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Chapter 04 - Ethics and Social Responsibility

Chapter 04 Ethics and Social Responsibility True / False Questions

1. Moral principles, values, or beliefs about what is "right" or "wrong" are known as ethics. True False

2. Steve has noticed that there has been an error in his weekly pay stub and the company has unknowingly paid him too much. Steve's pondering about whether to report this issue is an ethical dilemma. True False

3. Though laws often change, ethical principles remain constant and do not change over time. True False

4. Ethics and "the law" are the same thing. True False

5. Ethical beliefs lead to the development of laws and regulations. True False

6. Laws and regulations lead to the development of ethical beliefs. True False

7. Stakeholders have a claim on a company because when they buy its stock or shares they become its owners. True False

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8. Customers are stakeholders of an organization, but managers are not. True False

9. Employees are stakeholders of a company. True False

10. Stockholders are interested in the ethical practices of the company because they want to maximize the return on their investment. True False

11. Managers are the stakeholder group that bears the responsibility to decide which goals an organization should pursue to most benefit stakeholders. True False

12. Customers are often regarded as the most important stakeholder group. True False

13. The local communities in which an organization operates are generally not considered to be true stakeholders of the organization. True False

14. Company decisions that favor one group of stakeholders will always benefit the interests of other stakeholders. True False

15. In order for an organization to survive and prosper, it needs to satisfy its stakeholders. True False

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16. All stakeholders benefit in the long run from companies making the right choices. True False

17. Under the utilitarian rule, an ethical decision is that which creates the greatest good for the greatest number of people. True False

18. Michael was faced with a serious ethical dilemma. He chose a solution that created the greatest good for the greatest number of people. Michael was using the utilitarian rule. True False

19. When applying the moral rights rule, managers should choose the course of action that best protects and upholds their personal rights. True False

20. Under the moral rights rule, an ethical decision is one that distributes benefits and harms among people and groups in a fair, equitable, and impartial way. True False

21. From a moral rights perspective, managers should compare alternative courses of action on the basis of how each will affect the rights of each stakeholder group. True False

22. Decisions that protect the rights of some stakeholders often hurt the rights of others. True False

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23. Under the justice rule, managers should determine fair rules and procedures for distributing outcomes to stakeholders. True False

24. "An ethical decision is one that a typical person in a society would think is acceptable" is a statement that reflects the practical rule. True False

25. Jim is comfortable with his decision and would have no problem with people reading about it on the front page of a morning paper. It can be said that Jim is following the guidelines of the practical rule. True False

26. Applying the practical rule to analyze a business decision ensures that managers are taking into account the interests of all stakeholders. True False

27. When one person starts to profit from being unethical it encourages other people to act in the same way. True False

28. Web sites like Napster that allow for the free downloading of songs and movies can be viewed as a "tragedy of the commons" because pursuit of self interest will destroy the societal interest. True False

29. Trust, the esteem or high repute that people or organizations gain when they behave ethically, is an important asset. True False

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30. The standards that govern how members of a profession should conduct themselves are called organizational ethics. True False

31. An organization's code of ethics is shaped by the ethics of the top managers of the organization. True False

32. The way a company's managers view their duty to make decisions that enhance the well being of stakeholders is called organizational ethics. True False

33. A company's stance on social responsibility is the way its managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well being of stakeholders and society as a whole. True False

Multiple Choice Questions

34. Dianna has noticed that there has been an error in her weekly pay stub and the company has unknowingly paid her too much. Dianna's pondering about whether to report this issue is a(n): A. Moral scruple B. Ethical dilemma C. Ethic D. Norm E. Emotion

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35. The moral principles and beliefs about what is "right" and "wrong" are known as: A. Reputation B. Laws and regulations C. Ethics D. Terminal values E. Instrumental values

36. ___________ are thoughts and feelings that tell people what is right or wrong. A. Moral scruples B. Ethical dilemmas C. Ethics D. Norms E. Emotions

37. ______ lead to the development of ______. A. Laws; ethical beliefs B. Regulations; ethical beliefs C. Ethical beliefs; laws D. Laws; terminal values E. Regulations; laws

38. People or groups that supply a company with its productive resources are called: A. Suppliers B. Top management C. Shareholders D. Stockholders E. Stakeholders

39. Stockholders are interested in the way a company operates because they: A. Use the company's products B. Believe in being ethical C. Want to maximize ROI D. Want to avoid all risks E. Like to be in control

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40. Which of the following is NOT a stakeholder for an organization? A. Customers B. Employees C. Suppliers D. The local community E. Competition

