ADMS 1010 Final: ADMS1010 (1)assignment3

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fuchsiagoose431

30 Jan 2018

School

York University

Department

Administrative Studies

Course

ADMS 1010

Professor

Eytan Lasry

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Document Summary

In the text, the social responsibility of business is to increase its profit , milton. Friedman argues that the social responsibility is a disadvantage of either the freedom of markets or profit of corporations. Friedman uses examples throughout the article to support this argument. Friedman asserted that members is the organization take social responsibility for corporations will harm the profit. He took a person"s assumption as an example. He described the worker as a selling manager, and to take social responsibility he pushed down the value which caused the loss of profit. In this example, friedman criticized that this worker stole the fund of corporations to improve social benefit and he also made an assumption in which he expanded this example to corporations in the market. He also demonstrated how all the corporations are forced to lose profit for so-called social benefits.

Related Questions

1. Whistleblowing in the private employment sector in the United States typically is

Not protected by a uniform federal law

Protected under some state whistleblower protection statutes

Usually protected by the law if the disclosure is made to the media since the disclosure will be widespread and thus do the most good

Never required morally pursuant to Kantian ethics since the consequences for the whistleblowing employees usually are harsh, for example, loss of employment.

2. Advocate Antonio believes that corporations should not only be held accountable for their financial states, but also for some level of charitable and community and civic involvement. Antonio's beliefs would most likely be defined as:

A code of ethics

A social responsibility view

A corporate moral audit

A distributive justice legal theory.

3. What did Kant mean by the "Categorical" part to his Categorical Imperative?

You must act legally, period, because the "law is the law."

You and your company must act in a socially responsible manner if you and your company want to be placed in the "good corporate citizen" category.

You must act morally if the consequences are definitely good for you and your firm.

You must act morally based on what your reason informs you is the supreme ethical principle and the correct moral course of action regardless of consequences.

4. As to why a company should be a socially responsible one and get involved in civic and charitable affairs, Socrates would likely argue:

Justice is the will of the stronger.

Money comes from virtue.

Ignorance of the law is no excuse.

Virtue comes from money.

5. Happy Feet manufactures shoes in Country Y for sale in the United States. Happy Feet's president discovers that the Country Y workers' average age is sixteen and that they work on average of 13.2 hours per day in a 90 degree warehouse with insufficient safety precautions, all of which practices are legal in Country Y. The president of Happy Feet decides to improve the working hours and conditions of the company's workforce, even though these actions will be more expensive for the company. The president's decision is best described as

Lawful profit maximization

Moral profit-making

Illegal since the shareholders of Happy Feet might be harmed

Social Darwinism.

6. Which of the following statements is most accurate?

Morals are legal minimums.

Morals are legal maximums.

Laws are moral minimums.

Laws are moral maximums.

7. International Sales Corporation, like other business, has enforceable duties prescribed by

Ethics and the law

Ethics only

Neither ethics nor the law

The law only

8. Which is an accurate statement about the modern business corporation|

The corporation, once approved by the state and given a corporate charter, is a legal actor and artificial "person" endowed with legal and certain constitutional rights.

According to the traditional, conservative, Milton Friedman, organizational view of the corporation, it is only a legal actor and has no moral or social responsibility and just must obey the law and pay taxes.

A true corporate code of ethics today must have some provisions that go "above and beyond" the law; that is, an ethics code cannot be a mere "restatement" of the law.

All of the above.

9. A problem with the Last Resort principle when applied to business is:

Does business have the capability to help and to aid the community and local charities?

Is business the last real alternative to help and to aid the community and local charities?:

Are there potential legal liability issues for helping, aiding, and rescuing?

All of the above.

10. A spray paint company discovers that its products are being misused by children and young people, who get "high" sniffing the fumes. There are no warning labels on the spray paint cans. The company would be best deemed to have what type(s) of obligation and duty to take steps to protect children and young people?

An ethical obligation but not a legal duty

A legal obligation but not an ethical obligation

Both an ethical obligation and a legal duty

Neither an ethical obligation nor a legal duty.

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1) The subarea of finance where you need to value uncertain cash flows occurring at different points in time is:

a. investments

b. corporate finance

c. capital markets

d. bank management.

e. all of the above subareas

2) Which of the following statements is correct?

a. One advantage of forming a corporation is that equity investors are usually exposed to less liability than they would be in a partnership.

b. Corporations face fewer regulations than sole proprietorships.

c. One disadvantage of operating a business as a sole proprietor is that the firm is subject to double taxation, because taxes are levied at both the firm level and the Owner level.

d. It is generally less expensive to form a corporation than a proprietorship because, with a proprietorship, extensive legal documents ace required.

e. If a partnership goes bankrupt, each partner is exposed to liabilities only up to the amount of his or her investment in the business.

3) Which of the following statements is correct?

a. Corporations generally face fewer regulations than sole proprietorships.

b. Corporate shareholders are exposed to unlimited liability.

c. It is usually easier to transfer ownership in a corporation than in a partnership.

d. Corporate shareholders are exposed to unlimited liability, but this factor is offset by the tax advantages of incorporation.

e. Less of a corporation's income is generally subject to federal taxes.

4) The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to:

a. Maximize its expected total corporate income.

b. Maximize its expected EPS.

c. Minimize the chances of losses.

d. Maximize the stock price per share over the long run, which is the stockâs intrinsic value.

e. Maximize the stock price on a specific target date.

5) Which of the following is correct?

a. In most corporations, the CFO ranks above the CEO.

b. By Law in most states, the chairman of the board must also be the CEO.

c. It is possible for a person to simultaneously serve as CEO and chairman of the board, though many corporate control experts believe it is bad to vest both offices in the same person.

d. The CFO generally reports to the firm's chief accounting officer, who is normally the controller.

e. The CFO is responsible for raising capital and for making sure that capital expenditures are desirable, but he or she is not responsible for the validity of the financial statements, as the controller and the auditors have that responsibility.

6) The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be to

a. Maximize managers' own interests, which are by definition consistent with maximizing shareholders' wealth.

b. Maximize the firmâs expected EPS, which must also maximize the firmâs price per share.

c. Minimize the firmâs risks because most stockholders dislike risk in turn, this will maximize the firmâs stock price.

d. Use a well-structured managerial compensation package to reduce conflicts that may exist between stockholders and managers.

e. Since it is impossible to measure a stock's intrinsic value, the text states that it is better for managers to attempt to maximize the current stock price than its intrinsic value.

7) Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and bondholders?

a. Compensating managers with stock options.

b. Financing risky projects with additional debt.

c. The threat of hostile takeovers.

d. The use of covenants in bond agreements that limit the firmâs use of additional debt and constrain managers' actions.

e. Abolishing the Security and Exchange Commission.

8) Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers?

a. Pay managers large cash salaries and give them no stock options.

b. Change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover.

c. Beef up the restrictive covenants in the firmâs debt agreements.

d. Eliminate a requirement that members of the board of directors must hold a high percentage of their personal wealth in the firmâs stock.

e. For a firm that compensates managers with stock options, reduce the time before options are vested, i.e., the time before options can be exercised and the shares that are received can be sold.

9) Which of the following mechanisms would be most likely to help motivate managers to act in the best interests of shareholders?

a. Decrease the use of restrictive covenants in bond agreements.

b. Take actions that reduce the possibility of a hostile takeover.

c. Elect a board of directors tlta.t allows managers greater freedom of action.

d. Increase the proportion of executive compensation that comes from stock options and reduce the proportion that is paid as cash salaries.

e. Eliminate a requirement that members of the board of directors have a substantial investment in the firmâs stock.

10) Which of the following is correct?

a. Potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock.

b. Because bankruptcy requires that corporate bondholders be paid in full before stockholders receive anything, bondholders generally prefer to see corporate managers invest in high risk/high return projects rather than low risk/low return projects.

c. There is no good reason to expect a firmâs stockholders and bondholders to react differently to the types of assets in which it invests.

d. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.

e. Bondholders should generally be happier titan stockholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns.

11) You recently sold 100 shares of Microsoft stock to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following best describes this transaction?

a. This is an example of a direct transfer of capital

b. This is an example of a primary market transaction.

c. This is an example of an exchange of physical assets.

d. This is an example of a money market transaction.

e. This is an example of a derivative market transaction.

12) Which of the following statements is correct?

a. The NYSE does not exist as a physical location. Rather it represents a loose collection of dealers who trade stock electronically.

b. An example of a primary market transaction would be your uncle transferring 100 shares of Walmart stock to you as a birthday gift.

c. Capital market instruments include both long-term debt and common stocks.

d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.

e. While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

13) Which of the following is a primary market transaction?

a. You sell 200 shares of IBM stock on the NYSE through your broker.

b. You buy 200 shares of IBM stock from your brother. The trade is not made through a broker--you just give him cash and he gives you the stock.

c. IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.

d. One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.

e. IBM sells 2,000.000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

14) Money Markets are markets for:

a. Foreign currencies.

b. Consumer automobile loans.

c. Common stocks.

d. Long-term bonds.

e. Short-term debt securities such as Treasury bills and commercial paper.

15) You recently sold 200 shares of Disney stock, and the transfer was made through a broker. This is an example of:

a. A money market transaction.

b. A primary market transaction.

c. A secondary market transaction.

d. A futures market transaction.

e. An over-the-counter market transaction.

16) Which of the following statements is correct?

a. Hedge funds are legal in Europe and Asia, but they are not permitted to operate in the United States.

b. Hedge funds are legal in the United States, but they are not permitted to operate in Europe or Asia.

c. Hedge funds have more in common with investment banks than with any other type of financial institution.

d. Hedge funds have more in common with commercial banks than with any other type of financial institution.

e. Hedge funds are not as highly regulated as most other types of financial institutions.

17) Which of the following factors statements is correct?

a. The New York Stock Exchange is an auction market, and it has a physical location.

b. Home mortgage loans are traded in the money market.

c. If an investor sells shares of stock through a broker, then it would be a primary market transaction.

d. Capital markets deal only with common stocks and other equity securities.

e. While the distinctions are blurring, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties.

18) Which of the following statements is correct?

a. The term "IPO" stands for Introductory Price Offered, and it is the price at which shares of a new company are offered to the public.

b. IPO prices are generally established by the market, and buyers of the new stock must pay the price that prevails at the close of trading on the day the stock is offered to the public.

c. In a "Dutch auction," investors who want to buy shares in an IPO submit bids indicating how many shares they want to buy and the price they are willing to pay. The company determines how many shares it wants to sell. The highest price that enables the company to sell the desired number of shares is the price that all buyers must pay.

d. It is possible that the price set in an IPO is so high that investors will refuse to buy the number of shares that the company wants to sell. In this situation, the IPO is said to be oversubscribed.

e. It is possible that the price set in an IPO is so low that investors will want to buy more shares than the company wants to sell. In that case, the company will have to issue more shares than it wants to sell.

19) The stock market is thought to be efficient because:

a. There are many brokers working the exchange floors

b. Computers can make very fast calculations these days

c. There are many stock analysts following the same stocks

d. Stocks are available and are very inexpensive

e. Speed trading is now an acceptable trading technique

20) If the stock is priced correctly but with better management the firm could be worth even more, then the firm would be:

a. A potential target for a stock investor

b. A potential target for a private equity firm

c. A potential target for a bond fund

d. A potential target for the SEC

e. A potential target for share repurchases

1.) Using the computed financial ratios from question 1, compare Grounds Keeperâs performance from 2011 to 2012. Address what areas the company has improved and what areas it has not

a.) Liquidity

b.) Activity / turnover / efficiency

c.) Profitability

d.) Leverage / use of debt / solvency

2.) If you were the CEO of Grounds Keeper, what area(s) would you concentrate on to improve the performance of the company?

	2012	2011
Current ratio	2.54404052	2.37843623
Quick ratio	0.91950568	0.81560714
Inventory turnover	3.0658051	2.37047444
Average Collection Period	37.5274142	46.9735877
Total asset turnover	1.07567837	0.82629249
Net profit margin	0.09345852	0.07608566
Operating profit margin	0.15403918	0.13639319
Times Interest Earned	26.0681373	6.25082817
Debt/Net worth Ratio	0.59903778	0.67234699
Return on Equity ratio	0.16075336	0.1051388

Below is the provided information/scenario.

Grounds Keeper is considering adding fair trade coffee to their line of products. Other larger coffee companies are now including it, at consumersâ insistence. At a recent strategic management meeting, the companyâs officers identified the following points:

Fair trade coffee may attract new customers.

Fair trade coffee would allow Grounds Keeper to demonstrate its social responsibility.

Fair trade coffee would require more paperwork to meet certification and contract requirements.

The higher cost of Fair Trade Coffee would require a higher price or a reduced profit margin.

If coffee prices worldwide continue to increase, consumers may be reluctant to pay extra for Fair Trade Coffee.

Current suppliers of coffee to Grounds Keeper might be in competition with Fair Trade Coffee cooperatives.

One officer present asked the following question: Should we as a company have a good reason to try to influence actions in other parts of the world? Donât we have governments to do that?

