Test Bank For Management 8th Edition By Kinicki

Chapter 03 Test Bank True / False Questions 1. Paul, who is normally an ethical person, has an opportunity to acquire what he feels is "easy" money in his job, and he believes it is safe to steal the money because nobody would know if he does take it. Paul rationalizes that it is fine to steal the money because he needs it more than the person whom the money belongs to. The psychological mechanism that causes Paul to want to steal the money is poor self-esteem. FALSE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-01 Describe the triple bottom line of people, planet, and profit. Topic: Ethical Behavior Feedback: People know stealing is wrong, but they do it because of psychological mechanisms such as motivated blindness, the tendency to overlook information that works against their best interest. Motivated blindness allows us to behave unethically while maintaining a positive self-image. 2. Habitual cheating tends to begin with small infractions, such as illegally downloading books and songs, and then grows by increments into an ongoing deliberate strategy of deception or fraud. TRUE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-01 Describe the triple bottom line of people, planet, and profit. Topic: Ethical Behavior Feedback: As Carey has noted, habitual cheating tends to begin with small infractions, such as illegally downloading books and songs, and then grows by increments into an ongoing deliberate strategy of deception or fraud. 3. Prior to a 2010 natural-gas pipeline explosion in San Bruno, California, Pacific Gas & Electric chose to use its surplus revenues to improve safety, an example of ethical decision making. FALSE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Ethical Behavior Feedback: Prior to the explosion, PG&E's own internal audit found the incentives actually encouraged crews to produce inaccurate surveys. An independent audit found that over an 11-year period PG&E collected $430 million more from its gas operations than the government had authorized—and it "chose to use the surplus revenues for general corporate purposes" rather than for improved safety. In fact, in the three years prior to the explosion, the company spent $56 million a year on an incentive plan—stock awards, performance shares, and deferred compensation—for its executives and directors, including millions to the CEO. 4. The employees of a production facility that produce parts for boats are meeting to discuss ways to control rising costs, which are affecting their bonus (incentive pay). The employees are internal stakeholders of the factory. TRUE AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: Internal stakeholders include employees, owners, and the board of directors. Some of the directors on the board (inside directors) may be top executives of the firm. 5. The task environment of Top-Notch Sewing consists of just two groups, customers and stockholders, who give the employees and management of Top-Notch the daily tasks that the company's employees will handle. FALSE AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: The task environment consists of 11 groups that present employees with daily tasks to handle. The 11 groups are customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media. 6. Pleasant Resort, a successful 100-year-old hotel and resort, entered into a co-marketing arrangement with A-Plus Hotels, a five-star hotel chain. Both companies benefit from the new relationship. Pleasant is now able to market its facility and services through A-Plus's marketing team, and A-Plus Hotels now offers access to an upscale resort that it can recommend to its customers who are looking for a resort experience. A-Plus Hotels and Pleasant Resort can be considered strategic allies. TRUE AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Companies, and even nonprofit organizations, frequently link up with other organizations (even competing ones) to realize strategic advantages. The term strategic allies describes the relationship of two organizations that join forces to achieve advantages neither can perform as well alone. 7. The general environment, or macroenvironment, includes six forces: economic, technological, sociocultural, demographic, political-legal, and international. TRUE AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: The general environment, or macroenvironment, includes six forces: economic, technological, sociocultural, demographic, political-legal, and international. 8. When the Kiddie Village Daycare Center looks at the recent increase in the number of working mothers in its neighborhood to determine how many employees to hire, its managers are studying demographic forces. TRUE AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Demographic forces are influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin. 9. Paul, the vice president of marketing in an international sales organization, is considering opening an office in a new country. He is looking at the current economic, political, legal, and technological global forces in that country that can affect the success of his company's expansion into the new area. These forces that Paul is studying are international forces. TRUE AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: International forces are changes in the economic, political, legal, and technological global system that may affect an organization. 10.Just before introduction of a new revolutionary laptop, the Top205 by Top Computers, Greg, the CEO of Top, was informed that a problem with a part inside the Top205 may cause reliability issues. Greg knows that correcting the problem will delay the introduction of the product, and be expensive due to possible order cancelations and added advertising costs. But he also knows that allowing the new flawed computer into the market will affect Top Computers' reputation. Greg's decision whether to delay the introduction of the Top205 or proceed as planned is an example of an ethical dilemma. TRUE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Dilemma Feedback: An ethical dilemma is a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal. 11. The Sarbanes-Oxley Act set up the Federal Trade Commission to ensure consumer protection and to eliminate and prevent anticompetitive business practices, with penalties of as much as 25 years in prison for noncompliance. FALSE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Sarbanes-Oxley Feedback: The Sarbanes-Oxley Act established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance. 12. Companies can reduce unethical behavior by offering a case-based approach to ethics training that presents employees with ethical dilemmas and clarifies expectations. TRUE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Code of Ethics Feedback: Human resource professionals indicate that case-based training regarding ethical dilemmas and how to respond to them may reduce unethical behavior in the workplace. 