Exam 1 Review – Flashcards
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When referring to risk, which of the following statements is reasonable?
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Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities.
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Profits equal ____.
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the funds available for business growth, after expenses and salaries are paid.
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Which of the following circumstances is most likely to reduce one's standard of living?
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an increase in the cost of some goods such as escalating gasoline prices
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When developing and maintaining good stakeholder relationships, companies find that _____.
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most often, they must balance the needs of the stakeholders with the need to make profits
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As a ______, judy started a non-profit business called Music and Memories. She recognized that music, socialization and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time.
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social entrepreneur
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Efficiency means ______.
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producing items using the least amount of resources
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Blake wanted to offer high quality basics in his restaurant. His motto was "the best darn meat and potatoes for miles around." The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake's motto stated the business's competitive advantage, your accurate advice to Blake would be _______.
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The winning competitive advantage is one that addresses quality and service
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At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.
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using technology to stay responsive to customer needs
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Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two dogs. The goats provide milk, cheese, yogurt, and even fiber that is woven into yarn; the chickens provide free-range eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs, their home lifestyle represents _______.
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a growing trend in the social environment to have more control of the food they eat and where it comes from
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In the technological business environment the opportunity would be the internet, the challenge would be_______, whereas in the global business environment the opportunity would be ______ and the challenge would be war and terrorism.
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Identity theft and green living
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Since the mid-1980s, the __________ sector has generated the most amount of increases in employment in the United States.
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service
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Today, high-paying service-sector jobs in the U.S. can be found in ___________________.
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entertainment
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Profits equal _______.
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the funds available for business growth, after expenses and salaries are paid
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Which of the following circumstances is most likely to reduce one's standard of living?
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A decrease in the cost of some goods such as a decrease in housing prices.
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Eduardo has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. Challenges in the _________________ environment increase the risk of Eduardo starting a business.
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economic and legal
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To encourage entrepreneurial growth, governments might _______.
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pass laws that enable businesspeople to write contracts that are enforceable in court
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When referring to risk, which of the following statements is reasonable?
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Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities.
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Efficiency means _______.
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producing items using the least amount of resources
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The way in which a utilized to produce goods and services; and, the way those goods and services are distributed among those who desire to have them depends upon ______________.
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The economic system under which the country operates
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The famous actor, Robert Redford created The Sundance Film Festival, where talented, young directors and producers can submit their films for review and possible showing. The festival attracts thousands of tourists each year, employs many others at various capacities, and provides important exposure to up and coming artists who may otherwise not be able to get their works noticed. Ultimately, the festival provides social and economic benefit for many. Adam Smith believed that one's self-directed gain would eventually create prosperity for many, and called the process, the ___________.
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invisible hand
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At a young age, Lita's coaches were confident she had the potential to be a world class swimmer. They encouraged her parents to do as much as they could to further develop her skills, because a future in Olympic swimming could set her for life, including promotional endorsements and coaching positions when her competitive days were over. After four years on an athletic scholarship and Olympic experience under her belt, she chose a different path. With her savings and personal connections, she rented a corner building in a bustling San Francisco neighborhood and pursued her dream: a surf shop business. After several successful years, Lita was certain that Adam Smith would smile because:
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he laid the foundation for her success: She had freedom of choice.
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Which of the following best describes a capitalistic nation?
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Most or all of the factors of production and distribution are privately owned and operated for a profit.
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In a free-market economic system, if consumers perceive the price for a state of the art cell phone is too high for the value received, they are likely to avoid buying it. In the same light:
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if the consumer's desired price is too low, producers may limit the amount produced.
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Ray's mom specifically asked for a CIP cast iron pan for her birthday. As Ray scanned the cast iron pans in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. In his business class, he learned about ______________, where many sellers may be offering very similar products. Through other means, each seller differentiates his product from the competition.
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monopolistic competition
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You studied for two hours each day, for an entire week before your first marketing exam. On exam day, when you turned-in the test, you felt confident that your effort paid-off. At the next class meeting, your instructor said she was considering curving the grades because the class average was lower than she had anticipated. All of a sudden, your 98% score did not have the same impact that it did when you first saw it! Now the guy next to you that got an 84% was likely to have an "A" grade too. As you analyze this situation, you realize that it parallels an economic system such as ________________, where even if you work harder than another person, you are likely to realize the same benefit.
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Socialism
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In order for the value of goods and services to be counted as part of a nation's gross domestic product:
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the goods and services must be produced within the physical boundaries of a particular nation.
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According to the BEA [Bureau of Economic Analysis], during the period between 2007 and 2010, real GDP decreased at an average annual rate of 0.3%. This news would lead you to conclude:
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productivity in the U.S. also decreased.
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The U.S. unemployment rate is an important, key economic indicator because most of us need jobs to maintain our standard of living. A criteria used to calculate the unemployment rate is:
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unemployed persons age 16 and over, who have been looking for work during the past four weeks.
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The CPI [consumer price index] measures ________________ and ________________.
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inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures.
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At Six City Wellness Center, Greg operates a new state-of-the-art MRI scanner that serves approximately 10 patients during his 8-hr. shift. Patients are scheduled for various lengths of time, depending on which part(s) of their body requires scanning. The image quality is significantly superior to what it was on previous scanners, but the number of patients served per day remains the same. This situation attests to the fact that:
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the service sector has seen improvement in quality of service, but productivity remains about the same.
