Question 1

Unethical business conduct usually arises from____________.&#10;A) ignorance of the law&#10;B) unscrupulous individuals acting alone&#10;C) attempts to cheat shareholders of their dividends&#10;D) the way that an organization as a whole operates

Accepted Answer

Unethical business conduct often stems from ingrained patterns of behavior within an organization that prioritize profits over ethical considerations. This can include a lack of transparency, a focus on short-term gain over long-term sustainability, and a culture that does not value ethical decision-making. Ignorance of the law or the actions of a few unscrupulous individuals can contribute to unethical conduct, but it is primarily driven by organizational culture and leadership. Attempts to cheat shareholders are a specific example of unethical behavior but not the sole cause.

Question 2

What was the nature of the change in corporate ownership that occurred in the early 20^th century?

Accepted Answer

Not Answer

Question 3

Shareholders have governance over a company in return for____________.&#10;A) influence&#10;B) capital&#10;C) prestige&#10;D) advertising

Accepted Answer

Shareholders have governance over a company in return for providing capital. They invest in the company and own a portion of it, which gives them certain rights and responsibilities, including voting on important decisions and electing the board of directors. In exchange for this capital, shareholders have a say in how the company is run and receive a portion of its profits in the form of dividends. Therefore, choice B, capital, is the best answer.

Question 4

The central argument for shareholder control of a company states that____________.&#10;A) companies without shareholders are not likely to be profitable&#10;B) shareholders have the most to lose in their company involvement&#10;C) shareholders are more likely than management to operate a company profitably&#10;D) management can only control a company insofar as they are paid by it

Accepted Answer

Shareholders have a direct financial stake in the company, making them inherently motivated to see the company succeed, as their investments are directly at risk. This contrasts with management, whose personal financial stakes might not be as directly tied to the company's performance.

Question 5

Property can generally be defined as____________.&#10;A) some physical object&#10;B) the right to vote&#10;C) power over another person&#10;D) a set of rights

Accepted Answer

Property refers to a set of rights that one has over an object or thing, including the right to use, possess, transfer, and exclude others from using it. It includes both tangible objects like land, buildings, and personal possessions, as well as intangible things like intellectual property rights and contracts. Choices A, B, and C are too narrow or don't fit the definition of property.

Question 6

According to stakeholder theory,____________.&#10;A) stakeholders invest the most capital in a corporation&#10;B) a company ought to be run to the benefit of everyone involved in it&#10;C) everyone involved in a company should be treated as shareholders&#10;D) ownership of a company should be divided among all stakeholders

Accepted Answer

According to stakeholder theory, a company should be run to benefit everyone involved, not just shareholders or owners. The theory suggests that a company has responsibilities to its stakeholders, which includes employees, customers, suppliers, communities, and the environment, and that management should make decisions that balance the interests of all stakeholders in addition to shareholders.

Question 7

An effective corporate ethics program should include____________.&#10;A) standards that have been communicated to all levels&#10;B) oversight given to a few individuals&#10;C) training in all of the relevant laws&#10;D) reporting of all procedures to the public

Accepted Answer

An effective corporate ethics program should include standards that have been communicated to all levels of the organization to ensure that all employees understand the expectations and are held accountable for their actions. Oversight should be given to a broader group of individuals, not just a few, and training in all relevant laws is important but not sufficient on its own. There may be confidentiality concerns that make reporting of all procedures to the public unfeasible or undesirable.

Question 8

Adolf Berle argued against public responsibility of a corporation on the basis of .&#10;A) the rights of stakeholders&#10;B) limiting the power of shareholders&#10;C) excessive managerial power&#10;D) corporations' impact on society

Accepted Answer

Adolf Berle argued against the idea that corporations have a public responsibility on the basis of excessive managerial power. He was concerned that managers, who were not owners, had too much control over the companies and their operations, which could lead to decisions not in the best interest of the shareholders.

Question 9

The contractual theory of corporations states that____________.&#10;A) corporations have an implicit contract with society at large&#10;B) corporations make transactions easier than they otherwise would be&#10;C) individuals would be able to do business most easily without contracts&#10;D) when individuals pool their assets they are more likely to act with social responsibility

Accepted Answer

The answer of The contractual theory of corporations states that____________.&#10;A)...

Question 10

Explain the reasons why shareholder theory of control better accounts for interest protection than stakeholder theory.

Accepted Answer

The answer of Explain the reasons why shareholder theory of...

Question 11

The property rights theory of corporations has it that incorporation____________.&#10;A) is a general aspect of ownership&#10;B) is a matter of owning enough capital&#10;C) should be accompanied by rules&#10;D) is anyone's right

Accepted Answer

The answer of The property rights theory of corporations has...

Question 12

Explain Dodd's argument that corporations have a social service.

Accepted Answer

The answer of Explain Dodd's argument that corporations have a...

Question 13

The social institution theory of corporations has it that incorporation____________.&#10;A) is an essentially public matter&#10;B) should always be charted by the government&#10;C) should be handled democratically&#10;D) is a matter best left to shareholders

Accepted Answer

The answer of The social institution theory of corporations has...

Deck 13: Corporate Governance and Accountability