MGMT 3020 Midterm Study Guide

Which of the following is the most demanding social responsibility?

A business should not sell a product that causes harm to consumers. - The most demanding sense of responsibility is the responsibility not to cause harm to others. Often called a duty or an obligation to indicate that they oblige us in the strictest sense, responsibilities in this sense bind, or compel, or require us to act in certain ways.

Identify a true statement about a compliance-based culture.

A compliance-based culture is only as strong and as precise as the rules which workers are expected to follow.

Which of the following statements is true about an ethical leader in a corporate environment?

An ethical leader allocates corporate resources to support and promote ethical behavior - Ethical business leaders not only talk about ethics and act ethically on a personal level, but they also allocate corporate resources to support and to promote ethical behavior. There is a long-standing credo of management: "budgeting is all about values."

Identify a true statement about ethical decision making in business.

At some point, every worker, and certainly everyone in a management role, will be faced with an issue that will require ethical decision making. Not every decision can be covered by economic, legal, or company rules and regulations.

Ethical decision making in business is limited to major corporate decisions with dramatic social consequences.

False

In a general sense, a business stakeholder is one who has made substantial financial investments in the business

False

In business, every decision can be covered by economic, legal, or company rules and regulations

False

In civil law, there is no room for ambiguity in applying the law because much of the law is established by past precedent.

False

Stakeholder theory states that a firm should be managed for the sole benefit of stockholders.

False

Values are the only guidance individuals need to act in ways that are positive or ethical.

False

Due to diverse employee groups and management styles, the work culture of a large global firm in one country will differ significantly from the work culture of the same firm halfway around the world.

False - Despite the fact that corporations have many locations, with diverse employee groups and management styles, an individual working for a large global firm in one country will share various aspects of her or his working culture with someone working for the same firm halfway around the world.

The rights of employees to minimum wage, equal opportunity, and to bargain collectively as part of a union are examples of their rights grounded in moral entitlements.

False - Employees' rights to a minimum wage, equal opportunity, or to bargain collectively as part of a union are examples of the rights granted to them on the basis of legislation and judicial rulings. The other two kinds of employee rights common in business are their rights to those goods that they are entitled to on the basis of contractual agreements with employers and their rights grounded in moral entitlements.

Ethics attempts to answer the question of how we should live, but it does not give reasons to support its answers.

False - Ethics attempts to answer the question of how we should live, but it also gives reasons to support its answers.

Inattentional blindness is the inability to recognize ethical issues.

False - Inattentional blindness results from focusing failures.

Ethical decisions cannot be made on economic grounds.

False - It needs to be recognized that "business" or "economic" decisions and ethical decisions are not mutually exclusive. Just because a decision is made on economic grounds does not mean that it does not involve ethical considerations as well.

Normative myopia occurs only in business

False - Normative myopia does not occur only in business.

The concept of a human or moral right is central to the utilitarian ethical tradition.

False - The concept of a human or moral right is central to the principle-based ethical tradition.

The first step in making decisions that are ethically responsible is to consider all of the people affected by a decision, the people often called stakeholders.

False- The first step in making decisions that are ethically responsible is to determine the facts of the situation

________ rights protect individuals from being treated in ways that would violate their dignity and that would treat them as mere objects or means.

Human

In the ethical decision-making process, once one examines the facts and identifies the ethical issues involved, one should next ________.

Identify the stakeholders - The third step involved in ethical decision making involves one of its more critical elements. We are asked to identify and to consider all of the people affected by a decision, the people often called stakeholders.

Which of the following is the second step of the ethical decision-making process?

Identifying the ethical issues involved - The second step in responsible ethical decision making requires the ability to recognize a decision or issue as an ethical decision or ethical issue.

(n) ________ provides concrete guidance for internal decision making creating a built-in risk management system.

Code of conduct

In an ethical decision-making process, moral imagination helps individuals make ethically responsible decisions. Identify the step in which moral imagination is critical.

Consider the available alternatives - Once we have examined the facts, identified the ethical issues involved, and identified the stakeholders, we need to consider the available alternatives. Creativity in identifying options—also called "moral imagination"—is one element that distinguishes good people who make ethically responsible decisions from good people who do not.

Identify a true statement about corporate cultures

Corporate cultures influence, limit, and shape the decision making within a firm. - Decision making within a firm is influenced, limited, shaped and, in some cases, virtually determined by the corporate culture of the firm. Individuals can be helped—or hindered—in making the "right" or "wrong" decision (according to their own values) by the expectations, values, and structure of the organization in which they live and work.

