Exam 11: Corporate Governance, Social Responsibility, and Ethics

Business ethics are concerned with accepted principles of right or wrong governing the conduct of businesspeople. Identify and discuss the common examples of unethical decisions that businesspeople have made.

Jacob is a senior manager at Aries LLC. He has been earning significant bonuses in addition to his salary. He often misrepresents the financial information about the operations he handles, and he acquires more financial resources than he needs to run operations. Which of the following concepts is illustrated in this scenario?

Which of the following statements concerning stock-based compensation schemes for executives is NOT true?

Inside directors are not full-time employees of the company.

If a company fails to take stakeholder claims into account when formulating its strategies, stakeholders may withdraw their support.

Which of the following types of business law describes the accepted principles of right and wrong when dealing with competitive behavior?

When managers consider the efficiency, timeliness and employee satisfaction in a company's scorecard, they are looking at the customer perspective.

With recent events, corporate boards have taken a hands-off role in top-management decisions and play a much more passive role in corporate governance.

While the purpose of governance mechanisms is to reduce the scope and frequency of the agency problem, they are not involved in the alignment of the interests of business-unit managers with those of their superiors.

In a stakeholder impact analysis, after stakeholders' interests and concerns are identified it is necessary to identify the resulting strategic challenges.

Agency theory offers a way of understanding why managers do not always act in the best interests of stakeholders.

What is the best way for managers to ensure that ethical considerations are taken into account? List five out of the seven things managers can and should do to ensure that basic ethical principles are adhered to, and that ethical issues are routinely considered when making business decisions. Describe at least one way to accomplish each of these tasks.

To make sure that ethical issues are considered in business decisions:

Which of the following correctly describes the ethical right of each type of stakeholder?

Which of the following has been a negative effect of the SEC requirement that publicly traded companies in the United States are required to file quarterly and annual reports that are audited by an independent, accredited accounting firm?

Strategic control systems are the primary governance mechanisms established within a company to reduce the scope of the agency problem between levels of management.

Which of the following statements is true about the board of directors?

The internal research department of Libra Inc. has found that the packaging of health supplements produced by the company is faulty and resulting in poor quality. Despite this knowledge, the company has not improved the packaging and instead has advertised to its customers that this packaging is foolproof. Which of the following concepts is illustrated in this scenario?

When managers of a firm seek to unilaterally rewrite the terms of contracts with suppliers, buyers, or complement providers in a way that is more favorable to their firm, they are engaging in:

Which of the following is a source of gaining wealth whereby corporate raiders either push companies to change their corporate strategy to one that will benefit stockholders, or charge a premium for stock when the company wants to buy it back?