Question 1

There are costs to firms for their illegal and even unethical behaviors.Which of the following is seen as the most damaging and costly to these businesses?

Accepted Answer

Employee turnover is often the most damaging and costly because it can lead to loss of talent, increased recruitment and training costs, and decreased morale and productivity among remaining employees.

Question 2

_____ refers to a situation where a person's values are in conflict,making it unclear whether a particular decision is the right thing to do.

Accepted Answer

An ethical dilemma is a situation where a person is faced with a tough decision because there are conflicting values or ethical principles involved, and it is not clear which direction to take. This type of dilemma can arise in various contexts, including in the workplace, educational settings, and personal relationships. In such situations, it is important for the person to carefully consider the potential consequences of each option and make a decision that is consistent with their personal values and principles.

Question 3

The questions on who will be hurt and how much,who will benefit and how much,what does the owner or the firm owe others,and what do others owe the owner and the firm are typically asked when:

Accepted Answer

These questions are typically asked when the moral dimension of a problem is to be determined. They help in identifying the key stakeholders, their interests, and the potential impact of different solutions on them. This enables a more comprehensive evaluation of the moral implications of the problem and promotes ethical decision-making.

Question 4

Interacting with others in order to build relationships useful to a business refers to _____.

Accepted Answer

Networking involves building relationships with other professionals who can provide helpful information, referrals, and opportunities to a business. Moonlighting refers to working a second job, brainstorming is a group problem-solving technique, and bootstrapping refers to starting a business with minimal resources.

Question 5

Roller-Tell Inc.,a major supplier of components to the automobile industry,has recently confronted a crisis as one of its manufacturing units has been forcefully shut down by the local union.As a result,the company has been unable to meet the customer demands appropriately.As the owner of the business,the most appropriate way for the firm to handle this crisis is to:

Accepted Answer

In a crisis situation, transparency is important for maintaining trust and credibility with stakeholders. By making the process of dealing with the problem as open as possible, Roller-Tell Inc can communicate their efforts and commitment to resolving the issue, as well as actively seek input and support from customers and suppliers. Delegating the crisis management to employees may not provide the necessary direction or resources to effectively address the problem, while keeping stakeholders isolated or avoiding admission of an issue could lead to further distrust and negative impact on the company's reputation.

Question 6

Which of the following includes a three-step process that has been adopted to help small businesses make better and more ethical decisions?

Accepted Answer

The three-step process referred to in the question is LaRue Hosmer's model, which is a framework for ethical decision making for small businesses. The other options listed are not related to this process.

Question 7

Which of the following questions in LaRue Hosmer's approach to ethical decision making best reflects a decision maker's real or presumed obligations to people and institutions in a firm and in its task environment?

Accepted Answer

The question "What does the decision maker (or the firm) owe others?" best reflects a decision maker's real or presumed obligations to people and institutions in a firm and its task environment. This question not only considers the interests of the firm, but also acknowledges the responsibilities that the firm has towards its stakeholders including customers, employees, shareholders, suppliers, and the community. By asking this question, decision makers can ensure that they are making ethical and responsible decisions that take into account the interests of all stakeholders.

Question 8

Justin is a sales executive at a manufacturing company.One of his clients who purchases products from him at a higher price than that quoted by competitors is facing financial problems.Since Justin's promotion depends on his achieving the sales target,he cannot decide whether he should inform his client about the lower prices its competitors are paying.Justin is facing a situation known as _____.

Accepted Answer

Justin is facing an ethical dilemma. He is caught between his personal interest (achieving the sales target) and his professional ethics (providing his client with the best possible deal). He needs to make a moral choice in this situation, and his decision will have consequences for both himself and his client.

Question 9

Which of the following statements is true about caveat emptor?

Accepted Answer

Caveat emptor is often used as a defense by producers of shoddy merchandise, implying that it is the buyer's responsibility to be aware of any defects before purchasing. It is not considered a highly legitimate or accountable principle, as it prioritizes the seller's interests over the buyer's. While it has been approved as a legal principle in some cases, it is not routinely approved and is not a widely accepted practice in modern business.

Question 10

A system of values people use to determine whether actions are right or wrong is referred to as _____.

Accepted Answer

Ethics refers to the set of moral principles that guide individuals or groups in determining what is right or wrong. It is a system of values that helps people make decisions and judgments about behavior and actions. Bootstrapping is a term used in business to describe starting a company with minimal resources, pathos refers to an emotional appeal, and green auditing relates to assessing the environmental impact of an organization's activities.

Question 11

Sylvia had helped Jonathan,one of her previous subordinates,in establishing his business by referring him to an important venture capitalist.As an appreciation of her help,Jonathan has now agreed to hire and personally mentor her son as a trainee in his company.Both Sylvia and Jonathan are typically exhibiting _____.

Accepted Answer

Sylvia and Jonathan are exhibiting mutuality, which refers to the willingness or tendency of individuals or groups to help each other out of a sense of shared interests or goals, rather than a strict quid-pro-quo approach. This can be seen in how Sylvia helped Jonathan establish his business without any expectation of direct benefit, and how Jonathan is now returning the favor by mentoring Sylvia's son. This reflects a sense of reciprocity and mutual support, which is often associated with positive interpersonal relationships and collaborative work environments.

Question 12

To help and prepare small businesses to handle crisis they have been recommended to avoid:

Accepted Answer

Planning only after a crisis has occurred is not recommended because it leaves businesses unprepared and vulnerable. Effective crisis management involves proactive planning and preparation to ensure resilience and continuity.

Question 13

_____ is an approach to operating a firm or a line of business which identifies,creates,and exploits opportunities to make a profit in a manner that can minimize the depletion of natural resources,maximize the use of a recycled material,or improve the environment.

Accepted Answer

Sustainable entrepreneurship refers to an approach to operating a firm or business that seeks to make a profit while minimizing the depletion of natural resources, maximizing the use of recycled materials, or improving the environment. This involves identifying and exploiting opportunities that align with these goals and values, and implementing processes and strategies that support sustainable practices. This approach is increasingly popular among entrepreneurs and businesses seeking to balance profit with environmental and social responsibility.

Question 14

Social networking builds long-lasting relationships.Most entrepreneurs start with the Big 3 social networks,which are:

Accepted Answer

The Big 3 social networks for entrepreneurs are Twitter, Facebook, and LinkedIn. These platforms offer a wide reach, the ability to connect with other entrepreneurs and potential customers, and the opportunity to share content and build long-lasting relationships. Instagram and Tumblr are more focused on visual content and may not be as effective for building business relationships.

Question 15

_____ means "let the buyer beware," and is a philosophy sometimes used by businesses to put the burden for consumer protection onto a customer.

Accepted Answer

Caveat emptor is a Latin term that means "let the buyer beware." It implies that consumers are responsible for thoroughly researching and evaluating a product before purchasing it, and that the seller is not responsible for any problems that may arise after the sale. This philosophy is often used by businesses to shift the burden of consumer protection onto the customer, rather than taking responsibility for the quality and safety of their products.

Question 16

Ivan has recently started his new business venture,and he has been busy visiting trade exhibitions,business organizations,electronic business forums,and his previous colleagues in order to build contacts.This will help him use their expertise to the benefit of his business.Ivan is typically working on building a _____.

Accepted Answer

Ivan is building a social network by connecting with various individuals and organizations in his industry to gain knowledge and support for his business venture.

Question 17

Jake is a small business owner of Macho Doors,a manufacturer and installer of garage doors.His business has earned the reputation as a reliable,trustworthy business that makes high quality,long-lasting doors.However,with rising gasoline and wood prices,Jake is finding it hard to maintain the existing quality standards.If he continues with the existing quality standard,his profit margins will go down and he will not be able to hike his employees' salaries; if he inserts panels of lower quality wood the reputation of his business will be lost.The situation that Jakes faces is typically described as a(n)_____.

Accepted Answer

Jake is facing an ethical dilemma where he has to choose between maintaining the existing quality standard that is essential for his business reputation or compromising on the quality of his product to increase profit margins and pay salaries.

Question 18

_____ is a certification standard from the U.S.Green Building Council for buildings that are environmentally friendly.

Accepted Answer

LEED (Leadership in Energy and Environmental Design) is a certification standard from the U.S. Green Building Council for buildings that are environmentally friendly. ESOP (Employee Stock Ownership Plan) is a type of employee benefit plan, ISO (International Organization for Standardization) is a standard-setting body that develops and publishes international standards, and BATNA (Best Alternative to a Negotiated Agreement) is a negotiation term referring to the best course of action if a negotiation fails.

Question 19

The CEO at River Castle Inc.asked the employees to prepare a report on ways in which the company could become more environmental friendly.The reports revealed areas in which the company had been unnecessarily adding to its carbon footprint and consuming excessive energy due to faulty machines.As a corrective action,all the faulty and outdated equipment were replaced with efficient equipment.This is an example of a(n)_____.

Accepted Answer

The scenario best describes a green audit, which is an assessment of a company's environmental impact and identification of areas where improvements can be made. In this case, the audit revealed the company's faulty equipment as a major contributor to its carbon footprint, and the CEO took corrective action to replace it with more energy-efficient equipment. This is a proactive approach to reducing the company's impact on the environment. The other options are not applicable to the scenario.

Question 20

Which of the following is best avoided in handling a business crisis?

Accepted Answer

Mixing crisis management with the everyday management of a firm can lead to confusion and inefficiency. Crisis management requires a focused approach that is distinct from the routine operations of a business.

Quiz 3: Small Business Environment: Managing External Relations