Chapter 4 Activity

Identification

1. Insider. a person who is either employed by the corporation can an executive, manager,
employee or somebody who has significant personal and/or business relationships with
corporate management.

2. Keiretsu refers to industrial groups linked by trading relationships as well as

cross-shareholdings of debt and equity; boards of directors composed almost solely of
insiders; and a comparatively low (in some corporations, non-existent) level of input of
outside shareholders, caused and exacerbated by complicated procedures for exercising
shareholders' votes.

3. Outsider a person or institution which has no direct relationship with the corporation or
corporate management.

4. Japanese model model of governance characterized by a high level of stock ownership

by affiliated banks and companies; a banking system characterized by strong, long-term
links between bank and corporation; a legal, public policy and industrial policy framework.

5. Equity Financing Common method of raising capital in European and US Companies.

True or False

True 1. It is possible to outline a model of corporate governance for a given country.

True 2. To date, researchers have identified three models of corporate governance in

developed capital markets.

False 3. The corporate governance structure in each country develops in response to

country-specific factors and interest.

True 4. If a profits fall over an extended period, the main bank and the members of the
keiretsu may remove directors and appoint their own candidates to the company's board.

True 5. Most German corporations have traditionally preferred bank financing over equity
financing.

True 6. The Anglo-US model is characterized by share ownership of individual, and

increasingly institutional, investors not affiliated with the corporation.

False 7. Equity financing is not a common method of raising capital for corporations in the
United Kingdom and the US.

True 8. There is a causal relationship between the importance of equity financing, the size of
the capital market and the development of a corporate governance system.
True 9. The US is both the world's largest capital market and the home of the world's
most-developed system of proxy voting and shareholder activism by institutional investors.

True 10. Players in the Anglo-US model include management, directors, shareholders,
government agencies, stock exchanges, self-regulatory organizations and consulting firms
which advise corporations and/or shareholders on corporate governance at proxy voting.

False 11. The interests of shareholders and management always coincide.

False 12. A synonym for insider is executive director; a synonym for outsider is a executive
director.

True 13. Equity financing is important for Japanese corporations.

True 14. Traditionally, the same person has served as both chairman of the board of
directors and chief executive officer of the corporation.

True 15. Investors avoid legal liability by ceding to management control of the corporation,
paying management for acting as their agent by undertaking the affairs of the corporation.

True 16. In Japan, financial institutions and corporations firmly hold ownership of the equity
market

True 17. UK and US boards are generally smaller than boards in Japan and Germany.

False 18. In the UK and US, a wide range of laws and regulatory codes do not define
relationships among management, directors and shareholders.

True 19. Stock exchanges play an important role in the Anglo-US model by establishing
listing, disclosure and other requirements.

True 20. There is one important distinction between the US and the UK: in the US,
shareholders do not have the right to vote on the dividend proposed by the board of
directors.

True 21. Similar to the trend in the UK and US, the shift during the postwar period has been
away from individual ownership to institutional and corporate ownership.

False 22. Japanese corporations prefer that a minority of its shareholders be long-term,
preferably affiliated, parties.

True 23. German banks, and to a lesser extent, corporate shareholders, are the key players
in the German corporate governance system.
Multiple Choice

1. The corporate governance structure of joint stock corporations in a given country is

determined by several factors

a. the legal and regulatory framework outlining the rights and responsibilities of the parties
involved in corporate governance.
b. the de facto realities of the corporate environment in the country.
c. each corporation's articles of association.
d. All of the above
e. None of the above

2. While corporate governance provisions may differ from corporation to corporation many
de facto and de jure factors

a. have no effect at de facto.

b. affect corporations in a similar way.
c. affect only de facto.
d. do not affect corporations in a similar way.
e. none of the above

3. In Germany, corporations are also shareholders, sometimes holding long-term stakes in

other corporations, even

a. where there is industrial or commercial affiliation between the two.

b. where there is no industrial or with commercial affiliation between the two.
c. where there is with industrial or no commercial affiliation between the two.
d. where there is no industrial or commercial affiliation between the two.
e. any of the above

4. In each country, the corporate governance structure has certain characteristics or

constituent elements, which distinguish it from structures in other countries researchers have
identified

a. one single model.

b. two models.
c. three models.
d. more than three models.
e. no model.

