live up to the contracts into which one enters freely

Q: Which of the following is not an argument against the use of golden parachutes? A.The covered executives are already being well paid for their work. B.The covered executives are given an incentive to run the company poorly. C.The covered executives are being rewarded for failure. D.The covered executives are giving themselves the golden parachutes.

Q: Which of the following is the general obligation derived from the system of free enterprise that holds that parties must be able to count on the actions of other agents with whom they interact? A. the obligation to be fair in the transactions in which it engages B. the obligation not to undermine the freedom and values of the system C. the obligation to do no harm D. the obligation to live up to the contracts into which one enters freely

Q: A contract in which a corporation agrees to make payments to key officers in the event of a change in the control of the corporation is called A.a golden parachute. B.golden handcuffs. C.greenmail. D.the silver rule.

Q: Which of the following is not a measure by which businesses in the United States are determined to be small- or medium-sized? A. Number of managers B. Annual sales C. Net profit D. Value of total assets

Q: A shareholder rights plan aimed at discouraging or preventing a hostile takeover is known as A.a poison pill. B.golden handcuffs. C.a golden parachute. D.insider trading.

Q: For the EU and the WTO, a business is considered "medium-sized" if it has how many employees? A. 100 or fewer B. 250 or fewer C. 50 or fewer D. 250-301

Q: A major criticism of CEOs and boards during the 1980s, when corporate takeovers were regular occurrences, was A.not trying to get the best price they could for shareholders. B.focusing on "making deals" instead of running the business. C.trying to run up the price of their company's stock in preparation for the sale. D.being obsessed with self-preservation instead of making optimal decisions on behalf of shareholders.

Q: For the EU and the WTO, a small business is one with how many employees? A. 51-100 B. 50 or fewer C. 101-200 D. 201-300

Q: Compensation recovery mechanisms that enable a company to recoup compensation funds is called ____. A.proxy process. B.risk arbitrage. C.golden parachutes. D.clawback provisions.

Q: Which of the following is a statement of reciprocity? A. A transaction is just if there is a general feeling that it is just. B. A transaction is just if all those importantly affected by it freely agree to it as just. C. A transaction is just if the majority of people are treated fairly, as long as no direct harm is done to others. D. A transaction is just as long as due process of law within the host country is observed.

Q: The Say on Pay movement: A.First began with regulations including a requirement to put a remuneration report to a shareholder vote B.Began in the United States C.Evolved from concerns over low executive compensation D.Is supported by the SEC

Q: The recognition that the "good of the country" is not the same as the "good of corrupt leaders" is an expression of which moral norm for multinational operations? A. Activity must benefit the host country B. Do no intentional direct harm C. Respect the human rights of workers D. Respect the laws of a host country

Q: Executive Excess reports that in 2009 the ratio of CEO pay to average workers' pay was A.620 to 1. B.319 to 1. C.1,063 to 1. D.18 to 1.

Q: The restriction of multinationals from lobbying against reforms or laws that protect workers or consumers is an expression of which norm? A. Promote the development of just background institutions internally. B. Respect the human rights of workers C. Do no intentional direct harm D. Respect the laws of a host country.

Q: Directors who have no ties to the firm other than membership on the board are called A.dependent directors. B.free agent directors. C.inside directors. D.outside directors.

Q: Which of the moral norms prevents engaging in slavery and apartheid, paying less than subsistence wages, and providing less than adequate and safe working conditions. A. Promote the development of just background institutions internally. B. Respect the human rights of workers C. Do no intentional direct harm D. Respect the laws of a host country.

Q: Directors who have some sort of ties to the firm are termed A.dependent directors. B.independent directors. C.inside directors. D.outside directors.

Q: Which of the following is expressed by the norm to "do no intentional direct harm?" A. the moral maximum B. the moral mean C. the moral median D. the moral minimum

Q: Boards have recently improved in all of the following ways except A.more directors are independent. B.reducing executive pay. C.more directors own stock in the company. D.more boards are likely to demand change.

Q: Which of the following is not an unfair competition charge against multinationals? A. Multinationals pay higher wages than local companies. B. Multinationals do not carry their fair share of the cost of social development. C. Multinationals are able to operate on especially favorable and uncompetitive terms. D. Multinationals can borrow money at more favorable rates than local companies.

Q: When the interests of management and owners are not aligned, there will likely be a(n) A.agency problem. B.free agency dilemma. C.shareholder rebellion. D.shareholder resolution.

Q: Which of the following represent reasons for multinational corporations to operate in less developed countries (LDCs)? A. highly trained labor, tax incentives, scarce resources B. cheap labor, available resources, tax shelters C. good infrastructure, well-educated populace, textile factories D. strong currency, developed bureaucracies, decent healthcare

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: Which of the following is not a charge leveled against the World Trade Organization? A. That LDCs are not benefited and are, in fact, harmed. B. That all nations, regardless of size and wealth, are given equal voice. C. That the organization is not democratic nor transparent in its practices. D. That all of the nations are not, in fact, equal.

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: What, in the eyes of critics, has come to represent the epitome of globalization? A. International Monetary Fund (IMF) B. Multinational Corporations (MNC) C. World Trade Organization (WTO) D. Less Developed Countries (LDC)

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: What did Lenin call the last stage of fully developed capitalism? A. imperialism B. socialism C. totalitarianism D. communism