CHAPTER 3ETHICS AND SOCIAL RESPONSIBILITY

MULTIPLE CHOICE 1. Business ethics deals primarily with a social responsibility. . b the pricing of products and services. . c moral obligation. . d being unfair to the competition. .

ANS: C P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities ). $thics are important because a suppliers prefer to deal with ethical companies. . b customers prefer to deal with ethical companies. . c employees prefer to deal with ethical companies. . d all of the choices. .

%$#: p. &'

ANS: ! P S: 1 !"#: * NA : AACSB: $thics( +egal %esponsibilities

%$#: p. &'

,. According to the concept of moral intensity, a wor-er is most li-ely to behave ethically and legally when a a manager observes his or her behavior closely. . b the wor-er has intense morals. . c the conse.uences of the act are minor. . d the conse.uences of the act are substantial. .

ANS: ! P S: 1 !"#: ! NA : AACSB: $thics( +egal %esponsibilities

%$#: p. &/

0. Pierre ta-es a utilitarian viewpoint of ethics. 1e will therefore 2udge a business decision to be ethical so long as a more good than bad results from the decision. . b everybody is treated fairly.

. c certain rights are not violated. . d he has good character and integrity. .

ANS: A P S: 1 !"#: * NA : AACSB: $thics( "ndividual !ynamics

%$#: p. &/

'. Small3business owner 4ason is thin-ing about giving a potential customer an e5pense paid vacation to +as 6egas for her and her husband. 7hen as-ed if he is being ethical( 4ason replies( 8+oo- whatever wor-s( wor-s.8 7hich ethical principle is 4ason most li-ely using9 a focus on the rights of individuals . b pragmatism . c utilitarianism :conse.uences; . d focus on integrity :virtue ethics; .

ANS: B P S: 1 NA : AACSB: $thics( Strategy

!"#: *

%$#: p. &<

/. Bonita is an ethically centered production manager so she will ship a product a only after all its problems have been eliminated. . b only if the shipping people use pac-ing material that does not harm the environment. . c only after an ethics committee has approved it. . d as .uic-ly as she can to meet the customer=s schedule. .

ANS: A P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities &. Benefits derived from social responsibility include? a enhanced organi@ational efficiency . b producing better products . c attracting people who want to wor- for the firm . d both a A c .

%$#: p. <>

ANS: ! P S: 1 !"#: ! NA : AACSB: $thics( $nvironmental "nfluence

%$#: p. 1><

<. According to concept of moral laxity, wor-ers will often behave unethically because a they have planned to be unethical. . b they come from dysfunctional families. . c other issues seem more important at the time. . d management pressures them into unethical behavior. .

ANS: C P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities B. Cnethical behavior is often triggered by a pressure from higher management to achieve goals. . b an organi@ational atmosphere that condones such behavior. . c both a A b . d a system of chec-s and balances. .

%$#: p. <)

ANS: C P S: 1 NA : AACSB: $thics( Droup !ynamics 1>. Building a sustainable environment includes a developing a green supply chain . b omitting ha@ardous emissions . c both a A b . d writing a code of ethics .

!"#: *

%$#: p. <)

ANS: C P S: 1 !"#: * NA : AACSB: echnology( Eperations *anagement 11. #airness in employment practices centers on a hiring no family members or friends. . b giving people e.ual rewards for accomplishing the same tas-s. . c obeying e.ual employment opportunity legislation. . d avoiding conflicts of interest. .

%$#: pp. 1>)31>,

ANS: B P S: 1 NA : AACSB: Analytic( Strategy

!"#: *

%$#: p. <0

1). 7hich one of the following is not recommended as a method for a company to protect itself against se5ual harassment charges9 a !evelop a @ero3tolerance policy on harassment and communicate it to employees. . b %etaliate swiftly against employees who bring forth charges of harassment. . c Dive swift and sure punishment to harassers. . d rain managers at all levels on se5ual harassment issues. .

ANS: B P S: 1 !"#: ! NA : AACSB: $thics( +egal %esponsibilities 1,.

%$#: p. <'

eam leader Dary is scheduled to prepare a performance of +isa( a team member who also happens to be his wife=s closest friend. he ethical temptation Dary faces is a se5ual harassment. . b misuse of corporate resources. . c dealing with confidential information. . d conflict of interest. .

