Environment of Business Test 2
Which of the following is not one of the four types of corporate social responsibility?
Environmental
Which stakeholder is the primary focus of the shareholder model of corporate governance?
Investors
Making voluntary contributions of money, time, and other resources to improve the community most closely aligns with which type of social responsibility?
Philanthropic
For a local hair salon that is a privately-owned business, which of the following is not likely to be a stakeholder?
The New York Stock Exchange (NYSE)
What holds organizations together and allows them to focus on efficiency, productivity, and profits?
Trust
According to reports published in mainstream business media (like BusinessWeek and other sources) the best boards of directors:
are generally more independent and more active than other boards.
A company committed to implementing the stakeholder perspective in its social responsibility strategy begins by:
assessing corporate culture and identifying stakeholder groups.
In order for any social responsibility initiative to have a strategic impact in a company, it must be ully supported and valued by:
top management and leadership
In order for any social responsibility initiative to have strategic significance in a company, it must be fully supported and valued by
top management.
Which of the following best describes the stakeholder model of corporate governance?
A company has responsibilities to many stakeholders including investors, employees, suppliers, government agencies, and the community.
The Reactive-Defensive-Accommodative-Proactive Scale is best described by which of the following?
A method for assessing a company's strategy and performance with one particular stakeholder.
"Minimal" responsibility primarily involves:
Addressing the compliance concerns of stakeholders to legal and economic matters.
Which of these statements best describes the concept of social responsibility?
Adoption by a business of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic responsibilities expected by it stakeholders.
Which of the following best describes social responsibility?
Adoption by a business of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholder
Which of the following does NOT describe the treatment of stakeholders on a worldwide basis?
An organization's treatment of domestic stakeholders is generally the same as that of foreign stakeholders.
To which of the following forms of business can the concept of social responsibility be applied?
Any form of business, from a sole proprietorship to a large corporation
To which of the following forms of business can the concept of "social responsibility be applied:
Any form of business, from sole proprietorships to large corporations.
How can a company align the interests of owners with managers through its executive compensation actions?
By linking executives' compensation to company performance and achievement of goals
Which of the following does NOT describe how risk plays a role in organizations?
Ensuring that no executive is paid more than 100 times the average employee.
An individual who risks their wealth, time, and effort to develop an innovative product or service for a profit is called a(n):
Entrepreneur
Developing a code to assist employees in their decision-making is an example of an activity for which type of social responsibility?
Ethical
Which of the following is the BEST way for a stakeholder to gain legitimacy?
Exploring the issue from a variety of perspectives and then communicating your desires for change in a respectful manner.
Corporate governance requires little more than compliance with the law. (True/False)
False
Factors such as increased globalization, enhanced electronic communications, economic agreements and zones, and the reduction of trade barriers are reducing the need for corporate governance. (True/False)
False
Members of a company's board of directors no longer assume legal responsibility for a business' resources and decisions. (True/False)
False
Which of the following statements BEST describes the current trends in corporate governance?
Forces are driving businesses toward the stakeholder orientation and more formal governance.
Under the social responsibility philosophy, which of the following best describes what the government's role in corporate governance should be?
Governments need to be actively engaged in affording both protection and accountability for corporate power and decisions
Which of the following internal control mechanisms would be the MOST difficult for a small company to implement?
Having several employees involved with each transaction, decision, or organizational issue.
Which of the following is NOT one of the components of the reputation management process?
Impression
Which of the following statements is FALSE concerning how a company should communicate after a crisis?
It is better to wait until the company has a complete understanding of the crisis so that stakeholders will not be led astray by partial information.
Which of the following is LEAST LIKELY to be a use of internal controls in an organization?
Measuring the effects of advertising on sales
Why was there little reason to focus on corporate governance in the late 1800s and early 1900s?
Most companies were owner-operated and the owner made the strategic decisions about the business, so little governance was needed.
In 2007 and 2008, what happened for only the second time in the U.S. history?
Overall, CEOs took paycuts for two years in a row.
Who are the principals and agents of a corporation?
Owners and managers, respectively
Under the historical / traditional views of business, who was considered to be a stakeholder?
Owners, customers, employees, and business partners
Under the historical and traditional views of business, who was considered to be a stakeholder?
Owners, customers, employees, and business partners
Which of the following is NOT one of the responsibilities that will affect boards of directors in the future?
Serving on boards will require less of a commitment than in the past.
"Corporations are bound by the law, and by the rules of what you might call ordinary decency. Beyond this however, they have no duty to pursue the collective goals of society." This statement exemplifies which approach?
Shareholder model of corporate governance
What asset resides in relationships, and is characterized by mutual goals and trust, and smoothes internal and external transactions and processes?
Social capital
Which stakeholder provides the goods and services necessary for an organization to function effectively and efficiently?
Suppliers
How is corporate governance best defined?
The formal system of oversight, accountability, and control for organizational decisions and resources
"Corporate governance" is best defined as:
The formal system of oversight, accountability, and control for organizational decisions and resources.
On what basic paradigm is the shareholder model of corporate governance founded?
The maximization of wealth for investors and owners
On what basic guideline is the shareholder model of corporate governance founded?
The maximization of wealth for investors and owners.
Which of the following best describes the rationale of the stakeholder interaction model?
This model involves a two-way relationship with the firm's stakeholders.
Which of the following BEST describes the rationale of the "stakeholder interaction model?"
This model involves a two-way relationship with the organization's stakeholders.
On what two factors is a stakeholder's urgency based?
Time sensitivity and the importance of the claim to the stakeholder.
What is the primary concern of a board of directors?
To closely monitor the decisions made by managers on behalf of the company.
What is the purpose of the Organization for Economic Co-operation and Development's (OECD) Corporate Governance Principles?
To formulate minimum standards of fairness, accountability, transparency, and responsibility in business practice
Because corporate ownership today is most often separated from corporate management and control, conficts of interest between owners and operators can arise. (True/False)
True
Better corporate governance of financial businesses may help to limit the problems experienced in the financial industry in the 2008-09 financial meltdown. (True/False)
True
The Sarbanes-Oxley Act of 2002 increased accountability by imposing stricter disclosure requirements and holding Boards of Directors accountable for their actions. (True/False)
True
By banning the import of goods made by children under the age of 15 through indentured or forced labor, the U.S. is exercising which type of power?
Utilitarian
Minimal responsibility primarily involves
addressing the compliance concerns of stakeholders in regards to legal and economic matters.
The outcomes associated with positive stakeholder relationships are
both long-term and short-term in nature.
The outcomes associated with positive stakeholder relationships are:
both long-term and short-term in nature.
Individuals or organizations who earn a profit by providing goods and services that satisfy people's needs are called a(n) ____________.
business
After poor service, the second top reason consumers gave for avoiding or refusing to buy from certain companies was:
business misconduct
Corporate governance requires a system of ____ similar to the distribution of power between the executive, legislative, and judiciary branches of the U.S. government.
checks and balances
Corporate governance requires a system of _______ similar to the distribution of power between the executive, legislative, and judiciary branches of the U.S. government.
checks and balances
Effective shareholder activism could include all of the following activities EXCEPT:
defacing company property.
In evaluating social performance of an organization, when an organiztion is admitting responsibility but doing the very least that is required to correct the issue is using _______ behaviors.
defensive
Employee commitment develops from
employees who believe their future is tied to that of the organization and are willing to make personal sacrifices for the organization
As "fiduciaries," members of a company's board of directors are fundamentally expected to:
exercise both a duty of diligence and a duty of loyalty.
As fiduciaries, members of a company's board of directors are fundamentally expected to:
exercise both due diligence and due loyalty
Overall, evidence supports that social responsibility
has positive results like return on investment, return on assets, and sales growth.
An "outside director" on a company's board of directors:
has valuable expertise, but limited vested interest in the firm before assuming the role.
Society's primary method of enforcing its requirements regarding business behavior is through:
its legal system.
In the long run, the success of a company is built on:
long-term relationships with customers built on mutual respect and cooperation that leads to repeat purchasing.
Shareholder resolutions:
may stimulate a company to change its practices.
Which of the following is NOT usually considered a primary stakeholder?
media
Implementing social responsibility on a global level is complex because:
of the need to balance economic responsibility with other responsibilities
The extent to which a stakeholder can gain access to coercive, utilitarian, or symbolic ways of imposing or communicating its views to an organization is known as _______.
power
Groups that are fundamental to a company's operations and survival are collectively called _____.
primary stakeholders
Groups that are fundamental to a company's operations and survival are collectively called
primary stakeholders.
Business ethics refers to:
principles and standards that guide behavior in the business environment.
The framework to understand how businesses meet their economic, legal, ethical, and philanthropic responsibilities is developed around the assumption that social responsibility is a:
process
The stage of organizational crisis when warning signs and symptoms may occur is called the _______ stage.
prodromal
When a company is denying responsibility and doing less than is required with a particular stakeholder, it is engaging in a(n) _______ strategy.
reactive
In the ____ stage of organizational crisis, success or failure outcomes occur for the organization and its stakeholders.
resolution
An organizational crisis ischaracterized by all of the following EXCEPT:
routine problems occurring in business.
Groups that may influence or be affected by an organization but are not engaged in economic exchanges with the organization are called __________.
secondary stakeholders.
When the early Quakers refused to invest in, patronize, or partner with any business involved in the slave trade or military concerns, the Quakers were applying _________.
social investment criteria
The __________ model clearly acknowledges the dialog that exists between an organization's internal and external environments.
stakeholder interaction
Those groups to whom a company is responsible are collectively known as ____________.
stakeholders
In recent months, in response to the major collapse of the U.S. financial system in 2008-09, the federal government has become involved in corporate governance to a degree not seen since ______.
the Great Depression.
When fundamental expectations about social responsibility are not met by publicly-traded companies, then:
the confidence that investors have in corporations, fund managers, market analysts, and others will decline.
Perhaps the strongest argument against high levels of compensation for CEOs is
the discrepancy between the highest paid executives and the median (mid-point) employee wages.
Social investing is best defined as:
the integration (blending) of social and ethical criteria into the investment decision-making process.
Reputation management is:
the process of building and sustaining a company's good name and generating positive feedback from stakeholders.
The key characteristic of stakeholder relationships is one of _____.
trust
