Org. Theory and Design: Chapter 2 (MC)
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Questions and Answers

Who are the inside stakeholders of an organization?

  • CEOs, vendors, and competitors
  • Shareholders, managers, and the workforce (correct)
  • Top managers, customers, and suppliers
  • Investors, consultants, and regulators
  • What inducements do inside stakeholders typically receive?

  • Bonuses, time off, and flexible work hours
  • Recognition, promotions, and job security
  • Money, power, and organizational status (correct)
  • Training, development opportunities, and mentoring
  • What is the responsibility of top managers in an organization?

  • To negotiate contracts with suppliers and distributors
  • To manage day-to-day operations and employee schedules
  • To develop marketing strategies and advertising campaigns
  • To invest shareholder money in resources to maximize the organization's future output of goods and services (correct)
  • What do shareholders typically receive as their claim on organizational resources?

    <p>Prospective money in the form of dividends and increased stock prices</p> Signup and view all the answers

    Who are considered the owners of an organization?

    <p>Shareholders</p> Signup and view all the answers

    What comprises an organization's workforce?

    <p>All the nonmanagerial employees</p> Signup and view all the answers

    What is the primary contribution of customers to an organization?

    <p>Purchasing goods and services</p> Signup and view all the answers

    Which stakeholder group wants companies to compete in a fair manner and obey the rules of free competition?

    <p>Government</p> Signup and view all the answers

    What is the role of trade unions in relation to an organization?

    <p>Affecting the productivity and effectiveness of the organization</p> Signup and view all the answers

    What is a major problem that an organization has to face in terms of stakeholder approval?

    <p>Deciding how to allocate organizational rewards to different stakeholder groups</p> Signup and view all the answers

    Who has the ultimate authority over the use of a corporation’s resources?

    <p>Shareholders</p> Signup and view all the answers

    What is the role of inside directors in a company?

    <p>Accessing the most information</p> Signup and view all the answers

    What is the system of hierarchical reporting relationships within a large corporation called?

    <p>Chain of command</p> Signup and view all the answers

    Who is responsible for setting the organization’s goals and designing its structure?

    <p>(CEO) The Chief Executive Officer</p> Signup and view all the answers

    What can influence organizational effectiveness and decision making in five ways?

    <p>Allocating scarce resources among functional areas or business divisions.</p> Signup and view all the answers

    What does authority refer to in an organizational context?

    <p>The power to hold people accountable for their actions and to influence directly what they do and how they do it.</p> Signup and view all the answers

    What is the primary contribution of suppliers to an organization?

    <p>Providing reliable raw materials and component parts.</p> Signup and view all the answers

    What is the role of corporate-level management in an organization?

    <p>Having the ultimate responsibility for setting goals and objectives, allocating organizational resources, and designing the organization’s structure.</p> Signup and view all the answers

    Who reports directly to the CEO and shares the principal responsibility for managing the business?

    <p>Chief Operating Officer (COO)</p> Signup and view all the answers

    What do managers in line roles have direct responsibility for?

    <p>Production of goods and services</p> Signup and view all the answers

    What is the term used to describe the conduct of corporate managers who act in their own interests rather than in the interests of other stakeholders?

    <p>Self-dealing</p> Signup and view all the answers

    What is the central issue to overcome the agency problem according to the text?

    <p>Aligning interests of principal and agent</p> Signup and view all the answers

    What are ethical dilemmas according to the text?

    <p>Quandaries where people have to decide between self-interest and helping others</p> Signup and view all the answers

    What are moral scruples according to the text?

    <p>Thoughts and feelings that tell a person what is right or wrong</p> Signup and view all the answers

    What is a moral hazard problem according to the text?

    <p>A problem in evaluating agent's performance due to information advantage</p> Signup and view all the answers

    What are governance mechanisms according to the text?

    <p>Forms of control that align interests of principal and agent</p> Signup and view all the answers

    What is stock-based compensation according to the text?

    <p>Monetary rewards linked to company's performance.</p> Signup and view all the answers

    What is an ethical decision according to the moral rights model?

    <p>Decision that maintains and protects fundamental rights and privileges.</p> Signup and view all the answers

    What is described by 'self-dealing' according to the text?

    <p>Conduct of corporate managers acting in their own interests.</p> Signup and view all the answers

    What are ethics according to the text?

    <p>Inner-guiding moral principles, values, and beliefs.</p> Signup and view all the answers

    What is an agency problem according to agency theory?

    <p>Problem in determining managerial accountability due to information disadvantage.</p> Signup and view all the answers

    According to the passage, what are the three principal sources of ethical values that influence organizational ethics?

    <p>Societal, group or professional, and individual ethics</p> Signup and view all the answers

    What is one of the reasons why ethical rules governing action develop?

    <p>To control self-interested behavior</p> Signup and view all the answers

    What is the 'tragedy of the commons' problem referred to in the passage?

    <p>A problem related to self-interested behavior</p> Signup and view all the answers

    What is whistle-blowing as mentioned in the text?

    <p>When employees inform outside persons or agencies about unethical behavior</p> Signup and view all the answers

    Why do ethical laws and rules emerge, according to the passage?

    <p>To control self-interested behavior by individuals and organizations</p> Signup and view all the answers

    What do professional ethics refer to as mentioned in the passage?

    <p>The way a group of people uses to control the performance of tasks</p> Signup and view all the answers

    How can an organization encourage employees to act ethically?

    <p>By setting incentives for ethical behavior and disincentives for unethical behavior</p> Signup and view all the answers

    What is one of the reasons why unethical behavior takes place, according to the passage?

    <p>Outside pressure</p> Signup and view all the answers

    What does 'whistle-blowing' culture refer to as mentioned in the text?

    <p>When employees feel powerless to prevent an organization from committing an unethical act.</p> Signup and view all the answers

    What is one of the best ways of understanding the self-interest issue, as mentioned in the text?

    <p>'Tragedy of the commons' problem.</p> Signup and view all the answers

    What does 'professional ethics' specifically control as per the passage?

    <p>Performance of tasks or use of resources.</p> Signup and view all the answers

    According to the passage, what are societal ethics codified in?

    <p>Legal system, customs and practices, and unwritten norms and values.</p> Signup and view all the answers

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