BUS101 - Module 2 - Week 2 - Business Ethics and Corporate Social Responsibility

An example of cause-related marketing is:

Using the pink ribbon breast cancer symbol on a company's product packaging.

Consumers wishing to encourage corporate social and environmental responsibility can:

Vote with their wallet

Which of following categories fall within the definition of conflict of interest?

nepotism, self=dealing, outside employment, gifts from friends

When executives set aggressive goals, it becomes more important to:

openly address issues with employees.

A company wishing to reinforce its commitment to ethical behavior could institute:

A Whistleblower program

What is the difference in definition between a bribe and a gift?

A bribe is an act in expectation/return for a quid pro/quo

John, the officer of a large corporate department, interviews both internal and external candidates for a new leadership position in his division. The most qualified candidate is Joan, who has been with the company for 16 years and is 59 years old. John would like to promote Joan, but is concerned that she will not have the energy or commitment to handle the job in years ahead. This is an example of:

A legal dilemma

Kickback is a form of bribery distinguished on the basis of:

A negotiated agreement among both the giver and receiver.

What is the most positive outcome for a company or organization from whistleblower activities?

A whistleblower report shines a spotlight that stimulates immediate action to correct a situation of wrongdoing and longer-term action to prevent such activities from recurring

You notice a co-worker attending the same church that you attend, and over time you begin to become attracted to one another. Your company policy forbids romantic relationships between employees. This is an example of:

An ethical dilemma

In 2017, the credit-rating firm Equifax reported a massive data breach. Roughly 145 million people had their names, addresses, social security numbers and some credit card numbers compromised to hackers. While the hacking was known to the company as early as March, the breach was not reported to the public until July of that year. Interestingly, $1.8B in company stock was traded immediately prior to the announcement of the breach. Does this example represent illegal or unethical corporate behavior?

Both illegal and unethical behavior

Golf outings, meals, entertainment, and vehicles have been used in lieu of cash to pay purchasing agents in exchange for business deals. This type of payment is known as:

Bribery

An automotive company was looking to expand internationally and selected three possible countries in which to build a factory. All three of the potential counties had government officials who made it clear that for a little extra kickback, they would be willing to make the process much smoother to build a plant. In one country, the government official indicated his brother-in-law had the perfect piece of land to use as well. This company has run into what type of common ethical challenges?

Bribery and conflict of interest.

________ regulate(s) actions and behaviors that lie beyond control from government and applies to all aspects of business conduct relevant to an entire organization and individual actions.

Business ethics

Explain the concept of business ethics, and outline the steps companies take to encourage ethical behavior

Businesses and organizations possess a set of ethical standards just like people. When we refer to "business ethics" we are referring to the culture, attitudes, or actions governing "right vs. wrong." Most organizations have a formal code of ethics that guide the decisions and actions of the company.

Identify common ethical challenges faced by organizations

Businesses and their employees, managers, and owners face a variety of ethical issues as they go about their working lives. Ethical issues include conflicts of interest, bribes, conflicts of loyalty, and issues of honesty and integrity.

Companies that use the pink ribbon symbol for Breast Cancer awareness on their product packaging are practicing:

Cause-related marketing

Jon is a middle manager who has just joined a large pharma corporation. On his first day with the company, he is asked to read and sign a corporate code of ethics. This document consists of:

Company vision, values, and guidance on ethical standards

As a business owner, you also serve on the City Council of the location of your business. When city contracts are awarded, your business is in the running to win the bid. Concerned citizens claim you are unethical citing:

Conflict of Interest and Self Dealing.

A framework that helps establish guidelines for keeping business gifting above board includes consideration of:

Context, content, culture

Google.org made a $2.4 million grant to GiveDirectly, a nonprofit that provides direct cash aid to the poor. This example of Corporate Social Responsibility is known as:

Corporate Philanthropy

Examples of approaches to Corporate Social Responsibility include:

Corporate Philanthropy, Cause-related Marketing, Sustainability

Explain the concept of corporate social responsibility (CSR)

Corporate social responsibility (CSR) refers to actions that businesses take or refrain from taking based on the impact of those actions on the external environment and community. Areas of CSR include environmental concerns (green business), poverty, human rights, and animal rights. Today, businesses are realizing the importance of CSR (Corporate Social Responsibility) in attracting and maintaining employees and customers. Stakeholders are demanding that businesses give back to the larger community in which they operate. Examples of stakeholder and social responsibility can be seen at companies such as Toms Shoes and Starbucks.

Corporate social responsibility (CSR) can be defined as:

Corporations behaving in an ethical manner in society, taking responsibility for their actions

Whistleblower laws in the United States are designed to protect:

Employees

The key to ethical behavior by both a business and individual employees is:

Ethical standards and leadership set and practiced by senior management

________ are a set of standards that govern the conduct of a person, especially a member of a profession. A good example is the medical profession's oath to "do no harm."

Ethics

An example of an effective whistleblower case in the pharmaceutical industry is:

Exposing the use of contaminated ingredients in the drug manufacturing.

Nepotism is a form of conflict of interest and describes situations where:

Family members or their common employer gain favorable treatment because of their family ties.

Many employees of credit rating agencies lost their jobs during the mortgage crisis of 2008-2009 due to the scandal surrounding credit rating agencies:

Giving "money safe" AAA ratings, their highest rating, to securities that should have been "impaired" or downgraded to the lowest, or junk, ratings.

Overstating the impact of environmental actions to promote "eco-friendly" products is known as:

Greenwashing

The Golden Chunk hotel and casino was recently rocked by scandal with unethical gaming practices and lack of certain hotel safety disclosures. After an investigation, it was discovered that internal business ethical behavior standards were often brushed aside for profit. What would you guess was most likely to be the main reason for these ethics breaches at the Golden Chunk?

Its executives and upper management were responsible for misconduct and rule breaking setting the example for company employees.

Building trust and creating community between employees and stakeholders is:

Key outcome of Corporate Social Responsibility programs.

________ follow(s) the dictates of laws, which are written down and interpreted by the courts.

Legal behavior

Mega Mining operates mining facilities around the world and as a result controls a large portion of the market. When they opened a new mineral extraction facility on the tiny island nation of Candyland they realized they would immediately become the largest private contributor to the nation's GDP thus giving them a great deal of power. Much to the delight of investors, Candyland's government has enacted almost no regulations to protect the safety of workers or preserve the environment. The CEO of Mega Mining made several decisions regarding their operations in Candyland. Which of the following are examples of the company's ethical behavior?

Mega Mining installs scrubbers on the smokestacks of their smelting facility to protect the environment of Candyland.

Facts supporting the importance and nature of corporate social responsibility include:

Most large corporations spend money on lobbying.

You are the Chief Purchasing Officer for an established business. Your daughter (a recent college grad with a business degree) applies for a job with your company. If hired, your family relationship could constitute concerns of:

Nepotism

In 2015, the German automaker Volkswagen revealed that it had installed software on millions of cars in order to trick the Environmental Protection Agency's emissions testers into thinking that the cars were more environmentally friendly than they were. This action was:

Non-compliant with environmental regulations

Stock prices may be impacted by a company's social responsibility performance, when:

Poor performance drives stock prices down.

The CEO of Wells Fargo resigned in October 2016 due to the scandal surrounding the bank's:

Practice of forcing employees to open new customer accounts without the customer's permission.

In spite of the controversial nature of Corporate Social Responsibility corporations are adopting programs because:

Profit related benefits, recruiting and keeping the best employees, risk management.

Daniel has traveled to Africa and was struck with the scarcity of clean drinking water in many areas of his visit. He decides to start a company called Pure Drops that has as its mission the creation of water purification plants with all profits from the business. This example of CSR is referred to as:

Social entrepreneurship

Differentiate between ethical and legal behavior

Standards of ethical and legal behavior are intertwined but are separate "codes" arising from different sources. Legality comes from legislation or case law that establishes standards of behaviors—illegal behavior may be punished by fines, imprisonment, or both. As a branch of philosophy, ethics investigates the questions "What is the best way for people to live?" and "What actions are right or wrong in particular circumstances?" In practice, ethics seeks to resolve questions of human morality, by defining concepts such as good and evil, right and wrong, virtue and vice, justice and crime.

Determining the legality of a course of action will include a review of:

Statutes, regulations, and codes

Which would constitute a non-cash form of a kickback?

Super Bowl tickets from a nanotech company to the CTO who helped his company CEO enter a strategic alliance with them.

The Golden Spigot hotel and casino was recently rocked by scandal with unethical gaming practices and lack of certain hotel safety disclosures. Upper management has been fired and you are brought in as the new CEO to change things around. You have called everyone to a company meeting and are starting off by defining how you will be implementing strict business ethics. Which of the following begins to change the business ethics environment best for the company?

The Golden Spigot will publish standards governing the behavior and actions of employees and actions of the business, and implement mandatory policy training for all employees.

A company's supply chain is part of its Corporate Social Responsibility because:

The company is also responsible for its suppliers' products and services.

Companies who provide services and/or component products to another company are necessarily included in corporate social responsibility programs. These outside companies are known as:

The supply chain

If Corporate Social Responsibility is a good idea, why is it so controversial?

There are facts and arguments on both sides whether CSR is really benefitting society - jury is still out

Employees compelled to report a significant wrongdoing by their employer are protected by:

Whistleblower protection laws

As a real estate agent, you learn that the home you are trying to sell resides in a low-lying frequently flooded area. The seller has not disclosed the information, and the buyer has only seen the property on "dry" days. Choose your best ethical choice:

You disclose the information to the potential buyer and inform the seller of your action. You are risking the sale of the property.

Joel has been accepting small presents from his company's suppliers for years. Now one supplier has approached him with an offer to share a $50k commision in exchange for a lucrative contract award. This action would be defined as:

a kickback

Corporate Social Responsibility strategies encourage:

a positive impact on the environment and stakeholders.

Taylor Shoe Company just realized that the local newspaper advertisement was not correct and they immediately contacted the local newspaper. The local newspaper printed a correction with an apology for initially printing it incorrectly. This is an example of:

ethical behavior

Althea works for the Sunnyvale Tax Department in the collections department. She knows that the owner of the vacant lot next door to her home owes almost 5 years back taxes and the property will soon be auctioned off at a bargain price. If the lot is sold and someone builds on it, she will no longer have a view of the lake. On a Monday morning, her supervisor asks her to contact the local newspaper and place the notice of sale in the weekend edition. Althea knows that once the notice goes into the paper, dozens of investors will show up to bid on the lot. If she "forgets" to put the notice in the paper, no one outside of the few people in the tax office will know the sale is occurring and she and her husband could purchase the lot for ¼ of its actual market value. In this situation, Althea is facing a decision that involves:

an issue of honesty and integrity

The sincerity of corporate Social Responsibility programs is questioned:

as corporate "window-dressing".

The purpose of aligning corporate ethics and social responsibility is to:

build trust and create community between employees and stakeholders across all levels

As society evolves, what constitutes legal behavior:

changes

A ________ tends to support a company's obligation to its' stakeholders, rather than regulating a profession.

