quiz ch 2 and 3 Flashcards Preview

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Flashcards in quiz ch 2 and 3 Deck (40)
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1
Q

company mission? (3)

A

unique purpose that sets a company apart from others of its type. identifies scope of operations. reflects values/priorities of firm’s strategic decision makers

2
Q

three components of a mission?

A

specification of basic product or service, specification of primary market, and specification of principal technology for production or delivery

3
Q

primary company goals (3)

A

survival, growth, profitability

4
Q

which primary company goal is the mainstay goal of a business??

A

profitability. over long run, proves company can satisfy employees and stakeholders

5
Q

what does growth essentially equal??

A

CHANGE. needed in dynamic business environment!!

6
Q

company creed?

A

statement of company philosophy. reflects values, beliefs, and philosophical priorities to which strategic decision makers are committed

7
Q

what is a company’s self-concept?

A

business must know itself and the impact it has on others or of others on it

8
Q

newest trends in mission components? (3)

A

sensitivity to customer wants, concern for quality, and statements of company vision

9
Q

is it important to focus on customer satisfaction? why?

A

yes, customer satisfaction = quality customer service, leads to competitive advantages

10
Q

vision statement?

A

expresses aspirations of executive leadership, achieving desirable future

11
Q

board of directors?

A

group of stockholder representatives and strategic managers responsible for overseeing creation and accomplishment of company mission

12
Q

the three decisions boards of directors responsible for?

A

decisions that affect entire firm, commit firm and resources for long periods, and declare the firm’s sense of values

13
Q

who is the board of directors elected by?

A

stockholders

14
Q

agency theory?

A

set of ideas on org control based on belief that separation of ownership from management created potential for wishes of owners to be ignored

15
Q

what do owners tend to seek in their company?

A

stock value maximization

16
Q

agency costs?

A

cost of agency problems and cost of actions taken to minimize them

17
Q

moral hazard problem? what is this also known as?

A

owners have limited access to company info, so executives free to pursue their own interests. aka shirking (self-interest combined with smile)

18
Q

adverse selection?

A

agency problem caused by limited ability of stockholders to precisely determine competencies and priorities of executives at time they are hired

19
Q

5 problems that can result from agency?

A

executives pursue growth in company size, executives attempt to diversify their corporate risk, executives avoid risk, managers act to optimize their personal payoffs, executives act to protect their status

20
Q

3 solutions to agency problem?

A

owners could pay executives premium for their service, executives could receive backloaded compensation, creating teams of executives across diff units of corporation

21
Q

4 perceived stakeholders of organizations?

A

customers/government. stockholders. employees. society

22
Q

4 steps to incorporate interests of stakeholders in mission statement?

A

identify stakeholders. understand stakeholders’ specific claims. reconciliation of these claims and assignment of priorities to them. coordination of claims with other elements of company mission

23
Q

corporate social responsibility?

A

firms must serve society in general as well as financial interests of stockholders

24
Q

4 types of social commitment?

A

economic, legal, ethical, discretionary/social

25
Q

is CSR important in business today?

A

yes, corporate social responsibility is priority in American business

26
Q

three trends making businesses adopt CSR frameworks?

A

resurgence of environmentalism, increasing buyer power, and globalization of business

27
Q

sustainable business?

A

business that takes long term approach to minimizing its negative impacts on the ecology, society, and economy

28
Q

two areas of large scale investing?

A

guideline portfolio investing and shareholder activism

29
Q

sarbanes-oxley act of 2002

A

establishes new auditing and accounting standards

30
Q

social audit?

A

attempts to measure a company;s social performance against the social objectives it has set for itself

31
Q

3 basic support options businesses have?

A

donations of cash or material. creation of functional operation within company to assist external charitable efforts. development of collaboration approach.

32
Q

5 principles of successful collaborative social initiatives?

A

identify long term durable mission. contribute “what we do”. contribute specialized services to large-scale undertaking. weigh gov influence. assemble and value total package of benefits.

33
Q

challenge for management in incorporating social responsibility efforts?

A

must meet company obligations to stakeholders without compromising need to earn fair return for owners

34
Q

ethics?

A

moral principles that reflect society’s beliefs about the actions of an individual or group that are right and wrong

35
Q

what is the most critical quality of ethical decision-making?

A

consistency

36
Q

utilitarian approach?

A

judging appropriateness of particular action based on goal to provide greatest good for greatest amount of people

37
Q

moral rights approach?

A

judging appropriateness of particular action based on goal to maintain fundamental rights and privileges of individuals and groups

38
Q

social justice approach?

A

judging appropriateness of particular action based on equity, fairness, and impartiality in distribution of rewards and costs among individuals and groups

39
Q

two principles social justice approach stems from?

A

liberty principle and difference principle

40
Q

3 other important principles essential to social justice approach?

A

distributive-justice, fairness, and natural-duty principles