MANAGEMENT 5TH ASIA PACIFIC EDITION SCHERMERHORN – TEST BANK

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Testbank

 

to accompany

 

Management
5th Edition

 

by Schermerhorn et al.

 

Prepared by

Tui McKeown, Monash University

 

 

 

 

 

© John Wiley & Sons Australia, Ltd

 

 

Chapter 5

Ethical behaviour and corporate social responsibility

 

Multiple choice questions

 

  1. According to the textbook, ethical behaviour is:

 

  1. the same as legal behaviour in the context of business.
  2. interpreted outside the legal frame of reference.

*c. what is accepted as ‘good’ or ‘right’ as opposed to ‘bad’ or ‘wrong’ in the context of the governing moral code.

  1. All of the options listed
  2. None of the options listed

 

General Feedback:

Page 122. Factual. Learning objective 1. Ethical behaviour is accepted as ‘right’ or ‘good’ or ‘proper’ in the context of a governing moral code.

 

 

  1. Which of the following statements does NOT provide an accurate description of ethics?

 

  1. Ethics is the code of moral principles that sets standards of ‘good’ versus ‘bad’ or ‘right’ versus ‘wrong’.
  2. Ethics provides principles to guide the behaviour of individuals.
  3. Ethics provides principles to guide the behaviour of groups.

*d. Ethics is a set of principles that guide the organisation’s analysis of its external environment and the formulation of actions to respond to that environment.

  1. Ethics provides principles that help people make moral choices among alternative courses of action.

 

General Feedback:

Page 122. Factual. Learning objective 1. Ethics sets standards as to what is good or bad, or right or wrong in a person’s conduct.

 

 

  1. The utilitarian view of ethical behaviour is that which:

 

*a. provides the greatest good for the greatest number of people.

  1. respects and protects the individual’s fundamental rights.
  2. ensures that people are treated impartially and fairly.
  3. advances the pursuit of long-term self-interests.
  4. ensures the resolution of personal moral dilemmas.

 

General Feedback:

Page 123. Factual. Learning objective 1. The utilitarian view considers ethical behaviour as that which delivers the greatest good to the greatest number of people.

 

 

  1. Most ethical problems in the workplace arise when people are asked to do or are about to do something that:

 

  1. is illegal.
  2. goes against work group standards.

*c. violates their personal conscience.

  1. violates the organisation’s policies.
  2. violates social norms.

 

General Feedback:

Page 123. Factual. Learning objective 1. Most ethical problems in the workplace arise when people are asked to do, or find themselves about to do, something that violates the dictates of their conscience.

 

 

  1. The underlying beliefs and attitudes that help determine behaviour are referred to as:

 

*a. values.

  1. ethics.
  2. morals.
  3. personal standards.
  4. social norms.

 

General Feedback:

Page 123. Factual. Learning objective 1. Values are broad beliefs about what is or is not appropriate behaviour.

 

 

  1. To the extent that __________ vary among people, we can expect different interpretations of what behaviour is ethical or unethical in a given situation.

 

  1. laws

*b. values

  1. needs
  2. perceptions
  3. motives

 

General Feedback:

Page 123. Factual. Learning objective 1. Values are broad beliefs about what is or is not appropriate behaviour.

 

 

  1. The main emphasis of the individualism view of ethical behaviour is:

 

*a. assessing the implications of a decision in terms of its long-term personal consequences.

  1. promoting honesty and integrity.
  2. ensuring that people’s rights are protected and respected.
  3. evaluating a decision on the basis of its impartiality and fairness.
  4. ensuring that the greatest number of people benefit to the greatest extent possible.

 

General Feedback:

Page 123. Factual. Learning objective 1. The individualism view considers ethical behaviour as that which advances long-term self-interests.

 

 

  1. The individualism view is supposed to promote __________ but in business practice it may result in __________.

 

  1. personal enrichment; organisational enrichment

*b. honesty and integrity; pushing the law to its outer limits

  1. narcissism; procedural justice
  2. running roughshod over other people to achieve personal objectives; honesty and integrity
  3. pushing the law to its outer limits; interactional justice

 

General Feedback:

Page 123-124. Applied. Learning objective 1. The individualism view considers ethical behaviour as that which advances long-term self-interests.

 

 

  1. The main emphasis of the moral-rights view of ethical behaviour is:

 

  1. assessing the implications of a decision in terms of its long-term personal consequences.
  2. promoting honesty and integrity.

*c. ensuring that people’s rights are protected and respected.

  1. evaluating a decision on the basis of its impartiality and fairness.
  2. ensuring that the greatest number of people benefit to the greatest extent possible.

 

General Feedback:

Page 124. Factual. Learning objective 1. The moral-rights view considers ethical behaviour as that which respects and protects the fundamental rights of people.

 

 

  1. In contemporary organisations, __________ concerns the protection of employees with respect to their rights to privacy, due process, free speech, free consent, health and safety, and freedom of conscience.

 

  1. the utilitarian view.
  2. the individualism view.
  3. the collectivism view.

