Chapter 2 - Intro to Business

John, a purchasing​ agent, is offered an​ all-expense paid trip to Hawaii by a supplier if he agrees to award a substantial amount of business to the supplier. Accepting this trip would constitute​ _______. a. a conflict of interest b. insider trading c. social responsibility d. philanthropic giving e. collusion

a. a conflict of interest

Which of the following is NOT one of the rights under the Consumer Bill of​ Rights? a. consumers have a right to fair prices b. consumers have a right to safe products c. consumers have a right to choose what they buy d. consumers have a right to be educated about purchases e. consumers have a right to be heard

a. consumers have a right to fair prices

Abels Enterprises fully observes its legal requirements in doing business but considers profits a more important role than social​ responsibility, so it does nothing more than follow the​ "letter of the​ law." Which of the following BEST describes this​ company's approach to social​ responsibility? a. defensive stance b. preemptive stance c. accommodative stance d. proactive stance e. obstructionist stance

a. defensive stance

You go to work for a company that decides to outsource production to a country where wages are much​ lower, therefore keeping costs down and bolstering profits while providing the goods that customers demand at a fair price.​ However, some of your customers feel that you will be exploiting the foreign workers by paying them only pennies per hour. This is BEST described as an example of​ a(n) ____________ issue. a. ethical b. individual c. legal d. irrelevant e. political

a. ethical

As the owner of a growing​ company, your BEST course of action to establish a socially responsible corporate culture would be to​ _________. a. model the culture you want to create through your own actions b. mandate the culture you want in the employee handbook c. post a clear statement on your web site d. write a​ company-wide memo e. fire any employees who do not comply with the desired culture

a. model the culture you want to create through your own actions

An automobile manufacturer learns about an ignition switch defect that may cause serious safety issues but rather than enact an expensive recall of hundreds of thousands of​ vehicles, management covers it up. Which approach to social responsibility would this BEST​ demonstrate? a. obstructionist stance b. defensive stance c. preemptive stance d. accommodative stance e. proactive stance

a. obstructionist stance

What is the MOST LIKELY justification that a business might give for taking an obstructionist or a defensive stance toward social​ responsibility? a. profit maximization b. customer satisfaction c. free market operations d. ethical responsibilities e. government regulation

a. profit maximization

Direct influence to shape social responsibility practices by the government is most often accomplished through​ _______. a. regulation b. its tax codes c. political action committees (PACs) d. lobbying e. consumerism

a. regulation

Those​ individuals, groups or organizations directly affected by the practices of an organization are referred to as its​ ________. a. stakeholders b. guarantors c. supporters d. benefactors e. sponsors

a. stakeholders

​_______ involves public​ disclosure, often by an​ employee, of​ corruption, a​ wrongdoing, or illegal or unethical conduct on the part of others within an organization. a. whistle-blowing b. collusion c. price gouging d. insider trading e. lobbying

a. whistle-blowing

Absco Enterprises meticulously follows all laws and regulations and attempts to satisfy ethical​ requirements, but it does not go out of its way to address social or environmental issues unless it is persuaded to do so. This would suggest that the company has adopted​ a(n) _______ stance to social responsibility. a. obstructionist b. accommodative c. preemptive d. proactive e. defensive

b. accommodative

Organized efforts by individuals, groups, and the government help to protect consumers from unfair business practices are referred to as __________. a. corporate social responsibility b. consumerism c. lobbying d. collusion e. whistle-blowing

b. consumerism

In addition to a wide variety of​ soda, Pepsico produces and distributes corn and potato​ chips, breakfast​ cereals, and a variety of juices and teas. As part of its Corporate Social Responsibility​ campaign, the company has stated goals to reduce added​ sugars, fats, and sodium by the year 2025. The stakeholders MOST likely to benefit from these changes​ are___________. a. managers b. customers c. employees d. suppliers e. investors

b. customers

A senior level manager in a corporation learns that the Chief Financial Officer is going to be indicted the following day on charges of accounting fraud. He quickly sells his shares of stock in the​ corporation, fearing that the stock will fall after news of the indictment. This is an example of​ _______. a. an obstructionist stance b. insider trading c. whistle-blowing d. lobbying e. collusion

b. insider trading

Which of the following questions would a manager ask if​ s/he were examining an action or policy based upon the ethical norm of​ caring? a. which individuals or groups will be affected by this action or​ policy? b. is this action consistent with​ people's responsibilities to each​ another? c. does the action or policy respect the rights of all affected individuals or​ groups? d. is this action consistent with what is generally considered to be​ "fair"? e. would this decision optimize what is​ "best" for those who will be affected by​ it?

b. is this action consistent with people's responsibilities to each other?

The National Association of Realtors hires a consulting group to meet with members of Congress and the Senate and​ develop, advance, and influence legislation concerning the ownership and operation of real estate. This is an example of​ _______. a. consumerism b. lobbying c. collusion d. unethical behavior e. political action committee (PAC)

b. lobbying

A company donates a share of its profits to charitable programs and is a corporate sponsor of the philharmonic orchestra. The company is demonstrating social responsibility toward which of the following organizational​ stakeholders? a. invesetors b. local community c. suppliers d. customers e. employees

b. local community

​Leah's company has been consistently ranked one of the best places to work in the​ region, and it contributes a generous share of its profits each year to the arts and charitable endeavors in the community. Which of the following BEST describes this​ company's approach to social​ responsibility? a. obstructionist stance b. proactive stance c. defensive stance d. preemptive stance e. accommodative stance

b. proactive stance

The ethical norm of​ _______ examines whether an act optimizes the benefits to those who are affected by it. a. caring b. utility c. rights d. morality e. justice

b. utility

Which of the following BEST describes a conflict of​ interest? a. people on different sides of an issue agreeing to disagree b. parties engaging in an activity that does not equally benefit all parties c. an employee engaging in an activity that may benefit that individual to the detriment of his or her employer d. a company engaging in practices that conflict with government regulations e. two companies competing for the business of the same customer

c. an employee engaging in an activity that may benefit that individual to the detriment of his or her employer

What is considered​ "ethical" behavior and​ "unethical" behavior is​ _______. a. dictated solely through cultural influences b. prescribed by the government through formal laws and regulations c. based on both individual beliefs and social concepts d. determined solely by the individual e. established exclusively by upper management in an organization

c. based on both individual beliefs and social concepts

Ethical or unethical behaviors by employees and managers in the context of their jobs are referred to as​ _______. a. morals b. organizational customs c. business ethics d. values e. social norms

c. business ethics

A company that produces and distributes alcoholic beverages places all legally required warning labels on its products.​ However, in countries where such warning labels are not​ required, it does not do so. What approach to social responsibility does this BEST​ demonstrate? a. obstructionist stance b. accommodative stance c. defensive stance d. proactive stance e. preemptive stance

c. defensive stance

The Sarbanes-Oxley Act of 2002 was enacted as a reaction to several major corporate and accounting​ scandals, including Enron and WorldCom. It established new public accountability requirements for U.S.​ companies, and is an example of​ __________. a. favors b. political action committees (PACs) c. direct regulation d. lobbying e. indirect regulation

c. direct regulation

EpiPens contain a​ pre-set dose of​ epinephrine, a​ life-saving drug used by people at risk of experiencing anaphylactic shock from an allergic reaction. In​ 2007, Mylan obtained the rights to sell EpiPen and increased the list price from​ $94 to​ $609. Because it is a prescribed​ medication, sales of EpiPen did not drop and company revenues have steadily increased. This is BEST described as an example of​ a(n) ____________ issue. a. system of care b. management c. ethical d. legal e. financial accounting

c. ethical

A medical school hires a consultant to meet with Congressional staff to advocate federal funding for the medical​ school's research on breast cancer. This is an example of​ _______. a. insider trading b. collusion c. lobbying d. philanthropy e. political action committee (PAC)

c. lobbying

As part of your job in the social responsibility division of the marketing​ department, you are asked to gather information about the effects of a new product line on the​ company's commitments to relevant groups and individuals in its environment. To do​ this, you should first identify the​ ___________. a. pollutants b. consumer rights c. organizational stakeholders d. cost e. defensive stance

c. organizational stakeholders

​Alysia's cosmetic company was at the forefront of the move to ban testing on animals. Her firm has adopted an aggressive energy conservation approach to​ manufacturing, and it actively participates in programs to reduce poverty and illiteracy in the community. Which of the following would BEST describe the​ company's approach to social​ responsibility? a. accommodative stance b. defensive stance c. proactive stance d. preemptive stance e. obstructionist stance

c. proactive stance

The overall way in which a business balances its commitments to​ customers, employees,​ investors, or other stakeholders is known as​ _______. a. situational ethics b. fair trade c. social responsibility d. free trade e. sustainability

c. social responsibility

As part of your job in the social responsibility division of the marketing​ department, you are asked to gather information about the effects of a new product line on the​ company's commitments to relevant groups and individuals in its environment. To do​ this, you should first identify the​ ___________. a. production equipment b. research and development costs c. stakeholders d. cash requirements e. materials needed

c. stakeholders

Jack discovers that his employer is dumping dangerous chemicals into the river rather than disposing of them correctly. When management refuses to listen to his​ concerns, he contacts the Environmental Protection Agency to report the​ firm's conduct. This is an example of​ _______. a. consumerism b. an accommodative stance c. whistle-blowing d. collusion e. insider trading

c. whistle-blowing

Which of the following is the BEST description of a corporate social​ audit? a. an overview of an​ organization's finances to ensure stakeholder transparency b. a review of an​ organization's principles governing expectations and acceptable ethical conduct c. an assessment of the extent to which an organization is meeting stated​ local, state,​ federal, and international laws d. a formal assessment of a​ company's performance on social responsibility objectives e. a government review to ensure a​ business's compliance with federal and state legislation

d. a formal assessment of a company's performance on social responsibility objectives

Which of the following groups or individuals would NOT be considered an organizational stakeholder? a. customers b. suppliers c. employees d. competitors e. investors

d. competitors

Which of the following is deemed as the single MOST effective step an organization can take in order to encourage ethical behavior in the​ workplace? a. monitor employee behavior to ensure adherence to established rules and procedures. b. require attendance at ethics training programs on an annual basis. c. adopt a written code of ethics. d. demonstrate top management support of ethical standards. e. establish strict punishment for ethics violations.

d. demonstrate top management support of ethical standards

A manager must decide whether a particular course of action is ethical. What is the FIRST step the manager should take in reaching this​ decision? a. analyze the facts to determine the most appropriate moral values. b. identify all possible alternative courses of action. c. notify all affected parties of the situation. d. gather the relevant factual information. e. review past decisions made in similar situations.

d. gather the relevant factual information

Your business partner routinely posts his personal reviews of your products online in order to boost sales. This might be​ __________ as well as​ ___________. a. legal; ethical b. common; accepted c. acceptable; reasonable d. illegal; unethical e. effective; ethical

d. illegal; unethical

A manager who is examining an action or policy based on the ethical norm of justice would likely ask which of the following​ questions? a. does the action or policy optimize the benefits to those who are affected by​ it? b. which individuals or groups will be affected by this action or​ policy? c. does the action or policy respect the rights of all affected individuals or​ groups? d. is the action or policy consistent with what is considered fair or​ equitable? e. is the action or policy consistent with​ people's responsibilities to each​ other?

d. is the action or policy consistent with what is considered fair or equitable?

The National Weather Service is predicting that a major hurricane will impact the area within the next 48 hours. A local hardware store quickly doubles its prices on portable​ generators, plywood, and batteries in response to this weather forecast. This is an example of​ _______. a. whistle-blowing b. consumerism c. collusion d. price gouging e. lobbying

d. price gouging

The government can indirectly influence the social responsibility of businesses through​ _______. a. lobbying b. legislation c. political action committees (PACs) d. tax codes e. establishing codes of ethics for business

d. tax codes

A manager who discriminates against a member of a protected class in an employment decision such as​ hiring, firing,​ training, or promotion demonstrates​ _______ behavior. a. legal but unethical b. illegal but not unethical c. both legal and ethical d. ethical but not illegal e. both unethical and illegal

e. both unethical and illegal

As a supervisor for a food processing company cleanup​ crew, you contact a reporter for a major news network and disclose unsafe​ food-handling practices that are condoned by your company. The company is a major advertiser on the station that hosts the news and was warned that there was a potentially damaging story in the works. The story is never aired and upper management is aware that you are the source and has warned you to stay quiet. Your BEST course of action would be to​ _________. a. agree to sign a nondisclosure agreement in exchange for a cash settlement b. demand a corporate social audit c. attempt to effect change in the corporate culture d. remain silent and do your job e. contact the​ company's ethics committee or a U.S. Government regulatory agency such as the USDA

e. contact the company's ethics committee or a US government regulatory agency such as the USDA

"First lie, then deny" would be consistent with which approach to social responsibility? a. proactive stance b. accommodative stance c. defensive stance d. preemptive stance e. obstructionist stance

e. obstructionist stance

Which of the following approaches to social responsibility reflects the lowest degree of socially responsible​ practices? a. defensive stance b. preemptive stance c. accommodative stance d. proactive stance e. obstructionist stance

e. obstructionist stance

Some opponents of the national minimum wage laws believe that eliminating the minimum wage would virtually wipe out unemployment. Proponents of the minimum wage point to historical studies that show that raising the minimum wage has little or no effect on unemployment. As a corporate​ CEO, the BEST way for you to try to change the minimum wage law would be to​ __________. a. hire an experienced attorney b. have your business contribute directly to the political campaigns of candidates that support your position c. offer cash incentives to politicians who oppose your views d. offer free products and discounts to your state and local representatives in congress e. personally contact your state and federal legislators

e. personally contact your state and federal legislators

A corporation matches employee donations to charities and rewards employee volunteer efforts by compensating employees for up to 50 hours per year of community service. Which organizational dimension of managing social responsibility does this​ demonstrate? a. legal compliance b. ethical compliance c. codes of ethics d. whistle-blowing e. philanthropic giving

e. philanthropic giving

​Phyllis's company donates​ $1 million to the local humane shelter so that it can build a new facility in the area. This is an example of​ _______. a. consumerism b. misanthropy c. a political action committee (PAC) d. influence peddling e. philanthropic giving

e. philanthropic giving

A group formed for the purpose of soliciting funds and then contributing those funds to the campaigns of politicians is known as​ a(n) _______. a. consumer activist b. obstructionist c. philanthropist d. lobbyist e. political action committee (PAC)

e. political action committee (PAC)

The owners of several competing gas stations in a small town meet and agree that they will charge consumers the same price on gasoline so that they can eliminate price wars and maximize profits. This should be​ _________ because it is​ ________. a. ignored; business b. encouraged; perfectly legal c. encouraged; part of free market operations d. discouraged; monopolizing e. reported; collusion

e. reported; collusion