41. As the president of Missouri Bank, Carolyn has a right to expect a reward for investing her human capital. Which of the following is NOT normally a reward Carolyn should expect? A. Stock options B. Promotional opportunity C. Salary D. Benefits E. Guaranteed bonuses

42. The stakeholder group with the most responsibility for deciding the goals of the organization is: A. Stockholders B. Customers C. Managers D. Working-level employees E. Consultants

43. ___________ are often regarded as the most critical stakeholder group. A. Stockholders B. Managers C. Employees D. Customers E. Suppliers

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44. Which of the following would NOT be a reason why the City of St. Louis would be considered a stakeholder with the St. Louis Cardinal organization? A. The city provides utilities B. The organization contributes to the economy of the city C. The community provides homes for the players/workers D. The city provides tax revenue to the organization E. The city provides the necessary infrastructure that aids in operation

45. Michael was faced with a serious ethical dilemma. He chose a solution that created the greatest good for the greatest number of people. Which ethical rule was Michael using? A. Justice B. Moral Rights C. Utilitarian D. Practical E. Moral Scruples

46. The ____________ rule is that an ethical decision is one that produces the greatest good for the greatest number of people. A. Justice B. Moral Rights C. Utilitarian D. Practical E. Moral Scruples

47. The utilitarian rule states that an ethical decision is a decision that: A. Best protects the rights of people affected B. Produces the greatest good for the greatest number of people C. Distributes benefits and harms in a fair way D. Can be communicated with no reluctance E. Increases the financial effectiveness of the organization

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48. Under the ____________ rule, an ethical decision is the one that best maintains people's fundamental privileges. A. Justice B. Moral rights C. Utilitarian D. Practical E. Moral scruples

49. The _____________ rule is that an ethical decision is one that distributes rewards and harms in a fair way. A. Justice B. Moral rights C. Utilitarian D. Practical E. Moral scruples

50. As Bob was figuring the yearly bonuses for his employees, he paid particular attention to the percentages to ensure they were based on performance and not favoritism. Which ethical rule was Bob following? A. Practical B. Moral Scruples C. Utilitarian D. Justice E. Moral Rights

51. Under the practical rule, a manager would not be reluctant to communicate a decision to people outside the company when: A. He/she could announce the decision anonymously B. A typical person would consider the decision acceptable C. A typical person wouldn't care about the decision D. A typical person wouldn't know about the decision E. He/she could blame top management of the firm

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52. The practical rule states that an ethical decision is one that: A. Best protects the rights of people affected B. Produces the greatest good for the greatest number of people C. Distributes benefits and harms in a fair way D. Can be communicated with no reluctance E. Is relevant to financial effectiveness of the organization

53. If Michelle was employing the moral rights model of ethics in her decision making, she would: A. Seek to protect the privileges of people affected B. Maximize the greatest good for the greatest number of people C. Distribute benefits in fair ways, but ignores harm D. Distribute both benefits and harms in a fair way E. Randomly distribute harms and benefits

54. One managerial implication of the justice model is that managers should base their decisions on: A. The effects on stakeholders' rights B. What provides the maximum benefit to most stakeholders C. Whatever promotes a fair distribution of outcomes D. Arbitrary factors E. The organization's culture

55. According to the practical rule, a managerial decision that the manager has no hesitation or reluctance about communicating to people outside the company is called a(n): A. Moral scruple B. Popular decision C. Socially responsible decision D. Social audit E. Ethical decision

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56. Because it promotes the pursuit of self-interest that will destroy the societal interest, Web sites like Napster that allow for the free downloading of songs and movies can be viewed as a: A. Consequences of the commons B. Tragedy of the commons C. Tragedy of the field D. Consequences of selfishness E. Curse of unethical behavior

57. The idea that the pursuit of self-interest with no consideration for societal interests leads to disaster is called the: A. Tragedy of the commons B. Tragedy of errors C. Tragedy of the sheep D. Consequences of selfishness E. Curse of unethical behavior

58. A person's confidence and faith in another person's goodwill is called: A. Trust B. Reputation C. Responsibility D. Moral standing E. Emotional value

59. The esteem or high repute that individuals or organizations gain when they behave ethically is called: A. Trust B. Reputation C. Social responsibility D. Moral standing E. Emotional value

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60. Ethical behavior does NOT: A. Increase a company's efficiency B. Increase a company's effectiveness C. Increase a company's performance D. Reduce the national standard of living E. Increases the national well-being

61. Unethical behavior: A. Increases a company's efficiency B. Increases a company's effectiveness C. Reduces a company's performance D. Increases the national standard of living E. Increases national well-being and prosperity

62. Which of the following is NOT a main determinant of differences in ethics between people, companies, and countries? A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Operational ethics

63. Standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and individual rights are called: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Governmental ethics

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Chapter 04 - Ethics and Social Responsibility

64. The standards that govern how members of a profession should conduct themselves are called: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Governmental ethics

65. After a lengthy investigation, Larry lost his license to practice law. In all likelihood, Larry probably violated his: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Governmental ethics

66. When faced with an ethical dilemma as a manager, Joe tries to reflect back on his upbringing to decide between right and wrong. Joe is reflecting on: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Religious ethics

67. Standards that determine how people view their responsibilities to others and how they should act in situations when their own self-interest is at stake are called: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Governmental ethics

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68. Which of the following is least likely to be a source of individual ethics? A. Family B. Friends C. Church D. Teachers E. Supervisors

69. The guiding practices and beliefs through which a particular firm and its managers view their responsibilities to stakeholders are called: A. Societal ethics B. Occupational ethics C. Individual ethics D. Organizational ethics E. Governmental ethics

70. The individual ethics of which stakeholder group are important in shaping the organizational code of ethics? A. Employees B. Customers C. Community D. Founders E. Stockholders

71. Another name for a company's code of ethics is: A. Mission B. Vision C. Strategy D. Credo E. Goals

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72. The way a company's managers view their duty to make decisions that promote the welfare of stakeholders and society as a whole is called: A. Societal ethics B. Organizational ethics C. Social responsibility D. Organizational responsibility E. Environmental responsibility

73. All of the following are examples of managers being socially responsible EXCEPT: A. Give workers opportunities to enhance their skills and acquire additional education B. Moving a company's operations abroad for cheaper labor C. Allow employees to take time off D. Provide health care and pension benefits for employees E. Decline to invest in countries that have poor human rights records

74. Which of the approaches to social responsibility is the least socially responsible? A. Accommodative B. Proactive C. Defensive D. Obstructionist E. Obligatory

75. The managers of Lehman Brothers, whose bankruptcy helped propel the 2008-2009 financial crisis, used loopholes in to hide billions of dollars of worthless assets in its balance sheet to disguise its poor financial condition. What approach to social responsibility was Lehman Bothers employing? A. Accommodative B. Proactive C. Defensive D. Obstructionist E. Obligatory

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76. The unethical behavior characteristic of the ______ approach is exemplified when managers at Enron put their personal interests before their stakeholders' well being and above the law. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

77. Which of the following is NOT an approach to social responsibility discussed in the text? A. Accommodative B. Proactive C. Defensive D. Obstructionist E. Reactive

78. Which of the approaches to social responsibility is the most socially responsible? A. Accommodative B. Proactive C. Defensive D. Obstructionist E. Offensive

79. When tobacco companies sought to hide evidence that cigarette smoking causes lung cancer, they were exhibiting a(n) __________ approach. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

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80. A company that expects its managers to behave ethically to the degree that they stay within the law is acting with a(n) _______________ approach. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

81. When WorldCom gave managers stock options and bonuses even when company performance was declining, and managers sold stock in advance of other stockholders, they were acting with a(n) ____________ approach. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

82. With a(n) _____________ approach, companies and their managers behave legally and ethically and try to balance the interests of different stakeholders as the need arises. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

83. The president at Protector's Insurance takes pride in the fact that his organization strives to behave legally and ethically, but makes no attempts at going above and beyond what is legally required. What approach to social responsibility is the organization taking? A. Accommodative B. Proactive C. Defensive D. Obstructionist E. Offensive

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84. The approach most likely to be taken by the typical large U.S. company is the __________ approach. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

85. Companies that go out of their way to learn about the needs of different stakeholders and use organizational resources to promote their interests are using the ____________ approach. A. accommodative B. proactive C. defensive D. obstructionist E. offensive

86. Which of the following is NOT mentioned in the textbook as a firm that adopts the proactive approach to social responsibility? A. McDonald's B. Google C. Target D. Wal-Mart E. Green Mountain Coffee

87. Which is NOT a characteristic of a company that pursues a proactive approach to social responsibility? A. Promote a pollution-free environment B. Recycle C. Minimize the use of animals in drug and cosmetics testing D. Do just what the law dictates E. Fight to reduce crime

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88. A manager who actively embraces the need to behave in socially responsible ways is using which approach to social responsibility? A. Proactive B. Accommodative C. Obstructionist D. Defensive E. Assertive

89. To help create and maintain an ethical organization, managers should do all of the following E...