*d. the moral-rights view.

  1. the justice view.

 

General Feedback:

Page 124. Applied. Learning objective 1. The moral-rights view considers ethical behaviour as that which respects and protects the fundamental rights of people.

 

 

  1. The main emphasis of the justice view of ethical behaviour is:

 

  1. assessing the implications of a decision in terms of its long-term personal consequences.
  2. promoting honesty and integrity.
  3. ensuring that people’s rights are protected and respected.

*d. evaluating a decision on the basis of its impartiality and fairness.

  1. ensuring that the greatest number of people benefit to the greatest extent possible.

 

General Feedback:

Page 124. Factual. Learning objective 1.

 

 

  1. Using results-oriented performance criteria to judge what is best for most people in a business organisation is an application of which view of ethical behaviour?

 

  1. The utilitarian view
  2. The individualism view
  3. The collectivism view
  4. The moral-rights view

*e. The justice view

 

General Feedback:

Page 124. Applied. Learning objective 1. The justice view considers ethical behaviour as that which treats people impartially and fairly according to guiding rules and standards.

 

 

  1. Suppose that a lecturer’s main concern in grading term papers is to evaluate the papers and assign grades fairly and objectively in light of the requirements and grading scale contained in the course syllabus. From an ethics perspective, this is an example of the lecturer adopting which of the following views?

 

  1. The utilitarian view
  2. The individualism view
  3. The collectivism view
  4. The moral-rights view

*e. The justice view

 

General Feedback:

Page 124. Applied. Learning objective 1. The justice view considers ethical behaviour as that which treats people impartially and fairly according to guiding rules and standards.

 

 

  1. Not taking sexual harassment allegations against top management as seriously as allegations against supervisors is an example of violating the principle of:

 

  1. distributive justice.
  2. moral justice.
  3. ethical management.

*d. procedural justice.

  1. equitable policy.

 

General Feedback:

Page 124. Applied. Learning objective 1. Procedural justice is concerned that policies and rules are fairly administered.

 

 

  1. The degree to which people are treated the same without regard to ethnicity, race, gender and age is the concept of:

 

*a. distributive justice.

  1. moral justice.
  2. ethical management.
  3. procedural justice.
  4. equitable policy.

 

General Feedback:

Page 124. Factual. Learning objective 1. Distributive justice is concerned that people are treated the same regardless of individual characteristics.

 

 

  1. The degree to which other people are treated with dignity and respect deals with the issue of:

 

  1. utilitarianism.
  2. individualism.
  3. procedural justice.
  4. distributive justice.

*e. interactional justice.

 

General Feedback:

Page 124. Factual. Learning objective 1. Interactional justice is the degree to which others are treated with dignity and respect.

 

 

  1. Michele is a bank officer who takes the time to fully explain to an applicant why he was turned down for a loan. Michele is reflecting the ethical concern of ______ in her behaviour.

 

  1. procedural justice
  2. distributive justice

*c. interactional justice

  1. utilitarianism
  2. individualism

 

General Feedback:

Page 124. Applied. Learning objective 1. Interactional justice is the degree to which others are treated with dignity and respect.

 

 

  1. Critics claim that __________ is a form of __________, or the attempt to externally impose one’s ethical standards on others.

 

  1. cultural relativism; cultural universalism

*b. universalism; ethical imperialism

  1. cultural relativism; ethical imperialism
  2. ethical imperialism; cultural relativism
  3. ethical imperialism; Romanesque law

 

General Feedback:

Page 125. Factual. Learning objective 1. Critics of such a universal approach claim that it is a form of ethical imperialism, or the attempt to externally impose your ethical standards on others.

 

 

  1. An executive who assumes that ethical standards are universal in nature and should apply absolutely across cultures and national boundaries is operating under which cultural behaviour?

 

  1. Cultural activism
  2. Cultural relativism

*c. Ethical universalism

  1. Cultural socialism
  2. Ethical realism

 

General Feedback:

Page 125-26. Factual. Learning objective 1. Universalism suggests ethical standards apply across all cultures.

 

 

  1. Creating a corporate culture that values employees, customers and suppliers is a core value that:

 

  1. respects basic rights.
  2. promotes good citizenship.
  3. enhances social concerns.

*d. respects human dignity.

  1. respects stakeholder interests.

 

General Feedback:

Page 125. Factual. Learning objective 1. The core values or ‘hyper-norms’ that should transcend cultural boundaries focus on human dignity, basic rights and good citizenship.

 

 

  1. Which of the following does NOT accurately describe the universal values of respect for human dignity or respect for basic rights?

 

  1. Keeping a safe workplace
  2. Producing safe goods and services

*c. Supporting social institutions, including economic and educational systems

  1. Protecting the rights of employees and customers
  2. Avoiding anything that threatens people’s education and living standards

 

General Feedback:

Page 125-126. Factual. Learning objective 1. The core values or ‘hyper-norms’ that should transcend cultural boundaries focus on human dignity, basic rights and good citizenship.