5. The three models identified by the researchers with regards to corporate governance are:

a. These are the Anglo-Russian model, the Japanese model, and the German model
b. These are the Anglo-US model, the Chinese model, and the German model.
c. These are the French-US model, the Japanese model, and the German model
d. These are the Anglo-US model, the Japanese model, and the Russian model.
e. These are the Anglo-US model, the Japanese model, and the German model.
6. Each model identifies the following constituent elements:

a. non interest group in the corporate environment; the share ownership pattern in the given
country; the composition of the board of directors; the regulatory framework; disclosure
requirements for publicly-listed stock corporations; corporate actions requiring shareholder
approval; and interaction among key players.
b. key players in the corporate environment; the share ownership pattern in the given
country; the composition of the board of directors; the regulatory framework;
disclosure requirements for publicly-listed stock corporations; corporate actions
requiring shareholder approval; and interaction among key players.
c. key players in the corporate environment; do not share ownership pattern in the given
country; the composition of the board of directors; the regulatory framework; disclosure
requirements for publicly-listed stock corporations; corporate actions requiring shareholder
approval; and interaction among key players.
d. non interest group in the corporate environment; do not share ownership pattern in the
given country; the composition of the board of directors; the regulatory framework; disclosure
requirements for publicly-listed stock corporations; corporate actions requiring shareholder
approval; and interaction among key players.
e. none of the above

7. The Anglo-US model is characterized by

a. not increasingly institutional.

b. share ownership of individual.
c. investors affiliated with the corporation.
d. Undeveloped legal framework defining the rights and responsibilities of three key players,
namely management, directors and shareholders.
e. comparatively complicated procedure for interaction between shareholder and
corporation.

8. The Japanese model is characterized by a high level

a. of stock ownership by affiliated banks and companies.

b. banking system characterized by strong, long-term links between bank and corporation
c. a legal, public policy and industrial policy framework designed to support and promote
"keiretsu" boards of directors composed almost solely of insiders, and a comparatively low
level of input of outside shareholders.
d. all of the above
e. none of the above

9. Equity financing is a common method of raising capital for corporations in the

a. Philippines.
b. Japan.
c. China.
d. United Kingdom (UK) and the US.
e. all of the above
10. It is not surprising, that the US is the largest capital market in the world, and the third
largest stock exchange in the world in terms of market capitalization after the New York
Stock Exchange (NYSE) and Tokyo is

a. the Mumbai Stock Exchange.

b. the London Stock Exchange.
c. Philippine Stock Exchange.
d. NASDAQ.
e. none of the above

11. Institutional investors plays an important role in both

a. the capital market and corporate governance.

b. the operations and corporate governance.
c. the capital market and government
d. all of the above
e. none of the above

12. The Japanese system of corporate governance

a. is many-sided, centering around the financial/industrial network or keiretsu

b. is many-sided, centering around government and a financial/industrial network or keiretsu.
c. is many-sided, centering around a main bank and creditors
d. is many-sided, centering around a main bank and a financial/industrial network or
keiretsu
e. is many-sided, centering around the stockholders and a financial/industrial network or
keiretsu

13. Players in the Anglo-US model include

a. management, non directors, shareholders, government agencies, stock exchanges,

self-regulatory organizations and consulting firms.
b. management, directors, shareholders, government agencies, stock exchanges,
self-regulatory organizations and consulting firms.
c. management, directors, shareholders, non government agencies, stock exchanges,
self-regulatory organizations and consulting firms.
d. all of the above
e. none of the above

