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1.Thosewhohaveaclaimin someaspectofafirm'sproducts,operations,markets,industry,andoutcomesareknown asa. shareholders. b. stockholders. c. stakeholders. d.claimholders.e.special-interestgroups.

ANSWER: cPOINTS: 1DIFFICULTY: EasyREFERENCES: p.31LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

2.Stakeholders'poweroverbusinessesstemsfromtheir a.abilitytowithdraworwithholdresources.b.abilitytogenerateprofits. c.mediaimpact.d.politicalinfluence. e.stockownership.

ANSWER: aPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.32LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethics: NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


3.Whichofthefollowingdonottypicallyengageintransactionswithacompanyandthusarenotessentialforits survival?a.Employeesb.Secondarystakeholdersc.Primarystakeholdersd.Investorse.Customers

ANSWER: bPOINTS: 1DIFFICULTY: EasyREFERENCES: p.32LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

4.Afirmthatmakesuseofa recognizesotherstakeholdersbeyondinvestors,employees,andsuppliers,andexplicitlyacknowledgesthetwo-waydialogthatexistsbetweenafirm'sinternalandexternalenvironments. a.stakeholdermodelofcorporategovernanceb.stakeholderbias c.codeofethicsd.stakeholderinteractionmodel e.corporateinterfacemodel

ANSWER: dPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.33LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension


5.Thedegreetowhichafirmunderstandsandaddressesstakeholderdemandscanbereferredtoas a.a stakeholderorientation.b.a shareholderorientation.c.the stakeholderinteractionmodel. d.atwo-waystreet.e.acontinuum.

ANSWER: aPOINTS: 1DIFFICULTY: EasyREFERENCES: p.33LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

6.Whichof thefollowingindustriestendstogeneratea highleveloftrustfromconsumersandstakeholders?a.Insuranceb.Technology c.Banksd.Mortgagelenders e.Financialservices

ANSWER: bPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.32LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


7.Whichofthefollowingis nota benefitthatprimarystakeholderstendtoprovidetoorganizations?a.Suppliesofcapitalandresources. b.Expertiseandleadershipc.Word-of-mouthpromotion d.Infrastructuree.Pro-bonobookkeeping

ANSWER: ePOINTS: 1DIFFICULTY: EasyREFERENCES: p.32LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

8.A stakeholdergroupthatis absolutelynecessaryforafirm’ssurvivalis definedasa.direct.b.tertiary.c.secondary.d.special-interest. e.primary.



9.Whenunethicalactsarediscoveredin afirm,in mostinstances a.theyare causedbyunwillingparticipants.b.thecauseisduetoexternalstakeholders.c.theperpetratorsarecaughtandprosecuted.d.therewasknowingcooperationorcomplicityfromwithinthecompany. e.thecauseisacorruptBoardofDirectors.

ANSWER: dPOINTS: 1DIFFICULTY: EasyREFERENCES: p.30LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

10.Whichofthefollowingis nota methodtypicallyemployedbyfirmswhenresearchingrelevantstakeholdergroups?a.Surveysb.Focusgroupsc.Internetsearches d.Pressreviewse.Guessing



11.Astakeholderorientationcanbeviewedasa(n)a.necessityforbusinesssuccess. b.continuum.c.polarizingconcept.d.good marketingploy. e.expensiveproposition.


12.Shareholdersprovideresourcestoan organizationthatarecriticaltolongtermsuccess.Whichof thefollowingdoes thebooksuggestthatsuppliersoffer?a.Thepromiseofcustomerloyaltyb.Materialresourcesand/orintangibleknowledge c.Infrastructured.Revenuee.Leadershipskills



13.Whichofthefollowingis notassociatedwiththestakeholderinteractionmodel?a.Involvesatwo-wayrelationshipbetweenfirmandstakeholders b.Recognizestheinputofinvestors,employees,and suppliersc.Explicitlyacknowledgesdialoguewith afirm'sinternalenvironment d.Explicitlyacknowledgesdialoguewithafirm'sexternalenvironmente.Identifiesthemassmedia,specialinterestgroups,competitors,andtradeassociationsas primarystakeholders


14.Thefirstofthethreeactivitiesthatareassociatedwiththestakeholderorientationis the a.organization-widegenerationofdata.b.organization'sresponsivenesstointelligence. c.setof consumerattributesidentified.d.organizationalstrategyoftargetmarkets.e.humanrelationsdepartment'ssetof priorities.

ANSWER: aPOINTS: 1DIFFICULTY: EasyREFERENCES: p.33LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


15.Publichealthandsafetyandsupportof localorganizationsareissuesmostrelevanttowhichstakeholdergroup?a.Investorsb.Community c.Suppliersd.Customers e.Employees

ANSWER: bPOINTS: 1DIFFICULTY: EasyREFERENCES: p. 34, Table2-1LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

16.Minimizingtheuseof energyandreducingemissionsandwasteareissuesof importancetowhichstakeholder?a.Environmentalgroupsb.Suppliersc.Employeesd.Industryleaderse.Investors

ANSWER: aPOINTS: 1DIFFICULTY: EasyREFERENCES: p. 34, Table2-1LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


17.Theideathatthe missionofbusinessistoproducegoodsandservicesata profit,thusmaximizingitscontributionto societyisassociatedwitha.AdamSmith.b. TheodoreLevitt. c. Norman Bowie. d.HermanMillere.MiltonFriedman.

ANSWER: ePOINTS: 1DIFFICULTY: EasyREFERENCES: p.40LEARNINGOBJECTIVES: 2.4: Delineate a stakeholder orientation in creating corporate social responsibility: Delineate a stakeholder orientation in creating corporate social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

18.Theoriginatorof theideaof theinvisiblehand,whichis afundamentalconceptin freemarketcapitalism,was a.AdamSmith.b. TheodoreLevitt. c. Norman Bowie. d.HermanMillere.MiltonFriedman.

ANSWER: aPOINTS: 1DIFFICULTY: EasyREFERENCES: p.40LEARNINGOBJECTIVES: 2.4: Delineate a stakeholder orientation in creating corporate social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


19.Someeconomistsbelievethatifcompaniesaddresseconomicandlegalissues,theyaresatisfyingthedemandsof society,and thattryingto anticipateand meetadditionalneedswouldbealmostimpossible.Whicheconomist’s theoryaretheyfollowingmostcloselywiththis belief?a.AdamSmith.b. TheodoreLevitt. c. Norman Bowie. d.HermanMillere.MiltonFriedman.

ANSWER: ePOINTS: 1DIFFICULTY: ModerateREFERENCES: p.40LEARNINGOBJECTIVES: 2.4: Delineate a stakeholder orientation in creating corporate social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension

20.Inascendingorder,Carroll'sfourlevelsofsocialresponsibilityare a.ethical,legal,economic,philanthropic.b.economic,ethical philanthropic,legal. c.economic,legal, ethical,philanthropic. d.legal, ethical,economic,philanthropic. e.ethical,legal,moral,economic.

ANSWER: cPOINTS: 1DIFFICULTY: ModerateREFERENCES: p. 37,Figure2-3LEARNINGOBJECTIVES: 2.2: Define social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


21.Thetermusedtoexpresshowa firmmeetsits stakeholderexpectationsof its economic,legal,ethical,and philanthropicresponsibilitiesisa.reputation.b.corporatecitizenship.c.corporateethicalaudit. d.ethicalcitizenship.e.fiduciaryduties.

ANSWER: bPOINTS: 1DIFFICULTY: EasyREFERENCES: p.37LEARNINGOBJECTIVES: 2.2: Define social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

22.In corporategovernance, istheprocessof auditingandimprovingorganizationaldecisionsandactions.a.profitb.loyaltyc.accountability d.controle.diligence

ANSWER: dPOINTS: 1DIFFICULTY: EasyREFERENCES: p.43LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial

responsibilityinbusiness.NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


23.Accountability,oversight,andcontrolallfallunderthedefinitionandimplementationofcorporate a.profit.b.loyalty. c.care.d.governance. e.diligence.

ANSWER: dPOINTS: 1DIFFICULTY: EasyREFERENCES: p.43LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial


24.Majorcorporategovernanceissuesnormallyinvolve decisions.(Choosetheresponsethatismostcorrect)a.strategic-level b.tactical-levelc.divisional-level d.marketing-level e.accounting-level

ANSWER: aPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.44LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial

responsibilityinbusiness.NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension


25.Whichof thefollowingisamajorethicalconcernamongcorporateboardsof directors?a.Compensationb.The non-traditionaldirectorshipapproach c.Dividendreportingd.Corporatesocialaudits e.Debtswaps

ANSWER: aPOINTS: 1DIFFICULTY: EasyREFERENCES: p.44, bonuses

p.46p.48

LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial responsibilityinbusiness.

NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

26.OnepolicytoaddresstheissueofexecutivepaywasimplementedbyJ.P.Morgan,itstatedthat a.thereshouldbe no limiton whattopexecutivescanearn.b.managersshouldearnnomorethantwentytimesthepayofotheremployees. c.topmanagersshouldmakethesameamountasotheremployees.d.employeescandeterminehowmuchmanagersmake.e.thegovernmentshoulddeterminetheworthofeachmanager’sservice.

ANSWER: bPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.48LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial



27.Thespecificstepsfor implementingthe stakeholderperspectivedonotincludewhichofthe following?a.Identifyingstakeholdergroups b.Identifyingstakeholderissuesc.Identifyingand gainingstakeholderfeedback d.Identifyingandgaininggovernmentfeedbacke.Assessingorganizationalcommitmentto socialresponsibilitygroups

ANSWER: dPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.49LEARNINGOBJECTIVES: 2.6 -Listthestepsinvolvedinimplementinga stakeholderperspectiveinsocial

responsibilityandbusinessethics.NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge

28.Whatare the fourlevelsofsocialresponsibility?a.Financial,religious,ethical,andphilanthropicb.Ethical,philanthropic,selfish,andshort-sighted c.Economic,long-term,ethical,andphilanthropic. d.Legal,economic,ethical,andphilanthropice.Economic,compliance,legal,andphilanthropic

ANSWER: dPOINTS: 1DIFFICULTY: EasyREFERENCES: p. 37,Figure2-3LEARNINGOBJECTIVES: 2.2: Define social responsibilityNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


29.The modelisfoundedinclassiceconomicprecepts. a.economicb. shareholder c. stakeholder d.boarde.ISO

ANSWER: bPOINTS: 1DIFFICULTY: EasyREFERENCES: p.45LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial


30.Whichofthefollowingarenottypicallysecondarystakeholders?a.Televisionnewsanchors b.Special-interestgroupsc.Customersd.Tradeassociationse.Journalists

ANSWER: cPOINTS: 1DIFFICULTY: EasyREFERENCES: p. 35,Figure2-2LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethics: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension

31.Whichofthefollowingarenottypicallyprimarystakeholders?a.Customersb.Tradeassociationsc.Employeesd.Shareholders e.Suppliers

ANSWER: b


POINTS: 1DIFFICULTY: EasyREFERENCES: p. 35,Figure2-2LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension

32.Whydo criticsarguethathighcompensationforboardsof directorsisabadthing?a.Itistooexpensivefor the organization.b.It couldcauseconflictsofinterestbetweenthedirectorsandtheorganization. c.Itisnotfairtopoorlycompensatedemployees.d.Highpaywillrendertheboardlesscomplacent.e.Boardof directorcompensationisnotamajorissue.

ANSWER: bPOINTS: 1DIFFICULTY: EasyREFERENCES: p.46LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial



33.Boardmembersbeinglinkedtomorethanonecompanyisanexampleof a.strategicphilanthropy.b.stakeholdercommitment. c.interlockingdirectorate.d.conflictof interest. e.anillegalactivity.