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A few years ago, the American Society of Civil Engineers published a report card for America's interstates. It was reported that road repairs cost the American taxpayers $67 billion per year. Through the enactment of ___________ the U.S. government collects tax dollars and then spends some of these funds to maintain the infrastructure of the nation. Increasing taxes has the effect of drawing money away from the private sector.
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fiscal policy
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Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased. High demand has brought about shortages in some product categories. To help manage the situation in the short-term:
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the Fed will likely increase interest rates.
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The way in which a country's resources are utilized to produce goods and services; and, the way those goods and services are distributed among those who desire to have them depends upon ______________.
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The economic system under which the country operates
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In order for the value of goods and services to be counted as part of a nation's gross domestic product:
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the goods and services must be produced within the physical boundaries of a particular nation.
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The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________.
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The Theory of Comparative Advantage
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The nation of Andolvia exports $50 million worth of products and services and imports $44 million worth of products and services. Andolvia has a(n) _____________.
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trade surplus
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As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________.
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the cost of producing and marketing the product in a foreign market is significantly reduced
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_______________ is a cost effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. A domestic firm contracts with a foreign company to produce and private-label the goods, at a much cheaper price than the domestic firm could produce the same goods in its home market. The major cost differential is usually cheap labor.
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Contract manufacturing
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Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park business showed strong interest in buying land in Frollik, including beach front property, with the intent of building an entertainment park targeted toward families. The theme park company wants to make a commitment to Frollik, including the hiring of several hundred local employees. The global marketing strategy referred to in this scenario is ____________.
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foreign direct investment
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The strategic alliance between Coca Cola and Nestle has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a global marketing strategy, an important characteristic of a strategic alliance is _____________.
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participant companies do not share costs or profits
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Sovereign wealth funds (SWFs) are a fast growing form of foreign direct investment. The size of these funds and the fact that they are investments from the government coffers of other nations might be a cause for concern. More specifically, some fear __________.
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the governments who offer these funds may obtain sensitive technologies or gain control of strategic resources
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According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade.
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sociocultural
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Barkley wants to sell his bicycle horns to the Beijing and Shanghai markets, due to the high volume of bicycles as a common form of transportation in these two heavily populated cities. The exchange rate as of yesterday was $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?
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Not good. If the horn sold for $3.00, it would take 19.26 yuan to by it.
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During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry.
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import quotas
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Belonging to the EU (European Union) has its advantages for member nations. One advantage is ___________.
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European Union members have a common external tariff, but no internal tariff
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Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute.
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the WTO (World Trade Organization)
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______________ has dethroned Germany as the world's largest exporter.
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China
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Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.
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lack of technical talent to produce products
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Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.
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questionable safety and quality issues with finished products
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We refer to the BRIC nations as four economics powers that will likely dominate world trade by 2030. It is predicted that the two that will supply the world with most of the raw materials are ___________.
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Brazil and Russia
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Ethics are the standards of right and wrong set for us by society, whereas the law is __________.
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the minimum protection a society enacts toward behavior that is harmful to many
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If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) ________________.
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ethical dilemma
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Jake served on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective gear avoid a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own head gear. Jake knew that several other employees followed strict company policy every day and always wore their head gear; yet, they were not being acknowledged for their compliance. These employees also knew Jake was representing them on this committee. According to Normal Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision?
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How does the action I am proposing to take make me feel about myself?
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Encouraged by the new Sarbanes-Oxley law, individuals who report unethical or illegal behavior within an organization are referred to as ____________.
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whistleblowers
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The first day on the job waiting tables at a popular restaurant, Ashley noticed that when one member of the wait staff was serving a very large party, the other waiters would help with carrying food to the table(s) and even checking to make sure water glasses were filled and condiments were on the table. Although these actions were not part of the mandatory wait staff training, Ashley perceived that those who were not as attentive to helping out were not viewed as team players by the majority of employees. Ashley was observing an example of the ___________ followed at this organization.
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integrity-based ethics
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A legal provision known as the _______________ now provides for an award for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations, above the first $1 million.
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Dodd-Frank Wall Street Reform and Consumer Protection Act
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Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe ______________.
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CSR can lead to even more profits
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When an F5 tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Boccardi's Ristorante in St. Louis initiated an endeavor of driving several miles with a van of employees, equipment, and food to donate what they could to the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better.
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corporate social initiative
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The last recession changed the way many companies give. Monetary donations _______________. Many firms chose to ______________.
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decreased; encourage their employees to volunteer their time
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Progressive companies use __________ to communicate their CSR efforts with the public. Toyota ran a contest where it donated 100 cars to nonprofit organizations, voted on by Facebook™ and Twitter™ participants.
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social media
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A few months ago, Pedro's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for their stock: $6.50/share above market value. The event was not without its problems. An ethical issue arose when it was speculated that somehow a member of Pedro's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives. Three of them quickly bought shares of Italian Stallion and "got on record" before the acquisition. The ethical dilemma that occurred is called _________.
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insider trading
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The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed. Top management is essentially conducting a(n)_____________ . A measurable category would reasonably include _______________.
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social audit; amount of pollutants due to the manufacturing of Styrofoam containers
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Besides environmental groups, unions, and investors, a new type of watchdog organization that reports on corporate social responsibility efforts is _____________.
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socially conscious research organizations
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U.S. companies that operate abroad, particularly those who contract with foreign companies, are now _______________________ human rights and environmental standards followed by U.S. law.
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separating themselves from suppliers who violate
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Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms?
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Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms.
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Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms?
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Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms.
