Business Ethics Exam 3

The ______ directly appoint senior managers, including the Chief Executive Officer, to carry out the day-to-day management of the company. Board of Directors shareholders Strategic Planning Committee primary investors

Board of Directors

The belief that new technologies and practices that have uncertain consequences should not be undertaken refers to the ______. Golden Rule law of diminishing returns myopia value precautionary principle

precautionary principle

A problem with shareholder theory is that it does not account for the large-scale role that companies actually play in making ______. corporate strategies that help improve the bottom line goods that satisfy the needs of customers training programs that enhance the workplace the laws by which they are supposed to abide

the laws by which they are supposed to abide

The 2002 Sarbanes-Oxley Corporate Fraud Accountability Act requires the ______ to provide thorough oversight of firms' financial reports. Board of Directors Chief Operations Officer Chief Ethics Officer Shareholders Committee

Board of Directors

According to the ______, managers are presumed to have acted in the best interests of the corporation unless it can be shown otherwise. law of representation business judgment rule theorem of responsibilities right of managerial discretion

business judgement rule

Grand challenges are essentially ______ challenges, and tough ones at that. ethical redundant exponential geometric

ethical

Companies' interactions and relationships with their stakeholders are ______ in that they involve mutual obligation. narrow multifaceted reciprocal exclusive

reciprocal

Because shareholders are the company's owners and the ______ - that is, the last to be paid back - they have a position of primacy among stakeholders. venture capitalists standard investors tertiary providers residual claimants

residual claimants

Of particular importance in addressing grand challenges are the questions of whether the business environment ______, and who ______. punishes innovation; provides resources for social entrepreneurship rewards innovation; bears the costs and risks of innovation provides resources for social entrepreneurship; reprimands change offers grants for growth opportunities; challenges the status quo

rewards innovation; bears the costs and risks of innovation

Companies have ______ stakeholders, with which the company has interactions that are less frequent and often not commercial. primary secondary tertiary redundant

secondary

______ are persons who own the company, have the right to elect Board of Directors, receive dividends, participate in major decisions, and sue the company and its officers. Subjects Participants Shareholders Whistleblowers

shareholders

Based on the reciprocal duties of companies and stakeholders, companies offer wages, benefits job security, and opportunities, and employees provide ______. facilities, infrastructure, competent workforce, and an operating environment conducive to profitability financial payments (company revenues) skills, labor, and loyalty capital resources

skills, labor, and loyalty

The theory that the responsibility of business is to create value for stakeholders, including shareholders is ______ theory. institutional population ecology shareholder stakeholder

stakeholder

Individuals and organizations which influence and are influenced by the company are known as ______. participants stakeholders social actors subjects

stakeholders

In general, in considering the risks of innovation, societies have adopted a ______ approach according to which harm to some is an acceptable price of actions and policies that benefit many. teleological deontological virtue ethics social contract

teleological

Understanding what issue you are addressing in a grand challenge, which is Step ______ of the weight of reasons framework, can be difficult. 1 2 3 4

1

Which of the following activities is a form of stakeholder management that involves creating value for a range of stakeholders and not just shareholders. Research and development Corporate sustainability Scheduling Advertising

Corporate sustainability

Since the ______, the managers of publicly traded companies in most US states -- including Delaware, where the majority of US firms are incorporated -- have a legal duty to put the interests of shareholders ahead of all other stakeholders' interests. Dodge vs. Ford Motor Co. case of 1919 Purina vs. General Mills case of 1951 General Electric vs. Motorola case of 1962 Dell vs. Compaq case of 1987

Dodge vs. Ford Motor Co. case of 1919

Which of the following is one of the Sustainable Development Goals? End poverty in all its forms everywhere Erase the debt of all international companies Only offer products that are endorsed by the United Nations Reduce the negative impact of sustainable business practices

