BUS 101 Exam 1 – Elliott – Flashcards
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In the us, economy, _____ are considered the reward for the risk of entering business. A. revenues B. profits C. sales D. generated income amounts
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B. profits
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The factors of production in an economic system are: A. land, rent, capital, human resources B. captial, perserverance, human resources, natural resources C. rent, wages, interest, profit D. natural resources, human resources, capital
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D. natural resources, human resources, capital
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If it is not illegal, it MUST also be ethical A. true B. False
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B. False
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Outsourcing refers to: A. Relocating business processes and production to lower-cost locations overseas B. Using outside vendors to produce goods or fulfill services that were previously done in house C. Purchasing goods and service from firms overseas D. Moving production facilities to places near your home base of operations
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B. Using outside vendors to produce goods or fulfill services that were previously done in house
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Tanisha is a diabetes educator at a local clinic. Recently she was offered a lavish trip by a sales rep that has been pushing the clinic to use his company's diabetes supplies. Tanisha declined the gift. Which ethical challenge did she face? A. Whistle Blowing B. Honesty and Integrity C. Cultural Consequences D. Conflict of Interest
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D. Conflict of Interest
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Your supervisor asks you to conceal information from outside auditors examining the company's financial records. What is your ethical challenge? A. Loyalty versus truth B. Conflict of interest C. Honesty and integrity D. You have none.
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A. Loyalty versus truth
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The first step when facing an ethical problem is to ask: A. "Is it ethical?" B. "Is it legal?" C. "Is it fair?" D. "Has it been done before?"
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B. Is it Legal?
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Business have a responsibility to ______which includes: the right to be safe, the right to be informed, the right to choose, and the right to be heard. A. The general public B. Their employees C. Their customers D. Their stockholders E. Their suppliers
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C. Their Customers
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Regulations on financial reporting for business generally come from A. The Federal Bureau of Statistics B. The Securities and Exchange Commission C. Occupational Safety and Health Organization D. The International Trade Association E. The U.S. Department of Labor
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B. The Securities and Exchange Commission (SEC)
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10) Success Management, an advertising company, currently prepares advertising layouts and campaign slogans for Burger King. Recently, they have been approached by McDonalds to help build a new marketing strategy for that firm as well. The management of Success refused the offer because: A. They value their honesty and integrity B. They wanted to remain loyal to Burger King C. They did want to get involved in whistle-blowing D. They saw a conflict of interest
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D. They saw a conflict of interest
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When a firm donates supplies to a not-for-profit organization or contributes to cultural organizations, this is referred to as A. Corporate philosophy B. Corporate philanthropy C. Corporate social requirements D. Ethical leadership
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B. Corporate Philanthropy
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Serena's boss tells her in confidence that Julie will be laid off when the company announces a round of job cuts next week. Afterward, Julie asks Serena if there is any truth to the rumor of impending job cuts and if she knows anything about her status. What is Serena's ethical challenge? A. conflict of interest B. loyalty versus truth C. honesty versus integrity D. She is being asked to be a whistle blower. E. Serena faces no ethical challenge.
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C. Honesty versus Integrity
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Which of the following is an ethical issue dealing with a company and its direct relations with investors and the financial community? A. questionable accounting practices B. being insensitive to cultural differences among employees C. forcing older workers to retire D. paying women less than men E. polluting the local water source
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A. Questionable Accounting Practices
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Under tort law, product liability is an area where: A. damages can never be awarded to an injured party. B. businesses can be held liable for their negligence involving their products. C. businesses hold customers liable for purchasing competitors products. D. only damage to property, not persons, can be claimed.
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B. businesses can be held liable for their negligence involving their products
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The remedy for a tort is: A. imprisonment. B. a breach of contract. C. bankruptcy. D. monetary compensation.
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D. Monetary compensation
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Chicago's mayor has just signed legislation requiring fire sprinklers in every public school. This is an example of: A. common law. B. statutory law. C. administrative law. D. agency law.
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B. statutory law
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When each party to a contract provides something of value to the other party, the principle of competence has been satisfied. A. True B. False
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B. False
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Which of the following represents a statement from a "Confused Fact-Finder"? A. After analysis, we need to consider a novel approach to our supply chain problem B. We need more time to analyze our current supply chain system, and see what other companies like ours are doing. C. They taught us in Business School that this model of supply chain management is correct. D. After analysis of our current situation and looking to the various accepted supply chain models, we should choose option 1
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C. They taught us in business school that this model of supply chain management is correct.
