MID TERM BUSINESS PRINCIPLES Chapter 4

An automobile company is asked to recall 20 batches of its sports utility vehicle after it is found that a defect in the exhaust system of the car causes it to emit more smoke than the level permitted. In this scenario, the car manufacturing company is exceeding its _____ emissions.

Scope 3

According to research from the Ethics Resource Center (ERC), organizational culture is most influential in shaping the ethical conduct of individual employees.

True

One of the ways by which companies can show their responsibility toward the environment is by reducing their _____.

carbon footprint

Crayon, a well-established beauty products company, partnered with the Lenora Birdstone Foundation, a nonprofit organization, to raise awareness about breast cancer and collect funds for setting up a cancer unit at a local hospital. The company accumulated a sum of $5 million by selling organic creams to more than 2,000 people. In this scenario, Crayon was most likely involved in _____.

cause-related marketing

Ethan, an employee in a corporate company, is asked to do a systematic evaluation of the company's adherence to its social and ethical standards. In this case, Ethan should first:

establish the ethics and social responsibility goals that the company seeks to achieve.

Cornell Health Care, a renowned American hospital, regularly collaborates with other health-care centers to provide small medical clinics in low-income countries drugs and medical services at lower than normal prices. In this scenario, this practice of collusion by Cornell Health Care is _____.

illegal and ethical

In the context of legal and ethical dimensions of business conducts, embezzling money is:

illegal and unethical.

Providing rock-bottom prices only to distributors in underserved areas is__________.

illegal but ethical

Andrew, an employee in a corporate company, is asked to conduct a systematic evaluation of how well the company is meeting its ethics and corporate responsibility goals. In the given scenario, Andrew is most likely asked to do a _____.

social audit

Anderson invested $1 million in a company called Ladmen Corp. He, therefore, has a personal interest in the company's profits and its new ventures. Given this information, Anderson is a _____ in Ladmen Corp.

stakeholder

The trade union members of a wool manufacturing company are the company's _____.

stakeholders

David is the chief executive officer of Grand Rocks Mining Company. He has convinced the company's board of directors to implement a change in the mining procedure. According to the new procedure suggested by David, less resources will be exhausted. This will ensure that the ability of future generations to meet their needs is not harmed because of shortage of natural resources. By agreeing to David's suggestion, Grand Rocks has embraced the idea of _____.

sustainable development

Transparency International, a leading anticorruption organization, published its yearly index of "perceived corruption" across 168 countries in 2015. Its findings showed that:

the United States scored lesser than most of the European countries in the index of perceived corruption.

Yanmei, an employee at a news agency, learns that the reason her colleague was asked not to pursue a news story further was because the editor of the newspaper was bribed by the concerned party to suppress the matter. Yanmei reveals this information to the chief editor and her colleagues and also reports it to the media. In this scenario, Yanmei is a _____.

whistle-blower

In the context of a socially responsible organization, which of the following statements is true of consumerism?

It is a movement that suggests that customer rights should be the starting point of any business.

Adhering to a new act passed in 2002, the CEO of Pearsil & Pearsil, a real estate company, now personally certifies the validity of the company's financial statements. Given this information, the CEO most likely follows the_____.

Sarbanes-Oxley Act

Antonsen Inc., an accounting firm in Texas, follows certain guidelines while providing consulting services to a firm. One such guideline is to limit the services it provides to the firms it audits. The CEO of Antonsen Inc. is also required to certify the validity of the company's financial statements. In this scenario, Antonsen Inc. most likely abides by the requirements of the _____.

Sarbanes-Oxley Act

The _____ limits conflict-of-interest issues by restricting the consulting services that accounting firms can provide for the companies they audit.

Sarbanes-Oxley Act

Rupert is an individual who believes in contributing to the community by using eco-friendly products. In the context of universal ethical standards, Rupert most likely possesses the core value of _____.

citizenship

Trexlex, a sports retailer, employs Olympic hopefuls in its stores through the Olympic Job Opportunities Program. It offers athletes full-time pay and benefits for a flexible 20-hour workweek to accommodate their training schedules. In the context of a business's responsibility toward the community, this act by Trexlex exemplifies _____.

corporate responsibility

Gander, an apparel company, is known to be a profit-hungry company. It lands in a controversy when it comes to light that the company pays almost nonliving wages to the workers in its manufacturing subsidiaries based in developing countries. In the context of business behavior, Gander's business conduct is:

legal and unethical.

Vandium, a high-end smartphone, is known for its excellent audio quality and processing speed. However, most of its users complain of certain technical issues after a period of five months. The company, however, is well aware of these issues because it deliberately designs these products to fail after a certain period—a strategy to generate revenue through service charges. In the context of business behavior, Vandium's business conduct is:

legal and unethical.