ANS: ! P S: 1 NA : AACSB: Analytic( 1%*

!"#: $

%$#: p. </

10. Fate( the owner of a small telecommunications firm gives gifts of stoc- in her company to telephone company mangers who purchase her e.uipment. Fate is giving in to the ethical temptation of a -ic-bac-s. . b misuse of corporate resources. . c se5ual harassment. . d treating people unfairly. .

ANS: A P S: 1 !"#: $ NA : AACSB: $thics( +egal %esponsibilities

%$#: p. </

1'. *arvin has his own 7ebsite that carries ads for a do@en retailers. At night( *arvin spends hours clic-ing on these sites so he can collect commissions from the advertisers. *arvin is engaged in the scandal referred to as a clic- fraud.

. b wor-3at3home scam. . c cyber s.uatting. . d bac-dating 7ebsites. .

ANS: A P S: 1 !"#: * NA : AACSB: echnology( "nformation echnologies 1/. a . b . c . d .

%$#: p. <B

he purpose of bac-dating stoc- options is to give the stoc-3option holder large payout on his or her birthday. ta53free investment. chance to diversify his or her stoc- portfolio. sure profit on the options.

ANS: ! P S: 1 !"#: * NA : AACSB: $thics( +egal %esponsibilities

%$#: p. B>

1&. 7hich one of the following .uestions is not as-ed in si53.uestion ethics test9 a 1ow does it smell9 . b 7ho gets hurt9 . c 7hat can we possibly get away with9 . d 7ould you tell your child :or young relative; to do it9 .

ANS: C P S: 1 NA : AACSB: $thics( 1%* 1<. a . b . c . d .

!"#: $

%$#: p. B1

he ethical dilemma of choosing between two rights refers to choosing between the lesser of two evils. deciding which of two employee rights is the most important. deciding to offer a bribe or lose out on an important opportunity. choosing between the two types of se5ual harassment.

ANS: A P S: 1 !"#: * NA : AACSB: $thics( $thical %esponsibilities

%$#: p. B1

1B. a . b . c . d .

he sta-eholder view of social responsibility states that organi@ations must respond to the needs of employees and customers. shareholders and owners. all interested parties. all those who might sue the organi@ation.

ANS: C P S: 1 !"#: * NA : AACSB: $thics( $thical %esponsibilities

%$#: p. B,

)>. A firm is said to have good corporate social performance when a stoc-holders invest in socially responsible causes. . b charitable deductions are automatically deducted from pay without the consent of . employees. c the company has not been convicted of ethical violations for five consecutive years. . d sta-eholders are satisfied with its level of social responsibility. .

ANS: ! P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities

%$#: p. B0

)1. Corporate social responsibility has three components according to professors Basu and Pala@@o: a cognitive( linguistic( and cognitive . b ethical( social( authoritative. . c reflective( analytic( corporative . d conceptual( sensing( assertive .

ANS: A P S: 1 NA : AACSB: Analytic( Strategy

!"#: !

%$#: p. B)

)). A socially responsible mutual fund will only purchase stoc-s in companies that a have a no3smo-ing policy in place. . b have a culturally diverse management team. . c hire some 2ob candidates who are 1"6 positive. . d have good social performance. .

ANS: ! P S: 1 !"#: * NA : AACSB: %eflective hin-ing( Eperations *anagement ),. A whistle blower is an employee who a e5poses organi@ational wrongdoing. . b complains a lot to company management. . c engages in unethical behavior. . d referees disputes with other employees. .

%$#: p. B0

ANS: A P S: 1 !"#: $ NA : AACSB: $thics( "ndividual !ynamics

%$#: p. BB

)0. 7hich one of the following approaches to creating an ethical and socially responsible wor-place is li-ely to be the most powerful9 a Passing out buttons with the statement 84ust Say No to Bad $thics8 . b Placing posters about ethics throughout the organi@ation . c op management acting as models of the right behavior . d "ncluding a statement about ethics and social responsibility in the employee handboo.

