Ba 385 Midterm Test

Front 1

Define Business

Back 1

Collection of private, commercially oriented (profit-oriented) organizations, ranging in size from one-person proprietorships to corporate giants

Front 2

Define Society

Back 2

Community, a nation, or a broad grouping of people with common traditions, values, institutions, and collective activities and interests

Front 3

Define Macro Environment of Business

Back 3

Includes the total environment outside the firm, which is composed of 4 segments

Front 4

What are the 4 segments of Business Macro Environment?

Back 4

Social Environment
Economic Environment
Political Environment
Technological Environment

Front 5

What is the Social Macro Environment?

Back 5

The demographics, lifestyles, and social values of the society (over time)

Front 6

What is the Economic Macro Environment?

Back 6

The nature and direction of the economy in which business operates.

Front 7

What is the Political Macro Environment?

Back 7

Process by which laws get passed and officials get elected and all other aspects of the firm, political processes, and government.

Front 8

What is the Technological Macro Environment?

Back 8

Total set of technology-based advancements taking place in society.

Front 9

What is Pluralism?

Back 9

The diffusion of power among society’s many groups and organizations.

Front 10

What are the strengths of Pluralism?

Back 10

Prevents concentration of power
Maximizes freedom of expression and action
Disperses individual allegiances
Creates diversified set of loyalties
Provides built in checks and balances

Front 11

What are the weaknesses of Pluralism?

Back 11

Creates environment where everyone pursues their own self interests
Proliferates organizations and groups with overlapping goals
Forces conflict to center stage
Promotes inefficiency

Front 12

What are the problems of Special Interests Groups?

Back 12

-A special-interest society is pluralism taken to the extreme
-Make life more complex for businesses and government
-Can number in tens of thousands in some societies
-Pursue their own focused agendas
-Are active, intense, diverse and focused
-Often work at cross purposes, with no unified goals

Front 13

6 Factors in the Social Environment

Back 13

Affluence
Education
Awareness
Rising Expectations
Social Problem
Entitlement Mentality

Front 14

Awareness (as part of Social Environment)

Back 14

24/7 News and Investigative News Programs
Prime-Time Television Programs
Commercials
Movies

Front 15

Rising Expectations (as part of Social Environment)

Back 15

Belief or an attitude that each succeeding generation ought to have a standard of living higher than that of its predecessor

Front 16

Define Social Problem

Back 16

Gap between society’s expectations of social conditions and current social realities

Front 17

Entitlement Mentality

Back 17

General belief that someone is owed something just because they are a member of the society

Front 18

Define Business Power

Back 18

The ability or capacity to produce an effect or to bring influence to bear on a situation or people.

Front 19

What is the Iron Law of Responsibility

Back 19

In the long run, those who do not use power in a manner society considers responsible will tend to lose it.

Front 20

Define Corporate Social Responsibility

Back 20

Seriously considering the impact of a company’s actions on society

Front 21

Pyramid of Corporate Social Responsibility

Back 21

A socially responsible firm should strive to:
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities

Front 22

What is the Triple Bottom Line?

Back 22

Economic
Social
Environmental

Front 23

What is corporate citizenship?

Back 23

Embracing the concepts of:
Corporate social responsibility
Responsiveness
Performance

Front 24

What is Ethical Investing?

Back 24

Comprehensive investing approach complete with social and environmental screens, shareholder activism, and community investment, accounting for over 2.7 trillion

Front 25

Define Stake

Back 25

An interest or a share in an undertaking

Front 26

You could have a ______ in a Stake

Back 26

Interest
Right
Ownership

Front 27

Define Stakeholder

Back 27

Any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization

Front 28

5 Major Stakeholders

Back 28

Community
Consumers
Employees
Government
Owners

Front 29

Define Community as a Stakeholder

Back 29

General Public
Environmental Groups
Civic Groups

Front 30

Define Consumers as a Stakeholder

Back 30

Average Consumer
Product Liabilities
Social Activists

Front 31

List Employee Stakeholders

Back 31

Minorities
Women

Front 32

List Government Stakeholders

Back 32

Federal
State
Local

Front 33

List Owners Stakeholders

Back 33

Private Citizens
Institutional Groups
Board Members

Front 34

List 4 Stakeholder Attributes

Back 34

Legitimacy
Power
Urgency
Proximity

Front 35

What is Legitimacy?

Back 35

Perceived validity or appropriateness of the stakeholder’s claim to a stake

Front 36

What is Power?

Back 36

Ability or capacity of a stakeholder to produce and effect

Front 37

What is Urgency?

Back 37

Degree to which stakeholder’s claim demands immediate attention or response

Front 38

What is Proximity?

Back 38

Spatial distance between the organization and its stakeholders

Front 39

What are the 5 Key Questions in Stakeholder Management?

Back 39

Who are our stakeholders?
What are our stakeholders’ stakes?
What opportunities and challenges do our stakeholders present to the firm?
What economic, legal, ethical, and philanthropic responsibilities does the firm have to its stakeholders?
What strategies or actions should the firm take to best address stakeholder challenges and opportunities?

Front 40

Who are our stakeholders?

Back 40

There could be Generic Categories or Specific subcategories

Front 41

What are our stakeholders’ stakes?

Back 41

1. Legitimacy?
2. Power?
3. Urgency?

Front 42

What opportunities and challenges do our stakeholders present to the firm?

Back 42

Potential for cooperation?
Potential for threat?

