MGT 4150 Ch. 9
A strategic objective that is not considered a part of the business case for why companies should act in a socially responsible manner can be stated as, 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, employee morale, and training costs)."
A
According to the advocates of ethical relativism, A) if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a particular culture/society/country, then a case can be made that it is morally correct and ethical for a company to use these practices in conducting its business activities in that culture/society/country. B) each company should have the flexibility to set its own standards for deciding whether the use of underage labor and/or the payment of bribes/kickbacks are ethically acceptable or not. C) if the use of underage labor and/or the payment of bribes/kickbacks are not legal but locally acceptable in a particular country, then it is morally correct and ethical for a company to use these practices in that country. D) each industry should go by standards established by competitors for deciding whether the use of underage labor and/or the payment of bribes/kickbacks are ethically a
A
According to the ethical relativism school of thinking, A) there can be no one-size-fits-all template (set of authentic ethical norms) against which to gauge the conduct of company personnel, due to cross-cultural differences in ethical standards. B) a company should have a different set of ethical standards for each country in which it operates. C) only respected religious experts can provide companies with a higher order moral compass. D) the best source of ethical standards in each country where the company operates is that country's adopted Code of Required Ethical Conduct. E) since there can be no one-size-fits-all set of authentic ethical norms, it is appropriate for each company to hold company personnel to observing the company's code of ethical conduct.
A
Ben & Jerry's, Whole Foods Market, Stonyfield Farm, TOMS, Keurig Green Mountain, and Patagonia all have engaged in visible and well-publicized activities as socially conscious companies with which major result? A) increasing buyer patronage B) reducing the risk of reputation-damaging incidents C) internal benefits such as improved efficiency and workforce retention D) apparent correlations between CSR and their stock prices as well as other measures of financial performance E) reductions of their bottom lines by unspecified and unjustifiable amounts
A
Common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, also known as ethical universalism, gives rise to A) principles that set forth the traits and behaviors considered virtuous, that is, which a good person is supposed to believe in and display. B) principles embodied in international law that all societies and countries are obliged to practice. C) principles of right and wrong in judging the ethical correctness of business behavior. D) standards of what's ethical and what's unethical, applicable to all businesses in all countries, irrespective of local business traditions and local business norms. E) standards of what constitutes ethical and unethical behavior in business situations that are partly universal, but mainly are governed by local business norms.
A
For their final business class in college, Bill and Jill have been assigned a client that needs to improve its accounting and budgeting systems. Bill received the assignment by claiming on his résumé to have majored in accounting. His consulting partner, Jill, a marketing major, learns that he never actually passed any accounting courses. Jill is deciding whether or not to overlook the false claim, since Bill is otherwise conscientious and honorable and failure to pass the course might jeopardize his graduation. In her conversation with the instructor, which question will Jill NOT raise? A) Would the potential outcome of the proposed action pose a risk of embarrassment? B) Is what we are proposing to do fully compliant with our code of ethical conduct? C) Is there anything in the proposed action that could be considered ethically objectionable? D) Is it apparent that this proposed action is in harmony with our core
A
How do good corporate citizens function? A) They pursue discretionary activities that contribute to the betterment of society, especially in areas where government has chosen not to focus its efforts or has fallen short. B) They are active participants in the political processes. C) They identify up-and-coming managers who have a future in local- or state-level politics. D) They create a democratic workplace where the voices of lower-level employees are heard through representation on the board of directors. E) They seek to replace government functions with more efficient, market-driven solutions
A
If one concurs with the school of ethical universalism, then one believes that A) many basic moral standards travel well across cultures and countries and really do not vary significantly according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the situation. B) since ethical standards are subjectively determined, each company has a window within which it can define and implement its own ethical principles of right and wrong. C) what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical in business situations should be judged in light of local customs and social mores and can legitimately vary from one culture or nation to another. D) each country should have some degree of latitude in setting its own ethical standards for judging the ethical correctness of business actions/behaviors within its borders. E) concepts of right and wrong as they appl
A
Internal administrative costs that are incurred by companies for ethical wrongdoing include all of the following except A) costs attached to adverse effects on employee productivity. B) costs of remedial education and ethics training to company personnel. C) costs incurred in taking corrective actions. D) administrative costs associated with future compliance. E) legal and investigative costs
A
Senior executives can ensure compliance with the ethical code of conduct by considering whether A) the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable. B) the code of conduct is rejected by the market and accepted by employees. C) the code of conduct was accepted by rivals. D) the creation of the code of conduct should be handled by executives or employees. E) to eliminate the need to execute a code of conduct at all.
