long-term relationships with customers built on mutual respect and cooperation that leads to repeat purchasing. c. innovative integrated marketing communications programs.

Q1. The ________ model represents the current view of the relationship between a firm and the groups that both affect and are influenced by the firm. a. output b.
society c. shareholder d. input e. stakeholder Q2. What holds organizations together and allows them to focus on efficiency, productivity, and profits? a. Reliable

source of funds b. Respect c. Diversity d. Trust e. Competence Q3. In the long run, the success of a company is built on a. a company’s ability to negotiate with

suppliers and vendors. b. long-term relationships with customers built on mutual respect and cooperation that leads to repeat purchasing. c. innovative integrated

marketing communications programs. d. a company’s commitment to be on the leading edge of technology. e. its efficiency in operations. Q4. When just one business

provides a good or service in a particular market, what results? a. Lower prices due to that company’s efficiency b. Deregulation c. Oligopoly d. Trust e. Monopoly Q5.

In order for any social responsibility initiative to have strategic significance in a company, it must be fully supported and valued by a. legislators who develop

federal law and policy. b. the company’s stockholders. c. government officials in the local area. d. top management. e. non-profit groups who benefit from a company’s

philanthropic spending. Q6. What provisions did the Clayton Act include to clarify and expand upon the Sherman Antitrust Act? a. It provided specific exemptions to

utility and other similar industries, which tend to have natural monopolies due to the exorbitant costs involved with starting up. b. The Clayton Act actually made

most of the provisions of the Sherman Antitrust Act null and void rather than expanding on the earlier legislation. c. It specified that one person could be a member

of only three boards of directors within the same industry. d. It created an organization to protect consumers and businesses from unfair competition. e. It limited

mergers and acquisitions that have the potential to stifle competition. Q7. _____ leadership is best suited for higher levels of ethical commitment among employees and

strong stakeholder support for an ethical climate. a. Territorial b. Transcendental c. Tactical d. Transactional e. Transformational Q8. How is corporate governance

best defined? a. A system of decentralized mechanisms that assists a firm in meeting its goals b. The extent to which the content of workplace decisions is aligned

with a firm’s stated strategic direction c. The exercise of control and authority by those in mid-management positions d. The formal system of accountability and

control for organizational decisions and resources e. The philosophy that a board or CEO holds regarding accounting methods Q9. The Reactive-Defensive-Accommodative-

Proactive Scale is best described by which of the following? a. A scale that is used to rate a company’s overall efforts at developing and maintaining good

relationships with its employees and suppliers b. A method for assessing a company’s strategy and performance with one particular stakeholder c. Another name for a

social responsibility audit d. A scale that determines the motivations businesses have for implementing social responsibility programs e. A technique for firms to use

in developing public relations strategies Q10. Which of the following statements best describes the current trends in corporate governance? a. Businesses are moving

towards a stakeholder orientation with looser corporate governance. b. Businesses are gravitating towards the stakeholder orientation because the costs involved are

decreasing. c. Most companies are already using a shareholder orientation with formal governance. d. Companies are turning to a shareholder orientation with a more

informal corporate governance system. e. Forces are driving businesses toward the stakeholder orientation and more formal governance. Q11. Organizational crises are

characterized by all of the following except a. routine problems occurring in business. b. a threat to a company’s high-priority goals. c. far-reaching events. d.

being a surprise to a company’s membership. e. the need for swift action. Q12. What is the main argument presented by proponents of complete deregulation? a. Less

government intervention would allow business markets to work more effectively. b. Regulations hamper competition because they level the playing field. c. Regulations

are simply too confusing. d. Regulations lower prices to an unfair level that hinders firm profitability. e. There are no benefits received from regulations, only

enormous costs. Q13. Environmental regulations for social reasons have been necessary because of which of the following reasons? a. Companies have felt pressured to

‘voluntarily’ pay for environmental protection acts because they are afraid of the impact on their businesses if they are not viewed as environmentally responsible

organizations. b. Most companies eagerly pay for the costs involved with protecting their environment because they realize their future is closely linked with the

future of the environment. c. Consumers have willingly footed the bill for the costs of protecting the environment through paying higher prices for products and

services. d. Social reasons have led to regulations such as environmental protection and preservation because, although most companies voluntarily take on these

responsibilities, a few companies have shirked their share of the responsibility. e. Social reasons have led to regulations such as environmental protection since most

companies are unwilling to pay for these costs voluntarily. Q14. What asset resides in relationships, is characterized by mutual goals and trust, and smoothes internal

and external transactions and processes? a. Relationship capital b. Interpersonal capital c. Social capital d. Financial capital e. Intellectual capital Q15. Bribery

is associated with which of the following? a. Communications b. Organizational relationships c. Marketing d. Honesty and fairness e. Conflicts of interest Q16. About

how many consumers said they would be likely to switch to brands associated with a good cause, if price and quality were equal? a. Less than 5 percent b. 20 percent c.

