GMU BUS 100 Midterm

When a company puts its commitment to social and environmental responsibility into practice worldwide, not only locally or regionally it is called:

Global Corporate Citizenship

Companies demonstrate global corporate citizenship by:

Both B and C, but not A. Finding business opportunities that serve society, and Integrating concern for both financial and social performance.

Proactive companies are:

Much less likely to be blindsided by crises and negative surprises.

Corporate power refers to:

The capability of corporations to influence government, the economy, and society, based on their organizational resources.

The issues management process is a:

Systematic process companies use when responding to public issues that are of greatest importance to the business.

Good corporate citizens:

All of the above:

Strive to conduct all business dealings in an ethical manner, Work to protect the environment, and Make a concerted effort to balance the needs of all stakeholders.

Corporations that run their operations according to the stakeholder theory of the firm create value by:

All of the above:

Increasing their stock price, Developing their employees' professional skills, and Innovating new products.

What kind of power might a local community use to influence a company's decisions?

All of the above:

Publicizing an issue, Challenging whether a business activity should continue to operate, and Lobbying government policy makers for regulations.

Which statement is not correct about the business-society interdependence?

Actions by governments rarely affect business.

Which of the following statements is not true about the interactive social system?

The boundary between business and society is clear and distinct.

Customers can exercise economic stakeholder power by:

Boycotting products if they believe the goods are too expensive.

Contemporary issue management:

Is an interactive, forward thinking process.

Over time, the nature of business's relationship with its stakeholders often:

Evolves through a series of stages.

Stakeholder engagement is:

The process of ongoing relationship building between a business and its stakeholders.

Which of the following examples does not show a company guided by enlightened self-interest?

A company breaking past records by maximizing quarterly profits.

The "agency problem" arises when:

Managers act in their own interest, rather than in the interest of shareholders.

Which of the following arguments supports the concept of high executive compensation?

High salaries provide an incentive for innovation and risk-taking.

Investors may receive an economic benefit from the ownership of stock by receiving:

All of the above:

Interest, Dividends, and Capital Gains.

Which of the following statements is not true about shareholders?

They own equal shares of company assets.

Social investors seek to eliminate from their investment portfolios companies that:

All of the above:

Make dangerous products like tobacco or weapons, Pollute the environment, and Discriminate against employees.

Which of the following is not an instance of "insider trading"?

A marketing executive briefing stock analysts on the company's sales performance.

The mission of the Securities and Exchange Commission (SEC) is to:

Protect shareholders' rights by making sure that stock markets are run fairly.

Which of the following is not a legal right of shareholders?

To vote on who will become chief executive officer (CEO).

The board committee that administers and approves salaries and benefits of high-level managers in a company is called the:

Compensation committee.

How are directors (members of corporate boards) selected?

Shareholders elect the directors from a list of candidates.

All of the following values are present in most ethical decisions except:

Be cruel.

(Act responsibly. Be fair and just. Be honest.)

Cross-cultural contradictions arise due to:

Differences between home and host countries' ethical standards.

Which of the following examples best illustrate an ethics issue based on cross-cultural contradictions?

Legally marketing a pesticide abroad that has been banned in the U.S.

When attempting to build ethical safeguards into the company, businesses can take the following specific approaches:

Compliance and Integrity

Integrity-based ethics programs:

Combines concern for the law with an emphasis on employee responsibility.

The core components upon which a company's ethical performance depends include:

All of the above:

The personal character of the managers and employees, The values and virtues of the managers, and The traditions, attitudes, and business practices built into a company's culture.

Under the Sarbanes-Oxley Act, corporations are required to:

Have executives vouch for the accuracy of a firm's financial reports.

The main drawback to utilitarian reasoning is that:

It is difficult to accurately measure both costs and benefits.

Most ethics or compliance officers are generally entrusted to:

Reduce the risks to the company of employee misconduct.

By law, the financial records of publicly held companies are required to be:

Audited by a certified professional accounting firm.

Cooperation between business and government often occurs when:

They encounter a common problem or enemy

To influence government policymakers' actions, an information strategy involves:

Business leaders speaking before government policymakers.

The information strategy tool most used by business is:

Lobbying.

Deregulation is often:

A politically popular idea.

When a government orders companies not to conduct business in another country because of a war, human rights violations, or lack of a legitimate government; these orders are called:

Economic Sanctions.

Dark money refers to:

Undisclosed contributions to tax-exempt organizations.

Which of the following is not a constituency-building strategy tool?

Expert witness testimony.

Businesses promote an information strategy by inviting government leaders to:

All of the above:

Attend company award ceremonies, Give speeches to employees, and Visit local plant facilities.

When the market fails to adjust for the full costs of a firm's behavior, this is called

Market failure.

Past decisions of the courts, the original basis for the U.S. legal system, are called

Common laws.