What is a corporation?

A group of people working together.

A small business that ends at the death of its owners.

An entity that can endure beyond the natural lives of its members.

An entity in which its members are personally responsible for corporate debts beyond the amount of their investment.

Question 2. Question :

(TCO 1) Which statement is true about the Invisible Hand Argument?

The argument contends that there is no way that corporations can be held accountable for their actions.

Corporations should base their policies on things other than profits.

Argument suggests that if corporations are allowed to seek self-interest, their activities will yield the greatest good for society.

Argument suggests that corporations cannot be criticized or praised because their main objective is to increase profit.

Question 3. Question :

(TCO 1 & 3) What is one major aspect of the Let-Government-Do-It

argument?

Social responsibility is the role of corporations, along with increasing profit.

Corporations have several roles, including operating in a socially responsible manner.

The role of business is purely economic.

Government should work with businesses in order to promote social responsibility.

Question 4. Question :

(TCO 1 & 3) Which statement is true about corporate moral codes?

They should set ideal goals, no matter how unrealistic they may be.

They do not have to set goals at all if the standards are clear and concise.

They should set reasonable goals and subgoals.

No other views should be considered when drafting the corporate moral codes.

Question 5. Question :

(TCO 1 & 3) Which statement is NOT true about corporate culture?

A corporation’s culture can change daily.

A corporation’s culture can include the value system of the corporation.

The corporate culture can include the method by which the corporation conducts business.

The corporate culture will typically develop its own norms

Question 6. Question :

(TCO 1) Which is true about the social entity model?

It maintains that the only responsibility that a corporation has is to make a profit.

It maintains that a corporation only has an obligation to its stockholders.

It describes the relationship between the corporation and its employees.

It describes the relationship between the corporation and its stockholders and other constituencies affected by the corporation’s behavior.