40 percent d. 50 percent e. 80 percent Q17. Those groups to whom a company is responsible are collectively known as a. stakeholders. b. employees and customers. c.

society. d. very important people. e. stockholders. Q18. To which of the following forms of business can the concept of social responsibility be applied? a. Any form

of business from a sole proprietorship to a large corporation b. All forms of corporations c. All businesses except those with less than 50 employees d. Large, public

corporations e. Small, privately held corporations Q19. What aspect of corporate culture relates to an organization’s expectations about appropriate conduct? a.

Ethical climate b. Values c. Regulations d. Significant others e. Organizational climate Q20. Minimal responsibility primarily involves a. fulfilling social

responsibilities including legal and ethical guidelines. b. incorporating efforts in such a way as to benefit all stakeholders of the company. c. satisfying the

primary stakeholders regardless of the possible legal implications. d. trying to maximize stockholder wealth. e. addressing the concerns of contractual stakeholders in

regards to legal and economic matters. Q21. Which of the following is the best description of the possible legal ramifications of poor business conduct? a. It is

important to have an organizational mechanism for resolving all questionable issues. b. Legal issues are usually cut and dry since the law has either been violated or

has not been violated. c. Legal issues brought by stakeholders outside of the organization are almost always resolved within the organization. d. Ethical issues rarely

become so important that they reach the courtroom for resolution. e. The most cost effective way to resolve disputes is through the court system. Q22. If a doctor

exaggerates the condition of a patient in order for it to be a condition covered by insurance, the doctor is most likely applying which moral philosophy? a. Ethical

formalism b. Utilitarianism c. Illegal behavior d. Consequentialism e. Egoism Q23. Toll-free hotlines that companies set up to give employees a place to report

misconduct are associated with which aspect of ethics programs? a. Communicating standards and procedures via ethics training programs b. Consistently enforcing

standards, codes, and punishments c. Establishing systems to monitor and enforce ethical standards d. Continuously improving the program e. Establishing codes of

conduct that are reasonably capable of detecting and preventing misconduct Q24. 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? a. Legal b. Symbolic c. Legitimate d. Utilitarian e. Coercive Q25. Which of the

following best describes the Better Business Bureau (BBB)? a. The BBB is a federal government agency that helps resolve problems between businesses and consumers. b.

The BBB is a published list of companies to avoid doing business with due to their poor business practices. c. The BBB is a state agency that helps resolve problems

between businesses and consumers. d. The BBB is a network of agencies that assesses financial penalties against unethical businesses. e. The BBB is a self-regulatory

association that helps resolve problems between businesses and consumers. Q26. Which of the following internal control mechanisms would be the most difficult for a

small company to implement? a. Requiring all employees to take one week of vacation a year b. Limiting access to valuable inventory to as few employees as possible c.

Having several employees involved with each transaction, decision, or organizational issue d. Screening potential employees before hiring e. Developing a code of

conduct addressing ethical and legal issues Q27. How can a company align the interests of owners with managers through executive compensation? a. By significantly

reducing executive pay across the board b. By setting executive compensation at a level equal to the industry average c. By linking compensation to company performance

and achievement of goals d. By basing salaries on seniority with the company in order to increase longevity e. By capping executive compensation at ten times that of

the lowest paid employee Q28. Companies with less than 100 employees account for about ____ percent of total employment in the United States. a. 40 b. 50 c. 10 d. 60

e. 70 Q29. When Benetton used convicted felons awaiting death sentences in a new advertising campaign, a. sales increased because people responded favorably to a

company strong enough to address this controversial issue. b. dialogue about high rates of violence increased nationwide. c. people were outraged and some companies

responded by no longer carrying Benetton products. d. Benetton received an award for its creative and socially aware ad campaign. e. there was very little impact on

Benetton, its customers, or society in general. Q30. What is the set of conditions that limits barriers or provides rewards? a. Circumstances b. Motivation c.

Opportunity d. Influence e. Reinforcement Q31. Administrative spending for federal regulatory agencies, which is used as a measurement of regulatory costs, has a.

decreased because companies have been much more responsible at self-regulation, and less federal spending is needed. b. remained relatively steady throughout the past

couple of decades. c. decreased in the past years as more of the burden of regulation is shifted to the state agencies. d. increased steadily over the years as the

world of business has continued to grow and become more complex. e. increased in the past years because states have been ineffective with their regulations and the

burden has shifted to federal agencies. Q32. The flatter organizational hierarchies brought about due to economic instability of the 1980s and early 1990s caused all

of the following except a. focus on efficiency and economies of scale. b. workforce reduction. c. restructuring of the firm to focus on core competencies. d. more

opportunities for outstanding employees to move into management. e. increasing empowerment of lower level employees. Q33. Business ethics refers to a. unique industry

and professional factors that influence employees. b. principles and standards that guide behavior in the business world. c. companies refraining from forming

monopolies or restricting competition in any way. d. regulations and laws that guide companies in their business decisions. e. the percentage of after-tax profits

given to non-profit and community groups. Q34. A behavioral simulation, or role play exercise, is a relatively new ethics training device that a. has been found less

effective than traditional lecture training methods. b. recreates the complexities of organizational relationships and aids the development of analytical skills for

