Management Leading and Collaborating in a Competitive World 12th Edition Bateman – Test Bank

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Chapter 05

Ethics, Corporate Responsibility, and Sustainability

 

True / False Questions

1. Most people have unconscious biases that favor themselves and their own group.

True    False

 

2. Values are the rules that govern people’s behavior and identify the “goods” that are worth seeking.

True    False

 

3. The ethical system known as egoism is similar to Adam Smith’s concept of the invisible hand in business.

True    False

 

4. According to virtue ethics, moral individuals can transcend society’s rules by applying personal virtues.

True    False

 

5. Individuals can be ethical leaders if they have a strong moral character, regardless of what issues actually get most of their attention.

True    False

 

6. Integrity-based ethics programs are primarily concerned with the avoidance of illegality.

True    False

 

7. A good process for ethical decision making begins with considering the legal requirements.

True    False

 

8. A transcendent education involves balancing self-interest with responsibility to others.

True    False

 

9. Profit maximization and corporate social responsibility necessarily lead to opposing corporate policies.

True    False

 

10. Sustainable growth refers to economic growth and development that meet the organization’s present needs without harming the ability of future generations to meet their needs.

True    False

 

 

Multiple Choice Questions

11. Bill, the manager of Just Right Gelato, acts with integrity and honesty because he believes in a system of rules that governs the ordering of values. The system of rules that directs Bill’s behavior is known as _____.

A. compulsion

 

B. philosophy

 

C. law

 

D. ethics

 

E. justice

 

12. A situation, problem, or opportunity in which an individual is obligated to choose among several actions that must be evaluated as morally right or wrong is a(n) _____ issue.

A. moral

 

B. legal

 

C. value

 

D. relative

 

E. ethical

 

13. What are business ethics?

A. Principles of conduct, such as caring, being honest, pursuing excellence, and showing loyalty

 

B. The moral principles and standards that guide behavior in the world of business

 

C. The system of rules that governs the ordering of economic value

 

D. A situation, problem, or opportunity in which a political leader must choose among several actions

 

E. The principles, rules, and values that people use in deciding what is right or wrong for themselves

 

14. When Pam has to decide whether something is right or wrong, she considers the writings of the ancient teachers Confucius and Marcus Aurelius, whose works she has read many times. These books form the basis of Pam’s _____.

A. moral philosophy

 

B. value system

 

C. ethical situation

 

D. relativism

 

E. egoism

 

15. Which ethical system states that the greatest good for the greatest number should be the overriding concern of decision makers?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

 

16. Which ethical system was developed by a group of international executives, including business leaders from Japan, Europe, and the United States?

A. The Sabanes-Oxley Act

 

B. The Caux Principles

 

C. The Peter Principle

 

D. Kohlberg’s Model

 

E. Corporate Social Responsibility

 

17. Jarrett believes that ethical behavior is anything that provides the maximum benefit for himself. What ethical system does Jarrett subscribe to?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

 

18. Once a year at the annual employee meeting, the president of Federated Finance reminds everyone of his belief that there are certain values that everyone can agree on, such as honesty, fairness, and respect for life. Which ethical system does the president believe in?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

 

19. Which philosophy would be the most likely to emphasize that there are different ethics in different cultures?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

 

20. What do people in the preconventional stage of Kohlberg’s model of cognitive moral development base their decisions on?

A. Expectations held by groups or institutions

 

B. Self-chosen ethical principles

 

C. Laws and regulations

 

D. Rewards and punishment

 

E. Religious or philosophical teachings

 

21. What does the Sarbanes-Oxley Act, passed in 2002, require of companies?

A. To choose more independent boards of directors

 

B. To use a looser set of accounting rules

 

C. To keep two sets of books, one public and one private

 

D. To have someone other than managers sign off on financial results

 

E. To pay executives large annual bonuses

 

22. The ethical climate of an organization refers to

A. the requirement that companies adhere strictly to accounting rules.

 

B. decisions based on rewards and punishments and immediate self-interest.

 

C. ethical behavior that is based on the opinions and behaviors of relevant other people.

 

D. the processes by which decisions are evaluated and made on the basis of right and wrong.

 

E. an ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

 

