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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones Organizational Behavior, Design, and Change, 6e (Jones) Chapter 2 Stakeholders, Managers, and Ethics 1) Shareholders are important inside stakeholders. Answer: TRUE Diff: 2 Page Ref: 28 LO: 2-1 2) Contributions are defined as what the organization gives back to society. Answer: FALSE Diff: 1 Page Ref: 28 LO: 2-1 3) When employees feel that contributions exceed inducements, they are likely to withdraw their support for the organization. Answer: TRUE Diff: 1 Page Ref: 28 LO: 2-1 4) The stakeholder group with the ultimate authority over the organization's resources is the employees. Answer: FALSE Diff: 2 Page Ref: 28 LO: 2-1 5) Outside stakeholders include shareholders, managers, and the workforce. Answer: FALSE Diff: 2 Page Ref: 30 LO: 2-1 6) Customers are usually the largest outside stakeholder group. Answer: TRUE Diff: 1 Page Ref: 30 LO: 2-1 7) The subprime mortgage meltdown has resulted in an increased emphasis on large institutional investment companies to protect consumer interests. Answer: TRUE Diff: 3 Page Ref: 29 LO: 2-1 8) The unethical practices of Westland/Hallmark Meat Co. resulted in numerous deaths due to the consumption of contaminated beef. Answer: FALSE Diff: 3 Page Ref: 31 LO: 2-2

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 9) Because stakeholder goals conflict, an organization should just attempt to minimally satisfy the majority of stakeholders. Answer: FALSE Diff: 2 Page Ref: 34 LO: 2-1 10) All stakeholder groups are equally important. Answer: FALSE Diff: 3 Page Ref: 34 LO: 2-2 11) The board of directors selects the organization's top-management team. Answer: FALSE Diff: 3 Page Ref: 38 LO: 2-3 12) The hierarchy can be defined as the vertical ordering of organizational roles according to their relative authority. Answer: TRUE Diff: 1 Page Ref: 38 LO: 2-3 13) The CEO selects the organization's top-management team. Answer: TRUE Diff: 2 Page Ref: 38 LO: 2-3 14) "Self-dealing" is the term used to describe the conduct of managers who take advantage of their position to act in their own interests rather than in the interests of other stakeholders. Answer: TRUE Diff: 2 Page Ref: 41 LO: 2-4 15) Moral hazard is a condition that exists when managers must make quick decisions that may go against their ethical principles. Answer: FALSE Diff: 1 Page Ref: 41 LO: 2-4 16) Stock-based compensation schemes help solve the agency problem by aligning individual behaviors with corporate strategy. Answer: TRUE Diff: 2 Page Ref: 42 LO: 2-4

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 17) A promotion tournament is a vehicle by which managers can help employees focus on longterm, rather than short-term objectives. Answer: TRUE Diff: 2 Page Ref: 42 LO: 2-4 18) The concept of stockholder rights has become increasingly important in the 2000s. Answer: TRUE Diff: 1 Page Ref: 42 LO: 2-2 19) Because humans have free will, the law has very little impact on ethical behavior. Answer: FALSE Diff: 1 Page Ref: 44 LO: 2-5 20) Neither laws nor ethics are fixed principles that remain constant over time. Answer: TRUE Diff: 1 Page Ref: 44 LO: 2-5 21) A manager following the utilitarian model when faced with a moral decision would most likely examine the fundamental rights and privileges of the people affected by the decision. Answer: FALSE Diff: 1 Page Ref: 46 LO: 2-5 22) A manager following the utilitarian model when faced with a moral decision would most likely examine what produces the greatest good for the greatest number of people. Answer: TRUE Diff: 1 Page Ref: 46 LO: 2-5 23) A manager following the justice model when faced with a moral decision would most likely examine how fair the decision would be to affected stakeholders. Answer: TRUE Diff: 1 Page Ref: 46 LO: 2-5 24) One problem with the utilitarian model is that it leaves managers to determine the relative importance of each stakeholder group. Answer: TRUE Diff: 2 Page Ref: 46 LO: 2-5

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 25) The justice model tends to be the one that effective managers rely upon the most in making decisions. Answer: FALSE Diff: 2 Page Ref: 44 LO: 2-4 26) Gillette has been touted as a highly ethical organization due to its refusal to test cosmetics on animals. Answer: FALSE Diff: 1 Page Ref: 47 LO: 2-5 27) The "Tragedy of the Commons" example refers to the ethical dilemmas faced when individuals pursue their own self interests. Answer: FALSE Diff: 2 Page Ref: 49 LO: 2-5 28) Ethical rules often develop to slow the pursuit of self-interest. Answer: TRUE Diff: 1 Page Ref: 49 LO: 2-5 29) Behaving ethically can reduce transaction costs through the reputation effect. Answer: TRUE Diff: 2 Page Ref: 50 LO: 2-5 30) An organization's mission statement can be used to guide ethical behavior. Answer: TRUE Diff: 2 Page Ref: 52 LO: 2-5 31) Whole Foods has been successful in part because it realizes that the most important stakeholders are the team members and investors. Answer: FALSE Diff: 3 Page Ref: 53 LO: 2-1

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 32) ________ are people who have an interest or claim in an organization, in what it does, and in how well it performs. A) Stakeholders B) Organizers C) Technicians D) Foreign officials Answer: A Diff: 1 Page Ref: 28 LO: 2-1 33) The rewards that stakeholders receive for participating in an organization are called ________. A) inducements B) contributions C) kickbacks D) payoffs Answer: A Diff: 2 Page Ref: 28 LO: 2-1 34) The skills that organizations require to perform tasks are called ________. A) payments B) dividends C) inducements D) contributions Answer: D Diff: 2 Page Ref: 28 LO: 2-1 35) Stakeholders will generally participate in an organization if: A) contributions exceed inducements. B) inducements exceed contributions. C) payments exceed contributions. D) inducements exceed kickbacks. Answer: B Diff: 2 Page Ref: 28 LO: 2-1 36) Which of the following is a contribution? A) Dividends B) Salaries C) One's knowledge D) Gaining organizational power Answer: C Diff: 2 Page Ref: 28 LO: 2-1

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 37) Which of the following is an inducement? A) Free and fair collective bargaining B) Social and economic infrastructure C) Stock appreciation D) High-quality inputs Answer: C Diff: 2 Page Ref: 28 LO: 2-1 38) Which of the following is an inside stakeholder group? A) Trade unions B) Customers C) Suppliers D) Shareholders Answer: D Diff: 2 Page Ref: 29 LO: 2-1 39) Which of the following inside stakeholders contributes money and capital? A) Trade unions B) The workforce C) Shareholders D) Managers Answer: C Diff: 1 Page Ref: 29 LO: 2-1 40) The unethical practices at Westland/Hallmark Meat Co. resulted in what? A) The creation of a new FDA governing board B) Criminal prosecution and imprisonment of those directly implicated in the production of unsafe meat C) The untimely deaths of 3 citizens who consumed bad beef D) A restructuring of the entire company Answer: B Diff: 3 Page Ref: 31 LO: 2-1 41) Which of the following outside stakeholders contributes high-quality inputs? A) Trade unions B) The general public C) Customers D) Suppliers Answer: D Diff: 1 Page Ref: 29 LO: 2-1

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 42) Which of the following is an outside stakeholder group? A) Shareholders B) Unions C) Managers D) The workforce Answer: B Diff: 2 Page Ref: 29 LO: 2-1 43) What was Tom LaSora's impact on the union-management relationship at Chrysler? A) The more conciliatory dealings has resulted in more agreements, and better work practices. B) His hard line approach has made dealings much more hostile than either Ford or GM have experienced. C) His "customer first" approach has resulted in a superior dealer network. D) His anti-union stance has resulted in overall lower automobile costs for the consumer. Answer: A Diff: 2 Page Ref: 33 LO: 2-2 44) When an organization tries to satisfy stakeholders, it faces all of the following problems except: A) choosing which stakeholder goals to satisfy. B) losing the ability to innovate. C) deciding how to allocate organizational rewards to different stakeholder groups. D) balancing short-term and long-term goals. Answer: B Diff: 2 Page Ref: 34 LO: 2-2 45) Balancing short-term and long-term goals is hard because: A) official goals focus on the long-term and operative goals focus on the short-term. B) official goals focus on the short-term and operative goals focus on the long-term. C) stakeholder groups have different preferences for the time frame an organization should use to pursue goals. D) organizations do not place enough emphasis on operative goals. Answer: C Diff: 3 Page Ref: 34 LO: 2-2 46) The primary goal of capitalistic organizations is to: A) maximize shareholder wealth. B) form long-term relationships with suppliers. C) satisfy employees. D) satisfy customers. Answer: A Diff: 2 Page Ref: 35 LO: 2-2 7 Copyright Š 2010 Pearson Education Inc.


Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 47) The problem of doctors owning stock in hospitals is one of: A) potentially competing goals. B) organizational design. C) organizational structure. D) the conversion process. Answer: A Diff: 2 Page Ref: 36 LO: 2-2 48) The chain of command in a large organization is as follows: A) CEO, president, senior vice presidents, executive vice presidents. B) Board, CEO, executive vice presidents, presidents. C) CEO, president, executive vice presidents, vice presidents. D) President, divisional managers, executive vice presidents, vice presidents. Answer: C Diff: 2 Page Ref: 37 LO: 2-3 49) A company's top-management team consists of: A) functional and divisional managers. B) the president and executive vice president. C) executive vice presidents and vice presidents. D) senior vice presidents and divisional managers. Answer: B Diff: 2 Page Ref: 37 LO: 2-3 50) Determining management's rewards and incentives is primarily the responsibility of ________. A) the board of directors B) corporate management C) the CEO D) the shareholders Answer: C Diff: 1 Page Ref: 38 LO: 2-3 51) Which of the following statements about the CEO is false? A) He or she is the chief operating officer. B) He or she determines top management's rewards and incentives. C) He or she allocates resources to subunits. D) He or she influences stakeholders. Answer: A Diff: 2 Page Ref: 38 LO: 2-3

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 52) Which of the following employees would be considered to have a line role? A) Sales manager B) Executive Vice President of Finance C) R&D director D) Vice President of Production E) All are line roles. Answer: D Diff: 1 Page Ref: 39 LO: 2-3 53) Who usually ensures that an organization's internal operations match strategic objectives? A) The CEO B) The president C) The executive vice president of production D) The production manager Answer: B Diff: 3 Page Ref: 39 LO: 2-3 54) Who is the chief operating officer (COO) of an organization? A) The chairman of the board B) The CEO C) The president D) The executive vice president of operations Answer: C Diff: 3 Page Ref: 39 LO: 2-3 55) Which of the following managers has a line role? A) Sales manager B) R&D manager C) Production manager D) Executive vice president of finance Answer: C Diff: 2 Page Ref: 39 LO: 2-3 56) Which of the following would be considered to have a staff role? A) Sales manager B) Executive Vice President of Finance C) R&D director D) Vice President of Accounting E) All are staff roles. Answer: E Diff: 2 Page Ref: 39 LO: 2-3

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 57) Which of the following would be considered to be the lowest level of management? A) Divisional managers B) Functional managers C) Line managers D) Vice presidents Answer: B Diff: 2 Page Ref: 39 LO: 2-3 58) Divisional managers will most likely report to which member of the top-management team? A) Vice presidents B) Executive vice presidents C) Senior vice presidents D) The board of directors Answer: B Diff: 2 Page Ref: 39 LO: 2-3 59) Vice presidents are part of ________ management. A) corporate B) divisional C) functional D) line Answer: A Diff: 1 Page Ref: 39 LO: 2-3 60) Which of the following managers has a staff role? A) R&D manager B) Production manager C) Divisional manager D) Assembly line supervisor Answer: A Diff: 2 Page Ref: 39 LO: 2-3 61) When delegating authority, the agency problem arises because: A) the agent does not want to give up power. B) the principle does not desire more duties. C) the principle tends to have less information than the agent. D) the agent tends to have less information than the principle. Answer: D Diff: 3 Page Ref: 40 LO: 2-4

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 62) Moral hazard: A) is when the principle behaves unethically. B) is when the agent is motivated to pursue their own self-interest. C) is when the agent has the opportunity to unfairly influence the principle. D) is when the principle has too much authority over the agent. Answer: B Diff: 2 Page Ref: 41 LO: 2-4 63) "Self-dealing" is defined as ________. A) a manager acting in his own best interest, as opposed to the interests of the other stakeholders B) a cash bonus distributed privately amongst the top management team C) a manager promoting family members at the expense of others D) another term for "golden parachute" Answer: A Diff: 2 Page Ref: 41 LO: 2-4 64) Which of the following are generally used to solve agency problems? A) Ethics Credo's B) Governance mechanisms C) A more authoritarian management structure D) Principles not susceptible to moral hazard Answer: B Diff: 2 Page Ref: 41 LO: 2-4 65) Managers are sometimes able to pursue their own interests at the expense of other stakeholders because managers: A) have control over organizational resources. B) own the organization. C) have the ability to initiate a takeover. D) are the most powerful outside stakeholders. Answer: A Diff: 2 Page Ref: 45 LO: 2-5 66) A manager decides to locate a manufacturing plant in a location that maximizes the overall benefits to the stakeholders. Which model of ethics is he/she using? A) Justice B) Moral Rights C) Utilitarian D) None of the above Answer: C Diff: 2 Page Ref: 46 LO: 2-5

