Deck 1: Law-Value-Creation-And-Risk-Management

Question 1

The cost to firms for acting responsibly is often significantly less than the greater restrictions and costs imposed on them as a response to misdeeds or acting irresponsibly.

Answer 1

True

Question 2

Entering into nondisclosure agreements is an unethical practice that should not be tolerated by a legally astute manager.

Answer 2

False

Question 3

Researchers found a statistically significant inverse relationship between a country's economic prosperity,as measured by the per capita gross domestic product,and the country's judicial independence.

Answer 3

False

Question 4

According to the text,adequate protection of minority shareholder rights increases investment in new ventures.

Question 5

Private law provides the legal rules within which firms compete.

Question 6

Contracts allow managers to make their own "public" law.

Question 7

The center of operations for the European Union is located in Brussels,Belgium.

Question 8

A firm's illegal conduct has no bearing on the firm's competitive advantage because it does not necessarily divert funds from strategic investments or affect its image and reputation with its customers.

Question 9

Each activity in the value chain has legal aspects.

Question 10

Worker protection has not been a major public policy concern underlying U.S.business law.

Question 11

A legally astute manager would take a proactive approach to legal issues and relevant regulations.

Question 12

As used in the text,the term "legal astuteness" refers to the ability of a manager to avoid situations that make consultation with legal counsel necessary.

Question 13

Legal astuteness is a valuable managerial capability through which managers work effectively with counsel to solve complex problems and leverage resources to sustain competitive advantage.

Question 14

Promoting economic growth is one of the primary public policy objectives of laws and regulations applicable to business.

Question 15

Self-regulation within the advertising industry has been largely successful in making any bans on deceptive advertising unnecessary.

Question 16

To manage risk,firms may use insurance policies.

Question 17

The potential for legal analysis to be ambiguous means that even the most skilled and experienced advisers and lawyers sometimes get it wrong.

Question 18

Under the resource-based view of a business firm,a firm's resources can be a source of sustained competitive advantage if they are valuable,rare,and perfectly imitable by competitors.

Question 19

The Systems Approach recognizes that law is dynamic,as opposed to static.

Question 20

Lobbying legislators is one method by which managers can help shape the environment in which they do business.

Question 21

The __________ approach recognizes that "business decisions consist of continuous,interrelated economic and moral components."

A) procedural
B) systems
C) conciliatory
D) mandated

Question 22

The __________ was enacted after widespread abuses in the subprime mortgage market.

A) Walsh-Healy Mortgage Reformation and Consumer Protection Act of 2009
B) Mortgage Lending and Financial Reform Act of 2009
C) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
D) Financial Institution Regulatory Pronouncement and Consumer Revision Act of 2010

Question 23

Which of the following statements regarding a comparison of the law of the United States and the law of the European Union is true?

A) Laws of the United States and the European Union differ in regard to consumer privacy and emissions standards but are similar in regard to chemical usage and accounting standards.
B) Laws of the United States and the European Union differ in regard to consumer privacy,emissions standards,and chemical usage but are similar in regard to accounting standards.
C) Laws of the United States and the European Union differ in regard to consumer privacy,emissions standards,chemical usage,and accounting standards.
D) Laws of the United States and the European Union are similar in all significant areas involving business regulation and vary in only minor respects.

Question 24

J.P.Morgan Chase's "Sons and Daughters" hiring program,involving hiring children of China's ruling elite,was approved by the U.S.Department of Justice and the Securities Exchange Commission.

Question 25

Which of the following statements is true regarding typical requirements placed on employers mandating the provision of employee benefits?

A) Employers are typically required to provide workers' compensation,to pay unemployment insurance,and to pay social security and Medicare taxes.
B) Employers are typically required to pay unemployment insurance,to pay social security and Medicare taxes,and to provide health and life insurance as well as paid time off.
C) Employers are typically required to pay workers' compensation insurance,to pay social security and Medicare taxes,and to provide sick time and vacation time.
D) Employers are typically required to provide workers' compensation and to pay unemployment insurance,but employers are not required to pay social security and Medicare taxes.

Question 26

The __________ theory recognizes that firms have relationships with many constituent groups which both affect and are affected by the actions of the firm.

A) stakeholder
B) stockholder
C) relational
D) cohesive

Question 27

At its core,legal astuteness is the ability of a manager to

A) effectively communicate and solve problems with counsel.
B) prevent deceptive trade practices and piracy.
C) develop the firm's brand and marketing strategy.
D) encourage the sale of safe products at a fair price.

Question 28

Private property rights provide one area in which laws and regulations can promote economic growth.

Question 29

Which of the following is NOT one of the four primary public policy objectives furthered by laws and regulations applicable to U.S.business?

A) Promoting economic growth
B) Protecting workers
C) Promoting consumer welfare
D) Promoting governmental regulation

Question 30

The "systems approach" to business and society builds on which of the following stakeholder theory insights?

A) Firms have relationships with many constituent groups,which both affect and are affected by the actions of the firm.
B) Firms have relationships with many constituent groups,and that these groups must be managed to best promote value to stockholders.
C) Although firms have relationships with many constituent groups,these groups have little impact on the ongoing management of business firms.
D) Firms have relationships with only a few groups,such as employees,that are directly connected with business operations.

Question 31

In which of the following ways does U.S.law protect workers?

A) Facilitate innovative products and services
B) Prevent deceptive practices
C) Collect taxes and spend money
D) Require employers to provide certain benefits

Question 32

In 2016,which of the following spent the most in efforts toward lobbying lawmakers?

A) Blue Cross/Blue Shield
B) U.S.Chamber of Commerce
C) National Association of Realtors
D) JPMorgan Chase

Question 33

Firms with _____ have the ability to learn and adjust to circumstances in order to seize opportunities while dealing with competitive threats at the same time.

A) dynamic capability
B) strategic compliance
C) expansive public policy
D) judicial independence

Question 34

Which of the following is NOT a component of legal astuteness as referenced in the text?

A) A set of value-laden attitudes about the importance of law to the firm's success
B) A practice of leaving the resolution of legal issues to outside counsel
C) The ability to exercise informed judgment when managing the legal aspects of business
D) Context-specific knowledge of the law and the appropriate use of legal tools

Question 35

Which of the following does NOT provide an example of how organizations and the law are endogenously coevolutionary?

A) Managers lobbying legislators
B) Managers forming coalitions
C) Managers lobbying members of the executive branch
D) Government relying on managers' self-regulation

Question 36

Which of the following has the responsibility for deciding which allocation of resources and rewards in a business makes the most business sense?

A) The general manager
B) The in-house lawyer
C) An independently retained lawyer
D) An independently retained law firm,not just one lawyer

Question 37

In which of the following ways does U.S.law promote consumer welfare?

A) Facilitate innovative products and services
B) Regulate certain terms and conditions of employment
C) Collect taxes and spend money
D) Protect the environment

Question 38

In what way do managers make their own private law?

A) By advocating for judicial independence
B) By submitting to burdensome licensing requirements and filing fees
C) By retaining counsel ahead of any problems or issues
D) By entering into contracts and crafting certain governance structures

Question 39

__________ law is a type of law referencing formal rules embodied in constitutions and statutes enacted by legislatures.

A) Public
B) Private
C) Substantive
D) Remedial

Question 40

Legally astute management teams practicing strategic compliance management

A) view the cost of complying with government regulation as an investment,not an expense.
B) view the cost of complying with government regulation as an expense that should be avoided until legal action is threatened.
C) do only the minimum necessary to comply with any applicable law.
D) view the cost of complying with government regulation as an expense that should be avoided until legal action is threatened,while only engaging in the minimum efforts necessary to comply with any applicable law.

Question 41

Under the __________ view of the firm,resources can be a source of competitive advantage if they are __________.

A) resource-based; rare
B) systems-based; hard to copy
C) resource-based; available to competitors
D) systems-based; available to competitors

Question 42

In CASE 1.1 Sorrell v.IMS Health Inc.,drug manufacturers challenged as unconstitutional a Vermont statute prohibiting pharmacies from selling prescriber-identifying information for marketing prescription drugs without the consent of prescribers.What was the U.S.Supreme Court ruling in this matter?

