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BUS 101 Exam 1 – Elliott

B. profits
In the us, economy, _____ are considered the reward for the risk of entering business.
A. revenues
B. profits
C. sales
D. generated income amounts
D. natural resources, human resources, capital
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
B. False
If it is not illegal, it MUST also be ethical
A. true
B. False
B. Using outside vendors to produce goods or fulfill services that were previously done in house
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
D. Conflict of Interest
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
A. Loyalty versus truth
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.
B. Is it Legal?
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?”
C. Their Customers
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
B. The Securities and Exchange Commission (SEC)
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
D. They saw a conflict of interest
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
B. Corporate Philanthropy
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
C. Honesty versus Integrity
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.
A. Questionable Accounting Practices
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
B. businesses can be held liable for their negligence involving their products
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.
D. Monetary compensation
The remedy for a tort is:
A. imprisonment.
B. a breach of contract.
C. bankruptcy.
D. monetary compensation.
B. statutory law
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.
B. False
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
C. They taught us in business school that this model of supply chain management is correct.
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
E. Tort laws
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
D. Contract Law
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
B. False
If Mary agrees to give Tom her used textbook at the end of the semester they have a contract?
A. True
B. False
A. Tort law
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
D. employee/employer
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
E. reimbursement
A fiduciary must abide by each of the following obligations EXCEPT __________.
A. loyalty
B. notification
C. reasonable care
D. accounting
E. reimbursement
B. False
The business decision maker has a fiduciary responsibility to society.
A. True
B. False
D. Every stockholder is a stakeholder
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.
B. Managerial view
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.
D. All of the above
Which group is a stakeholder group we consider?
A. Community
B. Suppliers
C. Owners
D. All of the above
E. None of these
A. True
Not all stakeholder groups have a stake in each business decision.
A. True
B. False
B. False
In the Nike Case, Nike’s Business practices were illegal.
A. True
B. False
B. Biased Jumper
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
D. All of the above
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
C. Understand the value of analysis
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
D. A and B
Which of the following is NOT a stakeholder group
A. Customers
B. Government
C. Management
D. A and B
E. B and C
B. Maximizing Profit
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
C. A separation of ownership from control
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
E. All are true
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.
C. Perpetual Analyzer
“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
D. The firm recognizes the importance of a wide variety of stakeholders, but has fiduciary
responsibility only to shareholders.
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.
C. Hiring a firm to clean up your offices at night
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
C. Community because the group had an interest in Nike practices
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
D. False because there are a number of competing decision-making frameworks.
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.
D. Has an interest in many of the business decisions that are made making it a stakeholder.
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.
E. None of the above
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
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.
Read the following to answer questions 46-48
B. Loyalty vs. Truth
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
C. not consider the auditor as a stakeholder because his no stake in the event
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.
B. be known as a whistle-blower
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.
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.
Read the following to answer questions 50-52
A. Government
Which of the following is not a stakeholder group in this case
A. Government
B. Owners
C. Employees
D. suppliers
E. None of these
What is the major perspective of the owners
A. Economic
B. Legal
C. Ethical
D. All of these
E. None of these
C. All of these
In this case Mattel is:
A. Outsourcing its production
B. Offshoring its production
C. All of these
D. None of these
1.Confused Fact Finder
2. Biased Jumper
3. Perpetual analyzer
4. Pragmatic Performer
5. Strategic Revisioner
What are the stages of development for critical thinking?
Confused Fact Finder (50% of freshman)
· Looks for one answer even to open ended problems
· Provides illogical/contradictory arguments
· Unable to read carefully
Biased Jumper (Most college Seniors)
· Jumps to conclusions
· Stacks up evidence for own position (ignores contradictory)
Perpetual Analyzer
· Attempts to control own biases
· Identifies multiple perspectives logically
· Organizes info meaningfully
Pragmatic Performer
· Consciously prioritizes issues
· Well founded support for one solution
Strategic Revisioner
· 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
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
3 Major perspectives
Owners
Employees
Customers
Suppliers
Community
5 basic stakeholder groups
Tort Law
Contract Law
Statutory & Regulatory Law
3 main types of law
Tort Law
Law of Legal precedent of court decisions, recognizes that there are duties in the world of commerce
Contract Law
Parties negotiating agreements through rules and guidelines
of common law
Statutory Law & Regulatory Law
The legislative branch of government (state and federal)
creates administrative agencies to oversee certain aspects
of commerce. These agencies pass regulations
Contract Law
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.
Statutory & Regulatory Law
Example of which law?
Food and Drug Administration (FDA)
Tort Law
Example of which law?
The duty to keep a store clean from any danger to
customers
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.
If you are a lawyer representing a business which one of you is
the Fiduciary and which is the agent? Justify your response.
5 obligations that lawyer (fiduciary) follows
Loyalty
Obedience
Notification
Accounting
Reasonable care
5 obligations that lawyer (fiduciary) follows
False. Just because something is legal doesn’t mean that it is morally right (ethical).
True, False, or Uncertain. If something is legal it is also ethical.
Biased Jumper
Most political speech would be directed at which type of thinkers
Work at Will Doctrine
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..
Represent people/community
Has right to make laws and reprimand a business
Add retail space and lower taxes for new openings
Role of government in stakeholder analysis
They can control a business – whether it is going to be profitable or not.
Why should society be considered a stakeholder?
They aren’t. Have no money or say in the economic world
Why should the environment be considered a stakeholder?
Not failing. Producing income in bad situations
Pursuing sustainability in business?
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.
Off-shoring vs. Outsourcing
Whistle-Blower
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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