Chapter 4

The ethical norm, utility, answers the question,

"Does it optimize the best for all?"

The ethical norm, rights, answers the question,

"Does it respect the rights of those involved?"

The ethical norm, caring, answers the question,

"Is it consistent with responsibility to care?"

The ethical norm, justice, answers the question,

"Is it consistent with what is fair?"

Compliance is important for every organization, but complying with local, state, and federal laws is most challenging for companies doing business__________- simply because there are more regulations to follow.

in heavily regulated industries

The National Highway Traffic Safety Administration fined two heavy-duty truck manufacturers $44 million for failing to initiate safety recalls of vehicles in a timely fashion as required by federal regulation. The manufacturers will need to do a better job at _______ with regulations and laws.

legal compliance

Businesses rely upon________ to solicit and distribute money to the campaigns of the political candidates who are most likely to work in the firm's best interests.

political action committees

1)In companies that strive to be first to market with new technology, the risk that employees may divulge trade secrets is great. 2)At Zappos, managers are committed to making workers happy. 3)Nina waits tables, and a large part of her earnings comes from tips, which depend on how large the bill is. She falsely tells customers who order less expensive dishes that the kitchen is sold out of those items so that they are limited to more expensive choices.

1) treatment of employees by the organization, 2) treatment of the organization by the employees, and 3) treatment of other agents by the employees and/or the organization.

Indicate the area of social responsibility targeted by each Walmart initiative. 1. The Walmart Foundation and Walmart exceeded $1 billion in charitable contributions worldwide. 2. Eliminating landfill waste 3. Walmart and the Walmart Foundation are providing career opportunities for nearly 1 million women and 100,000 U.S. veterans.

1, 3. Social Welfare 2. environment

Businesses and government influence each other in areas of interest to social responsibility. Use the table to indicate whether the tool is used by business or by government. 1. Which entity relies upon environmental protection legislation as a tool of influence? 2. Which entity relies upon lobbying as a tool of influence?

1. Government 2. Business

Which approach to social responsibility is best explained by the statement, Meet legal and ethical obligations and do more on a case by case basis.? Defensive Accommodative Obstructionist Proactive

Accommodative

Augments for Social Responsibility 1.Businesses create problems and should help solve them. 2.Corporations are citizens in our society. 3.Businesses have the resources to solve problems. 4.Business is a partner in society.

Augments Against Social Responsibility 1.Business lacks expertise in social programs. 2.Involvement gives businesses more power. 3.There may be conflicts of interest. 4.Business exists to generate profit for the owners.

A colleague at work learned that your company, an industrial supply company, has been offering kickbacks to purchasing officers to secure contracts. She asks you whether she should do anything. What step do you suggest she take? Blow the whistle and disclose the unethical conduct. Quit. Do nothing. Identify other purchasing officers that might like to earn a kickback.

Blow the whistle and disclose the unethical conduct.

The National Football League focused on an anti-domestic violence initiative as part of its social responsibility efforts. If you were the manager leading the initiative, how would you most thoroughly evaluate its effectiveness? Report the funds allocated to the initiative. Conduct a social audit to identify what was accomplished. Measure the number of times the media mentioned the NFL's initiative. Survey the players and coaches.

Conduct a social audit to identify what was accomplished.

In what type of publication do companies summarize their social responsibility efforts and their achievements? Annual Report for publicly-traded companies Corporate Social Responsibility Report Charitable Giving Report Articles of Incorporation

Corporate Social Responsibility Report

Imagine you have been hired to advise the Chief Compliance Officer on ways to improve the company's rate of ethical compliance. What do you recommend? Check all that apply. Develop a code of conduct. Appoint an ethics committee. Create warning posters threatening disciplinary action for noncompliant employees. Provide training in ethics.

Develop a code of conduct. Appoint an ethics committee. Provide training in ethics.

How can companies show social responsibility? Check all that apply. Donating money to charity Educating the public about a social issue Making ethical decisions Putting profits first

Donating money to charity Educating the public about a social issue Making ethical decisions

The Obstructionist approach is______ the Defensive approach in degree of social responsibility.

Lower than

information technology

Management in the News Adam Vitale was sentenced to 30 months in prison and ordered to pay $180,000 in restitution to AOL after he found a way to spam 1.2 million AOL users without being caught by AOL's spam filter. He made a deal with a government informant, who sent spam e-mails advertising a computer security program in return for 50% of the product's profits. According to prosecutors, Vitale defeated AOL's filter system by using several different computer servers to relay the e-mails, and changed the e-mail header information to ensure the spam e-mails could not be traced back to him. Vitale reportedly made $40,000 a month from spam e-mails promoting stocks. (Source: Reuters. NY Man Pleads Guilty to Spamming AOL Subscribers. Retrieved from https://www.reuters.com/article/us-crime-spam/ny-man-pleads-guilty-to-spamming-aol-subscribers-idUSN1120537620070611) The Vitale story illustrates how ethical issues in__________ can threaten the rights of individuals.

the organizational culture will become less ethical

Management in the News In January of 2012, Yahoo! hired Scott Thompson, the former President of PayPal, as CEO. Just a few months later, Thompson stepped down amid allegations that he falsified his education on his résumé and bio. Thompson graduated from Stonehill College in Massachusetts with a degree in accounting, but he also claimed he had a degree in computer science. How did Thompson get away with it? Melinda Blackman, a professor of psychology at California State University in Fullerton, said "since he was a well-known and successful executive, a background check was probably put on the back burner." Yahoo! shareholder, Daniel S. Loeb, exposed Thompson's misrepresentation. (Source: Stewart, J. In the Undoing of a CEO, A Puzzle. (2012, May 18). New York Times. Retrieved from http://www.nytimes.com/2012/05/19/business/the-undoing-of-scott-thompson-at-yahoo-common-sense.html) If PayPal did not impose severe consequences for dishonesty in its top managers, the likely result would be that_____________ .

corporate governance

Management in the News Siemens, the German manufacturer of industrial and consumer products, violated the Foreign Corrupt Practices Act (FCPA) by engaging in a systematic practice of paying bribes to foreign government officials to obtain business. Allegations by the Securities Exchange Commission claimed Siemens paid bribes on a variety of contracts, including the design and construction of metro transit lines in Venezuela, power plants in Israel, and refineries in Mexico. Siemens also used bribes to obtain such business as the development of mobile telephone networks in Bangladesh; the creation of national identity cards in Argentina; and the sale of medical devices in Vietnam, China, and Russia. Siemens earned more than $1.1 billion in profits on these and several other transactions. Siemens agreed to pay $350 million in disgorgement to settle the SEC's charges, and a $450 million fine to the U.S. Department of Justice to settle criminal charges. Siemens also paid a fine of approximately $569 million to the Office of the Prosecutor General in Munich. Reportedly, the misconduct involved employees at all levels, including former senior management, and revealed a corporate culture in which bribery was tolerated, and even rewarded, at the highest levels of the company. (Source: SEC. (2008, December 15). SEC Charges Siemens AG for Engaging in Worldwide Bribery. Retrieved from https://www.sec.gov/news/press/2008/2008-294.htm) The Siemens story is primarily an example of an ethical issue in________

In your role as manager of the quality assurance program, you observe that one of the products manufactured by your company has a safety feature with a high rate of malfunction. What should your first step be? Report the issue to the ethics committee. Report the issue to the local news anchor. Report the issue to your supervisor. Report the issue to the regulatory agency that sets safety requirements for the industry.

Report the issue to your supervisor.

Corporate leaders may face a variety of ethical dilemmas. Which ethical concern is addressed by the Sarbanes-Oxley Act? The reporting of dividends paid to investors The accuracy of corporate financial disclosures The compliance of a corporation with environmental standards The price-fixing of products

The accuracy of corporate financial disclosures

According to the scenario, one way in which the government influences Monsanto's business is___________.

direct regulation of food-labeling requirements

If you were conducting a social audit at your company, which of the following pieces of information could you exclude? The company's revenues, expenses, and profits The resources devoted to each goal The quantitative outcomes for each goal The goals set for each initiative

The company's revenues, expenses, and profits

The Kiwanis Club asks you to make a presentation on corporate social responsibility. Which story will help you explain the concept of philanthropic giving in your presentation? Check all that apply. Walmart donated 4.5% of its pre-tax profits, amounting to $311,607,280, which helped support about 50,000 different charities. Monsanto Company spent over $2 million on lobbying efforts related to agriculture and food regulations. The Monsanto Fund Matching Gifts Program supports charities by matching donations of its employees. Monsanto Company reinforced its commitment to further improve the genetic potential of seeds by announcing a $20 million investment in its technology centers.

Walmart donated 4.5% of its pre-tax profits, amounting to $311,607,280, which helped support about 50,000 different charities. The Monsanto Fund Matching Gifts Program supports charities by matching donations of its employees.

You are the manager of a team, and you know that someday one of your employees may disclose suspicions of unethical conduct. You decide to discuss this hypothetical future situation at your next staff meeting. What should you tell your employees you will do if one of them blows the whistle on unethical conduct at the organization? Welcome their contribution. Demote them. Order them not to mention it to anyone again. Fire them.

Welcome their contribution.

Stockmann, a Finnish company, is planning to transfer internal data records on Russian citizens to facilities in Russia. The action is necessary for Stockmann_____________ now that Russia has implemented legislation requiring that companies doing business in Russia must house all data about Russian citizens on local soil and protected by Russian encryption.

to ensure legal compliance