 

 

  1. When some action must be taken but there is not a clear ‘right’ or ‘wrong’ approach, a person is faced with a(n):

 

  1. moral pinch.

*b. ethical dilemma.

  1. managerial decision.
  2. situation to avoid.
  3. lawsuit.

 

General Feedback:

Page 127. Factual. Learning objective 2. An ethical dilemma arises when action must be taken but there is no clear ‘ethically right’ option.

 

 

  1. If a manager makes a co-worker feel uncomfortable because of inappropriate comments or actions regarding sexuality, the manager may get caught in an ethical dilemma involving:

 

  1. discrimination.

*b. sexual harassment.

  1. conflicts of interest.
  2. customer confidence.
  3. organisational resources.

 

General Feedback:

Page 127. Factual. Learning objective 2. Sexual harassment – where a manager makes a co-worker feel uncomfortable because of inappropriate comments or actions regarding sexuality; or where a manager requests sexual favours in return for favourable job treatment.

 

 

  1. Ethical dilemmas in the form of __________ may occur where a manager takes a bribe, kickback or extraordinary gift in return for making a decision favourable to the gift giver.

 

  1. discrimination
  2. sexual harassment

*c. conflicts of interest

  1. customer confidence
  2. organisational resources

 

General Feedback:

Page 127. Applied. Learning objective 2. Conflicts of interest – where a manager takes a bribe or kickback or extraordinary gift in return for making a decision favourable to the gift giver.

 

 

  1. Ethical dilemmas in the form of __________ may occur where a manager has privileged information regarding the activities of a customer and shares that information with another party.

 

  1. discrimination
  2. sexual harassment
  3. conflicts of interest

*d. customer confidence

  1. organisational resources

 

General Feedback:

Page 127. Applied. Learning objective 2. Customer confidence – where a manager has privileged information regarding the activities of a customer and shares that information with another party.

 

 

  1. The results of a Harvard Business Review survey indicated that the ethical issues most frequently encountered by the magazine’s subscribers involved all but which one of the following?

 

  1. Dishonesty in advertising
  2. Dishonesty in communication with top management

*c. Dishonesty in communication with subordinates

  1. Dishonesty in communication with clients
  2. Dishonesty in communication with government agencies

 

General Feedback:

Page 127. Factual. Learning objective 2. The most frequently occurring issues involved dishonesty in advertising and communications with top management, clients and government agencies.

 

 

  1. A survey of Harvard Business Review subscribers revealed that many ethical dilemmas involve conflicts with:

 

  1. superiors.
  2. subordinates.
  3. customers.

*d. all of the options listed

  1. none of the options listed

 

General Feedback:

Page 127. Factual. Learning objective 2.

 

 

  1. The text reports that managers sometimes pressure their subordinates to engage in various unethical activities. Which of the following in NOT one of these unethical activities?

 

  1. Overlooking the boss’s wrongdoings
  2. Signing false documents
  3. Supporting incorrect viewpoints
  4. Doing business with the boss’s friends

*e. Doing personal favours for the boss

 

General Feedback:

Page 127-128. Factual. Learning objective 2. In a survey of Harvard Business Review subscribers, many of the ethical dilemmas reported by managers involved conflicts with superiors, customers and subordinates.

 

 

  1. In submitting her expense report for a recent business trip, Shirley sought reimbursement for some personal entertainment expenses. Knowing that the company policy precluded such reimbursement, she reported higher amounts for taxi fares and tips than she actually spent. Which of the following rationalisations most likely applies to Shirley’s actions?

 

  1. It’s not really illegal.
  2. It’s in everyone’s best interests.

*c. No one will ever know about it.

  1. Options A and B
  2. Options B and C

 

General Feedback:

Page 127-28. Applied. Learning objective 2. There are at least four common rationalisations that are used to justify misconduct in these and other ethical dilemmas.

 

 

  1. The text identifies different ways of dealing with the four rationalisations that are commonly used to justify unethical behaviour. Which one of the following courses of action is NOT a recommended way for dealing with at least one of the four rationalisations?

 

*a. When in doubt about a decision to be made or an action to be taken, don’t do it.

  1. If other people and other companies are doing it, you are justified in doing it too.
  2. Look beyond the short-term results to address longer term implications.
  3. Make sure everyone knows that wrongdoing will be punished whenever it is discovered.
  4. Organisational loyalty should not stand above the law and social morality.

 

General Feedback:

Page 127-28. Applied. Learning objective 2. When in doubt about a decision to be made or an action to be taken, don’t do it.

 

 

  1. Personal factors that help determine managerial ethics include:

 

*a. religious values.

  1. organisational policies.
  2. government regulation.
  3. ethical climate of the industry.
  4. behaviour of peers.

 

General Feedback:

Page 128. Factual. Learning objective 2. Family influences, religious values, personal standards and personal needs, financial and otherwise, will help determine a person’s ethical conduct in any given circumstance.

