SOLUTIONS
CHAPTER 1
Vocabulary
1. a. private property 11. business
b. profit 12. outsourcing
c. freedom of choice 13. technology
d. fair competition 14. relationship era
2. a. natural resources 15. vision
b. human resources 16. nearshoring
c. capital 17. strategic alliances
d. entrepreneurship 18. offshoring
3. capitalism 19. factors of production
4. partnership 20. entrepreneurs
5. brand 21. diversity
6. competition 22. not-for-profit organizations
7. competitive differentiation 23. relationship management
8. consumer orientation 24. transaction management
9. private enterprise system 25. creativity
10. branding 26. critical thinking
Analysis of Learning Objectives
LO 1.1: 1. T, 2. F, 3. F, 4. F.
LO 1.2: 1. a, 2. d, 3. b, 4. c.
LO 1.3: 1. T, 2. T, 3. T, 4. F., 5. F, 6. F. 7. T
LO 1.4: 1. F, 2. T, 3. T, 4. T, 5. T, 6. T, 7. a, 8. d, 9. b
LO 1.5: 1. T, 2. T, 3.F, 4. F, 5. T
LO 1.6:
1. Vision: Seeing market place needs and methods an organization can use
to satisfy them.
2. Critical thinking skills: the ability to analyze and assess information in
order to pinpoint problems or opportunities. It involves the ability to look
beneath the surface and determine the authenticity, accuracy, and worth
of information, knowledge and arguments.
3. Creativity: the capacity to develop novel solutions and to see new and
better ways of doing things.
4. Ability to steer change: the skill of recognizing employee strengths and
motivating people to adapt to the changes brought about by technology,
marketplace demands, and global competitiveness.
LO 1.7: 1. b, 2. c, 3. d, 4. a, 5. b
,Solutions 1-2
Self Review
True or False: 1. T, 2. F, 3. F, 4. F, 5. T, 6. T, 7. F, 8. F, 9. T, 10. F, 11.T,
12. T
Multiple Choice: 1. c, 2. d, 3. a, 4. c, 5. b, 6. d, 7. b, 8. c, 9. e, 10. c
Application Exercises
1. The colonial society
a. Mainly agricultural.
b. The United States was importing manufactured products from England.
2. The industrial Revolution.
a. Rapid construction and expansion of the railroad system.
b. Large scale production with rail transportation as means for wide distribution.
3. The age of industrial entrepreneurs.
a. Advances in technology and increased demand for manufactured goods.
b. Individuals began to act as risk takers, starting their own businesses.
4. The production era.
a. Emphasis on producing more goods faster.
b. Focus on internal processes such as assembly-line production.
5. The marketing era.
a. The competitive business environment brought the need for identifying and
satisfying target markets.
b. Growth in advertising, market and consumer research.
6. The relationship era.
a. Focus shifts to establishing long term relationships with customers, suppliers, and
to building partnerships and strategic alliances to further competitive differentiation.
b. Reliance on information technology to develop long-term relationships and sustain
customer satisfaction.
Short Essay Questions
1. The four basic rights awarded to citizens living in a private enterprise system are private
property, profit, freedom of choice and fair competition. The right to private property is the
right to own and use property, and is a primary motivation for hard work in the private
enterprise economics. The right to profit means that an entrepreneur can expect to keep
after tax profits earned by taking a business risk. This is both the incentive and reward to
taking the risk in the first place. The right to freedom of choice means people in a free
enterprise system can select careers, change jobs, and even open their own businesses. It
also means that they will generally have a choice between competing producers when they
want to make a purchase. Likewise, they will have many choices of investment
opportunities, including owning all or part of a business. Finally, people living in a private
enterprise system can expect that competition should be fair. The U.S. government, for
example, has passed laws that outlaw price discrimination, fraud in financial markets, and
deceptive practices in advertising and packaging. The intent of such laws is to eliminate
, Solutions 1-3
“cutthroat” competition that might harm consumers, the competitive environment, and the
natural environment.
2. In the 1990s business moved from transaction management to relationship management.
Relationship management makes use of information technology, partnerships, and
strategic alliances to build and sustain long-term relationships with customers, suppliers,
and other outside groups. Relationship management also depends increasingly on a
talented, diverse workforce to serve and understand the multicultural global market.
