Leading the PR Function Concepts and Vocabulary

Question 1

This type of organization makes money for shareholders or owners

Answer 1

For profit

Question 2

This type of organization doesn’t do business to make a profit for owners. Surplus income is used to expand the organization or support its mission

Answer 2

Nonprofit

Question 3

This type of organization may generate revenue surpluses but is not designed to earn money for owners or members. Surplus revenue is generally used to carry out operations (and may be returned to member/owners if fiscal reserves become large enough)

Answer 3

Not-for-profit

Question 4

For publicly traded companies, this report provides a comprehensive overview of a company

Answer 4

SEC Form 10-K (annual report)

Question 5

For publicly traded companies, this report is filed quarterly and contains unaudited financial data

Answer 5

10-Q (quarterly report)

Question 6

For publicly traded companies, this report is for unscheduled material or corporate events of importance to shareholders or the SEC. Good indicator for determining any significant problems (litigation for example). Provides current information about a corporation so investors can make informed buying decisions.

Answer 6

SEC Form 8-K (current report)

Question 7

For publicly traded companies, this filing is produced for the benefit of shareholders before an Annual Meeting of Shareholders so they can make informed decisions about matters to be discussed at the meeting

Answer 7

Proxy statement (also called Form Def 14A)

Question 8

Activity that ruins competition (illegal). Violations could include overselling wording in news releases announcing acquisitions and divestitures.

Answer 8

Anti-trust

Question 9

Requires lobbyists to register with the clerk of the US House of Representatives or the secretary of the Senate between the 1st and 10th day of each quarter. Must name publications in which the lobbyist has had content published

Answer 9

Federal Lobbying Act 1913

Question 10

These laws prevent organizations from contributing to any political campaign or candidate and prohibit any candidate from accepting such contributions

Answer 10

Federal Corrupt Practices Act of 1925, Hatch Act of 1929, Taft-Hartley Act of 1947

Question 11

Changed the rules by which corporations, unions and other organizations can contribute to political causes

Answer 11

2010 Citizens United

Question 12

Requires public relations professionals who represent a foreign government to register with the US State Department

Answer 12

Registration of Foreign Agents Act of 1938

Question 13

Requires all publicly traded companies to disclose material information to all investors at the same time, which includes any news that could influence a reasonable investor’s decision to buy or sell stock

Answer 13

Regulation Fair Disclosure (August 2000)

Question 14

Requires public companies to evaluate and disclose the effectiveness of internal financial reporting controls, accelerated insider trading reports and blackout periods. Requires CEO and CFO to sign certificates that say they have read and understood everything in company reports and the reports are complete and accurate.

Answer 14

Sarbanes-Oxley Act (2002)

Question 15

Enacted following the 1929 stock market crash. Contain checks and balances for securities-related actions.

Answer 15

Securities Act of 1933 and Security Exchange Act of 1934

Question 16

The embargo of publicity materials during a specific timeframe, called the [XXXX], because the materials could be construed as efforts to sell new securities. This rule is in effect from the date a corporation officially registers its intent to offer a security to 90 days after the registration statement becomes effective

Answer 16

Rule 5c of the Security Act of 1933

[XXXX = gag period]

Question 17

Mandates disclosure. This law requires filing specific information with the SEC to make that material public.

Answer 17

The Security Act of 1934

Question 18

An organization has the legal responsibility to ensure the information it releases is both accurate and complete.

Answer 18

Rule 10 b-5 of SEC 1934

Question 19

Covers solicitation of proxies from shareholders between when a corporation sends an official statement about a vote and the annual meeting where the proxy voting occurs.

Answer 19

Section 14 of the Act of 1934

Question 20

The interval between when a company registers a public offering of securities (stocks or bonds) with the SEC and the time the SEC declares the registration effective. Information that might affect the stock price or be perceived as “front-running” the stock offering.

Answer 20

Quiet Period

Question 21

Voluntary retirement plans for employees of for-profit businesses

Answer 21

401k retirement plan

Question 22

Voluntary retirement plans for employees of public/not-for-profit organizations

Answer 22

403b retirement plan

Question 23

Retirement plan that allows employees to choose from different types of benefits, usually through a salary reduction agreement..

Answer 23

Cafeteria benefit plan

Question 24

Retirement plan that promises employees a specific monthly benefit, usually not requiring employee contributions in the private sector, though employee contributions are required in the public sector.

Answer 24

Defined benefit plan

Question 25

Retirement plan creates an individual account for each employee, determined by the amount the employee contributes to eh account and income, expenses, gains and losses in the overall plan.

Answer 25

Defined-contribution plan

Question 26

Provide income after retirement or disability

Answer 26

Pension plan

Question 27

Allows workers who meet certain criteria to save for retirement. Investments are made after paying income taxes so earnings are tax-free upon withdrawal.

Answer 27

Roth retirement plan

Question 28

Budgets reinforce PR Plans by (3 concepts)

Answer 28

1. listing staff costs and workloads
2. specifying financial metrics for tracking contractor performance
3. establishing accountability for each expense

Question 29

Four basic methods corporations use to determine PR budgets:

Answer 29

1. overall money available for operations (PR is allocated a percentage of total budget)
2. Competitive necessity (matching competition)
3. Specific goals or tasks receive allocations
4. Excess money after expenses

Question 30

Report that shows assets, liabilities and capital of a business on a specific date

Answer 30

Balance Sheet

Question 31

Income statement that shows the profitability of a business over a specified time, including gross income, revenues, expenses and net income. Also known as a profit/loss or P&L statement.

Answer 31

Income statement

Question 32

All publicly traded companies must file these. This report shows how changes in balance sheet accounts and income over a specified reporting period affect cash flow.

Answer 32

Statement of cash flow

Question 33

This role is limited to product and profit-producing functions affecting the bottom line.

Answer 33

Line management function

Question 34

This role provides advice and counsel to those in line management positions.

Answer 34

Staff management function

Question 35

The components of a SWOT analysis

Answer 35

1. Strengths - attributes helpful to achieving the goal
2. Weaknesses - attributes harmful to achieving the goal
3. Opportunities - helpful external conditions
4. Threats - harmful external conditions

Question 36

To analyze a particular problem by thinking through the reasons a problem exists

Answer 36

Cause and effect diagrams

Question 37

Production of a visual image of a problem by breaking the problem into progressively smaller parts

Answer 37

Drill-down technique

Question 38

Assess where power and weaknesses lie and assume that five important forces affect competition: supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry

Answer 38

Porter’s Five Forces

Question 39

Core management determining the corporate vision, identity, corporate culture

Answer 39

Dominant coalition