Social sciences such as psychology and sociology are different from ethics owing to the fact that they are ________.

Descriptive in Nature- Social sciences, such as psychology and sociology, also examine human decision making and actions; but these sciences are descriptive rather than normative. This is due to the fact that they provide an account of how and why people act the way they do—they describe; as a normative discipline, ethics seeks an account of how and why people should act a certain way, rather than how they act.

Which of the following is the first step in making an ethically responsible decision?

Determining the facts of the situation - The first step in making decisions that are ethically responsible is to determine the facts of the situation. Making an honest effort to understand the situation, to distinguish facts from mere opinion, is essential.

Identify the view which holds that people act only out of a self-interest.

Egoism

Focusing failures result in moments where we ask ourselves, "How could I have missed that?" According to Bazerman and Chugh, this phenomenon is known as:

Inattentional blindness - Bazerman and Chugh warn of inattentional blindness, which they suggest results from focusing failures. These focusing failures then result in a moment where we ask ourselves, "How could I have missed that?"

Which of the following statements is true about the stakeholder theory?

It begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others. - Stakeholder theory begins with the recognition that every business decision affects a wide variety of people, benefiting some and imposing costs on others. Stakeholder theory recognizes that every business decision imposes costs on someone and mandates that those costs be acknowledged.

Which of the following is true of moral imagination?

It distinguishes good people who make ethically responsible decisions from good people who do not. - Once we have examined the facts, identified the ethical issues involved, and identified the stakeholders, we need to consider the available alternatives. Creativity in identifying options—also called "moral imagination"—is one element that distinguishes good people who make ethically responsible decisions from good people who do not.

Identify a true statement about the economic model of corporate social responsibility (CSR).

It has direct implications for the proper role of business management.

Which of the following is true about an integrity-based culture?

It reinforces a particular set of values. - A values-based or integrity-based culture is one that reinforces a particular set of values rather than a particular set of rules.

Which of the following is true about the Sarbanes-Oxley Act?

It required public companies to establish a code of conduct for top executives and, if they did not have one, to explain why it did not exist.

Identify a true statement about the integrative model of corporate social responsibility (CSR).

It suggests that firms should fully combine economic and social goals by bringing social responsibilities into the core of their business model. - Firms that fully integrate economic and social goals by bringing social responsibilities into the core of their business model follow the integrative model of corporate social responsibility (CSR). At first glance, firms that adopt the integrative model raise no particular ethical issues

The ________ tradition claims that our fundamental human rights, and the duties that follow from them, are derived from our nature as free and rational beings.

Kantian

Which of the following statements is true about ethical cultures?

Employees are expected to act in responsible ways, even when the law does not require it

Identify a true statement about ethical decision making in business.

Ethical decision making in business is not limited to major corporate decisions with dramatic social consequences. At some point, every worker, and certainly everyone in a management role, will be faced with an issue that will require ethical decision making.

Which of the following is an approach advocated while teaching ethics?

Ethics teachers must challenge students to think for themselves. The teacher's role should not be to preach ethical dogma to a passive audience, but instead to treat students as active learners and to engage them in an active process of thinking, questioning, and deliberating.

Identify the final step in the ethical decision-making process?

monitoring and learning from outcomes - Once you have explored the variables, it is time to make a decision. However, the process is not yet complete. To be accountable in our decision making, it is not sufficient to deliberate over this process, only to later throw up our hands once the decision is made: "It's out of my hands now!" Instead, we have the ability as humans to learn from our experiences. That ability creates a responsibility to evaluate the implications of our decisions, to monitor and learn from the outcomes, and to modify our actions accordingly when faced with similar challenges in the future.

Dramatic examples of tyrannical regimes in history demonstrate that:

one's ethical responsibility may run counter to the law -Holding that obedience to the law is sufficient to fulfill one's ethical duties begs the question of whether the law, itself, is ethical. Dramatic examples from history, including Nazi Germany and apartheid in South Africa, demonstrate that one's ethical responsibility may run counter to the law.

We tend to give in to ________ in our professional environments, both because we want to "fit in" and to achieve success in our organizations, and also because our actual thinking is influenced by our peers.

peer pressure - We tend to give in to peer pressure in our professional environments, both because we want to "fit in" and to achieve success in our organizations, and also because our actual thinking is influenced by our peers.

