Entrepreneurship and Small Business Management, 2nd Edition Test Bank

Entrepreneurship and Small Business Management, 2e (Mariotti) Chapter 20 Leadership and Ethical Practices 1) An authoritative leader takes a ________ approach. A) “Come with me” B) “Get out of my way” C) “Get over here” D) “Work harder” E) “I’ll do it myself” Answer: A Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 2) Which type of pay is based on a set percentage of every sale? A) Commission B) Salary C) Wages D) Dividend E) All of the above Answer: A Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 3) Which of the following is the statement of the values of a company? A) Code of ethics B) Code of conduct C) Ethical relativism D) Ethical dilemma E) All of the above Answer: A Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 4) Ways to make your business socially responsible include ________. A) Recycling B) Donating a portion of your profits to a charity C) Refusing to use animal testing on products D) Offering employees incentives to volunteer in the community E) All of the above Answer: E Page Ref: 606 Learning Obj.: LO 6 AACSB: Analytical thinking 1 Copyright © 2015 Pearson Education, Inc. 5) ________ is a system of moral conduct and judgment that helps determine right and wrong. A) Ethics B) Management C) Leadership D) Business E) Organization Answer: A Page Ref: 600 Learning Obj.: LO 3 AACSB: Analytical thinking 6) Which of the following is not a good alternative to sit-down meetings? A) Ignoring the issue the meeting is called for B) Stand-up meetings C) Going to other staff members’ offices D) Virtual meetings E) All of the above are good alternatives. Answer: A Page Ref: 600 Learning Obj.: LO 2 AACSB: Analytical thinking 7) Leaders learn how to manage their time so they can accomplish ________ with ________. A) More, less B) Less, more C) Everything, nothing D) Nothing, everything E) Greatness, nothing Answer: A Page Ref: 599 Learning Obj.: LO 2 AACSB: Analytical thinking 8) Which leadership style is most likely to fail when employees are lost and need direction? A) Affiliative B) Authoritative C) Coercive D) Coaching E) None of the above Answer: A Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 2 Copyright © 2015 Pearson Education, Inc. 9) A ________ is someone who gets things done through influence by guiding or inspiring others to voluntarily participate in a cause or project. A) Leader B) Manager C) Coworker D) Volunteer E) Boss Answer: A Page Ref: 597 Learning Obj.: LO 1 AACSB: Analytical thinking 10) Which type of leader sets very high performance standards for him/her and challenges employees to meet them, too. A) Pacesetting B) Affiliative C) Authoritative D) Coercive E) Coaching Answer: A Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 11) A behavior may be ________ and still not be ethical. A) Legal B) Officially permitted C) Officially authorized D) Permissible E) Official Answer: A Page Ref: 600 Learning Obj.: LO 3 AACSB: Reflective thinking 12) ________ set the tone for how your business operates. A) You B) Managers C) Staff D) Employees E) Stakeholders Answer: A Page Ref: 605 Learning Obj.: LO 6 AACSB: Analytical thinking 3 Copyright © 2015 Pearson Education, Inc. 13) One of the reasons people become entrepreneurs is to gain control over their time. So allow yourself ________. A) Downtime B) Play time C) Creative-thinking time D) All of the above E) None of the above Answer: D Page Ref: 600 Learning Obj.: LO 1 AACSB: Analytical thinking 14) Negative effects of coercive leadership include all of the following except ________. A) It damages employee morale B) It diminishes the flexibility of the company C) It diminishes the effectiveness of the company D) Employees may stop thinking and acting for themselves E) It motivates employees to work harder Answer: E Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 15) Ethical ________ arises when ethical standards are believed to be subject to interpretation. A) Relativism B) Superiority C) Majority D) Nepotism E) Rationalism Answer: A Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 16) Which of the following can help prevent a scandal, such as Enron? A) Do not treat company profits as personal funds. B) Keep accurate records. C) Create an advisory board. D) All of the above E) None of the above Answer: D Page Ref: 603 Learning Obj.: LO 4 AACSB: Analytical thinking 4 Copyright © 2015 Pearson Education, Inc. 17) Publishing Concepts Inc.’s seven driving values include all of the following except ________. A) Excellence B) People C) Service D) Fun E) Experience Answer: E Page Ref: 602 Learning Obj.: LO 3 AACSB: Analytical thinking 18) Which of the following is not one of the six pillars of character? A) Trustworthiness B) Respect C) Caring D) Fairness E) Honor Answer: E Page Ref: 602 Learning Obj.: LO 3 AACSB: Analytical thinking 19) Ethics are a system of ________ that define a code of behavior to distinguish between good and bad or right and wrong. A) Principles B) Values C) Beliefs D) Religious beliefs E) None of the above Answer: A Page Ref: 600 Learning Obj.: LO 3 AACSB: Analytical thinking 20) ________ is the six pillars of value for the actualized form, “Civility, courtesy, decency, dignity, autonomy, tolerance, acceptance.” A) Trustworthiness B) Respect C) Caring D) Fairness E) Citizenship Answer: B Page Ref: 602 Learning Obj.: LO 3 AACSB: Analytical thinking 5 Copyright © 2015 Pearson Education, Inc. 21) For a business, ethics are ________ and ________ moral principles applied to actions and issues within the business context. A) Individual, organizational B) Personal, managerial C) Individual, directorial D) Individual, governmental E) Individual, secretarial Answer: A Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 22) Which type of pay is a fixed amount of money paid at set intervals? A) Commission B) Salary C) Wages D) Dividend E) All of the above Answer: B Page Ref: 599 Learning Obj.: LO 1 AACSB: Analytical thinking 23) Which of the following is a set of official standards of employee behavior? A) Code of ethics B) Code of conduct C) Ethical relativism D) Ethical dilemma E) All of the above Answer: B Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 24) Conflicts of interest are situations in which ________ considerations and ________ obligations interfere with each other. A) Personal, professional B) Individual, professional C) Not public, professional D) Personal, employment E) Personal, job Answer: A Page Ref: 605 Learning Obj.: LO 5 AACSB: Analytical thinking 6 Copyright © 2015 Pearson Education, Inc. 25) The balancing act between ________ and ________, and being inaccessible is a difficult situation that each individual addresses differently. A) Being accessible, creating a positive environment B) Being busy, creating a positive environment C) Being accessible, creating a negative environment D) Being open, creating a positive environment E) Being accessible, creating a constructive environment Answer: A Page Ref: 600 Learning Obj.: LO 2 AACSB: Analytical thinking 26) ________ means having rules and safeguards in place to ensure that executives behave legally and ethically. A) Corporate governance B) Corporate domination C) Commercial governance D) Corporate authority E) Corporate supremacy Answer: A Page Ref: 603 Learning Obj.: LO 4 AACSB: Analytical thinking 27) Ethical ________ is a circumstance in which there is a conflict of ethical values, which thus muddy decision making. A) Dilemma B) Relativism C) Imperialism D) Conduct E) None of the above Answer: A Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 28) Some tips that can assist in increasing effectiveness include ________. A) Prioritize B) Set realistic daily goals C) Check e-mail a limited number of times per day D) Avoid being distracted by portable electronic devices E) All of the above Answer: E Page Ref: 600 Learning Obj.: LO 2 AACSB: Analytical thinking 7 Copyright © 2015 Pearson Education, Inc. 29) Which Microsoft product helps in implementing a Gantt chart? A) Project B) Publisher C) Outlook D) Access E) Excel Answer: A Page Ref: 600 Learning Obj.: LO 2 AACSB: Analytical thinking 30) Corporate social responsibility is the ethical ________ of a company to its community. A) Obligation B) Compulsion C) Duty D) Requirement E) Debt Answer: A Page Ref: 606 Learning Obj.: LO 6 AACSB: Analytical thinking 31) A “people come first” method that is effective when the business is in the team-building stage describes the pacesetting leadership type. Answer: FALSE Page Ref: 598 Learning Obj.: LO 1 AACSB: Analytical thinking 32) An advisory board will provide you with sound, ethical business advice without being your board of directors. Answer: TRUE Page Ref: 603 Learning Obj.: LO 4 AACSB: Analytical thinking 33) Whereas the underlying values provide a basis for ethical behavior, clear, written guidelines can create a firmer foundation and more consistent implementation. Answer: TRUE Page Ref: 605 Learning Obj.: LO 5 AACSB: Analytical thinking 8 Copyright © 2015 Pearson Education, Inc. 34) An entrepreneur who does not pay