ANSWER: cPOINTS: 1DIFFICULTY: ModerateREFERENCES: p.47LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial


34.Whatisthe firststepinimplementinga stakeholderperspectiveinanorganization?a.Identifyingresourcesanddeterminingurgency b.Identifyingstakeholdergroupsc.Identifyingstakeholderissuesd.Assessingthecorporateculturee.Assessingorganizationalcommitmentto socialresponsibility

ANSWER: dPOINTS: 1DIFFICULTY: EasyREFERENCES: p.49LEARNINGOBJECTIVES: 2.6 -Listthestepsinvolvedinimplementinga stakeholderperspectiveinsocial

responsibilityandbusinessethics.NATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Knowledge


35.Astakeholderorientationisnot completeunlessitincludes a.clearaccountingprocedures.b.majorfinancingactivities. c.marketingstrategy.d.feedbackfromspecial-interestgroups.e.activitiesthatactuallyaddressstakeholderissues.


36.Compareandcontrastthestakeholderandshareholdermodelsofcorporategovernance.

ANSWER: Theshareholdermodelof corporategovernanceisfoundedon classiceconomic precepts,includingthe goalofmaximizingwealthfor investorsandowners. The stakeholdermodelofcorporategovernanceadoptsa broaderviewofthepurposeof businessandanswerstoallstakeholders.

POINTS: 1DIFFICULTY: EasyREFERENCES: p.45LEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial


37.Whyisethicalmisconductmoredifficulttoovercomethanpoorfinancialperformance?

ANSWER: Lostfinancescanberegainedbutlossofreputationandshareholderconfidencecould be deadly.

POINTS: 1DIFFICULTY: EasyREFERENCES: p.31LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension


38.Discussthedifferencebetweenprimaryandsecondarystakeholdersin thestakeholderinteractionmodelandgive examplesforeachtype.

ANSWER: Thestakeholderinteractionmodelacknowledgestherearereciprocalrelationships betweenthecompanyandseveralprimaryandsecondarystakeholders. Themodel alsoacknowledgesthedialoguebetweenthecompany'sinternalandexternal environments. Primarystockholdersareessentialtothecompany'ssurvivaland include: employees,shareholders,suppliers,community,governmentregulatory agenciesandcustomers. Secondarystakeholdersarenotessentialtothecompany's survivalandinclude: specialinterestgroups,the massmedia,competitorsandtrade associations.

POINTS: 1DIFFICULTY: ModerateREFERENCES:

p.32,primaryandsecondarystakeholdersp.33, stakeholderinteractionmodelp.35, figure2-2

LEARNINGOBJECTIVES: 2.1: Identify stakeholders’ roles in business ethicsNATIONALSTANDARDS: UnitedStates-BUSPROG:EthicsSTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension

39.Whydo somebusinesspeopleandscholarsquestionwhetherethicsshouldhavearoleinbusiness?

ANSWER: Manybusinesspeopleandscholarsquestionthe roleofethicsandsocialresponsibility inbusiness. Legalandeconomicresponsibilitiesaregenerallyacceptedas themost importantdeterminantsof performance. "Ifthisiswelldone,"sayclassiceconomic theorists,"profitsaremaximizedmoreorlesscontinuouslyand firmscarryout their majorresponsibilitiestosociety."

POINTS: 1DIFFICULTY: EasyREFERENCES: p.39LEARNINGOBJECTIVES: 2.3: Examine the relationship between stakeholder orientation and social responsibilitySTATESTANDARDS: UnitedStates- NONE- DISC:EthicalResponsibilities-EthicalResponsibilitiesKEYWORDS: Blooms:Comprehension


40.Discussthreecorporategovernanceissues,whytheyaredefinedasissues,andhowyouwouldsolvethem.Use examplesin youranswer.

ANSWER: Studentscouldchoosefromanyof severaltopicslistedinthetextandinTable2-4CorporateGovernanceTopicsonpage43. Moststudentswillchooseexecutive compensationasonetopicsinceitwasdiscussedfrequentlyin thetextandis thefirst issuelistedinthetable. Compensationisan issuebecausemostpeoplebelieve executivesare notworthmillionsofdollarsinannualsalaryandbonuses. StudentsmaysiteJP Morgan'spolicylimitingexecutivepaytotwentytimesthepayof anyother employee. Thereareseveralotherissuesincluding

POINTS: 1DIFFICULTY: ModerateREFERENCES: p. 43, Table2-4

p.47-48, examplegiveninanswerLEARNINGOBJECTIVES: 2.5-Exploretheroleof corporategovernanceinstructuringethicsandsocial


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