MULTIPLE CHOICE ANSWERS MAY 2014

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Question 1
Which of the following statements is false concerning how a company should communicate after a crisis?
The communication after a crisis is usually not handled in a completely effective or ineffective manner.
It is better to wait until the company has a complete understanding of the crisis so that stakeholders will not be led astray by partial information.
If a company is slow to respond, stakeholders may feel as though the company does not care about their needs or is not remorseful about the crisis.
Crisis events are often chaotic, so management may begin the crisis response with a degree of ambiguity.
The company should communicate how it plans to resolve the crisis.

Question 2
An ethical issue is a problem, situation, or opportunity that harms consumers.
requiring society to choose among several actions that must be evaluated as right or wrong.
requiring an individual or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical.
requiring an individual or organization to choose between harming consumers or the environment and earning more profits.
that harms the environment.



Question 3
On what two factors is a stakeholder’s urgency based?
Economic timing and the stakeholder’s ability to use coercive power
Ethical sensitivity and the impact on society
Time sensitivity and the importance of the claim to the stakeholder
Opportunity and rationale of the stakeholder’s claim
Goal orientation and motivation of the stakeholder

Question 4
When just one business provides a good or service in a particular market, what results?
Lower prices due to that company’s efficiency
Deregulation
Oligopoly
Trust
Monopoly

Question 5
When Nine West Group was found to have violated antitrust laws, they were required to do all of the following except pay millions of dollars in fines.
stop including manufacturer’s suggested retail prices in product sales literature.
stop fixing dealer prices.
satisfy record keeping provisions to ensure future compliance.
not threaten to limit supplies to dealers that adopt their own resale prices.

Question 6
In the United States, the major role that society delegates to government is to keep prices of products low so that all consumers can purchase convenience and luxury goods.
provide laws based on the Constitution and Bill of Rights and enforce laws through the judicial system.
create more jobs.
encourage larger companies to conduct business in many other countries.
encourage competition by providing economic support to smaller companies in order to be competitive with powerful companies.

Question 7
Under the historical and traditional views of business, who was considered to be a stakeholder?
Owners, customers, employees, business partners, the community, the government, and special-interest groups
Owners and customers
Society in general
Owners
Owners, customers, employees, and business partners

Question 8
The most basic of business ethical standards
have been uniformly implemented through every firm’s ethics code.
include developing trust in all business relationships.
are centered around the mutual desire to protect the environment.
have been codified as laws and regulations.
demonstrate a company’s desires to address the needs of society.

Question 9
Which of the following statements best reflects a strategic approach to creating and maintaining an ethical corporate culture?
“Reducing unethical behavior is a business goal no different from increasing profits.”
“Our code of conduct is window-dressing.”
“Hiring and promoting good, ethical managers will automatically produce an ethical organization.”
“A decentralized approach to decision-making produces the most ethical corporate culture.”
“People are raised with strong personal values and should use them at work to resolve ethical conflict.”

Question 10
Which of the following is not an ethical issue in the area of communications?
Concealed facts in advertising
False or deceptive advertising
Bribery
Lying
Ambiguous statements in advertising

Question 11
What are the three primary factors that together influence the ethical decision-making process?
Stakeholder relationships, trust, and corporate culture
Society, profits, and longevity
Personal ethics, group ethics, and business ethics
Values, norms, and regulations
Opportunity, individual factors, and organizational relationships

Question 12
Organizational crises are characterized by all of the following except
routine problems occurring in business.
a threat to a company’s high-priority goals.
far-reaching events.
being a surprise to a company’s membership.
the need for swift action.

Question 13
What provisions did the Clayton Act include to clarify and expand upon the Sherman Antitrust Act?
It provided specific exemptions to utility and other similar industries, which tend to have natural monopolies due to the exorbitant costs involved with starting up.
The Clayton Act actually made most of the provisions of the Sherman Antitrust Act null and void rather than expanding on the earlier legislation.
It specified that one person could be a member of only three boards of directors within the same industry.
It created an organization to protect consumers and businesses from unfair competition.
It limited mergers and acquisitions that have the potential to stifle competition.

Question 14
Concerns involving consumer privacy, web site development, and online marketing relate to which classification of ethical issue?
Discrimination
Honesty
Communications
Technology
Conflict of interest

Question 15
By banning the importation of goods made by children under the age of 15 through indentured or forced labor, the U.S. government exercised which type of power?
Legal
Symbolic
Legitimate
Utilitarian
Coercive

Question 16
Making voluntary contributions of money, time, and other resources to improve the community most closely resembles which type of social responsibility?
Economic
Ethical
Philanthropic
Environmental
Legal

Question 17
What is the purpose of the Organisation for Economic Co-operation and Development’s (OECD) Corporate Governance Principles?
To override individual countries’ practices and implement identical policies throughout the forum’s members
To place most of the responsibility for corporate governance on the company’s managers
To outline an optimal system of corporate governance techniques that every developed country should strive to duplicate
To ensure the members of boards of directors are carefully selected to protect the interests of all stakeholders
To formulate minimum standards of fairness, accountability, transparency, and responsibility in business practice

Question 18
What asset resides in relationships, is characterized by mutual goals and trust, and smoothes internal and external transactions and processes?
Relationship capital
Interpersonal capital
Social capital
Financial capital
Intellectual capital

Question 19
Society’s primary method of enforcing its requirements regarding business behavior is through
the media.
buying foreign-made products.
the legal system.
self-regulation.
boycotts and demonstrations.

