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Commerce and BusinessbackBusinessbackStrategic ManagementbackStrategic ManagementbackPractice Set 2476back

Corporate Governance And Business Ethics

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Question 1
Free
Multiple Choice

How did Uber conflict with Carnegie Mellon University's National Robotics Engineering Center (NREC)?

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A

Uber promised a large donation to NREC but then reneged on the offer when NREC would not provide Uber with researchers.

B

Uber poached entire NREC research teams with signing bonuses, twice the salaries, and stock options, thereby threatening the future of NREC.

C

Uber allegedly stole ideas from the NREC research team and then claimed that these ideas were generated by their own researchers.

D

Uber bribed NREC officials to give permission for building an extension to the NREC facility that focuses solely on Uber research.

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Question 2
Free
Multiple Choice

In late 2014,Uber senior executive Emil Michael was heard to say that Uber should spend a million dollars to hire private investigators to dig up dirt on journalists who wrote damaging pieces on Uber.When the remarks became public,he apologized.How did Uber's CEO deal with Michael?

Choose correct answer/s
A

Uber's CEO demoted Michael.

B

Uber's CEO fired Michael.

C

Uber's CEO promoted Michael.

D

Uber's CEO refused to discipline Michael.

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Question 3
Free
Multiple Choice

Which of the following statements is true of shareholders in a public stock company?

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A

They directly supervise and coordinate the manufacture of products and delivery of services.

B

They are granted a charter of incorporation by the state and legally own company stock.

C

They are the centerpiece of corporate governance.

D

They are appointed by a board of directors to oversee the company's management.

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Question 4
Free
Multiple Choice

What does "limited liability for investors" imply in a public stock company?

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A

Shareholders are liable for their invested capital and personal wealth and not for any other investments made.

B

Shareholders who provide the risk capital are liable only to the capital specifically invested.

C

Shareholders are liable for all the decisions made by the board of directors of the company.

D

Shareholders have financial but not legal responsibilities toward the public stock company.

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Question 5
Free
Multiple Choice

Jamiro Inc.is a public stock company.Which of the following statements about the company best illustrates the fact that its investors have limited liability?

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A

Employees of Jamiro are legally permitted to invest their capital in the company's stock.

B

Employees of Jamiro are also the owners of the company.

C

Shareholders of Jamiro are responsible to the company only for the capital they have invested.

D

Shareholders of Jamiro are not permitted to trade their company stock at the New York Stock Exchange (NYSE).

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Question 6
Multiple Choice

Which of the following is a characteristic of a public stock company?

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A
Shareholders who provide risk capital are liable for all losses incurred by the company.
B
Investor ownership cannot be transferred easily between investors.
C
Legal personality allows a firm's continuation beyond the founder or the founder's family.
D
In publicly traded companies, professional managers are the legal owners of the company.
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Question 7
Multiple Choice

Warren owns shares in a company called Gerarch Communications Inc.The company's financial performance has been declining over the past few months,and the value of its stock has been decreasing.Warren wants to proactively cut his losses and therefore sells his shares.Lawrence,a trading enthusiast,buys shares in Gerarch Communications because he believes that the share prices cannot go anywhere but up.Which of the following characteristics of a public stock company does this scenario best exemplify?

Choose correct answer/s
A
separation of legal ownership and management control
B
legal personality
C
limited liability for investors
D
transferability of investor ownership
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Question 8
Multiple Choice

Hoptin Inc.is a public stock company.Which of the following best exemplifies the legal personality of the company?

Choose correct answer/s
A
Rosa can legally sell shares of Hoptin in the stock market.
B
John is a shareholder of Hoptin but does not have any managerial duties.
C
Kevin, an employee at Hoptin, is not responsible for any losses that Hoptin incurs.
D
Jessi Hoptin, the company's founder, died a few years ago, yet the company is doing well.
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Question 9
Multiple Choice

What best describes transferability of investor ownership in a public stock company?

Choose correct answer/s
A
Investors can give out company stocks as a gift.
B
Investors are allowed to trade shares of stocks.
C
Investors are allowed to participate in strategy formulation.
D
Investors can be hired as employees.
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Question 10
Multiple Choice

Mario founded Tapoz Communications Inc.in 1993.Ten years later,the company went public.Despite Mario's death in 2005,the company reported a 75 percent increase in revenue in 2006.Which of the following characteristics of a publicly traded company does this scenario best exemplify?