ANS: C P S: 1 !"#: * NA : AACSB: $thics( +eadership Principles

%$#: p. 1>'

)'. A recommended way of minimi@ing unethical behavior is for employees to a write anonymous notes to ethical violators. . b immediately report all suspicious behavior to top management. . c spend part of their vacation preparing a personal philosophy of ethics. . d confront fellow employees about ethical deviations. .

ANS: ! P S: 1 !"#: $ NA : AACSB: $thics( +eadership Principles TRUE/FALSE

%$#: p. 1>&

1. "n some situations a company action can be legal( yet still unethical.

ANS: P S: 1 !"#: * NA : AACSB: $thics( +egal %esponsibilities

%$#: p. &'

). $thics is the study of moral obligation( or separating right from wrong. ANS: P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities %$#: p. &'

,. According to the concept of moral intensity( an intensely moral person will be e.ually ethical in almost all situations. ANS: # P S: 1 !"#: * NA : AACSB: $thics( "ndividual !ynamics %$#: p. &/

0. According to the utilitarian view of ethics( what really counts is the net balance of good conse.uences over bad. ANS: P S: 1 NA : AACSB: $thics( Strategy !"#: * %$#: p. &<

'. According to the ethical philosophy of pragmatism( there are certain absolute principles or standards( ob2ective truth( and ob2ective reality that one must follow in business. ANS: # P S: 1 NA : AACSB: $thics( Strategy !"#: * %$#: p. &<

/. Escar( the meat department manager at a supermar-et( follows a deontological view of ethics. 1e therefore sees no ethical problem in selling rabbit meat and labeling it as chic-en( so long as no customer gets sic-. ANS: # P S: 1 !"#: ! NA : AACSB: $thics( +egal %esponsibilities %$#: p. &<

&. +ois is a slea@y individual who is out to manipulate and tric- people. According to the virtue ethics point of view( even when +ois=s actions do not harm people( she is still unethical. ANS: P S: 1 !"#: * NA : AACSB: $thics( "ndividual !ynamics %$#: pp. &<3&B

<. An ethically centered manager is more concerned about the completion dates of a pro2ect than high .uality( because he or she is primarily concerned about customer satisfaction. ANS: # P S: 1 NA : AACSB: $thics( Strategy !"#: * %$#: p. <>

B. According to a survey conducted by the $thics %esource Center( a fre.uent ethical problem is lying to employees( customers( vendors( or the public. ANS: P S: 1 !"#: $ NA : AACSB: $thics( "ndividual !ynamics %$#: p. <>

1>. An individual driver of unethical behavior is unconscious biases that lead us to behave in un2ust ways toward others. ANS: P S: 1 !"#: $ NA : AACSB: $thics( "ndividual !ynamics %$#: p. <1

11. 6iolating software agreements is so widely practiced( it is now considered no more illegal than an able3bodied person par-ing in a spaced reserved for physically disabled people. ANS: # P S: 1 NA : AACSB: $thics( Strategy !"#: $ %$#: p. <0

1). !hani is the human resources manager for a government agency. 1e faces a conflict of interest when his girlfriend=s mother applies to the agency and he must provide input on whether the woman should be hired. ANS: P S: 1 NA : AACSB: $thics( 1%* !"#: ! %$#: p. </

1,. 7hether to use corporate resources for personal use is an ethical dilemma that falls into a gray area for many people. ANS: P S: 1 !"#: * NA : AACSB: $thics( "ndividual !ynamics %$#: p. </

10. As a 7ebsite advertiser( you -now that you have been the victim of clic- fraud when thousands of people clic- on your ad with absolutely no interest in ma-ing a purchase33and you are charged for all those clic-s. ANS: P S: 1 NA : AACSB: $thics( Strategy !"#: * %$#: p. <B

1'. Ene of the ethical problems with bac-dating stoc- options is that it involves lying about when the option was granted. ANS: P S: 1 !"#: ! NA : AACSB: Analytic( Creation of 6alue %$#: p. B>

1/. Ene of the .uestions in the guide to ethical decision ma-ing as-s( 87ho gets hurt98 ANS: P S: 1 !"#: $ NA : AACSB: $thics( $thical %esponsibilities %$#: p. B1

