The Latin phrase, caveat emptor, meaning “let the seller beware” has put sellers on alert to look after their own interests.
Consumer advocacy groups in the United States actively promote and speak for the interests of millions of consumers.
As business firms grow in size and market power, they have increasingly lost the ability to dominate marketplace transactions with their customers.
Under the “right to be heard” protection, the consumer is to be assured satisfactory quality and service at fair prices.
The consumer’s right to privacy assures that information disclosed in the course of a commercial transaction is not shared with others unless authorized.
Consumers make less rational choices when they have accurate information about a product
Deceptive advertising is still legal in most countries
The Children’s Online Privacy Protection Act limits the collection of information online from and about children under the age of 13
The Department of Agriculture has authority over genetically modified food and some chemicals that may affect consumers.
The Environmental Protection Agency’s mission is to assure the safety and effectiveness of a wide range of consumer products including pharmaceutical drugs and foods.
In the “consumer self-help” approach to protecting consumer privacy rights, new government regulations will protect the consumer online.
The doctrine of strict liability extends only to the retailer who is involved in selling the product, not the manufacturer.
One reason for business efforts to reform product liability laws is the increasing cost of insuring against liability suits.
Quality management emphasizes high quality and customer satisfaction through continuous improvement of a company’s product or service at the final stages of the production process
Managing for product quality is an attempt by business to address its suppliers’ needs.
A prime social responsibility of business is to safeguard consumers:
While continuing to supply them with goods and services they want.
Consumers have become more dependent on businesses for product quality because:
The complexity of products makes choices complicated for consumers.
Which organization brings together 300 nonprofit groups to espouse the consumer viewpoint?
Consumer Federation of America.
Which of the following statements is not true about the organization Consumer
It is supported by the federal government.
A goal of the consumer movement is to make consumer power:
An effective counterbalance to the rights and powers of firms that sell goods and services
Which of the following is(are) core rights of consumers?
The right to safety.
The “right to be heard” assures that consumers’ interests will:
Receive full and sympathetic consideration.
The act that requires lenders to inform borrowers of the annual rate of interest to be charged, plus related fees and services charges is called:
The Truth in Lending Act.
In the United States, which of the following agencies enforces the laws prohibiting deceptive advertising?
Federal Trade Commission.
The law requiring that toys and infant products be tested before sale is called the:
Consumer Product Safety Improvement Act.
Which of the following is not a goal of consumer protection laws?
Facilitate consumers’ getting extended credit when making purchases
Manufacturers making false or misleading claims about a competitor’s product is:
Illegal and unethical
Before deregulation, government agencies frequently:
Held prices artificially high, shielding businesses from competition.
Which of the following limits the collection of information online from and about children under the age of 13?
The Children’s Online Privacy Protection Act.
Which of the following departments was established in 1914 and has been given additional powers to protect consumers over the years, including in the area of online privacy?
Federal Trade Commission
Which agency(ies) was(were) created during the great wave of consumer regulations in the 1960s and early 1970s?
A. Consumer Product Safety Commission.
B. National Highway Traffic Safety Administration.
C. National Transportation Safety Board.
The main responsibility of the National Highway Traffic Safety Administration is to:
Set motor vehicle safety standards.
Which of the following is a mission of the Food and Drug Administration?
To assure the safety and effectiveness of a wide range of consumer products
The major federal consumer protection agencies are authorized by law to:
A. Intervene directly into the very center of free market activities, if that is considered necessary to protect consumers.
B. Substitute government-mandated standards for decision making by private buyers and sellers.
C. Intervene in the market by influencing consumers to buy one product or service rather than another.
D. Both A and B, but not C
Online shoppers have always been concerned that:
Information they reveal in the course of a sales transaction might be misused.
An identifying marker placed on a user’s computer hard drive during visits in order to identify the user during each subsequent visit and to build profiles of their behavior over time is called a:
Advertising that is targeted to particular customers, based on their observed online behavior, is called:
When businesses adopt voluntary policies for protecting the privacy of individuals’ information disclosed during electronic transactions, this is called:
Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold, whether or not it was negligent or breached a warranty?
Many companies have argued that the evolution of strict liability has:
Unfairly burdened them with excess costs.
Under proposals to establish uniform federal standards for determining liability:
Companies would not have to go through repeated trials on the same charges in different states.
Consumer groups have generally opposed the idea of product liability reform using which of the following arguments?
Strict liability should be retained.
One alternative to product liability lawsuits is called:
Alternative dispute resolution.
In some cases, businesses have banded together to agree on how they will treat their customers. This is called:
Voluntary industry codes of conduct.