Defining the specific culture within an organization is not an easy task since it is partially based on each participant's ________ of the culture.

perception

According to the economic model of corporate social responsibility (CSR), ________ is a direct measure of how well a business firm is meeting society's expectations.

profit

The practice of attending to the "image" of a firm is sometimes referred to as:

reputation management

Corporate managers who fail to give due consideration to the rights of employees and other concerned groups in the pursuit of profit are treating these groups as means to the ends of stockholders. This is unjust according to the ________.

rights-based ethical framework

Which of the following versions of corporate social responsibility (CSR) suggests that the long-term financial well-being of every firm is directly tied to questions of how the firm both affects and is affected by the natural environment?

sustainability

Free market economics is grounded in the ________.

utilitarian framework of ethics - With roots in Adam Smith, the ethical view that underlies much of 20th-century economics—essentially what we think of as the free market—is decidedly utilitarian. In this way, utilitarianism continues to have a very strong impact on business and business ethics.

The ________ serves as an articulation of the fundamental principles at the heart of the organization and should guide all decisions without abridgment

Mission Statement

Virtue ethics directs us to consider the ________ of individuals and how various character traits can contribute to, or obstruct a happy, meaningful life.

Moral Character

In an ethical decision-making process, creativity in identifying options is called "________."

Moral imagination - Creativity in identifying options—also called "moral imagination"—is one element that distinguishes good people who make ethically responsible decisions from good people who do not.

Individual codes of conduct based on one's value structures regarding how one should live, how one should act, what one should do, and what kind of a person should one be is sometimes referred to as ________.

Morality - How should we live? This fundamental question of ethics can be interpreted in two ways. "We" can mean each one of us individually, or it might mean all of us collectively. In the first sense, this is a question about how I should live my life, how I should act, what I should do, and what kind of person I should be. This meaning of ethics is based on our value structures, defined by our moral systems; and, therefore, it is sometimes referred to as morality.

Ethics refers to the applications of ________ on which people's decisions are based.

Morals - There will be many times within a business setting where an individual will need to step back and ask: What should I do? How should I act? If morals refer to the underlying values on which our decisions are based, ethics refers to the applications of those morals to the decisions themselves. So, an individual could have a moral value of honesty, which, when applied to her or his decisions, results in a refusal to lie on an expense report.

Philosophers often state that ethics is ________, which means that it focuses on people's reasoning about how they should act.

Normative-Philosophers often emphasize that ethics is normative, which means that it deals with our reasoning about how we should act. Social sciences, such as psychology and sociology, also examine human decision making and actions; but these sciences are descriptive rather than normative.

Which of the following is a true statement about norms?

Norms are standards of appropriate and proper (or "normal") behavior. They establish the guidelines or standards for determining what we should do, how we should act, what type of person we should be.

Which of the following is emphasized by a compliance-based culture?

Obedience to rules as the primary responsibility of ethics

Which of the following statements reflects the approach of a principle-based ethical tradition?

Obey the law - Ethical principles can simply be thought of as a type of rule, and the principle-based approach to ethics tells us that there are some rules that we ought to follow even if doing so prevents good consequences from happening or even if it results in some bad consequences.

Which of the following is the reason why normative myopia is especially liable to occur in a business context?

People are more likely to focus on the technical aspects of the task at hand in a business context, and thus, fail to recognize the ethical aspect. - In a business context, people may be especially likely to focus on the technical aspects of the task at hand and experience normative myopia in the process. Chugh and Bazerman similarly warn of inattentional blindness, which they suggest results from focusing failures.

The ________ of corporate social responsibility (CSR) holds that just as individuals have no ethical obligation to contribute to charity or to do volunteer work in their community, business has no strict ethical responsibility to serve wider social goods.

Philanthropic Model - The philanthropic perspective of the economic model holds that, like individuals, business is free to contribute to social causes as a matter of philanthropy. From this perspective, business has no strict obligation to contribute to social causes, but it can be a good thing when they do so.

Which of the following is true of philanthropy in accordance with the economic model of corporate social responsibility?

Philanthropy done for reputational reasons and financial ends is ethically responsible. - From the perspective of the narrow view of economic model of corporate social responsibility (CSR), only philanthropy done for reputational reasons and financial ends is ethically responsible. Because business managers are the agents of owners, they have no right to use corporate resources except to earn owners greater returns on their investment.

Which of the following considerations can sometimes override consequences when comparing and weighing alternatives for ethical decision making?

Principles - Sometimes matters of principles, rights, or duties might override consequences when comparing and weighing alternatives for ethical decision making. For example, how an employee compares and weighs alternatives for ethical decision making could depend on the duties associated with his position.

Which of the following principles does utilitarianism emphasize?

Producing the greatest good for the greatest number - The emphasis on the overall good, and upon producing the greatest good for the greatest number, makes utilitarianism a social philosophy that opposes policies that aim to benefit only a small social, economic, or political minority. In this way, utilitarianism provides strong support for democratic institutions and policies.