Contributions and creativity of workers is crucial, so new employee-employer
partnerships have arisen to develop and retain better relationships with customers and
other outside groups. Finally, management must engage in ethical business practices and
consider social responsibilities to the wider society to assure the firm’s long-term
success.
, Solutions 2-1
CHAPTER 2
Vocabulary
1. family leave 11. business ethics
2. pollution 12. whistle-blowing
3. recycling 13. sexual harassment
4. code of conduct 14. Sarbanes-Oxley Act
5. social audit 15. integrity
6. consumerism 16. sexism
7. Equal Employment Opportunity 17. sustainable
Commission (EEOC) 18. stakeholders
8. conflict of interest 19. product liability
9. corporate philanthropy 20. green marketing.
10. social responsibility 21. discrimination
Analysis of Learning Objectives
LO 2.1: 1. T, 2. T, 3. F, 4. F, 5. T.
LO 2.2: 1. D, 2. D, 3. A, 4. C.
LO 2.3: 1. preconventional 2. conventional 3. postconventional 4. T, 5. F, 6. T, 7. T
LO 2.4: 1. F, 2. F, 3. T, 4. F. 5. F, 6. T, 7. T, 8. T, 9. T, 10. F, 11. F, 12. T, 13. F.
LO 2.5: 1. F, 2. T, 3. T, 4. T
Self Review
True or False: 1. F, 2. T, 3. F, 4. F, 5. F, 6. T, 7. T, 8. T, 9. T, 10. T, 11. T,
12. F, 13. F. 14. F, 15. T.
Multiple Choice: 1. e, 2. c, 3. a, 4. d, 5. c, 6.b, 7. d, 8. e, 9. c, 10.c.
Application Exercises
1. It is probably unethical for these sales people to share such information since they each
have a responsibility to protect the interests of their own employer.
2. Under the Americans with Disabilities Act (1991) this employer is obligated to make the
appropriate accommodations so that the qualified candidate can work despite her
disability.
3. This is an example of the continuing inequity in pay between the genders. This company
needs to review its salary schedules to eliminate pay differentials for jobs where people
have like skills and responsibilities.
4. Patty may have to start smoking outside, even though this is her business. As the
employer, if she exposes employees to second-hand smoke she may later be held liable
for any smoke-related illness an employee develops.
CHAPTER 1
Vocabulary
1. a. private property 11. business
b. profit 12. outsourcing
c. freedom of choice 13. technology
d. fair competition 14. relationship era
2. a. natural resources 15. vision
b. human resources 16. nearshoring
c. capital 17. strategic alliances
d. entrepreneurship 18. offshoring
3. capitalism 19. factors of production
4. partnership 20. entrepreneurs
5. brand 21. diversity
6. competition 22. not-for-profit organizations
7. competitive differentiation 23. relationship management
8. consumer orientation 24. transaction management
9. private enterprise system 25. creativity
10. branding 26. critical thinking
Analysis of Learning Objectives
LO 1.1: 1. T, 2. F, 3. F, 4. F.
LO 1.2: 1. a, 2. d, 3. b, 4. c.
LO 1.3: 1. T, 2. T, 3. T, 4. F., 5. F, 6. F. 7. T
LO 1.4: 1. F, 2. T, 3. T, 4. T, 5. T, 6. T, 7. a, 8. d, 9. b
LO 1.5: 1. T, 2. T, 3.F, 4. F, 5. T
LO 1.6:
1. Vision: Seeing market place needs and methods an organization can use
to satisfy them.
2. Critical thinking skills: the ability to analyze and assess information in
order to pinpoint problems or opportunities. It involves the ability to look
beneath the surface and determine the authenticity, accuracy, and worth
of information, knowledge and arguments.
3. Creativity: the capacity to develop novel solutions and to see new and
better ways of doing things.
4. Ability to steer change: the skill of recognizing employee strengths and
motivating people to adapt to the changes brought about by technology,
marketplace demands, and global competitiveness.
LO 1.7: 1. b, 2. c, 3. d, 4. a, 5. b
,Solutions 1-2
Self Review
True or False: 1. T, 2. F, 3. F, 4. F, 5. T, 6. T, 7. F, 8. F, 9. T, 10. F, 11.T,
12. T
Multiple Choice: 1. c, 2. d, 3. a, 4. c, 5. b, 6. d, 7. b, 8. c, 9. e, 10. c
Application Exercises
1. The colonial society
a. Mainly agricultural.
b. The United States was importing manufactured products from England.