A) Although speech promoting marketing was not protected by the First Amendment,the law was unconstitutional based on the due process clause.
B) The statute regulated commercial speech,which was evaluated under an "intermediate" standard and the law was,therefore,constitutional.
C) The statute did not involve constitutional issues and was,therefore,a permissible type of regulation.
D) The conduct prohibited by the law was protected by the First Amendment and the law was unconstitutional.

Question 43

Law is not just a static,external force acting upon managers and their firms; rather law and organizations are "endogenously coevolutionary."

Question 44

Management teams that practice __________.

A) value-based compliance management view the cost of compliance as an expense rather than an investment
B) strategic compliance management identify and embrace operational changes in order to convert regulatory constraints into innovation opportunities
C) resource-based management see regulation compliance as a competitive advantage
D) strategic-based risk management are the most legally astute of managers

Question 45

Discuss ways in which laws and regulations promote economic growth.

Question 46

Which of the following is a component of managing risk when assembling a team in business development?

A) Analyzing any covenants not to compete
B) Purposefully refusing to address issues such as sexual harassment
C) Informing employees that e-mail communications are not discoverable
D) Ignoring whistleblower protection

Question 47

Which of the following falls within the legal limits of lobbyist activity?

A) Giving gifts to governmental officials
B) Contributing to entities that hold the lawmaker's interest
C) Hosting campaign events for lawmakers running for reelection
D) Paying lawmakers' staff for personal access to lawmakers on behalf of client

Question 48

U.S.laws promote public welfare in a variety of ways.Which of the following would be one of those ways?

A) Protecting fundamental rights
B) Preventing deceptive practices
C) Regulating terms and conditions of employment
D) Allocating risks

Question 49

Under the resource-based view of a firm,when can a firm's resources be a source of sustained competitive advantage?

Question 50

Assume that after paying a large fine,a company survives charges of illegal activity.In what ways does illegal conduct put a company at a competitive disadvantage?

Question 51

Which of the following is NOT one of "Porter's Five Forces" that affect the competitive environment?

A) Threat of entry
B) Direct competition
C) Logistics and component supply
D) Buyer power

Question 52

How does U.S.business law promote consumer welfare?

Question 53

Legally astute management teams typically wait until later in the strategic development to bring counsel in and evaluate legal considerations.​

Question 54

Lobbying activities look different in the European Union from the way they look in the United States.Which of the following represents the advice of lobbyists for U.S.interests in the European Union?

A) Refrain from presenting your position to commission members individually; the presentation must be to the full commission to be considered.
B) The most effective lobbying follows the relevant EU commission's preliminary draft opinion.
C) Refrain from any lobbying activity until a full presentation can be made to regulators.
D) Present your position to regulators ahead of any political debate on the issue.

Question 55

Which of the following entities is at the center of a systems approach to law,business,and society?

A) Public law
B) Value proposition
C) Competitive environment
D) Top management team

Question 56

__________ is a type of relationship building lobbying that is prevalent in China.

A) Xantu
B) Olaying
C) Guanxi
D) Quinta

Question 57

In what three specific ways does U.S.law protect workers?

Question 58

_____ strategies for dealing with the interface between a firm's business and the natural environment that go beyond environmental regulatory compliance have been associated with _____ financial performance.

A) Proactive; sub-par
B) Legislative; improved
C) Proactive; improved
D) Defensive; peak

Question 59

The ____ approach to business and society introduced in the text is a descriptive framework that integrates legal and societal considerations with mainstream theories of competitive advantage and social responsibility.

A) Integrative
B) Systems
C) Proactive
D) Economic

Question 60

Merle,the CEO of a corporation owning a number of pet stores,calls you for advice.Merle shares inside information that the stock of the company is going to go down because of reports that a number of dogs sold by the store had become ill and that Merle,therefore,immediately sold all personal stock in the company before the information became public.Then Merle tells you that counsel has warned of pending charges of securities violation involving Merle's insider trading.Which of the following is true regarding Merle's situation?

A) Corporate executives may be fined but may not be sent to jail.
B) Corporate executives may be sent to jail,but only for offenses endangering others.
C) Corporate executives may be sent to jail,but only for fraud involving banks.
D) Corporate executives may be sent to jail for violation of criminal laws.