A
The "triple bottom line" refers to what three performance metrics a company should simultaneously succeed in? A) economic, social, and environmental B) pay, power, and performance C) planning, execution, and results D) legal, social, and economical E) legal, social, and environmental
A
The business case for why companies should act in a socially responsible manner includes such reasons as it A) generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs). B) increases the risk of reputation-damaging incidents. C) is not in the best interest of shareholders. D) can lead to decreased buyer patronage. E) can increase costs and reduce employee retention
A
The essence of socially responsible business behavior is A) balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen. B) 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. C) making sizable contributions to political action committees representing the interests of the industry. D) undertaking actions to balance the interests of all company stakeholders rather than just exclusively working to protect the interests of shareholders. E) providing jobs for the local community rather than outsourcing them to low wage labor countries.
A
The likelihood of ethical lapses as well as poor long-term company performance tends to increase when there is/are A) dramatic cuts in research and development expenditures in years when low earnings are reported by the company. B) increases in research and development expenditures in years when low earnings are reported by the company. C) executive commitment to implementing strategic suggestions from the board of directors. D) attracting investors who think the company's industry will grow. E) hiring and maintaining a skilled and diverse workforce.
A
Uber's scandals, tarnished reputation, loss of market share to rival companies, and the ouster of its cofounder Travis Kalanick was not due to A) inadequate returns to its shareholders owing to the delay of its planned initial public offering (IPO). B) unfair competitive practices. C) inadequate attention to customer safety and data privacy. D) sexual harassment in the workplace and a toxic workplace culture. E) price gouging during crises.
A
What is the function of the Global Reporting Initiative? A) It promotes greater transparency and facilitates benchmarking CSR efforts across firms and industries. B) It promotes and establishes mutual funds investment opportunities comprised of companies that excel on the basis of the triple bottom line. C) It promotes greater awareness of the Dow Jones World Index, which comprises companies that are engaged in environment sustainability. D) It promotes corporate governance, climate change, and labor practices. E) It is a nonprofit reporting organization that ranks companies on habitat protection.
A
When a company's social responsibility initiatives become part of the way it operates its business every day, these initiatives are A) likely to be fully effective in creating a competitive advantage. B) normally based on a corporate social agenda. C) ambiguous and rarely make a difference in the way the company does business. D) implausible to advance a positive, high-energy workplace environment. E) heavily dependent on encouraging employee morality
A
Which company's unethical practices will tend to incur mainly internal administrative costs? A) Company U must retrain its employees who are working in a toxic culture due to widespread reports of sexual harassment. B) Company V's tax evasion practices are revealed, leading to a dramatic drop in its stock price and simultaneously rising costs of debt. C) Company W incurs penalties of $1.0 billion for auto and mortgage loan abuses. D) Company X pays its male employees higher wages than female employees even though it has been propagating messages of workplace equality and fair play. E) Company Y experiences massive customer defections when it is made public that it is engaging in price gouging, or selling low-cost products at high prices.
A
A company that sets aside 2 percent of its pretax profits to build and then fund a cancer recovery facility for teens is an example of a corporate social responsibility action to A) enhance employee well-being. B) support philanthropy. C) protect and sustain the environment. D) ensure honorable and ethical action. E) promote workforce diversity.
B
According to integrated 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 a limited number of universal ethical principles and the circumstances of local cultures, traditions, and shared values. 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 moral managers. E) should be absolute and avoid wiggle room according to the circumstances of the situation.
B
After it came to light in 2017 that Wells Fargo employees fraudulently opened customer accounts to hit sales quotas, rehabilitating this bank's shattered reputation was expected to be time consuming and costly because its employees' actions could A) result in increased corporate taxes on the bank's profits. B) lead to unnerved creditors and increased risk of default on loans due to potential business fallout. C) result in higher stock prices and higher returns on invested capital. D) result in the increased costs of servicing the bank's customers. E) result in poaching talented employees from rival banks
B
Among the merits of why acting in a socially responsible manner is "good business," what remains to be proven in practice? 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) That there is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance. 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 leg
B
An environmental sustainability strategy consists of a company's deliberate actions to A) operate in an honorable manner, provide good working conditions for employees, and actively work to enhance the quality of life in the local communities where it operates and in society at large. B) meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet. C) protect and enhance natural resources and ecological support systems, taking into account the current consumption for the current generation. D) apply universal norms regarding the protection of the environment to its everyday operations and to function below the levels required by prevailing environmental regulations. E) balance c
B
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 in the company's home market. B) may quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country. 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
Good corporate citizens A) create a democratic workplace whereby the voices of lower-level employees are heard through representation on the board of directors. B) go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all. C) provide work-from-home options to working mothers residing in distant locations. D) develop and market only products that are "environmentally friendly." E) identify up-and-coming managers who have a future in local- or state-level politics
B
How can a company enhance the quality of life for its employees to support its attempt to uphold its reputation as a socially responsible business? A) It can discontinue relying on those suppliers that manufacture products using child labor. B) It can provide work-at-home opportunities. C) It can donate a percentage of its profits to a national charity. D) It can pay to have litter removed from a state highway. E) It can sell its products at a discounted price in underdeveloped countries
B
In July 2018, the Papa John's pizza chain decided to distance itself from John Schnatter, its founder and pitchman, after it was reported that he had used a racial slur in a comment about black people. Mr. Schnatter apologized and resigned as chairman. The company said Mr. Schnatter's image, a fixture on its marketing materials, would be removed as the "first of several key steps to rebuild trust from the inside-out." Papa John's suddenly faced the tricky task of disentangling itself from its founder and convincing its customers and investors to move on, and also began considering whether or not to rebrand itself. Papa John's strategy needed to be ethical because A) of the dangers that Papa John's top management might have become embarrassed if the company did not take action. B) it is good business and in the best interest of shareholders. C) everyone in the media behaves as ethics watchdogs and somebody might have
B
Juanita has opened a jewelry shop in your community and sources precious gems and metals only from Canada rather than Africa. Her rationale for this CSR and environmentally sustainable business practice includes all of the following except A) increasing buyer patronage. B) shortening the supply chain. C) lowering costs and enhancing employee recruiting and workforce retention. D) creating opportunities for revenue enhancement and best long-term profits for shareholders. E) reducing her exposure to the risk of reputation-damaging incidents
B
Marianne has opened a jewelry shop in your community and sources precious gems and metals only from Canada rather than Africa. Her rationale for her CSR and environmentally sustainable business practices includes all of the following except A) increasing buyer patronage. B) shortening the supply chain. C) lowering costs and enhancing employee recruiting and workforce retention. D) creating opportunities for revenue enhancement and best long-term profits for shareholders. E) reducing her exposure to the risk of reputation-damaging incidents.
B
Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical A) are governed mainly by religious views held in different geographic regions of the world. B) are present in all societies, organizations, and individuals. C) vary enormously from country to country across the world. D) ultimately depend on the circumstances—nothing is really black or white when it comes to ethical standards. E) ultimately depend on a person's own values and beliefs.
B
Short-termism is defined as A) making assessments of the moral character of a company's managers. B) the tendency for managers to focus on immediate performance objectives at the expense of longer-term strategic objectives. C) assessing the costs and damages to the company's reputation as a result of ethical violations. D) weighing the short-term costs of regulatory compliance with the long-term costs of noncompliance. E) assessing the short-term costs of complying with government regulations
B
Studies done on the correlation between good corporate behavior and good financial performance have generally found ________ correlation. A) no B) a small positive C) a small negative D) a large positive E) a large negative
B
The contentions that (1) many of the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms and (2) to the extent there is common moral agreement about right and wrong actions, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances, are defining beliefs of which of the following? A) the school of ethical relativism but not the school of ethical universalism B) the school of ethical universalism but not the school of ethical relativism C) integrative social contracts theory but not the school of ethical universalism D) the school of ethical relativism and the school of ethical universalism E) the school of ethical relativism but not integrative social contracts theory
B
The litmus test of a company's code of ethics is A) the degree to which it is connected to a company's statement of core values. B) the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business. C) the extent to which a company's approach to ethical behavior mirrors the ethical principles for society at large. D) based on the rules a company's top management and board of directors make about "what is right" and "what is wrong." E) determined by the ethical behaviors expected of company personnel in the course of doing their jobs.
B
The outcomes of why acting in a socially responsible manner is good business, do not include A) the higher the public profile of a company or brand, the greater the scrutiny of its activities and the higher the potential for it to become a target for pressure group action. 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) some employees feel better about working for a company committed to improving society—a condition that can contribute to lower turnover and better worker productivity. E) companies with deservedly good reputations for contributing time and money to the betterment of society are better able to attract and retain employees compared to companies with tarnished re
B
The school of ethical relativism holds that A) what constitutes ethical or unethical conduct should be determined by the religious convictions of each society or each culture within a country. B) when there are cross-country or cross-cultural differences in what is deemed 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 absolute and usually more stringent than universal ethical principles
B
The strength of integrated social contracts theory is that it A) correctly recognizes that all soundly reasoned ethical standards are universal. B) accommodates the best parts of ethical universalism and ethical relativism. C) puts no absolute limits on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. D) recognizes the importance of allowing local ethical norms to always take precedence over universal ethical norms. E) recognizes that individuals and businesses have a basic right to "moral free space" and that it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors
B
Triple-bottom-line (TBL) reporting is emerging as an important way for companies to A) conceal their initiatives and accomplishments in the areas of diversity, environment, community, and ethics to increase profitability. B) make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact on society. C) minimize transparency and facilitate benchmarking CSR efforts across firms and industries. D) minimize the use of standard reporting frameworks and metrics. E) attract profit-oriented investors.
B
Unethical managerial behavior tends to be driven by such factors as A) a lack of training in what is ethical and what is not. B) overzealous or obsessive pursuit of personal gain, wealth, and other self-interests; a company culture that puts the profitability and good business performance ahead of ethical behavior; and heavy pressures on company managers to meet or beat performance targets. C) widespread managerial belief in the ethical relativism school of thinking. D) widespread managerial belief in the ethical universalism school of thinking. E) confusing differences between what is ethical behavior in one's personal life and what is ethically permissible in business
B
Walmart, in 2017, announced plans to spend $20 billion on a share repurchase program while laying off thousands of workers and closing dozens of Sam's Club stores. This is a good example of A) buyback boosterism. B) short-termism. C) ethical relativism. D) tangible shareholder value appreciation. E) long-termism.
B
A belief in ethical relativism leads to the conclusion that A) since 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 use of underage labor and the payment of bribes/kickbacks should be deemed ethical or unethical depends on the moral standards, values, 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 is definitely not dependent on the moral standards, values, and business norms that prevail in particular cultures, societies, countries, or c
C
A multinational automobile manufacturer issues a public statement that the company's vehicle emissions tests had been falsified to meet environmental compliance standards over recent years using software specifically designed for that purpose. Following the news, the CEO is replaced, vehicle sales plummet, and the company's stock price sharply declines. Which of the following has the company incurred? A) only visible and internal administrative costs B) visible but not intangible costs C) visible and intangible costs D) internal administrative costs but not visible costs E) internal administrative costs but not intangible costs
C
Although exposing children to hazardous work and long work hours is unquestionably deplorable, which of the following, if true, leads to a moral dilemma? A) Use of adult workers instead leads to higher labor costs. B) Children are not as efficient as adults in doing physically demanding work. C) Many child laborers come from poverty-stricken families. D) Banning child labor increases school attendance. E) Working children learn independence.
C
An example of a company that does not pursue sustainability strategies is A) Häagen-Dazs, a maker of all-natural ice creams, which donates a portion of its profits and started a social media campaign to raise awareness about the dangers associated with the decreasing honeybee population. B) Keurig Green Mountain, which helps farmers improve their farming techniques and addresses local water scarcity and planning for climate change. C) Insys Therapeutics, which pays doctors to promote its pain management pharmaceuticals. D) Staples, one of the largest nonutility corporate producers of renewable energy in the United States, due to its installation of solar power panels in all of its outlets (and the sale of what it does not consume in renewable energy credit markets). E) TOMS shoes, which for every pair of shoes purchased donates a pair to a child in need in over 50 different countries.
C
Ethical relativism implies that A) concepts of ethically right and ethically wrong are relative across countries and cultures but are universal within countries or cultures. B) individuals and businesses have a basic right to "moral free space," and it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors. C) there are important occasions when local cultural norms and morality and the circumstances of the situation determine whether certain behaviors are right or wrong, for there are no absolutes when it comes to business ethics. D) concepts of right and wrong as applied to business situations are always a function of each company's own set of values, beliefs, and ethical convictions (as stated in the company's code of ethical conduct). E) standards of what is ethically right and ethically wrong as applied to business behavior are determined solely by whatever business no
C
Following public revelations of pressures on bank staff to set up fraudulent accounts in order to reach sales quotas, the CEO of Wells Fargo Bank was forced to apologize to and recompense customers for whom the bank had set up false credit card and auto loan accounts. As a consequence, over 100,000 account managers were terminated, a $186 million fine was paid to the U.S. government, the CEO was forced to resign, and the company's stock price also sharply declined. Which of the following costs did Wells Fargo incur? A) only visible and internal administrative costs B) visible but not intangible costs C) internal administrative costs, tangible costs, and intangible costs D) internal administrative costs but not visible costs E) visible and intangible costs
C
How do ethical principles apply to businesses? A) They chiefly deal with the actions and behaviors required to operate companies in a socially responsible manner. B) They chiefly deal with the rules each company's top management and board of directors make about "what is right" and "what is wrong." C) They are not materially different from ethical principles in general. D) They are generally less stringent than the ethical principles for society at large. E) They are generally more stringent than the ethical principles for society at large
C
Imagine that you are the chief executive of an automobile manufacturer. Your management team brings you a proposal: Let's close a plant producing gasoline cars in Michigan and open one producing electric cars farther south. You must decide whether to approve the plan. Which action would typically be considered in crafting your company's strategy of social responsibility? A) actions to promote your shareholders' interests such as raising the dividend or boosting the stock price B) actions restricting community service endeavors by employees in order to maintain productivity and meet quotas C) actions to ensure that your company provides relocation assistance and continuous employment for staff after the Michigan plant is closed D) actions that find loopholes in restrictive government regulations to permit the relaxation of workplace safety policies E) actions to increase profits by locating the new plant in a low-
C
Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition A) are generally advocates of the ethical relativism school of thought. B) are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants as you pay for a service rendered. C) face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel. D) are out-of-step with business reality given that the preponderance of company managers are immoral. E) are in a distinct minority compared to companies that view the payment of bribes and kickbacks as a legitimate or permissible practice.
C
On August 1, 2018, Reddit, an American social news aggregation, web content rating, and discussion website reported that it had been hacked. A spokesperson for Reddit said publicly, "Think about whether there's anything on your Reddit account that you wouldn't want associated back to that address." The company also included instructions for users to remove their Reddit data. Do Reddit company managers have an obligation to observe ethical norms when crafting and executing a strategic response to this breach of data security and potential loss of consumer privacy? A) No, because ethics in business are generally less stringent than the ethical principles for society at large. B) Yes, because ethics in business are generally more stringent than the ethical principles for society at large. C) Yes, because ethics in business are not materially different from ethical principles in general. D) No, because ethics in business
C
The Dow Jones sustainability index comprises the top 10 percent of the 2,500 companies listed in the Dow Jones World Index that excel in A) corporate governance and climate change mitigation. B) economic performance and environmental performance. C) economic performance, environmental performance, and social performance. D) mitigating the impact of climate change on the factory workers that make their products. E) climate change mitigation and labor practices.
C
The contention that ethical standards should reflect the collective views of multiple societies in establishing a set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundaries on actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actions of local cultures or groups (with their traditions and shared values), that further prescribe to what represents ethically permissible behavior and what does not, constitutes the basic principles of A) the school of ethical relativism. B) the school of ethical universalism. C) integrated social contracts theory. D) corporate social responsibility. E) the triple bottom line
C
The moral case for why a company should actively promote the betterment of society and act in a manner benefiting all its stakeholders A) is based on the principle of treating people fairly and with respect. B) is based on the conviction that improving the well-being of society ranks higher in priority and is certainly nobler than making a profit and serving the interests of shareholders. C) boils down to "it's the right thing to do." D) rests on the principle that a business is duty bound to fulfill its social contract to serve the interests of all stakeholders in a business enterprise. E) is based on the principle that business activities lack real legitimacy and have few socially redeeming qualities unless and until a company exerts a significant and sincere effort to give something back to the community.
C
The underlying thesis of ethical relativism does not imply that A) in a multinational company, application of ethical relativism equates to multiple sets of ethical standards. B) there are few absolutes when it comes to business ethics and thus few ethical absolutes for consistently judging a company's conduct in various countries and markets. C) when there are cross-country or cross-cultural differences in ethical standards, it is appropriate for ethical standards in a company's home market to take precedence over what the local ethical standards may be. D) a company that adopts the principle of ethical relativism and holds company personnel to local ethical standards necessarily assumes that what prevails as local morality is an adequate guide to ethical behavior. E) according to the ethical relativism school of thinking, a "one-size-fits-all" template for judging the ethical appropriateness of business actions and
C
Unilever's goal in 2010 was to double the size of the business while halving its environmental footprint by 2020. What actions has it not taken in pursuit of this goal? A) Unilever set up a central corporate team dedicated to spreading best sustainability practices from one factory or business unit to the rest of the company. B) Unilever created a "small actions, big differences" fund to invest in innovative ideas that help the company achieve its sustainability goal. C) Unilever dedicated significant resources and time to pursuing profit maximization strategies in order to boost its sustainability scores. D) Unilever worked with its suppliers to source sustainable agricultural products to reduce emissions from the overall footprint of its products and extend its sustainability efforts to its entire supply chain. E) Unilever enabled over 716,000 small farmers to improve their agricultural practices and/or their incom
C
When companies formulate and implement a strategy of corporate social responsibility, they generally do not A) devote efforts to employ an ethical strategy and observe ethical principles in operating the business. B) make charitable contributions, donate money and the time of company personnel to community service endeavors, supporting various worthy organizational causes. C) take steps to provide suppliers, distributors, and other value chain partners with handsome profit margins. D) initiate actions to build a workforce that is diverse with respect to gender, race, national origin, and other aspects that different people bring to the workplace. E) pursue actions to protect the environment and, in particular, to minimize or eliminate any adverse impact on the environment stemming from the company's own business activities
C
A company that promotes carpooling among its employees, has cut its printer-paper usage in half, and has installed solar panels on its roof is an example of a corporate social responsibility action to A) promote workforce diversity. B) ensure the company operates honorably and ethically. C) support philanthropy and participate in community service. D) protect and sustain the environment. E) enhance workplace amenities and employee well-being
D
A company's social responsibility strategy typically comprises A) actions to enhance workforce homogeneity. B) lobbying the government to rescind workplace safety and environmental regulations. C) making trade-offs between the betterment of profits versus the quality of life in the local community in which it operates. D) conscious efforts to ensure that all elements of the company's strategy are ethical and that its actions protect or enhance the environment (beyond what is legally required). E) ensuring the company's pricing and profits will not be viewed by the general public as obscenely high or exorbitant.
D
According to the school of ethical universalism A) concepts of what constitute 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 socially determined, leaving room for variation 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 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 by a global body that formulates the Code of Ethical Behav
D
Cultural demands to employ unethical means if circumstances become challenging can prompt A) otherwise dishonorable people to behave ethically. B) increased observance of ethical strategic actions. C) a moral work climate. D) clever ways to operate outside established policies to boost profits. E) company authorization to observe what's right
D
Ethical principles as they apply to the conduct of personnel and business decisions A) deal chiefly with standards a company has 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 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) deal primarily with the company's duty to comply with legal requirements and conform to ethical norms of society, 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 than what the law requires of them
D
For Uber, what was not a consequence of pursuing a strategy that had unethical or shady components? A) a pressing need to repair a toxic workplace culture characterized by sexual harassment and managerial inaction in response to formal complaints about unwanted behavior B) devastating public relations and the need for damage control C) a significant market share loss to Lyft D) defections of investors who nevertheless believed that the company's ride-sharing industry will grow E) the ouster of its cofounder Travis Kalanick from his position as the company's CEO
D
Shannon and Ian, student consultants, chose a home construction business as a client for a semester strategic planning assignment. Upon examination of the client's financial statements, the students discover that their client has been cheating the government out of several thousand dollars a year in taxes. Their client is a company owned by a couple who are in their late 50s and who have two children in college. Shannon and Ian are the only people other than the owners who are in a position to know about this situation. Which ethical principle should guide Shannon and Ian in their decision whether or not to report the owners to the Internal Revenue Service? 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 rig
D
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) the global corruption standards published by Transparency International. D) integrative social contracts theory. E) the Global Code of Ethical and Social Morality developed by the United Nations
D
The degree of cross-country variability in paying bribes and kickbacks to grease business transactions A) violates ethical principles of right and wrong in all countries. B) is ethically acceptable according to the principle of ethical universalism and ethically unacceptable according to the principle of ethical relativism. C) is acceptable to immoral managers but not to amoral managers. D) is one of the thorniest ethical problems that multinational companies face because paying bribes is normal and customary in some countries and ethically or legally forbidden in others. E) is more acceptable in dealing with a company's suppliers than in dealing with a company's customers
D
The rationale for businesses to act in a socially responsible manner include all of the following reasons, with the exception of A) every action a company takes can be interpreted as a statement of what it stands for. B) most business leaders can be expected to acknowledge that socially responsible actions and environmental sustainability are important and that businesses have a duty to be good corporate citizens. C) in return for society granting a business a "license to operate" and not be unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a responsible citizen and do its fair share to promote the general welfare. D) acting in a socially responsible manner is in the best financial interest of shareholders. E) every business has a duty to do what's best for shareholders while operating honorably, provide good working conditions to employees, and be a good environmental steward
D
The school of ethical universalism holds that A) concepts of right and wrong are not absolute and leave room for deviation from country to country or circumstance to circumstance. B) concepts of right and wrong are universal within countries but not across countries and cultures. C) concepts of right and wrong are governed by the Global Code of Ethical and Social Morality. D) the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all businesspeople. E) there are multiple sets of standards concerning what is ethically right or wrong that are universally applicable to citizens of a country.
D
The strength of the beliefs underlying ethical universalism is that A) ethical universalism recognizes significant variation in basic moral standards according to local cultural beliefs, local religious beliefs, and social mores. B) ethical standards are objectively determined by religious and moral experts. C) what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical is (or should be) grounded in religious doctrine and applied strictly to all business situations. D) it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country or culture a company is operating in. E) it leaves room for thinking that concepts of right and wrong can be varying shades of gray
D
The theory of corporate social responsibility concerns A) a company's duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct. B) a company's duty to maximize shareholder value. C) the blending of shareholder interests and employee interests. D) the company's responsibility to balance between strategic actions to benefit shareholders against the duty to be a good corporate citizen. E) top management's responsibility to ensure that the company's actions and decisions are in the best interest of society at large.
D
Uber prizes ruthless internal competition and WeWork promotes a partying, self-dealing culture. These two companies are examples of workplaces cultures A) that balance the time and money their companies spend to carry out social responsibility while preserving the bottom line. B) that prize internal benefits such as improved workforce retention and motivation. C) designed for the aggressive pursuit of market share, revenues, and profits. D) that increase the risk of reputation-damaging incidents. E) that promote increased buyer patronage
D
A company's environmental sustainability strategy consists of its deliberate actions to A) shelter the environmental impacts from the company's resources and competitive capabilities. B) provide for the defense of natural resources usage within cross-border commitments. C) moderate assurance for ecological support systems for future generations. D) guard against ultimate endangerment of the business. E) operate the business in a manner that promotes the longevity of sustainability effects
E
A manufacturer and marketer of prescription pharmaceuticals decided to raise the price of its anti-malaria drug from $15.00 per dose to $750.00 per dose, a price increase of 5,000 percent. Following a public outcry, the CEO was forced to resign, the company was forced to retract the price hike, and the company's stock price sharply declined. Which of the following has the company incurred? A) only visible and internal administrative costs B) visible but not intangible costs C) internal administrative costs but not intangible costs D) internal administrative costs but not visible costs E) visible and intangible costs
E
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) should be determined by the company's board of directors. C) should never be absolute but rather always provide some wiggle room according to the circumstances of the situation. D) 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. E) 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 uni
E
CSR and sustainability strategies typically entail A) careful consideration of revised corporate social agendas, specifically for the purpose of improving a company's competitive strength in the marketplace. B) discontinuing a company's customer value proposition or key value chain activities that may not be considered socially responsible. C) selectively weakening a company's competitive advantage in the marketplace in order to provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate endangerment of the planet. D) an observable and measurable level of expenditure that consists of 5 percent (or more) of pretax profits on social responsibility initiatives. E) deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate
E
Codes of conduct based on ethical relativism are not ethically problematic for multinational companies if they A) create a maze of conflicting ethical standards. B) justify conflicting ethical standards for operating in different countries. C) establish little moral basis for establishing ethical standards for a company worldwide. D) restrict enforcement of ethical standards worldwide. E) create standards that mostly relate to ethical codes in a company's home market, which might trigger compliance issues in the local market.
E
Corporate social responsibility refers to A) putting the public interest ahead of shareholder interests. B) equitable treatment of all stakeholders. C) a company's obligation to maximize shareholder wealth responsibly. D) ensuring that companies act in the best interest of stakeholders at large. E) operating in an honorable manner and being a good steward of the environment
E
From the ethical relativism perspective, which action is most likely to be considered morally valid? A) bribing a government official to allow you to transfer gambling winnings to a tax haven B) performing genital mutilations on nonconsenting female teens C) employing as laborers children under the age of nine D) agreeing to a country's policy of prohibiting the education of females E) bribing a government official in an underdeveloped country to obtain a permit to build a hospital
E
Imagine you are the founder of a company that provides shelter for pets that have neither homes nor owners to return to after a major weather disaster such as a fire, hurricane, or flood. What moral case could you provide to your staff as to why your company should engage in socially responsible actions and environmentally sustainable business practices? A) "Do whatever it takes to meet or beat their numbers." B) "The business of business is business, not ethics." C) "Society has given us the moral free space." D) "Do unto others before they do it to you." E) "It's the right thing to do."
E
Imagine you were asked to work for a residential construction company. How would you build a moral case for this company to engage in corporate social responsibility and environmentally sustainable business practices? A) Socially responsible actions and sustainable business practices can lower the construction firm's costs and enhance employee recruiting and workforce retention. B) Opportunities for revenue enhancement may also come from CSR and environmental sustainability strategies by the construction firm. C) Well-conceived CSR strategies and sustainable business practices are in the best long-term interest of the owners of the construction firm. D) Like any business, the construction firm must engage in practices that reflect ordinary decency and civic-mindedness, and contribute to society's well-being. E) If the construction firm makes a strong commitment to socially responsible behavior, doing so will reduce t
E
In 2017, it came to light that in order to meet its demanding profit target, Wells Fargo put such pressure on its employees to hit sales quotas that many employees responded by fraudulently opening customer accounts. Wells Fargo's ethical lapses are not a good example of A) how certain universal ethical principles apply in those situations where all societies— those endowed with rationality and moral knowledge—have a common moral agreement on what is right and wrong. B) how, within the boundaries of a social contract, local cultures or groups can specify what additional actions may or may not be ethically permissible. C) how universal ethical principles or norms leave some "moral free space" for the people in a particular country (or local culture or even a company) to make specific interpretations of what other actions may or may not be permissible within the bounds defined by universal ethical principles. D) ho
E
In 2020, Smithfield Foods, one of the nation's largest meat-packing companies, came under public scrutiny for refusing to disclose the number of positive novel coronavirus cases among its employees, as well as for its decision to export large amounts of meat to China while publicly warning about a looming meat shortage in the United States. Smithfield Foods's chief executive, Kenneth Sullivan, responded to critics of the company's actions by saying, "Processing plants were no more designed to operate in a pandemic than hospitals were designed to produce pork. In other words, for better or worse, our plants are what they are. Four walls, engineered design, efficient use of space, etc." How would you characterize Smithfield Foods' response in this situation? A) Any strategy that increases the risk of continued scrutiny or eventual litigation would reflect badly on the character of Smithfield Foods' person
E
Integrated social contracts theory does not apply A) to those situations where most all societies—endowed with rationality and moral knowledge—have common moral agreement on what is wrong and thereby place limits on which actions and behaviors fall inside the boundaries of what is right, and which ones fall outside. B) to commonly held views about what is morally right and wrong that constitute a "social contract" (contract with society) that is binding on all individuals, groups, organizations, and businesses in terms of establishing the line between ethical and unethical behaviors. C) to principles or norms that provide some "moral free space" for the people in a particular country (or local culture or even a company) to make specific interpretations of how certain actions may or may not be permissible within the bounds defined by universal ethical principles. D) to the principle that universal ethical norms ta
E
PepsiCo's Global Code of Conduct provides specific guidance concerning how to make decisions, how to treat others, and how to conduct business globally, organized around which four key operating principles? A) respect in the workplace, ethics in business activities, dealing with situations that call for bribery, and integrity in the marketplace B) integrity in the marketplace, ethics in business activities, global compliance, and whistle-blowing C) whistle-blowing, global compliance, integrity in the marketplace, and responsibility to shareholders D) global compliance, dealing with situations that call for bribery, integrity in the marketplace, and responsibility to shareholders E) respect in the workplace, integrity in the marketplace, ethics in business activities, and responsibility to shareholders
E
Sourcing a supply from a small, women-owned business is an example of a corporate social responsibility action to A) enhance employee well-being. B) support philanthropy. C) protect and sustain the environment. D) ensure honorable and ethical action. E) promote workforce diversity
E
The effect of ethical standards on a company's strategy does not A) always reflect badly on the character of the company personnel involved. B) encompass what is unethical in whole or in part as morally wrong. C) automatically result in damage to a company's reputation and have costly consequences. D) constitute good business and pursue the best interest of shareholders. E) lead to lower employee morale and higher employee turnover
E
The results of strategies that cannot pass the test of moral scrutiny often are NOT manifested in A) sharp drops in stock prices and lower dividends. B) devastating public relations hits. C) sizable fines. D) criminal indictment and convictions of company executives. E) increased customer loyalty.
E
The three dimensions of performance are often referred to in terms of the "three pillars" and include all of the following except A) a company's efforts to improve the lives of its internal and external stakeholders. B) the various social initiatives that make up the CSR strategies. C) a firm's ecological impact and environmental practices. D) the economic impact (value and costs) that the company has on society. E) a company's efforts to reduce research and development funding to boost profits
E
Valid business reasons for why companies should act in a socially responsible manner do not include A) generating internal benefits (such as improved employee recruiting, workforce retention, training, and worker productivity). B) reducing the risk of reputation-damaging incidents. C) acting in the best interest of shareholders in terms of increased stock price and financial performance. D) increasing buyer patronage and customer loyalty. E) reducing the triple bottom line
E
Visible costs that are incurred by companies and imposed for ethical wrongdoing include all of the following except A) government fines and penalties. B) civil penalties arising from class-action lawsuits or other litigation. C) lower dividends for shareholders. D) lower stock prices. E) legal and investigative costs
E
When Robin and Rich ask for a client's financial statements in order to complete the data collection for their strategic management project, the owner of the business tells Robin that his accountants are "preparing the financials but these won't be ready for several months." The client instead suggests that Robin and Rich fabricate the financials, since what he "really wants is a marketing plan," and that "no one will ever know if you've seen the actual financials or not." Which of the following should not guide Robin and Rich in their decision whether or not to take this as an authorization to submit false data as part of their final report? A) the pervasiveness of immoral and amoral businesspeople B) overzealous pursuit of personal gain, wealth, and other selfish interests C) a company or campus culture that places good business performance and good grades ahead of ethical behavior D) heavy pressures on students to
E
When high ethical principles are deeply ingrained in the corporate culture of a company, culture can function as a powerful mechanism for all of the following except A) communicating ethical behavioral norms. B) gaining employee buy-in to the company's moral standards. C) gaining employee buy-in to the company's business principles. D) gaining employee buy-in to the company's corporate values. E) boosting short-termism.
E
