Chapter 5: Ethics and Ethical Reasoning

True/False Questions

Easy

1. True/False: Ethics is solely about following the law. (False)

2. True/False: Business ethics is the application of general ethical ideas to business
behavior. (True)
3. True/False: Ethical problems in business never occur due to personal values. (False)
4. True/False: Honesty is considered an ethically and morally desirable behavior in
most societies. (True)
5. True/False: Ethical decision-making is unaffected by an individual's moral character.
(False)

Medium

6. True/False: Businesses are only required to follow legal requirements, not ethical
principles. (False)
7. True/False: Spirituality can influence managerial decision-making in business ethics.
(True)
8. True/False: The moral intensity of an issue can affect ethical decision-making
processes. (True)
9. True/False: Utilitarian reasoning focuses on the rights of individuals rather than the
outcomes of actions. (False)
10. True/False: Most managers reason at the highest stages of moral development.
(False)

Hard

11. True/False: A high level of social consensus decreases the moral intensity of an
ethical issue. (False)
12. True/False: Temporal immediacy refers to the physical proximity of the decision
maker to those affected by the decision. (False)
13. True/False: Ethical relativism suggests that ethical principles are universal and do
not vary between cultures. (False)
14. True/False: Ethical egoists believe that individuals should act in ways that promote
the greatest good for themselves. (True)
15. True/False: The probability that a decision maker's action will lead to predicted
consequences is a factor in moral intensity. (True)

Multiple-Choice Questions

Easy

1. Which of the following defines business ethics?

○ A. The legal rules companies must follow
○ B. The application of general ethical ideas to business behavior
 ○ C. The personal morals of business leaders
○ D. The pursuit of profit at all costs
○ Correct Answer: B
2. Ethical behavior in business is important because:
○ A. It ensures compliance with the law.
○ B. It enhances business performance.
○ C. It minimizes harm and promotes personal morality.
○ D. All of the above
○ Correct Answer: D
3. Which of the following is not typically considered unethical behavior?
○ A. Lying
○ B. Stealing
○ C. Helping others
○ D. Deceiving
○ Correct Answer: C
4. Managerial values often prioritize:
○ A. Personal comfort over company goals
○ B. Company goals over personal values
○ C. Personal relationships over business ethics
○ D. None of the above
○ Correct Answer: B
5. A common ethical issue in business is:
○ A. Balancing personal values with business goals
○ B. Following international laws
○ C. Increasing product sales
○ D. All of the above
○ Correct Answer: A

Medium

6. What is meant by 'moral intensity'?

○ A. The level of physical harm caused by a decision
○ B. The perceived importance of an ethical issue
○ C. The emotional impact of a decision
○ D. The legality of a decision
○ Correct Answer: B
7. Which of the following is a factor that influences moral intensity?
○ A. Magnitude of consequences
○ B. Temporal immediacy
○ C. Social consensus
○ D. All of the above
○ Correct Answer: D
8. Why do ethical problems occur in business?
○ A. Due to selfishness
○ B. Competitive pressures
○ C. Cross-cultural contradictions
○ D. All of the above
 ○ Correct Answer: D
9. The concept of 'ethical relativism' suggests that:
○ A. Ethical principles are universal
○ B. Ethical principles vary among cultures
○ C. Legal compliance is sufficient for ethical behavior
○ D. None of the above
○ Correct Answer: B
10. Utilitarian reasoning in ethics focuses on:
○ A. Rights of individuals
○ B. Fairness and justice
○ C. Greatest good for the greatest number
○ D. Religious principles
○ Correct Answer: C

Hard

11. Which ethical theory emphasizes the role of character and virtues in moral
decision-making?
○ A. Utilitarianism
○ B. Rights theory
○ C. Virtue ethics
○ D. Justice theory
○ Correct Answer: C
12. Temporal immediacy refers to:
○ A. The probability that a decision will lead to expected outcomes
○ B. The proximity of the decision maker to those affected
○ C. The time between the decision and the onset of its consequences
○ D. The social consensus around an issue
○ Correct Answer: C
13. What does 'proximity' in moral intensity refer to?
○ A. The social, physical, and psychological distance from those affected by a
decision
○ B. The immediacy of the decision's consequences
○ C. The legal implications of a decision
○ D. The magnitude of the consequences
○ Correct Answer: A
14. The stage of moral reasoning where individuals conform to expectations and rules
is known as:
○ A. Pre-conventional
○ B. Conventional
○ C. Post-conventional
○ D. Ethical egoism
○ Correct Answer: B
15. Which factor does not directly influence the moral intensity of an issue?
○ A. Magnitude of consequences
○ B. Temporal immediacy
○ C. Legal compliance
 ○ D. Social consensus
○ Correct Answer: C

Chapter 6: Organizational Ethics

True/False Questions

Easy:

1. T/F: An organization’s culture can influence its ethical climate. (T)

2. T/F: All business functions face the same ethical challenges. (F)
3. T/F: Ethics and compliance officers are responsible for overseeing an organization's
adherence to ethical standards. (T)
4. T/F: Ethics training programs are not necessary for improving ethical conduct in
organizations. (F)
5. T/F: Ethical challenges are more common in the finance function than in the supply
chain function. (F)

Medium: 6. T/F: An integrity-based ethics program focuses on compliance with laws and
regulations. (F) 7. T/F: The Sarbanes-Oxley Act restricts the offering of nonaudit consulting
services by auditing firms to their audit clients. (T) 8. T/F: Supply chain ethics only concern
the relationships with suppliers and not with customers. (F) 9. T/F: Professional associations
in various business functions help define ethical standards for their members. (T) 10. T/F: A
compliance-based ethics program seeks to avoid legal sanctions by enforcing organizational
rules. (T)

Hard: 11. T/F: The ethical climate of an organization has no significant impact on employee
behavior. (F) 12. T/F: Only large multinational corporations need to worry about conducting
business ethically in the global marketplace. (F) 13. T/F: An effective ethics and compliance
program can reduce the likelihood of employees observing misconduct. (T) 14. T/F: Ethical
issues in information technology are less severe compared to those in accounting. (F) 15.
T/F: Establishing ethical safeguards in a company is unnecessary if individual employees
have strong personal ethics. (F) 16. T/F: The Financial Reporting Council (FRC) was
established to improve auditing standards in the UK. (T) 17. T/F: Creating ethics reporting
mechanisms can help in the early detection of unethical behavior in organizations. (T) 18.
T/F: A professional code of conduct in supply chain management is less important than in
other business functions. (F) 19. T/F: The ethical climate of an organization is shaped solely
by its leadership. (F) 20. T/F: Ethics policies should be tailored to fit the specific needs of
different business functions within an organization. (T)

Multiple Choice Questions

Easy:

1. Which term best describes the overall moral atmosphere of a workplace?

○ A. Organizational ethics
○ B. Ethical climate
 ○ C. Corporate governance
○ D. Compliance program
○ Answer: B
2. Which function is primarily concerned with maintaining honesty, integrity, and
transparency in financial reporting?
○ A. Marketing
○ B. Supply Chain
○ C. Accounting
○ D. Human Resources
○ Answer: C
3. Who is typically responsible for overseeing an organization’s ethics program?
○ A. CEO
○ B. CFO
○ C. Ethics and compliance officer
○ D. Legal department
○ Answer: C
4. Which act restricts auditing firms from offering nonaudit services to their audit
clients?
○ A. Dodd-Frank Act
○ B. Sarbanes-Oxley Act
○ C. Clayton Act
○ D. Sherman Act
○ Answer: B
5. Ethical issues in which business function are often related to conflicts of interest
and transparency?
○ A. Information Technology
○ B. Accounting
○ C. Marketing
○ D. Operations
○ Answer: B

Medium: 6. What is one key role of professional associations in various business

functions?

● A. To provide financial support

● B. To define ethical standards
● C. To create marketing strategies
● D. To enforce legal compliance
● Answer: B
7. What kind of ethical program focuses on maintaining integrity and encouraging
ethical behavior beyond mere compliance?
○ A. Compliance-based program
○ B. Integrity-based program
○ C. Regulatory-based program
○ D. Ethics-based program
○ Answer: B
8. Which organization was created in the UK to monitor auditing firms?
 ○ A. Financial Services Authority
○ B. Financial Reporting Council
○ C. Securities and Exchange Commission
○ D. Public Company Accounting Oversight Board
○ Answer: B
9. What is an important aspect of conducting business ethically in the global
marketplace?
○ A. Reducing costs
○ B. Following local laws and customs
○ C. Increasing market share
○ D. Avoiding taxes
○ Answer: B
10. Which of the following is NOT a primary function typically associated with unique
ethical challenges?
○ A. Accounting
○ B. Finance
○ C. Marketing
○ D. Production
○ Answer: D

Hard: 11. What was a significant consequence for PricewaterhouseCoopers LLC in relation
to the mortgage lender fraud scheme? - A. Bankruptcy - B. $5.5 billion lawsuit - C. Loss of
clients - D. Acquisition by another firm - Answer: B

12. Which professional association is responsible for ethical standards in supply chain
management?
○ A. Institute of Supply Management
○ B. American Marketing Association
○ C. Financial Accounting Standards Board
○ D. International Ethics Standards Board for Accountants
○ Answer: A
13. According to a 2015 study, what is a benefit of having an effective ethics and
compliance program?
○ A. Higher profits
○ B. Reduced legal fees
○ C. Lower employee turnover
○ D. Reduced pressure to compromise ethical standards
○ Answer: D
14. Lynn Sharp Paine identified two approaches to ethics programs. Which approach
seeks to avoid legal sanctions?
○ A. Compliance-based approach
○ B. Integrity-based approach
○ C. Values-based approach
○ D. Normative-based approach
○ Answer: A
15. What ethical issue did Kobe Steel face related to its supply chain management?
○ A. Overcharging customers
 ○ B. Falsifying quality documents
○ C. Environmental violations
○ D. Labor exploitation
○ Answer: B
16. What significant ethical problem can arise in the marketing function?
○ A. Data breaches
○ B. Misleading advertising
○ C. Financial misreporting
○ D. Product recalls
○ Answer: B
17. In response to increasing ethical challenges, what kind of program do businesses
implement to institutionalize ethics?
○ A. Ethics training programs
○ B. Compliance audits
○ C. Performance reviews
○ D. Customer satisfaction surveys
○ Answer: A
18. Which factor does NOT influence the ethical climate of an organization?
○ A. Leadership
○ B. Organizational policies
○ C. Market conditions
○ D. Corporate culture
○ Answer: C
19. What is one method businesses use to report and address unethical behavior?
○ A. Anonymous hotlines
○ B. Quarterly reports
○ C. Annual meetings
○ D. Customer feedback forms
○ Answer: A
20. Which ethical issue is commonly associated with the information technology
function?
○ A. Insider trading
○ B. Data privacy
○ C. Workplace safety
○ D. Financial auditing
○ Answer: B

True/False Questions

Easy

1. Governments always work in collaboration with businesses. (False)

2. Public policy refers to the actions taken by government to address societal issues.
(True)
3. Regulation is often necessary to protect public interest. (True)
4. Antitrust laws are designed to promote competition and prevent monopolies. (True)
5. All government regulations are beneficial for business. (False)
Medium

6. The relationship between business and government is static and unchanging. (False)
7. Economic sanctions are orders from the government to cease business operations in
a specific country. (True)
8. In some countries, businesses may influence the political power of governments.
(True)
9. Public policy is composed of elements such as inputs, goals, and tools. (True)
10. Legitimacy issues arise when a government’s right to exercise power is undisputed.
(False)

Hard

11. All businesses prefer to operate without any form of government regulation. (False)
12. The costs of regulation always outweigh the benefits for society. (False)
13. Antitrust laws can include remedies such as breaking up a company into smaller
entities. (True)
14. In the global context, regulation of business is uniformly enforced across all
countries. (False)
15. A collaborative partnership between business and government is more common in
Asian countries due to their collective societal values. (True)

Chapter 7: Business–Government Relations

Multiple Choice Questions

Easy

1. Which of the following best defines public policy?

○ a) Actions taken by businesses to increase profits
○ b) Actions taken by government to address societal issues
○ c) Actions taken by individuals for personal gain
○ d) None of the above
○ Answer: b) Actions taken by government to address societal issues
2. What is the main purpose of antitrust laws?
○ a) To promote monopolies
○ b) To enhance consumer choices
○ c) To encourage fair competition
○ d) To reduce government intervention
○ Answer: c) To encourage fair competition
3. Which of the following is a major type of government regulation of business?
○ a) Environmental regulation
○ b) Product innovation
○ c) Market expansion
○ d) Employee training
○ Answer: a) Environmental regulation
4. Which of the following is a reason for government regulation?
○ a) To protect public health and safety
 ○ b) To decrease consumer protection
○ c) To reduce business competition
○ d) To promote monopolies
○ Answer: a) To protect public health and safety
5. Economic sanctions are usually imposed by governments to:
○ a) Encourage trade
○ b) Promote foreign investments
○ c) Cease business operations in a specific country
○ d) Support the local economy
○ Answer: c) Cease business operations in a specific country

Medium

6. The elements of the public policy process include:

○ a) Inputs, goals, tools, and effects
○ b) Goals, profits, and resources
○ c) Strategy, innovation, and marketing
○ d) None of the above
○ Answer: a) Inputs, goals, tools, and effects
7. Which of the following is an example of a regulatory agency in the United States?
○ a) Federal Trade Commission (FTC)
○ b) National Football League (NFL)
○ c) American Medical Association (AMA)
○ d) Federal Aviation Administration (FAA)
○ Answer: a) Federal Trade Commission (FTC)
8. The relationship between business and government is:
○ a) Always cooperative
○ b) Always adversarial
○ c) Dynamic and complex
○ d) Static and simple
○ Answer: c) Dynamic and complex
9. Which of the following conditions can affect the regulation of business in a global
context?
○ a) Economic conditions
○ b) Cultural differences
○ c) Political stability
○ d) All of the above
○ Answer: d) All of the above
10. Which of the following can be a benefit of government regulation?
○ a) Increased costs for businesses
○ b) Reduced innovation
○ c) Enhanced public confidence
○ d) Decreased product safety
○ Answer: c) Enhanced public confidence

Hard
 11. Which of the following best describes the adversarial model of business-government
relations?
○ a) Businesses and government work closely to achieve mutual goals.
○ b) Businesses and government frequently conflict and oppose each other’s
objectives.
○ c) Businesses completely ignore government regulations.
○ d) Government subsidizes businesses to prevent competition.
○ Answer: b) Businesses and government frequently conflict and oppose each
other’s objectives.
12. Why might businesses prefer regulation in some instances?
○ a) To increase operational costs
○ b) To create barriers to entry and maintain competitive advantage
○ c) To limit innovation
○ d) To reduce the quality of products
○ Answer: b) To create barriers to entry and maintain competitive advantage
13. In which scenario would economic sanctions be most likely applied?
○ a) When a country excels in technological advancements
○ b) When a country engages in human rights violations
○ c) When a country reduces import tariffs
○ d) When a country improves environmental standards
○ Answer: b) When a country engages in human rights violations
14. Which of the following is NOT a typical remedy under antitrust laws?
○ a) Imposing fines
○ b) Breaking up a company
○ c) Imposing tariffs on imports
○ d) Restricting mergers
○ Answer: c) Imposing tariffs on imports
15. How can business managers effectively navigate the dynamic relationship between
business and government?
○ a) By ignoring government policies
○ b) By closely monitoring significant forces that may alter this relationship
○ c) By opposing all forms of government regulation
○ d) By focusing solely on profit maximization
○ Answer: b) By closely monitoring significant forces that may alter this
relationship

Chapter9: Sustainable Development and Global Business

True/False Questions

Easy

1. True/False: Sustainable development means meeting the needs of the present

without compromising the ability of future generations to meet their own needs. (LO
9-2)
○ Answer: True
2. True/False: Natural capital refers to man-made assets like buildings and machinery.
(LO 9-1)
 ○ Answer: False
3. True/False: Population growth has no impact on the world's ecological crisis. (LO 9-
3)
○ Answer: False
4. True/False: Climate change is considered an environmental issue shared by all
nations and businesses. (LO 9-4)
○ Answer: True
5. True/False: Small businesses do not need to take steps to promote sustainable
development. (LO 9-5)
○ Answer: False

Medium

6. True/False: The concept of sustainable development includes fairness across

generations. (LO 9-2)
○ Answer: True
7. True/False: Human activity has not significantly altered the face of the planet. (LO 9-
1)
○ Answer: False
8. True/False: Global codes of environmental conduct are only applicable to large
businesses. (LO 9-6)
○ Answer: False
9. True/False: Economic development always leads to a reduction in ecological
damage. (LO 9-3)
○ Answer: False
10. True/False: The United Nations has estimated the value of natural capital to society
to be as high as $72 trillion per year. (LO 9-1)
○ Answer: True

Hard

11. True/False: Sustainable development requires that developing world countries

receive a fair share of benefits along with developed countries. (LO 9-2)
○ Answer: True
12. True/False: The Anthropocene era is defined by the minimal impact of human
activity on the climate and environment. (LO 9-4)
○ Answer: False
13. True/False: Businesses face limited supplies of critical resources due to the demands
exceeding the Earth's carrying capacity. (LO 9-4)
○ Answer: True
14. True/False: Environmental sustainability challenges are only the responsibility of
governments and not businesses. (LO 9-5)
○ Answer: False
15. True/False: The pursuit of sustainability involves ensuring that the benefits of
natural resource use are distributed equitably across generations. (LO 9-2)
○ Answer: True

Multiple-Choice Questions
Easy

1. What term refers to the world's stocks of natural assets, including its geology, soil,
air, water, and all living things? (LO 9-1)
○ A) Human capital
○ B) Financial capital
○ C) Natural capital
○ D) Social capital
○ Answer: C) Natural capital
2. Which of the following is a key aspect of sustainable development? (LO 9-2)
○ A) Increasing short-term profits
○ B) Reducing quality of life
○ C) Meeting present needs without compromising future generations
○ D) Ignoring environmental impact
○ Answer: C) Meeting present needs without compromising future generations
3. Which environmental issue is shared globally by all nations and businesses? (LO 9-4)
○ A) Urbanization
○ B) Climate change
○ C) Local pollution
○ D) Overfishing
○ Answer: B) Climate change
4. What do global codes of environmental conduct aim to promote? (LO 9-6)
○ A) Economic inequality
○ B) Sustainable business practices
○ C) Political stability
○ D) Cultural uniformity
○ Answer: B) Sustainable business practices
5. What does the term "Anthropocene" refer to? (LO 9-1)
○ A) An era of minimal human impact
○ B) A geological era dominated by human activity
○ C) A time period of extensive volcanic activity
○ D) A phase of natural climate stability
○ Answer: B) A geological era dominated by human activity

Medium

6. Sustainable development primarily focuses on balancing economic progress with

what? (LO 9-2)
○ A) Technological advancement
○ B) Military development
○ C) Environmental protection
○ D) Political influence
○ Answer: C) Environmental protection
7. Which of the following challenges do businesses face due to environmental issues?
(LO 9-4)
○ A) Increased employee satisfaction
○ B) Limited supplies of critical resources
○ C) Decreased production costs
 ○ D) Enhanced market competition
○ Answer: B) Limited supplies of critical resources
8. What is the role of natural capital in sustainable development? (LO 9-1)
○ A) Providing financial investments
○ B) Offering technological innovations
○ C) Supplying essential resources for human life
○ D) Reducing economic disparities
○ Answer: C) Supplying essential resources for human life
9. How does population growth interact with the world's ecological crisis? (LO 9-3)
○ A) It has no significant impact.
○ B) It exacerbates ecological challenges.
○ C) It mitigates environmental damage.
○ D) It stabilizes resource consumption.
○ Answer: B) It exacerbates ecological challenges
10. Which global code promotes environmental responsibility among businesses? (LO 9-
6)
○ A) The Kyoto Protocol
○ B) The Paris Agreement
○ C) The Global Compact
○ D) The Washington Consensus
○ Answer: C) The Global Compact

Hard

11. What is the fundamental ethical principle underlying sustainable development? (LO
9-2)
○ A) Maximizing short-term profits
○ B) Distributing benefits and burdens equitably
○ C) Promoting technological innovation
○ D) Reducing regulatory oversight
○ Answer: B) Distributing benefits and burdens equitably
12. Which city is known for demonstrating sustainable urban planning practices? (LO 9-
5)
○ A) New York, USA
○ B) Tokyo, Japan
○ C) Curitiba, Brazil
○ D) Paris, France
○ Answer: C) Curitiba, Brazil
13. In the context of sustainable development, what does fairness require? (LO 9-2)
○ A) Benefits are distributed according to market performance.
○ B) Developed countries receive more benefits than developing countries.
○ C) Both current and future generations benefit equitably.
○ D) Economic development is prioritized over environmental concerns.
○ Answer: C) Both current and future generations benefit equitably
14. What critical task must business leaders address in the pursuit of sustainability? (LO
9-5)
○ A) Increasing market share
 ○ B) Meeting both economic and environmental goals simultaneously
○ C) Reducing employee turnover
○ D) Expanding global trade networks
○ Answer: B) Meeting both economic and environmental goals simultaneously
15. How does the United Nations' Agenda 2030 relate to sustainable development? (LO
9-6)
○ A) It focuses solely on economic growth.
○ B) It sets broad goals for sustainable development.
○ C) It disregards environmental protection.
○ D) It applies only to developed countries.
○ Answer: B) It sets broad goals for sustainable development

Chapter 13: Shareholder Rights and Corporate Governance

True/False Questions

Easy

1. LO 13-1: All shareholders have the right to vote on major company decisions. (True)
2. LO 13-2: The board of directors is responsible for selecting top-level personnel in a
company. (True)
3. LO 13-3: Executive compensation is always considered fair and justified. (False)
4. LO 13-4: Shareholders can influence corporate policy through proxy voting. (True)
5. LO 13-5: Insider trading is a legal activity as long as it is done discreetly. (False)

Medium

6. LO 13-1: Institutional investors are less likely to vote their proxies compared to
individual shareholders. (False)
7. LO 13-2: Corporate governance solely focuses on protecting the interests of
shareholders. (False)
8. LO 13-3: Excessive executive compensation can sometimes lead to a decrease in
shareholder value. (True)
9. LO 13-4: Shareholders cannot bring lawsuits against a company’s officers. (False)
10. LO 13-5: Fraudulent accounting practices have no impact on stock market
performance. (False)

Hard

11. LO 13-1: Shareholders are considered owners of the company because they hold
shares of its stock. (True)
12. LO 13-2: Boards of directors typically meet only once a year. (False)
13. LO 13-3: The debate over whether top managers are paid too much is primarily
based on ethical considerations. (False)
14. LO 13-4: Shareholders can only promote their economic objectives and not their
social objectives. (False)
15. LO 13-5: Government regulations do not play a role in protecting against stock
market abuses. (False)
Multiple-Choice Questions

Easy

1. LO 13-1: What is one of the major legal rights of shareholders?

○ A) To vote on major mergers and acquisitions
○ B) To manage the daily operations of the company
○ C) To determine executive salaries
○ D) To select the CEO directly
○ Answer: A
2. LO 13-2: Who is primarily responsible for corporate governance?
○ A) Shareholders
○ B) Board of Directors
○ C) CEO
○ D) Government regulators
○ Answer: B
3. LO 13-3: What is a common component of executive compensation?
○ A) Stock options
○ B) Office location choice
○ C) Company car
○ D) Free lunch
○ Answer: A
4. LO 13-4: Shareholders can promote their objectives through:
○ A) Proxy voting
○ B) Attending board meetings
○ C) Daily management tasks
○ D) Hiring employees
○ Answer: A
5. LO 13-5: Insider trading refers to:
○ A) Buying stocks openly in the market
○ B) Trading stocks based on non-public information
○ C) Making trades during business hours
○ D) Sharing stock tips with friends
○ Answer: B

Medium

6. LO 13-1: Which type of investor is more likely to vote their proxies?

○ A) Individual investors
○ B) Institutional investors
○ C) Government regulators
○ D) Retail investors
○ Answer: B
7. LO 13-2: The board of directors primarily ensures that:
○ A) The company follows its strategic direction
○ B) Employees are satisfied with their jobs
○ C) Customers receive good service
○ D) The company pays taxes on time
 ○ Answer: A
8. LO 13-3: Which of the following can be a negative consequence of excessive
executive compensation?
○ A) Increased employee morale
○ B) Decreased shareholder value
○ C) Higher company profits
○ D) Improved customer satisfaction
○ Answer: B
9. LO 13-4: Shareholders can bring their concerns to the company through:
○ A) The annual shareholders' meeting
○ B) Directly contacting employees
○ C) Hiring an external consultant
○ D) Changing the company’s bylaws independently
○ Answer: A
10. LO 13-5: What role does the government play in protecting against stock market
abuses?
○ A) Monitoring trading activities
○ B) Issuing trading licenses
○ C) Setting stock prices
○ D) Managing company operations
○ Answer: A

Hard

11. LO 13-1: Which of the following best describes the rights of shareholders in publicly
traded companies?
○ A) They can directly manage daily operations.
○ B) They can vote on key corporate decisions and changes.
○ C) They can set the company’s strategic direction.
○ D) They can hire and fire employees at will.
○ Answer: B
12. LO 13-2: The role of the board of directors includes all the following except:
○ A) Establishing corporate objectives
○ B) Selecting top-level personnel
○ C) Ensuring compliance with the law
○ D) Managing day-to-day operations
○ Answer: D
13. LO 13-3: Executive compensation debates often revolve around whether:
○ A) Executives should have more vacation time
○ B) Executives' pay is aligned with company performance
○ C) Employees receive sufficient training
○ D) Executives work long enough hours
○ Answer: B
14. LO 13-4: Which method allows shareholders to nominate their own candidates for
the board of directors?
○ A) Proxy access
○ B) Shareholder meetings
 ○ C) Direct voting
○ D) Board resolutions
○ Answer: A
15. LO 13-5: The government can protect shareholders by:
○ A) Regulating fraudulent accounting practices
○ B) Deciding corporate strategies
○ C) Setting executive salaries
○ D) Running the company
○ Answer: A

Chapter 19: Managing the Public and the Corporate Reputation

True/False Questions

Easy:

1. The general public is considered an important organizational stakeholder. (True) - LO

19-1
2. Corporate reputation is solely based on a company's financial performance. (False) -
LO 19-2
3. Public relations departments manage the company's interactions with the media.
(True) - LO 19-3
4. A strong corporate reputation can provide a company with a competitive advantage.
(True) - LO 19-4
5. Crisis management is only necessary for large corporations. (False) - LO 19-5

Medium:

6. Social media is not a significant channel for public relations efforts. (False) - LO 19-3

7. Effective brand management does not influence a company's ability to charge premium
prices. (False) - LO 19-4

8. Companies with a good reputation can better withstand harsh criticism. (True) - LO 19-2

9. A crisis management plan should only be developed after a crisis occurs. (False) - LO 19-5
10. The media's portrayal of a company cannot affect its public reputation. (False) - LO 19-1

Hard:

11. Corporate reputation is built solely through direct interactions with customers. (False) -
LO 19-2

12. Effective crisis management plans should include strategies for both traditional and
social media. (True) - LO 19-5

13. User-generated content has no impact on a company’s reputation. (False) - LO 19-6

14. A firm’s public relations strategy should align with its ethical values and beliefs. (True) -
LO 19-3

15. The public does not have any direct impact on a firm's corporate image. (False) - LO 19-1

Very Hard:

16. Stakeholders generally want to avoid engaging with well-respected companies. (False) -
LO 19-2

17. Crisis management involves only internal communication strategies. (False) - LO 19-5

18. Public service announcements are an ineffective way for companies to enhance their
reputation. (False) - LO 19-6

19. The effectiveness of a firm’s brand management is not related to its corporate
reputation. (False) - LO 19-4

20. Ethical conduct is irrelevant in building a positive corporate reputation. (False) - LO 19-2

Multiple Choice Questions

Easy:

1. Who is considered an important organizational stakeholder according to Chapter 19?

○ a) Competitors
○ b) General public (Correct) - LO 19-1
○ c) Suppliers
○ d) Shareholders
2. What is a key responsibility of a public relations department?
○ a) Managing financial accounts
○ b) Overseeing product development
○ c) Managing media relations (Correct) - LO 19-3
○ d) Conducting market research
3. Why is a good corporate reputation important?
○ a) It guarantees high profits
○ b) It positively influences relationships with stakeholders (Correct) - LO 19-2
○ c) It eliminates competition
○ d) It reduces the need for marketing
4. What is an effective tool for handling unexpected situations in a firm?
○ a) Marketing plan
○ b) Financial forecast
○ c) Crisis management plan (Correct) - LO 19-5
○ d) Employee training program
5. Which of the following is NOT a tactic to enhance a firm’s reputation?
○ a) Executive visibility
○ b) Media training
○ c) Ignoring customer feedback (Correct) - LO 19-6
○ d) Public service announcements
Medium:

6. What is one benefit of having a strong corporate reputation?

● a) Increased regulatory scrutiny

● b) Better access to capital markets (Correct) - LO 19-2
● c) Higher production costs
● d) Less media attention
7. Which element is crucial for brand management?
○ a) Cost-cutting strategies
○ b) Increasing perceived value over time (Correct) - LO 19-4
○ c) Outsourcing customer service
○ d) Reducing advertising efforts
8. How can a company prepare for a potential crisis?
○ a) Ignoring potential risks
○ b) Developing a crisis management plan in advance (Correct) - LO 19-5
○ c) Reducing public relations staff
○ d) Focusing solely on financial performance
9. Which stakeholder group can influence a firm through opinions and actions?
○ a) Suppliers
○ b) General public (Correct) - LO 19-1
○ c) Competitors
○ d) Government agencies
10. What term describes the desirable qualities associated with an organization that
influence its relationships with stakeholders?
○ a) Corporate reputation (Correct) - LO 19-2
○ b) Brand equity
○ c) Market share
○ d) Financial performance

Hard:

11. Which of the following is an activity of a public relations department?

○ - a) Developing new products

○ - b) Managing corporate communication strategies (Correct) - LO 19-3
○ - c) Conducting internal audits
○ - d) Setting financial goals

12. How can a firm’s crisis management plan be effectively communicated?

○ a) By limiting information to top executives
○ b) By using a wide range of online platforms (Correct) - LO 19-5
○ c) By delaying public announcements
○ d) By focusing only on traditional media
13. What should a firm’s public relations strategy include to manage its corporate
reputation?
○ a) Reducing customer interactions
○ b) Engaging with stakeholders in various ways (Correct) - LO 19-3
 ○ c) Avoiding media exposure
○ d) Limiting corporate social responsibility efforts
14. Which tactic can help a business influence its reputation positively?
○ a) Reducing advertising budgets
○ b) Executive visibility and media training (Correct) - LO 19-6
○ c) Avoiding sponsorships
○ d) Cutting back on public service announcements
15. Which industry was found to have companies with a higher reputation quotient?
○ a) Financial sector
○ b) Health care sector
○ c) Consumer goods sector (Correct) - LO 19-2
○ d) Telecom sector

Very Hard:

16. Which of the following is NOT part of an effective crisis management plan?
○ - a) Quick and accurate communication with the media
○ - b) Ignoring online platforms (Correct) - LO 19-5
○ - c) Focusing on ethical responsibilities to stakeholders
○ - d) Preparing before the crisis occurs

17. What role does user-generated content play in corporate reputation management?
○ a) It is irrelevant to reputation
○ b) It can significantly impact the company’s image (Correct) - LO 19-6
○ c) It reduces brand value
○ d) It is solely negative
18. How does social media influence corporate reputation?
○ a) It has no significant impact
○ b) It can help in managing public relations and brand image (Correct) - LO 19-
3
○ c) It only spreads negative news
○ d) It is used mainly for internal communication
19. What is a critical element for enhancing a firm's reputation through public relations?
○ a) Reducing employee benefits
○ b) Engaging with the media and stakeholders (Correct) - LO 19-3
○ c) Focusing solely on financial performance
○ d) Limiting public announcements
20. Which of the following best describes the impact of a good corporate reputation on
stakeholder relationships?
○ a) It complicates stakeholder interactions
○ b) It positively influences stakeholder trust and engagement (Correct) - LO
19-2
○ c) It has no impact on stakeholder perceptions
○ d) It reduces the need for corporate social responsibility initiatives