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Exam 11: Corporate Governance, Social Responsibility, and Ethics

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Question 41

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When managers cannot find the right balance between profitability and profit growth, they can place too much emphasis on current profitability at the expense of future profitability and profit growth can make an enterprise less attractive to shareholders or they can place too much emphasis on profit growth can reduce the current profitability of the enterprise and have the same effect.

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Question 42

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Stock-based compensation schemes for senior executives are designed to align the interests of managers with those of stockholders.

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Question 43

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To stimulate reduction in its production costs, Delta LLC has moved its manufacturing facilities to an underdeveloped country where there are few labor laws. The employees at the manufacturing facilities are children and teenagers, and they receive minimal wages. Which of the following ethical issues is illustrated in this scenario?

Which of the following statements is true in the context of unethical behavior?

Consider a national chain of company-owned fast-food restaurants. For this firm, list the important stakeholders. Then describe how each stakeholder group can affect the firm's profitability.

Tom just received a $500 bonus for surpassing his yearly sales targets. This is an example of using employee incentives to motivate employees to work toward goals that are central to maximizing long-term profitability.

Which of the following are an example of an internal stakeholder in a company?

Explain the principles of agency theory, including the issues it addresses. What are some effective ways to deal with agency problems, as implied or stated by agency theory?

Venus LLC is a large monopolistic electronic firm. The firm has been putting a lot of pressure on some of the complementor companies, asking them to bundle their products along with the products made by Venus LLC, which will make it mandatory for customers to buy Venus LLC products along with the complementary products, even if they are unrelated. Which of the following is Venus LLC demonstrating?

To foster ethical behavior through organizational culture, businesses should: