Upgrade to remove ads
Only ₩37,125/year
-
Flashcards
-
Learn
-
Test
-
Match
-
Flashcards
-
Learn
-
Test
-
Match
Terms in this set (51)
Which of the following have been found to be ethical norms in business? (may choose multiple)
Self Interest
Reciprocity
Honesty
Fairness
Deception
Reciprocity, Honesty, Fairness
Corporate governance addresses the __________ problem, which underscores the risk of delegating responsibility and control to individuals who may not have the firm's best interest in mind.
SEC financial
corporate social responsibility
related diversification
principal-agent
principal-agent
Economist Michael Porter and many others argue that the value of public stock companies is too narrowly defined in terms of _________, leading to scandals and economic crises.
environmental protection
social initiatives
sales volume
financial performance
financial performance
The ________ and __________ commission is a federal regulatory agency whose task it is to oversee stock trading and enforce federal securities laws.
securities , exchange
The mechanism used to guide a company toward meeting its strategic goals within the bounds of the law is known as
stakeholder impact analysis
corporate governance
corporate social responsibility
strategic intent
corporate governance
In general, women and minorities
a) hold many top level management positions in Fortune 500 companies.
b) make up about 45% of directors on corporate boards.
c) are forbidden from
serving on corporate boards in the United States.
d) are underrepresented on corporate boards.
d) are underrepresented on corporate boards.
Optics Incorporated, a publicly-traded eyewear business, places profits ahead of all other performance metrics. This practice (may choose multiple)
a) fails to take into account the idea of corporate social responsibility.
b) is a good example of corporate social
responsibility.
c) benefits all of society, not just shareholders.
d) conforms to the traditional notion of shareholder capitalism
a) fails to take into account the idea of corporate social responsibility.
d) conforms to the traditional notion of shareholder capitalism
In a ________________ , a single investor or group of investors buys, with the help of borrowed money, the outstanding shares of a publicly traded company in order to take it private.
leveraged buyout
According to agency theory, conflict such as the principal-agent problem are considered __________ issues.
moral
social
legal
ethical
legal
In regard to the public stock company, limited liability means that
a) the company does not have any
responsibility to earn a profit on invested capital.
b) employees are free to pursue any initiative that interests them.
c) investors are not responsible for any debts incurred by the company, and are only at risk of losing the invested capital.
d) the business cannot be held legally responsible for any damage or injury caused to customers, the environment, or society at large.
c) investors are not responsible for any debts incurred by the company, and are only at risk of losing the invested capital.
The shared value creation framework encourages managers to focus on both ___________ and __________ needs.
(choose multiple)
social
spiritual
economic
emotional
social , economic
Which of the following statements is correct in regarding the interests of principals and agents?
(may
choose multiple)
a) Principals want to maximize corporate social responsibility initiates.
b) Principals want to maximize agents' total compensation including benefits, status, and power.
c) Agents want to maximize oversight in federal regulations.
d) Agents may be more interested in personal goals, such as maximizing their compensation or gaining power.
e) Principals want to maximize shareholder returns.
d) Agents may be more interested in
personal goals, such as maximizing their compensation or gaining power.
e) Principals want to maximize shareholder returns.
The shared value creation framework is a tool intended to help businesses
secure capital investments.
benefit all stakeholders, not just shareholders.
identify probable opportunities.
increase shareholder profits.
benefit all stakeholders, not just shareholders.
When facing an ethical dilemma, a manager can
a) determine whether he or she could comfortably defend the action to the public.
b) keep his or her actions hidden under the cover of inside information.
c) consult local laws and municipal codes.
d) consider whether the action in question conforms to the firm's code of conduct and industry practices.
a) determine whether he or she could
comfortably defend the action to the public.
d) consider whether the action in question conforms to the firm's code of conduct and industry practices.
The idea that a corporation is simply a collection of legal contracts is known as
the principal-agent problem.
agency theory.
information asymmetry.
the matrix principal.
agency theory.
The ideas of corporate social responsibility and stakeholder strategy are particularly prevalent in
Europe.
South America.
Asia.
Africa.
Europe.
A fiduciary responsibility is
a) a legal duty to act in another party's interests.
b) a set of incentives designed to improve employee performance.
c) a mandate to act in one's own self interest.
d) an at-will employment contract
a) a legal duty to act in another party's interests.
To achieve board independence, experts in corporate governance recommend that _________
more than 1 third of the board is female.
40% of the board members should be citizens of other countries.
members do not talk to each other.
less than one third of the board is made up of insiders.
less than one third of the board is made up of insiders.
Corporate governance is a system of
legal and ethical issues.
inputs and outputs.
checks and balances.
related and unrelated diversification.
Checks and balances
What are the two significant issues regarding the CEO pay debate?
a) the relationship between firm performance and CEO pay
b) The legal and political ramifications of CEO
pay
c) The history of CEO pay in the manufacturing industry
d) the size of the CEO compensation in relation to average employee pay
a) the relationship between firm performance and CEO pay
d) the size of the CEO compensation in relation to average employee pay
Following the rise of institutional investors, the use of poison pills to avoid hostile takeover has
grown steadily.
become
rare.
become mandatory.
been eliminated entirely.
become rare.
Narrowly defining public stock companies in terms of financial performance can lead to
more accurate accounting.
black swan events.
more efficient production.
improved public relations.
black swan events
In order to reconcile economic and social needs, managers should focus on
a) making products affordable for the poorest socioeconomic groups in order to improve standards of living
b) creating new regional clusters and business centers.
c) re-establishing the firm as a non-profit with a focus on social equity.
d) expanding value chains to include NGOs and other organizations committed to social goals.
e) understanding the supplier-buyer relationship
a) making products
affordable for the poorest socioeconomic groups in order to improve standards of living
b) creating new regional clusters and business centers.
d) expanding value chains to include NGOs and other organizations committed to social goals.
Which of the following are examples of moral hazard (select 3)?
a) A company dumping pollution into a local lake that must be cleaned using taxpayer money.
b) A processed food manufacturer distributing
frozen vegetables tainted with E Coli.
c) Banks making very risky loans with knowledge that the government will bail them out if necessary.
d) A copywriter secretly working on her novel at work.
a) A company dumping pollution into a local lake that must be cleaned using taxpayer money.
c) Banks making very risky loans with knowledge that the government will bail them out if necessary.
d) A copywriter secretly working on her novel at
work.
Financial statements by public companies must
(may choose multiple)
divulge insider information.
be audited by certified public accountants.
adhere to GAAP
meet shareholder expectations
be audited by certified public accountants.
adhere to GAAP
What are the four characteristics of a public stock company that make it an attractive corporate form?
a) limited liability for investors
b) definition of corporate governance processes
c) funded mostly by friends, family, and fools
d) transferability of investor interests
e) private ownership
f) legal personality
g) separation of ownership and control
a) limited liability for investors
d) transferability of investor interests
f) legal personality
g) separation of ownership and control
Social consequences of business activities, including pollution, energy loss, and dangerous accidents, are known as
internal costs.
externalities.
output incidences.
overruns.
externalities
A job seeker claiming to have extensive computer programming experience when their knowledge of the subject is minimal would be an example of
intuitive recruitment
moral
hazard
native digitalization
adverse selection
adverse selection
An executive can legally earn a significant profit from stock options if
he or she commits to purchasing the maximum amount of shares allowed
he or she engages in insider trading
the firm falls victim to a hostile takeover
the firm performs well and the actual price per share exceeds the negotiated strike price
the firm performs well and the actual price per share exceeds the negotiated strike price
If a company is poorly managed, its stock price may fall low enough for the firm to become a target for a ________ takeover.
hostile
The primary purpose of the board of directors is
to ensure that individual work tasks are completed
time.
managerial diversification
to offset information asymmetry
general strategic oversight and guidance
general strategic oversight and guidance
When agents are better informed that principals, a phenomenon known as ____________, the principal-agent problem may be exacerbated.
unbalanced knowledge
the seesaw effect
information overload
information asymmetry
information asymmetry
By taking a __________ position in Abacus, Mr. Paulson made more than $1 Billion in profits while his clients suffered huge losses.
left
short
right
long
short
Adverse selection is particularly a problem in
privately-owned businesses.
situations where one employee is responsible for an entire
project.
independent contracting roles
team-based environments
team-based environments
The primary difference between outside and inside members of the board of directors is
a) outside directors manage employees outside of the US, whereas inside directors handle US-based operations only.
b) outside directors are management employees specialized in more than one industry.
c) outside directors
are not employees of the firms, whereas inside directors are.
d) inside directors have a fiduciary duty to act in the interest of shareholders, whereas outside directors are not
c) outside directors are not employees of the firms, whereas inside directors are.
Employees that work in organizations that emphasize ethical behavior
are more likely to engage in moral hazard
are less likely to act
ethically
are no more or less likely to act ethically
are more likely to act ethically
are more likely to act ethically
Under agency theory, a manager should seek to align ________ between principals and agents to minimize opportunism.
disciplinary actions
work schedules
incentives
decision-making power
incentives
In line with stakeholder theory, which of the following strategic actions would NOT, according to Michael Porter, connect economic and societal needs?
Offer financial support to local politicians.
Focus on creating regional clusters.
Include non-traditional partners into the value chain such as NGOs
Expand the customer base to bring in non-customers such as those at the bottom of the pyramid
Offer financial support to local politicians.
Incentives that are too high-powered, such as an outsized bonus may cause ___________
individuals to use information symmetries to their own benefit.
individuals to have lower job stress and higher job performance.
individuals to get distracted from strategic activities which may negatively impact job performance.
individuals to recognize that law and ethics are not synonymous.
individuals to get distracted from strategic activities which may negatively impact job performance.
The interests of inside directors typically align with those of
senior management
low-level employees
society as a whole
shareholders
senior management
According to agency theory, which of the following managerial functions can be used to avoid adverse selection and moral hazard? (can choose multiple)
organization
control
leadership
discipline
organization , control
Managers who act upon secret company information for personal gain, such as by trading stocks based on the knowledge of future initiatives, are guilty of
wore fraud
predatory lending
insider trading
usury
...
The code of professional conduct based on societal norms and expectations is known as
societal reconciliation
corporate social responsibility
stakeholder impact analysis
business ethics
business ethics
In comparison to other countries, the United States ranks _______ in terms of its acceptance of shareholder capitalism.
toward the top
near the middle
toward the
bottom
dead last
near the middle
The right to buy a company's stock at a predetermined price sometime in the future is know as a(n)
stock option
lateral compensation
outside stock opportunity
executive negotiated price
stock option
Additional functions of a board of directors beyond general strategic oversight include
conducting background checks on all potential employees.
ensuring that the firm's accounting practices and reports are accurate.
day-to-day operational management.
selecting, evaluating, and compensating the CEO.
assessing and mitigating risk.
ensuring that the firm's accounting practices and reports are accurate.
selecting, evaluating, and compensating the CEO.
assessing and mitigating risk.
In 2014, 25% of GE's Board were women. Compared to other Fortune 500 companies, the Board of Directors at GE is ____________ in gender.
very small.
fairly diverse.
boring.
too homogeneous.
fairly diverse
A situation in which one party has an incentive to shirk their responsibility because the costs will fall to the other party is known as
moral hazard.
unbalanced
burden
a debt pendulum
adverse selection
moral hazard
A board of directors is elected to represent the interests of
society as a whole
company founders
low-level employees
shareholders
shareholders
The idea of corporate social responsibility (CSR) suggest that a firm's obligations should
always be
focused on increasing the price of the firm's shares by selling higher volume.
exceed the traditional imperative to increase profits.
never include any other performance indicator other than increasing profits.
not to extend ethical and philanthropic expectations.
exceed the traditional imperative to increase profits.
The relationship between CEO pay and job performance has been shown to be
very
strong
moderare
somewhat strong
weak
weak
Sets with similar termsChapter 12 Strategic Management
32 terms
kt11235
Chapter 12
110 terms
jocelyn_cooksey21
MGMT CH12
75 terms
bearaccounting
All
133 terms
Cara_Grazewski
Sets found in the same folderChapter 11.1/11.2 LearnSmart
29 terms
chllhul
Chapter 12.1-12.3 LearnSmart
30 terms
chllhul
MGT 400 Chapter 5
63 terms
summer_smith60
MAN4720 ch 9
52 terms
rcruzr418
Other Quizlet setsGeneral Training Principles and Program Modificati…
10 terms
Miller4u
01 Neandertals and Homo sapiens I
22 terms
mortiepm
The Minister's Black Veil and Nathaniel Hawthorne…
23 terms
julianamoore12
Related questionsQUESTION
As a further consideration, auditors should provide audit services only when the preconditions for an audit are present. These preconditions include:
2 answers
QUESTION
T/F: According to purchasing agents, one of the most common problems they encounter is that salespeople are inadequately trained.
2 answers
QUESTION
Which of following industries is most likely to have low equipment utilization?
2 answers
QUESTION
According to communications assistance for law enforcement act(1994), the telecommunication equipment should designed in a way that authorized government agents CAN NOT intercept wired and wireless communications.
4 answers