MG 308 Test #1

By law, the financial records of publicly held companies are required to be:

Audited by a certified professional accounting firm

When the benefits of an action outweigh its costs, the action is considered ethically preferred according to:

Utilitarian reasoning

Which of the following examples does not show a company guided by enlightened self-interest?

A company breaking past records by maximizing quarterly profits

The emergence of a public issue

A gap has developed between what stakeholders expect and what an organization is actually doing.

Which statement is not correct about the business-society interdependence?

Actions by governments rarely significantly affect business

The acceleration of globalization has been driven by:

All of the above: Technological innovation, transportation systems, social and political reforms

Why should businesses be ethical?

All of the above: 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

Customers can exercise economic stakeholder power by:

Boycotting products if they believe the goods are too expensive

Failure to understand the beliefs and expectations of stakeholders:

Causes the performance-expectations gap to grow larger

A purchasing agent directing her company's orders to a firm which she received a valuable gift, is an example of:

Conflict of interest

Cross-cultural contradictions arise due to:

Differences between home and host countries' ethical standards

Which of the following is an argument in favor of corporate social responsibility?

Discourages government regulation

The purpose of the World Trade Organization is to:

Eliminate barriers to free trade among nations

The unspoken understanding among employees of what is and is not acceptable behavior is called:

Ethical climate

Under the Sarbanes-Oxley Act, corporations are required to:

Have executives vouch for the accuracy of a firm's financial reports

Business managers need a set of ethical guidelines to help them:

Identify and analyze the nature of the ethical problem

The iron law of responsibility says that:

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

When a community group sues a company for health effects caused by the unsafe disposal of toxic chemicals, this is an exercise of a stakeholder's:

Legal power

Technological innovation has aided the spread of globalization:

Leveling the playing field and allowing all to participate on an equal footing in global commerce

Which of the following is considered to be a non-market stakeholder of a business?

Media

The term "race to the bottom" refers to:

Moving production jobs to the country with the lowest labor cost

Proactive companies are:

Much less likely to be blindsided by crises and negative surprises

An analysis of the stability or instability of a government is an example of scanning the:

Political Environment

The theory comparative advantage states that:

Productivity rises more quickly when countries produce goods and services based on their natural resources

Firms that generally act only when forced to do so, and then in a defensive manner are:

Reactive companies

Under the U.S. Corporate Sentencing Guidelines, if a firm has developed a strong ethics program, corporation executives found guilty of criminal activity may have their sentence:

Reduced

Which of the following is an argument against corporate social responsibility?

Requires skills businesses may lack

People everywhere depend on ethical systems to tell them whether their actions are:

Right or wrong

A giant step is taken toward improving ethical performance throughout the company when:

Senior-level managers signal to employees that they believe ethics is a high priority

The U.S. Act prohibits executives representing U.S.-based companies from paying bribes to foreign government officials, political parties, or political candidates:

The U.S. Foreign Corrupt Practices Act

Stakeholder groups can include:

all of the above: stockholders, the media, and environmental activists

People's ethical beliefs come from:

their religious background, family, and education