MGMT 405 Chapter 4

Why is it important for a company to be involved in global trade?

Because the company affects the prosperity of a society, a nation, and the global economy

When companies make ethical and socially responsible decisions on behalf of their employees, what is the result?

Companies make decisions that protect, enhance and promote the welfare and well-being of their stakeholders.

Which of the following best describes the managers' primary concern as a stakeholder group?

Deciding on a company's goals and how to use its resources

True or false: Making a decision concerning which stakeholder group's rights and expectations should be emphasized does not create an ethical dilemma for managers.

False

True or false: Societal ethics are standardized from country to country in nations throughout the world.

False

Which of the following is not an advantage of increased social responsibility?

Faster promotions for employees

What three company resources are managers responsible for to increase performance and, as a result, the company's stock price?

Financial, capital, and human

What are the advantages of social responsibility?

It can improve a company's reputation. If all organizations adopt a caring approach, a climate of caring will pervade the wider society. The more organizations act in socially responsible ways, the better the quality of life will be for the country as a whole.

How much time would it take for managers to negotiate contracts in a society where stakeholders routinely cheat each other in comparison to negotiating contracts in an ethical society?

It would take more time.

What would be an accurate statement regarding ethics and legality?

Just being legal does not make an action ethical.

Who is it that provides their human capital—their skills, expertise, and experience—to the company and, therefore, has a claim or stake in the company?

Managers

Which stakeholders have a claim on and a stake in a company because of the productive resources they provide? (Choose all that apply.)

Managers Executives Stockholders

Drag and drop the descriptive examples against the corresponding types of social responsibility approach.

Obstructionist: When managers knowingly seek to hide evidence from the public, such as that asbestos and/or tobacco causes lung cancer Defensive: When managers are granted large stock options and bonuses even as company performance declines rapidly Proactive: When managers seek ways to reduce operating costs to prevent layoffs to enable them to keep promises they make to employees Accommodative: When managers at older and more reputable companies, with much to lose, dissuade employees from acting unethically even when it would ensure their competitive advantage

What is the outcome when ethical values and norms become a part of an organization's culture?

Organizational members resist self-interested action.

What must society do first in order to punish undesired behavior?

Pass laws Reason: Society passes laws in order to indicate correct behavior and punish those who engage in undesired behavior.

Which ethical rule suggests communicating the decision to people outside the company?

Practical

What is the rule that describes ethical decisions in which a choice must be made to distribute or deny benefits among people and groups in a fair, equitable, or impartial way?

The justice rule

What is the rule in which ethical decisions are made in order to spread the greatest good for the greatest number of people?

The utilitarian rule

How would unethical behavior in the form of routine cheating by stakeholders affect managers' ability to do business? (Choose all that apply.)

There would be more non-productive activity. Additional bargaining will be needed to conclude contracts. Efficiency and effectiveness would decrease.

True or false. Stockholders buy shares of companies and thereby become owners.

True

True or false: A specific behavior that is deemed illegal is not necessarily unethical.

True

True or false: One principal way that a company can act ethically toward employees and meet their expectations is by creating an occupational structure that fairly and equitably rewards employees for their contributions.

True

What is it called when a person has faith in the goodwill of another person, even if this puts them at risk?

Trust

Managers using the utilitarian rule must first consider the types and levels of ______ various stakeholder groups.

benefits and harm to

The issue of fair compensation for top managers is problematic in ______.

both for-profit and nonprofit companies

Consider a situation in which people are faced with two opposing decisions: one could possibly go against people's self-interest, but may help a person or group; or one could possibly hurt someone, while helping oneself. This is called an ethical

dilemma

While managers may want to treat all stakeholders equally, in reality, they need to prioritize the treatment of the various stakeholder groups which may create an ethical ________ for managers.

dilemma

Suppliers expect fair and prompt payment for the purchase of their materials, and ______ expect to receive products from manufacturers at the agreed-upon quality and price.

distributors

A company within a community contributes to its local ______.

economy

Managers using the moral rights rule consider the ______.

effects of an action on individuals' rights

Managers and employees must work to increase _____ in order to create loyal customers and attract new ones.

efficiency and effectiveness

Non-discriminatory hiring, promotion, and reward systems are a means of acting ethically toward ______.

employees

The quandary people find themselves in when they have to decide if they should act in a way that might help another person or group even though doing so might go against their own self-interest defines a(n) ______ dilemma.

ethical

To strengthen a company's organizational culture, managers make good decisions when faced with ethical dilemmas by instilling in their employees ______.

ethical values

Managers have a claim on an organization because they bring to it their: (Choose all that apply.)

expertise. skills. experience.

Unethical behavior can ruin business commerce, which in turn can lower a society's standard of living, because _______.

fewer goods and services are produced

Customers are frequently regarded as the most critical stakeholder group for the company's success because ______.

if a company cannot attract customers to buy its products, it cannot stay in business

When people's self-interests are at stake, their _____ ethics influence how they perceive their responsibilities and how they behave towards others.

individual

The four main determinants of differences in ethics among people, employees, companies, and countries are organizational ethics:

individual ethics occupational ethics societal ethics

The _____ rule states that an ethical decision is a decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way.

justice

The ______ rule states that an ethical decision is a decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way.

justice

To enforce their views of right or wrong behavior, different groups in society lobby for ______.

laws

The stakeholder group responsible for choosing the strategic goals that the company should pursue to benefit all of the company's stakeholders is the ______.

managers

The stakeholder group responsible for directing the use of their company's financial and human resources to increase performance are the ______.

managers

The ______ rule involves comparing the effects of potential actions to the rights of various stakeholder groups, then choosing the action that best protects all the groups' rights.

moral rights

The ______ rule states that ethical decisions are ones that maintain and protect people's fundamental rights and privileges.

moral rights

Some non-profit organizations pay their top executives _____ per year, despite arguments that the compensation is excessive because it is a non-profit organization.

more than $1 million

Managers who will break the law to satisfy their own self-interest demonstrate the ______ approach. Managers who obey the law, but do nothing more than that to act in a socially responsible manner, exhibit the ______ approach.

obstructionist; defensive

For members of a particular trade or craft, their profession's _____ ethics are the standards that govern how members should conduct themselves when performing work-related activities.

occupational

If a medical professional were to prescribe a medication because of the benefits he or she would receive from the pharmaceutical company, this would defy the profession's ______.

occupational ethics

Company founders are very influential in shaping the ______, as these are the guiding principles and beliefs that will shape the company's core and serve as a lens through which managers view their responsibility towards their stakeholders.

organization's code of ethics organizational ethics

Companies and their managers are guided by _____ ethics, which are the guiding practices and beliefs that managers use as the lens through which they view their responsibilities toward their stakeholders.

organizational

Societal ethics, occupational ethics, individual ethics, and _____ ethics are the four main determinants of difference in ethics among people, employees, companies, and countries.

organizational

If unethical behavior is discovered by those in authority and goes unpunished, likely consequences of this may be:

others in the organization feel they can act in the same manner resources will be wasted increased cynicism and decreased morale among employees

Individual ethics are ______ that determine how people view their responsibilities to other people and groups and how they should act in situations when their own self-interests are at stake.

personal standards and values

The ______ rule is that an ethical decision is one that a manager has no hesitation about communicating to people outside the company because the typical person in a society would think it is acceptable.

practical

Unethical behavior generally results in a(n) _______ in efficiency, effectiveness, company performance, and national standards of living, well-being, and prosperity.

reduction

A company's ethics impacts its view of how it must protect, promote, and care for the welfare and well-being of all stakeholders and society as a whole. This obligation to make decisions that will offer such protections is referred to as the company's ______.

social responsibility

When issues of fairness, justice, and equality are governing forces ensuring the rights of every individual, ______ are the standards being practiced.

societal ethics

A company's employees, customers, stockholders, suppliers, and distributors are considered the company's ______.

stakeholders

Employees, customers, suppliers, and distributors, and the community are all considered ______ because they are all affected by the way a company and its managers behave.

stakeholders

Owners of shares in a company are called ______.

stockholders

Stakeholders that provide an organization with inputs such as raw materials, components, contract labor, and clients are referred to as ______. This group expects to be paid fairly and promptly for their inputs.

suppliers

A company can act ethically toward employees and meet their expectations by creating an occupational structure ______.

that fairly and equitably rewards employees

It is important to punish unethical behavior ___.

to keep others from engaging in their own unbridled self-interest. Reason: Unethical behavior that goes unpunished creates incentives for people to put their unbridled self-interest above the rights of others.

People are more willing to enter into a somewhat risky venture when they _____ the person or group with whom they are entering the relationship. (Enter one word.)

trust

Managers using the ______ rule first consider the types and levels of benefits and harm to various stakeholder groups. They should choose the course of action that provides the most benefits, or conversely does the least harm, to stakeholders.

utilitarian

The ______ rule states that ethical decisions are those that produce the greatest good for the greatest number of people.

utilitarian

What managerial attitude best exemplifies the moral rights rule?

"Do unto others as you would have them do unto you."