Business 1301
Which of the following statements is true of a code of ethics?
A code of ethics provides guidelines to help employees achieve organizational objectives.
Charles wants to start a décor business and takes a loan of $35,000 from the bank to set up the business. Once the business is up and running, Charles will have full control of the business and its profits. However, he will also be responsible for any losses that the business incurs. In this scenario, which of the following forms of business ownership is Charles planning to start?
A sole proprietorship
The stockholders of a construction firm decide to start a steel company, but they want to have limited liability. After completing the business plan, they initiate the process of establishing the company by filing articles of incorporation and paying the filing fees to the state government. In this scenario, the stockholders of the firm want to start a _____.
C Corporation
In the context of codes of ethics, the Johnson & Johnson Credo has guided the company profitably through a number of crises. This is considered the best-known code because it:
Carefully refrains from overpromising financial rewards while focusing on benefiting their customers.
A premium brand of men's wear introduces a new range of dinner suits and licenses its franchisees to sell this product. However, the brand retains the production rights. This scenario exemplifies a(n) _____.
Distributorship
Consumerism is a widely accepted social movement. Which of the following can be considered a consumer's right?
Expressing legitimate complaints easily
A sole proprietorship tends to be both larger and more profitable than a partnership
False
In the context of business behavior, producing products that you know will break before their time is illegal and unethical.
False
In the context of limited partnerships, the general partners of a company assume limited personal liability for any of the company's debts.
False
In the context of social responsibility, a corporation that does not have profits as a first priority is referred to as a D-Corp.
False
Michael owns 100 shares of stock in the Samson Electricals Corporation, but as a stockholder he does not have the right to vote in stockholders' meetings. In this scenario, Michael owns common stock.
False
Signing a franchise agreement exempts the franchisee from making any form of payments to use a franchisor's products.
False
Stakeholders refer to groups of people who have a malicious intent toward an organization and who often resort to harmful actions.
False
The owner of a sole proprietorship must share any after-tax profits with the company's shareholders.
False
Lancelock Inc. buys a less accomplished firm by directly signing a deal with the target firm's shareholders. The move is vehemently opposed by the board of directors and the top management of the target firm. This is an example of a _____.
Hostile takeover
In the context of franchising, which of the following statements is true of a business format franchise?
It is an agreement in which franchisor grants the franchisee the right to both make and sell its good or service.
In the context of the legal and ethical dimensions of business conduct, rewarding integrity is an example of _____.
Legal and ethical behavior
Research from the ethics resource center suggests that ___ has more influence than any other variable on the ethical conduct of individual employees?
Organizational culture
Heleus Oil & Gas Company routinely performs emission tests to keep a check on the emissions produced by its corporate operations and find new ways to reduce them significantly. In this scenario, Heleus Oil & Gas Company is tracking its:
Scope 1 emissions
The Canadian government issues a legal notice to one of its coal manufacturing companies after the government learns that the heating equipment purchased by the company emits a higher level of gases than the level permitted by the Environmental Protection Agency. In this scenario, the coal manufacturing company is in violation of exceeding the level of its _____ emissions.
Scope 2
A(n) _____, a type of divestiture, occurs when a company issues stock in one of its own divisions or operating units and sets it up as a separate company—complete with its own board of directors and corporate officers.
Spin-off
A thriving cowboy culture encourages entrepreneurship. The term "cowboy culture" refers to a culture where:
Standout individuals who break free of old ways attract attention and admiration in many of the countries with high entrepreneurship rates.
According to research from the Ethics Resource Center (ERC), organizational culture is most influential in shaping the ethical conduct of individual employees.
True
In the context of creating and maintaining an ethical organization, more-engaged employees are much less likely to behave badly.
True
In the context of the three types of emissions tracked by corporations, Scope 1 emissions refer to direct emissions produced by corporate operations.
True
The Internal Revenue Service classifies each limited liability company (LLC) based on the tax treatment the company selects.
True
The personal needs, culture, and the family of an individual influence his or her ethical choices.
True
There is no limit on the number of partners who can participate in a general partnership.
True
When people view ethics as relative, their ethical standards shift depending on the situation.
True
In the context of funding options for small businesses, the______assists entrepreneurs by partially guaranteeing loans from local commercial lenders.
U.S. Small Business Administration
The benefits of a general partnership include its
ability to pool financial resources
Aragon, a brand of inverters, provides products that work well in the first year of their use. The performance of the products, however, starts declining after the first year, and the products eventually become unusable within a short period of time. The pattern of breakdown is similar for all Aragon inverters. Reports suggest that Aragon intentionally creates inferior products to increase repurchases. In the given scenario, Aragon is guilty of _____.
planned obsolescence
Deborah dreams of owning a pub in the heart of the city she lives in. She wants to have a music band right next to the bar playing her favorite rock ballads. She also has creative ideas for the food on the menu. Since Deborah already has the funds needed to start the pub, which of the following suggestions is most likely to help Deborah realize her dream?
Deborah should start from scratch as that will allow her to implement her own concept, decision, and structure