Chapter 3

Dr. Milton​ Friedman's traditional views of business responsibility include all of the following EXCEPT​ ____________.

social responsibility is a necessary evil of business

Honest Tea is socially responsible as well as financially sound and profitable. This most closely conforms to the observations of which of the following?

the in-depth of analysis by Margolis and Walsh

Archie Carroll proposed that the managers of business organizations have four responsibilities. Carroll lists these four responsibilities in order of priority. Which of the following does Carroll note has the highest​ priority?

economic

In order to determine which​ group's interest has​ priority, the corporation may need to craft​ a(an) ________________, an overarching strategy that explicitly articulates the​ firm's ethical relationship with its stakeholders.

enterprise strategy

It is obvious that Honest Tea feels an obligation to its stakeholders. One of the questions they may have to answer is: "Which group's interests should have priority?" To answer this question they may need to craft a(n)_______________________.

enterprise strategy

​________ constitutes​ one's rules of personal behavior based on religious or philosophical grounds.​ ________ is defined as the consensually accepted standards of behavior for an​ occupation, a​ trade, or a profession.

​Morality; Ethics

The​ ________ approach proposes that decision makers be​ equitable, fair, and impartial in the distribution of costs and benefits to individuals and groups. The​ ________ approach proposes that actions and plans should be judged by their consequences.

​justice; utilitarian

Which of the following is an example of an organization that failed to appease its stakeholders and give something back to the​ community?

A press release about a recent scandal at the firm

Which of the following clarifies company expectations of employee conduct in various​ situations; and makes clear that the company expects its people to recognize the ethical dimensions in decisions and​ actions?

Code of ethics

​________ specifies how an organization expects its employee to behave while on the job.

Code of ethics

According to​ Kohlberg, which level of moral development are actions justified by an external code of​ conduct?

Conventional

How will you determine TriStates ethical responsibilities?

Determine TriStates core values, and specify goals based on those core values. You decide to determine Tri States ethical responsibilities by determining Tri States core values, and specifying goals based on those core values. This was the optimal choice, because a code of ethics should be based on core values.

Because resources are limited, management wants to choose one social responsibility project for immediate action. Success here could lead to more projects down the road. For now, management wants your recommendation: Which project is most likely to have a large social impact at the lowest cost, and lowest risk, to TriState?

Donate surplus TriState dairy products to people who need them. You decided to donate surplus TriState dairy products to people who need them. This was the most economic choice for a social responsibility initiative, because it simply required TriState to deliver resources that already exist.

​________ urges a return to a​ laissez-faire worldwide economy with minimal government regulation and argued against the concept of social responsibility as a function of business.

Friedman

You read TriStates current code of ethics. In summary, it states that employees should be treated with respect, that all business should be carried out in accordance with all applicable laws, and that any violation of TriStates ethical guidelines is cause for disciplinary action. What is the best criticism of this code of ethics?

It covers no ethical responsibilities beyond conforming to law and supporting employees. Examining Tri States code of ethics, you determine that it covers no ethical responsibilities beyond conforming to law and supporting employees. This was the optimal criticism to be made, because a code of ethics should cover responsibility to the public.

According to​ ________, a​ person's ethical behavior is affected by his or her level of moral​ development, certain personality​ variables, and such situational factors as the job​ itself, the​ supervisor, and the organizational culture.

Kohlberg

What would be the best way to produce and market Lactose Defiant in a way that could be considered ethical?

Label the product clearly, to indicate its nutritional hazards and/or benefits. You decided that selling an unhealthy yogurt snack could be ethically justified by labeling the product to clearly indicate its nutritional attributes. This was the optimal choice because it is the most honest and accurate. It provides the consumer with the best information to make a dietary decision..

​________ is based on the belief that all social roles carry with them certain obligations to that​ role, moral decisions are deeply​ personal, and that individuals have the right to run their own lives.

Role relativism

​________ is based on the belief that morality is simply a matter of following the norms of an​ individual's peer group.

Social group relativism

Honest Tea and its management team demonstrate what type of responsibility? a. economic responsibility

Social responsibility

Moral relativism claims that morality is relative to some​ personal, social, or cultural standard and that there is no method for deciding whether one decision is better than another. Which of the following is NOT a form of moral​ relativism?

Societal relativism

Seth Goldman, Honest Tea's Co-Founder and CEO, wakes up excited every day since he believes his company is producing healthier products than most and that their products are __________________

Sustainably produced

Marks​ & Spencer​ (M&S) leads the way to sustainability. All of the following are examples of activities conducted by the firm EXCEPT​ ________________.

The idea that waste is a given in the operation of businesses is accepted by​ M&S

You discuss with the CEO your plan to do the most good at the lowest cost. The CEO asks: "Why dont we just make a financial donation to a worthy cause?" What is the best response?

