PRELIM EXAMINATION 2nd Semester SY 2015-2016

Subject: GOOD GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY

Teacher: Ms. Ma.Leonora V. Alusen

A. Multiple Choice. Choose the letter of the best answer.

1. Which one is not a benefit of good governance?

A. Improve marketability
B. Reduce the vulnerability of companies
C. Reduction of corporate value
D. Improve company’s credibility

2. The primary inside stakeholder of a corporation?

A. Bondholder
B. Board of Directors
C. Shareholders
D. Public

3. Which one is not the role of non-executive director?

A. Monitoring of Performance
B. Audit
C. Implements internal control
D. Setting of strategy

4. Which one is/are not part of corporate governance?

A. Board of Directors
B. Chief Financial Officer
C. Chief Executive Officer
D. None of the Above

5. Managers of firms should only take actions that:

A. Increase the value of the firm’s future cash flows
B. They expect to increase the firm’s share price
C. Have benefits which are at least as great as the cost of those actions.
D. All of the above

6. You were just hired as the CEO of a company, your primary objective should be:
A. To maximize the company’s earnings
B. To maximize profits
C. To maximize the company’s price of ordinary shares
D. To eliminate the company’s competitors

7. Which of the following is not a strength of the corporate form of business

A. Unlimited life of the business
B. Unlimited access to capital
C. Unlimited liability
D. Double taxation of income

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8. Which one is not the benefit of good governance?
A. Reduced vulnerability
B. Marketability
C. Credibility
D. Prudence

9. The ultimate owners of a corporation:

A. The national government
B. The debt holders
C. The equity holders
D. The executive staff of the corporation

10. As a manager, you encountered an important problem that seems almost impossible to solve.
Top management would likely suggest that you
A. Hire a consultant who brings the right knowledge and expertise to the problem
B. Stand out of the way and let someone else work on the issue
C. Try using different lenses to analyze the problem and develop strategies
D. Call a meeting of everyone who knows about the issue and make a group decision about
what to do.

11. It is argued that even the smartest managers take foolish actions in decision making because
they
A. Are too clever for their own good
B. Have a parochial and distorted view of the problem at hand
C. Are driven by self-love and ego, which stifle their ability to understand a situation
correctly
D. Fall into the trap of personality weaknesses such as pride, arrogance and unconscious
need to go wrong.

12. As described the actions of the successful manager as similar to a skilled carpenter and using
the right tools for the job. Thus, a successful manager must:
A. Make sure their organizations are “level” ( i.e. balanced)
B. Possess a diverse collection of high-quality implements along with the knowledge of how
and when to use them.
C. Measure twice but cut once ( i.e. not make hasty decisions)
D. Have the right wood (i.e. employees) for the job.

13. The process of grouping work positions into formal teams and departments, and then linking
them together within the organization is known as __________.
A. Differentiation.
B. Departmentalization.
C. Structural team development.
D. Organizing.
E. Functional team management.

14. Three common types of traditional organizational structures are __________.

A. Centralized, decentralized, and integrated.
B. Functional, horizontal, and vertical.
C. Divisional, centralized, and line.
D. Functional, divisional, and matrix.
E. Matrix, staff, and functional.

15. When an organization chart shows vice presidents of marketing, manufacturing, finance, and
human resources reporting directly to the president of a company, the top management group is
organized as a __________ structure.
A. Vertical.
B. Functional.
C. Divisional.
D. Matrix.
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16. Potential disadvantages of functional structures include all of the following EXCEPT:
A. Difficulties in pinpointing responsibilities for cost containment, product or service quality,
timeliness, and innovation.
B. Provides for clear career paths.
C. Sense of cooperation and common purpose tends to break down.
D. Narrow view of performance objectives.
E. Too many decisions referred upward in the organizational hierarchy.

17. The _________ problem refers to the lack of communication, coordination, and collaborative
problem solving across functions.
A. Horizontal silos.
B. Vertical bug-a-boo.
C. Functional chimneys.
D. Divisional smokestack.
E. Matrix identity.

18. The functional chimneys problem can _________.

A. Slow decision making.
B. Diminish cooperation and commitment to a common purpose.
C. Interfere with coordination across functions.
D. Create difficulties in pinpointing responsibilities.
E. All of the above.