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 67) A manager chooses to tell affected employees about an impending layoff, despite the damage this causes to the stock price of the organization. She did this because it was "the right thing to do." Which model of ethics is she using? A) Justice B) Moral Rights C) Utilitarian D) None of the above Answer: B Diff: 2 Page Ref: 46 LO: 2-5 68) A manager decides to distribute the pool of bonus money equally among all of the subordinates, even though some performed better than others. He is using which ethical model in making this decision? A) Justice B) Moral Rights C) Utilitarian D) None of the above Answer: A Diff: 2 Page Ref: 46 LO: 2-5 69) ________ evolve(s) through negotiation and compromise between stakeholders. A) Social responsibility B) Organizational ethics C) Socialization tactics D) Rites of passage Answer: B Diff: 2 Page Ref: 45 LO: 2-5 70) Societal ethics: A) encourage companies to use tactics that lead to an institutionalized role orientation. B) encourage companies to use tactics that lead to an individualized role orientation. C) encourage companies to adopt a broad stance on social responsibility. D) include unwritten norms and values. Answer: D Diff: 3 Page Ref: 47 LO: 2-5

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 71) What does Gillette do when it receives a protest letter regarding animal testing? A) They ignore it since they get very few of them. B) They turn them over to the ethics committee for further study. C) They respond to each one of them so that the public can better understand their position. D) They have the CEO telephone the sender. Answer: C Diff: 2 Page Ref: 47 LO: 2-5 72) A doctor was banned from practicing medicine because he consistently prescribed unnecessary procedures. This doctor: A) violated professional ethics. B) violated individual ethics. C) took a narrow stance on social responsibility. D) took a broad stance on social responsibility. Answer: A Diff: 2 Page Ref: 49 LO: 2-5 73) Suppose you are the son or daughter of a mobster, and you believe that it is OK to steal if it is in the best interest of your family. This view comes from: A) the reputation effect. B) the Justice model of ethics. C) your individual ethical beliefs. D) societal ethics. Answer: C Diff: 1 Page Ref: 49 LO: 2-5 74) What does the "Tragedy of the Commons" illustrate? A) That moral hazard is a real issue that managers need to deal with B) That common men and women don't have the resources to make ethical decisions C) That the rational pursuit of individual self interest results in disaster D) That individuals tend to pursue the collective goals if they are clear what they are Answer: C Diff: 2 Page Ref: 47 LO: 2-5 75) Which of the following is not one of the benefits of the "Reputation Effect"? A) It reduces transaction costs. B) Customers have a positive view of the organization. C) It helps managers follow ethical rules and guidelines. D) It allows employees to feel good about the decisions they make. E) All are benefits of the reputation effect. Answer: E Diff: 2 Page Ref: 50 LO: 2-5 13 Copyright Š 2010 Pearson Education Inc.


Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 76) Which of the following is not one of the reasons that unethical behavior occurs? A) Personal ethics B) Outside pressure C) Pursuit of self-interest D) Unrealistic stakeholder expectations Answer: D Diff: 1 Page Ref: 49 LO: 2-5 77) At Sears, management created a reward system that had the effect of making employees act unethically and overcharge customers. This was caused by: A) bad individual ethics. B) outside pressure. C) societal ethics. D) the Moral Rights model of ethics. Answer: B Diff: 3 Page Ref: 51 LO: 2-5 78) To create an ethical organization: A) a company should use a bottom-up approach. B) a company should offer employees lifetime employment. C) top management should promote moral values and behave ethically. D) a company should use socialization tactics that lead to an institutionalized role orientation. Answer: C Diff: 2 Page Ref: 52 LO: 2-5 79) Roger observed his manager charging personal long distance calls to the company. Roger sent an anonymous letter about the incident to an outside board. Roger: A) was behaving unethically. B) is an ethics officer. C) is a whistle-blower. D) is on an ethics committee. Answer: C Diff: 1 Page Ref: 52 LO: 2-5 80) Why is Johnson & Johnson considered to have a higher standard of ethics than Dow Corning? A) J&J's managers are better trained in ethical principles. B) J&J's clear ethics credo C) J&J's whistle-blowing program D) J&J's use of a promotion tournament Answer: B Diff: 1 Page Ref: 57 LO: 2-5 14 Copyright Š 2010 Pearson Education Inc.


Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 81) A friend is a manager at a small technology firm that manufactures radiology equipment, such as CAT scanners. He states that shareholders want him to increase profits, so he is willing to do whatever it takes to increase profits. In fact, he has the opportunity to get a contract with a supplier who will supply parts at a lower cost, but the quality will be noticeably worse. However, as the hospital is the only one in this rural area, most patients do not have the option to go to another hospital. What can you tell your friend about behaving ethically? Answer: Shareholders do not want profits increased by unethical acts. When an organization behaves unethically, it is a more risky investment. Furthermore, reducing quality would hurt the reputation of the company, which would cause its stock price to drop lower than the stock prices of competitors who behaved ethically. Some shareholders will withdraw support simply because they don't believe in unethical behavior. State that costs can be reduced in other ways and that ethical behavior pays off in the long run, because it gives an organization a positive reputation. Diff: 2 Page Ref: 45 LO: 2-5 82) In Agency Theory, what is "Moral Hazard"? Under what conditions does it exist? Answer: Moral hazard exists when principles have more information than agents, both parties have different goals, and it is difficult to evaluate how the agent performs. There are various ways to solve the agency problem. One way is through governance mechanisms, which allow the agent to more easily be monitored, and the other is through various compensation schemes designed to align the goals of the principle and the agent. Diff: 1 Page Ref: 41 LO: 2-4 83) The Johnson & Johnson case discussed what management's course of action was after cyanide-laced Tylenol was discovered on store shelves. Using the three ethical models (utilitarian, moral rights, and justice), discuss what the thought processes or alternative solutions managers might come to when faced with a similar situation. Answer: This question is a good application of the ethics models. You might have them answer as phrases. Below are some examples: Utilitarian: "Will more people be helped or harmed by pulling all of the Tylenol off the store shelves?" Moral Rights: "Are we violating consumer's rights by keeping the Tylenol on the shelves?" Justice: "What is the fairest solution for all stakeholders involved?" Diff: 2 Page Ref: 57 LO: 2-5

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 84) You are the owner of a factory that makes candy bars. One morning, you notice an employee intentionally inserting an insect into a piece of candy. You can't stop the line of production in time, and therefore can't find the piece of candy. It is mixed in with thousands of other pieces. After analyzing the situation, you determine that the negative publicity associated with recalling the candy was not worth the very small risk of a consumer getting ill. You fire the employee, but do not recall the candy. Does your solution align with the utilitarian, moral rights, or justice model of ethics? Describe why. Answer: The cost benefit analysis aligns with the utilitarian type of thinking. The greatest good for the greatest number of people can be had by doing nothing. Diff: 2 Page Ref: 46 LO: 2-5 85) You are the owner of a factory that makes candy bars. One morning, you notice an employee intentionally inserting an insect into a piece of candy. You can't stop the line of production in time, and therefore can't find the piece of candy. It is mixed in with thousands of other pieces. After analyzing the situation, you determine that regardless of the cost, you cannot let a bad piece of candy enter the marketplace. Consumers are not paying for insects, and you just couldn't live with yourself if someone got sick because of your lack of action. You therefore destroy several semi loads of candy to make sure the piece does not get sold to a consumer. Does your solution align with the utilitarian, moral rights, or justice model of ethics? Describe why. Answer: Moral rights. The framework is that consumers just shouldn't eat insects, even if the risk is small. Diff: 2 Page Ref: 4 LO: 2-5 86) You are the owner of a factory that makes candy bars. One morning, you notice an employee intentionally inserting an insect into a piece of candy. You can't stop the line of production in time, and therefore can't find the piece of candy. It is mixed in with thousands of other pieces. a. What would you do to solve this problem? b. Which solution does your stakeholder group emphasize? c. Does your solution align with the moral rights, justice, or utilitarian model of ethics? Describe why. Answer: Make sure their solution solves the problem. Many students will want to "fire the employee," which is fine, but doesn't really solve the problem. Diff: 2 Page Ref: 46 LO: 2-5

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Full file at http://testbank360.eu/test-bank-organizational-theory-design-and-change-6th-editionjones 87) You are the owner of a large package delivery firm. You've noticed a drop in efficiency of several of your drivers. You suspect that these drivers are taking long lunch hours, and running errands on company time. You install computers into the driver's trucks to monitor what they are doing with their time, and indeed you were correct. What concept does this illustrate? Provide details. Answer: This is an agency problem. More specifically, this is an illustration moral hazard in that the manager has a difficult time evaluating performance. The solution is an illustration of a governance mechanism. Diff: 3 Page Ref: 46 LO: 2-4

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Test bank organizational theory design and change 6th edition jones  

test bank organizational theory design and change 6th edition jones. Full file at http://testbank360.eu/test-bank-organizational-theory...

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