Chapter 3 Quiz - Quiz questions with answers and explanations. PDF

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Quiz questions with answers and explanations....

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Chapter 3 Quiz 1. In order to ensure that his employees knew how to treat customers, suppliers, competitors, and other stakeholders Mr. Quill wrote about his expectations in a set of standards called a(n) code of ethics. Response Feedback: A code of ethics consists of a formal written set of ethical standards guiding an organization’s actions. Most codes offer guidance on how to treat customers, suppliers, competitors, and other stakeholders. The purpose is to clearly state top management’s expectations for all employees. Most codes prohibit bribes. 2. Dallas, the president of a successful family-owned company, wants to give back to the people of the community. To do this, she consistently donates a significant portion of company profit to local charities, sponsors little league teams, and ensures that the company is acting like a good citizen. What Dallas’s company is doing is an example of corporate social responsibility. Response Feedback: Corporate social responsibility (CSR) is the notion that corporations are expected to go above and beyond following the law and making a profit to help society. 3. Sabine, a successful banker and educator, has decided to retire, but she is very interested in staying involved with her company because “it cares”. So when asked to be on its board of directors, she gladly accepted the invitation. As a member of the board, Sabine will be involved with the organization’s overall strategic goals and approval of major decisions. Response Feedback: Members of the board of directors are very important in setting the organization’s overall strategic goals and in approving the major decisions and salaries of top management. 4. Corporate governance is the system of governing a company so that the interests of corporate owners and other stakeholders are protected.

Response Feedback: Corporate governance is the system of governing a company so that the interests of corporate owners and other stakeholders are protected. 5. Ethics are standards of right and wrong that influence behavior. Response Feedback: Ethics are the standards of right and wrong that influence behavior. 6. Small manufacturers could allow waste to runoff into a stream that feeds a local lake because it benefits them in the short term. Instead, they follow good disposal practices to avoid harming others in the long run, because it is in their best long-term interests to have good relationships with the community. This reflects the individual approach to deciding ethical dilemmas. Response Feedback: Ethical behavior in the individual approach is guided by what will result in the individual’s best long-term interests, which ultimately are in everyone’s self-interest. The assumption here is that you will act ethically in the short run to avoid others harming you in the long run. 7. Edward told a friend, “I’m tires of my company ignoring the environment. They keep dumping hazardous waste into the groundwater. I just hate that they’re getting away with it so I’m calling the EPA to report them.” In this situation, Edward’s decision to expose company action makes him a(n) whistle-blower. Response Feedback: A whistle-blower is an employee who reports organizational misconduct to the public, such as health and safety matters, waste, corruption, or overcharging of customers. 8. Three brothers, Larry, Darryl, and Darrell who own Bottletop Bakery, are concerned because Panera Bread is opening a new store just one mile from their shop. They know that Panera will be offering similar products; therefore, Panera Bread will be a competitor to Bottletop Bakery.

Response Feedback: Competitors are people or organizations that compete for customers or resources. 9. To focus on improving company customer service this year, the CEO outlines a list of stakeholders to concentrate on: distributors, local communities, and the mass media. These three groups are external stakeholders. Response Feedback: External stakeholders are people or groups in the organization’s external environment that are affected by it. The external task environment consists of 11 groups that present the organization with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee associations, local communities, financial institutions, government regulators, special-interest groups, and the mass media. 10. To increase profitability, top management of a national retailer needs to decide if it will close several stores. Management knows that by closing the locations, it will save the company millions of dollars and benefit many stockholder groups and individuals, compared to keeping those stores open and benefiting fewer people. This logic is an example of the utilitarian approach. Response Feedback: Ethical behavior in the utilitarian approach is guided by what will result in the greatest good for the greatest number of people. Managers often take the utilitarian approach, using financial performance such as efficiency and profit as the best definition of what constitutes “the greatest good for the greatest number”....