Chapter 4 LearnSmart Quiz

The most basic question in an ethics-based management system is Multiple Choice Is it legal? Who will know? Is it balanced? Has it been done before?

Is it legal? Explanation The most basic question in business ethics is "Is it legal?"

If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) Multiple Choice important act of self-interest. ethical dilemma. win-win situation. corporate accountability issue.

ethical dilemma. Explanation Being faced with an ethical dilemma means you must choose between equally unsatisfactory alternatives.

The first day on the job waiting tables at a popular restaurant, Amber noticed that when one member of the waitstaff was serving a very large party, the other waiters would help carry food to the tables and even check to make sure water glasses were filled. Although these actions were not part of the mandatory waitstaff training, Amber perceived that waitstaff members who were not helping out were not viewed as team players by the majority of employees. Amber was observing an example of the ___________ followed at this organization. Multiple Choice integrity-based ethics social order ethics compliance-based ethics actual ethics

integrity-based ethics Explanation Integrity-based ethics is informal company behavior that evolves from individuals' desire to make things better for all. These define the company's guiding values, and most often it involves shared accountability.

A legal provision known as the _______________ provides a "bounty" provision for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations that exceed $1 million. Multiple Choice Sarbanes-Oxley Ruling Sherman Act Internal Audit Company Protection Act Dodd-Frank Wall Street Reform and Consumer Protection Act

Dodd-Frank Wall Street Reform and Consumer Protection Act Explanation The Dodd-Frank Wall Street Reform and Consumer Protection Act provides whistleblowers an award if their actions lead to an enforceable action or conviction. This is called a bounty provision because as stated, they may receive a monetary award for their actions.

Organizational ethics begins Multiple Choice at the top levels of management. only with full-time employees. with the labor unions and employee groups. with mid-level and supervisory managers.

at the top levels of management. Explanation People learn their standards and values by observing others. Organizational ethics begins at the top. Effective leaders can provide a strong example by exhibiting ethical behavior that helps instill corporate ethical values in employees.

The last recession changed the way many companies offer support to people and communities in need. Many companies Multiple Choice increased their financial donations because they understood how badly society needed a helping hand. increased financial donations to local areas but pulled away from national and global contributions. decreased financial donations and eliminated support in almost every way. decreased financial donations but encouraged their employees to volunteer their time to corporate social initiatives and projects.

decreased financial donations but encouraged their employees to volunteer their time to corporate social initiatives and projects. Explanation During the last recession monetary contributions decreased and companies found ways to continue their philanthropic participation by asking employees to donate time to corporate social initiatives and other projects.

Which of the following is NOT a part of an integrity-based ethics code? Multiple Choice Stresses shared accountability Emphasizes strong penalties for wrongdoers Supports ethically sound behavior Defines an organization's guiding principles

Emphasizes strong penalties for wrongdoers Explanation An integrity-based ethics code defines the organization's guiding values, creates an environment that supports ethically sound behavior, and stresses shared accountability.

Which of the following is NOT included as one of the questions we must ask when faced with an ethical dilemma? Multiple Choice Is it legal? Is it balanced? How will it make me feel about myself? Is it acceptable if everyone else is doing it?

Is it acceptable if everyone else is doing it? Explanation When faced with an ethical dilemma, it is essential to ask (1) Is it legal? (2) Is it balanced? and (3) How will it make me feel about myself?

Encouraged by the new Sarbanes-Oxley Act, individuals who report unethical or illegal behavior within an organization are Multiple Choice corporate raiders. whistleblowers. vigilantes. compliance police.

whistleblowers. Explanation Whistleblowers are insiders who report illegal or unethical behavior.

When an F5 (category 5) tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Good Eats Restaurant in St. Louis drove several hours with a van of employees, equipment, and food to donate what they could to help the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better. Multiple Choice corporate social initiative corporate inclusion policy corporate beneficial management social impact program

corporate social initiative Explanation Corporate social initiative refers to a company taking the initiative to utilize its expertise and resources to make a situation better.

With regard to socially responsible behavior, American businesses are Multiple Choice demanding socially responsible behavior from international suppliers, particularly in the areas of environmental standards and human rights issues. holding international suppliers to different standards than American companies must adhere to in the United States. not concerned with the ethical or socially responsible behavior of their international suppliers. demanding that international suppliers adhere to higher, more costly standards than their American counterparts.

demanding socially responsible behavior from international suppliers, particularly in the areas of environmental standards and human rights issues. Explanation American businesses are demanding socially responsible behavior from international suppliers, particularly in the areas of environmental standards and human rights issues.

Which of the following is the BEST reason for a business to be managed ethically? Multiple Choice Business leaders don't want to get caught behaving unethically. An ethically managed business helps to reduce employee turnover. If the company is engaged in a lawsuit, the ethics code can be used as a legal defense. So government regulators will not be able to complain about the ethical behavior of the company.

An ethically managed business helps to reduce employee turnover. Explanation A business should be managed ethically for many reasons: to maintain a good reputation; to keep existing customers and attract new ones; to avoid lawsuits; to reduce employee turnover; to avoid government intervention; and to please customers, employees, and society.

Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe Multiple Choice benevolence can lead to a vote of no confidence by company stakeholders. CSR can lead to even more profits. firms should take added caution not to support government programs that protect the environment. the fastest way to demoralize your stakeholders is to spend too much money supporting social issues, such as having employees assist in community efforts.

CSR can lead to even more profits. Explanation Corporate social responsibility (CSR) is the concern businesses have for the welfare and betterment of society. Businesses can show their CSR in many ways. Its premise is based on integrity, fairness, and respect for others. Companies that participate in CSR typically have more loyal employees and customers. In the long run, CSR enhances profits.

Which of these actions is LEAST likely to restore the trust of the American public in the free-market system? Multiple Choice Passing stricter accounting and financial reporting laws. Punishing those who have broken the law. Defining the concept of ethics more narrowly, and making the definition closer to the definition of legality. Passing new laws making business, religious, and government leaders more accountable for their actions.

Defining the concept of ethics more narrowly, and making the definition closer to the definition of legality. Explanation To restore trust leaders must (1) punish those who have broken the law and (2) pass new laws to make accounting records more transparent and businesspeople more accountable for their actions.

When it comes to ethical behavior, Multiple Choice many Americans decide what's ethical based upon the situation in which they find themselves. most Americans think that their view of morality should be accepted by all. most Americans think there is very little difference between right and wrong. most Americans have an absolute sense of what is moral.

many Americans decide what's ethical based upon the situation in which they find themselves. Explanation Many Americans today have few moral absolutes. They decide situationally whether it is okay to do specific actions.

Government and business leaders are being held to Multiple Choice lower ethical standards than in the past. ethical standards in the U.S., but unfortunately foreign leaders are not being subjected to ethical scrutiny. higher ethical standards than in the past. ethical standards that are often unreasonable and cannot be met by most leaders.

higher ethical standards than in the past. Explanation The moral and ethical standards by which leaders are judged are far stricter than in the past.

A few months ago, Paulie's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for the stock they owned in the company. However, it was disclosed that somehow a member of Paulie's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives and several friends. They quickly bought shares of Italian Stallion and purchased the stock before the acquisition became public. These actions are Multiple Choice moral impropriety. insider trading. acquisition stalking. pro-current procurement.

insider trading. Explanation Insider trading refers to the discussion or leak of private, proprietary information about a firm that is not yet made public. Typically, it is the kind of information where parties in the know can benefit. Due to the fact that it is not yet public, those who act upon the information have an unfair advantage and stand to gain financially. It is an act that is against the law and against Securities and Exchange Commission policy.