Businesses can take a number of measures to respond voluntarily to consumer demands. Which of the following is an example of such a measure?
Consumer call centers.
The employment relationship confers rights and duties on both sides.
Employees in the United States have the right to organize and bargain collectively.
Employers are not required by law to agree to the union’s demands, but they are required to bargain in good faith.
Some labor unions have departed from their traditional adversarial approach to work cooperatively with employers for their mutual benefit.
The Occupational Safety and Health Act gives workers the right to a job “free from recognized hazards that are causing or likely to cause death or serious physical harm.”
Employment-at-will is a legal doctrine that means employees are hired and retain their jobs at the sole discretion of the employer.
Under the new social contract, the bond between the employer and employee has become stronger.
In a business context, privacy rights refer to protecting an individual’s personal life from unwarranted intrusion by his or her employer.
Most management experts recommend that employers let employees know whenever they are being electronically monitored.
According to a recent study, nearly all companies test employees or job applicants for drugs.
Drug testing for cause is commonly used after an accident or some observable change in behavior.
In general, employee assistance programs have been very cost effective.
The U.S. Constitution protects the right to free speech—which means only the government can take away this right.
The term labor standards refers to the conditions under which a company’s employees work
The Council for Economic Priorities has developed a set of workplace rules called Social Accountability 8000, or SA 8000
someone is entitled to be treated a certain way, this refers to a(n):
Employees in the United States have a legal right to
A. Organize and bargain collectively.
B. A safe and healthy workplace.
Where are workers not permitted to form independent unions
B. Communist countries.
C. Military dictatorships.
Under US laws
Most private and public workers have the right to hold an election to choose what union they want to represent them, if any.
During the 1930s, many workers in the United States joined unions, and the ranks of organized labor grew rapidly. This historical period was called:
the new deal
Since the mid-1950s the proportion of American workers represented by unions has
Which of the following statements are not true about the right to a safe and healthy workplace
Over recent years no new categories of accidents or illnesses have emerged.
According to the US Department of Labor:
Annually, more than 3 million workers in private industry are hurt or become ill on the job.
Three out of every 100 workers are hurt or become ill on the job annually.
According to the U.S. Bureau of Labor statistics, the highest injury rates are found in which of these industries?
The Occupational Safety and Health Act gives workers the right to a job:
That is free from recognized hazards that are likely to cause death or serious injury
According to the new social contract:
Companies try to attract workers by giving them interesting and challenging work
Which of the following led to significant corporate restructuring and downsizing?
A. Fierce global competition.
B. Emphasis on improving the “bottom line.”
Privacy rights seek to protect the employees’ private lives from
Intrusive and unwarranted business actions
A reason for an increase in employee monitoring does not include
To reduce the employer’s health insurance premiums
Which of the following is true about romantic relationships in the workplace?
Many companies allow managers to become romantically involved with subordinates, so long as they do not supervise them directly.
Which of the following is true about random drug testing of employees?
It screens randomly-selected employees at various times through the year.
Which of the following is not an argument favoring employee drug testing
It is an intrusion on individual privacy.
Which of the following is(are) true about Employee Assistance Programs (EAPs)?
A. They offer counseling and follow-up to alcohol abusers.
B. Roughly 90 percent of employers offer EAPs for alcohol users.
C. In general, EAPs have been very cost-effective.
Which of the following is not true about employee theft?
Almost half of all employees have stolen from an employer at least once in his or her career.
Has been replaced by written psychological tests.
Which of the following is(are) true about honesty tests?
It is a written psychological test trying to predict employee honesty on the job
The right to free speech is protected in the United States by the:
When an employee believes their employer has done something that is wrong or harmful to the public, and he or she reports alleged organizational misconduct to the media, government, or high-level company officials, what has occurred?
The Sarbanes-Oxley Act makes it illegal for employers to:
Retaliate against whistle-blowers who report information that could have an impact on the value of a company’s shares.
Which law allows individuals who sue federal contractors for fraud to receive up to 30 percent of any amount recovered by the government?
U.S. False Claims Act (as amended in 1986).
Only after which of the following conditions is(are) met, should the whistle-blower go public
A. The unreported act would do serious and considerable harm to the public.
B. The employee has reported the act to his or her immediate supervisor and has made their moral concern known.
The conditions under which a company’s employees work is called:
Universal rules establishing a common set of labor standards worldwide are called
fair labor standards
The Council of Economic Priorities has developed a set of workplace rules called
Social Accountability 8000.
A strong employer-employee relationship is central to
A. Achieving a corporation’s goals of economic production.
B. Satisfying the wishes of those who contribute their skills and talents to the company.
The term diversity refers to variation in the important human characteristics that distinguish people from one another.
Workforce diversity represents both a challenge and an opportunity for businesses.
The term pay gap refers to the inequitable concentration of a group, such as minorities or women, in a particular job category.
Even though racial and gender bias has been lowered in most organizations, women and persons of color remain underrepresented in executive level positions.
By 2010, around 25 percent of businesses were owned or controlled by women, according to the Center for Women’s Business Research.
Beginning on a major scale in the 1960s, U.S. presidents issued executive orders and Congress enacted laws intended to promote equal treatment of employees
Beginning on a major scale in the 1960s, U.S. presidents issued executive orders and Congress enacted laws intended to promote equal treatment of employees.
The major agency charged with enforcing equal opportunity laws and executive orders in the United States is the Americans with Disabilities Council (ADC).
Affirmative action occurs when one group is unintentionally discriminated against in an effort to help another group.
Sexual harassment is limited to overt acts of individual coworkers or supervisors.
The number of working women that have told researchers they have been sexually harassed on the job is between 40 and 70 percent.
Sexual and racial harassment will happen, and there is little a business can do to eliminate the problem.
A diversity council is a group of managers and employees responsible for developing and implementing specific action plans to meet an organization’s diversity goals
Companies that promote equal employment opportunity generally do better at attracting and retaining workers from all backgrounds.
According to U.S. Census data released in 2012, in about one-third of all married couples with children, both parents worked at least part-time.
Under the Family Medical Leave Act, companies that employ 50 or more people must grant unpaid, job-protected leaves for up to 12 weeks to employees with serious family needs, including the birth or adoption of a baby.
Variation in the important human characteristics that distinguish people from one another is called:
Age, ethnicity, gender, mental or physical abilities, race, and sexual orientation are what dimensions of diversity?
By 2020, the Bureau of Labor Statistics estimates that what percentage of all workers will be women?
The growing diversity in the U.S. workforce is due to:
A. Millennials entering the workforce.
B. Immigration from other countries.
C. Shifting patterns of work and retirement.
Which ethnic group, as defined by the U.S. Census, represents the fastest-growing percentage of the labor force?
Women have entered the workforce:
A. To earn income to support their families.
B. Due to the inadequacies of retirement plans and health care programs.
C. To sustain an accustomed standard of living.
The pay gap for Hispanic women (relative to white men) has:
Declined by almost 5 percent since 2000
Which of the following is not true about occupational segregation?
The large pay gap for Hispanic workers partly reflects their concentration in several high-paying occupations.
In 2011, what percentage of corporate officers of the Fortune 500 companies were women
A study by Catalyst found that companies with three or more female directors had:
Significantly higher returns on equity than those with no female directors
Glass walls” refers to:
Fewer opportunities to move sideways into jobs that lead to the top.
How do “glass walls” differ from “glass ceilings?”
Glass walls focus on sideways promotions in the organization
Which of the following is not true about women business owners?
They are forming businesses at roughly the same rate that men are.
Which of the following government rules on equal treatment of employees does not apply to businesses?
affirmative actionplans must be permanent
The Equal Employment Opportunity Commission was created in
Which of the following is not true about the Equal Employment Opportunity Commission (EEOC)?
It monitors foreign governments’ employment practices.
Executive Order 11246, established in 1965, mandates:
Affirmative action for all federal contractors and subcontractors.
The Americans with Disabilities Act defines a “disabled worker” as:
One who can perform the “essential functions” of a job, with or without reasonable accommodations.
Which of the following is an argument against affirmative action?
C. It is inconsistent with the principles of fairness and equality.
Reverse discrimination occurs when:
One group is unintentionally discriminated against in an effort to help another group
Sexual harassment applies to:
Either men or women who are being harassed.
Racial harassment is illegal under:
Title VII of the Civil Rights Act.
Since the early 1990s racial harassment charges filed:
Have more than doubled to about 9,000 a year.
Companies can combat sexual and racial harassment—and protect themselves from expensive lawsuits–by:
A. Developing a zero-tolerance policy on harassment and communicate it clearly to employees.
B. Establishing a complaint procedure and act quickly to resolve any problems.
Which of the following is an action that companies take to manage diversity effectively
Set up a diversity council to monitor the company’s goals.
Which of the following is not a benefit of managing diversity effectively
These businesses get tax breaks from the federal government.
Which of the following is(are) true about child care programs?