14. The German model prescribes

a. all boards with separate members

b. two boards with no separate members.
c. All the boards with no separate members.
d. two boards with separate members.
e. none of the above
15. Good governance practitioners prescribe the election of a board of directors

a. by shareholders but do not require that boards act as fiduciaries for shareholders'
interests by overseeing management on behalf of shareholders.
b. by shareholders and require that boards act as agent for shareholders' interests by
overseeing management on behalf of shareholders.
c. by shareholders and require that boards act as fiduciaries for shareholders'
interests by overseeing management on behalf of shareholders.
d. by shareholders and require that boards act as fiduciaries for shareholders' interests by
overseeing management on behalf of the government.
e. by creditors and require that boards act as fiduciaries for shareholders' interests by
overseeing management on behalf of shareholders.

16. A synonym for insider is

a. executive director.
b. stakeholder.
c. stockholder.
d. government representative.
e. non-executive director or independent director.

17. Banks hold long-term stakes in German corporations and as in Japan bank
representatives are elected

a. to Japanese boards.
b. to German boards.
c. to US boards.
d. all of the above
e. none of the above

18. Germans' conservative investment strategy, the corporate governance structure are
geared

a. towards relationships between the key players, notably stockholders and government
b. towards cutting the relationships between the key players, notably banks and
corporations.
c. towards bridging relationships between the key players, notably banks and corporations.
d. towards preserving relationships between the key players, notably banks and
corporations.
e. towards mend relationships between the key players, notably banks and corporations.

19. in the Japanese model, the four key players are:

a. creditor, affiliated company or keiretsu, management and the government.

b. main bank, non-affiliated company, management and the government.
c. non-government organizations, affiliated company or keiretsu, the government.
d. suppliers, affiliated company or keiretsu, management and the government.
e. main bank, affiliated company or keiretsu (a major inside shareholder),
management and the government.

20. A synonym for outsider is

a. executive director.
b. stakeholder.
c. stockholder.
d. government representative.
e. non-executive director or independent director.

21. The board of directors of Japanese corporations is composed almost completely of

a. middle managers
b. creditors.
c. insiders, that is, executive managers, usually the heads of major divisions of the
d. all of the above
e. none of the above

22. The German corporate governance model

a. significantly similar from both the Anglo-Us and the Japanese model, although some of its
elements resemble the Japanese model.
b. differs significantly from both the Anglo-Us and the Japanese model, but some of its
elements are copied from the Japanese model.
c. differs significantly from both the Anglo-US and the Japanese model, although
some of its elements resemble the Japanese model.
d. significantly similar from both the Anglo-US and the Japanese model, although some of its
elements differ the Japanese model.
e. differs significantly from both the Anglo-US and the Japanese model, and no elements
resemble the US model

23. Board composition and board representation remain important shareholder concerns of
shareholders in

a. Asia.
b. Japan in particular.
c. Europe in General.
d. the UK and IJS.
e. other countries.

24. German and Japanese competitors in response to competition, individual and

institutional investors began

a. to shy themselves about trends, conduct research and organize themselves in order to
represent their interests as shareholders and inform themselves about trends, conduct
research and organize themselves in order to represent their interests as shareholders.
b. to focus themselves about non-trends, conduct research and organize themselves in
order to represent their interests as shareholders.
c. to inform themselves about trends, conduct research and organize themselves in
order to represent their interests as shareholders.
d. to inform themselves about trends, avoid conduct research and organize themselves in
order to represent their interests as shareholders.
e. to inform themselves about trends, conduct research and work alone in order to represent
their interests as shareholders.

25. The term "capital market" is broad

a. encompassing not all the markets where stocks, bonds, futures, derivative and other
financial instruments are traded. "Securities market" is more specific referring to stocks and
bonds.
b. encompassing all the markets where stocks, bonds, futures, derivatives and other
financial instruments are traded. "Securities market" is more specific referring to
stocks and bonds.
c. encompassing all the markets where stocks, excluding bonds, futures, derivatives and
other financial instruments are traded. "Securities market" is more specific, referring to
stocks and bonds.
d. encompassing all the markets where stocks, bonds, excluding futures and derivatives and
other financial instruments are traded. "Securities market" is more specific, referring to
stocks and bonds.
e. encompassing all the markets where stocks, bonds, futures, derivatives and other
financial instruments are not traded. "Securities market" is more specific referring to stocks
and bonds.

Chapter 5 Activity

Identification

1. Agency cost Resources to be sacrificed to keep an eye on things that are perceived or
need to be closely controlled from the perception of the principal are significant costs in a
principal/agent relationship

2. Proxy voting Refers to an exercise of voting on behalf of shareholders through the use of
a special authority given by shareholder/principal

3. Derivative suit A give lawsuit filed by a shareholder on behalf of the corporation against a
third party

4. Corporate Takeover The general term referring to transfer of control of a firm from one
group of shareholders to another group of shareholders.

5.Tender offer T An act whereby the acquiring company makes a public offer the price of
which is way higher than the current market price making it hard for the existing
shareholders to resist.
6. Partial or full equity conversion This takeover is done by giving the shareholders of the
target company offers that include a debt instrument in partial/full payment of shares

7. Share swap or all share deal A takeover where there will be no money involved; instead
the bidder company issues its own new shares to the shareholders of the company.

8. Competitors Refers to corporations and other business entities private or public offering
the same product or services that the company is offering at the same time.

9. Watchdogs Refers to independent organizations regulating or trying to police a particular

industry or corporate conduct to make certain that, the activities of these companies
belonging to the same industry are accordance with the acceptable standards that are
backed up by laws.

10. Predator companies Corporations that are always on the watch and waiting for a
chance to take over a certain company, be it via friendly or hostile takeover.

11. Gatekeepers The term given to independent third party persons or entity whose
cooperation is important because they have the capability to at least deter, if not prevent
misconducts of corporations.

12. Investment bankers An individual or entity which acts as an agent for corporation isstiq
securities.

13. Underwriting An arrangement with an investment banker whereby the investment

banker agrees to buys the entire issue at a set price. It also refers to the guarantee by the
investment banker that the issuer company will receive a certain minimum amount for their
new issued securities for sale.

14. Stock Exchanges Refers to an entity which offers trading services and facilities for
stock brokers and traders, to buy and sell shares of stock and other securities.

15. Hostile takeover A type of takeover which permits the "acquirer to be" company to
bypass the target company's management if it is uncooperative and unwilling to agree to a
merger or takeover

True or False

True 1. Control pyramids effectively entrust the corporate governance of the greater part of
the corporate sectors of many countries to a handful of elite, established families who can
quite reasonably be described as oligarchs.

True 2. Agency theory is relevant to many aspects of corporations from the fundamental
question of why firms exist to questions of corporate structure.

False 3. Even if shareholders are highly interested in profit maximization , they should also
care about the corporation's harms to society.
False 4. Managers may have incentives to reveal negative information in the hope that they
can ultimately avoid responsibility.

False 5. Even if impersonal owners have financial incentives to do social good, their
financial incentives may lead them to be more socially responsible than sole proprietors

True 6. The traditional analysis of firm behavior is concerned with potential principal-agent
problems between managers and owners, with the latter typified by individual and family
shareholders.

True 7. The non-financial incentives of sole proprietors do not necessarily lead them to be
more socially responsible than morally disengaged owners who seek only to earn as much
money as possible.

False 8. The relevant legal questions for the corporate social responsibility debate focus on
what contracts shareholders and managers should not be allowed to make with the firm.

True 9. Though social responsibility theorists assume that public corporation shareholders
are morally removed from corporate actions, this does not take into account that
shareholders make individual decisions to invest in particular firms.

False 10. Socially-responsible shareholders derive utility from socially-responsible

investments or dis-utility from socially-responsible investments.

