1 Employer-employee relationship is much the same as it has always been.
(A) True
(B) False
2 Which of the following are neutral parties that can be called to help settle labor disputes?
(A) arbitrator
(B) steward
(C) mediator
(D) charter
(E) outside director
3 Which statements about the old employment relationships are correct?
(A) Under the old employment relationship, job seekers were expected to be hired and trained
for the job.
(B) The old relationship provided job security, steady pay increases with good benefits, opportunities for
advancement, and long-term employment.
(C) Employees are responsible for their own career future, which is likely to entail having multiple jobs.
(D) The old manager–employee relationship was more collaborative than adversarial.
(E) The old relationship called for loyalty to and identification with the employer.
4 Which of the following is true about executive compensation?
(A) U.S. executives are the highest paid in the world.
(B) Compensation only comes in the form of salaries.
(C) Executives are prohibited by federal law to earn more than $1 million a year.
(D) A golden parachute refers to executives bailing out of a company before it goes bankrupt.
(E) An executive’s skill and performance has little do to with his or her compensation.
5 What is the mission of the Security and Exchange Commission (SEC)?
(A) To help stockholders by trading the stocks for buyers and sellers.
(B) To approve which stocks can be bought and sold in the stock market and to oversee the exchange of
stocks.
(C) To protect stockholders’ rights by regulating the stock market to make sure it is run fairly and that
investment information is fully disclosed.
(D) To fine businesses that break the rules of the stock exchange including fraud.
(E) To guarantee profits for all shareholders.
6 _________ occurs when a person uses confidential information before it becomes public
knowledge to buy or sell the company stock.
(A) Outsider trading
(B) Freewheeling
(C) Whistleblowing
(D) Insider trading
(E) Hedging
7 Which of the following statements is not a major stakeholder in a corporation?
(A) Board of directors
(B) Management
(C) Employees
(D) Stockholders
(E) General public
8 _________is the right to be treated fairly and to receive an impartial review of a complaint.
(A) Ombudsmanship
(B) Mediation
(C) Due process
(D) Governance
(E) Employment at will
9 Which statement correctly describes ombuds?
(A) They are used primarily during employment negotiating to help settle disagreements and to
make a binding decision for them.
(B) They are primarily used to investigate and help settle employee complaints between employers and
employees fairly.
(C) They are primarily used to help employers get workers.
(D) They are primarily used to help businesses meet employee rights.
(E) None of these statements is correct.
10 Which of the following are employee rights based on?
(A) personalities of management
(B) whims and fancies
(C) emotions
(D) ethical and legal employer expectations
(E) agreements and contracts
11 Which of the following are concerned with safety and health in the work place?
(A) OSHA
(B) Department of Labor
(C) Patient Protection and Affordable Care Act
(D) Workplace violence
(E) Privacy
12 List five rights of a stockholder.
Answer:
13 Describe due process.
Answer:
14 What was the Norris-LaGuardia Act?
Answer:
15 What are labor unions? Why is it important to study them?
Answer:
16 List at least five aspects of the new employment relationship between employers and
employees.
Answer:
17 Which statements about boards of directors are correct?
(A) Outside directors are employees or people who have other ties to the company.
(B) Outside directors provide a method of balancing power and a system of checks and balances to help
prevent corruption.
(C) The potential problem of inside directors is that they are often beholden to the CEO and may agree
with whatever the executive wants.
(D) Board members are balanced in gender and ethnicity.
(E) Outside directors are rarely friends of a company’s CEO, and thus provide fair and impartial opinions
about the business’s operations.
18 Which of the following are rights of a stockholder?
(A) Share in profits through dividend payment
(B) Vote on bylaws and charter changes
(C) Sell shares of stock
(D) Know about the affairs of the corporation through information disclosure
(E) Receive an annual report with financial performance and condition
19 Which statements about corporate stakeholders and their primary power are correct?
(A) The stockholders are only individuals and do not include institutional investors.
(B) The stockholders are the legal owners of the corporation. Their primary power is to select the
corporate board of directors.
(C) Managers plan, organize, lead, and control a firm’s resources to achieve corporate goals. Their
primary power is to control day-to-day operations.
