BUS 101 Test 1

incorportation of business

...An incorporated business (also called a corporation) is a type of business that offers many benefits over being a sole proprietor or partnership, including liability protection and additional tax deductions. Forming a corporation also allows you raise capital through sale of shares of your company

Phases of Corporate Responsibility

1950's-1960's- Corporate Social Stewardship 1960's-1970's- Corporate Social Responsiveness 1980's-1990's- Corporate/Business Ethics 1990's-Present- Corporate/Global Citizenship

iron law of responsibility

Those who do not positively use their corporate power are bound to lose it.

stakeholder theory

a corporation serve a broad public purpose: to create a value for society

inventory management

a science primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials.

market stakeholder

a stakeholder involved in the economic transactions with the company

nonmarket stakeholder

a stakeholder who is not involved in the economic transactions but still affected by the actions

national transportation safety board

airline safety

external environment of business

all things outside the business is dynamic and ever changing

directors of a company

an elected group of people who have a legal duty to establish corporate objectives, develop broad policies, and select top-level personnel to carry out these objectives and policies

caveat emptor

buyer beware--the principle that the seller of a product cannot be held responsible for its quality unless it is guaranteed in a warranty.

corporate power

capability of corporations to influence government, economy and society based on organizational resources

Interaction between business and society - six forces shape the business and society relationship:

changing societal expectations, growing emphasis on ethical reasoning and actions, globalization, evolving government regulations and business response, dynamic natural environment, and explosion of new technology and innovation

stakeholder map

comparing the stakeholders views on an issue and their salience

federal trade commission

competitive pricing deceptive trade practices packaging and labeling consumer credit disclosure and reporting online privacy

corportate social responsibility

corporation needs to have a positive effect on community and will be held accountable

companies repuation

desirable or undesirable qualities associated with an organization or its actors that may influence the organization's relationships with its stakeholders

supply chain

encompasses all activities associated with the flow and transformation of goods from the raw materials stage to the end user, as well as the associated information transfer

business and social interactions

environmental groups, governmental organizations, community work

department of justice

fair competition consumer civil rights

consumer financial protection bureau

fairness and transparency in consumer financial products and services

Stakeholder theory of the firm argues that a firm's sole purpose is to create value for its shareholders.

false

legal rights of stockholders

get dividends annual reports elect members hold directors and officers accountable sell their stock

types of stockholders

institutional and individual investors

cost of social responsibilty

lowers economic efficiency imposes unequal costs among competitors hidden costs passed on to stakeholders

National Highway traffic safety administration

motor vehicle safety standards, speed limit, fuel economy

law and regulation

o protect the consumer, and to make sure businesses serve the consumers and society instead of only worrying about making money. At that point they become machines and The Matrix is born. Unfortunately every organization will eventually reach a point in its existence where its primary purpose will be self preservation and perpetuation. At this point the organization will no longer serve basic human need

institutional investors

pensions, mutual funds, insurance companies, and university endowments that own stock

bottom of the pyramid

poorest people in the world-near 4 billion who earn less than 2.50 a day business opportunity because they are such a large market

SEC

protect stockholders' interests

food and drug administration

safety and standards of food, drugs, good additives cosmetics and medical devices

consumer product safety commission

safety standards for consumer products flammable fabrics, hazardous substances, posion prevention packaging

selection of board members

shareholders vote at the annual meeting where absent owners may vote by proxy

transparency in business

stockholders should be fully informed as possible in order to make sound investments, in recent years transparency in business has increased a great amount

Business Society Inter dependance

that the two are not two separate entities, they cross over and flow in between both

EPA

the US federal governmental agency responsiblie for most environmental regulation and enforcement

ownership theory

the company belongs to the owner and has to work for the owners to make the most money

product quality

the firm selling the products are responsible for injuries that may come from those products

Corporate social responsibility CSR

the idea that businesses should act in a way that enhances society and their stakeholders and be held accountable for any of its actions that affect people their communities and their environment

corporate governance

the process by which a company is controlled, or governed

internal stakeholder

those who are employed by the firm, they contribute their effort and skill to the company

external stakeholder

those who are not directly employed by the firm but are effected by it

the right of consumer

to be informed to safety to choose to be heard to privacy

2. The interest of different stakeholders often coincide

true

3. Stakeholder map is a useful tool, it enables managers to see quickly how stakeholders feel about certain issues.

true

attributes of board members

usually made up of outsiders, often CEOs of other companies will sit on the board, major stockholders, former governmental officials, academics, representatives of the community or retired executives

stakeholder power types

voting power- legitimate right to cast a vote economic power- customers, suppliers and retailers political power-exercise power through legislation, regulations or lawsuits legal power- bringing suit against a company for damages caused by defective products, brought by employees for damages caused by workplace injury, or brought by environmentalists for damages caused by pollution informational power- having access to valuable data, facts or details

microfinancing

when financial organizations provide loans to low-income clients or solidarity (group of borrowers) lending groups who traditionally lack access to banking or related services helping people in the bottom billion and reaching a new market making money for the banking institutions

online shopping

you need to try and get the same customer service you would get in a store online

5. By 2010, out of the 100 largest U.S. companies, how many had separated the positions of CEO and board chairs?

→ 31: separate to have a better corporate governance, not all power in the same place.

5. A firm subscribing to the ownership theory of the firm would mainly be concerned with providing value for its...

→ Shareholders

4. Which of the following is NOT a function of board committees?

→ The finance committee works closely with the human resources departments to fund employees salaries They do not fund, they get involved but not funded its funded within the company

2. Stock options represent the right to buy a company's stock at a set price for a certain period

→ True

Since the 1960s, phenomenal growth in the numbers if institutional investors in the U.S.

→ True: company's started forming finance groups/ give customer advantages

4. Which Statement is not correct about the business society interdependence?

→ actions by government rarely significantly affect business

3. Which of the following is NOT a legal right of stockholders?

→ to vote on who will become CEO