True 11. Investors may invest in mutual funds that investigate and monitor the social
responsibility of its portfolio firms.

True 12. Financially innocuous social investing may influence management

True 13. The fact that social investors hold a significant chunk of corporation's shares signal
that managers will not face discipline from shareholders if they depart to some extent from
strict profit maximization, as by following the investment guidelines of socially responsible
investment funds

True 14. Institutional shareholders are potentially influential in spurring socially-responsible

governance.

False 15. While managers of most institutional investors have duties to minimize financial
returns, this would not apply to managers of social investment funds

True 16. It is at least equally plausible that socially motivated shareholders would balk at
investing in or approving adoption of governance mechanisms that make managers
significantly more accountable to shareholders.

True 17. Credit and asset markets can operate with regulation to cause firms to internalize
harms even when they do not deal directly with their victims.
False 18. Mandatory disclosure requirements may not be needed to supplement market and
contractual devices.

False 19. Like shareholders, employees cannot insist on socially-responsible behavior by

choosing where to work.

False 20. Labor market discipline may be perfect.

True 21. Consumers buying branded goods can be more confident in the firm's attention to
social characteristics, and that firms will react quickly to protect the brand if social
responsibility issues arise.

Multiple Choice

1. The study of the morality of choices made by people is known

a. ethics.
b. business ethics.
c. freedom of choice.
d. moral aptitude.
e. standard of behavior

2. Some Enron executives were aware of the financial problems the company was facing
and yet failed to reveal this information to the public. These actions taken by Enron
executives were

a. moral.
b. normal.
c. in the best interests of the shareholders.
d. unethical.
e. in the best interests of the employees.

3. Taking credit for others' ideas or work or not meeting one's commitments in a mutual
agreement are ethical issues concerning

a. fairness and honesty.

b. organizational relationships.
c. conflict of interest.
d. communications.
e. freedom of choice.

4. Bribes are

a. unethical.
b. ethical only under certain circumstances.
c. uncommon in many foreign countries,
d. economic returns.
e. ethical.
5. You are the decision maker for purchasing office equipment in your organization. One
sales representative privately offers you PBA season tickets if you help him out. This tactic is

a. a corporate discount.
b. a common business practice.
c. bribe.
d. personal selling.
e. ethical.

6. The _________ factor affecting ethical behavior includes one's moral values and central
attitude.

a. individual
b. social
c. opportunity
d. moral
e. ethical

7. All of the following are factors that affect the level of ethical behavior organization in an
organization except

a. individual factors.
b. social factors.
c. opportunity.
d. demographic factors.
e. moral values.

8. What are the three sets of factors that influence the standards of behavior in an
organization?

a. organizational norms, circumstances, morals

b. peer pressure, attitudes, social factors
c. historical factors, management attitudes, opportunity
d. opportunity, individual factors, social factors
e. financial factors, opportunity, morals

9. Ed works in a position where there is very little supervision. In fact, although he considers
himself ethical, he figures he could go away for a week without anyone noticing. Which
general set of factors is most likely to influence Ed's e behavior?

a. Individual
b. Social
c. Moral
d. Circumstantial
e. Opportunity
10. Suppose that when making decisions with ethical content, an executive for the
Coca-Cola Company always considers whether she would be comfortable explaining her
decision after the fact to a national TV audience. Such thinking

a. is clearly a way to shift responsibility and should be avoided.

b. encourages ethical decision making.
c. is likely to be illegal.
d. would encourage legal payoffs to university officials for making Coke the official on
campus drink
e. violates several international laws.

11. What is probably the most effective way for a company to encourage ethical behavior?

a. Hire employees who are ethical and in agreement with the companies views.
b. Have ethics training sessions for interested employees.
c. Threaten employees with immediate termination for unethical behavior.
d. post signs discouraging sexual harassment and discrimination
e. enforce a written code of ethics for the organization.