 

 

  1. When Aaron Jenkins kept 1000 workers on the payroll after his clothing factory burned down, his ethical behaviour was influenced by the __________ factor.

 

  1. social
  2. organisation

*c. person

  1. corporate
  2. environment

 

General Feedback:

Page 128. Applied. Learning objective 2. See figure 5.3.

 

 

  1. Anita Roddick’s 11-point charter on ethical conduct at the Body Shop International is an example of the influence of __________ on ethical behaviour.

 

  1. religious values
  2. government regulation
  3. personal standards and needs

*d. formal policies of the employing organisation

  1. behaviour of peers and supervisors

 

General Feedback:

Page 129. Applied. Learning objective 2. The fact that The Body Shop still has to respond to occasional criticisms about its operations demonstrates the inadequacy of formal policies alone to guarantee consistent ethical behaviour.

 

 

  1. Ethics training refers to:

 

*a. structured programs to help participants understand the ethical aspects of decision making, and how to incorporate ethical standards into their daily lives.

  1. teaching corporate outlines for formal corporate codes of ethics.
  2. training on the laws under which ‘white collar’ criminals are prosecuted.
  3. learning about corporate guidelines for ethical employee conduct.
  4. exposure to governmental regulations for defence contractors.

 

General Feedback:

Page 130-31. Factual. Learning objective 3. Ethics training seeks to help people understand the ethical aspects of decision-making and to incorporate high ethical standards into their daily behaviour.

 

 

  1. Ethics training should be designed to:

 

  1. help people deal with ethical issues while under pressure.
  2. help people incorporate ethical standards into their daily work behaviour.
  3. help people to have the moral courage to do what is right.

*d. all of the options listed

  1. none of the options listed

 

General Feedback:

Page 131. Factual. Learning objective 3. Ethics training, in the form of structured programs to help participants understand the ethical aspects of decision-making, is designed to help people incorporate high ethical standards into their daily behaviour.

 

 

  1. According to the text, an important way for double-checking the ethics of a decision is to ask which one of the following questions?

 

  1. How would I feel about this decision if it makes a lot of money for the company?
  2. How would I feel if I receive a large bonus as a result of making this decision?
  3. How would I feel if this decision harms someone?
  4. How would I feel if a competitor loses business as a result of this decision?

*e. How would I feel if my family finds out about my decision?

 

General Feedback:

Page 131. Factual. Learning objective 3. Manager’s notepad 5.2 presents a seven-step checklist for making ethical decisions when confronting an ethical dilemma.

 

 

  1. According to the text, an important way to test whether a decision is consistent with one’s personal ethical standards is to ask which of the following questions?

 

*a. How would I feel about this if my decision is printed in the local newspaper?

  1. How would I feel if this decision harms someone?
  2. How would I feel if my employer loses a lot of money as a result of this decision?
  3. All of these questions are important ways of testing the ethics of a decision.
  4. None of these questions is an important way of testing the ethics of a decision.

 

General Feedback:

Page 131. Factual. Learning objective 3. Manager’s notepad 5.2 presents a seven-step checklist for making ethical decisions when confronting an ethical dilemma.

 

 

  1. A strict chain of command, strong work group identities and ambiguous priorities are:

 

*a. organisational barriers to whistleblowing.

  1. essential components of moral quality circles.
  2. mechanisms for resolving ethical dilemmas.
  3. all of the options listed.
  4. none of the options listed.

 

General Feedback:

Page 131-32. Factual. Learning objective 3. Whistleblowers face the risks of impaired career progress and other forms of organisational retaliation, up to and including dismissal. Many workers become whistleblowers unintentionally when reporting workplace fraud, corruption or maladministration.

 

 

  1. The __________ is an approach for gaining shared commitments to high ethical standards.

 

  1. autonomous work group

*b. moral quality circle

  1. ethical work group
  2. worker ethics team
  3. shared ethics task force

 

General Feedback:

Page 132. Factual. Learning objective 3. moral quality circles help create shared commitments for people to work at their moral best.

 

 

  1. __________ should act as ethical role models and set an ethical tone in their areas of responsibility.

 

  1. Top management
  2. Middle management
  3. First-line or supervisory management

*d. All levels of management

  1. Top and middle management levels only

 

General Feedback:

Page 132. Factual. Learning objective 3. All managers must act as ethical role models and set an ethical tone in their areas of responsibility.

 

 

  1. Which of the following statements does NOT provide an accurate description regarding how pressure to achieve goals affects ethics and ethical behaviour?

 

  1. Employees often feel pressure to compromise personal standards to achieve company goals.
  2. A company director can create an ethical climate by setting reasonable goals.
  3. Any manager can unwittingly encourage subordinates to engage in unethical behaviour by exerting too much pressure to achieve goals that are too difficult.
  4. Part of a manager’s ethical responsibility is to be realistic in setting performance targets for others.

*e. Managers can create an ethical environment by setting goals that are extremely challenging and continuously push subordinates to achieve these goals.

