Question 1

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople. Identify and discuss the common examples of unethical decisions that businesspeople have made.

Accepted Answer

Unethical behavior often occurs when peo...

Question 2

Which of the following has been a negative effect of the SEC requirement that publicly traded companies in the United States are required to file quarterly and annual reports that are audited by an independent, accredited accounting firm?

Accepted Answer

A)   Stockholders can have complete faith that the information contained in financial statements accurately reflects the state of affairs of a company.
B)   The information can enable a stockholder to calculate the profitability (ROI
C)   of a company in which he or she invests.
C)   There have been issues of misrepresentation of the true financial state of companies to investors such as inflating the revenues or earnings to generate higher stock prices to give managers the benefits of stock option grants for personal gain at the expense of stockholders.
D)   It has encouraged other developed nations to enact similar regulations and requirements.
E)   It gives consistent, detailed, and accurate information about how efficiently and effectively the agents of stockholders, the managers, are running the company.F) A) and D)
G) A) and C)

Question 3

To make sure that ethical issues are considered in business decisions:

Accepted Answer

A)   companies should eliminate the principal-agent approach.
B)   companies should have a no-layoff policy.
C)   top managers should articulate and model ethical behaviors.
D)   top managers should generously grant stock options.
E)   companies should hire and promote employees with a strong focus on economic gains.F) C) and E)
G) B) and D)

Question 4

Which of the following is a source of gaining wealth whereby corporate raiders either push companies to change their corporate strategy to one that will benefit stockholders, or charge a premium for stock when the company wants to buy it back?

Accepted Answer

A)   A stock option
B)   Greenmail
C)   Self-dealing
D)   On-the-job consumption
E)   Risk capitalF) None of the above
G) B) and C)

Question 5

In a stakeholder impact analysis, after stakeholders' interests and concerns are identified it is necessary to identify the resulting strategic challenges.

Accepted Answer

A) True 
 B)False

Question 6

When managers consider the efficiency, timeliness and employee satisfaction in a company's scorecard, they are looking at the customer perspective.

Accepted Answer

A) True 
 B)False

Question 7

What is the best way for managers to ensure that ethical considerations are taken into account? List five out of the seven things managers can and should do to ensure that basic ethical principles are adhered to, and that ethical issues are routinely considered when making business decisions. Describe at least one way to accomplish each of these tasks.

Accepted Answer

Managers can and should do at least seve...

Question 8

With recent events, corporate boards have taken a hands-off role in top-management decisions and play a much more
passive role in corporate governance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following correctly describes the ethical right of each type of stakeholder?

Accepted Answer

A)   Stockholders have the right to expect that a firm will not violate the basic expectations that society places on enterprises.
B)   Customers have the right to be fully informed about the products and services they purchase, including the right to information about how those products might cause them harm.
C)   Employees have the right to expect that the firm will abide by the rules of competition and not violate the basic principles of antitrust laws.
D)   Suppliers have the right to safe working conditions, fair compensation for the work they perform, and just treatment by managers.
E)   Competitors have the right to timely, accurate information about their investments in accounting statements.F) B) and D)
G) C) and E)

Question 10

Which of the following statements concerning stock-based compensation schemes for executives is NOT true?

Accepted Answer

A)   Under accounting regulations that were enforced until 2005, stock options, like wages and salaries, were expensed.
B)   Huge stock-option grants can align the interests of management and stockholders.
C)   Stock-based compensation schemes can dilute the equity of stockholders.
D)   Huge stock-option grants increase the outstanding number of shares in a company.
E)   Top managers can earn huge bonuses from stock options that were granted several years prior.F) A) and B)
G) C) and D)

Question 11

If a company fails to take stakeholder claims into account when formulating its strategies, stakeholders may withdraw their support.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is true about the board of directors?

Accepted Answer

A)   The board members are directly elected by the employees of the company.
B)   The board has no legal authority to hire, fire, and compensate the CEO.
C)   Some of the board members hold positions on the boards of several companies.
D)   The board has no power to nominate people for positions in management.
E)   Divisional and functional managers usually form the board.F) B) and E)
G) B) and C)

Question 13

Inside directors are not full-time employees of the company.

Accepted Answer

A) True 
 B)False

Question 14

While the purpose of governance mechanisms is to reduce the scope and frequency of the agency problem, they are not involved in the alignment of the interests of business-unit managers with those of their superiors.

Accepted Answer

A) True 
 B)False

Question 15

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Accepted Answer

A) True 
 B)False

Question 16

When managers of a firm seek to unilaterally rewrite the terms of contracts with suppliers, buyers, or complement providers in a way that is more favorable to their firm, they are engaging in:

Accepted Answer

A)   opportunistic exploitation.
B)   information manipulation.
C)   downsizing.
D)   greenmail.
E)   self-dealing.F) A) and C)
G) B) and E)

Question 17

The internal research department of Libra Inc. has found that the packaging of health supplements produced by the company is faulty and resulting in poor quality. Despite this knowledge, the company has not improved the packaging and instead has advertised to its customers that this packaging is foolproof. Which of the following concepts is illustrated in this scenario?

Accepted Answer

A)   Information manipulation
B)   Anticompetitive behavior
C)   Agency strategy
D)   Information symmetry
E)   On-the-job consumptionF) C) and E)
G) B) and E)

Question 18

Jacob is a senior manager at Aries LLC. He has been earning significant bonuses in addition to his salary. He often misrepresents the financial information about the operations he handles, and he acquires more financial resources than he needs to run operations. Which of the following concepts is illustrated in this scenario?

Accepted Answer

A)   Glass-ceiling effect
B)   Self-dealing
C)   Agency strategy
D)   Takeover constraints
E)   Stock optionsF) A) and B)
G) None of the above

Question 19

Which of the following types of business law describes the accepted principles of right and wrong when dealing with competitive behavior?

Accepted Answer

A)   Tort laws
B)   Antitrust laws
C)   Intellectual property law
D)   Securities law
E)   Contract lawsF) A) and E)
G) A) and C)

Question 20

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Accepted Answer

A) True 
 B)False

Exam 11: Corporate Governance, Social Responsibility, and Ethics

Which of the following types of business law describes the accepted principles of right and wrong when dealing with competitive behavior?

Correct Answer
verified

Which of the following is a source of gaining wealth whereby corporate raiders either push companies to change their corporate strategy to one that will benefit stockholders, or charge a premium for stock when the company wants to buy it back?

Correct Answer
verified

While the purpose of governance mechanisms is to reduce the scope and frequency of the agency problem, they are not involved in the alignment of the interests of business-unit managers with those of their superiors.

Correct Answer
verified

When managers of a firm seek to unilaterally rewrite the terms of contracts with suppliers, buyers, or complement providers in a way that is more favorable to their firm, they are engaging in:

Correct Answer
verified

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Correct Answer
verified

Which of the following correctly describes the ethical right of each type of stakeholder?

Correct Answer
verified

When managers consider the efficiency, timeliness and employee satisfaction in a company's scorecard, they are looking at the customer perspective.

Correct Answer
verified

With recent events, corporate boards have taken a hands-off role in top-management decisions and play a much more passive role in corporate governance.

Correct Answer
verified

Correct Answer
verified
Managers can and should do at least seve...
View Answer

Inside directors are not full-time employees of the company.

Correct Answer
verified

Which of the following statements is true about the board of directors?

Correct Answer
verified

If a company fails to take stakeholder claims into account when formulating its strategies, stakeholders may withdraw their support.

Correct Answer
verified

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Correct Answer
verified

In a stakeholder impact analysis, after stakeholders' interests and concerns are identified it is necessary to identify the resulting strategic challenges.

Correct Answer
verified

Correct Answer
verified

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople. Identify and discuss the common examples of unethical decisions that businesspeople have made.

Correct Answer
verified
Unethical behavior often occurs when peo...
View Answer

Which of the following has been a negative effect of the SEC requirement that publicly traded companies in the United States are required to file quarterly and annual reports that are audited by an independent, accredited accounting firm?

Correct Answer
verified

Which of the following statements concerning stock-based compensation schemes for executives is NOT true?

Correct Answer
verified

To make sure that ethical issues are considered in business decisions:

Correct Answer
verified

Correct Answer
verified

Exam 11: Corporate Governance, Social Responsibility, and Ethics

Which of the following types of business law describes the accepted principles of right and wrong when dealing with competitive behavior?

Correct AnswerverifiedShow Answer

Which of the following is a source of gaining wealth whereby corporate raiders either push companies to change their corporate strategy to one that will benefit stockholders, or charge a premium for stock when the company wants to buy it back?

Correct AnswerverifiedShow Answer

While the purpose of governance mechanisms is to reduce the scope and frequency of the agency problem, they are not involved in the alignment of the interests of business-unit managers with those of their superiors.

Correct AnswerverifiedShow Answer

When managers of a firm seek to unilaterally rewrite the terms of contracts with suppliers, buyers, or complement providers in a way that is more favorable to their firm, they are engaging in:

Correct AnswerverifiedShow Answer

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Correct AnswerverifiedShow Answer

Which of the following correctly describes the ethical right of each type of stakeholder?

Correct AnswerverifiedShow Answer

When managers consider the efficiency, timeliness and employee satisfaction in a company's scorecard, they are looking at the customer perspective.

Correct AnswerverifiedShow Answer

With recent events, corporate boards have taken a hands-off role in top-management decisions and play a much more passive role in corporate governance.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedManagers can and should do at least seve...View AnswerShow Answer

Inside directors are not full-time employees of the company.

Correct AnswerverifiedShow Answer

Which of the following statements is true about the board of directors?

Correct AnswerverifiedShow Answer

If a company fails to take stakeholder claims into account when formulating its strategies, stakeholders may withdraw their support.

Correct AnswerverifiedShow Answer

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

Correct AnswerverifiedShow Answer

In a stakeholder impact analysis, after stakeholders' interests and concerns are identified it is necessary to identify the resulting strategic challenges.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople. Identify and discuss the common examples of unethical decisions that businesspeople have made.

Correct AnswerverifiedUnethical behavior often occurs when peo...View AnswerShow Answer

Which of the following has been a negative effect of the SEC requirement that publicly traded companies in the United States are required to file quarterly and annual reports that are audited by an independent, accredited accounting firm?

Correct AnswerverifiedShow Answer

Which of the following statements concerning stock-based compensation schemes for executives is NOT true?

Correct AnswerverifiedShow Answer

To make sure that ethical issues are considered in business decisions:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
Managers can and should do at least seve...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Unethical behavior often occurs when peo...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified