Chapter 9

A company's strategy needs to be ethical because A. of the dangers that top management will get embarrassed if the company's unethical behavior is publicly exposed. B. a strategy that is unethical not only damages the company's reputation but it can also have costly consequences. C. everyone is an ethics watchdog and somebody is sure to blow the whistle on the company's unethical behavior. D. of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used. E. unethical strategies are inconsistent with or else weaken the corporate culture.

B. a strategy that is unethical not only damages the company's reputation but it can also have costly consequences.

Unethical business behavior tends to be driven by such factors as A. a managerial mind-set that "the business of business is business, not ethics." B. overzealous pursuit of personal gain, wealth, and other selfish interests. C. a company culture that puts the profitability and good business performance ahead of ethical behavior. D. heavy pressures on company managers to meet or beat earnings targets. E. All of these.

E. All of these.

Which of the following is not something a company should usually consider in crafting a strategy of social responsibility? A. Actions to benefit shareholders (such as raising the dividend to boost the stock price) B. Making charitable contributions and donating money and the time of company personnel to community service endeavors C. Actions to ensure the company has an ethical strategy and operates honorably and ethically D. Actions to protect or enhance the environment E. Actions to create a workforce diversity program

A. Actions to benefit shareholders (such as raising the dividend to boost the stock price)

Which one of the following is not a part of the business case for why companies should act in a socially responsible manner? A. Every business has a moral duty to be a good corporate citizen. B. Acting in a socially responsible manner reduces the risk of reputation-damaging incidents. C. Acting in a socially responsible manner is in the overall best interest of shareholders. D. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. E. Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, training, and improved worker productivity).

A. Every business has a moral duty to be a good corporate citizen.

Which one of the following is not one of the major drivers of unethical managerial behavior? A. Intense competitive pressures B. Overzealous pursuit of personal gain, wealth, and other selfish interests C. A company culture that puts the profitability and good business performance ahead of ethical behavior D. Heavy pressures on company managers to meet or beat earnings targets E. The attitude among management that "the business of business is business, not ethics"

A. Intense competitive pressures

The contention that because different societies and cultures have divergent values and standards of right and wrong it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores rather than according to a single set of ethical standards A. defines what is meant by "ethical relativism." B. defines what is meant by "ethical universalism." C. is the foundation of integrated social contracts theory. D. is the basis for the theory of ethical variation. E. is the guiding principle of the Global Code of Ethical and Social Morality created by the United Nations.

A. defines what is meant by "ethical relativism."

Good corporate citizens A. go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all. B. are active participants in the political process. C. identify up-and-coming managers who have a future in local- or state-level politics. D. create a democratic workplace whereby the voices of lower-level employees are heard through representation on the board of directors. E. All of these.

A. go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all.

The costs incurred when ethical wrongdoing is done fall into three specific categories and include all except A. intangible costs such as legal and investigative costs incurred by the company. B. internal administrative costs associated with ensuring future compliance. C. intangible costs such as customer defections. D. less visible costs such as costs of complying with often harsher government regulation. E. visible costs to shareholders such as lower stock price.

A. intangible costs such as legal and investigative costs incurred by the company.

According to the school of ethical universalism, A. universal ethical principles or norms put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside—such universal norms include honesty, trustworthiness, respecting the rights of others, practicing the Golden Rule, and avoiding unnecessary harm to workers or to the users of the company's product or service. B. all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical and Social Morality (which is subscribed to by 150 nations of the world). C. all societies and countries apply essentially the very same set of universally defined ethical principles of right and wrong in judging the ethical correctness of business behavior. D. it is only fair that the standards of what's ethical and what's unethical be applied universally to all businesses in all countries irrespective of local business traditions and local business norms. E. the standards of what constitutes ethical and unethical behavior in business situations are partly universal, but in the main are governed by local business norms.

A. universal ethical principles or norms put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside—such universal norms include honesty, trustworthiness, respecting the rights of others, practicing the Golden Rule, and avoiding unnecessary harm to workers or to the users of the company's product or service.

Which one of the following is false as concerns the merits of why acting in a socially responsible manner is "good business"? A. Companies with good reputations for contributing time and money to bettering society are better able to attract and retain employees compared to companies with tarnished reputations. B. Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders. C. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. D. Operating in a socially responsible manner protects the company from consumer, environmental, and human rights activist groups that are quick to criticize businesses whose behavior they consider to be out of line. E. Well-conceived social responsibility strategies help avoid or preempt legal and regulatory actions that could prove costly to the company.

B. Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders.

According to integrative social contracts theory, the ethical standards a company should try to uphold A. are governed by the school of ethical universalism. B. are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not—but universal norms always take precedence over local ethical norms. C. are governed by each country's Code of Required Ethical Conduct, which sets forth that each individual/group/business/organization has a "social contract" to observe the ethical and moral standards that the country has adopted. D. should be determined by the company's board of directors. E. should never be absolute but rather always provide some wiggle room according to the circumstances of the situation.

B. are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not—but universal norms always take precedence over local ethical norms.

Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical A. vary enormously from religion to religion and country to country across the world. B. are present in all societies, organizations, and individuals. C. ultimately depend on the circumstances—nothing is really black or white when it comes to ethical standards. D. are governed mainly by the thinking and writings of religious clerics at the School of Morally Correct Thinking and Behavior in Geneva, Switzerland. E. ultimately depend on a person's own values and beliefs.

B. are present in all societies, organizations, and individuals.

The essence of socially responsible business behavior is A. encouraging company personnel to run for political offices. B. balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen. C. undertaking actions to balance the interests of all company stakeholders rather than just exclusively look out for the interests of shareholders. D. making sizable contributions to political action committees representing the interests of the industry. E. pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant.

B. balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.

The major drivers of unethical business behavior include A. greed, pervasive managerial immorality, and a general lack of scruples on the part of top executives regarding how customers and suppliers should be treated. B. corporate cultures that put the bottom line ahead of ethics, heavy pressures on company managers to meet or beat performance targets, and overzealous or obsessive pursuit of wealth accumulation, power, status, and other selfish interests. C. widespread managerial belief in the ethical relativism school of thinking. D. an aversion to ethical correctness on the part of top executives and a belief that unethical behavior is unimportant and probably won't be discovered. E. intense competitive pressures.

B. corporate cultures that put the bottom line ahead of ethics, heavy pressures on company managers to meet or beat performance targets, and overzealous or obsessive pursuit of wealth accumulation, power, status, and other selfish interests.

Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel A. base their standards of what is ethical and what is unethical on the Global Code of Ethical Conduct first developed in 1935 and since subscribed to by the governments of 180 countries. B. have little moral basis for ethical standards companywide because it has no ethical standards or principles of its own. C. have no fair way to judge the ethical correctness of the conduct of company personnel. D. have a one-size-fits-all set of ethical standards. E. end up allowing each company employee to determine what set of ethical standards to observe.

B. have little moral basis for ethical standards companywide because it has no ethical standards or principles of its own.

The contentions that (1) many of the same standards of what's ethical and what's unethical resonate with peoples of most cultures, societies, and religions and (2) to the extent there is common moral agreement about right and wrong actions, there exist a set of common ethical standards to which organizations and individuals can be held accountable are defining beliefs of A. the school of ethical relativism. B. the school of ethical universalism. C. integrated social contracts theory. D. the School of Morally Correct Thinking and Behavior in Paris, France. E. the Global Code of Ethical and Social Morality developed in 1925 at a worldwide convention of distinguished religious clerics.

B. the school of ethical universalism.

The school of ethical relativism holds that A. what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country. B. when there are country or cross-cultural differences in what is considered ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere. C. concepts of right and wrong are always governed by business norms in each country, culture, or society. D. concepts of right and wrong are always a function of each individual's own set of values, beliefs, and ethical convictions. E. concepts of right and wrong as they apply to business behavior are always varying shades of gray, never absolute (i.e.; black or white).

B. when there are country or cross-cultural differences in what is considered ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.

Which of the following is not generally on a company's menu of actions to consider in crafting a strategy of social responsibility? A. Actions to ensure that the company operates in an honorable and ethical manner B. Actions to build a workforce that is diverse with respect to gender, race, national origin, and perhaps other personal characteristics C. Actions to look out exclusively for the best interests of shareholders D. Actions to protect or enhance the environment (apart from what is required by governmental authorities) E. Actions to create a work environment that enhances the quality of life for employees

C. Actions to look out exclusively for the best interests of shareholders

Ethical principles in business A. deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner. B. deal chiefly with the rules each company's top management and board of directors make about "what is right" and "what is wrong." C. are not materially different from ethical principles in general. D. are generally less stringent than the ethical principles for society at large. E. are generally more stringent than the ethical principles for society at large.

C. are not materially different from ethical principles in general.

Environmental sustainability involves A. a corporate commitment to go beyond society's expectations for ethical strategies and business behavior to addressing the unmet noneconomic needs of society. B. striking a balance between (1) the economic responsibility to reward shareholders with profits, (2) the legal responsibility to follow the laws in countries where it operates, (3) the ethical responsibility to abide by society's moral norms, and (4) the discretionary philanthropic responsibility to contribute to the noneconomic needs of society. C. deliberate actions to protect the environment and provide for the longevity of resources, maintain ecological support systems for future generations, and guard against the ultimate endangerment of the planet. D. developing strategies that yield a sustainable competitive advantage that will allow the company to be sustainable for the long term. E. All of these.

C. deliberate actions to protect the environment and provide for the longevity of resources, maintain ecological support systems for future generations, and guard against the ultimate endangerment of the planet.

The contention that ethical standards should be governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not are the basic principles of A. the school of ethical relativism. B. the school of ethical universalism. C. integrative social contracts theory. D. the global corruption standards published by Transparency International. E. the Global Code of Ethical and Social Morality developed by the United Nations.

C. integrative social contracts theory.

The results of strategies that cannot pass the test of moral scrutiny often are manifested in A. sharp drops in stock prices. B. devastating public relations hits. C. sizable fines. D. criminal indictment and convictions of company executives. E. All of these.

C. sizable fines.

Business ethics concerns A. developing a consensus among companies worldwide as to what ethical principles that businesses should be expected to observe in the course of conducting their operations. B. what ethical behaviors should be expected of company personnel in the course of doing their jobs. C. the application of ethical principles and standards to business activities, behavior, and decisions. D. developing a special set of ethical standards for businesses to observe in conducting their affairs. E. picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

C. the application of ethical principles and standards to business activities, behavior, and decisions.

A belief in ethical relativism leads to the conclusion that A. because ethical standards are subjective, it is perfectly appropriate for each company to define and implement its own ethical principles of right and wrong as concerns the use of underage labor and the payment of bribes and kickbacks. B. ethical standards are determined objectively (rather than subjectively). C. whether the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, beliefs, convictions, and business norms that prevail in particular cultures, societies, countries, or circumstances. D. ethical standards are objective and universal; thus, whether the use of underage labor and the payment of bribes and kickbacks should be deemed ethical or unethical definitely is not dependent on the moral standards, values, beliefs, convictions, and business norms that prevail in particular cultures, societies, countries, or circumstances. E. standards of right and wrong are governed by what is legal in a given country; thus, whether the use of underage labor and the payment of bribes and kickbacks is ethical or unethical is governed by local law.

C. whether the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, beliefs, convictions, and business norms that prevail in particular cultures, societies, countries, or circumstances.

Integrative social contracts theory maintains that A. there is no such thing as "moral free space"—all ethical standards are determined by societal norms, and individuals have an implied social contract to live up to these standards. B. few nations or cultures have common moral agreement on what is ethically right and wrong. C. there should be no absolute limits put on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. D. "first-order" universal ethical norms always take precedence over "second-order" local ethical norms. E. each country/culture/society has commonly held views about what constitutes ethically appropriate actions/behaviors; these common standards of what is ethical and what is not combine to form a "social contract" that all individuals in that country/culture/society are obligated to observe.

D. "first-order" universal ethical norms always take precedence over "second-order" local ethical norms.

Ethical principles as they apply to business conduct and business decisions A. deal chiefly with a company's standards about what is right and wrong insofar as the conduct of its business is concerned and about what behaviors are expected of company personnel. B. deal chiefly with the behaviors that a company's board of directors expects of all company personnel in both their conduct on the job and their conduct off the job. C. involve the rules a company's top management and board of directors make about "what is right" and "what is wrong." D. are not materially different from ethical principles in general. E. are generally less stringent than the ethical principles for society at large because it is well understood that businesses should not be expected to operate any differently from what the law requires of them.

D. are not materially different from ethical principles in general.

According to the school of ethical universalism, A. concepts of what constitutes ethical behavior and unethical behavior are dictated by subjectively provable moral principles but not by objectively provable moral principles. B. concepts of right and wrong are universal within countries/societies but not across countries or cultures. C. concepts of what is ethical and what is unethical are universal and absolute, leaving no room for deviation from country to country or circumstance to circumstance. D. to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable. E. all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world.

D. to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable.

Companies committed to environmental sustainability A. consider the commitment to shareholders as a "first-order" priority, commitment to employees as a "second-order" priority, and commitment to the environmental protection as a "third-order" commitment. B. consider the commitment to the environment as a "first-order" priority, commitment to employees as a "second-order" priority, and commitment to shareholders as a "third-order" commitment. C. consider the commitment to the environment as a "first-order" priority, commitment to shareholders as a "second-order" priority, and commitment to shareholders as a "third-order" commitment. D. undertake initiatives directed at improving the company's triple bottom line (TBL), which places importance on economic, environmental, and social metrics. E. believe that it is important to convince consumers to change buying habits that first consider meeting the consumer's needs to first considering whether the product is environmentally friendly.

D. undertake initiatives directed at improving the company's triple bottom line (TBL), which places importance on economic, environmental, and social metrics.

A company's social responsibility strategy is typically comprised of all but which one of the following elements? A. Actions to enhance workforce diversity and make the company a great place to work B. Making charitable contributions and donating the time of company personnel to community service endeavors C. Actions to protect or enhance the environment D. Conscious efforts to ensure that all elements of the company's strategy are ethical and actions to protect or enhance the environment (beyond what is legally required) E. Actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant

E. Actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant

Striving to be socially responsible entails touching such bases as A. what actions to take to enhance workforce diversity and make the company a great place to work. B. whether to make charitable contributions and donate money and the time of company personnel to community service endeavors. C. what, if any, actions to take to protect or enhance the environment (beyond what is legally required). D. exerting conscious efforts to ensure that all elements of the company's strategy are ethical and actions to make the company a great place to work. E. All of these

E. All of these

The business case for why companies should act in a socially responsible manner includes such reasons as A. it generates internal benefits (as concerns employee recruiting, workforce retention, training, and improved worker productivity). B. it reduces the risk of reputation-damaging incidents. C. it is in the best interest of shareholders. D. the potential for increased buyer patronage. E. All of these

E. All of these

Which of the following should be on a company's menu of actions to consider in crafting a strategy of social responsibility? A. Actions to ensure that the company operates in an honorable and ethical manner B. Actions to ensure diversity in the workforce C. Actions (over and above what is required) to protect or enhance the environment, including both those environmental problems stemming from the company's own business activities and those problems outside the company's immediate sphere of operations D. Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work E. All of these

E. All of these

The consequences of pursuing a strategy that has unethical or shady components include A. lower stock prices. B. customer defections and loss of reputation. C. incurring potentially large legal and investigative costs, government fines, and civil penalties. D. the costs of providing remedial education and ethics training to company personnel. E. All of these.

E. All of these.

Corporate social responsibility as it applies to businesses refers to A. a company's duty to put the public interest ahead of shareholder interests. B. societal expectations that all company stakeholders will be treated equally and fairly. C. a company's duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct. D. the responsibility that top management has for ensuring that the company's actions and decisions are in the best interest of society at large. E. a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

E. a company's duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.

A company's unethical behavior may result in the following except A. buyers will shun the company. B. the company will have difficulty recruiting and retaining talented employees. C. the company risks damage to shareholders in the form of lost revenues, higher costs, and lower profits and the company's reputation will suffer. D. the company will have to deal with the Sarbanes-Oxley Act of 2002, which requires the company remove the tarnished employees. E. All of these.

D. the company will have to deal with the Sarbanes-Oxley Act of 2002, which requires the company remove the tarnished employees.