13. Despite recent pressure from stockholders to increase profits, World Extraction Corp., a global petroleum organization, has maintained a practice of consistently acting ethically by being a good global corporate citizen, taking host-country and global standards into consideration when making decisions, and obeying the laws of host countries as well as international law. World Extraction Corp. provides an example of a company acting in a socially responsible way. TRUE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: According to University of Georgia business scholar Archie B. Carroll, corporate social responsibility rests at the top of a pyramid of a corporation's obligations, right up there with economic, legal, and ethical obligations. Carroll suggests the responsibilities of an organization in the global economy should take the following priorities, with profit being the most fundamental (base of the pyramid) and corporate citizenship at the top: (1) Be a good global corporate citizen, as defined by the host country's expectations; (2) be ethical in practices, taking host-country and global standards into consideration; (3) obey the law of host countries as well as international law; and (4) make a profit consistent with expectations for international business. 14. As businesses are going green today, sustainability programs have produced environmental benefits, but unfortunately, they have also resulted in higher costs and lower revenues, and at times, they have hurt organizations competitively. FALSE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: Today, going green has entered the business mainstream; sustainability programs are producing not only environmental benefits but also cost savings, revenue growth, and competitive advantages. 15. After the scandals at WorldCom, Tyco, Adelphia, and Enron, in which company employees lost millions of dollars and their nest eggs, U.S. companies showed less concern for corporate governance and more interest in the development of corporate social responsibility. FALSE AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 03-06 Discuss the role of corporate governance in assessing management performance. Topic: Corporate Governance Feedback: Corporate governance is the system of governing a company so that the interests of corporate owners and other stakeholders are protected. After the Enron and other scandals, there was a renewed interest in corporate governance. 16. Shane, a sales manager, remarked that typically, her employees sincerely and positively overstate their job performance and abilities. This is an example of the ____ effect. A. overstatement B. motivated blindness C. holier-than-thou D. cheating E. fudging AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: With the "holier-than-thou" effect, science writer Benedict Carey suggests, "people tend to be overly optimistic about their own abilities and fortunes—to overestimate their standing in class, their discipline, their sincerity." 17. Alonzo, the president of his high school's senior class and honor society, has been very busy and did not study for an important history test. Although Alonzo is very confident, he realizes that he probably will not do well on the test. He has talked himself into cheating because he believes that cheating will help him maintain his strong GPA, which he will need to be accepted by a good college. He tells his friend, "I don't usually cheat, but I really have to do it." Which of the following might explain Alonzo's behavior? A. the holier-than-thou effect B. the deception effect C. the cheating requirement D. a depression disorder E. motivated blindness AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: Motivated blindness is the tendency to overlook information that works against our best interest. "People who have a vested self-interest, even the most honest among us, have difficulty being objective," says one report. "Worse yet, they fail to recognize their lack of objectivity." Motivated blindness enables us to behave unethically while maintaining a positive self-image. Most students rationalize cheating by saying, "I don't usually do this, but I really have to do it." They would rather cheat than show their families they got an F. 18. Don, the owner of a bait and tackle shop, attended an entrepreneurship workshop that discussed the triple bottom line, which measures an organization's ____ performance. A. social, environmental, and financial B. financial, diversity, and environmental C. social, synergy, and diversity D. marketing, profit, and efficiency E. social, effectiveness, and financial AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-01 Describe the triple bottom line of people, planet, and profit. Topic: Triple Bottom Line Feedback: The triple bottom line—representing people, planet, and profit (the 3 Ps)—measures an organization's social, environmental, and financial performance. 19. What mechanism is used to provide a systematic assessment of an organization's performance in implementing socially responsible programs, often based on predefined goals? A. sustainability program B. code of ethics C. diversity program D. financial audit E. social audit AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-01 Describe the triple bottom line of people, planet, and profit. Topic: Triple Bottom Line Feedback: A social audit is a systematic assessment of a company's performance in implementing socially responsible programs, often based on predefined goals. 20. An organization's internal stakeholders consist of A. the board of directors, employees, and suppliers. B. the board of directors, customers, and owners. C. customers, families of employees, and employees. D. the board of directors, employees, and owners. E. competitors, the community, and suppliers. AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: A company's internal stakeholders consist of employees, owners, and the board of directors. 21. The marketing director for Zap Games, a video game company, has informed his employees that he feels the company needs to improve its relationship with the distributors of the company's products because the distributors are part of the ______ environment for Zap Games. He believes that a stronger relationship with distributors will lead to more market share, and higher profits, for both Zap Games and its distributors. A. strategic B. focused C. outlying D. external E. task AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Distributors are part of an organization's task environment, and therefore one of its external stakeholders. 