Quiz 3: Social Entrepreneurs, Ethics, and Strategic Planning

The obligations of a business to maximize the positive effects it has on society and minimize the negative effects are referred to as ______. A) ethics B) social responsibility C) strategic planning D) sustainability

Which concept refers to the fact that a business has the obligation to impact society on four levels--economic, legal, ethical, and philanthropic? A) business responsibility B) moral obligation C) social responsibility D) ethical responsibility

Strategic planning is providing the ______ game plan for a business. A) near-term B) long-term C) short-term D) intermediate-term

______ is a set of shared beliefs within an organization. A) Ethics B) Social responsibility C) Strategic planning D) Culture

Wilma has been described by others as a good corporate citizen. She contributes to the community by volunteering through her church and she strives to improve the quality of life in everyone she meets. Wilma possesses qualities within which level of the social responsibility pyramid? A) philanthropic goodwill B) ethical responsibility C) legal obligations D) economic responsibility

Art has always played by the rules and obeyed the law. He believes that law is society's codification of right and wrong. Art possesses qualities within which level of the social responsibility pyramid? A) philanthropic goodwill B) ethical responsibility C) legal obligations D) economic responsibility

The level of social responsibility that has historically been the focus of business is ______. A) legal B) economic C) ethical D) philanthropic

The view that a business must make a profit in order to survive and make other contributions is known as ______. A) economic responsibility B) legal responsibility C) ethical responsibility D) philanthropic responsibility

Which level of social responsibility centers on making sure creditors are paid, a strong competitive advantage is maintained, and operations are efficient? A) economic responsibility B) legal responsibility C) ethical responsibility D) philanthropic responsibility

Which responsibility is at the highest level on the social responsibility pyramid? A) economic responsibility B) legal responsibility C) ethical responsibility D) philanthropic responsibility

Economist Milton Friedman emphasized the fact that business had "one and only one social responsibility," that being ______. A) economic responsibility B) legal responsibility C) ethical responsibility D) philanthropic responsibility

The level of responsibility that leads to obedience of the law is what level of social responsibility? A) economic responsibility B) legal obligation C) ethical responsibility D) philanthropic goodwill

The minimum threshold of socially expected business behavior is which two levels of social responsibility? A) economic and philanthropic B) economic and legal C) ethical and legal D) ethical and philanthropic

Dealing with the consequences of one's own actions is referred to as ______. A) idealism B) utilitarianism C) deontology D) virtue ethics

As a business manager, Sally focuses on employing only those individuals who have a strong character of honesty and integrity. This aligns most closely with which ethical perspective? A) idealism B) utilitarianism C) deontology D) virtue ethics

The company New Leaf develops and sells eco-friendly paper in an industry that is notorious for both severe environmental impact and resistance to change. This company can be viewed as ______. A) socially responsible B) economically responsible C) legally responsible D) fiscally responsible

The obligation of individuals and businesses to do what is right is known as ______. A) economic responsibility B) legal responsibility C) ethical responsibility D) philanthropic responsibility

Which level of social responsibility is concerned with a business doing well without the expectation of anything in return? A) economic responsibility B) legal obligations C) ethical responsibility D) philanthropic goodwill

Philanthropic goodwill would be concerned with which of the following? A) reasonable profit B) meeting the legal requirements of all laws dealing with discrimination C) meeting obligations to society D) improving quality of life and promoting generosity

Philanthropic activity is best suited to ______. A) small companies B) medium-sized companies C) large corporations D) any sized company

A small business sponsoring a Little League team for the summer would be an example of which level of social responsibility? A) economic B) legal obligations C) ethical D) philanthropic goodwill

In the National Business Ethics Survey, ______ percent of U.S. small business respondents considered their top managers ethical. A) 80 B) 58 C) 49 D) 41

The rules of moral values that guide decision making, or one's understanding of right or wrong, are referred to as ______. A) cultural values B) business ethics C) mission and vision D) social norms

A tool with which the owner of a business communicates ethical expectations to everyone associated with the business is called a ______. A) code of conduct B) tool of ethics C) code of ethics D) tool of conduct

Which of the following does not apply to an ethical code that is written for a small business? A) It should be written concisely and clearly. B) It should apply equally to all employees. C) It should be a reflection of the small business owner's ideals and beliefs. D) It should not be included in an employee handbook.

How often should your firm's ethics code be reviewed? A) annually B) once it is established, it should never be changed C) every day D) whenever the firm is covered unfavorably in the media

A long-term planning tool used for viewing a business and the environments in which it operates in the broadest terms is ______. A) strategic planning B) intermediate planning C) short-term planning D) strategic alternatives

The first function of good management is which of the following? A) good planning B) good organization C) good leadership D) good recruiting and hiring

Green marketing refers to businesses showing concern for which of the following issues? A) the environment B) willingness to devote a percentage of profits to charitable organizations C) landscaping cities through development of parks D) offering child care services as part of employee benefit packages

A/an ______ helps an organization determine the most appropriate steps to take to accomplish the goals that are identified in the strategic plan. A) mission statement B) code of ethics C) strategic objective D) action plan

______ is a long-range management tool that helps small businesses be proactive in the way they respond to environmental change. A) Strategic planning B) Short-term planning C) Intermediate planning D) Strategic alternatives

The process of ______ provides an overview of a business and all the factors that may affect it in the next three to five years. A) strategic planning B) short-term planning C) intermediate planning D) strategic alternatives

The statement of the reason an organization exists is called a ______. A) profit margin B) mission statement C) statement of intentions D) profit potential

The foundation on which all other goals and strategies are based is a ______. A) mission statement B) statement of intentions C) code of ethics D) list of company goals

One of Robert's roles within the company that he manages is to constantly examine what is happening in all sectors that have an impact on the industry, both within the business and outside of it. This role is referred to as ______. A) social entrepreneurship B) BCG analysis C) environmental analysis D) strategic impass

The mission statement should have how many words? A) 100 or fewer B) 75 or fewer C) 50 or fewer D) 25 or fewer

The step of strategic planning in which the internal strengths and weaknesses of a business and the opportunities and threats that exist outside the business is called a/an ______. A) SWAT analysis B) SWOT analysis C) external environmental analysis D) internal environmental analysis

Environmental analysis is important to small businesses because ______. A) they are less flexible B) they are less sensitive to customer preferences C) they have more competitors D) they have fewer resources to risk

The increased popularity of tattoos among teens and twenty-somethings means opportunity for skin artists who are able to provide this service in a small business. This is an example of what type of opportunity? A) economic B) legal C) competitive D) sociocultural

An analysis of the ______ environment identifies strengths and weaknesses that exist within the business. A) internal B) external C) economic D) sociocultural

Threats and opportunities to a business can be found in which of the following environments? A) economic and legal only B) legal and sociocultural only C) technological and competitive only D) economic, legal, sociocultural, competitive, and technological

Which of the following environments would the threat of new trade restrictions fall into? A) economic B) legal/regulatory C) sociocultural D) competitive

Which of the following environments would a change in the age of the Baby Boomers fall into? A) economic B) legal/regulatory C) sociocultural D) competitive

Which of the following environments would a change in the interest rate fall into? A) economic B) legal/regulatory C) sociocultural D) competitive

Which type of analysis is important in matching the strengths of a business to the external environmental factors that are identified? A) external analysis B) internal analysis C) SWOT analysis D) SWAT analysis

The facet of a business that the business does better than all of its competitors is known as which of the following? A) competitive advantage B) competitive edge C) competitive power D) absolute advantage

Incorporating the best elements of a competitor's products into a product is called ______. A) benchmarking B) reverse engineering C) reengineering D) SWOT analysis

Which of the following ideas is not valuable in defining competitive advantage? A) Advantages are relative, not absolute. B) Multiple types of competitive advantages should be strived for. C) Areas of competition change over time. D) Once found, a good competitive advantage will remain an advantage for years.

______ refers to how passively or aggressively the businesses within an industry compete with each other. A) Threat of substitute products or services B) Threat of new entrants C) Degree of rivalry among existing competitors D) Degree of external competition

______ is a function of how easily other businesses can enter the market. A) Degree of rivalry among existing competitors B) Threat of new entrants C) Bargaining power of competition D) Threat of substitute products or services

______ affects the price that must be paid to produce goods. A) Degree of rivalry among existing competitors B) Bargaining power of suppliers C) Bargaining power of buyers D) Threat of substitute products or services

______ affects how much prices may be changed. A) Degree of rivalry among existing competitors B) Bargaining power of suppliers C) Bargaining power of buyers D) Threat of substitute products or services

______ is determined by the options that customers have when buying the products or services of a business. A) Threat of new entrants B) Degree of rivalry among existing competitors C) Bargaining power of buyers D) Threat of substitute products or services

Intrigued by the fast-paced technology industry, Samantha decided to open a technology start-up. She soon realized that the competition in this industry is fierce and a high level of capital is needed to stay on top. After a few years, she sold her company and went on to pursue different interests. This is an example of which fatal flaw in strategic thinking? A) failure to identify a true competitive advantage B) misreading industry attractiveness C) pursuing a competitive advantage that is not sustainable D) compromising a strategy in an attempt to grow faster

______ are a good example of failing to identify a true competitive advantage. A) Imitations B) Misleading strategies C) Vague employee instructions D) Misreading industries

Having a competitive advantage is ______, otherwise the business is not needed. A) unnecessary B) necessary C) critical D) relative to the industry

In order to cope with a quickly changing competitive environment, small businesses need to be ______. A) competition driven B) reactive C) market driven D) liquid

Occasionally, competitive advantages are gained after a product ______. A) has been previously introduced B) has been discontinued C) has been recalled D) has been discovered to have numerous defects

There are ______ generic competitive strategies by which a small business can gain a competitive advantage. A) two B) three C) four D) five

Differentiation can effectively remove direct competition if customers can be shown that ______. A) the difference is better B) the difference is lower prices C) the product is collectible D) the product is brand name specific

If a business intends to compete primarily on product price, it must ______. A) advertise B) raise prices C) lower prices D) lower costs

Studies that measure the impact that a mass merchandiser like Wal-Mart has on small retailers have shown that small stores usually ______. A) go out of business B) stay in business but make minor profits C) outperform Wal-Mart D) benefit as long as they stock different merchandise

An advantage does not necessarily have to be in the ______. It may come from anything the business does. A) market B) product C) economy D) customer's tastes

______ research offers a way to answer questions about the customers' changing wants and needs. A) Market B) Competitive C) Internal D) Operations management

The products and services that people like and dislike at any particular time are shaped by ______. A) one or two major influences B) usually ten influences C) hundreds of identifiable influences D) hundreds of unidentifiable influences

In order to write effective goals, which of the following factors must be considered? A) Goals should be written in terms of actions. B) Goals should be measurable. C) Goals should be difficult to accomplish. D) Goals should have no definite time period for completion.

Cindy owns a flower shop, and her primary goal is to increase sales in the current fiscal year. This goal can best be described as ______. A) measurable B) challenging, yet attainable C) communicated with everyone in the company D) written with a time frame for achievement

According to the text, if completion of your SWOT and competitive analysis identifies no major problems ______. A) you must have overlooked something B) there may not be problems at present but you need to focus on potential future problems C) that may be because you are not doing anything D) don't fix anything

A business-level goal describes ______. A) who the small business owner is and what the business is B) the performance desired from specific departments C) a plan of action that details how plans will be accomplished D) what the overall business should accomplish

