Chapter 4: Ethics and Social Responsibility

Identify a true statement about the relationship between social responsibility and economic performance of companies. a. There is no guarantee that socially responsible companies will be profitable. b. Businesses predominantly become less profitable when they become socially responsible. c. Socially responsible companies always succeed in maximizing profits. d. A huge trade-off exists between being socially responsible and economic performance

a. There is no guarantee that socially responsible companies will be profitable.

Which of the following statements is true of social responsibility and economic performance? a. There is no trade-off between being socially responsible and economic performance. b. Being socially responsible guarantees business success. c. There is no inherent relationship between social responsibility and economic performance. d. Socially responsible companies experience vastly different ups and downs than traditional businesses do.

a. There is no trade-off between being socially responsible and economic performance.

Which of the following is considered secondary stakeholders of an organization? a. Trade associations b. Employees c. Customers d. Suppliers

a. Trade associations

The first step in a compliance program under the U.S. Sentencing Commission Guidelines for Organizations is to: a. establish standards and procedures. b. encourage employees to report violations. c. delegate decision-making authority specifically to ethical employees. d. enforce standards consistently and fairly.

a. establish standards and procedures.

In the context of ethical intensity of decisions, _____ refers to the chance that something will happen that results in harm to others. a. probability of effect b. proximity of effect c. temporal immediacy d. social consensus

a. probability of effect

According to Milton Friedman, the only social responsibility that organizations have is to: a. satisfy their owners. b. make employees happy. c. divert wealth toward society. d. achieve long-time survival.

a. satisfy their owners

Vincent refuses to watch a pirated movie because he believes that, as a whole, the community is better off when the rights of others such as directors, actors, and producers of the movie are not violated. According to Kohlberg's stages of moral development, Vincent is most likely at the _____. a. social contract stage b. "good boy, nice girl" stage c. law and order stage d. instrumental exchange stage

a. social contract stage explanation: According to Kohlberg's stages of moral development, Vincent is most likely at the social contract stage. In Stage 5, the social contract stage, individuals will make their ethical decisions based on what is best for society.

Joe is a manager at Zoien Corp. He wants to hire an honest person for the position of software engineer at his firm. While interviewing candidates, Joe asks each candidate, "What would you do if someone in the management asked you to do something unethical?" Which of the following types of tests is Joe using to screen the candidates? a. An aptitude-based integrity test b. An overt integrity test c. A covert integrity test d. A personality-based integrity test

b. An overt integrity test

Under the U.S. Sentencing Commission Guidelines for organizations, which of the following is the final step in a compliance program? a. Training employees on standards and procedures b. Improving the program after violations c. Assigning upper-level managers to be in charge of the program d. Encouraging employees to report violations

b. Improving the program after violations

Rose found strong evidence that her supervisor, Roger, was stealing confidential documents from the company. Rose immediately reported Roger's actions to the top management. Rose's action is an example of: a. property deviance. b. brainstorming. c. whistle-blowing. d. personal aggression.

c. whistle-blowing.

Which of the following is necessary for a code of ethics to encourage ethical decision making and behavior in a company? a. The code should revolve around legal factors and not organizational goals and missions. b. The company must communicate its code to others both inside and outside the company. c. The code must contain broad rather than specific guidelines. d. The company must ensure that competitor information included in the code is shared among all employees.

b. The company must communicate its code to others both inside and outside the company.

Which of the following ethical principles holds that one should never take any action that is unkind or harms a sense of community, such as the positive feelings that come from working together to accomplish a commonly accepted goal? a. The principle of individual rights b. The principle of religious injunctions c. The principle of personal virtue d. The principle of long-term self-interest

b. The principle of religious injunctions

A batch of a particular car model is found to have a serious defect in the engine that is potentially harmful. As soon as the company learns of the manufacturing defect, it announces an immediate recall of the entire defective batch of cars. This is an example of a(n) _____. a. defensive strategy b. accommodative strategy c. proactive strategy d. reactive strategy

b. accommodative strategy A company using an accommodative strategy will accept responsibility for a problem and take a progressive approach by doing all that could be expected to solve the problem