22. Patsy, a registered nurse, has decided to start a home healthcare service to assist with the medical, meal preparation, and light housecleaning needs of older adults. To grow her business, Patsy is focusing her marketing efforts on the older adult population; in these efforts, she is involved with the _____ environment. A. task B. general C. internal D. natural capital E. strategic allies AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Age is one of the demographic forces, and demographic forces are part of an organization's general environment. 23. Don was recently promoted, and his salary increase includes retirement investment options, so he has decided to take part in an ESOP. This means that Don A. will be on the company's board of directors. B. will participate in an Externship Supervisors' Oversight Plan. C. will be buying or receiving shares of his company's stock. D. is now one of the company's external stakeholders. E. is in charge of an investment group. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: With an Employee Stock Ownership Plan (ESOP), employees buy (or are given) company stock to become owners. 24. Amy, a successful banker and educator, has decided to retire, but she is very interested in staying involved with a company "that cares." So when asked to serve on its board of directors, she gladly accepted the invitation. As a member of the board, Amy will be involved with the organization's A. overall strategic goals and approval of major decisions. B. daily company management and employee supervision. C. overall strategic goals and global HR management. D. daily specific company goals and management of a specific department. E. oversight of sales and marketing. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: Members of the board of directors are very important in setting the organization's overall strategic goals and in approving the major decisions and salaries of top management. 25. Warm Hearts is a nonprofit organization that brings warm meals to older adults and runs errands for its clients; the board of Warm Hearts is called the A. board of directors. B. board of ethics. C. strategic board. D. daily oversight committee. E. board of regents. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: In nonprofit organizations, such as universities or hospitals, the board may be called the board of trustees or the board of regents. 26. Marie and Marti are partners who solely own M and M Florist. As owners, they can A. claim only limited liability. B. avoid taking any legal responsibility for M and M. C. sell stock in their company. D. claim an organization as their legal property. E. decide not to pay a dividend to their stockholders. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders Feedback: The owners of an organization consist of all those who can claim it as their legal property. A partnership is a form of business ownership. 27. To focus on improving company customer service this year, the CEO of a pet food manufacturer outlined a list of stakeholders to concentrate on: distributors, local communities, and the mass media. These three groups are A. external stakeholders. B. general stakeholders. C. internal stakeholders. D. preferred stockholders. E. interest groups. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: External stakeholders are people or groups in the organization's external environment that are affected by it. The external task environment consists of 11 groups that present the organization with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and the mass media. 28. Rebecca and Donna, owners of Fine Coffee and Pastry Shop, are concerned because Panera Bread is opening a new store just one mile from their shop. Rebecca and Donna know that Panera will be offering similar products; therefore, Panera Bread will be a ____ to Rebecca and Donna. A. competitor B. competitive ally C. strategic ally D. distributor E. internal stakeholder AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Competitors are people or organizations that compete for customers or resources. 29. A supplier is an external stakeholder that A. competes for customers or resources. B. helps a company sell its goods and services to customers. C. joins forces with another company to achieve advantages that neither can achieve on its own. D. rescinds tax breaks when firms don't deliver promised jobs. E. provides raw materials, services, equipment, labor, or energy. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: A supplier is a person or an organization that provides supplies like raw materials, services, equipment, labor, or energy to other organizations. 30. Every Saturday Mrs. Jones and hundreds of other shoppers visit ABC Market, a grocery store, to buy food for their home or business. These shoppers are _____ to ABC. A. suppliers B. community allies C. competitors D. customers E. partners AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Customers are those who pay to use an organization's goods or services. 31. ABC Brothers' cleaning products and equipment are sold to consumers and commercial cleaning companies in Best Supply's janitorial supply and equipment store. ABC relies heavily on Best Supply to help sell its goods and services to customers. Best Supply is a(n) ____ for ABC Brothers' products. A. competitor B. distributor C. customer D. subsidiary E. account ally AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: A distributor is a person or an organization that helps another organization sell its goods and services to customers. 32. Ole McDonald, a successful farm equipment supply company in the Midwest, has joined forces with A-Plus Supply, a national hardware and home retailer. As a result of this new relationship, Ole McDonald can open stores in other regions and A-Plus can now offer a high-quality product in the farm community. Ole McDonald and A-Plus Supply are now A. distributors. B. competitors. C. customers. D. suppliers. E. strategic allies. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: The term strategic allies describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone. 33. Since the 1950s, the percentage of the U.S. labor force represented by unions has A. rapidly increased. B. steadily increased. C. fallen to nearly zero. D. steadily declined. E. remained unchanged. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: In recent years, the percentage of the labor force represented by unions has steadily declined (from 35 percent in the 1950s to 11.1 percent in 2015). 34. Local communities are stakeholders of organizations because communities A. rely on the products the companies produce. B. rely on the tax base from companies and the jobs the company provides. C. wish to join forces with organizations to create strategic alliances. D. need a major corporate presence to maintain federal funding of the local highway system. E. prefer products made by large multinational organizations over locally made products. AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Local communities are important stakeholders. Schools and municipal governments rely on the organization for their tax base. Families and merchants depend on its employee payroll for their livelihoods. In addition, everyone from the United Way to the Little League may rely on it for some financial support. 35. The city government of Pleasantville promised significant tax breaks to a large retailer if it opened a store in Pleasantville, which would result in nearly 200 new local jobs. However, the retailer decided that it would staff the new Pleasantville store with employees from its other stores, meaning no new jobs were created. As a result, the city of Pleasantville instituted clawbacks by A. increasing the tax breaks offered to the retailer. B. forcing the retailer to pay large fines. C. rescinding the tax breaks given to the retailer. D. boycotting the retailer. E. forcing the retailer to unionize. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: If a community gives a company tax breaks in return for the promise of new jobs and the firm fails to deliver on its promises, the community may institute clawbacks, which means rescinding the tax breaks when firms don't deliver promised jobs. 36. Which type of funding raises small amounts of money from many people to finance a new venture? A. crowdfunding B. multifunding C. duplicating D. venture-funding E. angel-financing AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Crowdfunding means raising money for a project or venture by obtaining many small amounts of money from many people ("the crowd"). 37. _______ are regulatory agencies, such as the SEC (Securities and Exchange Commission), that establish ground rules under which organizations may operate. A. Whistle-blowers B. Government moderators C. Government regulators D. Interest groups E. Watchdogs AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Government regulators establish ground rules under which organizations may operate. Regulators include the World Trade Organization and the Federal Aviation Administration. 38. Joe, a lobbyist who represents the oil industry, is meeting with several members of Congress to try to exert political influence by contributing funds to the lawmakers' election campaigns. Joe also is involved in a letter-writing campaign to promote his cause. Joe is working on behalf of a A. government regulator. B. task force. C. focus group. D. strategic alliance. E. special-interest group. AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Special-interest groups are groups whose members try to influence specific issues. Special-interest groups may try to exert political influence, as in contributing funds to lawmakers' election campaigns or in launching letter-writing efforts to officials. Or they may organize picketing and boycotts—holding back their patronage—of certain companies or events (such as the Oscars). 39. The mass media are part of an organization's A. general environment. B. task environment. C. internal stakeholders. D. macroenvironment. E. distribution network. AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: No manager can afford to ignore the power of the mass media—print, radio, TV, and the Internet—to rapidly and widely disseminate news both bad and good. Thus, most companies, universities, hospitals, and even government agencies have a public relations person or department to communicate effectively with the press. The mass media are part of an organization's task environment. 40. Which forces are part of the macroenvironment? A. economic, technological, sociocultural, and diversity B. diversity, microenvironment, sociocultural, demographic, and political-legal C. globalism, technological, sociocultural, demographic, and microenvironment D. economic, technological, sociocultural, demographic, political-legal, and international E. international, demographic, diversity, family, culture, and technology AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Beyond the task environment is the general environment, or macroenvironment, which includes six forces: economic, technological, sociocultural, demographic, political-legal, and international. 41. What is a synonym for the macroenvironment? A. economic environment B. ethical environment C. microenvironment D. task environment E. general environment AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: The macroenvironment is also known as the general environment, and it includes six forces: economic, technological, sociocultural, demographic, political-legal, and international. 42. Tom and his managers are discussing the unemployment, inflation, and interest-rate trends that might affect their chain of coffee shops over the next 12 months and the projected growth in the areas where the stores are located. The managers are studying the ______ forces in their organization's general environment. A. technological B. sociocultural C. political D. economic E. international AACSB: Knowledge Application Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Economic forces consist of the general economic conditions and trends like unemployment, inflation, interest rates, and economic growth that may affect an organization's performance. 43. Fewer children are interested in learning how to play a musical instrument, and young people having less interest in owning cars. These two trends are examples of ____ forces at work. A. diversity B. financial C. political D. sociocultural E. legal AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: Sociocultural Forces Feedback: Sociocultural forces are influences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization or industry. 44. _____ forces lead to new developments in methods for transforming resources into goods or services. For example, a new technique called hydraulic fracturing (or fracking) has been developed to harvest natural gas trapped below the earth's surface. A. Sociocultural B. Technological C. Demographic D. Political-legal E. Media AACSB: Technology Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Technological forces lead to new developments in methods for transforming resources into goods or services. 