Front 43

What strategies or actions should the firm take to best address stakeholder challenges and opportunities?

Back 43

Deal Directly/Indirectly?
Take Offense/Defense?
Accommodate/Negotiate?
Manipulate/Resist?
Combination of strategies?

Front 44

What are the 3 Strategic Steps towards Successful Stakeholder Management

Back 44

-Integrating stakeholder management into firm’s governing philosophy
-Create stakeholder-inclusive “values statement”
-Implement a stakeholder performance measurement system

Front 45

Definition of Poison Pill

Back 45

Intended to discourage or prevent hostile takeover. Other shareholders are able to purchase shares, thus diluting the suitor’s holdings and making acquisition prohibitively expensive.

Front 46

Define Golden Parachute

Back 46

Contract in which corporation agrees to make payments to key officers in the event of a change in control.

Front 47

Define Insider Trading:

Back 47

Practice of obtaining critical information from inside a company and using that information for one’s own personal financial gain.

Front 48

Define Corporate Legitimacy:

Back 48

-A condition that prevails when there is an congruence between an organization’s activities and society’s expectations

Front 49

What is the Hierarchy of Corporate Authority?

Back 49

State Charter
Shareholders
Board of Directors
Management
Employees

Front 50

How has a Separation of Ownership from Control developed from precorporate period to corporate period?

Back 50

Precorporate period:
Owners (ownership)
Managers (control)

Corporate Period:
Shareholders (ownership)
Board of Directors
Managers (control)

Front 51

What are the Issues Surrounding Compensation?

Back 51

-CEO Compensation and Performance
-Executive Retirement Plans
-Outside Director Compensation

Front 52

Define Stock Options

Back 52

Allows purchase of stock in the future at the price it is today

Front 53

Define Backdating

Back 53

Allows purchasing stock at yesterday’s price resulting in immediate wealth increase

Front 54

Define Spring-Loading

Back 54

Granting stock option at today’s price with the knowledge that stocks value will increase

Front 55

Define Bullet Dodging

Back 55

Delaying of stock option grant until right after bad news

Front 56

What is Sarbanes – Oxley Act of 2002 (SOX)

Back 56

Limits the non-auditing services an auditor can provide
Requires auditing firms to rotate the auditors working with a specific company
Makes it unlawful for accounting firms to provide services where conflicts of interests exist
CEOs and CFOs certify and are held responsible for financial representations
Enhances financial disclosure with requirements
Audit committees must have at least one financial expert
Whistle-blowers are given protection
Code of ethics disclosure

Front 57

Define Business Ethics

Back 57

Involves describing, characterizing and studying morality (focuses on “What is taking place?”)

Front 58

Define Normative Ethics

Back 58

Concerned with supplying and justifying moral systems (Focuses on “What ought to be taking place?”)

Front 59

What are the Sources of Ethical Norms?

Back 59

-Fellow workers,
-Local Community
-Regions of Country
-Profession
-Employer
-Society at Large
-Religious Beliefs
-The law
-Friends
-Family

Front 60

What is the Venn Model?

Back 60

Three circles with the following:
Ethical responsibility
Legal responsibility
Economic responsibility

Front 61

Four Ethics Questions

Back 61

-What is?
-What ought to be?
-How do we get there?
-What is our motivation in all of this?

Front 62

Three models of Management Ethics:

Back 62

-Moral Management:
-Immoral Management:
-Amoral Management:

Front 63

-Moral Management:

Back 63

-Conforms to high standards of ethical behavior or professional standards of conduct

Front 64

-Immoral Management:

Back 64

-An approach devoid of ethical principles and active opposition to what is ethical

Front 65

-Amoral Management:

Back 65

-Intentional:
Does not consider ethical factors
-Unintentional:
-Causal or careless about ethical factors

Front 66

Sources of Manager’s Values:

Back 66

-Internal:
-External:

Front 67

-Internal Sources of Manager’s Values

Back 67

-Respect for authority structure
-Loyalty (to bosses and organization) -Conformity (to principles and practices) -Performance (counts above all else) -Results (count above all else)

Front 68

External Sources of Manager’s Values

Back 68

-Religious Values
-Philosophical Values
-Cultural Values
-Legal Values
-Professional Values

Front 69

4 Levels of Ethical Challenges

Back 69

-Personal
-Organizational
-Industry/Professional
-Societal/Global

Front 70

4 Factors impacting morality of managers and employees

Back 70

-Organization’s Moral Climate
-Industry’s Moral Climate
-Business’s Moral Climate
-Society’s Moral Climate

Front 71

7 Ethical Principles:

Back 71

-Utilitarianism
-Rights
-Justice
-Care
-Virtue Ethics
-Servant Leadership
-Golden Rule

Front 72

7 Ethical Tests

Back 72

-Test of Common Sense
-Test of One’s Best Self
-Test of Making something public
-Test of Ventilation
-Test of Purified Idea
-Big Four (Greed, Speed, Laziness, Haziness)
-Gag Test

Front 73

-Ethics Screen consists of 3 approaches

Back 73

-Conventional Approach
-Principles Approach
-Ethics Tests Approach

Front 74

Ethical Decision Making Practice

Back 74

-Identify action or decision you are about to take
-Articulate all dimension of proposed action
-Ethics Screen
-Course of action passes screen
Engage in action
-Course of action fails ethics screen
Do not engage in action
-Identify new course of action