Strategy - Chapter 9

63. Which of the following statements regarding a company's social responsibility and sustainability strategy is FALSE? A. A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5 percent (or more) of pretax profits on social responsibility initiatives. B. Social responsibility strategies that have the effect of both providing valuable social benefits and fulfilling customer needs in a superior fashion can lead to competitive advantage. C. A few companies have integrated social responsibility and/or environmental sustainability objectives into their missions and overall performance targets. They view social performance and environmental metrics as an essential component of judging the company's overall future performance. D. Unless a company's social responsibility initiatives become part of the way it operates its business every day, the initiatives are unlikely to be fully effective. E. While the strategies and actions of all socially responsible companies have sameness in the sense of drawing on the same categories of socially responsible behavior, each company's version of being socially responsible is unique.

A. A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5 percent (or more) of pretax profits on social responsibility initiatives.

51. Which of the following is NOT something a company should usually consider in crafting a strategy of social responsibility? A. Actions to benefit shareholders (such as raising the dividend or boosting the stock price). B. Making charitable contributions and supporting community service endeavors and reaching out to make a difference in the lives of the disadvantaged. C. Actions to ensure the company has an ethical strategy and operates honorably and ethically. D. Actions that promote good stewardardship (by protecting and enhancing) the environment. E. Actions to enhance workforce diversity.

A. Actions to benefit shareholders (such as raising the dividend or boosting the stock price).

56. The "triple bottom line" refers to what three performance metrics a company should simultaneously succeed in? A. Economic, social, and environmental. B. Pay, power, and performance. C. Planning, execution, and results. D. Legal, social, and economical. E. Legal, planning, and environmental.

A. Economic, social, and environmental.

70. Which one of the following is NOT a part of the business case for why companies should act in a socially responsible manner? A. Every business has a moral duty to be a good corporate citizen. B. Acting in a socially responsible manner reduces the risk of reputation-damaging incidents. C. Acting in a socially responsible manner is in the overall best interest of shareholders. D. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. E. Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).

A. Every business has a moral duty to be a good corporate citizen.

35. Which one of the following is NOT one of the major drivers of unethical managerial behavior? A. Intense competitive pressures. B. Overzealous pursuit of personal gain, wealth, and other self-interests. C. A company culture that puts the profitability and good business performance ahead of ethical behavior. D. Heavy pressures placed on company managers to meet or beat earnings targets. E. The pervasiveness of immoral and amoral businesspeople.

A. Intense competitive pressures.

31. Which of the following is NOT a key question that senior executives must ask whenever a new strategic initiative is under review? A. Would the potential outcome of the proposed action pose a risk of embarrassment? B. Is what we are proposing to do fully compliant with our code of ethical conduct? C. Is there anything in the proposed action that could be considered ethically objectionable? D. Is it apparent that this proposed action is in harmony with our core values? E. Are any conflicts or concerns evident between the proposed action and our core values?

A. Would the potential outcome of the proposed action pose a risk of embarrassment?

11. The contention that since there are cross-country or cross-cultural differences in ethical standards, it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores should take precedence over a single set of ethical standards or what may be applicable in a company's home market: A. defines what is meant by ethical relativism. B. defines what is meant by ethical universalism. C. is the foundation of integrated social contracts theory. D. is the basis for the theory of ethical variation. E. is the guiding principle of the Global Code of Ethical and Social Morality created by the United Nations.

A. defines what is meant by ethical relativism.

62. The Global Reporting Initiative promotes: A. greater transparency and facilitates benchmarking CSR efforts across firms and industries. B. and establishes mutual funds investment opportunities comprised of companies that are excelling on the basis of the triple bottom line. C. greater awareness of The Dow Jones World Index, which comprises companies that are engaged in the environment. D. corporate governance, climate change, and labor practices. E. All of these.

A. greater transparency and facilitates benchmarking CSR efforts across firms and industries.

16. According to the advocates of ethical relativism: A. if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a particular culture/society/country, then a case can be made that it is morally correct and ethical for a company to use these practices in conducting its business activities in that culture/society/country. B. each company should have the flexibility to set its own standards for deciding whether the use of underage labor and/or the payment of bribes/kickbacks are ethically acceptable or not. C. if the use of underage labor and/or the payment of bribes/kickbacks are legal in a particular country, then it is morally correct and ethical for a company to use these practices in that country, no matter what the legality of using these practices happens to be in other countries. D. each industry should have the flexibility to set its own standards for deciding whether the use of underage labor and/or the payment of bribes/kickbacks are ethically acceptable or not. E. it is very clear that the use of underage labor or the payment of bribes and kickbacks are ethically impermissible—local customs, behavioral norms, and traditions absolutely cannot be taken into account.

A. if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a particular culture/society/country, then a case can be made that it is morally correct and ethical for a company to use these practices in conducting its business activities in that culture/society/country.

68. The business case for why companies should act in a socially responsible manner includes such reasons as: A. it generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs). B. it increases the risk of reputation-damaging incidents. C. it is not in the best interest of shareholders. D. it can lead to decreased buyer patronage. E. it can increase costs and reduce employee recruiting.

A. it generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).

65. When a company's social responsibility initiatives become part of the way it operates its business every day, these initiatives are: A. likely to be fully effective in creating a competitive advantage. B. normally based on a corporate social agenda. C. ambiguous and rarely make a difference in the way the company does business. D. implausible to advance a positive, high-energy workplace environment. E. heavily dependent on encouraging employee morality.

A. likely to be fully effective in creating a competitive advantage.

9. If one concurs with the school of ethical universalism, then one believes that: A. many basic moral standards travel well across cultures and countries and really do not vary significantly according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the situation. B. since ethical standards are subjectively determined rather than objectively determined, each company has a window within which it can define and implement its own ethical principles of right and wrong. C. what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical in business situations should be judged in light of local customs and social mores and can legitimately vary from one culture or nation to another. D. each country should have some degree of latitude in setting its own ethical standards for judging the ethical correctness of business actions/behaviors within its borders. E. concepts of right and wrong as they apply to business behavior are always varying shades of gray, never absolute (that is, black or white).

A. many basic moral standards travel well across cultures and countries and really do not vary significantly according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the situation.

55. Good corporate citizens: A. pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short. B. are active participants in the political process. C. identify up-and-coming managers who have a future in local- or state-level politics. D. create a democratic workplace whereby the voices of lower-level employees are heard through representation on the board of directors. E. All of these.

A. pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short.

48. The essence of socially responsible business behavior is that a company: A. should balance strategic actions to benefit shareholders against the duty to be a good corporate citizen. B. undertake actions that add value to shareholders. C. respect societal expectations that shareholders should be rewarded for providing risk capital. D. should strive to make the company a great place to work. E. all of these make sense because without shareholders and worker commitment there is no need for social responsibility.

A. should balance strategic actions to benefit shareholders against the duty to be a good corporate citizen.

20. According to the ethical relativism school of thinking: A. there can be no one-size-fits-all template (set of authentic ethical norms) against which to gauge the conduct of company personnel, due to cross-cultural differences in ethical standards. B. a company should have a different set of ethical standards for each country in which it operates. C. only respected religious experts can provide companies with a higher order moral compass. D. the best source of ethical standards in each country where the company operates is that country's adopted Code of Required Ethical Conduct. E. since there can be no one-size-fits-all set of authentic ethical norms, it is appropriate for each company to hold company personnel to observing the company's code of ethical conduct.

A. there can be no one-size-fits-all template (set of authentic ethical norms) against which to gauge the conduct of company personnel, due to cross-cultural differences in ethical standards.

8. According to the school of ethical universalism: A. universal ethical principles set forth the traits and behaviors that are considered virtuous and that a good person is supposed to believe in and to display. As such, these norms put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside—such universal norms include honesty, respecting the rights of others, practicing the Golden Rule, and not acting in a manner that harms others or pillages the environment. B. all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical and Social Morality (which is subscribed to by 150 nations of the world). C. all societies and countries apply essentially the very same set of universally defined ethical principles of right and wrong in judging the ethical correctness of business behavior. D. it is only fair that the standards of what's ethical and what's unethical be applied universally to all businesses in all countries irrespective of local business traditions and local business norms. E. the standards of what constitutes ethical and unethical behavior in business situations are partly universal, but in the main are governed by local business norms.

A. universal ethical principles set forth the traits and behaviors that are considered virtuous and that a good person is supposed to believe in and to display. As such, these norms put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside—such universal norms include honesty, respecting the rights of others, practicing the Golden Rule, and not acting in a manner that harms others or pillages the environment.

32. Senior executives can ensure compliance with the ethical code of conduct by considering: A. whether the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable. B. whether the code of conduct is rejected by the market and accepted by employees. C. whether the code of conduct was accepted by rivals. D. whether the creation of the code of conduct should be handled by executives or employees. E. whether to eliminate the need to execute a code of conduct at all.

A. whether the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable.

40. A company's strategy needs to be ethical because: A. of the dangers that top management will get embarrassed if the company's unethical behavior is publicly exposed. B. (1) a strategy that is unethical in whole or in part is morally wrong and reflects badly on the character of the company personnel involved and (2) an ethical strategy is good business and in the best interest of shareholders. C. everyone is an ethics watchdog and somebody is sure to blow the whistle on the company's unethical behavior. D. of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used. E. unethical strategies are inconsistent with or else weaken the corporate culture.

B. (1) a strategy that is unethical in whole or in part is morally wrong and reflects badly on the character of the company personnel involved and (2) an ethical strategy is good business and in the best interest of shareholders.

71. Which one of the following is FALSE as it concerns the merits of why acting in a socially responsible manner is good business? A. The higher the public profile of a company or brand, the greater the scrutiny of its activities and the higher the potential for it to become a target for pressure group action. B. Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders. C. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. D. Some employees feel better about working for a company committed to improving society—a condition that can contribute to lower turnover and better worker productivity. E. Companies with deservedly good reputations for contributing time and money to the betterment of society are better able to attract and retain employees compared to companies with tarnished reputations.

B. Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders.

42. Which of the following is NOT a particularly sound or valid reason why a company's strategy should be ethical? A. An unethical strategy reflects badly on the character of the company personnel involved. B. Most all shareholders believe it is honorable for their company to pursue an ethical strategy (even though it usually entails making less profit) and are turned off by company efforts to make greater profits via unethical means. C. An ethical strategy is in the self-interest of shareholders, partly because an unethical strategy can damage a company's reputation and partly because unethical behavior can be very costly in terms of fines and penalties, legal and investigative costs, customer defections, and lower employee morale. D. Customers shun companies known for their shady behavior and ethically upstanding company personnel are repulsed by a work environment where unethical behavior is condoned. E. A strategy that is unethical in whole or in part is morally wrong.

B. Most all shareholders believe it is honorable for their company to pursue an ethical strategy (even though it usually entails making less profit) and are turned off by company efforts to make greater profits via unethical means.

36. When managers take advantage of their position to further their own private interests rather than those of the firm, what generally occurs? A. A corporate takeover. B. Self-dealing. C. Mergers and the forced sale of stocks. D. A shareholder buyout. E. An increased investment of time and money into business operations.

B. Self-dealing.

28. The strength of integrated social contracts theory is that it: A. correctly recognizes that all soundly reasoned ethical standards are universal. B. accommodates the best parts of ethical universalism and ethical relativism. C. puts no absolute limits on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. D. recognizes the importance of allowing local ethical norms to always take precedence over universal ethical norms. E. recognizes that individuals and businesses have a basic right to "moral free space" and that it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors.

B. accommodates the best parts of ethical universalism and ethical relativism.

24. According to integrated social contracts theory, the ethical standards a company should try to uphold: A. are governed by the school of ethical universalism. B. are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations, and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior. But universal ethical norms always take precedence over local norms. C. are governed by each country's Code of Required Ethical Conduct, which sets forth that each individual/group/business/organization has a "social contract" to observe the ethical and moral standards that the country has adopted. D. should be determined by the company's moral managers. E. should never be absolute but rather always provide some wiggle room according to the circumstances of the situation.

B. are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations, and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior. But universal ethical norms always take precedence over local norms.

4. Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical: A. vary enormously from religion to religion and country to country across the world. B. are present in all societies and cultures, and in organizations and individuals, with some of the most important concepts of what is right and what is wrong (for example, being truthful) resonating with people of most cultures, and are thus universal. C. ultimately depend on the circumstances—nothing is really black or white when it comes to ethical standards. D. are governed mainly by the thinking and writings of religious clerics at the School of Morally Correct Thinking and Behavior in Geneva, Switzerland. E. ultimately depend on a person's own values and beliefs.

B. are present in all societies and cultures, and in organizations and individuals, with some of the most important concepts of what is right and what is wrong (for example, being truthful) resonating with people of most cultures, and are thus universal.

44. The business case for an ethical strategy: A. focuses primarily on costs that are difficult to quantify (for example, customer defections and adverse effects on employee productivity) but can often be the most devastating. B. emphasizes that pursuing unethical strategies not only damages a company's reputation but can also have costly consequences that are wide-ranging. C. starts with numerous ethical rules and guidelines and an environment where employees rely on these rules for moral guidance. D. starts with managers who understand there is a big difference between adopting values statements and codes of ethics that serve merely as window dressing and those that truly paint the white lines for a company's actual strategy and business conduct. E. begins with ethical guidelines that help send the message that management takes the observance of ethical norms seriously and that behavior falling outside ethical boundaries will have negative consequences.

B. emphasizes that pursuing unethical strategies not only damages a company's reputation but can also have costly consequences that are wide-ranging.

33. The major drivers of unethical managerial behavior include: A. greed, atheism, pervasive managerial immorality, and a general lack of scruples on the part of top executives regarding how customers and suppliers should be treated. B. ethically corrupt corporate cultures, heavy pressures on company managers to meet or beat performance targets, and overzealous pursuit of personal gain, wealth, and other self-interests. C. widespread managerial belief in the ethical relativism school of thinking. D. an aversion to ethical correctness on the part of top executives and a belief that unethical behavior is unimportant and probably won't be discovered. E. intense competitive pressures.

B. ethically corrupt corporate cultures, heavy pressures on company managers to meet or beat performance targets, and overzealous pursuit of personal gain, wealth, and other self-interests.

58. Triple-bottom-line (TBL) reporting is emerging as an important way for companies to: A. conceal their initiatives and accomplishments in the areas of diversity, environment, community, and ethics to increase profitability. B. make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact on society. C. minimize transparency and facilitate benchmarking CSR efforts across firms and industries. D. minimize the use of standard reporting frameworks and metrics. E. attract environmentally savvy and socially oriented investors.

B. make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact on society.

60. An environmental sustainability strategy consists of a company's deliberate actions to: A. operate in an honorable manner, provide good working conditions for employees, and to actively work to enhance the quality of life in the local communities where it operates and in society at large. B. meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet. C. apply ethical principles of right and wrong regarding the protection and enhancement of natural resources and ecological support systems as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world. D. apply universal norms regarding the protection of the environment to its everyday operations and to establish guidelines regarding what actions are ecologically sound based on the findings of the scientific community. E. balance commonly held views about what constitutes environmentally appropriate actions against its ability to make a profit.

B. meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet.

22. Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel: A. base their standards of what is ethical and what is unethical on the Global Code of Ethical Conduct first developed in 1935 and since subscribed to by the governments of 180 countries. B. quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country. C. have no fair way to judge the ethical correctness of the conduct of company personnel. D. have a one-size-fits-all set of ethical standards. E. end up allowing each company employee to determine what set of ethical standards to observe.

B. quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country.

30. The litmus test of a company's code of ethics is: A. the degree to which it is connected to a company's statement of core values. B. the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business. C. the extent to which a company's approach to ethical behavior mirrors the ethical principles for society at large. D. based on the rules a company's top management and board of directors make about "what is right" and "what is wrong." E. determined by the ethical behaviors expected of company personnel in the course of doing their jobs.

B. the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.

5. The contentions that (1) many of the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms and (2) to the extent there is common moral agreement about right and wrong actions, common ethical standards are can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances are defining beliefs of: A. the school of ethical relativism. B. the school of ethical universalism. C. integrated social contracts theory. D. the School of Morally Correct Thinking and Behavior in Paris, France. E. the Global Code of Ethical and Social Morality developed in 1925 at a worldwide convention of distinguished religious clerics.

B. the school of ethical universalism.

37. Short-termism is defined as: A. making assessments of the moral character of the company managers. B. the tendency for managers to focus excessive attention on short-term performance objectives at the expense of longer-term strategic objectives. C. assessing the costs and damage to the company's reputation as a result of ethical violations. D. weighing the short-term costs of regulatory compliance with the long-term costs of noncompliance. E. assessing the short-term costs of complying with government regulations.

B. the tendency for managers to focus excessive attention on short-term performance objectives at the expense of longer-term strategic objectives.

12. The school of ethical relativism holds that: A. what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country. B. when there are cross-country or cross-cultural differences in what is deemed fair or unfair, what constitutes proper regard for human rights, and what is considered ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere. C. concepts of right and wrong are always governed by business norms in each country, culture, or society. D. concepts of right and wrong are always a function of each individual's own set of values, beliefs, and ethical convictions. E. concepts of right and wrong as they apply to business behavior are always varying shades of gray, never absolute (that is, black or white).

B. when there are cross-country or cross-cultural differences in what is deemed fair or unfair, what constitutes proper regard for human rights, and what is considered ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.

50. Which of the following is NOT generally on a company's menu of actions to consider in crafting a strategy of social responsibility? A. Actions to ensure that the company's strategy is ethical and that ethical principles will be observed in operating the business. B. Making charitable contributions, donating money and the time of company personnel to community service endeavors, supporting various worthy organizational causes, and reaching out to make a difference in the lives of the disadvantaged. C. Actions to look out exclusively for the best interests of its owners, the shareholders. D. Actions to protect or enhance the environment (apart from what is required by governmental authorities). E. Actions to create a work environment that enhances employee well-being and makes the company a great place to work.

C. Actions to look out exclusively for the best interests of its owners, the shareholders.

15. Which one of the following statements about the ethical relativism school of thinking is FALSE? A. In a multinational company, application of ethical relativism equates to multiple sets of ethical standards. B. There are few absolutes when it comes to business ethics and thus few ethical absolutes for consistently judging a company's conduct in various countries and markets. C. The best and fairest way for a multinational company to approach the enforcement of ethical standards companywide is to reject ethical universalism and pursue ethical relativism. D. A company that adopts the principle of ethical relativism and holds company personnel to local ethical standards necessarily assumes that what prevails as local morality is an adequate guide to ethical behavior. E. According to the ethical relativism school of thinking, a "one size fits all" template for judging the ethical appropriateness of business actions and the behaviors of company personnel does not exist.

C. The best and fairest way for a multinational company to approach the enforcement of ethical standards companywide is to reject ethical universalism and pursue ethical relativism.

2. Ethical principles in business: A. deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner. B. deal chiefly with the rules each company's top management and board of directors make about "what is right" and "what is wrong." C. are not materially different from ethical principles in general. D. are generally less stringent than the ethical principles for society at large. E. are generally more stringent than the ethical principles for society at large.

C. are not materially different from ethical principles in general.

66. The moral case for why a company should actively promote the betterment of society and act in a manner benefitting all its stakeholders: A. is based on the principle of treating people fairly and with respect. B. is based on the conviction that improving the well-being of society ranks higher in priority and is certainly nobler than making a profit and serving the interests of shareholders. C. boils down to "it's the right thing to do." D. rests on the principle that a business is duty bound to fulfill its social contract to serve the interests of all stakeholders in a business enterprise. E. is based on the principle that business activities lack real legitimacy and have few socially redeeming qualities unless and until a company exerts a significant and sincere effort to give something back to the community.

C. boils down to "it's the right thing to do."

19. Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition: A. are generally advocates of the ethical relativism school of thought. B. are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants. Whether you tip for service at dinner or make payments to government officials to get goods through customs or give kickbacks to customers to retain their business, you pay for a service rendered. C. face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel. D. are out-of-step with business reality given that the preponderance of company managers are immoral. E. are in a distinct minority compared to companies that view the payment of bribes and kickbacks as a legitimate or permissible practice.

C. face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel.

23. The contention that ethical standards should reflect the collective views of multiple societies in establishing a set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundaries on actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actions of local cultures or groups (with their traditions and shared values), that further prescribe to what represents ethically permissible behavior and what does not, constitutes the basic principles of: A. the school of ethical relativism. B. the school of ethical universalism. C. integrated social contracts theory. D. the School of Morally Correct Thinking and Behavior based in Rome, Italy. E. the Global Code of Ethical and Social Morality developed by the United Nations.

C. integrated social contracts theory.

1. Business ethics concerns: A. developing a consensus among companies worldwide as to what ethical principles businesses should be expected to observe in the course of conducting their operations. B. what ethical behaviors should be expected of company personnel in the course of doing their jobs. C. the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel. D. developing a special set of ethical standards for businesses to observe in conducting their affairs. E. picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

C. the application of general ethical principles to the actions and decisions of companies and the conduct of their personnel.

13. According to the school of ethical relativism: A. concepts of ethically right and ethically wrong are relative across countries and cultures but are universal within countries or cultures. B. individuals and businesses have a basic right to "moral free space" and it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors. C. there are important occasions when local cultural norms and morality and the circumstances of the situation determine whether certain behaviors are right or wrong, for there are no absolutes when it comes to business ethics. D. concepts of right and wrong as applied to business situations are always a function of each company's own set of values, beliefs, and ethical convictions (as stated in the company's code of ethical conduct). E. standards of what is ethically right and ethically wrong as applied to business behavior are determined solely by whatever business norms prevail in a particular country/culture/society and these business norms are certain to vary across countries/cultures/societies.

C. there are important occasions when local cultural norms and morality and the circumstances of the situation determine whether certain behaviors are right or wrong, for there are no absolutes when it comes to business ethics.

54. Striving to be socially responsible entails touching such bases as: A. what actions to take to moderate workforce diversity and make the company a great place to work. B. whether to shrink charitable contributions and trim down the time commitment of company personnel to community service endeavors to increase earnings. C. what, if any, actions to take to protect or enhance the environment (beyond what is legally required). D. exerting conscious efforts to ensure that all elements of the dissolute company's strategy are executed diligently. E. All of these.

C. what, if any, actions to take to protect or enhance the environment (beyond what is legally required).

17. A belief in ethical relativism leads to the conclusion that: A. since ethical standards are subjective, it is perfectly appropriate for each company to define and implement its own ethical principles of right and wrong as concerns the use of underage labor and the payment of bribes and kickbacks. B. ethical standards are determined objectively (rather than subjectively). C. whether the use of underage labor and the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or circumstances. D. ethical standards are objective and universal—thus whether the use of underage labor and the payment of bribes and kickbacks should be deemed ethical or unethical definitely is NOT dependent on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or circumstances. E. standards of right and wrong are governed by what is legal in a given country—thus whether the use of underage labor and the payment of bribes and kickbacks are ethical or unethical is governed by local law.

C. whether the use of underage labor and the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or circumstances.

67. Which one of the following is NOT part of the moral case for why a company should actively promote the betterment of society? A. "It's the right thing to do." B. Most business leaders can be expected to acknowledge that socially responsible actions and environmental sustainability are important and that businesses have a duty to be good corporate citizens. C. In return for society granting a business a "license to operate" and not be unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a responsible citizen and do its fair share to promote the general welfare. D. Acting in a socially responsible manner is in the overall best interest of shareholders. E. Every business has a moral duty to take corporate citizenship into consideration and to do what's best for shareholders within the confines of discharging its duties to operate honorably, provide good working conditions to employees, be a good environmental steward, and display good corporate citizenship.

D. Acting in a socially responsible manner is in the overall best interest of shareholders.

61. Which of the following is NOT something a company should consider in crafting an environmental sustainability strategy? A. Actions to protect the environment that will guard against the ultimate endangerment of the planet. B. Actions to maintain ecological support systems for future generations. C. Actions to provide for the longevity of natural resources. D. Actions to support the Global Environmental Council's fund, which allocates grants based on a competitive basis. E. All of these.

D. Actions to support the Global Environmental Council's fund, which allocates grants based on a competitive basis.

27. Integrated social contracts theory maintains that: A. there is no such thing as "moral free space"—all ethical standards are determined by societal norms, and individuals have an implied social contract to live up to these standards. B. few nations or cultures have common moral agreement on what is ethically right and wrong. C. there should be no absolute limits put on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. D. adherence to universal ethical norms always takes precedence over local ethical norms. E. each country/culture/society has commonly held views about what constitutes ethically appropriate actions/behaviors. These common standards of what is ethical and what is not combine to form a "social contract" that all individuals in that country/culture/society are obligated to observe.

D. adherence to universal ethical norms always takes precedence over local ethical norms.

38. Cultural demands to employ unethical means if circumstances become challenging can prompt: A. otherwise dishonorable people to behave ethically. B. increased observance of ethical strategic actions. C. a moral work climate. D. clever ways to operate outside established policies to boost profits. E. company authorization to observe what's right.

D. clever ways to operate outside established policies to boost profits.

3. Ethical principles as they apply to the conduct of personnel and business decisions: A. deal chiefly with standards a company has (and that are elaborated in its code of ethics) about what is right and wrong insofar as the conduct of its business is concerned and about what behaviors are expected of company personnel. B. deal chiefly with the behaviors that a company's board of directors expects of all company personnel in both their conduct on the job and off the job. C. involve the rules a company's top management and board of directors make about "what is right" and "what is wrong." D. deal primarily with the company's duty to comply with legal requirements, conform to ethical norms of society, and ethical principles in general. E. are generally less stringent than the ethical principles for society at large because it is well understood that businesses should not be expected to operate any differently than what the law requires of them.

D. deal primarily with the company's duty to comply with legal requirements, conform to ethical norms of society, and ethical principles in general.

18. The degree of cross-country variability in paying bribes and kickbacks to grease business transactions: A. violates ethical principles of right and wrong in all countries. B. is ethically acceptable according to the principle of ethical universalism and ethically unacceptable according to the principle of ethical relativism. C. is acceptable to immoral managers but not to amoral managers. D. is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others. E. is more acceptable in dealing with a company's suppliers than in dealing with a company's customers.

D. is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others.

10. The strength of the beliefs underlying ethical universalism is that: A. ethical universalism recognizes the obvious—basic moral standards vary significantly according to local cultural beliefs, local religious beliefs, and social mores. B. ethical standards are objectively determined by religious and moral experts. C. what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical is (or should be) grounded in religious doctrine and applied strictly to all business situations. D. it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country market or culture a company is operating in. E. it leaves no room for thinking that concepts of right and wrong can be varying shades of gray—they are always absolute and unambiguous.

D. it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country market or culture a company is operating in.

6. The school of ethical universalism holds that: A. concepts of right and wrong are absolute and leave no room for deviation from country to country or circumstance to circumstance. B. concepts of right and wrong are universal within countries but not across countries and cultures. C. concepts of right and wrong are governed by the Global Code of Ethical and Social Morality. D. the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople. E. all societies and countries apply essentially the very same set of universally defined ethical principles of right and wrong in judging individual behavior.

D. the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople.

7. According to the school of ethical universalism: A. concepts of what constitute ethical behavior and unethical behavior are dictated by subjectively provable moral principles but not by objectively provable moral principles. B. concepts of right and wrong are universal within countries/societies but not across countries or cultures. C. concepts of what is ethical and what is unethical are universal and absolute, leaving no room for deviation from country to country or circumstance to circumstance. D. to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable. E. all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world.

D. to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable.

53. A company's social responsibility strategy is typically comprised of all but which one of the following elements? A. Actions to enhance workforce diversity and make the company a great place to work. B. Making charitable contributions and donating money and the time of company personnel to community service endeavors. C. Actions to protect or enhance the environment. D. Conscious efforts to ensure that all elements of the company's strategy are ethical and that its actions protect or enhance the environment (beyond what is legally required). E. Actions to keep the company's profits at a reasonable and acceptable level to ensure the company's products/pricing will not be viewed by the general public as obscenely high or exorbitant.

E. Actions to keep the company's profits at a reasonable and acceptable level to ensure the company's products/pricing will not be viewed by the general public as obscenely high or exorbitant.

14. If one accepts the tenets of the school of ethical relativism, then it follows that: A. there are multiple sets of ethical standards rather than a single universal set. B. at least some ethical standards are governed by local norms, religious doctrines, and social customs rather than by absolute standards of right and wrong. C. what constitutes ethical or unethical behavior on the part of businesses must in some cases be judged in the light of local customs and social mores. D. it is inappropriate to hold businesses accountable for observing a universal set of ethical standards. E. All of these.

E. All of these.

21. Codes of conduct based on ethical relativism can be ethically dangerous for multinational companies because: A. it creates a maze of conflicting ethical standards. B. it justifies conflicting ethical standards for operating in different countries. C. it establishes little moral basis for establishing ethical standards for the company worldwide. D. it restricts enforcement of ethical standards worldwide. E. All of these.

E. All of these.

25. According to integrated social contracts theory: A. universal ethical principles apply in those situations where most all societies—those endowed with rationality and moral knowledge—have a common moral agreement on what is wrong and thereby put limits on what actions and behaviors fall inside the boundaries of what is right, and which ones fall outside. B. commonly held views about what is morally right and wrong form a contract with society that is binding on all individuals, groups, organizations, and businesses in terms of establishing right and wrong and in drawing the line between ethical and unethical behaviors. C. universal ethical principles or norms leave some "moral free space" for the people in a particular country (or local culture or even a company) to make specific interpretations of what other actions may or may not be permissible within the bounds defined by universal ethical principles. D. universal ethical norms always take precedence over local ethical norms. E. All of these.

E. All of these.

29. Within the integrated social contracts approach, we find that a multinational company's code of conduct involves universal norms that must be enforced worldwide and also the inclusion of local moral standards (traditions and cultures) by the host country, thereby allowing for ethical diversity which avoids: A. the discomforting case of the self-righteous multinational trying to operate as a standard bearer of morality worldwide. B. the disturbing case where a multinational's ethical conduct is found to be no higher than those local ethical norms, especially in situations where local ethical norms permit practices generally considered immoral or when local norms clearly conflict with a company's code of ethical conduct. C. the necessity to activate compromises on what is ethically permissible and what is not. D. much of the internal conflict because "first-order" ethical norms always take precedence over local "second-order" norms. E. All of these.

E. All of these.

34. Unethical managerial behavior tends to be driven by such factors as: A. the pervasiveness of immoral and amoral businesspeople. B. overzealous pursuit of personal gain, wealth, and other selfish interests. C. a company culture that puts the profitability and good business performance ahead of ethical behavior. D. heavy pressures on company managers to meet or beat earnings targets. E. All of these.

E. All of these.

39. When high ethical principles are deeply ingrained in the corporate culture of a company, culture can: A. function as a powerful mechanism for communicating ethical behavioral norms. B. function as a powerful mechanism for gaining employee buy-in to the company's moral standards. C. function as a powerful mechanism for gaining employee buy-in to the company's business principles. D. function as a powerful mechanism for gaining employee buy-in to the company's corporate values. E. All of these.

E. All of these.

41. Which of the following represents a justifiable reason for why a company's strategy should be ethical? A. An unethical strategy reflects badly on the character of the company personnel involved. B. A strategy that is unethical in whole or in part is morally wrong. C. Pursuing an unethical strategy damages a company's reputation and can have costly consequences. D. An ethical strategy is good business and is in the best interest of shareholders. E. All of these.

E. All of these.

43. The strength of the beliefs underlying the moral case for an ethical strategy: A. begins with managers who themselves have strong character (for example, who are honest, have integrity, and truly care about how they conduct a company's business). B. starts with managers who walk the talk in displaying the company's stated values. C. involves managers with high ethical principles and standards who are advocates of a corporate code of ethics and strong ethics compliance and are genuinely committed to certain corporate values and business practices. D. starts with managers who understand there is big difference between adopting values statements and codes of ethics that serve merely as window dressing and those that truly paint the white lines for a company's actual strategy and business conduct. E. All of these.

E. All of these.

45. Visible costs which are incurred by companies and imposed for ethical wrongdoing can include: A. Government fines and penalties. B. Civil penalties arising from class-action lawsuits or other litigation. C. Lower dividends for shareholders. D. Lower stock prices. E. All of these.

E. All of these.

47. A company's unethical behavior risks doing considerable damage to the company's shareholders in the form of: A. adverse fallout including lost revenues and higher costs, lower profits and lower stock price, and diminished business reputation. B. diminished personal reputation. C. balancing duties with economic reality. D. disapproval from community activists, government agencies, and interested parties. E. All of these.

E. All of these.

52. Which of the following should be on a company's menu of actions to consider in crafting a strategy of social responsibility? A. Actions to ensure that the company's strategy is ethical and that ethical principles will be observed in operating the business. B. How much and what kinds of resources it will allocate to charitable contributions, community service endeavors, various worthy causes, and helping the disadvantaged. C. Actions (over and above what is required) to protect or enhance the environment, including both those environmental problems stemming from the company's own business activities and those problems outside the company's immediate sphere of operations. D. Actions to create a work environment that enhances employee well-being and makes the company a great place to work. E. All of these.

E. All of these.

57. The three dimensions of performance are often referred to in terms of the "three pillars" and include: A. People, planet, and profit. B. People, which refers to the various social initiatives that make up the CSR strategies. C. Planet, which refers to a firm's ecological impact and environmental practices. D. Profit encompasses the economic impact (value and costs) that the company has on society. E. All of these.

E. All of these.

64. CSR strategies and environmental sustainability strategies that both provide valuable benefits and fulfill customer needs in a superior fashion can lead to competitive advantage: A. while corporate social agendas that address only social issues may boost the company's reputation for corporate citizenship are unlikely to improve its competitive strength in the marketplace. B. when they are linked to a company's competitively important resources and capabilities of value chain activities. C. when such initiatives become ingrained in the way it operates its business every day. D. especially when the workforce diversity strategy encourages individuality, inclusiveness and for respecting differences it can lead to empowerment and creative ways to serve customers. E. All of these.

E. All of these.

69. The business case for CSR and environmentally sustainable business practices suggests such actions can: A. lead to increased buyer patronage. B. reduce the risk of reputational damaging incidents. C. lower costs and enhance employee recruiting and workforce retention. D. provide opportunities for revenue enhancement and are in the best long-term interest of shareholders. E. All of these.

E. All of these.

26. Which one of the following is NOT a key element of integrated social contracts theory? A. Universal ethical principles apply in those situations where most all societies—endowed with rationality and moral knowledge—have common moral agreement on what is wrong and thereby put limits on what actions and behaviors fall inside the boundaries of what is right, and which ones fall outside. B. Commonly held views about what is morally right and wrong form a "social contract" (contract with society) that is binding on all individuals, groups, organizations, and businesses in terms of establishing right and wrong and in drawing the line between ethical and unethical behaviors. C. Universal ethical principles or norms leave some "moral free space" for the people in a particular country (or local culture or even a company) to make specific interpretations of what other actions may or may not be permissible within the bounds defined by universal ethical principles. D. Universal ethical norms always take precedence over local ethical norms. E. Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.

E. Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.

49. The notion of social responsibility as it applies to businesses is concerned with: A. a company's duty to put the public interest ahead of shareholder interests. B. societal expectations that all company stakeholders will be treated equally and fairly. C. a company's duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct. D. the responsibility that top management has for ensuring that the company's actions and decisions are in the best interest of society at large. E. a company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

E. a company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

59. A company's environmental sustainability strategy consists of its deliberate actions to: A. shelter the environmental impacts from the company's resources and competitive capabilities. B. provide for the defense of natural resources usage within cross-border commitments. C. moderate assurance for ecological support systems for future generations. D. guard against ultimate endangerment of the business. E. operate the business in a manner that saps the longevity of sustainability effects.

E. operate the business in a manner that saps the longevity of sustainability effects.

46. Internal administrative costs which are incurred by companies for ethical wrongdoing include the following except: A. legal and investigative costs incurred by the company. B. remedial education and ethics training costs to company personnel. C. those costs incurred in taking corrective actions. D. administrative costs associated with future compliance. E. those costs attached to adverse effects on employee productivity.

E. those costs attached to adverse effects on employee productivity.