MBA 705 CHAPTER 5 Exam #1 Questions with Correct Answers
Objectives are specific, often quantified, versions of goals - ✔✔True
Goals are verifiable and specific, and are developed so that management can
measure performance - ✔✔False
Creditors and suppliers typically share the same goals for the organization -
✔✔False
Social responsibility refers to an individual's responsibility to make business
decisions that are legal, honest, moral, and fair - ✔✔False
The utilitarian view of ethics suggests that anticipated outcomes and
consequences should be the primary considerations when evaluating an ethical
dilemma - ✔✔True
Adverse selection exists when the parties in an arrangement do not share equally
in the risks and benefits - ✔✔False
A situation in which a firm's managers fail to act in the best interest of the
shareholders is known as the stakeholder dilemma - ✔✔True
The triple bottom line refers to the notion that firms must maintain and improve
social and ecological performance in addition to economic performance - ✔✔True
, Over the past several decades, the composition of the typical board has shifted
from one controlled by insiders to one controlled by outsiders - ✔✔False
When additional insiders are added to outsider-dominated boards, CEO dismissal
is more likely when corporate performance declines - ✔✔False
When additional outsiders are added to insider-dominated boards, outsiders are
more likely to pressure for corporate restructuring when performance is poor -
✔✔True
Many companies limit the number of board memberships their own board
members may hold - ✔✔True
Any purchase of a controlling quantity of shares of a firm by an individual, a group
of investors, or another organization is known as a leveraged buyout (LBO) -
✔✔False
Corporate takeovers have been promoted as a system of checks and balances for
firm management - ✔✔True
Corporate takeovers have been supported because of their ability to reduce the
debt of acquired firms - ✔✔False
Individuals or groups who are affected by or can influence an organization's
operations are called - ✔✔stakeholders.
Objectives are specific, often quantified, versions of goals - ✔✔True
Goals are verifiable and specific, and are developed so that management can
measure performance - ✔✔False
Creditors and suppliers typically share the same goals for the organization -
✔✔False
Social responsibility refers to an individual's responsibility to make business
decisions that are legal, honest, moral, and fair - ✔✔False
The utilitarian view of ethics suggests that anticipated outcomes and
consequences should be the primary considerations when evaluating an ethical
dilemma - ✔✔True
Adverse selection exists when the parties in an arrangement do not share equally
in the risks and benefits - ✔✔False
A situation in which a firm's managers fail to act in the best interest of the
shareholders is known as the stakeholder dilemma - ✔✔True
The triple bottom line refers to the notion that firms must maintain and improve
social and ecological performance in addition to economic performance - ✔✔True
, Over the past several decades, the composition of the typical board has shifted
from one controlled by insiders to one controlled by outsiders - ✔✔False
When additional insiders are added to outsider-dominated boards, CEO dismissal
is more likely when corporate performance declines - ✔✔False
When additional outsiders are added to insider-dominated boards, outsiders are
more likely to pressure for corporate restructuring when performance is poor -
✔✔True
Many companies limit the number of board memberships their own board
members may hold - ✔✔True
Any purchase of a controlling quantity of shares of a firm by an individual, a group
of investors, or another organization is known as a leveraged buyout (LBO) -
✔✔False
Corporate takeovers have been promoted as a system of checks and balances for
firm management - ✔✔True
Corporate takeovers have been supported because of their ability to reduce the
debt of acquired firms - ✔✔False
Individuals or groups who are affected by or can influence an organization's
operations are called - ✔✔stakeholders.
