Deck 10: Corporate Responsibility

Question 1

Researchers found that higher sales and market share can be attained by employing sustainable strategies.

Answer 1

True

Question 2

The Enron scandal featured

A)a crude oil ship, the Valdez, that ran aground.
B)a company that falsified its accounts from top to bottom of its main financial statements.
C)a rogue trader who bankrupted his firm.
D)a financier who stole money from rich clients including Hollywood stars, politicians and a wealthy dog.

Answer 2

B

Question 3

The global financial crisis showed that the boards of most financial institutions understood the risks they were running, but did not tell shareholders the extent of these risks until too late.

Answer 3

False

Question 4

Most companies in the past decade have taken a status quo approach to corporate responsibility.

Question 5

Chevron's Partnering for a Better Future program involves investing in strengthening the communities in which it operates because it believes business succeeds when people prosper.

Question 6

The new leaders value emotional intelligence because they can use it to motivate employees emotionally as well as intellectually.

Question 7

If banks lack 'social legitimacy' they

A)have balance sheets which, though legal, are weaker than society expects.
B)have not paid enough money into fashionable charities and swanky dinners.
C)are perceived by society to have equity, ethical, and/or sustainability problems.
D)are perceived by society to have equity, gearing, and sustainability problems.

Question 8

When a natural disaster occurs in the twenty-first century,

A)financial markets and global economies react rapidly - sometimes with dire effects.
B)global financial markets go into meltdown.
C)most people and governments ignore pleas for help.
D)it has little effect outside the region concerned.

Question 9

The current macro environment is very sensitive to small movements because of the highly unstable macroeconomic balance.

Question 10

In the 1990s and 2000s regulation and restrictions on all kinds of banks were loosened in part because politicians wanted the wealth and jobs created by the financial sector itself.

Question 11

Empirical research into leadership tends to conclude that successful leaders have many different characteristics and approaches to dealing with people.

Question 12

The original cause of the Great Recession was

A)a tsunami in the Pacific Ocean.
B)the 'Euro' crisis.
C)a financing failure in the US housing market.
D)government borrowing rising out of control.

Question 13

The Enron, Worldcom, and Madoff scandals featured serious ethical breaches including falsifying accounts resulting in substantial financial losses to investors.

Question 14

The 'Great Recession' occurred in the first half of the twentieth century.

Question 15

The new leaders are fearless, hard-charging men and women who understand their businesses deeply and accept full responsibility.

Question 16

A long-term underlying cause of the financial crisis was

A)'Light touch' regulation which encouraged financial innovation.
B)Lehman Brothers.
C)increased lending by Chinese savers.
D)governments selling CDOs.

Question 17

Stakeholder management is separate from strategy development and implementation.

Question 18

A lack of social legitimacy could bring down yet more investment or commercial banks.

Question 19

Despite economic and financial troubles, politically and socially the first decade of the twenty-first century started smoothly.

Question 20

Chevron is seeking to balance profitability and social responsibility.

Question 21

A Ponzi scheme

A)is guaranteed a minimum income.
B)pays "returns" to savers out of capital paid in from new investments or new investors.
C)is guaranteed to fail eventually.
D)b and c.

Question 22

Ultimately business leaders have got to

A)tend the emotional climate of the organization.
B)provide meaning for the typical employee's aspirations.
C)unify and inspire their employees.
D)all of the above.

Question 23

Corporate governance refers to

A)the way that a company is directed, administered, and controlled at the top.
B)the company's internal rules governing how members of the board must behave.
C)the set of national laws concerning the general ways companies are run.
D)b and c.

Question 24

The 'equity' problem is

A)fundamentally about the distribution of income in the capitalist system, and what seems fair given different people's inputs, job security, advancement, recognition, diversity, and flexible work schedules.
B)about banks' inadequate reserves of equity compared to their debt funding from savers.
C)about excessive gearing generally in the financial system, and the failure of global regulators to ensure adequate reserve ratios.
D)the old agency problem: shareholders being ripped off by managers giving themselves bonuses that are far too generous.

Question 25

The strategic worry about short-termism is that

A)managers focus on short-term sales targets and are not concerned about profits.
B)managers focus too much on short-term economic conditions and not on profits.
C)managers focus too much on immediate operations, and not on strategic issues.
D)managers focus too much on headline profitability and not enough on the underlying causes of it.

Question 26

Principal concerns of corporate responsibility include

A)profit and shareholder wealth maximization.
B)social and ecological sustainability.
C)equity, occupational health and safety, ethics, social and ecological sustainability.
D)return on equity and protecting the environment.

Question 27

Business sustainability refers to the triple bottom line of

A)profit, people and planet.
B)the environment, profit and share value.
C)profit, planet and innovation.
D)none of the above.

Question 28

A SIM is a framework for helping categorize jurisdictions by their

A)strategies, innovation, and management.
B)social, innovation, and sustainability components.
C)sustainability, investment, and management components.
D)social, economic, and environmental sustainability components.

Question 29

Select the best answer. Some of the benefits to firms from employing sustainable strategies include

A)improved reputation and profit.
B)improved brand reputation, premium pricing and margins, attracting and retaining employees.
C)protecting the environment and earning industry respect.
D)none of the above.

Question 30

Today's high levels of interconnectedness result from high levels of

A)global trade, interest and exchange rate flexibility, and speed of communication.
B)global trade, unemployment and inflation.
C)government and private sector debt, and today's high speed of communication.
D)b and c.

Question 31

Using the Virtue Matrix introduced by Roger Martin of the University of Toronto, a firm is said to occupy the Strategic Frontier quadrant when it

A)advances shareholder value and long term profitability.
B)advances corporate responsibility and the community it serves.
C)advances corporate responsibility and shareholder value.
D)none of the above.

Question 32

Select the best strategic reasons for firms to ensure proper occupational health and safety practices.

A)Improve industry reputation.
B)Improve the bottom line.
C)The potential to win awards which could increase brand value.
D)Direct financial impact and diminished brand value if they don't follow these practices.

Question 33

Meeting the 'triple bottom line' refers to

A)having acceptable profits, balance sheets, and cashflows.
B)having an adequate performance economically, socially, and environmentally.
C)satisfying all three of your main stakeholder groups simultaneously.
D)producing satisfactory financials for this year, next year, and the medium-term future.

Question 34

At the heart of the Enron and Worldcom scandals was

A)a fraud by businessmen purporting to be more qualified than they actually were.
B)a fraud by directors and senior managers involving accounts with overstated profits.
C)a series of increasingly daring financial raids that was ultimately bound to fail.
D)bribery and corruption of government officials.

Question 35

Hamel argues that modern business leaders need to be

A)all-wise decision makers and iron-fisted disciplinarians.
B)constitution writers, social architects, and entrepreneurs of meaning.
C)information system architects and social entrepreneurs.
D)IT architects, constitutional experts, and successful entrepreneurs.