45. When a food distributor considers changing the products it markets in the southern states because of an increasing percentage of customers from Central and South America, it is examining the ____ forces at work in the southern United States. A. economic B. demographic C. technological D. political E. legal AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Demographic forces are influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin. 46. _____ forces affect the way politics shape laws and the way laws shape the opportunities for and threats to an organization. For example, some cities in the United States (including New York and San Francisco) have set the minimum wage far above the federally mandated minimum wage. A. Political-legal B. Demographic C. Financial D. Sociocultural E. Technological AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: Political-legal forces may lead to changes in the way politics shape laws and the way laws shape the opportunities for and threats to an organization. As for legal forces, some countries have more fully developed legal systems than others. American companies may be willing to use the legal system to advance their interests, as in suing competitors to gain competitive advantage, but they must also be aware that other companies may do the same to them. 47. Changes in the economic, political, legal, and technological global system that may affect an organization are ______ forces. For example, stresses within the European Union (including the United Kingdom's recent decision to exit the EU) may have global ramifications. A. local B. demographic C. international D. technological E. internal stakeholder AACSB: Analytical Thinking Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-03 Identify important stakeholders outside the organization. Topic: External Stakeholders Feedback: International forces are changes in the economic, political, legal, and technological global system that may affect an organization. 48. Joe, the owner of ABC Electronics, just discovered that his trusted friend Paul, his accountant for over 30 years, has been mishandling the company books and stealing from the company bank account. Joe must decide whether to ignore his friend's actions and avoid bad publicity for ABC Electronics, or to have Paul arrested for embezzlement. Joe is facing A. a whistle-blower. B. a synergy factor. C. an issue of corporate governance. D. a social audit. E. an ethical dilemma. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Dilemma Feedback: An ethical dilemma is a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization, but that is unethical or even illegal. 49. Ethics are A. influences arising from changes in the characteristics of a population. B. an organization's written code of social responsibility. C. standards of right and wrong that influence behavior. D. a set of behaviors accepted as "right" or "good." E. rules to be enforced in an organization. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: Ethics are the standards of right and wrong that influence behavior. 50. ______ are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior. These beliefs may include the idea that employees should be promoted solely on the basis of merit, that no bribes will be paid to foreign officials to obtain business licenses, and that companies should offer extended maternity leave upon the employee's request. A. Morals B. Norms C. Ethical advantages D. Values E. Fairness factors AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: Values are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior, such as the belief that fairness means hiring according to ability, not family background. 51. To increase profitability, top management of a national retailer needs to decide if it will close several stores. Management knows that by closing the locations, it will save the company millions of dollars and benefit many stockholder groups and individuals. The benefits of closing the stores outweigh the benefits of keeping them open. Keeping the stores open would be advantageous for many fewer people than closing the stores. This logic is an example of the ___ approach to deciding ethical dilemmas. A. individual B. majority C. utilitarian D. justice E. moral-rights AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Utilitarian Approach Feedback: Ethical behavior in the utilitarian approach is guided by what will result in the greatest good for the greatest number of people. Managers often take the utilitarian approach, using financial performance such as efficiency and profit as the best definition of what constitutes "the greatest good for the greatest number." 52. Consider the following situation: Local livestock farmers could allow the runoff of manure nutrients into a stream that feeds a local lake because polluting the stream helps farmers in the short term. However, farmers will act ethically in the short run to avoid harming others in the long run because doing so is also in the farmer's best long-term interests. This type of thinking reflects the _____ approach to deciding ethical dilemmas. A. individual B. group C. moral-rights D. utilitarian E. justice AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Dilemma Feedback: Ethical behavior in the individual approach is guided by what will result in the individual's best long-term interests, which ultimately are in everyone's self-interest. The assumption here is that you will act ethically in the short run to avoid others harming you in the long run. 53. With recent reports of identity theft, Mr. Jones, the CEO of a construction company, is concerned about his employees' privacy, and because of recent accidents on the job, he is also worried about the safety of his workers. Mr. Jones's concerns with privacy and health and safety are key elements in the _____ approach to deciding ethical dilemmas. A. individual rights B. justice C. impartial D. utilitarian E. moral rights AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Moral-Rights Approach Feedback: Ethical behavior in the moral-rights approach is guided by respect for the fundamental rights of human beings, such as those expressed in the U.S. Constitution's Bill of Rights. We would all tend to agree that denying people the right to life, liberty, privacy, health and safety, and due process is unethical. 