Question 20
Which of the following best describes ethics?
Choices and judgments about acceptable standards of conduct that guide the behavior of individuals and groups
Balancing the ever-changing and complex needs of society with the desire for profit
Beliefs held by all people
Guidelines that a company provides its employees to ensure that they will act in the best interest of society
Rules about how one should act in a business situation

Question 21
The outcomes associated with positive stakeholder relationships are
unlikely to have an effect on the firm’s reputation.
both long-term and short-term in nature.
always long-term in nature.
of minimal importance to the operation of the firm.
mostly short-term in nature.

Question 22
Which of the following is least likely to be considered destructive or unfair competition?
Stealing competitors’ trade secrets
Using a “bait and switch” method for selling products to customers
Collaborating with a competitor to establish prices so that each firm can ensure a certain level of profit
Obtaining information through competitive intelligence
Lowering prices significantly in an effort to drive competitors out of a market, and then raising prices afterwards

Question 23
Which of the following best describes how businesses should manage the regulatory environment?
Businesses should try to follow all of the laws that apply to doing business and should also consider the economic implications of their actions.
Top managers must take responsibility and be accountable for assessing legal risks and developing corporate programs that promote and reward acceptable conduct.
Businesses should hesitate to punish employees who have committed an illegal or unethical act in order to protect the reputation of the company.
Companies should maintain their primary focus of making a profit, and then try to operate in the regulatory environment.
The company should hire a consulting group to deal with compliance with laws and regulations since managers have more important matters to address.

Question 24
Which type of investor causes the most problem for CEOs in developing strategic plans?
Institutional investors
Shareholders willing to sacrifice short-term gains for long-term income
Global investors who don’t understand the business
Employees who own stock
Shareholders seeking short-term gains

Question 25
Communication is important in keeping a firm on its ethical course because
top executives must enforce overall ethical standards within the organization.
issues such as price collusion and bribery must be decided on a decentralized basis.
employees must learn when unethical behavior is appropriate to maximize profits.
the moral philosophies of employees are always consistent with the moral philosophies of top management.
centralization may reduce the opportunity for unethical conduct.

Question 26
In the workplace, _____ provide(s) the greatest influence on employee (un)ethical behavior.
personal moral values
company policies and procedures
ethics training
peers and coworkers
religion and family upbringing

Question 27
In order for any social responsibility initiative to have strategic significance in a company, it must be fully supported and valued by
legislators who develop federal law and policy.
the company’s stockholders.
government officials in the local area.
top management.
non-profit groups who benefit from a company’s philanthropic spending.

Question 28
Which of the following is not one of the responsibilities that will affect boards of directors in the future?
Serving on boards will require less of a commitment than in the past.
Boards will need to work more effectively as teams.
The selection of board members will become increasingly formalized.
Annual reports and other company documents will include more nonfinancial information.
Boards will be responsible for developing company purpose statements that cover a range of aims and stakeholder concerns.

Question 29
Mary finds herself most content and fulfilled when she is diligently working alone and dreads meetings and interactions with coworkers. Which of the following needs is probably least important for Mary?
Power
Achievement
Affiliation
Fulfillment
Contentment

Question 30
Overall, evidence supports that social responsibility
negatively affects a firm’s performance because it increases costs and reduces profits.
is unrelated to the performance of a business.
is good for a firm’s reputation, but has little effect on performance.
works well in theory, but is hard to implement in business.
is positively associated with return on investment, return on assets, and sales growth.

Question 31
Administrative spending for federal regulatory agencies, which is used as a measurement of regulatory costs, has
decreased because companies have been much more responsible at self-regulation, and less federal spending is needed.
remained relatively steady throughout the past couple of decades.
decreased in the past years as more of the burden of regulation is shifted to the state agencies.
increased steadily over the years as the world of business has continued to grow and become more complex.
increased in the past years because states have been ineffective with their regulations and the burden has shifted to federal agencies.

Question 32
Groups that are fundamental to a company’s operations and survival are collectively called
VIPs.
critical stakeholders.
shareholders.
top stakeholders.
primary stakeholders.

Question 33
Which of the following is not a recommended step for changing the ethical culture of an organization?
Avoid the use of informal systems to communicate expectations
Avoid the perception of hidden agendas
State your position, philosophy or belief
Implement communications and education strategies
Reinforce the policy through measurements and rewards

Question 34
In the “bad apple-bad barrel” analogy,
a code of conduct is not taken seriously as a key component of an ethics program.
the code of conduct is used to solve all ethical dilemmas faced in the workplace.
“bad apples” refer to an unethical corporate culture.
no one has the right to label some conduct as unethical.
“bad apples” are people who will always do things in their own self-interest regardless of organizational standards of conduct.