Fair Trade Coffee

What is fair trade certification?
Much like organic certification, fair trade certification lets you know about the origin of a product. Fair trade certified products come from all over the world, but share a common history. Farmers who grow fair trade products receive a fair price, and their communities and the environment benefit as well.

Fair trade certified coffee directly supports a better life for farming families in the developing world through fair prices, community development and environmental stewardship. Fair trade farmers market their own harvests through direct, long-term contracts with international buyers, learning how to manage their businesses and compete in the global marketplace. Receiving a fair price for their harvest allows these farmers to invest in their families' health care and education, reinvest in quality and protect the environment. This empowerment model lifts farming families from poverty through trade, not aid, creating a more equitable and sustainable model of international trade that benefits producers, consumers, industry and the Earth. The Fair for Life label is backed by IMO, one of the third-party certifiers of fair trade products for the U.S. market.

The Fair for Life label guarantees:

Fair price: Family farmers receive fair prices for their harvest, and premiums specifically earmarked for community development projects; even higher premiums are given for certified organic products. Farmer organizations are also eligible for pre-harvest credit.

Environmental sustainability: Harmful agrochemicals and GMOs are strictly prohibited in favor of environmentally sustainable farming methods that protect farmers' health and preserve valuable ecosystems for future generations. Fair trade farmers protect the land and wildlife habitat by intercropping plant species to improve soil fertility and protect against erosion. Stringent environmental management programs, including water conservation, proper waste disposal and prohibitions on planting in protected areas further encourage environmental stewardship.

Fair labor conditions: Workers on fair trade farms enjoy freedom of association, safe working conditions and fair wages. Forced child labor is strictly prohibited.

Direct trade: Importers purchase from fair trade producer groups as directly as possible, eliminating unnecessary middlemen and empowering farmers to develop the business capacity needed to compete in the global marketplace.

Democratic and transparent organizations: Fair trade farmers and farm workers decide how to invest fair trade revenues, and proof of a democratic process is required.

Community development: Fair trade farmers and workers invest fair trade premiums in social and business development projects like scholarship programs, healthcare services and quality improvement training.

Examples of community projects include:

Members of the COSURCA coffee cooperative in Colombia successfully prevented the cultivation of more than 1,600 acres of coca and poppy used to produce illicit drugs.

In the highlands of Guatemala, indigenous Tzutuhil Mayans in the La Voz cooperative are sending local kids to college for the first time.

Near Lake Titicaca, in Peru, the CECOVASA cooperative is assisting members from Quechua and Aymara indigenous groups in improving coffee quality and transitioning to certified organic production.

The CECOCAFEN cooperative in Nicaragua established a reproductive health program providing tests for the virus that causes cervical cancer.

What is IMO "Fair for Life" fair trade certification?
"Fair for Life" is a brand neutral third party certification program for social accountability and fair trade in agricultural, manufacturing and trading operations. The program complements existing fair trade certification systems. Social accountability and fair trade have become important indicators to select business partners in a global market place. The Fair for Life Social & FairTrade Certification Program offers operators of socially responsible projects a solution for objective inspection and certification by a highly qualified external verifier. It combines strict social and fair trade standards with adaptability to local conditions.

Why is fair trade certification needed today?
Throughout the global south, family farmers follow generations of tradition to cultivate food products we enjoy every day. Yet many family farmers in the developing world don't receive a fair price for their crops. These isolated rural communities lack direct market access, often selling their premium crops below the cost of production to local middlemen who misrepresent global prices. This cycle of debt forces many to abandon their land and years of agricultural heritage, destroying the social and cultural fabric of these communities. When farming communities in the developing world suffer, the whole world suffers - forced immigration, inferior-quality products and large-scale farming methods that often compromise the environment.

Who benefits from fair trade certification?

Producers: Beyond receiving a fair, stable price, fair trade also empowers producers to invest in their organizations, improve their communities and protect the environment.

Consumers: Fair trade certification enables consumers to "vote with their dollar" by providing an independent guarantee that products were produced and traded fairly. We all lead busy lives, and we want to do the right thing, but we're busy. What if we could make a positive impact just with the purchases we make every day? And not have to go out of our way to do this? That's the compelling proposition of fair trade.

The Earth: Fair trade certification requires and rewards environmentally sustainable farming practices that protect farmers' health and preserve valuable ecosystems for future generations, and provides the resources and technical assistance needed for organic certification.

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ADMS 1010 Final: ADMS1010 (1)assignment3

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