 

General Feedback:

Page 132-33. Factual. Learning objective 3. Clearly, any manager, in his or her relationships with subordinates, may unknowingly encourage unethical practices by exerting too much pressure for them to accomplish goals that are too difficult.

 

 

  1. Official written guidelines for behaviour in situations susceptible to the creation of ethical dilemmas are referred to as the organisation’s formal:

 

*a. codes of ethics.

  1. corporate social responsibility.
  2. management guidelines.
  3. employee mandate.
  4. employee handbook.

 

General Feedback:

Page 132. Factual. Learning objective 3. Codes of ethics are written guidelines that state values and ethical standards intended to guide the behaviour of employees.

 

 

  1. Gap, Inc. expects certain ethical commitments from all its vendors. These ethical standards deal with all of the following EXCEPT:

 

  1. discrimination.
  2. forced labour.
  3. working conditions.

*d. minimum wages and benefits.

  1. freedom of association.

 

General Feedback:

Page 133. Factual. Learning objective 3. Among the many areas covered, the document specifically deals with discrimination, forced labour, working conditions and freedom of association.

 

 

  1. Formal codes of ethics are usually concerned with expressing how employees may be expected to behave in respect to all of the following EXCEPT:

 

  1. workforce diversity.
  2. political contributions.
  3. confidentiality of corporate information.

*d. choice of friends and acquaintances.

  1. response to bribes and kickbacks.

 

General Feedback:

Page 132-33. Factual. Learning objective 3. Most codes of ethical conduct identify expected behaviours in terms of general organisational citizenship, the avoidance of illegal or improper acts in a person’s work, and good relationships with customers.

 

 

  1. Codes of ethical conduct have several limitations. Which of the following is NOT one of these limitations?

 

  1. Codes of ethical conduct cannot cover all situations.

*b. Ethical codes provide automatic insurance for universal ethical conduct.

  1. The value of an ethics code relies on the organisation’s underlying human resource foundation.
  2. Ethical codes are not replacements for hiring people of integrity.
  3. Ethical codes cannot replace leadership that is committed to being positive role models for the rest of the organisation’s members.

 

General Feedback:

Page 133. Applied. Learning objective 4. They cannot cover all situations, and they are not automatic insurance for universal ethical conduct.

 

 

  1. The value of any formal code of ethics relies on:

 

  1. effective hiring practices that staff organisations with honest and moral people.
  2. committed managers who are willing to set examples and act as positive ethical role models.
  3. the underlying human resource foundations of the organisation.

*d. all of the options listed.

  1. none of the options listed.

 

General Feedback:

Page 133. Applied. Learning objective 4. Ultimately, of course, the value of any formal code of ethics still rests on the underlying human resource foundations of the organisation – its managers and other employees.

 

 

  1. Corporate social responsibility is defined as an obligation of the organisation to act in ways that serve both its own interests and the interests of its:

 

  1. stakeholders.
  2. employers.
  3. board of directors.

*d. many external stakeholders.

  1. customers.

 

General Feedback:

Page 133. Factual. Learning objective 4. Corporate social responsibility is the obligation of an organisation to act in ways that serve both its own interests and the interests of its stakeholders.

 

 

  1. __________ refers to an organisation’s obligation to act in ways that serve its own interests as well as those of its many external stakeholders.

 

  1. A code of ethics
  2. A moral code
  3. A formal policy statement

*d. Corporate social responsibility

  1. Public accountability

 

General Feedback:

Page 134. Factual. Learning objective 4. Corporate social responsibility is the obligation of an organisation to act in ways that serve both its own interests and the interests of its stakeholders.

 

 

  1. The leadership beliefs that guide socially responsible organisational practices include all of the following EXCEPT:

 

  1. people.
  2. communities.
  3. natural environment.

*d. short-term success.

  1. reputation.

 

General Feedback:

Page 134. Factual. Learning objective 4. The leadership beliefs that guide socially responsible organisational practices are people, communities, natural environment, long term and reputation.

 

 

  1. Which of the following arguments is NOT against the assumption of social responsibility by business?

 

  1. Social responsibility will raise costs.
  2. Social responsibility will reduce business profits.

*c. Social responsibility will dilute the social power of business.

  1. Social responsibility will dilute the purpose of business.
  2. Social responsibility will give business too much social power.

 

General Feedback:

Page 136. Applied. Learning objective 4. The arguments against corporate social responsibility include fears that the pursuit of this goal will reduce business profits, raise business costs, dilute business purpose, give business too much social power, and do so without business accountability to the public.

 

 

  1. __________ is the social responsibility view that maintains the organisation must be concerned for the broader social welfare.

 

  1. The shareholder model
  2. The free market model
  3. The stakeholder view
  4. The classical view

*e. The socioeconomic view

 

General Feedback:

Page 136. Factual. Learning objective 4. The socioeconomic view holds that management of any organisation must be concerned for the broader social welfare and not just for corporate profits.

 

 

  1. Which of the following statements does NOT support the argument that corporations should engage in socially responsible behaviour?

 

  1. Social responsibility decreases the need for restrictive government regulation.
  2. Businesses have the resources and obligation to act in socially responsible ways.
  3. Socially responsible behaviour improves the public image of business.

*d. Pursuing socially responsible goals may dilute the purpose of the business.

  1. Long-run profits for the business may improve or even be dependent on its degree of social responsibility.

 

General Feedback:

Page 136. Applied. Learning objective 4. The arguments against corporate social responsibility include fears that the pursuit of this goal will reduce business profits, raise business costs, dilute business purpose, give business too much social power, and do so without business accountability to the public.

 

 

  1. Which statement is MOST correct in terms of the textbook presentation of the public’s expectations of business with respect to corporate social responsibility?

 

  1. There are no compelling arguments against corporate social responsibility.
  2. Corporate social responsibility is not related to managerial ethics.

*c. There are increased expectations that organisations will act with genuine social responsibility.

  1. The Australian legal system does not protect the rights of consumers against socially irresponsible business acts.
  2. Corporate social responsibility should be the concern of only top-level managers in organisations.

 

General Feedback:

Page 136-37. Applied. Learning objective 4. Today, there is little doubt that the public at large wants businesses and other organisations to act with genuine social responsibility.

 

 

  1. Which of the following statements regarding the relationship between social responsibility and financial performance is NOT true?

 

  1. High performance in social responsibility can be associated with strong financial performance.
  2. At worst, strong corporate social responsibility has no adverse impact on financial performance.

*c. High performance in social responsibility is seldom, if ever, associated with strong financial performance.

  1. Recent evidence suggests that corporate social responsibility leads to improved financial performance that, in turn, leads to additional socially responsible actions.
  2. Businesses can serve the public good and a broad pool of stakeholders as well as advance the financial interests of their shareholders.

 

General Feedback:

Page 136-37. Applied. Learning objective 4. On the research side, there is increasing evidence that high performance in social responsibility can be associated with strong financial performance and, at worst, has no adverse financial impact.

 

 

  1. A social audit is:

 

*a. a systematic assessment and reporting of an organisation’s resource commitments and action accomplishments in areas of social responsibility.

  1. a public opinion survey regarding the social impact of a corporation’s actions.
  2. an internal accounting audit requested by shareholders.
  3. a systematic assessment of the corporation’s impact on its employees’ social lives.
  4. a survey of employees regarding their social preferences.

 

General Feedback:

Page 137. Factual. Learning objective 4. A social audit is a systematic assessment of an organisation’s accomplishments in areas of social responsibility.

 

 

  1. The text identifies several criteria for evaluating socially responsible corporate behaviour. A company is meeting its __________ when it earns a profit through provision of goods and services desired by customers.

 

*a. economic responsibility

  1. legal responsibility
  2. ethical responsibility
  3. discretionary responsibility
  4. stakeholder responsibility

 

General Feedback:

Page 137. Factual. Learning objective 4. A formal assessment of corporate social performance might include questions posed at these four levels: 1. Is the organisation’s economic responsibility met? Is it profitable? 2. Is the organisation’s legal responsibility met? Does it obey the law? 3. Is the organisation’s ethical responsibility met? Is it doing the ‘right’ things? 4. Is the organisation’s discretionary responsibility met? Does it contribute to the broader community?

 

 

  1. Corporate social responsibility is reflected in the way a company deals with all of the following EXCEPT:

 

  1. general corporate philanthropy.
  2. labour relations.
  3. diversity practices.

*d. organisational politics.

  1. aid to education.

 

General Feedback:

Page 137-38. Applied. Learning objective 4. An organisation meets its ethical responsibility when its actions voluntarily conform not only to legal expectations but also to the broader values and moral expectations of society.

 

 

  1. The text identifies several criteria for evaluating socially responsible corporate behaviour. A company is meeting its __________ when it operates within the law and according to the requirements of various external regulations.

 

  1. economic responsibility

*b. legal responsibility

  1. ethical responsibility
  2. discretionary responsibility
  3. stakeholder responsibility

 

General Feedback:

Page 137. Factual. Learning objective 4. Is the organisation’s legal responsibility met? Does it obey the law?

 

 

  1. An organisation is meeting its ethical responsibility when it:

 

  1. complies with the law and requirements of various external regulations.
  2. voluntarily moves beyond basic economic, legal and ethical expectations to provide leadership in advancing social wellbeing.
  3. earns a profit through provision of goods and services desired by customers.

*d. voluntarily conforms to legal expectations as well as broader values and moral expectations of society.

  1. anticipates socially responsible behaviour.

 

General Feedback:

Page 138. Factual. Learning objective 4. Is the organisation’s ethical responsibility met? Is it doing the ‘right’ things?

 

 

  1. An organisation is meeting its legal responsibility when it:

 

*a. complies with the law and requirements of various external regulations.

  1. voluntarily moves beyond basic economic, legal and ethical expectations to provide leadership in advancing social well-being.
  2. earns a profit through provision of goods and services desired by customers.
  3. voluntarily conforms to legal expectations, and broader values and moral expectations of society.
  4. anticipates socially responsible behaviour.

 

General Feedback:

Page 138. Factual. Learning objective 4. Is the organisation’s legal responsibility met? Does it obey the law?

 

 

  1. The text identifies several criteria for evaluating socially responsible corporate behaviour. A company is meeting its __________when it voluntarily conforms to legal as well as broader values and moral expectations of society.

 

  1. economic responsibility
  2. legal responsibility

*c. ethical responsibility

  1. discretionary responsibility
  2. stakeholder responsibility

 

General Feedback:

Page 137-38. Factual. Learning objective 4. A formal assessment of corporate social performance might include questions posed at these four levels: 1. Is the organisation’s economic responsibility met? Is it profitable? 2. Is the organisation’s legal responsibility met? Does it obey the law? 3. Is the organisation’s ethical responsibility met? Is it doing the ‘right’ things? 4. Is the organisation’s discretionary responsibility met? Does it contribute to the broader community?

 

 

  1. An organisation is meeting its discretionary responsibility when it

 

  1. complies with the law and requirements of various external regulations.

*b. voluntarily moves beyond basic economic, legal and ethical expectations to provide leadership in advancing social wellbeing.

  1. earns a profit through provision of goods and services desired by customers.
  2. voluntarily conforms to legal expectations as well as broader values and moral expectations of society.
  3. anticipates socially responsible behaviour.

 

General Feedback:

Page 138. Factual. Learning objective 4. Is the organisation’s discretionary responsibility met? Does it contribute to the broader community?

 

 

  1. The highest level of social performance comes through the satisfaction of an organisation’s:

 

  1. economic responsibility.
  2. legal responsibility.
  3. ethical responsibility.

*d. discretionary responsibility.

  1. stakeholder responsibility.

 

General Feedback:

Page 138. Factual. Learning objective 4. The highest level of social performance comes through the satisfaction of an organisation’s discretionary responsibility.

 

 

  1. The obstructionist strategy of social responsibility meets the organisation’s:

 

*a. economic responsibility.

  1. economic and legal responsibilities.
  2. economic, legal and ethical responsibilities.
  3. economic, legal, ethical and discretionary responsibilities.
  4. economic, legal, ethical, discretionary and political responsibilities.

 

General Feedback:

Page 139. Factual. Learning objective 4. An obstructionist strategy avoids social responsibility and reflects mainly economic priorities.

 

 

  1. The defensive strategy involves a corporate social responsibility commitment that:

 

  1. reflects mainly economic concerns.

*b. seeks to protect the organisation by doing the minimum legally required to satisfy expectations.

  1. is congruent with society’s prevailing norms, values and expectations.
  2. takes preventative action to avoid adverse social impact.
  3. is inconsistent with prevailing societal norms.

 

General Feedback:

Page 139. Factual. Learning objective 4. A defensive strategy seeks to protect the organisation by doing the minimum legally required to satisfy social expectations.

 

 

  1. The defensive strategy of social responsibility meets the organisation’s:

 

  1. economic responsibility.

*b. economic and legal responsibilities.

  1. economic, legal and ethical responsibilities.
  2. economic, legal, ethical and discretionary responsibilities.
  3. economic, legal, ethical, discretionary and political responsibilities.

 

General Feedback:

Page 139. Factual. Learning objective 4. A defensive strategy (‘do the minimum legally required’) seeks to protect the organisation by doing the minimum legally necessary to satisfy expectations

 

 

  1. The accommodative strategy of social responsibility meets the organisation’s:

 

  1. economic responsibility.
  2. economic and legal responsibilities.

*c. economic, legal and ethical responsibilities.

  1. economic, legal, ethical and discretionary responsibilities.
  2. economic, legal, ethical, discretionary and political responsibilities.

 

General Feedback:

Page 139. Factual. Learning objective 4. An accommodative strategy accepts social responsibility and tries to satisfy prevailing economic, legal and ethical performance criteria.

 

 

  1. The proactive strategy of social responsibility meets the organisation’s:

 

  1. economic responsibility.
  2. economic and legal responsibilities.
  3. economic, legal and ethical responsibilities.

*d. economic, legal, ethical and discretionary responsibilities.

  1. economic, legal, ethical, discretionary and political responsibilities.

 

General Feedback:

Page 139. Factual. Learning objective 4. A proactive strategy meets all the criteria of social responsibility, including discretionary performance.

 

 

  1. An organisation that is following a(n) __________ social responsibility strategy would likely take a leadership role in identifying and responding to emerging social issues.

 

  1. obstructionist
  2. defensive
  3. accommodative

*d. proactive

  1. ethical

 

General Feedback:

Page 139. Factual. Learning objective 4. A proactive strategy meets all the criteria of social responsibility, including discretionary performance.

 

 

  1. Governments take an active role in regulating business affairs in Australia and New Zealand in all of the following areas EXCEPT:

 

  1. environmental protection.
  2. consumer protection.

*c. profit maximisation.

  1. occupational health and safety.
  2. fair labour practices.

 

General Feedback:

Page 140-41. Factual. Learning objective 5. Like most other developed countries, Australia and New Zealand have many pieces of legislation specifically designed to enforce social responsibility on businesses. These laws and regulations are usually in the form of minimum standards that must be met in terms of occupational health and safety (OHS), fair labour practices, environmental protection and the like.

 

 

  1. __________ allow(s) executives to communicate positive images of their organisations to the public at large.

 

  1. Personal contacts and networks

*b. Public relations campaigns

  1. Lobbying
  2. Political action committees
  3. Bribery

 

General Feedback:

Page 141. Factual. Learning objective 5. Through public relations campaigns, executives can communicate positive images of their organisations to the public at large, with the potential for them to speak positively on the business’s behalf.

 

 

  1. According to the text, the approaches that businesses can take in influencing government include all of the following EXCEPT:

 

  1. personal contacts and networks.
  2. public relations campaigns.
  3. lobbying.
  4. illegal acts.

*e. refusing to abide by regulatory controls.

 

General Feedback:

Page 141. Factual. Learning objective 5. There are a number of ways in which businesses, in particular, try to influence government to adopt and pursue policies favourable to them including: personal contacts and networks; public relations campaigns, lobbying; and illegal acts.

 

 

  1. __________ enable(s) executives to get to know important people in government.

 

*a. Personal contacts and networks

  1. Public relations campaigns
  2. Lobbying
  3. Political action committees
  4. Bribery

 

General Feedback:

Page 141. Factual. Learning objective 5. Through personal contacts and networks, executives get to know important people in government.

 

 

  1. __________ enable(s) executives to have their positions and preferences communicated directly to government officials.

 

  1. Personal contacts and networks
  2. Public relations campaigns

*c. Lobbying

  1. Political action committees
  2. Bribery

 

General Feedback:

Page 141. Factual. Learning objective 5. Lobbying expresses opinions and preferences to government officials.

 

 

  1. Increasingly, the public demands that:

 

  1. managers will be held accountable for achieving performance objectives as well as for maintaining high ethical standards and social responsibility.
  2. organisations will be held accountable for ethical and social performance as well as economic performance.
  3. managers at all levels must achieve performance objectives while doing so in a socially responsible manner.

*d. all of the options listed

  1. none of the options listed

 

General Feedback:

Page 140-42. Factual. Learning objective 5. As public demands grow for organisations to be accountable for ethical and social performance as well as economic performance, the manager stands once again in the middle.

 

 

 

 

 

 

Essay questions

 

  1. Identify the alternative views of ethical behaviour and briefly describe the main emphasis of each view.

 

Correct Answer:

Pages 123-24. Students should identify the four views: individualism view (does a decision or behaviour promote our long-term self-interests?), moral-rights view (does a decision or behaviour maintain the fundamental rights of all human beings?), utilitarian view (does a decision or behaviour do the greatest good for the most people?) and justice view (does a decision or behaviour show fairness and impartiality?).

 

 

  1. Explain the concepts of cultural relativism and universalism. What implications do these concepts have for international business operations?

 

Correct Answer:

Page 125-26. Cultural relativism suggests there is no one right way to behave; ethical behaviour is determined by its cultural context. Universalism suggests ethical standards apply across all cultures. Students need to take examples from different cultural situations and analyse the impact of these two views on international business operations.

 

 

  1. What is an ethical dilemma? Describe some of the possible sources of ethical dilemmas.

 

Correct Answer:

Pages 127-28. An ethical dilemma is a situation that, although offering potential benefit or gain, is also unethical. Some of the problem areas or situations where managers can get caught in ethical dilemmas include discrimination, sexual harassment, conflict of interest, customer confidence and organisational resources. Students should further elaborate on each of these areas.

 

 

  1. Discuss the ways in which high ethical standards may be maintained in organisations.

 

Correct Answer:

Pages 130-33. Some of the methods for maintaining high ethical standards in workplace involve ethics training (seeks to help understand the ethical aspects of decision making and to incorporate high ethical standards into their daily behaviour), whistleblower protection, top management support, formal codes of ethics, and strong ethical cultures.

 

 

  1. What is social responsibility? In your opinion, should businesses be socially responsible? Support your answer with appropriate reasons.

 

Correct Answer:

Pages 133-36. Corporate social responsibility is the obligation of an organisation to act in ways that serve both its own interests and the interests of its many external stakeholders. Students can identify the two contrasting views of social responsibility, with one side arguing against it and the other arguing for it. The classical view holds that management’s only responsibility in running a business is to maximise profits. The arguments against corporate social responsibility include fears that the pursuit of this goal will reduce business profits, raise business costs, dilute business purpose and give business too much social power. By contrast, the socio-economic view holds that management of any organisation must be concerned for the broader social welfare and not just for corporate profits.

 

 

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