Question 1

The Statement that accurately describes corporations is

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corporate shareholders have limited liability for their debts

Question 2

Corporations differ from partnerships and other forms of business association in two ways. One of these is that

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they must be publicly registered or in some way officially acknowledged by the law

Question 3

In Citizens United v. Federal Elections Commission, the U.S. Supreme Court

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defended the first Amendment right of corporations to spend money to support political candidates they favor

Question 4

A common point of contention about corporations is

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philosophers and business theorist disagree whether corporations are moral agents.

Question 5

Milton Friedman argues that

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a business's only social responsibility is to maximize profits within the rules of the game

Question 6

Which of the following do advocates of the broader view of corporate social responsibility believe?

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Corporations have moral obligations to consumers, to employees, to suppliers and contractors, to the surrounding community, and to society at large

Question 7

One of the three important limits to what the law can do discussed by Christopher Stone is

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designing effective regulations is difficult.

Question 8

Externalities are

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unintended side-effects

Question 9

The best statement concerning corporations is

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corporate culture can be both explicit and implicit.

Question 10

The rules of the game for corporate work are intended to

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promote open and free competition

Question 11

Milton Friedman's perspective is that the only social responsibility of a business is to

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make money for its owners

Question 12

Those with a broader view concerning business obligations believe that with power comes

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social responsibility

Question 13

Adam Smith proposed that in our pursuit of economic interest we are led by

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an invisible hand to promote general good

Question 14

T or F: Most Business observers agree with Berle and Means that, because stock ownership in large corporations is so dispersed, actual control of the corporation has passed to management.

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True

Question 15

T or F: Internal or external corporate responsibility audits can help improve a corporation's corporate culture

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True

Question 16

T or F: Corporate internal decision (CID) structures amount to established procedures for accomplishing specific goals.

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True

Question 17

T or F: Limited liability means that members of a corporation are financially liable for corporate debts only up to the extent of their investments

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True

Question 18

T or F: The invisible-hand argument against broadening corporate responsibility says that business's appetite for profit should be controlled by the hand of the government

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True

Question 19

T or F: Milton Friedman argues that business has a responsibility to provide employment, refrain from polluting, and eliminate discrimination, even when it's not profitable to do so

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False

Question 20

T or F: Externalities are the unintended negative (or in some cases positive) consequences that an economic transaction between two parties can have on some third party

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True

Question 21

T or F: The business-can't-handle-it argument is an argument in favor of a broad view of corporate responsibility

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False

Question 22

T or F: Legally a corporation is a thing that can endure beyond the natural lives of its members and that has incorporators who may sue and be sued as a unit and who are able to cosign part of their property to the corporation for ventures of limited liability

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True

Question 23

T or F: The case of Citizens United v. Federal Election Commission ruled that corporations could spend money to support political candidates

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True

Question 24

T or F: According to Milton Friedman, business has no social responsibilities other than to maximize profits so long as it follows the rules of the game

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True

Question 25

T or F: Adherents of the broader view of corporate responsibility claim that modern business is untimely integrated with the rest of society and that, as a result, although society expects business to pursue its economic interest, business has other responsibilities as well.

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True

Question 26

T or F: Externalities give us a reason to support the narrow view of corporate responsibility

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False

Question 27

T or F: An effective professional or business moral code - as well as the public's awareness of this code- never good for business

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False

Question 28

T or F: It is never profitable for corporations to acknowledge that business should be conducted to make positive contribution to society rather than just make a profit

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False

Question 29

T or F: According to proponents of broadening corporate responsibility, corporations should welcome the outside opinions of society as a whole, local community, customers, suppliers, employees, managers, and stockholders.

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True

Question 30

T or F: A corporate moral code should set reasonable goals and subgoals, with an eye on blunting unethical pressures on subordinates

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True

Question 31

The first corporations

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were towns, universities, and ecclesiastic orders.

Question 32

Which of the following contributed to the more relaxed incorporation procedures of modern times?

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The idea that incorporation is a by-product of the people's right to associate, not a gift from the state.

Question 33

Some argue for the narrow view of corporate social responsibility on the ground that managers have a fiduciary responsibility to maximize the profits of their shareholders. As discussed in Chapter 5, one problem with this argument is that..

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promises to try to make the stockholders money don't override all our other obligations.

Question 34

Which of the following is one of the three arguments in favor of narrow corporate social responsibility discussed in Ch 5?

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The idea that incorporation is a by-product of the people's right to associate, not a gift from the state.

Question 35

Kenneth Arrow discussed two important situations in which profit maximization can be socially inefficient. One of these occurs when:

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there is an imbalance of knowledge between buyer and seller.

Question 36

Milton Snoeyenbos argues that:

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Corporate moral codes can make it more reasonable to expect employees to behave ethically.

Question 37

Momentum for the corporate organization of business really gained momentum after which war?

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Civil War

Question 38

The debate over corporate moral agency hinges on which question?

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Corporate Punishment

Question 39

The idea that corporations are moral agents

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-

Question 40

Melvin Anshen suggests that there is a relationship between business and society which he termed as..

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social contract

Question 41

Most Americans believe a corporation's top obligation is to its..

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employees

Question 42

In the corporate world, the board of directors will typically:

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rubber stamp

Question 43

What is a corporation? How does it differ from partnerships? What are the different kinds of corporations?

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A corporation is an independent legal entity owned by shareholders, in which the shareholders decide on how the company is run and who manages it. A partnershipis a business in which two or more individuals share ownership. C, S, limited liability companies, and nonprofit organizations.

Question 44

What is the problem of vanishing individual responsibility?

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Inside a corporation, it may be difficult, even impossible, to assign responsibility for a particular outcome to any single individual because so any different people, acting within a given CID framework, contributed to it in small ways.Many find it easy to say it's not my job or I was just following procedure to escape responsibility. CIDSs seem to make this type of explanation common.

Question 45

Explain Milton Friedman's view of social responsibility?

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Business has no social responsibilities other than to maximize profits. Friedman & Levitt said that diverting corporations from the pursuit of profit makes our economic system less efficient. Business' only social responsibility is to make as much money as possible for shareholders within the boundaries of law and custom. Private enterprise shouldn't be forced to undertake public responsibilities that they think properly belong to government, charities, religious institutions, nonprofits, etc.

Chapter 5 Corporations Test

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