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The type of law that recognizes the inherent duties in the world of commerce and provides a way to correct problems? A. Fiduciary Relationships B. Statutory Laws C. Concurrent Resolution Laws D. Contract Laws E. Tort Laws
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E. Tort laws
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When a business decision maker deals with Suppliers they are mostly governed by this type of law. A. Fiduciary Relationships B. Statutory Laws C. Concurrent Resolution Laws D. Contract Laws E. Tort Laws
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D. Contract Law
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If Mary agrees to give Tom her used textbook at the end of the semester they have a contract? A. True B. False
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B. False
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Miguel Hernandez and his 5 year old daughter Amelia were shopping in Wal-Mart one day. Amelia was too big to fit in the baby seat, so crawled under the shopping cart to ride on the undercarriage. An employee rounded a corner too fast and banged into Miguel's cart. Amelia's hand got caught in the wheel was injured requiring stitches. This type of case is most likely to fall under: A. Tort Law B. Contract law C. Common law D. Consumer Protection Law
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A. Tort law
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Which of the following does NOT represent a principal/fiduciary relationship? A. shareholder/board of directors B. corporation/corporate officers C. investor/portfolio manager D. employee/employer E. client/accountant
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D. employee/employer
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A fiduciary must abide by each of the following obligations EXCEPT __________. A. loyalty B. notification C. reasonable care D. accounting E. reimbursement
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E. reimbursement
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The business decision maker has a fiduciary responsibility to society. A. True B. False
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B. False
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Which of the following statements is accurate? A. Stockholders are the same thing as stakeholders. B. All stakeholders are stockholders. C. Stakeholders are a type of stockholders. D. Every stockholder is a stakeholder.
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D. Every stockholder is a stakeholder
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The view of the firm that recognizes suppliers, customers, employees, and owners as stakeholders is the A. production view. B. managerial view. C. ownership view. D. entrepreneurial view.
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B. Managerial view
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Which group is a stakeholder group we consider? A. Community B. Suppliers C. Owners D. All of the above E. None of these
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D. All of the above
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Not all stakeholder groups have a stake in each business decision. A. True B. False
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A. True
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In the Nike Case, Nike's Business practices were illegal. A. True B. False
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B. False
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Most political speech is considered to be on what critical thinking level A. Confused fact finder B. Biased jumper C. Perpetual analyzer D. Strategic revisionary
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B. Biased Jumper
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A strategic revsioner: A. Is able to pick a plan from many B. Is able understand that the plan may need to be changed C. Understand the value of analysis D. All of the above E. None of the above
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D. All of the above
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A perpetual analyzer: A. Is able to pick a plan from many B. Is able understand that the plan may need to be changed C. Understand the value of analysis D. All of the above E. None of the above
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C. Understand the value of analysis
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Which of the following is NOT a stakeholder group A. Customers B. Government C. Management D. A and B E. B and C
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D. A and B
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The economic responsibility that firms owe to their stockholders refers to A. Finding and managing sources of supply B. Maximizing profit C. Keeping customers happy D. Being socially responsible in the community E. Managing and paying debts on time
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B. Maximizing Profit
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The main reason that the production view of the firm evolved into the managerial view of the firm was A. Social pressure of civic groups and social advocates B. Increasing wealth of the business C. A separation of ownership from control D. An increase in global competition
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C. A separation of ownership from control
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Critical Thinking requires A. Deep analysis of the an issue B. Looking at consequences, assumptions and implications of a problem C. Recognizing multiple perspectives of an issue D. Both A and B E. All are true.
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E. All are true
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"It is possible that we will be out of oil in 20 years, but we should do more research before we make any policy decision," A. This is an example of a Confused Fact-finder. B. This is an example of a Biased Jumper C. This is an example of a Perpetual Analyzer D. This is an example of a Strategic Revisioner
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C. Perpetual Analyzer
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Which of the following describes the synthesis approach to stakeholder management? A. The firm is managed to benefit a wide group of stakeholders, with fiduciary responsibility to all. B. Shareholders are the primary group for whom the firm is managed. C. All stakeholder groups are equal in importance. D. The firm recognizes the importance of a wide variety of stakeholders, but has fiduciary responsibility only to shareholders. E. Managers see stakeholders as instruments that must be managed for the benefit of the firm's owners.
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D. The firm recognizes the importance of a wide variety of stakeholders, but has fiduciary responsibility only to shareholders.
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Which of the following is an example of outsourcing? A. Sending a business process to another firm in another country. B. Buying an input in production from a supplier when you used to make it in the business C. Hiring a firm to clean up your offices at night. D. All of the above E. None of the above
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C. Hiring a firm to clean up your offices at night
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In the Nike Case which we discussed in class the AFL-CIO represented which group of stakeholders? A. Employees as it was backed by unions B. Customers because college students buy Nike products C. Community because the group had an interest in Nikes practices D. All of the above E. None of the above
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C. Community because the group had an interest in Nike practices
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Stakeholder theory is universally accepted as the model for business decision-making. A. True because it takes into account the positions of all those affected by a decision. B. True because that is how government demands that decisions be justified to owners. C. False because government demands that owners interests be considered above all. D. False because there are a number of competing decision-making frameworks.
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D. False because there are a number of competing decision-making frameworks.
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Customers as a group: A. Are always the most important stakeholders because without customers there is no business. B. Need not be considered in most cases because as stakeholders they are protected by statutory law. C. Has a moral stake in the operation of the business making it a stakeholder D. Has an interest in many of the business decisions that are made making it a stakeholder.
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D. Has an interest in many of the business decisions that are made making it a stakeholder.
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Which of the following is an example of the principle of Work-at-will? A. Individuals cannot be given long term employment contracts B. Being fired only for just cause. C. Given equal access to a job despite possible physical or mental challenges. D. All of the above E. None of the above
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E. None of the above
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Read the following to answer questions 46-48
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Andy attends college on a full-time basis and works part-time for Meredith's Garden Center. The owner, Jim Meredith, asked Andy to work late into the night to move merchandise from one warehouse to an empty warehouse located across town. Andy thought his assignment was unusual but was happy to get the extra hours of work. The next day, Andy overheard the company's auditors discussing their visit to the warehouse where he had moved the merchandise. Apparently, Mr. Meredith was attempting to fool the auditors. They had counted the merchandise on the previous day. On the following day, they had counted the same merchandise a second time but at a different warehouse. Meredith was attempting to acquire a bank loan and wanted to impress the loan officer with a strong financial report. Andy knew Meredith would mislead the auditors and banker but did not know what to do.
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The on the job ethical dilemma that Andy faces can best be described as an issue involving: A. conflict of interest B. loyalty versus truth C. breach of contract D. restraint of trade
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B. Loyalty vs. Truth
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In deciding what action, if any, he should take, it would be proper for Andy to: A. consider Meredith as a primary stakeholder because of his ownership claim. B. not consider the banker as a stakeholder because no loan has been made yet. C. not consider the auditor as a stakeholder because his no stake in the event D. not consider himself as a stakeholder because he is doing what he was told to do.
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C. not consider the auditor as a stakeholder because his no stake in the event
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If Andy would tell the auditors that he moved the merchandise, in the context of business ethics, Andy would: A. be known as a liar. B. be known as a whistle-blower. C. have committed a tort. D. have failed in his fiduciary duty to the banker.
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B. be known as a whistle-blower
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Read the following to answer questions 50-52
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Under the headline, "How Barbie Is Making Business a Little Better," USA Today reported on how the Mattel toy company, maker of the famous Barbie doll, has undertaken a series of initiatives to improve conditions in overseas factories. Mattel is one of the world's leading toy companies, with such well-known brands as Hot Wheels, Fisher-Price, and Matchbox. In the late 1990s, Mattel first began monitoring practices in other company's manufacturing facilities that produce their products. The company temporarily brought in academic and nonprofit organizations from outside the company to audit and investigate operations in Mexico, China, Indonesia, Malaysia, Thailand, and the Central African Republic. The auditors examined the working conditions, on-site medical facilities, worker training, wages, and overtime hours. If a particular company did not meet Mattel's standards, it was dropped. For example, the company ended its contract with a sewing factory in Mexico where audits revealed the presence of underage workers, forced overtime, and noxious chemical fumes, after factory owners missed a deadline to fix the problems. "We call it zero tolerance," said Mattel's senior vice president of operations.