him/herself may not realize the opportunity cost of working for oneself. Answer: TRUE Page Ref: 599 Learning Obj.: LO 1 AACSB: Analytical thinking 35) The issue of business ethics exploded in 1965 when several large corporations were found to have published inaccurate financial statements. Enron was among these corporations. Answer: FALSE Page Ref: 603 Learning Obj.: LO 3 AACSB: Analytical thinking 36) Leadership comes from self-esteem applied to knowledge, skills, and abilities. Answer: TRUE Page Ref: 597 Learning Obj.: LO 1 AACSB: Analytical thinking 37) Entrepreneurs who do not pay themselves regularly tend to understate their return on investment. Answer: FALSE Page Ref: 599 Learning Obj.: LO 1 AACSB: Analytical thinking 38) Ethical business behavior is only moral; it does not make good business sense. Answer: FALSE Page Ref: 601 Learning Obj.: LO 3 AACSB: Reflective thinking 39) A code of conduct can help eliminate the problem of ethical relativism, which arises when ethical standards are believed to be subject to local interpretation. Answer: TRUE Page Ref: 601 Learning Obj.: LO 3 AACSB: Analytical thinking 40) One of the easiest aspects of maintaining integrity for any entrepreneur is complying with the multitude of laws that apply to business. Answer: FALSE Page Ref: 604 Learning Obj.: LO 4 AACSB: Analytical thinking 9 Copyright © 2015 Pearson Education, Inc. 41) The Silver Rule says, “Do unto others as you would have others do unto you.” Answer: FALSE Page Ref: 600 Learning Obj.: LO 3 AACSB: Analytical thinking 42) Leaders perpetually have more tasks to complete than there is time to complete them. Answer: TRUE Page Ref: 599 Learning Obj.: LO 2 AACSB: Analytical thinking 43) One recommendation for ethical leadership is that organizations need to put into place a documented procedure for dealing with ethical challenges. Answer: TRUE Page Ref: 602 Learning Obj.: LO 3 AACSB: Analytical thinking 44) Integrity is upholding behavioral standards on the level of the ethical principles that an individual espouses. Answer: TRUE Page Ref: 604 Learning Obj.: LO 4 AACSB: Analytical thinking 45) Getting more done in less time does not contribute to success. Answer: FALSE Page Ref: 599 Learning Obj.: LO 2 AACSB: Analytical thinking 46) Describe how your business could support corporate social responsibility. Answer: Corporate social responsibility is the ethical obligation of a company to its community. Companies exhibit their commitment to the communities they serve through a variety of means and with varying motivations. Some examples include financial contributions to not-for-profit community organizations, supporting volunteerism, and in-kind donations. Page Ref: 606 Learning Obj.: LO 6 AACSB: Reflective thinking 10 Copyright © 2015 Pearson Education, Inc. 47) Draft some items for a code of ethics and business conduct. How do these items support your business idea? Answer: While student responses will vary, it is important for them to understand that the Six Pillars of Character — trustworthiness, respect, responsibility, caring, fairness, and citizenship — would help in developing a code of conduct. For example, if impartiality (an aspect of fairness) is critical, the code of ethics might require employees from accepting personal gifts from stakeholders, such as vendors. Page Ref: 602 Learning Obj.: LO 3 AACSB: Application of knowledge 48) What time management tools in chapter 20 would you use? How would you use them? Answer: While student responses will vary, it is important to know that a variety of tools are available for time management. A Gantt chart is a valuable tool to organize the many things you need to do. Microsoft Project helps in this area. Other tools include prioritizing, setting realistic goals, etc. Page Ref: 600 Learning Obj.: LO 2 AACSB: Application of knowledge 49) As an entrepreneur, how would you pay yourself? Why did you choose that option? Answer: An entrepreneur can pay himself/herself through commission, salary, wages, or dividend. Student responses will vary as each option has its merits and demerits. Page Ref: 598 Learning Obj.: LO 1 AACSB: Application of knowledge 50) Which leadership style best suits you? Will this be useful in business? How? Answer: There are a number of leadership styles — coercive, authoritative, affiliative, democratic, pacesetting, and coaching. Each depends on the personality of the leader and the context. Student opinions will vary. Page Ref: 598 Learning Obj.: LO 1 AACSB: Application of knowledge 11 Copyright © 2015 Pearson Education, Inc.