Choose correct answer/s
A
transferability of investor ownership
B
legal personality
C
limited liability for investors
D
separation of legal ownership and management control
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Question 11
Multiple Choice

Which of the following statements best supports the separation of ownership and control in publicly traded companies?

Choose correct answer/s
A
Shareholders are liable only for the capital they invest and not for their personal wealth.
B
Shareholders can freely trade the company stocks.
C
Shareholders own stocks but do not run the company.
D
Managers control the company but may also have stock ownership.
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Question 12
Multiple Choice

According to Michael Porter,which of the following is a problem with many publicly traded companies?

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A
Shareholders of publicly traded companies do not have a legitimate claim on profits.
B
Many publicly traded companies have defined value creation too narrowly in terms of financial performance.
C
There is no transferability of stock ownership in publicly traded companies.
D
The legal owners of publicly traded companies also make management decisions for the company.
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Question 13
Multiple Choice

What is the result of managers' pursuit of strategies that define value creation too narrowly in public stock companies?

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A
It gives the managers greater control of the performance of the organization in the long term.
B
It reduces the trust of shareholders in the organization as a vehicle for value creation.
C
It helps companies increase firm profits by creating shared value.
D
It enables companies to create social value by addressing society's needs but prevents them from creating economic value for shareholders.
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Question 14
Multiple Choice

Vijay is a firm believer in Milton Friedman's view of a firm's social obligations.With which of the following statements is Vijay most likely to agree?

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A
Businesses can use their resources to create profit as long as they do so within the rules of the game.
B
Firms should not go beyond their economic responsibility to increase profits.
C
Firms should define value creation more narrowly in terms of financial performance.
D
Businesses should engage in open and free competition without deception or fraud, only as long as their competitors do so.
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Question 15
Multiple Choice

According to the perspective of shareholder capitalism,

Choose correct answer/s
A
shareholders in public stock companies are restricted from buying shares of two competing companies.
B
shareholders in public stock companies have the most legitimate claim on profits.
C
shareholders in public stock companies have significant decision-making power.
D
shareholders in public stock companies have unlimited financial liability.
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Question 16
Multiple Choice

Leila is a graduate student pursuing a course in business.Presented with the case of Uber's unethical behavior,Leila wonders if Uber's board of directors should ask the CEO of Uber,Travis Kalanick,to step down.Having a strong belief in Michael Porter's idea of value creation,Leila is most likely to conclude that

Choose correct answer/s
A
Uber's board of directors should not ask Kalanick to step down because doing so would cause a profit dip that would affect its shareholders.
B
Uber's board of directors should ask Kalanick to step down because it has a greater obligation toward society.
C
Uber's board of directors should not ask Kalanick to step down because he was responsible for an almost 90 percent appreciation of the company's stock.
D
Uber's board of directors should ask Kalanick to step down because agents, unlike principals, are disposable.
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Question 17
Multiple Choice

Which of the following real-world events would act as the most likely deterrent against adopting a purely stakeholder strategy approach to business?

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A
the nonsustainable debt levels incurred by sovereign governments to fund social programs
B
the financial crisis in Europe brought about by money lenders seeking to make quick money
C
the collapse of the economy in the U.S. brought about by the housing crisis
D
the rise of GDP in countries that do not believe in Milton Friedman's philosophy
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Question 18
Multiple Choice

Creating economic value for shareholders while also creating social value is known as creating

Choose correct answer/s
A
a social market economy.
B
shareholder capitalism.
C
shared value.
D
stakeholder strategy.
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Question 19
Multiple Choice

Which of the following perspectives best supports the shared value creation framework?

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A
Markets are more often than not defined by societal needs rather than economic needs.
B
Failing to create value for society almost always reflects on the bottom line.
C
A firm's competitive advantage depends on pitting economic and societal needs in a trade-off.
D
Externalities such as pollution, wasted energy, and costly accidents actually create internal costs.
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Question 20
Multiple Choice

Which of the following statements best supports the view that GE's ecomagination strategy is in line with the shared value creation framework?

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A
The ecomagination strategy is the brainchild of the founder of the company.
B
The ecomagination strategy helps GE spend more on research and development than other similar companies.
C
The ecomagination strategy generated $3 billion in revenues for GE during 2012.
D
The ecomagination strategy allows GE to produce "green" products while increasing revenue and competitive advantage.
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