A. They help reduce employee absenteeism and tardiness.
B. They aid in recruiting by making the company more attractive to parents.
C. They help retain talented employees.
When a mother or father is granted time off when children are born or adopted and during the early months of a child’s development, this is called:
Under the Family and Medical Leave Act (FMLA), passed in 1993:
Companies that employ 50 or more people must grant unpaid, job protected leaves of up to 12 weeks to employees faced with serious family needs.
What steps have companies been taking to support their Lesbian, gay, bisexual, and transgender employees?
A. Adopted written antidiscrimination policies.
B. Provided management training on sexual diversity issues.
C. Provided health benefits to same-sex partners.
The term community refers to a company’s area of local business influence.
The term community is sometimes improperly used to refer to a range of groups that are affected by an organization’s actions, whether or not they are in the immediate vicinity.
The community relies heavily on business, but business is not mutually dependent on the community.
Civic engagement is a major way in which companies carry out their corporate citizenship mission.
Social capital refers to the norms and networks that enable collective action
Community relations departments work primarily on the national level to link the corporation to community stakeholders.
The construction industry has taken the lead in creating programs to revitalize neighborhood housing.
An important aspect of the business-community relationship is corporate philanthropy.
Corporations are prohibited from giving more than 10 percent of its income for philanthropic purposes.
Foreign-owned corporations typically establish and use corporate foundations less frequently than U.S. firms.
Charitable donations are defined as gifts of products or services.
Many companies have turned to technology to improve the amount and effectiveness of employee volunteerism.
Strategic philanthropy emphasizes the links between corporate contributions and business goals, such as creating demand for a product or service.
All corporate contributions benefit their donors directly.
Many community problems are people problems, involving hopes, attitudes, sentiments, and expectations for better human conditions.
Which company donates 5 percent of its branches or stores’ total sales revenue to a worthy local nonprofit organization three days a year?
whole markets foods
Which company paid its employees to volunteer in their communities two days a week after a tsunami in Japan disrupted operations at its U.S. facilities?
honda motor company
Business depends on the community for:
B. Public services.
C. Transportation systems.
Which of the following statements is true about the relationship between business and the community?
It is one of mutual interdependence.
The term civic engagement describes:
The active involvement of businesses and individuals in improving communities
Which of the following is a good way for a business to express its commitment to corporate citizenship?
A. By establishing community relations programs.
B. By behaving responsibly toward all its stakeholders.
C. By correcting problems associated with its operations.
ich of the following is a reason for businesses to get involved in the community?
A. To win local support for business activity.
B. To build social capital.
C. To meet stakeholder demands.
Social capital is a phrase that describes the following, except:
A. The goodwill that is engendered by the fabric of social relations.
B. A close relationship between companies and groups in the community.
C. The norms and networks that enable collective action.
Which of the following statements is true about community relations?
About 80 percent of companies factor community involvement into their overall strategic plan.
Which of the following is not included among purposes for establishing community relations departments by businesses?
Manage international relations projects for economic development
What is the most important social issue facing communities, according to a survey of community relations managers?
Which company provided one million free vouchers for its online technology skills courses and certification exams during 2009?
Which of the following non-profit, locally funded and controlled organizations offer housing rehabilitation and financial services to neighborhood residents?
neighborhood housing services
Habitat for Humanity is considered a:
Minority enterprises often do business in locations with:
A. High crime rates.
B. Poor transportation.
C. Low-quality public services.
What percentage of AT&T’s procurement spending went to minority, women, and disabled veteran-owned businesses in 2011?
As communications improve and people around the world are able to witness the horrors of natural disasters, terrorism, and war, international relief efforts by corporations are becoming:
Another term for corporate giving is corporate:
Which region received the most U.S. international charitable contributions in 2011?
Average corporate giving in the Unites States:
Is far below the 10 percent tax deduction now permitted
What company gives all of its earnings to charity?
Foreign-owned corporations use foundations:
Less frequently than U.S. firms.
The share of all giving made up by in-kind contributions of products and services has been
A. Rising steadily over the past decade.
How do companies encourage their employees to volunteer their time?
A. By publicizing specific projects.
B. By offering recognition for service.
C. By publicizing opportunities to serve.
Which of the following sectors receives the largest percentage of corporate cash and in-kind contributions?
Health and human services.
According to a Harvard Business Review study, which of the following is not an area in which corporate contributions are most likely to enhance a company’s competitiveness?
Factor conditions are strategic contributions focusing on:
The supply of trained workers, physical infrastructure, and natural resources
Which of the following is not a strategy to help companies get the most benefit from their contributions?
Establish priorities even if they come into conflict with firm core values
A financial services firm decided to assess the return on its social investment in an educational program in local schools. As part of its assessment, it measured the improvement in learning among students who had participated in the program, compared with the learning of students who had not. Which of the following elements was assessed?
Which of the following is not a distinct period in corporate involvement in education reform from the 1980s to the present?
D. Total quality management of the education system.
How the general public perceives a business firm can have a major effect on its performance
An effective public relations program is not fundamental to an organization’s relationship with the public.
The public relations function is a boundary-spanning role that primarily involves the flow of information to and from the organization.
A public relations program should be reactive, not proactive.
An example of direct communications is through a company website.
An example of indirect communications is through television.
Members of the Public Relations Society of America are expected to adhere to the core values of advocacy, honesty, and fairness, among others.
Historically, public relations officers worked mostly through contact with traditional media outlets.
The major activity carried out by public relations managers is writing blogs
The Internet-based communication revolution has significantly benefited only large organizations.
The Public Relations Society of America is the government agency charged with regulating advertisements in the United States.
The Federal Trade Commission serves as a public watchdog evaluating honesty and fairness in advertising.
The Securities and Exchange Commission is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable
The public scrutiny following a corporate crisis can have a political, legal, financial, and governmental impact on its business.
Key employees must be identified in advance of a crisis so that they are ready to address the issue.
A firm can affect the general public’s values, attitudes and actions through:
A. Television advertisements.
B. Billboard messages.
C. Blogs written by CEOs.
A good public relations program:
Sends a constant stream of information to the company’s stakeholders.
As one group of scholars has written, the essential role of the public relations program appears to be that of:
A. A window out of the corporation through which management can perceive, monitor, and understand external change.
B. A window in through which society can influence corporate policy and practice.
In 1889, the first public relations department was created by:
The professional core values for the Public Relations Society of America include:
A. Advocacy and honesty.
B. Expertise and independence.
C. Loyalty and fairness.
The International Public Relations Association was founded in:
A 2011 Pew Research Center and Knight Foundation report confirmed that this medium remained the major source of weather, traffic and breaking news for consumers?
local television news
According to comScore, a provider of digital intelligence, in December 2008 the total number of individuals, aged 15 and older, who accessed the Internet from their home or work computers was:
Global businesses that have extended their public relations strategies globally should:
Ensure that sufficient funding is allocated globally for a positive and effective public affairs impact.
The Ad Council’s inaugural campaign slogan was:
loose lips sink ships
In 2011, Facebook and Time Warner joined forces to create this program against bullying
Stop Bullying: Speak Up”.
What media technique is used to promote the general perception of a product or service, rather than promoting its functional attributes?
What describes the practice of businesses using their public relations’ outreach in ways to influence the public’s opinion of a political or legislative issue of concern to the company?
The “WE AGREE” campaign was an image advertisement about what?
B. Chevron’s position on big oil’s support of local schools.
e right to free speech is protected under the U.S. Constitution’s:
Which of the following statements is true about the right to free speech?
A. Free speech is not an unrestricted right.
B. Free speech comes with the obligation of acting in the best interest of the public.
C. Free speech requires adhering to ethical principles.
Who warned, “Advertisements contain the only truth to be relied on in a newspaper?”
The Federal Trade Commission attempts to ensure that the public is protected against which of the following unethical business practices?
The use of deception to distort the truth.
In a 1998 FTC report to Congress, how many websites did the government agency find collected personal consumer information?
OVER 85 PERCENT
The agency created in 1934 and charged with regulating interstate and international communications by radio, television, wire, satellite, and cable is called:
Federal Communications Commission.
The act passed to allow virtually any business to enter the telecommunications industry is called:
1996 Telecommunications Act.
A critical function of the public relations manager is:
A significant business disruption that stimulates extensive news media and social networking coverage is called a(n):
Which of the following is a type of corporate crisis?
A. Acts of God.
B. Management indecision.
C. Mechanical problems.
Often unexpected events.
According to the Institute for Crisis Management this industry is among the top crisis-prone industries because of sophisticated technology found in its products:
Scenario-based press releases, key discussion points, and procedures to activate the organization’s website are all part of which step in an effective crisis management plan?
Get ready before the crisis hits.
Seeking to restore the firm’s reputation takes place during this effective crisis management step:
Follow up and, where appropriate, make amends to those affected.
A rule of media communication is to:
A. Be honest.
B. Be current.
C. Be accessible.
Emphasizing key points and guiding the reporter to them is called:
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