12. Family ownership is one feature of the _______ of much of the world.

a. government sector
b. corporate sector
c. non-governmental sectors
d. civic groups
e. all of the above

13. In Japan, there are extensive cross-holdings within business groups known as ________

a. Kaizen
b. Keiretsu
c. Kanban
d. social responsibility
e. agency cost

14. Because agency problems are likely to be significantly different from a

a. multinational corporation.
b. freestanding family firm.
c. transnational corporations
d. Corporate take-over
e. business ethics

15. ________________is an important example of the agency problems created in a control

pyramid.
a. Bribes
b. Contract fixing
c. Tunneling
d. All of the above
e. None of the above

16. Existing company policies addresses three sets of principal/agent problems which are
inherent in the structure of large companies those arising bet management and the
shareholders as a class

a. between majority creditor and minority shareholders, and between the controllers of the
company and non-shareholder stakeholders.
b. between majority shareholders and minority shareholders, and between the
non-controllers of the company and non-shareholder stakeholders.
c. between majority shareholders and minority shareholders, and between the
controllers of the company and non-shareholder stakeholders.
d. All of the above
e. None of the above

17. Where the typical pattern is one of dispersed shareholding, legislative and policy
attention tends to focus, as the provisions of the Code of Good Governance demonstrate on

a. profit maximization.
b. the first agency problem.
C. corporate control
d. corporate merger.
e. None of the above

18. The collapse of giant Enron in 2001 showed how catastrophic___________ can be

a. the credit crunch

b. the Asian financial crisis
c. the agency problem
d. corporate takeover
e. business ethics

19. When an executive uses company assets to underwrite persons' loans, the _______ as
company takes on debts to provide its executives with higher incomes.

a. tunneling
b. pyramiding
c. corporate take-over
d. agency problem occurs
e. any of the above

20. External regulation may be inadequate to align corporate profits with

a. corporate stakeholders
b. government regulators
c. best practices
d. social welfare
e. all of the above

21. Social responsibility theorists argue that excessive accountability to shareholders causes
managers to ignore social costs and benefits in favor of ____________

a. personal gain
b. corporate takeover
c. merger with other company
d. government regulations
e. sort of short-term accounting profits that are reflected in share price.

22. Lawmakers rely on those responsible for internal governance to achieve

socially-desirable results by responding to the _____

a. regulation.
b. stakeholders.
c. board of directors.
d. creditors.
e. code of ethics.

23. Given stakeholders' heterogeneous objectives, internal dissension might seriously

compromise their effectiveness

a. in governing the firm.

b. in satisfying other stakeholders.
c. in addressing agency problems.
d. all of the above
e. none of the above

24. Managers may be more likely than remote owners to feel responsibility for the firm acts
and thus to be subject to the same social norms and moral sc influence

a. corporate takeovers
b. creditors.
c. government agencies
d. other interest groups.
e. individuals in their personal lives.

Chapter 6 Activity
True or False

True 1. The field of business ethics applies moral standards to business situations.

True 2. Business people face ethical issues every day and some of these issues can be
difficult to assess.

False 3. Business people by the very nature of their work rarely face ethical issues to
resolve.

True 4. Fairness and honesty in business are two important ethical concerns.

False 5. Relationships with customers and co-workers rarely create ethical problems.

True 6. Sponsors of advertisements aimed at children must be especially careful to avoid

misleading messages.

False 7. There is nothing unethical about accepting payments to do something you would
normally do in your job anyway.

False 8. Ethical behavior is most likely to be compromised when the personal ethics of
business people are high.

True 9. An individual's moral values and central, value-related attitudes clearly influence
one's business behavior.

True 10. Most authorities agree that business ethics should be improved.

True 11. A personnel manager of a large company would probably agree that the more
ethical the company, the easier it is to attract good people.

True 12. A code of ethics is a written guide to acceptable and ethical behavior as defined by
an organization.

True 13. Awareness of corporate social responsibility has increased along with government
involvement.