TriState could simply donate money, but there are additional ways that TriState could achieve the same positive impact at a lower cost. When the CEO suggests making a simple financial donation, you argue that the company could achieve the same positive impact at a lower cost. This was the best argument in favor of social responsibility activities. While donations can do good, a company in TriStates position can likely find other ways to have a greater impact at lower costs.

Which of the following is used to describe those employees who report illegal or unethical behavior on the part of​ others?

Whistle-blowers

In order for a business corporation to be sustainable—that ​is, to be successful over a long period of time—it must satisfy​ ______________________________.

all of its​ economic, legal,​ ethical, and discretionary responsibilities.

Recall that socially responsible companies utilize a number of activities to appease and give something back to its stakeholders. All of the following are examples of firms that are socially responsible and give back to stakeholders EXCEPT​ ________.

an organization that intentionally misrepresents its economic performance primarily to influence stock prices

All of the following are examples of a global organization that uses environmental sustainability efforts to improve its bottom line EXCEPT​ ________.

an organization that maximizes products and services in global operations because they do not implement recycling operations in global operations

Various studies indicate that an increasing number of companies are developing​ ________ and implementing ethics training workshops and seminars to promote ethical behavior in the workplace.

code of ethics

The third step in stakeholder analysis is to estimate the effect on​ __________________________________ from any particular strategic decision.

each stakeholder group

A​ person's _______________________is affected by his or her level of moral​ development, certain personality​ variables, and such situational factors as the job​ itself, the​ supervisor, and the organizational culture.

ethical behavior

All of the following are examples of secondary stakeholders EXCEPT​ ________.

shareholders

The concept of​ ________ proposes that a private corporation has responsibilities to society that extend beyond making a profit.

social responsibility

According to​ Kohlberg, which level of moral development is characterized by considerations of​ society's laws and​ norms?

Conventional

​________ is based on the belief that morality is relative to a particular​ culture, society, or​ community; adherents of this argue that people should understand the practices of other​ societies, but NOT judge them.

Cultural relativism

Jane, a TriState employee, speaks to you privately: "Im concerned about the fact that the barns arent being kept clean and that the animals arent being checked for disease and infection. Im not sure what the rules are about this, but I thought you should know because I think its a problem."

Janes concerns should be taken seriously and investigated. She should be rewarded for bringing this to your attention. When an employee informs you of Tri States unsanitary treatment of its farm animals, you respond by rewarding her for bringing the issue to your attention. This was an optimal choice because it promotes an ethical culture and recognizes employees for doing the right thing. Furthermore, Tri state now has the opportunity to alleviate the issue and better protect customers and employees.

TriState is selling a high-fat, high-sugar yogurt snack called Lactose Defiant. Which of the following, if true, would argue that selling the product violates TriStates code of ethics?

TriState is responsible for foreseeable misuses of its products. When asked why selling an unhealthy yogurt snack would violate TriStates code of ethics, your response was that TriState is responsible for foreseeable misuses of its products. This was the best choice, because misuse of this product overeating is clear and easy to predict.

You know that it is going to take a lot to persuade upper management to accept your position and the idea of becoming more socially responsible. You have heard talk of scrapping both and plowing more profits back into updating production facilities. What would be the best argument for what you are trying to do at Tri-State?

You selected arguing that social responsibility aids long-term profitability. This was the best choice. There are many reasons why social responsibility is a great path for organizations, and in this situation, this is the most appropriate argument.

Now that the code of ethics has been revised, how do you intend to measure how well employees are conforming to the code of ethics?

You selected performance reviews. This was the best choice. By making the ethics code part of the performance review process, you are demonstrating that ethics matter, and each employee is accountable for honoring the code.

In the industry and the community, Tri-State is known for its low-cost business strategy, but also as a company that is generous to its employees. After 100 years of successful operation, it now finds itself with a respected brand and a market share leader. Tri-State also prides itself on helping with school lunch programs in disadvantaged school districts. In the past, it has helped organizations like the Salvation Army and Red Cross when natural disasters occur across the United States, but this is on an as-needed basis. How would you classify Tri-State's social actions?

You selected social responsiveness. This was the best choice. Currently, it doesn't appear that Tri-State has reached the highest level of social action, but it is farther along than the classical approach. Social responsiveness fits between those two levels of social action.

Jane, a Tri-State employee, speaks to you privately and says: "I'm concerned about the fact that the barns aren't being kept clean and that the animals aren't being checked for disease and infection. I'm not sure what the rules are about this, but I thought you should know because I think it's a problem." Because your position also covers any instances of whistleblowing within the company, how should you handle this information?

You selected that Jane's concerns should be taken seriously and investigated. This was the best choice. This choice promotes an ethical culture. Furthermore, Tri-State now has the opportunity to alleviate the issue and better protect customers and employees.

Stakeholder analysis is the identification and evaluation of corporate stakeholders. The first step in stakeholder analysis is to identify primary stakeholders. All of the following statements are correct about primary stakeholders in stakeholder analysis EXCEPT​ ____________.

determining exactly who constitutes the​ firm's customers and exactly what they want is a complex but not difficult task

Tri-State has come off a very good year financially and has plans to do more for the community. You discuss with the CEO your plan to do the most good at the lowest cost. The CEO asks, "Why don't we just make a financial donation to a worthy cause?" What is the best response?

You selected that Tri-State could simply donate money, but there are additional ways that Tri-State could achieve the same positive impact at a lower cost. This was the best choice. This was the best argument in favor of social responsibility activities. While donations can do good, a company in Tri-State's position can likely find other ways to have a greater impact at lower costs.

Tri-State is selling a high-fat, high-sugar yogurt snack called Lactose Defiant. Which of the following, if true, would argue that selling the product violates Tri-State's code of ethics?

You selected that Tri-State is responsible for foreseeable misuses of its products. This was the best choice. Misuse of this product - overeating - is clear and easy to predict.

In Tri-State's region, "organic" is defined as lacking preservatives, pesticides, or other chemicals, and being non-destructive to the environment. What would be the best approach to becoming organic?

You selected that Tri-State products could be made entirely with organic ingredients. This was the best choice. It helps Tri-State products meet the definition of "organic."

While you are waiting on the top management team to present your recommendations to the board of directors, you take a look at updating Tri-State's current code of ethics. In summary, it states that customers and employees should be treated with respect, that all business should be carried out in accordance with all applicable laws, and that any violation of Tri-State's ethical guidelines is cause for disciplinary action. What is the best criticism of this code of ethics?

You selected that it covers no ethical responsibilities beyond conforming to law and supporting employees. This was the best choice. A code of ethics should cover responsibility to the public.

After some great discussions with the CEO and Vice Presidents, you now feel that you have a majority of the top management team on board. Although resources are limited, you feel that the most pressing need is to become more sustainable. This is an important issue not just in the milk industry, but worldwide. Success here could lead to important impacts down the road. For now, management wants your recommendation: Which project is most likely to lead Tri-State into becoming more sustainable, but also provide a significant return to Tri-State?

You selected to begin a line of organic products. This could make Tri-State's products healthier and have a big impact on the environment. This was the best choice. By offering an organic line, the company could become more sustainable and capitalize on a new product line.

What would be the best way for TriState to donate its surplus dairy products?

TriState could work with community organizations to ensure that the products are stored and refrigerated properly. You decided that the best way for Tri State to donate its surplus products would be to work with community organizations to ensure that the products are stored and refrigerated properly. This was the optimal choice, because the donated products could spoil if they arent handled properly. Further, community organizations can effectively and efficiently manage distribution of the products.

How will you determine Tri-State's ethical responsibilities?

You selected to determine Tri-State's core values, and specify goals based on those core values. This was the best choice. A code of ethics should be based on core values.

Archie Carroll proposed that the managers of business organizations have four​ responsibilities: economic,​ legal, ethical, and discretionary. The​ ________ responsibilities of a business​ organization's management are to produce goods and services of value to society so that the firm can repay its creditors and increase the wealth of its​ shareholders; whereas the​ ________ responsibilities are defined by governments in laws that management is expected to obey.

​economic; legal

Archie Carroll proposed that the managers of business organizations have four​ responsibilities: economic,​ legal, ethical, and discretionary. The​ ________ responsibility of an​ organization's management is to follow the generally​ self-beliefs about behavior in a​ society; whereas the​ ________ responsibilities are the purely voluntary obligations a corporation assumes.

​ethical; discretionary

The utilitarian approach proposes that actions and plans should be judged by their consequences. Research reveals that stakeholders who have the ability to affect the company have​ ________; whereas stakeholders that have​ ________ have a legal or moral claim on company resources.

​power; legitimacy

​________ refers to formal codes that permit or forbid certain behavior and might or might NOT enforce ethics.

Laws

Which of the following is NOT an event or characteristic that occurs in the third step of the stakeholder​ analysis?

There is room for misunderstanding because the​ corporation's relationship with each stakeholder is not covered by written or verbal agreements.

Honest Tea is a socially responsible company and must also ask: "To whom are we responsible?" A corporation's _________________ environment includes a large number of groups with interest in a business organization's activities, which are referred to as stakeholders

Task

Some people justify their seemingly unethical positions by arguing that there is no one absolute code of ethics and that morality is relative. Which of the following is the term used to claim that morality is relative to some​ personal, social, or cultural​ standard?

Moral relativism

​________ constitute(s)​ one's rules of personal behavior based on religious or psychological grounds.

Morality

​________ is based on the belief that all moral decisions are deeply personal and that individuals have the right to run their own lives.

Naive relativism

Now that the code of ethics has been revised, how do you intend to measure how well employees are conforming to the code of ethics?

Performance reviews You decide to enforce the revised ethics code by using performance reviews. This was the optimal choice. By making the ethics code part of the performance review process, you are demonstrating that ethics matters and each employee is accountable for honoring the code.