54. ______ guides the justice approach to deciding ethical dilemmas. A. Increasing profits and workplace diversity B. Respect for the fundamental rights of human beings C. Respect for impartial standards of fairness and equity D. Respect for society and the environment E. The individual's best long-term interest AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Justice Approach Feedback: The justice approach is guided by respect for impartial standards of fairness and equity. 55. Bernard (Bernie) Madoff used money from newer investors to pay off older investors. Which type of scam was Madoff running? A. illegal lobbying B. insider trading C. salami slicing D. Ponzi scheme E. whistle-blowing AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: Financier Bernard (Bernie) Madoff, who confessed to running a $50 billion Ponzi scheme, used cash from newer investors to pay off older ones, the definition of this type of scheme. 56. Greg, the president of an IT company, is friends with Jack, the CEO of HyperTech, a company that develops and manufactures computer hardware. Jack tells Greg that HyperTech is about to announce the creation of a revolutionary new computer processor that will quadruple processing capacity and cause HyperTech's sales and profits to skyrocket. Greg then purchases a large number of shares of HyperTech company stock before the news of the new computer processor is made public. In which illegal activity has Greg engaged? A. a Ponzi scheme B. short selling C. issuing a call D. information abuse E. insider trading AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: Insider trading is the illegal trading of a company's stock by people using confidential company information. 57. The Sarbanes-Oxley Act of 2002 established requirements for ____. Noncompliance can result in penalties of A. proper financial record keeping for private companies; as much as 25 years in prison. B. proper financial record keeping for government organizations; as much as 25 years in prison. C. codes of ethics guidelines for organizations; as much as $2 million. D. proper financial record keeping for public companies; as much as 25 years in prison. E. all corporate financial records to be made public; as much as $5 million. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: The Sarbanes-Oxley Act of 2002 established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance. 58. Jane, a successful store manager, leads her employees by encouraging them and showing that she genuinely believes in them. She also encourages group and team efforts. Jane manages at Kohlberg's _____ level of personal moral development. A. unconventional B. nonconventional C. conventional D. postconventional E. preconventional AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Kohlberg's Model Feedback: Kohlberg proposed three levels of personal moral development: preconventional, conventional, and postconventional. At Level 2 (the conventional level), people follow the expectations of others. People whose moral development has reached this level are conformist but not slavish, generally adhering to the expectations of others in their lives. Level 2 managers lead by encouragement and cooperation and are more group and team oriented. Most managers are at this level. 59. Don has managed several restaurants for over 50 years and is close to retirement. With his maturity and business experience, his decisions are sound, based on solid, proven values. Don tends to be an independent thinker who focuses on empowering his employees. Don manages at Kohlberg's ______ level of personal moral development. A. conventional B. nonconventional C. unconventional D. preconventional E. postconventional AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Kohlberg's Model Feedback: Kohlberg proposed three levels of personal moral development: preconventional, conventional, and postconventional. Only about a fifth of American managers reach Level 3, the postconventional level, when managers are guided by internal values. It is the farthest along in moral development, and Level 3 managers are independent souls who follow their own values and standards, focusing on the needs of their employees and trying to lead by empowering those working for them. 60. The employees of Mom's Pizza, a local pizza restaurant, feel that the owners and managers really try to follow the ethical policies outlined in their company's code of ethics. Pete, a cook, said that "Just today, Joe, our manager, called our supplier to let them know we received an extra case of tomatoes that we did not pay for. And they do this type of thing almost every day." Mom's Pizza maintains a(n) A. dilemma-free climate. B. profitable climate. C. ethical climate. D. holier-than-thou atmosphere. E. synergy environment. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Climate Feedback: An ethical climate represents employees' perceptions about the extent to which work environments support ethical behavior. It is important for managers to foster ethical climates because they significantly affect the frequency of ethical behavior. 61. A(n) ____ is a formal written set of ethical standards guiding an organization's actions. A. moral compass B. business plan C. dilemma document D. ethical plan E. code of ethics AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Code of Ethics Feedback: A code of ethics consists of a formal written set of ethical standards guiding an organization's actions. Most codes offer guidance on how to treat customers, suppliers, competitors, and other stakeholders. The purpose is to clearly state top management's expectations for all employees. Most codes prohibit bribes. 62. Phillip said to a close friend, "I am fed up with my company's continual disregard for the environment. They secretly dispose of hazardous chemicals into a nearby stream constantly. I don't know how they get away with it! I am going to call a reporter at the and reveal what my company is doing." Phillip's decision to tell somebody about his company's actions is an example of A. operating at a preconventional level. B. violating a code of ethics. C. backstabbing his manager. D. being guided by the invisible hand. E. whistle-blowing. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior Feedback: A whistle-blower is an employee who reports organizational misconduct to the public, such as health and safety matters, waste, corruption, or overcharging of customers. 63. As the CEO of a company that produces products for schools, Hannah believes that her company needs not only to produce a profit but also to do things that benefit society. _______ guides Hannah's beliefs. A. Individual responsibility B. The desire for sustainability C. Social responsibility D. A sense of moral rights E. Corporate lobbying AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: Social responsibility is a manager's duty to take actions that will benefit society's interests as well as the company's interests. 