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Which of the following is not a stakeholder group in this case A. Government B. Owners C. Employees D. suppliers
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A. Government
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What is the major perspective of the owners A. Economic B. Legal C. Ethical D. All of these E. None of these
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E. None of these
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In this case Mattel is: A. Outsourcing its production B. Offshoring its production C. All of these D. None of these
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C. All of these
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What are the stages of development for critical thinking?
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1.Confused Fact Finder 2. Biased Jumper 3. Perpetual analyzer 4. Pragmatic Performer 5. Strategic Revisioner
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· Looks for one answer even to open ended problems · Provides illogical/contradictory arguments · Unable to read carefully
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Confused Fact Finder (50% of freshman)
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· Jumps to conclusions · Stacks up evidence for own position (ignores contradictory)
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Biased Jumper (Most college Seniors)
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· Attempts to control own biases · Identifies multiple perspectives logically · Organizes info meaningfully
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Perpetual Analyzer
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· Consciously prioritizes issues · Well founded support for one solution
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Pragmatic Performer
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· Interprets & re-interprets bodies of info over time · Prioritizes and addresses boundaries effectively · Strategic, long-term vision · Randomly considers possible ways to generate new information
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Strategic Revisioner
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3 Major perspectives
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Legal - legal law protects employees from being fired based on gender Ethical - it many not be illegal bit is it morally right? Economical - ways of making money
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5 basic stakeholder groups
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Owners Employees Customers Suppliers Community
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3 main types of law
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Tort Law Contract Law Statutory & Regulatory Law
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Law of Legal precedent of court decisions, recognizes that there are duties in the world of commerce
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Tort Law
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Parties negotiating agreements through rules and guidelines of common law
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Contract Law
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The legislative branch of government (state and federal) creates administrative agencies to oversee certain aspects of commerce. These agencies pass regulations
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Statutory Law & Regulatory Law
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Example of which law? I sign a contract with my roommate saying that she will give me one drawer if I win a game of Mario-Kart. If she wins, I will give her one of my drawers.
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Contract Law
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Example of which law? Food and Drug Administration (FDA)
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Statutory & Regulatory Law
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Example of which law? The duty to keep a store clean from any danger to customers
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Tort Law
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If you are a lawyer representing a business which one of you is the Fiduciary and which is the agent? Justify your response.
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The Lawyer is the Fiduciary and the agent is the business. The lawyer is the Fiduciary because he is looking out for his client (the business') best interest.
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5 obligations that lawyer (fiduciary) follows
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5 obligations that lawyer (fiduciary) follows Loyalty Obedience Notification Accounting Reasonable care
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True, False, or Uncertain. If something is legal it is also ethical.
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False. Just because something is legal doesn't mean that it is morally right (ethical).
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Most political speech would be directed at which type of thinkers
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Biased Jumper
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Employment is at the will of the business. Any hiring is presumed to be "at will"; that is, the employer is free to discharge individuals "for good cause, or bad cause, or no cause at all," and the employee is equally free to quit, strike, or otherwise cease work..
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Work at Will Doctrine
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Role of government in stakeholder analysis
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Represent people/community Has right to make laws and reprimand a business Add retail space and lower taxes for new openings
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Why should society be considered a stakeholder?
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They can control a business - whether it is going to be profitable or not.
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Why should the environment be considered a stakeholder?
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They aren't. Have no money or say in the economic world
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Pursuing sustainability in business?
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Not failing. Producing income in bad situations
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Off-shoring vs. Outsourcing
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Outsourcing is the movement of an internal business processes to an external company. Basically the company (stakeholders) relies on another source, also known as suppliers, to make their products. Off shoring is a business process in which a company has their products shipped over from another country (usually 3rd world) where labor is cheaper.
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a person working within an organization who reports misconduct. They may be a current or past employee, and the misconduct may be ongoing at the time of the report or may have taken place in the past. In most cases, the misconduct reported by this person violates a law that threatens the public in one way or another, though any form of misconduct may be reported.
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Whistle-Blower