Question 35
Environmental regulations for social reasons have been necessary because of which of the following reasons?
Companies have felt pressured to “voluntarily” pay for environmental protection acts because they are afraid of the impact on their businesses if they are not viewed as environmentally responsible organizations.
Most companies eagerly pay for the costs involved with protecting their environment because they realize their future is closely linked with the future of the environment.
Consumers have willingly footed the bill for the costs of protecting the environment through paying higher prices for products and services.
Social reasons have led to regulations such as environmental protection and preservation because, although most companies voluntarily take on these responsibilities, a few companies have shirked their share of the responsibility.
Social reasons have led to regulations such as environmental protection since most companies are unwilling to pay for these costs voluntarily.

Question 36
Self-regulation is an effort to
enhance governmental authority in overseeing business practice.
train executives in ethics and leadership so they are more skilled in the workplace.
decrease the role and status of the Better Business Bureau and similar organizations.
demonstrate social responsibility and preclude further governmental regulation.
develop industry standards for pricing.

Question 37
When fundamental expectations about social responsibility are not met by publicly-traded companies,
the government is most likely to pursue a self-regulatory approach with these firms.
stock markets perform better.
there is no effect on investors, customers, employees and business partners.
there is little that any stakeholder can do to remedy the situation.
the confidence that investors have in corporations, mutual fund managers, market analysts, and others will be severely tested.

Question 38
In which of Kohlberg’s stages of moral development does an individual emphasize others over himself or herself?
Stage of punishment and obedience
Stage of individual instrumental purpose and exchange
Stage of mutual interpersonal expectation, relationships, and conformity
Stage of prior rights, social contract, or utility
Stage of social justice and conscience maintenance

Question 39
A study of 330,000 employees found that ethical lapses in the workplace are most often caused by problems _______, rather than individual unethical behavior.
with bonus and commission structures
associated with quality and safety regulations
in the corporate culture, including corporate beliefs and value systems
with personal moral values
in finance and accounting

Question 40
Toll-free hotlines that companies set up to give employees a place to report misconduct are associated with which aspect of ethics programs?
Communicating standards and procedures via ethics training programs
Consistently enforcing standards, codes, and punishments
Establishing systems to monitor and enforce ethical standards
Continuously improving the program
Establishing codes of conduct that are reasonably capable of detecting and preventing misconduct

Question 41
_____ expose an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies.
Private investigators
Secret shoppers
Malcontents
Fraud-finders
Whistleblowers

Question 42
Under the social responsibility philosophy, which of the following best describes what the government’s role in corporate governance should be?
Governments have influence on neither corporate governance nor the overall success of corporations on a global level.
Governments should take a hands-off approach to regulating corporate governance and let the corporations take care of it.
Governments should dictate how businesses run their corporate governance systems to ensure equality and fair competition.
Governments should wait until after a crisis, such as the Asian economic crisis, before intervening with corporate governance procedures.
Governments need to be actively engaged in affording both protection and accountability for corporate power and decisions.

Question 43
One of the most effective methods of ethics training is
getting employees involved in resolving ethical dilemmas that relate to actual situations in the workplace.
discussing cognitive moral development.
providing a video of the ethics officer.
providing a CD-ROM of material for employees to view on their own.
testing employees on the code of conduct.

Question 44
Which act is the principal tool employed by the federal government to prevent businesses from restraining trade and monopolizing markets?
Anti-Monopoly Act
Federal Trade Commission Act
Sherman Antitrust Act
Roosevelt Antitrust Act
Clayton Antitrust Act

Question 45
How could regulation on businesses result in a “hidden tax” to consumers?
Consumers may be required to pay large fees to have their garbage carried off to a landfill.
States could raise their sales taxes to compensate for higher regulatory costs.
Businesses could pass regulatory costs on to their consumers in the form of higher prices.
Purchasing in larger quantities may actually become more expensive per unit than smaller purchases.
Consumers may have to pay for recycling products that have been used or disposed.

Question 46
Which of the following is not one of the components of the reputation management process?
Impression
Organizational identity
Reputation
Performance
Image

Question 47
The Reactive-Defensive-Accommodative-Proactive Scale is best described by which of the following?
A scale that is used to rate a company’s overall efforts at developing and maintaining good relationships with its employees and suppliers
A method for assessing a company’s strategy and performance with one particular stakeholder
Another name for a social responsibility audit
A scale that determines the motivations businesses have for implementing social responsibility programs
A technique for firms to use in developing public relations strategies

Question 48
Which of the following is least likely to be a use of internal controls in an organization?
Safeguarding corporate assets and resources
Protecting the reliability of organizational information
Measuring the effects of advertising on sales
Allowing comparisons between actual and planned performance
Ensuring compliance with laws

Question 49
About how many consumers said they would be likely to switch to brands associated with a good cause, if price and quality were equal?
Less than 5 percent
20 percent
40 percent
50 percent
80 percent

Question 50
In the long run, the success of a company is built on
a company’s ability to negotiate with suppliers and vendors.
long-term relationships with customers built on mutual respect and cooperation that leads to repeat purchasing.
innovative integrated marketing communications programs.
a company’s commitment to be on the leading edge of technology.
its efficiency in operations.