Business 100 Exam

Which of the following examples does not show a company guided by enlightened self-interest? A company vice-president invited to attend a local community's town planning meeting. A company providing the best quality product at a fair price. A company providing assistance to employees who attend evening college. A company breaking past records by maximizing quarterly profits.

A company breaking past records by maximizing quarterly profits.

Which of the following is not an example of stakeholders' economic power? A supplier halts shipments to a business customer that demanded very low prices. A social group protests a government's decision to raise taxes. A local community boycotts a grocery store suspected of inaccurate weight scales. An equal rights group refuses to do business with a company that has a discriminatory hiring policy.

A social group protests a government's decision to raise taxes.

Government's role is to create and enforce laws that: Control businesses' actions in society. Protect society from business. Protect businesses' interest in society. Balance the relationship between business and society.

Balance the relationship between business and society.

Investors may receive an economic benefit from the ownership of stock by receiving: Interest Dividends Capital gains. Both dividends and capital gains.

Both dividends and capital gains.

Which of the following is the result of the inseparable relationship between business and society? All business decisions have a social impact. The vitality of business depends on society's actions and attitudes. The survival of business is independent of society. Both of these answers are correct: All business decisions have a social impact and the vitality of business depends on society's actions and attitudes.

Both of these answers are correct: All business decisions have a social impact and the vitality of business depends on society's actions and attitudes.

Failure to understand the beliefs and expectations of stakeholders: Causes a company's profits to increase in the short run. Causes a company's profits to decrease in the short run. Causes the performance-expectations gap to grow larger. Decreases the chance of a corporate buy-out.

Causes the performance-expectations gap to grow larger.

Some companies have created a department of corporate citizenship to: Centralize under common leadership wide-ranging corporate citizenship functions. Adopt the United Nations' Global Compact Principles. Decentralize under common leadership wide-ranging corporate citizenship functions. Narrow the job of the public relations office.

Centralize under common leadership wide-ranging corporate citizenship functions.

Which of the following is an example of fulfilling social objectives through stock ownership? Selling stock of companies that refused to do business with nations that produced conflict minerals. Divesting from Chinese companies that made products using forced labor. Investing in Burmese companies that had been accused of human rights abuses. Selling stock of companies with a below-market rate of return.

Divesting from Chinese companies that made products using forced labor.

The unspoken understanding among employees of what is and is not acceptable behavior is called: Ethical climate. Corporate image. Ethical relativism Rites and rituals.

Ethical climate.

Over time, the nature of business's relationship with its stakeholders often: Evolves through a series of stages. Becomes more hostile. None of these answers is correct. Remains static.

Evolves through a series of stages.

To publish annual financial reports. Exercise formal legal authority over company policy. Have the highest stake in the performance of the company. Inherited the business from their predecessors. Have a moral responsibility to serve both the company's employees and customers

Exercise formal legal authority over company policy.

What is one advantage of operating as a B corporation? Government certifications are frequently conferred. They are tax-free organizations . Audits are not required. Financial reporting is not required.

Government certifications are frequently conferred.

A firm subscribing to the shareholder theory of the firm would mainly be concerned with providing value for its: Investors Customers Board of Directors Community

Investors

Government regulations help balance negative externalities such as: Age restrictions for Social Security recipients. No smoking rules enforced to mitigate the effects of second-hand smoke. Drug testing at private businesses. Gender controls over alcohol purchases and consumption.

No smoking rules enforced to mitigate the effects of second-hand smoke.

An analysis of the stability or instability of a government is an example of scanning which environment? Social. Political. Legal. Geophysical.

Political

A common tactic in a financial-incentive political strategy is: Legal challenges. Expert witness testimony. Lobbying Political contributions.

Political contributions.

A recent study found that, compared to the 1980s, managers today place what importance on moral values, such as honesty and forgiveness? Less important. About the same importance. Slightly more important. Triple the importance.

Slightly more important.

The issue management process is a: Systematic process companies use when responding to public issues that are of greatest importance to the business. Beneficial tool used only to maximize the positive effects of a public issue for the organization's advantage. Confusing process that is rarely used to help top management within an organization. Beneficial tool used only to minimize the negative effects of a public issue for the organization's advantage.

Systematic process companies use when responding to public issues that are of greatest importance to the business.

Corporations that run their operations according to the stakeholder theory of the firm create value by: Innovating new products. Increasing their stock price. Developing their employees' professional skills. All of these answers are correct.

All of these answers are correct.

The core components upon which a company's ethical performance depends include: The values and virtues of the managers. The personal character of the managers and employees. The traditions, attitudes, and business practices built into a company's culture. All of these answers are correct.