Besides environmental groups, unions, and investors, a relatively new type of watchdog organization that reports on corporate social responsibility efforts is Multiple Choice internal search and occupy organizations. corporate raider divisions. socially conscious research organizations. secondary market companies.

socially conscious research organizations. Explanation Socially conscious research organizations collect information on the social responsibility efforts of companies.

Which of the following statements reflects the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms? Multiple Choice Multinational corporations are committed to operating within the legal limits of U.S. law. U.S. law does not require U.S. firms to comply because of competitive advantage concerns. It's the age-old reality: "Out-of-sight, out-of-mind." U.S. companies tend to overlook and forget human rights abuses abroad. U.S. companies follow the lead of consumers, and at this time, there is no evidence of a trend toward concern for better human rights and environmental standards. Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms.

Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms. Explanation Demanding developing countries to adhere to U.S. law on human rights and the environment is not clear-cut. Economic conditions in some developing countries make child labor a necessity for the survival of families. In other situations, traditions and customs make gifts and other bribery-type activities the long-standing practice in some nations.

Ethics are the standards of right and wrong set for us by society, whereas legality refers to Multiple Choice a higher calling where society acknowledges that we must take a higher level of action against what may be perceived as a wrongful act. the specific and certain way of solving right and wrong that goes beyond what we consider good ethical behavior. the collection of laws to protect society from fraud, theft, and violence. obedience strictly out of compliance, whereas ethical behavior is in compliance.

the collection of laws to protect society from fraud, theft, and violence. Explanation When compared to ethics, legality is narrower. It refers to laws we have written to protect ourselves from fraud, theft, and violence.

Jake serves on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective headgear to avoid suffering a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own headgear. Jake knew that several other employees followed strict company policy every day and always wore their headgear; yet, they were not being acknowledged for their compliance. According to Norman Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision? Multiple Choice Does the action I am about to take follow universal business practices? Is the action I am proposing to take something the boss would like to promote among workers? How does the action I am proposing to take make me feel about myself? How can my decision help elevate my own status within the firm?

How does the action I am proposing to take make me feel about myself? Explanation Norman Vincent Peale suggests that decisions that solve ethical dilemmas should be evaluated against three questions: (1) Does the decision follow laws and company policy? (2) Is it balanced—is there a sense of fairness in the decision? (3) How does the decision made make me feel about myself?

The You Design, We Build Company makes custom furniture of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and to list negative occurrences that supervisors observed. Top management is essentially conducting a(n) Multiple Choice internal investigation. social audit. aggregate independent appraisal. 360-review.

social audit. Explanation A social audit is a systematic evaluation of a company's progress toward becoming a socially responsive organization. Both positive and negative activities are measured. The amount of pollutants a firm unleashes into the environment would serve as an example of a negative activity that would be included in the social audit measurements.

The benefit of using __________ to communicate a business's CSR efforts to the public is that it allows companies to reach broad and diverse groups directly in a low-cost, efficient way. Multiple Choice TV ads government-supported direct mail campaigns employees and internal public relations social media

social media Explanation The primary value of using social media to communicate CSR efforts is that it allows companies to reach broad and diverse groups, allows them to connect directly with customers in a low-cost, efficient way, and enables them to interact with specific groups more easily than through more traditional efforts.

According to the text, ethical behavior begins with Multiple Choice top corporate leaders. government regulations and laws. religious and community leaders. ourselves.

ourselves Explanation As noted in this section of the text, ethics begins with each of us. It can be difficult to find your way in an ethical dilemma; however, the chosen behavior is personal.

U.S. companies that operate abroad, particularly those who contract with foreign companies, are now ________ human rights and environmental standards followed by U.S. law. Multiple Choice free from the concern of asking suppliers to lower their standards to be in compliance with requiring suppliers to be evaluated monthly concerning separating themselves from suppliers who violate

separating themselves from suppliers who violate Explanation There is significant pressure on U.S. companies to separate themselves from suppliers who violate human rights and environmentally progressive guidelines.