BUS 4950 CH 12

Arnold is a firm believer in Milton Friedmans view of a firms social obligations. With which of the following statements is Arnold most likely to agree?

Business can use their resources to create profit as long as they do so within the rules of the game

Elvira is the CEO of a firm. She has an opportunity to increase the competitive advantage of her company but is not sure if accepting the opportunity is ethical. Which of the following questions would help her decide if accepting the opportunity is ethical?

How would the media report her decision to accept the opportunity if it were to become public?

GameGo is a publicly traded manufacturer of home electronics. Based on what you have read, which of these actions would be wisest for GameGos board of directors to take to be sure that the companys new CEO is as motivated as possible

Link the CEOs pay ti her performance, but avoid high-powered incentives that may cause reckless behavior

which of the following real-world scenarios best exemplifies information asymmetry in a public stock company?

based on tip off by a Goldman Sachs employee, the Galleon Group sold its holding in Goldman Sachs stocks prior to the announcement of missed earnings estimate

which of the following is true of business ethics?

certain notions such as fairness, honesty, and reciprocity are universal norms.

because of poor management, the stock price of Orange Dolphin Inc., falls and many investors sell their shares. Soon Orange Dolphin becomes the target of hostile takeover, during which Hans buy enough shares to exert control over the firm. In this scenario, Hans performs the role of a(n)

corporate raider

which of the following is an implication for the strategist in the context of corporate governance and a company success?

effective corporate governance and solid business ethics are critical to gaining and sustaining competitive advantage

Gino is the CEO of a financial services firm. What action should Gino take to be sure the firm avoids moral hazards?

gino should define undue risk-taking, institute strict auditing of loans, and make it clear that the company will fire employees who lend recklessly

Starling Inc. is a public stock company that provides natural gas for businesses. Although this company generates a large profit, managements focus on reducing costs caused the maintenance budget to be trimmed... This scenario supports Michael Porters warning that public companies

have defined value creation too narrowly in terms of financial performance, thereby contributing to black swan events

the board of directors of a public stock company consists of

individuals who formally represent the firms shareholders and oversee the work of executives

Marika received a tip from a close friend who is an executive manager of a publicly traded company called MicroGreen Inc. The manager received some inside information about how to trade MicroGreen stock to get a huge profit. He shared this information with Marika. This scenario is an example of

information asymmetry

adverse selection in public stock company occurs when

information asymmetry increases the likelyhood of selecting inferior alternatives

what do we call board members who are part of the companys senior management team appointed by shareholders to provide the board with necessary information pertaining to the companys internal workings and performance.

inside directors

Angelica is the CEO of sandhaven Ltd.a publicly traded company. the shareholders want Angelica on the board of directors despite her recent appointment as the CEO. this decision of the shareholders is most likely because Angelica is

likely to provide the Board of Directors valuable inside information.

ethics is

not synonymous with law

Megan is a graduate student pursuing a source in business. Presented with the case of a company's unethical behavior, Megan wonders if the company's board of directors should ask the CEO to step down...Megan is most likely to conclude that company's board of directors

should ask the CEO to step down because it has a greater obligation toward society

The MBA oath first developed at harvard business school and now signed by students at over 300 business schools is modeled after

the hippocratic oath in medicine

Grameen Bank in Bangladesh was founded to provide microcredit to impoverished farmers who wanted to start their own entrepreneurial ventures that would help themselves climb out of poverty. This best exemplifies Michael Porter's suggestion that

the largest but poorest socioeconomic group can yield significant business opportunities

which of the following could be used as an example of why a stakeholder strategy approach to business has short comings?

the non sustainable debt level incurred by sovereign governments to fund social programs

which of the following is true of the codes of conduct of an organization?

they detail how the organization expects an employee to behave and to represent the company in business dealings