MGMT 1005 Exam 3 Practice Questions

According to the McKinsey survey, this unhelpful behavior was described as the focus of leadership during the 2008 financial crisis.

monitoring individual performance

For Friedman, this stakeholder has superior rights to the profits of a corporation.

shareholder or owner

This ethical explanation for CSR would seek a fair balance between the duties to shareholders and the duties to customers, employees and members of the community.

"Justice and Fairness" approach

Mortgage brokers who provided subprime loans to borrowers in order to make commissions without regard to the negative impact on those borrowers made decisions according to this stage of Kohlberg's theory.

"instrumental-relativist" stage (pre-conventional selfish level)

This author described corporate social responsibility using a pyramid with philanthropy at the top.

Archie Carroll

First leadership mechanism - what a leader pays _____________ to

Attention

Worked closely with local populations in a collaborative way

Both Mectizan Donation Program and Mosaic Villages Project

Described a pyramid of corporate social responsibility

Carrol

Second leadership mechanism - a leader's reaction to ____________

Crisis

True or False? The McKinsey survey performed after the 2008 financial crisis indicated that women were more likely to demonstrate the kinds of leadership needed after the crisis and that most companies were taking concrete steps toward increasing gender diversity to meet this need.

False

Response to 2008 Financial Crisis

Dodd Frank

This legislation was passed as a result of the 2008 Financial Crisis.

Dodd-Frank

First responsibility of a company in the CSR pyramid

Economic

Third responsibility of a company in the CSR pyramid

Ethical

True or False? Mosaic demonstrated Friedman's narrow shareholder rights perspective in the Mosaic Villages Project because Mosaic was focused only on profits, and did not make any effort to build economic capacity among small holder farmers around the world.

False

True or False? Porter & Kramer explain the strategy of "Creating Shared Value" by using a deontological argument, explaining that CSV is based upon rights and duties.

False

True or False? The Sarbanes-Oxley Act was a command response to a market failure, while the Dodd-Frank act repealed regulations and therefore was a market response to the mortgage crisis.

False.

This group of authors described the factors leading up to the 2008 financial crisis.

Financial Crisis Inquiry Commission

Advocated for a shareholder rights approach to social responsibility

Friedman

This company has partnered with Merck and the MDP to improve the health of stakeholders in developing countries.

Glaxo-Smith-Kline

Purchased homes, many with "subprime" mortgages

Homebuyers

Purchased mortgages and bundled them in to CDO's

Investment Banks

Match each stakeholder in the mortgage securitization pipeline with the correct description of its role in the pipeline.

Investment banks: bundled mortgage payments into complex derivatives called "collateralized debt obligations" Homeowners: borrowed money to purchase homes Mortgage banks: loaned money to home buyers, and then "sold" the mortgage payments to fund CDO's Investors: purchased shares in the synthetic securities backed by CDO's Rating agencies: assigned credit ratings to CDO's based upon the risk of non-repayment of mortgages

Pumped money into the pipeline and made more money available for mortgage lending

Investors

Second responsibility of a company in the CSR pyramid

Legal

Originated mortgages, charged fees, and "sold" mortgages to other stakeholders

Lenders

Consulting firm that wrote a report about leadership needs after the 2008 crisis

McKinsey

Attracted another partner to join its program

Mectizan Donation Program

Donated all needed supplies expecting nothing in return

Mectizan Donation Program

Video showed a company engaging in CSR in the developing world

Merck

This author described the social responsibility of business as maximizing shareholder return.

Milton Friedman

This level of management described by Carroll corresponds to Kohlberg's "post-conventional" level.

Moral Management

Video showed a company engaging in CSV in the developing world

Mosaic

Helped local stakeholders to make more money

Mosaic Villages Project

Offered low interest loans to purchase supplies

Mosaic Villages Project

Final, discretionary responsibility of a company in the CSR pyramid

Philanthropic

Wrote about "creating shared value"

Porter & Kramer

Which author's or authors' theory (or theories) of corporate social responsibility is/are supported by a teleological rationale?

Porter & Kramer's "Creating Shared Value" theory

These two authors stated that a corporation's actions to improve society should be through the creation of "shared value."

Porter and Kramer

CSV article referred to this author in the section "reconceiving products and markets"

Prahalad

Which pyramid that we have studied is NOT representative of stages or levels of activity?

Prahalad's pyramid

This way to create shared value is also described by Prahalad.

Reconceiving products and markets

Fourth leadership mechanism - a leader's allocation of _____________

Rewards

Third leadership mechanism - a leader's actions

Role Modeling

Response to 2002 Financial Crisis

Sarbanes Oxley

Had a theory of five leadership mechanisms

Schein

Sims & Brinkmann described how this author's five mechanisms applied to the Enron case.

Schein

Fifth leadership mechanism - a leader's criteria for ________________

Selection & Dismissal

Which of the following is NOT part of Carroll's CSR description? a. The first responsibility of a business is to make money. b. Social responsibility includes both legal and ethical responsibilities for corporations. c. Social responsibility is integrated into daily corporate strategy and budgets. d. Philanthropy is voluntary and discretionary.

Social responsibility is integrated into daily corporate strategy and budgets.

This level of Prahalad's pyramid represents individuals who have the most individual spending power.

Top of the Pyramid

True or False? Milton Friedman believed that the social responsibility of business was simply to make profits, and not to intend to make society better through social engagement.

True

True or False? Porter & Kramer support government regulation that encourages companies to pursue shared value, and state that regulation is necessary for well-functioning markets.