True 14. Within a firm, social responsibility begins with manager's attitude.

True 15. The economic model of social responsibility emphasizes profits.

False 16. The economic model of social responsibility emphasizes the effect of business
decisions on society.

True 17. The socioeconomic model of social responsibility emphasizes the effect of business
decisions on society.

False 18. Because of the continuing problem of inflation, an increasing number of have
adopted the economic model of social responsibility.
False 19. There are many more socially responsible businesses today them there were ten
managers years ago.

False 20. In support of their position, proponents of the socioeconomic model argue that
businesses should be allowed to ignore social issues.

True 21. The right to choose means that consumers must have a choice of products offered
by different manufacturers and sellers.

False 22. The lesser the competition, the greater the choice available to consumers.

True 23. Affirmative-action plans encompass all areas of human resources management,
including recruiting, hiring, training, promotion and pay.

False 24. To achieve affirmative action goals and to remedy past discrimination, hiring
quotas are required.

False 25. The hard-core unemployed are made up of mentally-ill individuals and those with
prior criminal convictions.

Multiple Choice

1. Which of the following best describes social responsibility?

a. A corporation's rights, such as due process in a court of law, freedom of speech and
privacy.

b. Adoption by a business of a strategic focus for fulfilling the economic, legal,

ethical, and philanthropic responsibilities expected of it by its stakeholders.

c. A company's attempt to maximize its profits in order to benefit stockholders.

d. All the policies of a company that promote ethical business practices.

e. All businesses except those with less than 50 employees.

2. To which of the following forms of business can the concept of social responsibility be
applied?

a. Large, public corporations

b. Small, privately held corporations

c. All forms of corporations

d. Any form of business from a sole proprietorship to a large corporation

e. All businesses except those with less than 50 employees

3. In order for any social responsibility initiative to have strategic significance in a company, it
must be fully supported and valued by

a. top management.

b. legislators who develop federal law and policy.

c. government officials in the local area.

d. the company's stockholders.

e. non-profit groups who benefit from a company's philanthropic spending.

4. Which of the following is not one of the four types of corporate social responsibility?

a. Ethical

b. Economic

c. Environmental

d. Legal

e. Philanthropic

5. Many claimed that Microsoft's dominance in the computer operating systems market
violated which corporate social responsibility?

a. Ethical

b. Economic

c. Legal
d. Environmental

e. Philanthropic

6. Society's primary method of enforcing its requirements regarding business behavior is

through

a. the legal system.

b. boycotts and demonstrations.

c. the media.

d. buying foreign made products,

e. self-regulation.

7. Business ethics refers to

a. regulations and laws that guide companies in their business decisions.

b. companies retraining from forming monopolies or restricting competition in any way

c. principles and standards that guide behavior in the business world.

d. unique industry and professional factors that influence employees.

e the percentage of after-tax profits given to non-profit and community groups.

8. Minimal responsibility primarily involves

a. incorporating efforts in such a way as to benefit all stakeholders of the company.

b. fulfilling social responsibilities including legal and ethical guidelines.

c. addressing the concerns of contractual stakeholders in regards to legal and

economic matters.

d. trying to maximize stockholder wealth.

e. satisfying the primary stakeholders regardless of the possible legal implications.

9. Developing a code to aid employees in their decision making is an example of an activity

for which type of social responsibility?

a. Economic

b. Ethical

c. Philanthropic

d. Legal

e. Governance

10. Making voluntary contributions of money, time, and other resources to improve the
community most closely resembles which type of social responsibility?

a. Economic

b. Legal

c. Philanthropic

d. Environmental

e. Ethical

11. For a local beauty shop that is a privately owned business, which of the following is not
likely to be a stakeholder?

a Tax authorities

b. Customers

C. Suppliers of hair coloring solutions

d. Philippine Stock Exchange

e Other businesses in the same neighborhood and shopping center

12. Those groups to whom a company is responsible are collectively known as

a stockholders.

b. society.

c. employees and customers.

d. stakeholders.

e. very important people.

13. The flatter organizational hierarchies in the US brought about due to economic instability
of the 1980s and early 1990s caused all of the following except

a. workforce reduction.

b. increasing empowerment of lower level employees.

c. more opportunities for outstanding employees to move into management.

d. restructuring of the firm to focus on core competencies.

e. focus on efficiency and economies of scale.

14. Mattel, the maker of Barbie dolls, frequently shows television ads aimed at children on
Saturday mornings, when many children are known to watch cartoons. Some of these ads
mix cartoon-type animation and "real" shots of the dolls so that it is sometimes difficult for
even an adult to determine what the doll can or cannot do This most likely represents

a. a conflict of interest.

b. an ethical problem because children may be deceived about what Barbie can do.

c. an ethical concern for many creditors of Mattel.

d. illegal payoffs, if parents are getting more than they actually know they are paying for.

e. that Mattel employees need better working conditions and higher pay.
15. For health-related companies such as weight watchers, one of the most frequent ethical
issues related to communications that they face is

a deception

b. providing too much information

c seeking BFAD approval.

d experiments on animals.

e. safe packaging.

16. What specific area of business communications presents ethical questions by sometimes
containing false and misleading messages for adults and especially children?

a. press releases

b. newspaper articles

c. consumer reports' rankings

d. audited financial reports

e advertising

17. If a company deals with violations of its ethical codes, the opportunity to be unethical will
be reduced.

a leisurely and lightly

b. firmly and consistently

c. on a case-to-case basis

d quietly and erratically

e frequently and severely

18. A whistleblower is a person who

a. announces the beginning and end of a work shift.

b. praises his own accomplishments.

c. does public relations work for a company.

d accepts responsibility when a company is in trouble with the government.

e reports illegal or unethical conduct within his organization.

19. Jose Velarde is an ethics officer at a large financial institution. He likely performs all of
the following duties except

a. coordinating ethical conduct.

b. providing advice to employees when they are uncertain.

c. giving top management advice about their decisions.

d. encouraging all employees to be whistleblowers.

e. determining the punishment for ethical violations.

20. A whistleblower is a person who

a. announces the beginning and end of a work shift.

b. praises his own accomplishments.

c. does public relations work for a company.

d. accepts responsibility when a company is in trouble with the government.

e reports illegal or unethical conduct within his organization.

21. Where does social responsibility of business have to begin? The manager of a large
chain recently spoke to a group of college students about making it in the business world. He
focused particularly on the importance of fulfilling the purpose of the business organization to
produce and market profitable products needed by society. in so doing, he indicated that a
stockholder, not the society as a whole, invests in a corporation to earn a return on his
investment and that a firm is legally obligated to act in stockholders' interests. What concept
do the manager's comments reveal?

a. Socioeconomic model of social responsibility

b. Economic model of social responsibility

c. Strictest model of social responsibility

d. Consumerism

e. Rights of employees

22. The economic model of social responsibility places primary emphasis on

a. quality of life.

b. active government involvement.

c. conservation of natural resources.

d. economic return.

e. the balance of economic return and social return.

23. The manager of a successful local restaurant believes his responsibilities are to provide
delicious meals and excellent service, provide jobs, comply with laws and the BIR
requirements and earn a respectable profit on the restaurant. These are the managers only
concerns. What concept does this indicate?

a Socialism

b. The economic model of social responsibility

c. The socioeconomic model of social responsibility

d. Consumer protectionism

e. A lack of social responsibility

24. The economic model of social responsibility was developed in period when the primary
concern of firms was

a. long-term success and profitability.

b. improving the quality of life.

c. short-term profits and survival

d. complete customer satisfaction and expansion

e having safe and satisfied employees.

25. The socioeconomic model of social responsibility places primary emphasis on

a. quality of life.

b. production.

c. economic return.

d. exploitation of natural resources

e profit