resolving ethical issues. c. requires the use of technology, including video and the computer. d. can only be used in small organizations. e. focuses on legal issues

in the workplace and the skills that employees need to resolve legal concerns. Q35. Transactional leadership a. creates employee satisfaction by negotiating for levels

of performance or ‘bartering’ for desired behaviors. b. is practiced by middle managers who are striving to become top managers. c. cannot be implemented for quickly

changing ethical climates or reacting to ethical problems or issues. d. promotes workplace activities and behaviors through a shared vision and sense of mission. e. is

least effective in firms with an emphasis on manufacturing and industrial products. Q36. Which moral classification considers a decision right or acceptable if it

accomplishes a desired result such as pleasure, knowledge, career growth, or utility? a. Ethical formalism b. Consequentialism c. Justice d. Egoism e. Results theory

Q37. When Nine West Group was found to have violated antitrust laws, they were required to do all of the following except a. pay millions of dollars in fines. b. stop

including manufacturer’s suggested retail prices in product sales literature. c. stop fixing dealer prices. d. satisfy record keeping provisions to ensure future

compliance. e. not threaten to limit supplies to dealers that adopt their own resale prices. Q38. Employee commitment develops from a. employees who believe their

future is tied to that of the organization and are willing to make personal sacrifices for the organization. b. the reality that unemployment is on the rise, and

people are lucky to have good jobs c. paying the best wages in the industry. d. offering child care to working mothers and fathers. e. working in a team-based

organization. Q39. When Hormel Foods implemented an Internet-based procurement system, Hormel’s relationships with its suppliers were affected in all of the following

ways except a. by increased dependency on Hormel’s business in order to justify the cost outlays. b. by making Hormel’s suppliers more attractive to other food

companies, which would increase the prices the suppliers could charge. c. through tangible investments such as equipment, tools, and software. d. through the

suppliers’ evaluation to ensure that Hormel was worth the investment. e. through intangible investments such as time, effort, and trust. Q40. Which stakeholder is the

primary focus of the shareholder model of corporate governance? a. Investors b. Community c. Employees d. Suppliers e. Customers Q41. The framework to understand how

businesses meet their economic, legal, ethical and philanthropic responsibilities is developed around the assumption that social responsibility is a a. requirement by

federal law. b. theory, with little relevance to business practice. c. process. d. specific set of rules and guidelines. e. result that does not need further

attention. Q42. Under the historical and traditional views of business, who was considered to be a stakeholder? a. Owners, customers, employees, business partners, the

community, the government, and special-interest groups b. Owners and customers c. Society in general d. Owners e. Owners, customers, employees, and business partners

Q43. Who are the principals and agents of a corporation? a. Owners and executives, respectively b. Customers and managers, respectively c. Stockholders and employees,

respectively d. Managers and employees, respectively e. Employees and stockholders, respectively Q44. Which of the following statements best reflects a strategic

approach to creating and maintaining an ethical corporate culture? a. ‘Reducing unethical behavior is a business goal no different from increasing profits.’ b. ‘Our

code of conduct is window-dressing.’ c. ‘Hiring and promoting good, ethical managers will automatically produce an ethical organization.’ d. ‘A decentralized approach

to decision-making produces the most ethical corporate culture.’ e. ‘People are raised with strong personal values and should use them at work to resolve ethical

conflict.’ Q45. One of most common fraudulent activities reported by employees about their coworkers is a. lowering quality standards to cut costs. b. giving bribes to

foreign officials. c. using dishonest messages in advertising campaigns. d. discriminating in the hiring process. e. claiming to have worked extra hours. Q46. About

half of the issues raised on ethics help or assistance lines relate to a. improper quality standards. b. questions about top management’s behavior. c. human resource

issues and complaints. d. advertising and marketing concerns. e. accounting and financial misrepresentations. Q47. Which of the following is the best way for a

stakeholder to gain legitimacy? a. Insisting that your group’s interests are extremely important to society in general b. Letting the media know the horrible things

the company has done so that the rest of the world will know c. Making claims that you feel are reasonable, regardless of the view of other stakeholders d. Exploring

the issue from a variety of perspectives and then communicating your desires for change in a respectful manner e. Committing acts of violence to show the company and

the community that you are serious Q48. The outcomes associated with positive stakeholder relationships are a. unlikely to have an effect on the firm’s reputation. b.

both long-term and short-term in nature. c. always long-term in nature. d. of minimal importance to the operation of the firm. e. mostly short-term in nature. Q49. On

what basic precept is the shareholder model of corporate governance founded? a. The maximization of wealth for investors and owners b. Everyone should contribute to

social welfare c. Supply and demand found in the marketplace d. The customer is always right e. The problem created when ownership and control are not separated Q50.

In the United States, the major role that society delegates to government is to a. keep prices of products low so that all consumers can purchase convenience and

luxury goods. b. provide laws based on the Constitution and Bill of Rights and enforce laws through the judicial system. c. create more jobs. d. encourage larger

companies to conduct business in many other countries. e. encourage competition by providing economic support to smaller companies in order to be competitive with

powerful companies.

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