A function-level goal describes ______. A) who the small business owner is and what the business is B) the performance desired from specific departments C) a plan of action that details how plans will be accomplished D) what the overall business should accomplish

A strategy describes ______. A) who the small business owner is and what the business is B) the performance desired from specific departments C) a plan of action that details how plans will be accomplished D) what the overall business should accomplish

What type of planning addresses operational growth? A) strategic planning B) business planning C) ethical planning D) financial planning

NARRBEGIN: 3-1 Scenario 3-1. Betty's Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals. NARREND -In Scenario 3-1, which level of the social responsibility pyramid would Milton Friedman maintain Betty should be most concerned with? A) economic responsibility B) legal obligations C) ethical responsibility D) philanthropic goodwill

NARRBEGIN: 3-1 Scenario 3-1. Betty's Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals. NARREND -In Scenario 3-1, which level of the social responsibility pyramid is Betty concerned with when she is preparing food? A) economic responsibility B) legal obligations C) ethical responsibility D) philanthropic goodwill

NARRBEGIN: 3-1 Scenario 3-1. Betty's Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals. NARREND -In Scenario 3-1, besides providing her customers with the best service possible, Betty is also interested in the rest of their trip. Which level of the social responsibility pyramid addresses this aspect of her business? A) economic responsibility B) legal obligations C) ethical responsibility D) philanthropic goodwill

NARRBEGIN: 3-1 Scenario 3-1. Betty's Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals. NARREND -In Scenario 3-1, the sponsorship of the soccer team would fall under which level of social responsibility? A) economic responsibility B) legal obligations C) ethical responsibility D) philanthropic goodwill

NARRBEGIN: 3-1 Scenario 3-1. Betty's Bed and Breakfast is a small business that provides a bed and breakfast for travelers usually on their way to the Grand Canyon. The business resides in a small community whose economy is primarily devoted to tourism. Betty obtains her livelihood from her business. Because she provides food, she is inspected yearly by government agencies to ensure she is meeting governmental guidelines concerning food preparation. Betty feels strongly that her business is not only to provide shelter and food but also information on directions, room reservations, medical information, and any other information that she has available or can find for her guests. This information includes a short-cut that can be taken to the Grand Canyon that reduces traveling time by an hour. This past summer she sponsored a soccer team comprised of elementary students from the local grade school. The soccer team placed third in the state finals. NARREND -In Scenario 3-1, Betty's competitive advantage would be which of the following? A) the bed and food she provides B) the sponsorship of the soccer team C) the extra services she provides her guests D) the strictness with which she adheres to food preparation

NARRBEGIN: 3-2 Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services. NARREND -In Scenario 3-2, keeping current with the new technologies and the cash flow problem are examples of which environment? A) external environment B) internal environment C) economic environment D) technological environment

NARRBEGIN: 3-2 Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services. NARREND -In Scenario 3-2, Terry's new competition and his potential customer referrals are examples of which environment? A) external environment B) internal environment C) economic environment D) technological environment

NARRBEGIN: 3-2 Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services. NARREND -In Scenario 3-2, an increase in interest rates seems very likely in the future. This will severely affect Terry's cash flow problems. This is an example of a threat from which of the following environments? A) economic environment B) legal/regulatory environment C) sociocultural environment D) competitive environment

NARRBEGIN: 3-2 Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services. NARREND -In Scenario 3-2, Terry is seriously considering dropping his hourly fee. He is doing this in response to which environment? A) economic environment B) legal/regulatory environment C) sociocultural environment D) competitive environment

NARRBEGIN: 3-2 Scenario 3-2. Terry's Technology Service is currently conducting a SWOT analysis of the business. Several differing factors have been observed. One of the major strengths of Terry's business is that he has kept current with all the new technologies that have been developing. The ability to adapt the technologies to business applications has been a key feature of the business. A definite weakness of the business is that Terry's cash flow has been strained lately due to the capital investments that are necessary in order to keep up with current technological advances. Owing to Terry's good relationship with his customers, he is getting many referrals for new customers. A recent consideration is his competition. A new business has started in town that is offering similar services. NARREND -In Scenario 3-2, considering the business that Terry is pursuing, which of the following environments must he pay close attention to? A) economic environment B) legal/regulatory environment C) competitive environment D) technological environment

Strategic planning is the process of identifying the mission, goals, and objectives of a business.

Social responsibility is the obligation of a business to maximize the positive impact it has on society and to minimize the negative impact.

Social responsibility refers to the rules of moral values that guide decision-making.

The philanthropic goodwill level on the social responsibility pyramid is concerned with a company's obligation to be ethical and to do what is right, just, and fair.

Historically, the primary role of business has been economic.

Philanthropy is the bottom level of the social responsibility pyramid.

Milton Friedman emphasizes the philanthropic side of social responsibility.

Virtue ethics deals with the consequences of one's own actions.

Over the past several years, the term social entrepreneur has emerged as a way to describe the use of business skills to marshal resources.

Changes in ethical standards and values usually precede changes in laws.

Utilitarianism is rule-based or duty-based.

A code of ethics is a formal statement of the long-range goals and plans for a company.

When it comes to a code of ethics, companies should take a "three Ps" approach: print it, post it, and pray they read it.

A code of ethics that is supported and enforced by management will become a part of a company's culture.

The long-term planning tools used for viewing a business and its environment in the broadest of terms are known as the operational plan.

The mission statement is the foundation on which all other goals and strategies of a business are based.

The last step in the strategic planning process involves the establishment of control systems.

An effective mission statement balances ideas and reality.

The heart of the strategic planning process is the mission statement.

There is little connection between strategic planning and social responsibility.

The step of strategic planning in which the manager identifies pollution caused by the firm is known as environmental analysis.

A small business may be significantly more affected by an environmental change than a larger business would be.

An analysis of the external environment identifies opportunities and threats faced by a business.

External analysis assesses the strengths and weaknesses of a company.

A competitive advantage must be sustainable over time in order to be a benefit to the business.

A company's competitive advantage could be defined as being the two things that the company does best that set it apart from the competition.

A competitive advantage is the advantage that a business has over its competitors.

A competitive advantage need not be sustainable in order to remain an advantage.

A competitive advantage is relative, not absolute.

Competitive advantage must be defined from the customer's perspective.

If a small business cannot sustain a competitive advantage, the best recommendation is to view the business as a short-term investment rather than a long-term enterprise.

Having a competitive advantage is critical. Businesses must do something better than the competition.

Competitive advantage as a core of small business strategy is critical, but the inertia of the marketplace may also be relied on for survival.

When looking for a competitive advantage, one of the best tools for survival is looking at the mistakes of other businesses.

A competitive advantage will cause customers to be more satisfied with one business, resulting in increased market share for that business.

The three generic competitive strategies by which a business can gain competitive advantage are lowering costs, differentiation, and focus strategies.

Focus strategies target a broad segment of the market.

Small businesses concentrate on niches or narrow market segments.

Differentiation means that a product or service is different than the product or service of the competition.

A single method to continuously differentiate a product will sustain a competitive advantage.

The most difficult part of strategic planning is drafting a list of alternatives.

Planning for the future is an exact science.

Business plans and strategic plans support each other but accomplish different purposes.

Discuss the relationship between social responsibility, ethics, and strategic planning.

Compare and contrast the four levels depicted in the pyramid of social responsibility.

List and describe the four areas of laws that regulate business activity.

Discuss the importance of a code of ethics for a business.

Describe the importance of a mission statement to a business.

Define competitive advantage and explain two core ideas that are valuable in defining competitive advantage.

List and describe at least five areas of comparison that may be included in a competitive analysis.

Explain three of the five basic forces of competition that exist within every industry.

Describe three benefits of gaining a competitive advantage.

Explain in detail one strategy by which a business could gain a competitive advantage.

Describe three components of well-written goals.