code of ethics

Expulsion from membership in a professional organization could occur due to failure to comply with its':

code of practice

The American Veterinary Medical Association (AVMA) is a not-for-profit association representing more than 89,000 veterinarians. They have the "Principles of Veterinary Medical Ethics" that is adopted by the profession. This compliance program is an example of a:

code of practice

Companies today are held to higher standards than ever before. Consumer and other groups consider not only the quality and price of a company's products but also its:

commitment to environmental and social concerns

David is a sales person for a large software company. In working with a new client on their needs for a new accounting system, he hears them converse about the need for a third-party consultant to help instill best practices. Although David's company offers the same professional services, David recommends his brother's firm who is an independent consultant in the same field. This would be considered a:

conflict of interest

Decision makers in organizations exhibit values and create practices and policies which are a result of ________ beliefs held by these individuals.

ethical

Juan is a middle manager at a technology company. This week he is hosting a group of businesspeople who are considering a strategic partnership with the company. As the week progresses, some of the visitors ask Juan for access to sensitive classified information that is about the company's newest technology developments. He knows that the partnership is of great importance to the company, and if he can solidify the deal, it could lead to a VP position in the company for himself. He is now faced with a(n) ________ issue.

ethical

While ________ beliefs are held by individuals, they can also be reflected in the values, practices and policies of decision makers in organizations.

ethical

According to the National Business Ethics survey, if senior management in a company wants to boost or ensure ________, they need to begin with accountability in the organization.

ethical behavior

The Golden West pool table manufacturer marketing manager just saw that the regional online newspaper advertisement displayed incorrect information and immediately contacted the online newspaper. The regional online newspaper posted a correction with an apology for initially posting it incorrectly. This is an example of:

ethical behavior

Katie owns her home and decides to sell the house herself. She lives in a state with no disclosure laws if homes are sold directly by an owner, but Katie filled out Property Condition Disclosure paperwork anyway. One month later the property is under contract and will close in seven days. While doing a final house cleaning, Katie discovers evidence of mice. Katie can mitigate the problem without alerting the new owners or let them know about this new disclosure and possibly delay or jeopardize the sale. Katie is now faced with a(n) ________ dilemma.

ethical dilemma

Google's statement of "don't do evil" is an example of:

ethical policy

All of the following are examples of impact of CSR on stakeholders EXCEPT:

increased competition from foreign companies

Fred is a realtor selling Katie's home. Katie filled out the "Property Condition Disclosure" paperwork, and Fred is obligated to disclose present and future disclosures to potential buyers. The property is now under contract to sell to new owners. In a casual conversation however, Katie tells Fred three years ago there was a termite problem but it was eradicated. After checking the paperwork, Fred discovers no indication of this on the disclosure paperwork. Fred is now faced with a(n) ________ dilemma.

legal

How do we differentiate between ethical and legal behavior in the workplace?

legal behavior governed by standards, ethical behavior governed by standards

Kathy, in accounts receivable, receives a cash overpayment from a loyal customer. Her boss never reviews the details of accounts receivable transactions, so Kathy could easily pocket the overpayment amount. Kathy is faced with a(n) ________ dilemma.

legal dilemma.

In decision making, determining the ________ of a course of action may depend on statutes, regulations and codes.

legality

When executives bend the rules or turn a blind eye to bad behavior, the policies ________ value and executives ________ the respect of employees.

lose, lose

Often the ethical tone of a business is set by:

organizational leadership.

To assist you in distinguishing the difference between a gift and a bribe you should:

refer to company policy regarding the acceptance of gifts.

According to the National Business Ethics survey, in general, if a company wants to boost or ensure ethical behavior in their organization, the accountability and enforcement should begin with:

senior management

The term "business ethics" refers to:

standards and values that govern the behaviors and actions of employees and the business itself

In the Volkswagen case study presented in this section, what was the root cause of corporate wrongdoing by employees of the company?

super agressive perfomance goals and an "achieve it at any cost" corporate culture created by senior management

In the National Business Ethics Survey, ________ of the employees identified pressure to meet unrealistic objectives as the most likely cause for them to compromise their ethical standards.

the majority

Executives play an important role in creating company policies on ethics and by:

visibly following and upholding the policies.