MGMT 4850 - Chapter 9 Final

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Studies done on the correlation of between good corporate behavior and good financial performance have generally found

a small positive correlation

A company that sets aside 2 percent of its pre-tax profits to build and then fund a cancer-recovery facility for teens is an example of a corporate social responsibility action to:

support philanthropy

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.

Which of the following is an activity a company engages in to enhance the quality of life for its employees in an attempt to fulfill its corporate social responsibility?

It provides work-at-home opportunities

The notion of social responsibility as it applies to businesses is concerned with

a company's duty to operate in a honorable manner and provide good working conditions for employers

Which of the following builds a moral case for corporate social responsibility and environmentally sustainable business practices?

a strong commitment to socially responsible behavior reduces the risk of reputation-damaging incidents

The strength of integrated social contracts theory is that is

accommodates the best parts of ethical universalism and ethical relativism

According to integrated social contracts theory, the ethical standards a company should try to uphold

are governed both by a limited number of universal ethical principles and the circumstances of local cultures, traditions, and shared values

Ethical principles in business

are not materially different from ethical principles in general

Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical

are present in all societies, organizations, and individuals

The essence of socially responsible business behavior is

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

The moral case for why a company should actively promote the betterment of society and act in a manner benefiting all its stakeholders

boils down to "its the right thing to do"

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

boosting short-termism

Which of the following is most likely to be morally valid from the perspective of ethical relativism?

bribing a government official in an underdeveloped country to obtain a permit to build a hospital

Cultural demands to employ unethical means if circumstances become challenging can prompt:

clever ways to operate outside established policies to boost profits

Which of the following companies incurs mainly internal administrative costs due to unethical practices?

company D must retrain its employees who are using their Twitter accounts to post workplace frustrations.

Ethical principles as they apply to the conduct of personnel and business decisions

deal primarily with the company's duty to comply with legal requirements and conform to ethical norms of society, in general

The contention that since there are cross-country or cross-cultural differences in ethical standards, it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores should take precedence over a single set of ethical standards or what may be applicable in a company's home market

defines what is meant by ethical relativism

Which of the following would increase the likelihood of ethical lapses as well as poor long term company performance?

dramatic cuts in research and development expenditures in years when low earnings are reported by the company

The "triple bottom line" referes to what three performance metrics a company should simultaneously succeed in?

economic, social, & environmental

Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition

face a particularly vexing problem of losing business to competitors that have no scruples - an outcome that penalizes ethical companies and company personnel

The business case for why companies should act in a socially responsible manner includes such reasons as it

generates internal operating benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs)

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 inclusions 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

integrated social contracts theory

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

integrative social contracts theory

Following a public outcry, the CEO of a nationwide consumer bank was forced to apologize to and recompense customers for whom the bank had set up false credit card and auto loan accounts, over 100,000 account managers were terminated, and the company's stock price also sharply declined. Which of the following did the company incur?

internal administrative costs, tangible costs, and intangible costs

The degree of cross-country variability in paying bribes and kickbacks to grease business transactions

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

How does a company's unethical behaviors risk doing direct damage to a company's creditors?

it could lead to default on loans due to potential business fallout

The strength of the beliefs underlying ethical universalism is that

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

A company's strategy needs to be ethical because

it is good business and in the best interest of shareholders

What is the function of the Global reporting initiative?

it promotes greater transparency and facilitates bench-marking CSR efforts across firms and industries

When a company's social responsibility initiatives become part of the way it operates its business everyday, these initiatives are

likely to be fully effective in creating a competitive advantage

Triple-bottom-line (TBL) reporting is emerging as an important way for companies to

make the results of their CSR strategies apparent to stakeholders and for stakeholders to hold companies accountable for their impact of society

Companies that adopt the princple of ethical relativism in providing ethical guidance to company personnel

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

An environmental sustainability strategy consists of a company's deliberate actions to

meet the current needs of customers, suppliers, shareholder, 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

A company's environmental sustainability strategy consists of its deliberate actions to

operate the business in a manner that promotes the longevity of sustainability effects

Unethical managerial behavior tends to be driven by such factors as

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

Sourcing a supply from a small, women-owed business is an example of a corporate social responsibility action to

promote workforce diversity

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:

protect and sustain the environment

The theory of corporate social responsibility concerns

the company's responsibility to balance between strategic actions to benefit shareholders against the duty to be a good corporate citizen

THe litmus test of company's code of ethics is

the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business

The school of ethical universalism holds that

the most fundamental conceptions of right and wrong are universal and apply to members of all societies, all companies, and all business-people

Senior executives can ensure compliance with the ethical code of conduct by considering whether

the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable

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?

the school of ethical universalism but not the school of ethical relativism

Short-termism is defined as

the tendency for managers to focus on immediate performance objectives at the expense of longer-term strategic objectives

How do good corporate citizens function?

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

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%. 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?

visible and intangible costs

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?

visible and intangible costs

Striving to be socially responsible entails touching such bases as

what, if any, actions to take to protect or enhance the environment (beyond what is legally required)

The school of ethical relativism holds that

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

A belief in ethical relativism leads to the conclusion that

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


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