64. The company that Don owns, the Ardmore General Store, is a family-owned company that has been in business for more than 100 years. Don wants to give back to the people of the community to acknowledge their role in the store's success. He decides to donate a significant portion of the store's profits to a charity every year. Don's decision is an example of ___ in action. A. corporate social responsibility B. corporate governance C. a code of ethics D. economic responsibility E. legal responsibility AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: Corporate social responsibility (CSR) is the notion that corporations are expected to go above and beyond the law and profit to help society. 65. Sustainable economic development A. meets future needs without compromising present needs. B. always generates greater profitability. C. produces greater diversity in the workforce. D. meets present needs without compromising the ability of future generations to meet their needs. E. is an idea proposed by Frank and Lillian Gilbreth to cut costs and increase efficiency. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Sustainability Feedback: Sustainability is meeting the needs of the present without compromising the ability of future generations to meet their own needs. 66. Business scholar Archie Carroll suggested that ________ is the first and primary responsibility of an organization in the global economy. A. to be a good global corporate citizen, as defined by the host country's expectations, B. to make a profit consistent with expectations for international business C. to be ethical in its practices D. to obey the law of host countries as well as international law E. to have a written code of ethics AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: Making a profit consistent with expectations for international business is at the bottom of Carroll's global corporate social responsibility pyramid. These priorities are illustrated in the pyramid in Figure 3.2. 67. Mr. Smythe, a wealthy businessman who made his fortune in the oil industry, understands the importance of a college education, so he has donated over $10 million over the last several years to colleges and universities. Mr. Smythe's actions are an example of A. philanthropy. B. sustainability. C. servant leadership. D. mentoring. E. corporate governance. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Corporate Social Responsibility Feedback: Philanthropy is defined as making charitable donations to benefit humankind. 68. Which of the following is an example of a green policy or action? A. A local factory pollutes the atmosphere via smokestacks that belch out carbon dioxide. B. The owner of a sole proprietorship announces that she is taking on a business partner. C. A major publisher donates 10,000 books a year to national literacy groups. D. 3M encourages employees to experiment with creating new products. E. Coca-Cola has pledged to replenish (return to nature) all the water it uses to make its beverages. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-05 Describe the concept of social responsibility and its role in today's organizations. Topic: Ethical Climate Feedback: Green policies and actions benefit the environment. Coca-Cola's promise to replenish water has an environmental goal. 69. Which of the following describes the system of corporate governance? A. governing an industry, such as the trucking industry, to protect customers B. protecting citizens against unethical state and national governments C. governing a company so that the interests of corporate owners and other stakeholders are protected D. monitoring an industry, such as law firms, to ensure ethical practices E. monitoring and limiting corporate political donations AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 03-06 Discuss the role of corporate governance in assessing management performance. Topic: Corporate Governance Feedback: Corporate governance is the system of governing a company so that the interests of corporate owners and other stakeholders are protected. 70. On an organization's board of directors, A. inside directors are supposed to be elected from outside the organization and outside directors may be members of the firm. B. inside directors must work for the company and outside directors are also members of the firm. C. inside directors may be members of the firm and outside directors are supposed to be elected from outside the firm. D. inside directors are always retired executives and outside directors typically are employees. E. inside directors must work for the organization and outside directors are paid members of the organization. AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 03-06 Discuss the role of corporate governance in assessing management performance. Topic: Corporate Governance Feedback: Inside directors may be members of the firm; outside directors are supposed to be elected from outside the firm. 71. With regard to boards of directors, and in particular their oversight of the CEO, the board of directors' _______ is the biggest complaint. A. lack of interest in company matters B. lack of corporate social responsibility C. focus on profit over employee satisfaction D. lack of independence from the CEO E. lack of a written ethical code AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-06 Discuss the role of corporate governance in assessing management performance. Topic: Corporate Governance Feedback: The biggest complaint concerns the independence of the directors. Inside directors may be members of the firm, but outside directors are supposed to be elected from outside the firm. However, in some companies, the outside directors have been handpicked by the CEO, making oversight difficult. 72. This question has three parts; be sure to answer all three. First, contrast the "holier-than-thou" effect and motivated blindness. Second, explain how both concepts might apply to the following situation: "Glenn is the president of the senior class, and he is having a very busy semester, trying to balance his coursework and his internship at a major company. He can't find the time he needs to write a term paper for his history course. To save himself time, he decides to buy a prewritten paper from a website that sells papers for a hefty fee." Third, explain the dynamics behind cheating. The "holier-than-thou" effect: Science writer Benedict Carey suggests, "People tend to be overly optimistic about their own abilities and fortunes—to overestimate their standing in class, their discipline, their sincerity. . . . But this self-inflating bias may be even stronger when it comes to moral judgment." In Glenn's case, the holier-than-thou effect may result in Glenn not questioning his own moral judgment. He may believe that as senior class president, he has the right to take shortcuts because the entire senior class benefits when Glenn works on their behalf. He may also feel that buying a term paper from the Internet is not at all immoral; he may see it as a necessity that helps him get everything done (rather than as cheating). Motivated blindness: This is the tendency to overlook information that works against our best interest. "People who have a vested self-interest, even the most honest among us, have difficulty being objective," says one report. "Worse yet, they fail to recognize their lack of objectivity." Motivated blindness enables us to behave unethically while maintaining a positive self-image. Glenn has an internship with a good company, so he is clearly motivated to make contacts and have a career. Doing well in his history course is in his self-interest, because he needs a good GPA to get called for job interviews. In short, he is motivated to buy the term paper by self-interest and has difficulty being objective about this decision. The dynamics behind cheating: Habitual cheating, Carey suggests, "begins with small infractions—illegally downloading a few songs, skimming small amounts from the register, lies of omission on taxes—and grows by increments." As success is rewarded, these "small infractions" can burgeon into an ongoing deliberate strategy of deception or fraud. Buying the term paper can become a slippery slope for Glenn. If he cheats and does not get caught, he may be tempted to take additional "shortcuts" in the future. These shortcuts may involve cheating or fraud at the company that hires him. AACSB: Ethics Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-04 Explain the importance of ethics and values in effective management. Topic: Ethical Behavior 73. This question has two parts; be sure to answer both. First, explain each element of the triple bottom line. Next, imagine that you are managing White Teeth Inc., a company that produces chemical treatments that dentists use to whiten their patients' teeth. Explain how you might take each element of the triple bottom line into account in your day-to-day management of the company. The triple bottom line—representing people, planet, and profit (the 3 Ps)—measures an organization's social, environmental, and financial performance. In this view of corporate performance, an organization has a responsibility to its employees and to the wider community (people), is committed to sustainable (green) environmental practices (planet), and includes the costs of pollution, worker displacement, and other factors in its financial calculations (profit). Success in these areas can be measured through a social audit, a systematic assessment of the company's performance in implementing socially responsible programs, often based on predefined goals. Here are some examples of how you might manage the 3 P's at White Teeth, Inc.: People: In general, you will treat your employees with respect, paying them properly and offering them the best benefits package that your company can afford. You can take your people responsibilities several steps further, too. For example, you might institute a program that offers a lower price to people with lower income. (Many pharmaceutical companies have begun selling extremely expensive drugs at discounted prices to lower-income people.) Planet: Tooth whitening agents are made from chemicals. You want to make sure you are not dumping chemical waste into any public water supplies and that you are disposing of waste products responsibly and legally. Profit: Of course, White Teeth, Inc. is in business to make a profit. While doing the best for your people and the planet, you want to keep an eye on the bottom line, making sure that you are minimizing your costs (while still creating a safe, effective product), marketing your product widely and maximizing your customer base, and maximizing your profits. AACSB: Ethics Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-01 Describe the triple bottom line of people, planet, and profit. Topic: Triple Bottom Line 74. This question has two parts; be sure to answer each one. First, what are stakeholders, and why is it important for managers to understand this concept? Second, describe the stakeholders at a nonprofit organization, Just Say No Way, whose employees travel to grammar schools to talk with students about the dangers of drugs. Stakeholders are the people whose interests are affected by an organization's activities. Internal stakeholders consist of employees, owners, and the board of directors. Managers must take all of these stakeholders into account as they make decisions and operate the business. The employees are those who work for the organization. The staff of Just Say No Way may include a marketing person who does community outreach, a scheduler who makes appointments at local schools, a support or administrative staff, a director or CEO, and the speakers who travel from school to school. The owners of an organization consist of all those who can claim it as their legal property. The owners of Just Say No Way can claim it as their property. Because the company does not manufacture a product (rather, it provides a service to local schools, neighborhoods, children, and parents), it will not have an inventory of products that it owns, but it likely will own office equipment, computers, and perhaps even cars that the speakers drive as they travel from school to school. The board of directors are very important in setting the organization's overall strategic goals and in approving the major decisions and salaries of top management. Because Just Say No Way is a nonprofit organization, its board is called the board of trustees or the board of regents. The trustees of Just Say No Way will determine how best to use the donations that fund the organization (for example, how it might expand its program into other states or how it might offer talks on new topics, such as the dangers of using steroids or how to recognize and stop in-person or online bullying). AACSB: Ethics Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-02 Identify important stakeholders inside the organization. Topic: Internal Stakeholders 75. This question has two parts; be sure to answer both. First, what are external stakeholders? Next, imagine you are the manager of an art gallery, Diaspora, whose mission is to show (and sell) art by marginalized populat