Which of the following is a value that will impact the culture of an organization in the absence of any other established values?

Profit - at any cost

Legal rules, organizational rules, role-based rules, and professional rules form a part of a ________, which functions to organize and ease relations between individuals.

Social Contract - Legal rules, organizational rules, role-based rules, and professional rules can be thought of as part of a social agreement, or social contract, which functions to organize and ease relations between individuals.

No group could function if members were free at all times to decide for themselves what to do and how to act. Which of the following functions to organize and ease relations between individuals?

Social Contract - Legal rules, organizational rules, role-based rules, and professional rules can be thought of being a part of a social agreement, or social contract, which functions to organize and ease relations between individuals.

In a general sense, anyone who affects or is affected by decisions made within a firm can be called a business ________.

Stakeholder-In a general sense, a business stakeholder will be anyone who affects or is affected by decisions made within the firm, for better or worse. Failure to consider these additional stakeholders will have a detrimental impact on those stakeholders, on stockholders, specifically, and on the firm's long-term sustainability as a whole.

Which of the following is an essential element in establishing an ethical leadership?

The end or objective toward which the leader leads - While some means may be ethically more appropriate than others (e.g., persuasion rather than coercion), it is not the method alone that establishes a leader as ethical. The other element of ethical leadership involves the end or objective toward which the leader leads.

Which of the following should an organization do in order to have an effective compliance and ethics program?

The organization should establish standards and procedures to prevent and detect criminal conduct. - For an effective compliance and ethics program, the organization should communicate its standards and procedures to prevent and detect criminal conduct. The organization shall communicate its standards and procedures to all members of the organization through training or other means appropriate to such individuals' respective roles and responsibilities.

Which of the following is the pursuit of the highest standard for what we should believe?

Theoretical reason - Theoretical reason is the pursuit of truth, which is the highest standard for what we should believe. According to this tradition, science is the great arbiter of truth.

Which of the following statements is true about value-based cultures?

These cultures are perceived to be more flexible and far-sighted corporate environments - In the 1990s, a distinction came to be recognized in types of corporate culture: some firms were classified as compliance-based cultures (the traditional approach) while others were considered to be integrity-based or values-based cultures. These latter cultures are perceived to be more flexible and far-sighted corporate environments.

Ethics refers to how human beings should properly live their lives.

True

Lack of any generally accepted fundamental values for the organization is a clear sign of a "toxic" culture

True

One of the major challenges to an ethics based on rights points to practical problems in applying a theory of rights to real-life situations.

True

Societies that value individual freedom legally stipulate codes of personal integrity and common decency to safeguard this freedom.

True

The philanthropic perspective of the economic model holds that business has no strict obligation to contribute to social causes.

True

No culture, in business or elsewhere, is static.

True - No culture, in business or elsewhere, is static. Cultures change; but modifying culture—indeed, having any impact on it at all—is a bit like moving an iceberg

Responsibility for the circumstances that can encourage ethical behavior and can discourage unethical behavior falls predominantly to the business management and executive team.

True - Responsibility for the circumstances that can encourage ethical behavior and can discourage unethical behavior falls predominantly to the business management and executive team.

Legislators created a form of business called corporations to encourage people to engage in business activities.

True - The law has created a form of business called corporations, which limits the liability of individuals for the risks involved in business activities. Legislatures thought that businesses could be more efficient in raising the capital necessary for producing goods, services, jobs, and wealth if investors were protected from undue personal risks.

A critical element of comparing and weighing the alternatives is the consideration of ways to mitigate, minimize, or compensate for any possible harmful consequences

True - The next step in the decision-making process after considering all available alternatives is to compare and weigh the alternatives. A critical element of this evaluation will be the consideration of ways to mitigate, minimize, or compensate for any possible harmful consequences or to increase and promote beneficial consequences.

The philanthropic perspective of the economic model in which business support for a social cause is done because it is the right thing to do differs from the reputational version only in terms of the:

Underlying Motivation - The philanthropic perspective of the economic model in which business support for a social cause is done simply because it is the right thing to do differs from the reputational version only in terms of the underlying motivation.

________ is commonly identified with the principle of "maximize the overall good" or, in a slightly different version, of producing "the greatest good for the greatest number.

Utilitarianism

Which of the following is true about values?

Values are underlying beliefs that cause us to act or to decide in a certain way.

An ethics of ________ shifts the focus from questions about what a person should do, to a focus on who that person is.

Virtue - This shift requires not only a different view of ethics but, at least as important, a different view of ourselves.

The study of various character traits that can contribute to, or obstruct, a happy and meaningful human life is part of ________

Virtue Ethics

The ________ tradition reminds us that we are as likely to act out of habit and based on character as we are to act after careful deliberations.

Virtue ethics - When we talk about decision making, it is easy to think in terms of a rational, deliberative process in which a person consciously deliberates about and weighs each alternative before acting. But the virtue ethics tradition reminds us that our decisions and our actions are very often less deliberate than that. We are as likely to act out of habit and based on character as we are to act after careful deliberations.

What is the difference between virtue ethics and principle-based ethics?

Virtue ethics is based on character traits, whereas principle-based ethics is based on a set of rules. - Virtue ethics is a tradition within philosophical ethics that seeks a full and detailed description of those character traits, or virtues, that would constitute a good and full human life. Principle-based ethics direct us to act on the basis of set moral rules or principles.

The defenders of the sustainability approach toward corporate social responsibility (CSR) point out that ________.

all economic activity exists within a biosphere that supports all life - They argue that the present model of economics, and especially the macroeconomic goal of economic growth, is already running up against the limits of the biosphere's capacity to sustain life.

Utilitarianism determines ethical and unethical acts by their ________.

consequences - Thus, the end justifies the means according to utilitarians.

The three major categories of an ethical framework are:

consequences, principles, and personal character

________ is generally referred to as the responsibilities that a business has to the society in which it operates.

corporate social responsibility (CSR)

The form of business that limits the liability of individuals for the risks involved in business activities is known as ________.

corporation

The omission known as change blindness occurs when ________.

decision makers fail to notice gradual changes over time - According to Bazerman and Chugh, change blindness is one of the means by which ethical issues might go unnoticed. This omission occurs when decision makers fail to notice gradual changes over time.

The aspect of business ethics that examines business institutions from a social rather than an individual perspective is referred to as:

decision making for social responsibility - Business ethics is concerned with how business institutions ought to be structured, about whether they have a responsibility to the greater society (corporate social responsibility or CSR), and about making decisions that will impact many people other than the individual decision maker. This aspect of business ethics asks people to examine business institutions from a social rather than from an individual perspective. This broader social aspect of ethics is referred to as decision making for social responsibility.

According to the ________ model of corporate social responsibility (CSR), the social responsibility of business managers is simply to pursue profit within the law.

economic

The ________ directs managers to maximize profit and shareholder wealth and recognizes only legal limitations on the pursuit of profit.

economic model of corporate social responsibility (CSR) - The narrow economic model of corporate social responsibility (CSR) directs managers to maximize profit and shareholder wealth and recognizes only legal limitations on the pursuit of profit. A variation of this model acknowledges that philanthropy is an ethically good thing that can indirectly contribute to profit by improving reputation and brand recognition.

A ________ environment is one in which employees act in responsible ways, even when the law does not require it.

ethical

Corporate social responsibility (CSR) refers to the:

ethical expectation that society has for business. - Corporate social responsibility (CSR) refers to the ethical expectations that society has for business. Social responsibility is what a business should or ought to do for the sake of the society, even if this comes with an economic cost.

Whistle-blowing to external groups is usually preferred over internal mechanisms for reporting wrongdoing.

false - Because whistle-blowing to external groups, such as the press and the legal authorities, can be so harmful to both the whistle-blower and to the firm itself, internal mechanisms for reporting wrongdoing are preferable for all concerned.

If we are told specifically to pay attention to a particular element of a decision or event, we are likely to miss all of the surrounding details, no matter how obvious. According to Bazerman and Chugh, this phenomenon is known as ________.

inattentional blindness - Bazerman and Chugh warn of inattentional blindness, which they suggest results from focusing failures. If we happen to focus—or if we are told specifically to pay attention to a particular element of a decision or event—we are likely to miss all of the surrounding details, no matter how obvious.

Missing a highway turn-off as a result of speaking on a cell phone while driving is an example of ________.

inattentional blindness - Bazerman and Chugh warn of inattentional blindness, which they suggest results from focusing failures. These focusing failures then result in a moment where we ask ourselves, "How could I have missed that?" You may recall speaking on a cell phone while driving and perhaps missing a highway turn-off by mistake.

________ are fundamental to theories of social justice upon which capitalist economies have been built.

liberty and equality - Liberty and equality are fundamental to theories of social justice upon which democratic societies and capitalist economies have been built and, thus, are crucial to an understanding of business ethics. They are also the core elements of most modern conceptions of social justice