Deck 2: Organizational Stakeholders, Management, and Ethics

Question 1

The rewards that stakeholders receive for participating in an organization are called .

A)payoffs
B)kickbacks
C)inducements
D)contributions

Answer 1

C

Question 2

Which of the following managers has a line role?

A)R&D manager
B)Sales manager
C)Production manager
D)Executive vice president of finance

Answer 2

C

Question 3

are the moral rules and values that a group of people uses to control the way they perform a task or use resources.

A)Interpersonal Ethics
B)Professional Ethics
C)Group Ethics
D)Individual Ethics

Answer 3

B

Question 4

At Sears, management created a reward system that had the effect of making employees act unethically and overcharge customers. This was caused by:

A)outside pressure.
B)bad individual ethics.
C)societal ethics.
D)the Moral Rights model of ethics.

Question 5

Suppose you are the son or daughter of a mobster, and you believe that it is OK to commit murder if it is in the best interest of your family. This view comes from:

A)your personal ethical beliefs.
B)societal ethics.
C)the reputation effect.
D)the Justice model of ethics.

Question 6

The primary goal of capitalistic organizations is to:

A)satisfy employees.
B)form long- term relationships with suppliers.
C)maximize shareholder wealth.
D)satisfy customers.

Question 7

Coalitions within organizations tend to be a result of:

A)poor performance within the organization.
B)conflicting goals within the organization.
C)reduced profits.
D)reduced market share.

Question 8

Which of the following outside stakeholders contributes high- quality inputs?

A)Customers
B)Suppliers
C)Trade unions
D)The general public

Question 9

When delegating authority, the agency problem arises because:

A)the principle tends to have less information than the agent.
B)the agent tends to have less information than the principle.
C)the principle does not desire more duties.
D)the agent does not want to give up power.

Question 10

Determining management's rewards and incentives is primarily the responsibility of .

A)the board of directors
B)the shareholders
C)corporate management
D)the CEO

Question 11

Which of the following would be considered to be the lowest level of management?

A)Divisional managers
B)Line managers
C)Functional managers
D)Vice presidents

Question 12

A manager chooses to tell affected employees about an impending layoff, despite the damage this causes to the stock price of the organization. She did this because it was "the right thing to do." Which model of ethics is she using?

A)Utilitarian
B)Justice
C)Moral Rights
D)None of the above

Question 13

Roger observed his manager charging personal long distance calls to the company. Roger sent an anonymous letter about the incident to an outside board. Roger:

A)is an ethics officer.
B)is on an ethics committee.
C)was behaving unethically.
D)is a whistle- blower.

Question 14

Which of the following would be considered to have a staff role?

A)Sales manager
B)Executive Vice President of Finance
C)Vice President of Accounting
D)R&D director
E)All are staff roles.

Question 15

A company's top- management team consists of:

A)the president and executive vice president.
B)senior vice presidents and divisional managers.
C)executive vice presidents and vice presidents.
D)functional and divisional managers.

Question 16

Societal ethics:

A)include unwritten norms and values.
B)encourage companies to use tactics that lead to an institutionalized role orientation.
C)encourage companies to use tactics that lead to an individualized role orientation.
D)encourage companies to adopt a broad stance on social responsibility.

Question 17

are people who have an interest or claim in an organization, in what it does, and in how well it performs.

A)Foreign officials
B)Stakeholders
C)Technicians
D)Organizers

Question 18

The skills that organizations require to perform tasks are called .

A)dividends
B)contributions
C)inducements
D)payments

Question 19

The problem of doctors owning stock in hospitals is one of:

A)the conversion process.
B)organizational structure.
C)potentially competing goals.
D)organizational design.

Question 20

is the major trustee for the shareholders.

A)An institutional investor
B)The largest individual shareholder
C)The chairman of the board of directors
D)The president of the company

Question 21

To create an ethical organization,

A)a company should use socialization tactics that lead to an institutionalized role orientation.
B)a company should use a bottom- up approach.
C)top management should promote moral values and behave ethically.
D)a company should offer employees lifetime employment.

Question 22

Which of the following employees would be considered to have a line role?

A)Executive Vice President of Finance
B)R&D director
C)Vice President of Production
D)Sales manager
E)All are line roles.

Question 23

evolve(s)through negotiation and compromise between stakeholders.