19. A(n) _________ groups together people who work on the same product or process, serve
similar customers, or work in the same area or geographic region.
A. Divisional structure.
B. Informal structure.
C. Matrix structure.
D. Integration structure.

20. All of the following are potential advantages of using a divisional structure EXCEPT:
A. More flexibility in responding to environmental changes.
B. Establishes clear points of responsibility for product or service delivery.
C. Expertise is focused on specific customers, products, or regions.
D. Duplication of resources and efforts across divisions..

21. __________structures group together jobs and activities dealing with a single product or
service.
A. Product structures.
B. Geographical structures.
C. Area structures.
D. Customer structures

23. __________ clearly identifies costs, profits, problems, and successes in a market area with a
central point of accountability.
A. Product structures.
B. Geographical structures.
C. Area structures.
D. Customer structures

24.__________ structures group together jobs and activities that are being performed in the
same location.
A. Product.
B. Market.
C. Geographical.
D. Customer.

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25. Structures that group together jobs and activities that are part of the same processes are
called __________ structures.
A. Geographical.
B. Product.
C. Matrix.
D. Customer.
E. Process.

26..A matrix structure basically combines elements of __________and __________ structures.

A. Horizontal  vertical.
B. Horizontal  divisional.
C. Functional  vertical.
D. Functional  divisional.
E. Vertical  divisional.

27. Which structural approach makes use of permanent cross-functional teams to integrate
functional expertise in support of a clear divisional focus on a product, project, or program?
A. Hybrid.
B. Matrix.
C. Divisional.
D. Functional.
E. Individual.

28. Workers in a matrix structure belong to at least two formal groups at the same time. These
two groups are a __________ group and a __________ group.
A. Functional  product, project, or program.
B. Supplier. distributor
C. Union  product, project, or program.
D. Functional  nonfunctional.
E. Functional  total quality.

29. If an organization is concerned about frequently adding and deleting new products or
services and also wants to make sure that customers or clients always have a program manager
available to respond to questions and concerns, the__________ structural form is a good choice.
A. Horizontal.
B. Vertical.
C. Functional.
D. Matrix.

30.All the following are potential disadvantages of the matrix structure EXCEPT:
A. Adding team leaders increases costs.
B. “Groupitis”.
C. Problem solving is forced down the hierarchy to where the best information is available.
D. Power struggles between functional and program managers.
E. Confusion of team members regarding task direction.

31.The main emphasis of the utilitarian view of ethical behavior is __________.

A. Assessing the implications of a decision in terms of its long-term personal consequences.
B. Promoting honesty and integrity.
C. Evaluating a decision on the basis of its impartiality and fairness.
D. Ensuring that the greatest number of people benefit to the greatest extent possible.

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32. The individualism view of ethical behavior is that which __________.
A. Provides the greatest good for the greatest number of people.
B. Respects and protects the individual’s fundamental rights.
C. Ensures that people are treated impartially and fairly.
D. Advances the pursuit of long-term self-interests.

33. The main emphasis of the individualism view of ethical behavior is __________.
A. Assessing the implications of a decision in terms of its long-term personal consequences.
B. Promoting honesty and integrity.
C. Ensuring that people’s rights are protected and respected.
D. Evaluating a decision on the basis of its impartiality and fairness.

34. The main emphasis of the moral-rights view of ethical behavior is __________.
A. Assessing the implications of a decision in terms of its long-term personal consequences.
B. Promoting honesty and integrity.
C. Ensuring that people’s rights are protected and respected.
D. Evaluating a decision on the basis of its impartiality and fairness.

35. The individualism view is supposed to promote __________ but in business practice it may
result in __________.
A. Personal enrichment  organizational enrichment.
B. Honesty and integrity  pushing the law to its outer limits.
C. Narcissism  procedural justice.
D. Running roughshod over other people to achieve personal objectives  honesty and integrity.

36. The justice view of ethical behavior is that which __________.

A. Provides the greatest good for the greatest number of people.
B. Respects and protects the individual’s fundamental rights.
C. Ensures that people are treated impartially and fairly.
D. Advances the pursuit of long-term self-interests.

37. A manager who operates in a foreign country with the premise that ethical behavior is always
determined by its cultural context is adopting a perspective of __________.
A. Cultural activism.
B. Cultural relativism.
C. Ethical imperialism.
D. Cultural socialism.