True

True or False? Schein's leadership mechanisms drive company culture and the behavior of employees based upon the words and actions of company managers and leaders.

True

This ethical approach could describe the subprime mortgage industry as ethical because it increased the dignity and choice for more families to be able to purchase a home.

What is a Kantian "Rights" approach?

This ethical approach would find the government's failure to regulate derivatives unethical because of the negative impact on the economy and the outcome of mortgage foreclosures.

Utilitarian approach

This complicated investment product was made up of pooled mortgage payments.

a collateralized debt obligation or CDO

Which of the following statements are accurate according to Porter & Kramer's article "Creating Shared Value?" a. Friedman's description of capitalism disregards external stakeholders, and is therefore too narrow for the CSV approach. b. Government regulation can be beneficial to a CSV approach. c. CK Prahalad's advocacy for reconceiving products and markets at the bottom of the pyramid is NOT a part of the CSV approach. d. Carroll's description of companies "giving back" to charity as part of being a "good corporate citizen" is part of the CSV approach.

a. & b. a. Friedman's description of capitalism disregards external stakeholders, and is therefore too narrow for the CSV approach. b. Government regulation can be beneficial to a CSV approach.

Which of the following are NOT part of Porter & Kramer's CSV approach? a. "Giving back" out of a sense of duty and fairness to the community b. Enabling local cluster development to foster more transparent local markets c. Being a "good corporate citizen" through philanthropy d. Redefining productivity in the value chain, saving money and also the environment e. Creating value and economic growth for both the corporation and for key stakeholders

a. & c. a. "Giving back" out of a sense of duty and fairness to the community c. Being a "good corporate citizen" through philanthropy

The Mectizan Donation Program is most accurately characterized by which approach to corporate social engagement? a. Carroll's Corporate Social Responsibility approach b. Friedman's Shareholder Rights approach c. Porter & Kramer's Creating Shared Value approach

a. Carroll's Corporate Social Responsibility approach

If a company seeks to assist society by first focusing on profits, and then by giving voluntary and discretionary corporate financial support to community organizations, in which approach to corporate social performance is it engaged? a. Corporate Social Responsibility (stakeholder) approach b. Shareholder Rights approach c. Creating Shared Value approach

a. Corporate Social Responsibility (stakeholder) approach

The Mosaic Villages Project is most accurately characterized by which approach to corporate social engagement? a. Porter & Kramer's Creating Shared Value approach b. Friedman's Shareholder Rights approach c. Carroll's Corporate Social Responsibility approach

a. Porter & Kramer's Creating Shared Value approach

If a company seeks to assist society by focusing only on profits and returns to shareholders, in which approach to social responsibility is it engaged? a. Shareholder Rights approach b. Creating Shared Value approach c. Corporate Social Responsibility (stakeholder) approach

a. Shareholder Rights approach

Which of the following elements were SIMILAR between the 2002 and 2008 financial crises? a. The use of financial derivatives to manage the volatility of markets b. Failure of governance agents to sufficiently notify the public of the risks of high-performing investments c. Investment opportunities characterized by innovation and complexity d. Unethical behavior in the form of predatory lending of subprime mortgages e. A shift in the energy industry from regulated delivery of energy to deregulated trading of energy

a., b., & c. a. The use of financial derivatives to manage the volatility of markets b. Failure of governance agents to sufficiently notify the public of the risks of high-performing investments c. Investment opportunities characterized by innovation and complexity

Which of the following statements are accurate according to Porter & Kramer's article "Creating Shared Value?" a. CK Prahalad's advocacy for reconceiving products and markets at the bottom of the pyramid is NOT part of the CSV approach b. Government regulation can be beneficial to a CSV approach. c. Friedman's description of capitalism disregards external stakeholders, and is therefore too narrow for the CSV approach. d. Companies "giving back" to charity as part of being a "good corporate citizen" is part of the CSV approach.

b. & c. b. Government regulation can be beneficial to a CSV approach. c. Friedman's description of capitalism disregards external stakeholders, and is therefore too narrow for the CSV approach.

Which of the following elements was NOT regulated by the Sarbanes-Oxley act of 2002? a. Accounting firms working with public companies. b. Derivatives transactions by large investment banks. c. Public company management and boards of directors.

b. Derivatives transactions by large investment banks.

Which of the following are NOT part of Carroll's CSR description? a. CSR includes both legal and ethical responsibilities for corporations. b. CSR is voluntary and discretionary. c. CSR is integrated into daily corporate strategy and budgets. d. The first responsibility of CSR is to make money.

c. CSR is integrated into daily corporate strategy and budgets.

This level of Kohlberg's pyramid contains the interpersonal concordance and law-and-order stages.

conventional level

Changing the behavior of this stakeholder is the goal of Mosaic in its effort to increase global food supplies via the use of its products.

customer behavior

According to Carroll's pyramid, this is the first and most basic step of CSR.

economic responsibility or making profits

The goal of the Mosaic Villages Project was to: ___________________, while the goal of the Mectizan Donation Program was to: ___________________.

help poor, small holder farmers to grow more food and make more money; cure river blindness in poor countries

These four categories of market participants make up the "securitization food chain."

home buyers, banks, investment banks, and investors

This level of Carroll's pyramid is voluntary or discretionary.

philanthropic level

An example of unethical behavior in the FCIC's report involving customers' rights to free choice and transparency in the marketplace.

predatory lending of subprime mortgages

This term describes why one might be more likely to steal a can of Coke than a $1 bill.

psychological distance (from money)