Chapter 4

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

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

Which of the following terms refer to the standards that determine how people should act in situations when their own self-interest is at stake?

Individual ethics

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

Practical

Which of the following rules states that an ethical decision is one that a manager has no hesitation or reluctance about communicating to people outside the company because the typical person in a society would think it is acceptable?

Practical

Which of the following terms refer to the standards that govern how members of a society should deal with one another?

Societal ethics

What is the role of the board of directors in determining organizational ethics?

To check the ethical maturity & reputation of potential top managers

Social Responsibility Approach: Defensive

When managers are granted large stock options & bonuses even as company performance declines rapidly

Social Responsibility Approach: Accommodative

When managers at older & more reputable companies, with much to lose, dissuade employees from acting unethically even when it would ensure their competitive advantage

Social Responsibility Approach: Proactive

When managers seek ways to reduce operating costs to prevent layoffs to enable them to keep promises they make to employees

A credo of a company refers to its:

code of ethics

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 product, it cannot stay in business.

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

laws

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

organizational

The willingness of one person to have confidence in the goodwill of another person is called _____.

trust

In order to monitor the ethical practices & procedures of an organization, the ethics ombudsperson must ______.

1. Communicate ethical standards to all employees 2. Teach managers & employees how to respond appropriately to ethical dilemmas

A community provides a company with _______

1. Homes for employees 2. Social infrastructure 3. Labor force 4. Utilities

Advantage of increased social responsibility

1. Improved organizational reputation 2. Increased business & rising profit 3. Improved quality of life for stakeholders

What are the advantages of social responsibility?

1. It can improve a company's reputation 2. If all organizations adopt a caring approach, a climate of caring will pervade the wider society 3. The more organizations act in socially responsible ways, the better the quality of life will be for the country as a whole

Because they own stock in a company, _____ are partial owners of that company.

1. Shareholders 2. Stockholders 3. Stakeholders

Managers have a claim on an organization because they bring to it their ______.

1. Skills 2. Expertise 3. Experience

Ethics ombudspeople have which of the following responsibilities in an organization?

1. They monitor the ethical practices & procedures in an organization 2. They can counsel employees facing ethical dilemmas 3. They have organization-wide authority to investigate ethical lapses

Why do organizations create company credos?

1. To ensure that everyone knows that those who act unethically will be punished. 2. To show the company will not tolerate people who put their interests above those of stakeholders 3. To deter people from demonstrating self-interested, unethical behavior

From their employers, employees can reasonably expect to:

1. be paid the same as other employees, given all other factors being equal 2. be treated fairly 3. receive compensation consistent with their performance

_____ companies and managers stay within the law and abide strictly by legal requirements but make no attempt to exercise social responsibility beyond what the law dictates.

Defensive

_____ are the inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave.

Ethics

What is a possible indication of high ethical standards?

Following the corporate credo

Which of the following rules states that an ethical decision distributes benefits and harms among people and groups in a fair, equitable, or impartial way?

Justice

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

Managers

Which of the following stakeholder groups have the responsibility for deciding the goals of the organization that must be pursued to benefit stakeholders?

Managers

Which of the following terms refer to the guiding practices and beliefs through which a particular firm views its responsibilities to stakeholders?

Organizational ethics

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

Organizational members resist self-interested action

Ethics

The inner guiding moral principles, values, & beliefs that people use to analyze or interpret a situation & then decide what is the right or appropriate way to behave

Which of the following rules states that an ethical decision is a decision that produces the greatest good for the greatest number of people?

Utilitarian

Social Responsibility Approach: Obstructionist

When managers knowingly seek to hide evidence from the public, such as that asbestos &/or tobacco causes lung cancer

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

Because ethical & legal rules are relative & change over time, people are frequently faced with _____.

ethical dilemmas

Employees scrutinize the behavior of managers, who serve as _____ to their subordinates.

ethical role models

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

ethical values

Managers provide a visible means of support to develop an ethical culture. Increasingly, organizations are creating the role of ethics offices, or _______, to monitor their ethical practices & procedures.

ethics ombudsperson

The utilitarian rule states that ethical decisions are those that produce the greatest ______ for the greatest number of people. When they use this rule, managers try to choose the option or behavior that causes the greatest good or the least harm for stakeholders.

good

Consideration of people's right to freedom, life, safety, property, privacy, & free speech are important to managers using the _______ rights rule to make ethical decisions.

moral

The _________ rule states that ethical decisions is one maintain & protect people's fundamental rights & privileges

moral rights

An accurate portrayal of the relationship between law & ethics is that _________.

neither laws nor ethics are fixed principles & both may change with time

According to the approaches to social responsibility, at the low end of the range is the _____ approach, in which companies and their managers choose not to behave in a socially responsible way.

obstructionist

Companies and managers taking a _____ approach actively embrace the need to behave in socially responsible ways.

proactive

Behaving ethically consistently over time develops & protects your professional image or _________, which in turn enables you to obtain resources & earn a living.

reputation

Stakeholders must earn a good ______ within their organizations, as their livelihoods depend on their ethical behavior & the esteem they build from colleagues & managers.

reputation

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

societal ethics

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

stakeholders

Stockholders are interested in how a company operates because:

they want to maximize the return on their investment.