38.__________ refers to an organization’s obligation to act in ways that serve its own interests as
well as the interests of society at large.
A. A code of ethics.
B. A moral code.
C. A formal policy statement.
D. Corporate social responsibility.

39. The persons, groups, and other organizations directly affected by the behavior of an
organization and holding a stake in its performance are referred to as __________.
A. Governing boards.
B. Organizational stakeholders.
C. Trustees.
D. Role senders.

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40.__________ is the social responsibility view holding that management’s only responsibility in
running a business is to maximize profits.
A. The stockholder model.
B. The free market model.
C. The corporate view.
D. The classical view.

45.All of the following are arguments against the assumption of social responsibility by business
EXCEPT:
A. Social responsibility will raise business costs.
B. Social responsibility will reduce business profits.
C. Social responsibility will dilute the social power of business.
D. Social responsibility will dilute the purpose of business.

46. __________ is the social responsibility view that maintains the organization must be
concerned with the broader social welfare and not just with corporate profits.
A. The stockholder model.
B. The stakeholder view.
C. The classical view.
D. The socioeconomic view.

47. Arguments that corporations should engage in socially responsible behavior include all of the
following EXCEPT:
A. Social responsibility decreases the need for restrictive government regulation.
B. Businesses have the resources and obligation to act in socially responsible ways.
C. Socially responsible behavior improves the public image of business.
D. Pursuing socially responsible goals may dilute the purpose of the business.

48. Which of the following statements regarding the relationship between social responsibility
and financial performance is NOT true?
A. High performance in social responsibility can be associated with strong financial
performance.
B. At worst, strong corporate social responsibility has no adverse impact on financial
performance.
C. High performance in social responsibility is seldom, if ever, associated with strong financial
performance.
D. Recent evidence suggests that corporate social responsibility leads to improved financial
performance and this, in turn, leads to additional socially responsible actions.

49. An organization is meeting its economic responsibility when it __________.

A. Is in compliance with the law and requirements of various external regulations.
B. Voluntarily moves beyond basic economic, legal, and ethical expectations to provide
leadership in advancing social well-being.
C. Earns a profit through provision of goods and services desired by customers.
D. Voluntarily conforms to legal expectations and broader values and moral expectations of
society.

50. An organization is meeting its legal responsibility when it __________.

A. Is in compliance with the law and requirements of various external regulations.
B. Voluntarily moves beyond basic economic, legal, and ethical expectations to provide
leadership in advancing social well-being.
C. Earns a profit through provision of goods and services desired by customers.
D. Voluntarily conforms to legal expectations and broader values and moral expectations of
society.

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B. Identify the stakeholders being described in the following statement.
1. Refers to the party given the authority to implement policies as determined by the Board
of Director in directing the course/business activities of the corporation. Group of people
running the day-to-day activities of the corporation.
2. Refers to the party who lend to the corporation goods, services or money.
3. Refers to people who invest their capital in the corporation.
4. Refers to people who contribute their skills, abilities and ingenuity to the corporation.
They are the ones who invested their future in the company with full trust and confidence
that the entity would make then secure.
5. The party considered to be the very reason for the existence of the corporation. They are
the buyers of the corporation’s product or services for final consumption.
6. The party has an interest on the taxes the corporation will pay. The business entity also
lessens the burden of delivering health service, education, utilities and transportation.
7. The party that bears the brunt of the consequences likes pollution, calamities, diseases and
many other undesirable consequences.

C. Based form the documentary “The Corporation’ Identify the metaphors being described in the
following statement.

1. A corporation is part of a whole, which if you remove it the pictures becomes

incomplete and if it’s the only part it’s not going to work.
2. Some are blocking and tackling, some are running the ball, and some are throwing the ball,
but has a common purpose that is to succeed as an organization.
3. People in organization work together for a common end.
4. It reaches almost everywhere, its extra ordinary powerful, it’s pretty hard to avoid and
transforms lives of people.
5. Soaring clear eyed, competitive, ready to strike, but not vulture, noble, visionary,
majestic that people can believe in and be inspired that creates such a lift.
6. They are trying to devour as much profit as possible at anyone’s expense
7. A gentle big fish which could swallow you in an instant
8. A creation that has overwhelmed and overpowered his creator.