A)Organizational ethics
B)Socialization tactics
C)Rites of passage
D)Social responsibility

Question 24

Large institutional shareholders like CALPERS are doing all of the following except:

A)intervening in long- term management decisions.
B)monitoring the salaries and bonuses of managers.
C)monitoring the actions of company boards.
D)encouraging companies to create antitakeover provisions.

Question 25

Which of the following are generally used to solve agency problems?

A)Principles not susceptible to moral hazard
B)Ethics Credo's
C)Governance mechanisms
D)A more authoritarian management structure

Question 26

Who usually ensures that an organization's internal operations match strategic objectives?

A)The CEO
B)The production manager
C)The executive vice president of production
D)The president

Question 27

Which of the following statements about the CEO is false?

A)He or she determines top management's rewards and incentives.
B)He or she influences stakeholders.
C)He or she allocates resources to subunits.
D)He or she is the chief operating officer.

Question 28

Managers are sometimes able to pursue their own interests at the expense of other stakeholders because managers:

A)have the ability to initiate a takeover.
B)are the most powerful outside stakeholders.
C)own the organization.
D)have control over organizational resources.

Question 29

The coalition view of organizations:

A)states that all stakeholder groups are equally important.
B)implies that all stakeholder groups have the same goals.
C)states that organizations must form alliances with each other.
D)implies that some stakeholder groups have priority over others.

Question 30

What does the "Tragedy of the Commons" illustrate?

A)That common men and women don't have the resources to make ethical decisions
B)That individuals tend to pursue the collective goals if they are clear what they are
C)That moral hazard is a real issue that managers need to deal with
D)That the rational pursuit of individual self interest results in disaster

Question 31

Vice presidents are part of management.

A)corporate
B)divisional
C)line
D)functional

Question 32

Which of the following is not one of the benefits of the "Reputation Effect?"

A)It reduces transaction costs.
B)It allows organizations to charge a higher price for their products.
C)Customers have a positive view of the organization.
D)It helps managers follow ethical rules and guidelines.
E)All are benefits of the reputation effect.

Question 33

When an organization tries to satisfy stakeholders, it faces all of the following problems except:

A)deciding how to allocate organizational rewards to different stakeholder groups.
B)choosing which stakeholder goals to satisfy.
C)losing the ability to innovate.
D)balancing short- term and long- term goals.

Question 34

are the personal and moral standards used by individuals to structure their interactions with other people.

A)Interpersonal Ethics
B)Professional Ethics
C)Individual Ethics
D)Societal Ethics

Question 35

Moral hazard:

A)is when the principle has too much authority over the agent.
B)is when the agent has the opportunity to unfairly influence the principle.
C)is when the agent is motivated to pursue their own self- interest.
D)is when the principle behaves unethically.

Question 36

Which of the following is an inside stakeholder group?

A)Customers
B)Shareholders
C)Trade unions
D)Suppliers

Question 37

Divisional managers will most likely report to which member of the top- management team?

A)Vice presidents
B)Senior vice presidents
C)Executive vice presidents
D)The board of directors

Question 38

A manager decides to locate a manufacturing plant in a location that maximizes the overall benefits to the stakeholders. Which model of ethics is he/she using?

A)Moral Rights
B)Justice
C)Utilitarian
D)None of the above

Question 39

Stakeholders will generally participate in an organization if

A)inducements exceed contributions.
B)inducements exceed kickbacks.
C)contributions exceed inducements.
D)payments exceed contributions.

Question 40

What does Gillette do when it receives a protest letter regarding animal testing?

A)They ignore it since they get very few of them.
B)They respond to each one of them so that the public can better understand their position.
C)They have the CEO telephone the sender.
D)They turn them over to the ethics committee for further study.

Question 41

Shareholders are important inside stakeholders.

Question 42

A friend is a manager at a small technology firm that manufactures radiology equipment, such as CAT scanners. He states that shareholders want him to increase profits, so he is willing to do whatever it takes to increase profits. In fact, he has the opportunity to get a contract with a supplier who will supply parts at a lower cost, but the quality will be noticeably worse. However, as the hospital is the only one in this rural area, most patients do not have the option to go to another hospital. What can you tell your friend about behaving ethically?

Question 43

Gillette has been touted as a highly ethical organization due to its refusal to test cosmetics on animals.

Question 44

Outside stakeholders include shareholders, managers, and the workforce.