All of these answers are correct.

Why should business be ethical? Most people want to act in ways that are consistent with their own sense of right and wrong. Ethical behavior protects business firms from abuse by unethical employees and competitors. Society's stakeholders expect it from businesses. All of these answers are correct.

All of these answers are correct.

The capability of corporations to influence government, the economy, and society, based on their organizational resources is called: Corporate power. CEO power. Corporate citizenship. Corporate media.

Corporate power.

An argument in support of high executive compensation is: High executive pay drives away talented middle managers who feel unfairly compensated. High salaries provide an incentive for innovation and risk-taking. Inflated executive pay helps U.S. firms compete with foreign rivals. There is currently a surplus of qualified executive candidates.

High salaries provide an incentive for innovation and risk-taking.

Contemporary issue management: Is an interactive, forward-thinking process. Is a linear process. Is used by all government agencies. Was useful in the 1970s, but not today.

Is an interactive, forward-thinking process.

Businesses are expected to be ethical in their relationships with: Stockholders. Customers. Competitors. All of these answers are correct.

All of these answers are correct.

An emerging business model that attempts to strategically balance the interests of all stakeholders to solve social and environmental problems is called: B Lab. CSR Corporation. Balanced Corporation. B Corporation.

B Corporation.

The board committee that administers and approves salaries and benefits of high-level managers in a company is called: Human resources. Executive. Compensation. Nominating.

Compensation

Which ethical criterion is described by the idea that a company should strive for efficiency? Egoism. Benevolence. Principle. Business-centered.

Egoism

All of the following are external stakeholders of the firm except: Managers Customers. Shareholders. Suppliers.

Managers

Which one of the following is considered to be a nonmarket stakeholder of business? Customers Nongovernmental organizations. Creditors. Shareholders.

Nongovernmental organizations.

People everywhere depend on ethical systems to tell them whether their actions are: Legal or illegal. Right or wrong. Financially attainable or not. Logical and reasonable judgment.

Right or wrong.

A large sporting goods store that raised the age for purchase of some firearms in response to public concerns for gun control were seen by detractors as: Being too selfish to care about humanity. Trying to solve a problem they had no expertise in. Risking their reputation by engaging in politics. Being too small and weak to make a difference.

Risking their reputation by engaging in politics.

Around the world, government: Tends to be controlled by business. Tends to cooperate with business. Tends to be in conflict with business. Sometimes cooperates and sometimes is in conflict with business.

Sometimes cooperates and sometimes is in conflict with business.

The iron law of responsibility says that: In the long run, economic responsibility leads to social responsibility. In the long run, those who do not use power responsibly will lose it. Law is most important, more than social or economic responsibility. In the short run, sacrifice social goals for economic goals.

In the long run, those who do not use power responsibly will lose it.

A stakeholder analysis: Creates equality among all stakeholder interests. Allows managers to examine two primary questions. Involves understanding the nature of stakeholder interests. Actions by governments rarely affect business.

Involves understanding the nature of stakeholder interests.

Stakeholder engagement is: The acquisition of information gained from analyzing the multiple environments. Competitive intelligence being collected ethically and systematically. Any issue that is of mutual concern to an organization and one or more of its stakeholders. The process of ongoing relationship building between a business and its stakeholders.

The process of ongoing relationship building between a business and its stakeholders.

People's ethical beliefs come from: Legislative action and judicial decisions. Reading the company's profit and loss statements. Their religious background, family, and education. The organization's code of ethics.

Their religious background, family, and education.

Cooperation between business and government often occurs when: Business operates at arm's length from the government. Business can afford it. They encounter a common problem or enemy. Government has the support of the people.

They encounter a common problem or enemy.

Which of the following statements is not true about shareholders? They are investors in the company. They are the legal owners of business corporations. They own equal shares of company assets. Managers pay close attention to their needs and interests.

They own equal shares of company assets.

A legal right of shareholders is: To vote on who will become chief executive officer (CEO). To vote on members for the board of directors. To publish annual financial reports. To receive interest, if declared.

To vote on members for the board of directors.

Which statement is not correct about the business-society interdependence? Business is a part of society. Business is separated from the rest of society by clear boundaries. Business activities impact other activities in society. Actions by governments rarely affect business.

Actions by governments rarely affect business.

Public policies and government regulations are shaped by: Business Special interest groups. Government. All of these answers are correct.

All of these answers are correct.

Stakeholder groups can include: Shareholders Business support groups. Environmental activists All of these answers are correct.

All of these answers are correct.

Which of the following statements is true about corporate social responsibility? Businesses should monitor and prevent social problems in advance of their becoming major issues. Both of these answers are correct: Businesses should monitor and prevent social problems in advance of their becoming major issues; and corporations should be accountable for any actions that affect people, their communities, and the environment. A company should seek maximum profits from its operations in order to provide the best for society. Corporations should be accountable for any actions that affect people, their communities, and the environment.

Both of these answers are correct: Businesses should monitor and prevent social problems in advance of their becoming major issues; and corporations should be accountable for any actions that affect people, their communities, and the environment.

Which of the following are examples of natural monopolies? Electric utilities and railroads. Cable television and the media. Internet services and trucking. None of these answers are correct.

Electric utilities and railroads.

An argument that opposes the idea of high executive pay is: High salaries provide an incentive for innovation and risk-taking. Not many individuals are capable of running today's large, complex organizations. Top athletes and entertainers make a lot of money, so top executives should, too. High salaries divert resources that could be used to invest in the business.

High salaries divert resources that could be used to invest in the business.

Proactive companies are: Much less likely to be blindsided by crises and negative surprises. Much more likely to be forced to defend themselves. Just as likely to be blindsided by crises and negative surprises. Much more likely to be blindsided by crises and negative surprises.

Much less likely to be blindsided by crises and negative surprises.

Scholars found that spirituality affects employee and organizational performance in what way? Negatively Positively. Has no affect. Only affects not-for-profit organizations

Positively

The five types of stakeholders' power recognized by most experts are: "Voting, economic, political, legal, and informational power. " "Social, legal, environmental, economic, and political power. " "Social, regulatory, voting, governance, and information power. " "Economic, informational, legal, shareholder, and political power. "

"Voting, economic, political, legal, and informational power. "

Which of the following companies is being the most socially responsible? A company changing its product design to comply with regulatory mandates. A company trying to maximize its profits and then contributing to an environmental protection fund. A company halting its production of toxic gases after it discovered that people objected to this practice and threatened legal action. A company trying its best to operate in a way which will help local students get education and jobs.

A company trying its best to operate in a way which will help local students get education and jobs.

The emergence of a public issue indicates that: Consumers are unaware of how an organization's actions affect them. Technology is forcing ethics and business strategy closer together. A gap may be developing between what stakeholders expect and what an organization is actually doing. Consumers are unaware of how an organization's actions affect them

A gap may be developing between what stakeholders expect and what an organization is actually doing.

Proponents against corporate social responsibility feel that public officials, not business people, should solve societal problems because: The private sector is not mandated to solve these issues. Both of these answers are correct. Business people do not have the skill set to solve societal problems. Neither of these answers is correct.

Both of these answers are correct.

Proponents of business as a political participant argue: A pluralistic system invites many participants. It is business's constitutional right to be involved. Business is a vital stakeholder of government. Both of these answers are correct: A pluralistic system invites many participants; and business is a vital stakeholder of government.

Both of these answers are correct: A pluralistic system invites many participants; and business is a vital stakeholder of government.

Companies demonstrate global corporate citizenship by: Integrating concern for both financial and social performance. Finding business opportunities that serve society Building reactive stakeholder partnerships. Both of these answers are correct: Finding business opportunities that serve society and integrating concern for both financial and social performance.

Both of these answers are correct: Finding business opportunities that serve society and integrating concern for both financial and social performance.

When attempting to build ethical safeguards into the company, businesses can take the following specific approaches: Institutional and Legal. Legal and Practical. Compliance and Integrity. Value-based and Consequentialism.

Compliance and Integrity.

Which political action strategy seeks to gain support from other affected organizations to better influence policymakers? Information strategy. Constituency-building strategy. Financial-incentive strategy. Lobbying strategy.

Constituency-building strategy.

When working well, the issue management process: Generates two specific options for each issue. Continuously cycles back to the beginning and repeats. Minimizes dialogue with the stakeholders and focuses on short-term survival. Is static and never pulls in additional information that would disturb the balance.

Continuously cycles back to the beginning and repeats.

Which of the following is a key feature of effective boards of directors? Ensure that no outside members are included on the board. Combine the duties of the board chairman and the chief executive. Fill all important positions on the board with managers with insider knowledge of the firm. Hold regular meetings without the CEO present.

Hold regular meetings without the CEO present.

One of the main reasons that American executives are paid so much is: Qualified individuals are scarce because most current CEOs were born during the "baby bust" years of the Great Depression. High executive compensation in other nations puts upward pressure on the salaries of U.S. executives. Most executives are paid based on their performance, and rising compensation reflects the excellent performance of their firms. Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an interest in pushing compensation up.

Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an interest in pushing compensation up.

Stakeholder engagement is, at its core, a: Relationship. Program. Systems model. Process.

Relationship