MKTG 300 CH3

Top managers who behave ethically can influence others in an organization to behave ethically. a. True b. False

TRUE

9. The greater the number of persons affected by a negative outcome, the more likely it is that marketers will recognize a problem as unethical. a. True b. False

True

Environmental sustainability is an important component of the sustainability philosophy. a. True b. False

True

Ethical questions range from narrowly defined issues to broader philosophical, social questions. a. True b. False

True

Morals are rules people develop as a result of cultural values and norms. a. True b. False

True

Refer to Drug Marketing. Which level of the pyramid of social responsibility is most relevant to this situation in which the drug companies want to ensure that they are "playing by the rules"? a. Legal responsibilities b. Ethical responsibilities c. Philanthropic responsibilities d. Economic responsibilities e. Standard responsibilities

a. Legal responsibilities RATIONALE: Legal responsibilities are based on obeying the law. Law is society's codification of right and wrong.

Florida Hospitals

A group of hospital administrators in Florida were discussing the amount of resources used to care for patients who were illegal immigrants and had no medical insurance. One man discussed how his hospital had spent over $2 million on one illegal immigrant who had no family or friends and who was not getting better. Another administrator stated that his hospital was losing $20 million annually in order to provide care for the influx of illegal immigrants into the state. After a great deal of discussion, it was determined that there was probably nothing any one could do about the situation, and that each of them had definite ideas about how to deal with the problems.

Today's business ethics are difficult to learn because they are different from those used outside the business world. a. True b. False

False RATIONALE: Today's business ethics actually consist of a subset of major life values learned since birth.

8. When writing codes of ethics, businesses must ensure their codes deal with every possible situation. a. True b. False

False RATIONALE: Codes that are too detailed encourage employees to substitute rules for judgment.

14. Sustainability is the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment. a. True b. False

False RATIONALE: Green marketing is the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment.

1. Most people have not applied ethical standards in their everyday lives. a. True b. False

False RATIONALE: If you have experienced resentment at a line-cutter, then you have applied ethical standards.

5. Unfortunately, most businesspeople have not progressed beyond the self-centered and manipulative actions of preconventional morality. a. True b. False

False RATIONALE: Preconventional morality is childlike--calculating, selfcentered, and even selfish, based on what will be immediately punished or rewarded. Fortunately, most businesspeople have progressed beyond this behavior.

Because social responsibility has proven to have a limited return on investment, the number of businesses opting to act socially responsible is declining. a. True b. False

False RATIONALE: Social responsibility of business is growing around the world.

While many green products have practical benefits, none of them are readily apparent to consumers. a. True b. False

False RATIONALE: Some green products have practical benefits that are readily apparent to consumers. A few examples are energy-efficient appliances (cut electric bills), heat-reflective windows (cut air-conditioning costs), and organic foods (no pesticides poisoning the food or planet).

Sustainability refers to a business's concern for society's welfare. a. True b. False

False RATIONALE: Sustainability refers to the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time.

The foundation for the pyramid of corporate social responsibility is philanthropic responsibility. a. True b. False

False RATIONALE: The pyramid of corporate social responsibility portrays economic performance as the foundation for the other three responsibilities (legal, ethical, and philanthropic).

Drug Marketing

Pharmaceutical companies spent $4.4 billion on prescription drug advertising in 2008, mostly on television and in magazines. While the Internet is becoming a more prominent medium to reach consumers and is the primary source used to seek health information, these companies spent less than $130 million on Web marketing. One reason is that there are no guidelines, which makes these heavily regulated marketers uneasy. For example, television commercials for prescription drugs must include disclosures regarding the major side effects if the brand name is mentioned in the ad. The Food and Drug Administration (FDA) claims that existing regulations address many of the Internet advertising issues, but other aspects of Web marketing, such as social networking and search marketing, must be reviewed. That's why the FDA hearings on this issue were attended by pharmaceutical giants and Web companies like Google, Yahoo, and WebMD Health

____ is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profit and help the world at the same time. a. Sustainability b. Philanthropy c. Cause marketing d. Creative ethics e. International ethics

a. Sustainability This is the definition of sustainability, which looks at the long term and is based on the notion that companies cannot thrive for long in a world where billions of people are suffering and are desperately poor.