Question 45

Balancing short- term and long- term goals is hard because:

A)organizations do not place enough emphasis on operative goals.
B)official goals focus on the long- term and operative goals focus on the short- term.
C)stakeholder groups have different preferences for the time frame an organization should use to pursue goals.
D)official goals focus on the short- term and operative goals focus on the long- term.

Question 46

Which of the following managers has a staff role?

A)Divisional manager
B)Production manager
C)Assembly line supervisor
D)R&D manager

Question 47

In Agency Theory, what is "Moral Hazard?" Under what conditions does it exist?

Question 48

Which of the following is not one of the reasons that unethical behavior occurs?

A)Pursuit of self- interest
B)Unrealistic stakeholder expectations
C)Personal ethics
D)Outside pressure

Question 49

Which of the following is an outside stakeholder group?

A)The workforce
B)Shareholders
C)Managers
D)Unions

Question 50

A doctor was banned from practicing medicine because he consistently prescribed unnecessary procedures. This doctor:

A)violated professional ethics.
B)took a broad stance on social responsibility.
C)took a narrow stance on social responsibility.
D)violated individual ethics.

Question 51

Which of the following inside stakeholders contributes money and capital?

A)The workforce
B)Shareholders
C)Trade unions
D)Managers

Question 52

The chain of command in a large organization is as follows:

A)president, divisional managers, executive vice presidents, vice presidents
B)CEO, president, executive vice presidents, vice presidents
C)board, CEO, executive vice presidents, presidents
D)CEO, president, senior vice presidents, executive vice presidents

Question 53

Which of the following is an inducement?

A)High- quality inputs
B)Social and economic infrastructure
C)Stock appreciation
D)Free and fair collective bargaining

Question 54

The hierarchy can be defined as the vertical ordering of organizational roles according to their relative authority.

Question 55

Who is the chief operating officer (COO)of an organization?

A)The president
B)The executive vice- president of operations
C)The chairman of the board
D)The CEO

Question 56

The justice model tends to be the one that effective managers rely upon the most in making decisions.

Question 57

The stakeholder group with the ultimate authority over the organization's resources is the employees.

Question 58

A promotion tournament is a vehicle by which managers can help employees focus on long term, rather than short term objectives.

Question 59

A manager decides to distribute the pool of bonus money equally among all of the subordinates, even though some performed better than others. He is using which ethical model in making this decision?

A)Moral Rights
B)Utilitarian
C)Justice
D)None of the above

Question 60

The Organizational Insight "Conflicting Interests in Health Care" discusses the relationship between doctors and pharmaceutical companies. The pharmaceutical companies entice doctors to prescribe their drugs through free samples, free meals, and entertainment. Using the three ethical models (utilitarian, moral rights and justice), discuss the thought process a doctor would have when faced with this situation.

Question 61

Because stakeholder goals conflict, an organization should just attempt to minimally satisfy the majority of stakeholders.

Question 62

The board of directors selects the organization's top- management team.

Question 63

All stakeholder groups are equally important.

Question 64

The coalitional view of organizations implies that some stakeholder groups have priority over other groups.

Question 65

The Hudson's Bay company uses third- party compliance audits to ensure suppliers adhere to the company's policy on child labour .

Question 66

Stock based compensation schemes help solve the agency problem by aligning individual behaviors with corporate strategy.

Question 67

Behaving ethically can reduce transaction costs through the reputation effect.

Question 68

A manager following the justice model when faced with a moral decision would most likely examine how fair the decision would be to affected stakeholders.

Question 69

An organization's mission statement can be used to guide ethical behavior.

Question 70

When employees feel that contributions exceed inducements, they are likely to withdraw their support for the organization.

Question 71

Contributions are defined as what the organization gives back to society.

Question 72

One problem with the utilitarian model is that it leaves managers to determine the relative importance of each stakeholder group.

Question 73

A manager following the utilitarian model when faced with a moral decision would most likely examine what produces the greatest good for the greatest number of people.

Question 74

The CEO selects the organization's top- management team.

Question 75

A manager following the utilitarian model when faced with a moral decision would most likely examine the fundamental rights and privileges of the people affected by the decision.

Question 76

Customers are usually the largest outside stakeholder group.

Question 77

Moral hazard is a condition that exists when managers must make quick decisions that may go against their ethical principles.

Question 78

Canadian doctors have lobbied provincial governments on behalf of pharmaceutical companies.

Question 79

The "Tragedy of the Commons" example refers to the ethical dilemmas faced when individuals pursue their own self interests.