When Rubberstamp Productions, previously a small-time production house, grew in size, the first thing its chief executive officer (CEO) did was establish a set of guidelines that detailed all the principles, standards, and procedures to be followed in the company's line of business. The CEO set specific standards on topics ranging from treatment of coworkers to protecting the environment to maintenance of financial records. This scenario illustrates that the CEO developed a _____. a. performance appraisal document b. code of ethics c. cognitive map d. database of employee records

b. code of ethics

A(n) _____ is a social responsiveness strategy in which a company admits responsibility for a problem but does the least required to meet societal expectations. a. proactive strategy b. defensive strategy c. accommodative strategy d. retroactive strategy

b. defensive strategy

n the context of ethical intensity of decisions, _____ is the time between an act and the consequences the act produces. a. proximity of effect b. temporal immediacy c. probability of effect d. production deviance

b. temporal immediacy

Kyle always sticks to his principles when making a decision even if the decision conflicts with the law. According to Kohlberg's stages of moral development, Kyle is at the _____. a. punishment and obedience stage b. universal principle stage c. social contract stage d. law and order stage

b. universal principle stage explanation: According to Kohlberg's stages of moral development, Kyle is at the universal principle stage. In this stage, an individual will stick to his or her principles even if his or her decision conflicts with the law or what others believe is best for society

Signorite Inc., an apparel brand, manufactures clothes in workshops in a small town in Arhus. The workers work in a hazardous environment. Recently, a fire broke out in one of its workshops and resulted in numerous deaths and casualties. Many workers remained without work for months. Signorite acknowledged the problem but compensated the families of the victims with a very small cash sum and never addressed the matter again. Identify the social responsive strategy used by Signorite in this scenario. a. A comprehensive strategy b. A proactive strategy c. A defensive strategy d. An accommodative strategy

c. A defensive strategy

Who among the following would be considered a secondary stakeholder of Smokin' Steaks, a popular chain of steak houses? a. The supplier of hamburger meat to Smokin' Steaks franchises nationwide b. Mary Silverman, the owner of the Smokin' Steaks c. An animal rights organization that protests against Smokin' Steaks' use of animal products d. Dominic Francis, the manager of a Smokin' Steaks restaurant in Brooklyn

c. An animal rights organization that protests against Smokin' Steaks' use of animal products

Which of the following scenarios illustrates the strongest temporal immediacy? a. Tox-O Chemical Corp. will make a nearby stream unfit for aquatic life within 20 years by regularly dumping its toxic wastes into the stream. b. Administrative assistants at Carson Office Supply will probably have carpal tunnel syndrome as a result of typing on computer keyboards for eight hours every day. c. Bronwyn Inc. will have to lay off 50 employees before the following week because of poor economic conditions. d. Employees at Darwin Pharmaceuticals will stop receiving incentives from next year as a result of deteriorating sales performance.

c. Bronwyn Inc. will have to lay off 50 employees before the following week because of poor economic conditions.

In the context of ethical intensity of decisions, _____ refers to how much an act affects the average person. a. deviance of effect b. probability of effect c. concentration of effect d. proximity of effect

c. concentration of effect

Under the U.S. Sentencing Commission Guidelines for Organizations, the base fine for an organization involved in unethical behavior is computed by: a. assessing the net worth of the organization. b. examining the written code of ethics of the organization. c. determining the level of offense that has occurred in the organization. d. calculating the number of employees in the organization. Hide Feedback

c. determining the level of offense that has occurred in the organization.

A company using a _____ will anticipate responsibility for a problem before it occurs, do more than expected to address the problem, and lead the industry in its approach. a. defensive strategy b. reactive strategy c. proactive strategy d. retaliatory strategy

c. proactive strategy

In the carrot-and-stick approach used by the law to determine punishment for unethical behavior, the carrot signifies: a. heavy incentives for whistleblowing. b. heavy fines for unethical behavior. c. reduced fines for having an effective compliance program. d. reduced incentives for less money spent on social causes

c. reduced fines for having an effective compliance program.

In the carrot-and-stick approach used by the law to determine punishment for unethical behavior, the stick signifies: a. the incentive in the absence of any offense. b. the reduced fine for having an effective compliance program. c. the threat of heavy fines based on the level of offense. d. the incentive for cooperating with federal authorities

c. the threat of heavy fines based on the level of offense.

Which of the following companies is fulfilling its ethical responsibility? a. Amtel adheres to labor and tax laws or applicable industry regulations. b. AzBev reports regulatory agencies about a business that is engaged in suspected illegal or improper activities c. RSDA Inc. donates $1 million to a local charity to build a retirement home. d. BmC Corp. avoids trade with unscrupulous companies.

d. BmC Corp. avoids trade with unscrupulous companies.

Which of the following actions is an example of whistle-blowing? a. Managers drinking at the workplace and violating workplace rules b. Employees turning up late to work and lying to the top management about it c. Managers ignoring employees who do not maintain office timings d. Employees reporting to authorities that coworkers are stealing money from clients

d. Employees reporting to authorities that coworkers are stealing money from clients Whistle-blowing is the act of reporting others' ethics violations to management or legal authorities

After a problem and its constituents have been identified, which of the following questions should a manager ask next in order to make an ethical decision? a. What makes this an ethical problem? b. Who could be helped? c. Can I negotiate with those involved? d. How did it happen in the first place

d. How did it happen in the first place

_____ is a company's social responsibility to obey society's laws and regulations as it tries to meet its economic responsibilities. a. Discretionary responsibility b. Cultural responsibility c. Ethical responsibility d. Legal responsibility

d. Legal responsibility

Which of the following is considered a primary stakeholder of an organization. a. The media b. Trade associations c. Special interest groups d. Local communities

d. Local communities

Identify a true statement about stakeholders. a. Secondary stakeholders are groups on which a company depends for its long-term survival.. b. Primary stakeholders are important to a company because they can affect public perceptions and opinions about socially responsible behavior. c. Secondary stakeholders engage in regular transactions with a company and are critical to its long-term survival. d. Meeting the needs of primary stakeholders is usually more important than meeting the needs of secondary stakeholders of a company.

d. Meeting the needs of primary stakeholders is usually more important than meeting the needs of secondary stakeholders of a company.

_____ indirectly estimate job applicants' honesty by measuring psychological traits such as dependability and conscientiousness. a. Overt integrity tests b. Aptitude-based integrity tests c. Covert integrity tests d. Personality-based integrity tests

d. Personality-based integrity tests

According to Kohlberg's stages of moral development, which of the following is true of individuals at the instrumental exchange stage? a. They would avoid trouble for themselves. b. They would avoid activities that are bad for society. c. They would do whatever the law permits them to do. d. They would worry less about punishment

d. They would worry less about punishment explanation: According to Kohlberg's stages of moral development, in Stage 2, the instrumental exchange stage, an individual will worry less about punishment and more about doing things that directly advance his or her wants and needs.

Savoureel Corp., a nutrition bar manufacturer, learns that its nutrition bars being sold in Selenasia are made from low-quality ingredients that could cause health problems to its consumers. The company immediately stops the sale of its products in Selenasia and conducts a thorough investigation in its Selenasia business branch. The company also announces new quality standard checks and assures its customers that such errors will not occur again. In this case, Savoureel has adopted the _____ social responsiveness strategy. a. defensive b. proactive c. reactive d. accommodative

d. accommodative

n order to create an ethical company culture, the first objective of ethics training is to: a. caution employees about the consequences of reporting violations. b. assign upper-level managers to be in charge of ethical responsibilities. c. delegate the ethical decision-making authority to all employees. d. develop employees' awareness of ethics.

d. develop employees' awareness of ethics.

Venus Electronics Corp. periodically conducts donation drives for famine victims and underprivileged children in Rhenasia. Venus Electronics is fulfilling its _____ responsibilities. a. economic b. cultural c. legal d. discretionary

d. discretionary

In the context of principles of ethical decision making, the _____ states that the law represents the minimal moral standards of society, so one should never take any action that violates the law. a. principle of personal virtue b. principle of individual rights c. principle of distributive justice d. principle of government requirements

d. principle of government requirements

In the context of principles of ethical decision making, the _____ states that one should never take an action that does not result in greater good for society. a. principle of individual rights b. principle of personal virtue c. principle of distributive justice d. principle of utilitarian benefits

d. principle of utilitarian benefits

Jake, a college freshman, wants to watch a movie that was released last month. His roommates download a free, pirated copy of the movie from a website and ask Jake to join them when watching it. Jake refuses as he knows that it is illegal to download and watch pirated movies. He is afraid he might be penalized if caught. According to Kohlberg's stages of moral development, Jake is at the _____ of moral development. a. "good boy, nice girl" stage b. instrumental exchange stage c. law and order stage d. punishment and obedience stage

d. punishment and obedience stage explanation: According to Kohlberg's stages of moral development, Jake is at the punishment and obedience stage of moral development. In Stage 1 of the preconventional level of moral development, the punishment and obedience stage, individuals are afraid of being caught and punished. Hence, their primary concern is to avoid trouble

According to the _____, management's most important responsibility is the firm's long-term survival. a. shareholder model b. media advocacy model c. normative model d. stakeholder model

d. stakeholder model