NSTAR Gas & Electric Company in Boston provides continuing financial support for an injury prevention program run by the Children's Hospital Boston. This funding is an example of: a. corporate social responsibility b. ethical conveyance c. a duty to engage in cause marketing d. a right to engage in social marketing e. multiculturalism

a. corporate social responsibility

For every home built by Habitat for Humanity, Whirlpool Corporation has given and continues to give free kitchen appliances to the deserving family. This donation of appliances is an example of how companies assume their: a. corporate social responsibility b. ethical conveyance c. duty to engage in cause marketing d. right to engage in social marketing e. multiculturalism

a. corporate social responsibility Corporate social responsibility is a business's concern for society's welfare, in this case an injury prevention program.

. In the future, electrical power may come from quantum nucleonics, a form of nuclear power that produces no residual radiation. The ability to use this form of power will require equipment adaptations, but it will solve the world's need for clean and efficient power. Companies that replace inefficient sources of power with quantum nucleonics only after they are required to by the Environmental Protection Agency are operating at a(n) _____ responsibility level. a. legal b. philanthropic c. ethical d. economic e. cultural

a. legal RATIONALE: At the legal responsibilities level, the business obeys the law.

Japanese law prohibits the storage of more than 50 pounds of explosive at any single site in the nation. Every night, Universal Studios Japan hosts a fireworks display. The theme park recently came under government investigation when allegations were made that the park was detonating more than 50 pounds of explosives in its nightly fireworks displays. If the allegations are true, in terms of the pyramid of corporate social responsibility, then Universal Studios Japan is not operating at a(n) _____ responsibility level. a. legal b. philanthropic c. ethical d. economic e. cultural

a. legal RATIONALE: Universal Studios Japan is not obeying the letter of the law.

Ethical development can be thought as having three levels. The most basic, childlike level is the _____ stage. a. preconventional morality b. transformationalism c. conventional morality d. postconventional morality e. actualized morality

a. preconventional morality

Hallie is a calculating, self-centered salesperson. She never engages in relationship marketing. She looks on any sales situation as a "win-lose" situation, and she believes any legal method she can use is justified when she wins. Hallie is most likely at the _____ stage of ethical development. a. preconventional morality b. transformationalism c. conventional morality d. egocentrism e. basic morality

a. preconventional morality

All of the following are factors influencing ethical decision making and judgments EXCEPT: a. rate of prosecution b. top management actions on ethics c. probability of a harmful outcome d. number of people to be affected e. social consensus

a. rate of prosecution

Which of the following is an argument used to support corporate social responsibility (CSR)? a. The free market, not companies, should decide what is best for the world. b. CSR can be a profitable undertaking. c. Businesses are not responsible for social or environmental problems. d. Businesses don't have the expertise to make social decisions. e. CSR is universally recognized, so there is no need for arguments to support CSR.

b. CSR can be a profitable undertaking. Smart companies can prosper and build shareholder value by tackling global problems

Which level of ethical development moves from an egocentric viewpoint toward the expectations of society? a. Postconventional morality b. Conventional morality c. Preconventional morality d. Secondary morality e. Primary morality

b. Conventional morality

_____ is the concern of business for the long-range welfare of both the company and its relationships to the society within which it operates. a. Consumerism b. Corporate social responsibility c. Cultural sensitivity d. Conventional morality e. Environmental consideration

b. Corporate social responsibility

At the most basic level, a firm must be profitable. What level of the pyramid of corporate social responsibility is this? a. Social b. Economic c. Ethical d. Legal e. Accountability

b. Economic The pyramid of corporate social responsibility portrays economic performance as the foundation for the other three responsibilities (legal, ethical, and philanthropic).

At what level of the pyramid of corporate social responsibility will a company be a good corporate citizen? a. Economic b. Philanthropic c. Social d. Legal e. Ethical

b. Philanthropic Philanthropic responsibilities involve being a good corporate citizen by contributing resources to the community and improving the quality of life.

Which of the following statements about the theory of sustainability is true? a. Sustainability is an internal process in which companies match resources and objectives. b. Sustainability is the idea that socially responsible companies will outperform their peers when they focus on the world's problems as marketing opportunities. c. According to the theory of sustainability, a company cannot be socially responsible without a code of ethics and managerial support of that code. d. According to the theory of sustainability, ethical behavior should never be viewed as the means of obtaining a competitive advantage. e. Sustainability is only successful if it focuses on organizational strengths.

b. Sustainability is the idea that socially responsible companies will outperform their peers when they focus on the world's problems as marketing opportunities. -Sustainability is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profit and help the world at the same time. .

Refer to Drug Marketing. If a drug manufacturer claims that its manufacturing processes are environmentally friendly in its advertising, this is an example of: a. sustenance marketing b. green marketing c. philanthropy d. deontological marketing e. clean marketing

b. green marketing RATIONALE: Green marketing is an outgrowth of the social responsibility movement and is the development and marketing of products designed to minimize negative effects on the physical environment or to improve the environment.

2. The movement to develop and market products designed to minimize negative effects on the physical environment or to improve the environment is known as: a. enviromarketing b. green marketing c. cause marketing d. social marketing e. minimalist marketing

b. green marketing RATIONALE: This is the definition of green marketing

1. Pacific Gas and Electric (PG&E) Company has donated almost $300,000 to 58 local governments and communitybased organizations for local economic development projects. Recipients of these grants include the San Benito County Economic Development Corporation's Business Outreach Program, the San Jose Conservation Corps' Hennessy Place Affordable SingleFamily Housing Project, and Mariposa County's Business Development Training Program. This sort of donation indicates PG&E was operating at a(n) _____ responsibility level of the pyramid of corporate social responsibility. a. legal b. philanthropic c. ethical d. economic e. cultural

b. philanthropic RATIONALE: By supporting local economic development projects, PG&E was being a good corporate citizen.

Many airlines offer passengers the option to purchase carbon offsets as an environmentally friendly compensation for their carbon footprint. For example, Delta customers can pay $10 to a fund that plants trees as a way to offset the carbon emissions from the airplane. Some would say Delta is: a. acting in accordance with recent rulings by the U.S. Supreme Court b. socially responsible c. not ethically motivated d. demonstrating a lack of concern for diversity e. using issue-oriented marketing

b. socially responsible

Novartis created the Novartis Research Institute for Tropical Diseases in Singapore. The institute is unique because it is a not-for-profit organization that focuses on the discovery of new drugs for the treatment of neglected diseases, such as dengue fever and tuberculosis. Not only is this good business, it is also: a. mandated by Supreme Court rulings b. socially responsible c. not ethically motivated d. demonstrating a lack of concern for diversity e. using environmental marketing

b. socially responsible Social responsibility is the duty that a business feels for the welfare of society. By helping developing nations, Novartis is helping to meet the needs of society.

One approach to developing a personal set of ethics is to: a. rely solely on one's personal character to determine what action to take b. stress the importance of rules c. ignore problems associated with the magnitude of consequences d. avoid examining the consequences of particular acts e. never trust your own behavioral instincts

b. stress the importance of rules c. ignore problems associated with

In order to combat U.S. corporations use of illegal payments and bribes in international business dealings, Congress enacted: a. the Future Corporation Protection Act (FCPA) b. the Foreign Corrupt Practices Act (FCPA) c. the Foreign Anti-Bribery Act (FABA) d. the Corporations Against Foreign Corruptions Act (CAFCA) e. Congress cannot pass laws regarding foreign business practices.

b. the Foreign Corrupt Practices Act (FCPA)

At which level of the pyramid of corporate social responsibility must a business "play by the rules"? a. Economic b. Philanthropic c. Legal d. Ethical e. Conformist

c. Legal RATIONALE: Firms operating at the legal level obey the law and play by the rules of the game.

Which of the following factors will influence ethical decision making and judgments? a. Likelihood of stakeholder responsibility b. Proactive nature of organizational sustainability c. Potential magnitude of the consequences d. Probability of ethical consensus e. Consequence of adjacencies

c. Potential magnitude of the consequences

Like many other professional organizations and businesses, the American Marketing Association has developed a formal, written guideline to help its members make better ethical decisions. This document is called a: a. behavioral practice b. moral ruling c. code of ethics d. direction of value e. principled regulation

c. code of ethics

In the _____ stage of ethical development, loyalty and obedience to the organization or to society become paramount. a. preconventional morality b. transformationalism c. conventional morality d. postconventional morality e. actualized morality

c. conventional morality

The pyramid of corporate social responsibilities contains all of the following components EXCEPT: a. economic responsibilities b. ethical responsibilities c. cultural responsibilities d. legal responsibilities e. philanthropic responsibilities

c. cultural responsibilities The four components of the pyramid of corporate social responsibility are economic, legal, ethical, and philanthropic responsibilities.