(D) Employees do the work to provide the products and other functions. Their primary power includes
collective bargaining and striking.
(E) The boards of directors provide strategic direction and governance and oversee the managers of the
corporation. The board’s primary power is to select, advise, supervise, and evaluate the top managers.
20 Which statement about employee rights is not correct?
(A) Employees have the right to benefits.
(B) Employees have the right to due process, to be treated fairly.
(C) Employees have the right to a safe and healthy workplace.
(D) Employees have the right to personal off-the-job privacy, but not to business-related privacy at work.
(E) Employees have the right to freedom of speech and to blow the whistle for wrongdoing at work
without penalty.
21 The _________doctrine holds that the employment relationship is voluntary and that
employees can be fired or quit for any or no reason.
(A) employment-at-large
(B) employee outcome
(C) employee option
(D) employment-at–will
(E) freedom-to-work
22 The Electronic Communications Privacy Act of 1986 essentially protects individual rights to
privacy, but it allows employers to monitor job-related communication.
(A) True
(B) False
23 OSHA stands for Ombudsman Safety and Hazard Authority
(A) True
(B) False
24 An ombuds investigates complaints and helps to settle them fairly.
(A) True
(B) False
25 Today, it is common for ex-employees to take the firm to court to get back their jobs
through employee lawsuits.
(A) True
(B) False
26 To compete successfully in the global economy, management, and labor need to collaborate
and compete with their business competitors, rather than fight amongst themselves.
(A) True
(B) False
27 Unions in the United States are on the rise.
(A) True
(B) False
28 An understanding of labor relations is not necessary for those working in nonunion firms
because it cannot aid in keeping the firm from becoming unionized.
(A) True
(B) False
29 The employer–employee relationship is critical because it affects the performance of the
business.
(A) True
(B) False
30 The stock market is a bit like legalized gambling—the house (financial institutions and
brokers) always wins because it gets a commission regardless of profit or loss.
(A) True
(B) False
31 A corporate charter is granted by the federal government giving the firm the right to
operate under basic terms of its existence and governance.
(A) True
(B) False
32 _______ provide workers with desired outcomes and protection from undesired outcomes.
(A) Unionizations
(B) Employee rights
(C) Employer concessions
(D) Arbitrations
(E) Whistleblowing
33 The _______ Act gave employees the right to unionize without fear of prosecution, and it
listed unfair practices of employers
(A) Wagner
(B) Norris-LaGuardia
(C) Fair Standards
(D) Civil Rights
(E) Employee Protection
34 A/n _______ is a neutral party who makes a binding decision for management and labor.
(A) teamster
(B) ombud
(C) arbitrator
(D) mediator
(E) collector
35 Which statement about employment contracts in union and nonunion organizations is not
correct?
(A) All employer–employee relations include employment contracts.
(B) Nonunion employment contracts are negotiated on an individual basis; they are usually implicit,
informal, and not written.
(C) Union employment contracts are developed through collective bargaining and affect all union
members.
(D) Union employment contracts are usually explicit, formal, and written legal contracts.
(E) All of these statements are correct.
36 Which of the following statements is true about the employer-employee relationship?
(A) It does not usually affect business performance.
(B) It affects society and government operations.
(C) If transit workers in New York go on strike, it does not affect the general public.
(D) The National Football League lockout only affected owners and players.
(E) Employer–employee relations affect only the market environment.
37 Which statement about the new employment relationships is correct?
(A) The company provided job security, steady pay increases with good benefits, and
opportunities for advancement.
(B) Employees enjoy long-term employment.
(C) The new relationship calls for loyalty to and identification with the employer.
(D) The new manager–employee relationship was quite adversarial.
(E) The new relationship expects loyalty to self and identification with the profession.
38 Governance refers to the total cost of the employee; executives commonly receive a salary,
benefits, bonuses, stock options, and many perks.
(A) True
(B) False
39 Shareholder resolutions place a suggested action on the proxy statement to be voted on by
all stockholders.
(A) True
(B) False
40 Explain how the SEC helps to protect stockholders.
Answer: