Business and Society Chapter 10

In a 2002 poll, _________ ranked last on the "who do you trust scale."

Chief executive officers

In this example of a conflict of interest, ________ conducted a series of off-the-books partnerships that were used to hide the organization's debt and inflate its stock price. The partnerships were managed by the company's executives who stood to profit the most from the transactions.

Enron

Because stakeholders' interests frequently do not overlap, an organization is able to focus on one stakeholder at a time.

False

Despite Johnson & Johnson's best efforts to respond to its customers by pulling Tylenol off shelves, the product has never regained its market share.

False

Only since Enron's collapse have ethicists and business professionals really been concerned about the increasing focus on "short-term" earnings.

False

The pharmaceutical industry has found that advertising directly to the consumer minimizes problems experienced earlier with consumers regarding their confidence in products.

False

Toyota, like Johnson & Johnson, halted production in response to its concerns for its customers

False

The Federal Communication Commission (FCC)

Guard rights of consumers

The Federal Trade Commission

Guard rights of consumers

Occupational Safety and Health Administration (OSHA)

Guard rights of employees

The Federal Reserve Board

Guard rights of shareholders

The Environmental Protection Agency (EPA)

Guard rights of the community

The idea that consumers have the right to safety, right to be heard, right to choose, and right to be informed came from ____________ in ________.

John F. Kennedy; 1962

In this classic example of a company treating its employees responsibly, ____________ was the first company to offer company-paid vacations, stock ownership plans, employee suggestion program, and the guaranteed employment plan. This company has not laid off employees in the United States since 1948.

Lincoln Electric

In a classic example of failing to protect its employees, ___________ knew asbestos caused cancer as early as 1930. However, the company lied to its employees and used several tactics to cover-up the product's effects.

Manville Corporation

Business partners, customers, and employees

Primary Stakeholders

Opinion formers, community, and authorities

Secondary Stakeholders

An interest, claim, or right to something

Stake

Before the beginning of the twentieth century, consumers did not have the right to sue manufacturers for a defective product.

True

Conflicts involving organizations are more damaging than those who involve individuals.

True

Ethical disasters in corporations often start as small issues and it is either denial or mismanagement that cause seemingly minor situations to mushroom into huge legal, ethical, and public relations nightmares.

True

In ethical decision-making and particularly in cases dealing with product safety, firms are best served when they consider the long-term consequences of a decision.

True

In the past five-to-ten years, most lawsuits filed against pharmaceuticals are related to the companies' advertising and marketing practices.

True

Nothing will put a company out of business faster than offering a product that is dangerous, poorly produced, or of inferior quality.

True

One of the most common faults in ethical decision making is to ignore the long-term consequences of a decision.

True

The definition of conflict for an organization is similar to that for an individual ; that is, if a stakeholder thinks that an organization's judgment is biased because of a relationship it has with another firm, a conflict could exist

True

The real proportion of wrong-doers is probably quite small.

True

The due care theory involves at least the elements set out below.

f: a, c, & d a. products and services meet all government regulations and specifications c. products should be inspected regularly for quality d. manufacturers should institute a system to recall products that prove dangerous after

Organizations have many ethical obligations to their employees including:

right to privacy, right to a safe workplace, right to freedom of speech

For the public, the top three factors in corporate reputation are :

transparent and honest practices, trustworthiness, and high-quality products and services