2. The industrial Revolution.
a. Rapid construction and expansion of the railroad system.
b. Large scale production with rail transportation as means for wide distribution.
3. The age of industrial entrepreneurs.
a. Advances in technology and increased demand for manufactured goods.
b. Individuals began to act as risk takers, starting their own businesses.
4. The production era.
a. Emphasis on producing more goods faster.
b. Focus on internal processes such as assembly-line production.
5. The marketing era.
a. The competitive business environment brought the need for identifying and
satisfying target markets.
b. Growth in advertising, market and consumer research.
6. The relationship era.
a. Focus shifts to establishing long term relationships with customers, suppliers, and
to building partnerships and strategic alliances to further competitive differentiation.
b. Reliance on information technology to develop long-term relationships and sustain
customer satisfaction.
Short Essay Questions
1. The four basic rights awarded to citizens living in a private enterprise system are private
property, profit, freedom of choice and fair competition. The right to private property is the
right to own and use property, and is a primary motivation for hard work in the private
enterprise economics. The right to profit means that an entrepreneur can expect to keep
after tax profits earned by taking a business risk. This is both the incentive and reward to
taking the risk in the first place. The right to freedom of choice means people in a free
enterprise system can select careers, change jobs, and even open their own businesses. It
also means that they will generally have a choice between competing producers when they
want to make a purchase. Likewise, they will have many choices of investment
opportunities, including owning all or part of a business. Finally, people living in a private
enterprise system can expect that competition should be fair. The U.S. government, for
example, has passed laws that outlaw price discrimination, fraud in financial markets, and
deceptive practices in advertising and packaging. The intent of such laws is to eliminate
, Solutions 1-3
“cutthroat” competition that might harm consumers, the competitive environment, and the
natural environment.
2. In the 1990s business moved from transaction management to relationship management.
Relationship management makes use of information technology, partnerships, and
strategic alliances to build and sustain long-term relationships with customers, suppliers,
and other outside groups. Relationship management also depends increasingly on a
talented, diverse workforce to serve and understand the multicultural global market.
Contributions and creativity of workers is crucial, so new employee-employer
partnerships have arisen to develop and retain better relationships with customers and
other outside groups. Finally, management must engage in ethical business practices and
consider social responsibilities to the wider society to assure the firm’s long-term
success.
, Solutions 2-1
CHAPTER 2
Vocabulary
1. family leave 11. business ethics
2. pollution 12. whistle-blowing
3. recycling 13. sexual harassment
4. code of conduct 14. Sarbanes-Oxley Act
5. social audit 15. integrity
6. consumerism 16. sexism
7. Equal Employment Opportunity 17. sustainable
Commission (EEOC) 18. stakeholders
8. conflict of interest 19. product liability
9. corporate philanthropy 20. green marketing.
10. social responsibility 21. discrimination
Analysis of Learning Objectives
LO 2.1: 1. T, 2. T, 3. F, 4. F, 5. T.
LO 2.2: 1. D, 2. D, 3. A, 4. C.
LO 2.3: 1. preconventional 2. conventional 3. postconventional 4. T, 5. F, 6. T, 7. T
LO 2.4: 1. F, 2. F, 3. T, 4. F. 5. F, 6. T, 7. T, 8. T, 9. T, 10. F, 11. F, 12. T, 13. F.
LO 2.5: 1. F, 2. T, 3. T, 4. T
Self Review
True or False: 1. F, 2. T, 3. F, 4. F, 5. F, 6. T, 7. T, 8. T, 9. T, 10. T, 11. T,
12. F, 13. F. 14. F, 15. T.
Multiple Choice: 1. e, 2. c, 3. a, 4. d, 5. c, 6.b, 7. d, 8. e, 9. c, 10.c.
Application Exercises
1. It is probably unethical for these sales people to share such information since they each
have a responsibility to protect the interests of their own employer.
2. Under the Americans with Disabilities Act (1991) this employer is obligated to make the
appropriate accommodations so that the qualified candidate can work despite her
disability.
3. This is an example of the continuing inequity in pay between the genders. This company
needs to review its salary schedules to eliminate pay differentials for jobs where people
have like skills and responsibilities.
4. Patty may have to start smoking outside, even though this is her business. As the
employer, if she exposes employees to second-hand smoke she may later be held liable
for any smoke-related illness an employee develops.