End poverty in all its forms everywhere

______ duty simply means a duty of trust. Claimant Empowered Contractual Fiduciary

Fiduciary

______ involve choices about who benefits and who is harmed, questions about fundamental rights, and issues of basic fairness. Logical thoughts Grand challenges Virtue patterns Teleological episodes

Grand challenges

______ focuses on developing new technologies that address grand challenges. Virtue ethics Resource dependency Industry-transforming innovation Population ecology

Industry-transforming innovation

______ maintained that it is irresponsible for the employees of a corporation to do more than the law requires to address issues such as controlling pollution and training the unemployed. Milton Friedman Peter Drucker Max Weber Adam Smith

Milton Friedman

OSHA was established under the ______ Act, passed in 1970. Civil Rights Equal Health and Safety Occupational Safety and Health American with Disabilities

Occupational Safety and Health

In the U.S., the ______ develops and enforces rules on workplace health and safety, what workers can be exposed to, and what notices and warnings employers are required to give them. Committee on Health and Safety Occupational Safety and Health Administration Equal Employment Opportunity Commission American Safety, Health, and Wellness Group

Occupational Safety and Health Administration

The renowned management theorist ______ proclaimed that avoiding harm was the quintessential business ethic that no firm should violate. Peter Drucker Max Weber Edwin Locke Douglas MacGregor

Peter Drucker

______ theory holds that the sole responsibility of business is to earn maximum return for shareholders, within the boundaries of society's laws and customs. Resource dependency Shareholder Stakeholder Institutional

Shareholder

______ theory is concerned with how firms manage their relationships with and create value for a broad range of stakeholders, not just shareholders. Stakeholder Downward comparison Self-interest Ethical firm

Stakeholder

______ theory posits that firms have an ethical duty to create value not only for shareholders but other stakeholders as well. Stakeholder Social exchange Social learning Population ecology

Stakeholder

While a wide range of problems might be considered grand challenges, the most widely accepted are those addressed by the ______. Ethical Principles of the World Bill of Basic Human Rights World Business Code of Conduct Sustainable Development Goals

Sustainable Development Goals

An approach that seeks to target a large population of underserved to provide new products, services, and technologies; the size of the market would enhance and expand the businesses market-base is the ______ approach. base of the pyramid creating shared value industry-transforming entrepreneurship population ecology

base of the pyramid

The Sustainable Development Goals were adopted by the ______ in 2015. Organization of the American Territories World Trade Organization United Nations Congress of Europe Countries and the United States

United Nations

The ______ emphasizes that businesses can flourish in the long run by offering products and services that meet the needs of and are affordable to society's poorest people. base of the pyramid approach shared value approach industry-transforming entrepreneurship approach population ecology approach

base of the pyramid approach

One of the reasons that corporations should emphasize people at the base of the pyramid is the ______. opportunity to pay off the debt of developed nations opportunity to marginalize competitors ability to develop monopolies for creating increased stakeholder value ability to recruit idealistic, young, enthusiastic and highly motivated workers

ability to recruit idealistic, young, enthusiastic and highly motivated workers

Shareholders who seek to influence managers and directors are known as ______. squeaky wheels loose cannons activist shareholders empowered shareholders

activist shareholders

The directors and managers are ______, or people who have a duty to work on behalf of the owners of a firm. venture capitalists principals agents secondary stakeholders

agents

Based on the reciprocal duties of companies and stakeholders, companies offer financial gain (e.g., dividends, increase in stock price), and shareholders provide ______. facilities, infrastructure, competent workforce, and an operating environment conducive to profitability financial payments (company revenues) skills, labor, and loyalty capital resources

capital resources

Shareholder ______ occurs when shareholders rather than directors and managers control the company's decisions and direction. precedence capitalism primacy utopia

capitalism

The precautionary principle forces companies to have second thoughts prior to attempting to ______. strategically plan commercialize their discoveries hire an ethics officer manage board governance

commercialize their discoveries

Applying the weight of reasons to a grand challenge is no easy task, primarily because grand challenges are so ______. simple complex narrow repetitive

complex

One problem with shareholder theory has to do with its assumption that companies should not go beyond ______ to benefit stakeholders other than shareholders because doing so would reduce shareholder wealth. values compliance principles social exchange

compliance

The structures and processes used to direct and control a corporation is embedded in the process of ______. board direction corporate governance residual claiming empowerment

corporate governance

An approach to business in which companies deploy their core resources and capabilities to create value for shareholders and society simultaneously is the ______ approach. base of the pyramid creating shared value industry-transforming entrepreneurship population ecology

creating shared value

An approach to business in which companies, governments, and nongovernmental organizations work together to use capitalism to address grand challenges is ______. creative capitalism socialism population ecology resource dependency

creative capitalism

Bill Gates's ______ is treated as synonymous with the base of the pyramid approach. population ecology shared value approach resource dependency creative capitalism

creative capitalism

When considering the reciprocal duties of companies and stakeholders, companies offer taxes, jobs, other economic, social, and environmental benefits, and communities and their members provide ______. facilities, infrastructure, competent workforce, and an operating environment conducive to profitability financial payments (company revenues) skills, labor, and loyalty capital resources

facilities, infrastructure, competent workforce, and an operating environment conducive to profitability

The reciprocal duties of companies and stakeholders indicates that companies offer reliable, affordable, quality products, and services, and customers provide ______. facilities, infrastructure, competent workforce, and an operating environment conducive to profitability financial payments (company revenues) skills, labor, and loyalty capital resources

financial payments (company revenues)

Milton Friedman argued it was the job of ______ to address social problems. the general public business government shareholders

government

Milton Friedman clearly distinguished the relative roles of business and government in society, with ______ responsible for developing and implementing laws that reflect the will and ethical beliefs of the society's citizens without infringing any of those citizens' freedoms, and ______ focusing on increasing profits while working within the legal framework established by citizens through government. government; businesses businesses; government general public; business businesses; general public

government; businesses

All of the following are primary stakeholders except ______. customers employees suppliers governments

governments

The precautionary principle shifts the burden of proof in risk management and places the burden on the ______ to show that the risk of adverse consequences is minimal or non-existent. shareholders innovators injured parties ethics officer

innovators

U.S. laws also aim to prevent managers from engaging in ______ - that is, profiting from their knowledge of significant nonpublic information about the company by buying or selling company stock. money laundering insider trading off-balance-sheet accounting ongoing speculation

insider trading

One important criticism of shareholder theory is that simply following ______ is not sufficient from an ethical standpoint because they often do not embody accepted ethical standards. social mores laws and regulations social exchanges organizational cultures

laws and regulations

Stakeholder theorist Ed Freeman and his colleagues write that stakeholder theory is "first, and most fundamentally, a ______ theory." recursive redundant moral simple

moral

Friedman's view that businesses should not get ahead of the law in addressing social and environmental issues fails from a strategic perspective, in the sense that it is a(n) ______ approach to business. proactive subjective objective reactive

objective

A problem with shareholder theory is that it can blind managers to their legal and ethical obligations to ______. other stakeholders holders of preferred stock owners of a firm develop sound training programs

other stakeholders

A ______ occurs when a director or manager of the corporation does not fulfill his or her fiduciary duty to work on behalf of the shareholders. management myopia manager-owner dilemma shareholder-director quandary principal-agent problem

principle-agent problem

The ______ occurs because managers take an active interest in and have great knowledge of the company, while most shareholders are only passively involved in the company's affairs principal-agent problem shareholder-director quandary management myopia management dilemma

principle-agent problem

The fiduciary duty of company decision-makers to shareholders often is referred to as a ______ relationship. quid pro quo principle-agent board-governance justice-rights

principle-agent/justice-rights

Primary stakeholders, and for the most part secondary ones as well, have ______ relationships with the company, and they can withdraw from the relationship if they find the inducement unacceptable partial voluntary simple complex

voluntary