Girls between the ages of 8 and 15 years are one of the growing markets for high-end shoe manufacturers, and podiatrists say the trend is leading to many stylish young girls with grown-up foot problems. Shoe manufacturers who develop and market adult-styled shoes to this group are not operating at a(n) _____ responsibility level of the pyramid of corporate social responsibility. a. legal b. philanthropic c. ethical d. economic e. cultural

c. ethical RATIONALE: The companies are not doing what is right, just, and fair and so are not operating ethically.

Corporate social responsibility is defined as the: a. belief that the legal system defines ethical behavior b. development of inclusive codes of ethics c. rules by which social rewards are attained d. business's concern for society's welfare e. coordination of social programs for publicity purposes

d. business's concern for society's welfare

One of the favorite foods in Thailand is shark fin soup. A San Francisco-based organization claimed the soup made by its leading producer contained mercury poison, yet the leading producer of shark fin soup wanted to continue selling the soup because it believes it has a responsibility to its investors to be profitable. In terms of the pyramid of corporate social responsibility, this indicates that the soup manufacturer was operating at a(n) _____ responsibility level. a. Legal b. philanthropic c. ethical d. economic e. cultural

d. economic The company believed its mission was to be profitable.

Refer to Florida Hospitals. In order to make an ethical decision on how to handle uninsured illegal immigrants, the Florida hospital administrators must consider all of the following EXCEPT: a. social consensus b. number of people affected by the decision c. probability of harmful outcome to the hospital and to the individuals d. magnitude of morality e. length of time between the decision and the onset of consequences

d. magnitude of morality RATIONALE: Other considerations include potential magnitude of the consequences, top management's actions on ethics, and the extent of ethical problems within the organization.

Ruthanne Ross is a sales manager for Pampered Chef, a company that sells kitchen tools and other aids for cooking through party plans. She is very concerned about making sure her salespeople understand the importance of treating each customer fairly and developing long-term relationships with them. She asks that before a sale is made, the salesperson should make sure customers can afford the items and are not buying due to social pressures. Ross is most likely at the _____ stage of ethical development. a. preconventional morality b. transformationalism c. conventional morality d. postconventional morality e. actualized morality

d. postconventional morality

The _____ stage of ethical development represents the morality of the mature adult. a. preconventional morality b. transformationalism c. conventional morality d. postconventional morality e. actualized morality

d. postconventional morality

All of the following statements about the creation of a code of ethics are true EXCEPT: a. A written code helps employees avoid confusion when determining whether their decisions are ethical. b. A code can be an effective internal control on behavior. c. The process of formulating the code facilitates discussions that ultimately create better decisions. d. A code helps employees identify what their firm recognizes to be acceptable business practices. e. A code guarantees ethical behavior among a firm's employees.

e. A code guarantees ethical behavior among a firm's employees.

_____ refers to the moral principles or values that generally govern the conduct of an individual or a group. a. Righteousness b. Social consensus c. Sustainability d. Virtue e. Ethics

e. Ethics

Which of the following statements does not describe ethics? a. Ethics are the moral principles or values that generally govern the conduct of an individual. b. Ethics is the standard of behavior by which conduct is judged. c. Morals are a foundation for ethical behavior. d. Ethical values are situation specific and time oriented. e. Ethics occur naturally, and cannot be taught.

e. Ethics occur naturally, and cannot be taught.

_____ are the rules people develop as a result of cultural values and norms. a. Virtues b. Ethics c. Socialization d. Conscience e. Morals

e. Morals

The four components of the pyramid of corporate social responsibility are: a. sustainability, creativity, profit, and culture b. organizational culture, creativity imagery, economic performance, and objectivity c. organizational, financial, social, and cultural responsibilities d. sustainability, legality, creativity, and competition e. economic, legal, ethical, and philanthropic responsibilities

e. economic, legal, ethical, and philanthropic responsibilities The four components of the pyramid of corporate social responsibility are economic, legal, ethical, and philanthropic responsibilities.

The fact that many people believe that businesses should focus on making a profit and leave social and environmental issues to nonprofit organizations is: a. one of the arguments in support of social responsibility b. one of the reasons so many organizations have a sustainability plan c. creating a competitive disadvantage for larger corporations d. forcing organizations to choose between stakeholders and the environments in which the stakeholders live e. one of the arguments against social responsibility

e. one of the arguments against social responsibility This is just one argument against social responsibility.