1&. A study of 7al3*art suggests that what constitutes being socially responsible is not so clear cut. ANS: P S: 1 !"#: ! NA : AACSB: %eflective hin-ing( Eperations *anagement 1<. %$#: pp. B'3B&

he concept of social responsibility holds that business organi@ations have a legal obligation to be good citi@ens. ANS: # P S: 1 !"#: * %$#: p. B)

NA : AACSB: %eflective hin-ing( $nvironmental "nfluence 1B. Parties often disagree about what constitutes socially responsible behavior( such as selling handguns in a retail store. ANS: P S: 1 NA : AACSB: $thics( Strategy )>. !"#: ! %$#: p. B,

he sta-eholder viewpoint is the traditional perspective on social responsibility that a business organi@ation is responsible only to its owners and stoc-holders ANS: # P S: 1 !"#: * NA : AACSB: $thics( $thical %esponsibilities %$#: p. B,

)1. Ergani@ations ta-e a ma2or social responsibility initiative when they establish programs that help employees balance the demands of wor- and personal life. ANS: P S: 1 NA : AACSB: Analytic( 1%* !"#: * %$#: p. B<

)). +incoln $lectric Co.( a Cleveland3based manufacturer of welding e.uipment( has become the model of a company whose management has avoided downsi@ing. ANS: P S: 1 NA : AACSB: Analytic( 1%* !"#: ! %$#: p. 1>>

),. Blowing the whistle on one=s employer fre.uently leads to negative conse.uences for the individual( such as no further promotions or low performance evaluations. ANS: P S: 1 !"#: ! NA : AACSB: $thics( +egal %esponsibilities %$#: p. 1>>

)0. According to the concept of a virtuous cycle( corporate social performance and financial performance enhance each other. ANS: P S: 1 NA : AACSB: Analytic( Strategy !"#: $ %$#: p. 1><

)'. $conomically viable refers to such financial benefits as attaining reduced costs from energy savings( gaining governmental subsidies( and avoiding penalties.. ANS: P S: 1 !"#: * NA : AACSB: Analytic( Creation of 6alue ESSAY 1. A ma2or corporate thrust toward ethical and socially responsible behavior to go green. 1ow can a company try to create a sustainable environment ANS: %$#: p. 1>)

Doing green means creating processes that are :1; environmentally friendly( :); economically viable( and :,; pragmatic. $nvironmentally friendly refers to reducing pollution. $conomically viable refers to reduced costs from energy savings. A pragmatic approach means sustainability through a realistic approach. P S: 1 !"#: * %$#: p. 1>) NA : AACSB: Analytic( $nvironmental "nfluence ). "magine that you are about to hire a relative or close friend over a more .ualified outside candidate. a-e this problem through the ethical decision3ma-ing guide( and reach a decision about whether to hire him or her. ANS: !ecision ma-ers as- si5 things "s it right9 No? "s it fair9 No? 7ho gets hurt9 he .ualified candidate? 7ould you be comfortable if the details of your decision were reported on the front page of your local newspaper( on a popular 7eb site or blog( or through your companyGs e3mail system9 No? 7ould you tell your child to do it9 No? 1ow does it smell9 Bad. he person should not be hired. P S: 1 !"#: * %$#: p. B1 NA : AACSB: $thics( +eadership Principles ,. Are values closely related to ethics9 $5plain ANS: 6alues are closely related to ethics. 6alues can be considered clear statements of what is critically important. $thics become the vehicle for converting values into actions( or doing the right thing. A personGs values also influence which -ind of behaviors he or she believes are ethical. P S: 1 !"#: * %$#: p. &B NA : AACSB: $thics( $thical %esponsibilities 0. Nestle "ndia wants to produce its products locally. About half its 0<> factories are located in developing countries. he company has introduced a water education program( has bored wells for nearly 1>> village schools for children( and teaches hygiene programs. 1. 7hy is Nestle a socially responsible company9 ). 1ow has social responsibly increased NestleGs profits9 ANS: 1. he initiatives by Nestle "ndia to create clean water supplies can considered socially responsible because they are loo-ing out for the welfare of society. ). Being socially responsible leads to increased profits for Nestle because without clean water available locally( the company cannot operate successfully. P S: 1 !"#: ! %$#: pp. &03&' NA : AACSB: $thics( Strategy