Business Chapter 4: Business Ethics and Social Responsibility: Doing Well by Doing Good

Car manufacturers have begun designing more electric vehicles because consumers are increasingly conscious of their __________. These consumers do not want to feel like they are contributing to climate change, and they have changed their buying behaviors to reflect that desire. carbon footprint cause-related marketing sustainable development green marketing

carbon footprint Carbon footprint refers to the amount of harmful greenhouse gases that a firm (or individual) emits throughout its operations, both directly and indirectly.

Outside of his job as an IT associate at a telecommunications company, Samuel volunteers for Big Brothers Big Sisters (BBBS). Samuel knows that his company sometimes donates to nonprofits in the community, so he puts together a proposal suggesting that the company partner with BBBS to provide free or reduced-cost internet access to participants. In his proposal, Samuel mentions that the company could use this partnership with BBBS to garner goodwill within the community. What Samuel is proposing is a type of ___________. cause-related marketing planned obsolescence green marketing sustainable development

cause-related marketing Cause-related marketing involves partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.

Mel has worked for a midsize educational research company for more than ten years. When she first started, leadership appeared to have a strong commitment to corporate values and the company's longstanding code of ethics. As the years passed, many of those leaders left the organization and a new CEO was eventually hired. The new CEO decided to restructure the company and create a revised set of values and a new code of ethics. During this time, the corporate culture became more toxic, and a number of scandals came to light, including an entire department that was misusing corporate funds. Research shows that significant ________ can drive misconduct in organizations. strong leadership individual contribution change accountability

change Research shows that organizations undergoing significant change have noticeable increases in misconduct.

Soon after Samsung released the Galaxy Note 7, the company announced that the battery on some units could overheat and explode. It initially offered replacements, but those devices also presented a potential overheating hazard. When consumers continued to complain, Samsung bowed to pressure to issue an expensive U.S.-wide recall of the device and to issue software updates to prevent users in other countries from using the devices. Samsung responded to this controversy in a way that demonstrates a commitment to __________. the Sarbanes-Oxley Act planned obsolescence corporate philanthropy consumerism

consumerism Consumerism is a social movement that focuses on four key consumer rights: (1) the right to be safe, (2) the right to be informed, (3) the right to choose, and (4) the right to be heard.

(4-4)Sustainable development means ______. -marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit -developing and promoting environmentally sound products and practices to gain a competitive edge -business contributions to the community through the actions of the business itself rather than donations of money and time -doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs

doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs Sustainable development means doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs

(4-4)An organization's responsibility to _______ may include complying with laws and offering additional benefits, such as on-site childcare. investors suppliers customers employees

employees An organization's responsibility to employees may include complying with laws that include equal opportunity, workplace safety, minimum-wage, and overtime requirements, as well as providing additional benefits such as on-site childcare.

(4-1,4-2)Being open-minded is an example of the universal ethical standard of _____. -respect -responsibility -fairness -caring

fairness Being open-minded is an example of the universal ethical standard of fairness

(4-4)All of the following are ways that companies are responsible to communities except _____. -corporate responsibility -green marketing -cause-related marketing -corporate philanthropy

green marketing Green marketing is developing and promoting environmentally sound products and practices to gain a competitive edge. This is a way that companies are responsible to the environment, not the community.

The Clean Dream is a company that manufactures and sells eco-friendly paper products, like toilet paper and paper towels, made out of recycled materials. It believes that many consumers are becoming more conscious of their environmental impact and would be willing to switch from traditional brands to Clean Dream's brand. This is an example of __________. planned obsolescence sustainable development green marketing cause-related marketing

green marketing Green marketing means marketing environmental products and practices to gain a competitive edge.

Jordan's boss has asked her to review the company's progress toward becoming more socially responsible. Jordan is going to go through all of the activities the company has completed over the past year and weigh them against their initial goals. Jordan is conducting a _________ audit. cause-related marketing social planned obsolescence code of conduct

social A social audit is a systematic evaluation of how well a firm is meeting its ethics and social responsibility goals.

Cerise works in marketing at a kitchenware company that does not have a published code of conduct. She recently overheard a coworker talking about a way to improve their click-through rates on digital ads. Cerise mentioned the idea to her boss, who then recommended the idea to the company's chief marketing office. At the company's end-of-year banquet, the chief marketing office awarded Cerise with the coveted "marketer of the year" award for her "big idea." Although Cerise believes that it's wrong to take credit for someone else's idea, she feels justified in winning the award because the idea helped earn the company more money. Cerise has failed in maintaining _________. -a universal ethical standard -an ethical dilemma -business ethics -a personal ethic

-business ethics Business ethics is the application of right and wrong, good and bad, in a business setting. Cerise has not applied her personal ethic in a business setting, and thus failed in maintaining business ethics.

(4-5, 4-6)The starting point for a social audit is to _________. -increase community involvement -create a code of conduct -measure financial performance -establish goals

-establish goals The starting point for a social audit is to establish goals.

(4-3) Which of the following statements is incorrect regarding studies about employees feeling pressure to break rules at work? -Employees who self-identified as individual contributors felt more pressure than employees who self-identified as top managers to break the rules. -Employees felt more pressure to break the rules when they had weak supervisor leadership. -Employees felt more pressure to break the rules when they perceived their leaders had a weak commitment to organizational values and ethical leadership. -Misconduct increases in organizations experiencing significant change.

Employees who self-identified as individual contributors felt more pressure than employees who self-identified as top managers to break the rules. -Employees who self-identified as being part of top management experienced pressure to bend the rules almost two times greater than employees who self-identified as individual contributors.

(4-1,4-2)_________is/are the obligation of a business to contribute to society, while ______is/are a set of beliefs about right and wrong, good and bad.

Social responsibility: Social responsibility is the obligation of a business to contribute to society, while ethics are a set of beliefs about right and wrong, good and bad. Ethics: Social responsibility is the obligation of a business to contribute to society, while ethics are a set of beliefs about right and wrong, good and bad.

Aaliyah manages international contracts for a national retailer that sells housewares and décor. She recently had to cancel one of their largest manufacturing contracts because of alleged human rights violations at a foreign facility. To help prevent future violations and ensure that all of the manufacturers they do business with hold themselves to socially responsible standards, what kind of document should Aaliyah include in all of her contracts? The company's roadmap for planned obsolescence An explanation of the company's sustainable development goals An explanation of the company's cause-related marketing goals The company's code of conduct

The company's code of conduct A code of conduct is an official document that businesses use to set clear policies for human rights, wages, safety, and environmental impact.

Oleksii bought stock in GameStop in early 2021. Ever since, he has been closely following industry reports about the company to make sure that they are investing in long-term growth. Oleksii is just one of many investors who hold stock in the company and who care about the company's performance. Why should GameStop consider the interests of these investors? GameStop is concerned about ethical dilemmas regarding the investors. GameStop stock is a form of planned obsolescence. The investors have a social responsibility to GameStop. The investors are stakeholders in the company.

The investors are stakeholders in the company. Stakeholders are groups that have a stake—or a personal interest—in the performance and actions of an organization.

(4-3) Which of the following is not a question that may appear on an ethical decision-making framework? -What would our competitor do? -Who would benefit? Who would suffer? -Are the alternative solutions legal? Are they fair? -Could you defend your decision on the nightly TV news?

What would our competitor do? "What would our competitor do?" is not one of the questions that may appear on expertly developed frameworks for ethical decision making. A leader has no way of knowing if their competitor would act ethically or not.

Kelly works at a company that has a published code of ethics. She has observed some troubling behavior in the purchasing department: one purchasing agent is buying paper products exclusively from her husband's company, which appears to be a conflict of interest. Kelly thinks she should tell someone, but she isn't sure who. Kelly's company lacks ________. executive buy-in whistleblower protection a reporting structure staff training

a reporting structure An important part of a code of ethics is a clear and trusted reporting structure. Employees should be able to easily and anonymously report ethical violations that they observe.

Evan is the manager of a Walmart store in Idaho. On a recent Sunday—their busiest day of the week—the Walmart lost power for four hours. The relatively short power outage cost Evan's store roughly $3 million in lost revenues and spoilage. The only way to recover financially in the short term would be to lay off half of the store's employees. Evan knows that there are a number of college students who are high performers. He assumes these employees still live at home with their parents, but he can't be sure. He also knows that there are some employees who live paycheck-to-paycheck and rely on their employment at Walmart to feed their families. Evan is torn between laying off employees based on their perceived financial need versus their performance. Which of the following represents Evan's decision? -A code of ethics -An ethical dilemma -A universal ethical standard -Business ethics

-An ethical dilemma An ethical dilemma is a decision that involves a conflict of values; every potential course of action has some significant negative consequences.

Kasia works in R&D at a packaged foods company. Her team has just released a new yogurt product that is marketed toward children who are sensitive to dairy. The product had been on shelves for just over a week when Kasia discovered a discrepancy on the label: although it says that it is manufactured in a nut-free facility, one of the individual ingredients is manufactured in a facility that does use nuts in some products, so the potential for cross-contamination is high. Kasia reported this to her boss, but her boss asked her to not tell anyone else and promised they would fix the label on the next run. If Kasia reports this to anyone else, the company will have to pull the product from shelves and issue a recall. This could cost the company millions of dollars in lost sales and potential lawsuits, which could result in layoffs. Whether Kasia decides to report the issue to higher authorities or not, she knows that someone will suffer. Which of the following describes Kasia's situation? -An ethical dilemma -A universal ethical standard -Business ethics -A code of ethics

-An ethical dilemma An ethical dilemma is a decision that involves a conflict of values; every potential course of action has some significant negative consequences.

(4-5, 4-6) Individual companies can influence the working conditions and pay of workers in foreign countries in which of the following ways? -Conducting a social audit -Creating a code of conduct for foreign vendors -Only hiring American workers -Offering bribes to government officials in foreign countries

-Creating a code of conduct for foreign vendors Creating a code of conduct for foreign vendors can influence the working conditions and pay of workers in foreign countries

Amanda works as an HR manager in a multinational corporation. Although her parents taught her that certain common practices in American society, like divorce, are "bad," she knows she must set aside her personal beliefs when interviewing job candidates. Amanda's belief in certain practices as "good" or "bad" according to her upbringing represents her personal ______. -ethics -code of ethics -ethical dilemma -universal ethical standard

-Ethics Ethics are a set of beliefs about right and wrong, good and bad.

(4-5, 4-6) Which of the following is not a question that businesses must consider regarding bribes? -How can corporations monitor corruption and enforce corporate policies in their foreign branches? -What are other ways to gain a competitive edge in countries where bribes are both accepted and expected? -Will our bribe lead to the outcome we are expecting? -When does a gift become a bribe?

-Will our bribe lead to the outcome we are expecting? "Will our bribe lead to the outcome we are expecting?" is not a question for businesses to consider regarding bribes.establish goals

Lana works at a large investment brokerage firm. Many employees, including Lana, have corporate credit cards for business travel and for entertaining clients. When employees travel, they must adhere to a per diem for each meal. When they entertain clients, the amount they can spend is more generous. Lately, Lana has been noticing that some of her coworkers use their corporate cards to buy expensive meals that exceed the per diem while traveling. They will claim that a customer was present in order to get the expense approved. Lana has suggested to the HR department that they create a document that specifically states that this kind of behavior is unacceptable. Lana is asking HR to create a(n) ________. -ethical dilemma -business ethic -universal ethical standard -code of ethics

-a code of ethics A code of ethics is a formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.

Xin is a recent college graduate who is interning with a hedge fund. He is excited to be working in finance and is willing to work long hours to impress his coworkers in the hopes that they will hire him as a full-time employee. One of his colleagues asks Xin if he can make copies of a document. While he is making the copies, Xin notices that the document includes material nonpublic information from another company. He knows from his studies that it would be illegal to make investment decisions based on this information. Xin is not sure how to handle this situation, so he references the company handbook, which includes standards of conduct, also known as ___________. -an ethical dilemma -a universal ethical standard -business ethics -a code of ethics

-a code of ethics A code of ethics is a formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.

Amer and Denton work together at a publishing company where a high-level executive was recently fired for misappropriating company funds. Although Amer and Denton were raised in different countries and with different spiritual beliefs, they both agree that stealing from their employer, like the executive did, is wrong. This kind of shared belief across cultures and experiences is part of __________. -a code of ethics -business ethics -an ethical dilemma -a universal ethical standard

-a universal ethical standard Universal ethical standards are norms that apply to all people across a broad spectrum of situations.

Armen works for an exporter and has learned that in some countries, bribery of government officials is not only common, it's not considered unethical. Armen understands that to get business done in these countries, he must do things differently than he would in Canada, where his company is located. In this case, bribery is an example of something that would not be included in ___________. -business ethics -a universal ethical standard -a code of ethics -an ethical dilemma

-a universal ethical standard Universal ethical standards are norms that apply to all people across a broad spectrum of situations.

Jennifer is a supply manager at a shipping company. She also runs a small business selling her artwork on the side. Sometimes Jennifer takes home offices supplies from her day job to use in her personal business: things like sticky notes, pens, shipping labels, and printer paper. She is always sure to order enough of these items for the company so that there are plenty available for her coworkers. Although she would never take money from the company, Jennifer does not believe she is doing anything wrong because "no one will miss those items." Which of the following is Jennifer not applying in her behavior at work? -Business ethics -A code of ethics -A universal ethical standard -An ethical dilemma

-business ethics Business ethics is the application of right and wrong, good and bad, in a business setting. Cerise has not applied her personal ethic in a business setting, and thus failed in maintaining business ethics.

Fatima is the director of human resources for a public relations firm. Recent controversies among some of her company's clients have prompted leadership to ask her to create a set of standards of conduct for their employees. The leadership team hopes that a published _______ will help prevent a scandal in their own workplace by encouraging "good" behavior. ethical dilemma document code of ethics universal ethical standard ethics review

-code of ethics A code of ethics is a formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.A code of ethics is a formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.

Allison works at a company with a published code of ethics and a commitment to a positive corporate culture that includes respect and kindness. Her manager, Jill, uses a lot of harsh and sometimes explicit language in front of her employees. Jill's behavior makes Allison feel uncomfortable, but even worse, it seems to encourage other employees to act in a similar manner. Allison spoke to a few of these employees to let them know how their behavior was making her feel, and they in turn confided that they felt pressured by Jill to act that way. When it comes to modeling ethical behavior, Allison's manager is demonstrating a(n) ________ commitment to organizational values. -individual -conflicted -weak -strong

-weak Research shows that direct supervisory leaders with a weak commitment to corporate values put more pressure on their employees to bend the rules than leaders with a strong commitment to corporate values.

(4-1,4-2) Which of the following is the definition for an ethical dilemma? -Ethical norms that apply to all people across a broad spectrum of situations -The application of right and wrong, good and bad, in a business setting -A decision that involves a conflict of values -A set of beliefs about right and wrong, good and bad

A decision that involves a conflict of values An ethical dilemma is a decision that involves a conflict of values.

C.J. works in the product engineering department of a popular appliance manufacturer. His manager has pressured him to use cheaper components in future refrigerator designs so that they will break sooner, thus prompting consumers to purchase refrigerators more often. What is C.J.'s manager proposing? A form of corporate responsibility A type of planned obsolescence A commitment to stakeholders An investment in consumerism

A type of planned obsolescence Planned obsolescence is the strategy of deliberately designing products to fail in order to shorten the time between purchases.

(4-4)__________includes all business donations to nonprofit groups, including money, products, and employee time, while _________focuses on the actions of the company rather than donations of money and time.

Corporate Philanthropy, Corporate responsibility: includes all business donations to nonprofit groups, including money, products, and employee time, while corporate responsibility focuses on the company's actions rather than donations of money and time.

A popular chain restaurant called Sunday Roasters decided to build a new location and had two options for construction sites, one more expensive than the other. The cheaper site abutted a waterway, which the company knew would likely become contaminated during construction. The restaurant also learned that the vibrations and noise from the machinery could disturb the wildlife, potentially affecting the fragile ecosystem for years to come. The more expensive construction site posed no threat to the local wildlife or waterways. Refer to Scenario 4.1. Julia lives in the town where Sunday Roasters has just built their new location near a fragile waterway. Julia and some of her neighbors are upset by this decision and have called for their fellow citizens to boycott the restaurant. Why should the company take their opinions into consideration? Julie and her neighbors have social responsibilities toward the company. The company is committed to consumerism. The company believes in planned obsolescence. Julia and her neighbors are stakeholders of the company.

Julia and her neighbors are stakeholders of the company. Stakeholders are groups that have a stake—or a personal interest—in the performance and actions of an organization.

Many consumers believe that Apple, Inc., is engaging in _________, because whenever it launches a new iPhone model, older models appear to break down. green marketing planned obsolescence sustainable development cause-related marketing

planned obsolescence Planned obsolescence is the strategy of deliberately designing products to fail in order to shorten the time between purchases.

(4-1,4-2)Examples of the universal ethical standard of ______ are being considerate and tolerant of differences. -citizenship -respect -caring -trustworthiness

respect Examples of the universal ethical standard of respect are being considerate and tolerant of differences.

(4-4)The _______ means that consumers should have access to and the ability to review all information about a product before buying. right to be informed right to choose right to be heard right to safety

right to be informed The right to be informed means that consumers should have access to and the ability to review all information about a product before buying.

(4-4)The _______ means that consumers should have access to a variety of products at competitive prices. right to be informed right to choose right to be heard right to safety

right to choose The right to choose means that consumers should have access to a variety of products at competitive prices.

A popular chain restaurant called Sunday Roasters decided to build a new location and had two options for construction sites, one more expensive than the other. The cheaper site abutted a waterway, which the company knew would likely become contaminated during construction. The restaurant also learned that the vibrations and noise from the machinery could disturb the wildlife, potentially affecting the fragile ecosystem for years to come. The more expensive construction site posed no threat to the local wildlife or waterways. Refer to Scenario 4.1. When Sunday Roasters opted for the cheaper site, it demonstrated a lack of ___________. ethical dilemmas universal ethical standards social responsibility a code of ethics

social responsibility Social responsibility is the obligation of a business to contribute to society.

Marley works for a company that manufactures tobacco products. To help offset the negative consequences of the products her company sells, Marley is part of a task force that promotes smoking cessation education programs. These programs are a way the company promotes its ___________. universal ethical standards social responsibility ethical dilemmas code of ethics

social responsibility Social responsibility is the obligation of a business to contribute to society.

(4-3) A whistle-blower is _______. -someone who helps to develop a company's code of ethics -someone who conducts staff training on ethics -someone who feels pressure to break the rules in an organization -someone who reports a company's illegal or unethical behavior

someone who reports a company's illegal or unethical behavior -A whistle-blower is someone who reports illegal or unethical behavior.