23. Which of the following has been identified as a factor that contributes to unethical behavior?

A. Having a written code of ethics

 

B. Believing that ethical problems have complex solutions

 

C. Emphasizing short-term revenues over long-term considerations

 

D. Balancing the demands of all stakeholders rather than giving shareholders priority

 

E. Having written-out procedures for handling ethical problems

 

24. Which of the following statements about compliance-based ethics programs are true?

A. The programs are developed by moral thinkers.

 

B. The programs promote moral excellence in an organization.

 

C. The programs tolerate some illegal behavior.

 

D. The programs emphasize personal responsibility for ethical behavior.

 

E. The programs do not create a moral commitment to ethical conduct.

 

25. Moral awareness involves

A. knowing which actions are required by law.

 

B. knowing which actions are morally defensible.

 

C. realizing that an issue has ethical implications.

 

D. having the strength to act in accordance with your ethics.

 

E. adopting the values of the most relevant moral leaders.

 

26. A whistleblower is a person who

A. tells others that wrongdoing has occurred.

 

B. encourages others to commit wrongdoing.

 

C. serves as legal counsel for an organization.

 

D. serves as the chief ethical officer of an organization.

 

E. signs off on the financial results of an organization.

 

27. Which of the following responsibilities lies at the base of the pyramid of global corporate social responsibility and performance?

A. Legal responsibility

 

B. Economic responsibility

 

C. Environmental responsibility

 

D. Ethical responsibility

 

E. Philanthropic responsibility

 

28. Better Mornings Breakfast Foods Inc. donates large quantities of its products to support a free breakfast program at a school in a disadvantaged neighborhood. This program would be listed on which layer of the pyramid of corporate responsibilities?

A. Legal responsibility

 

B. Economic responsibility

 

C. Environmental responsibility

 

D. Ethical responsibility

 

E. Philanthropic responsibility

 

29. Which of the following is one of the five higher goals of a transcendent education?

A. Self-awareness

 

B. Independence

 

C. Eloquence

 

D. Tolerance

 

E. Civil aspiration

 

30. According to Milton Friedman, what is the social responsibility of business?

A. To increase profits

 

B. To redistribute wealth

 

C. To preserve the environment

 

D. To spread capitalism

 

E. To improve the quality of life

 

31. How has the view of the business community toward environmental issues changed in the twenty-first century?

A. Business now sees such issues as a no-win situation.

 

B. Business now sees such issues as a burden and a cost.

 

C. Business now sees such issues as a business opportunity.

 

D. Business now sees such issues as yesterday’s problem.

 

E. Business now sees such issues as overblown hype.

 

32. The creation and distribution of wealth generate by-products that can cause injury, loss, or danger to people and the environment. Because of that, we are said to live in a(n) _____ society.

A. hazardous

 

B. unhealthy

 

C. toxic

 

D. risk

 

E. wasteful

 

33. What is the goal of ecocentric management?

A. To gain green environmental certification to impress consumers and other stakeholders

 

B. To make the organization’s products and services seem environmentally friendly even if they really are not

 

C. To reimburse the people adversely affected by the pollution that the organization’s past economic activities created

 

D. To instill an organizational ethics code that is based on the ethical system known as egoism

 

E. To create sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders

 

34. _____ in business is considered compatible with the natural ecosystems that generate and preserve life.

A. Relativism

 

B. Sustainability

 

C. Greenwashing

 

D. Development

 

E. Philanthropy

 

35. Which of the following terms refers to misleading marketing claims about the environmentally friendly nature of a product?

A. Carbon footprint

 

B. Sustainability

 

C. Greenwashing

 

D. Ecomanagement

 

E. Whistleblowing

 

36. _____ is the system of rules that governs the ordering of values.

A. Ethnocentrism

 

B. Ethics

 

C. Dynamics

 

D. Legitimacy

 

E. Dialectics

 

37. Who often suffers the most when corporations behave unethically?

A. The top executives

 

B. The consumers

 

C. The rank-and-file employees

 

D. The corporation lawyers

 

E. The board of directors

 

38. Joan is a traveling sales representative. Most of her colleagues fill out inaccurate expense records in order to be eligible for extra reimbursement. Joan can either do the same thing or record real, accurate expenses. Joan’s situation is an example of _____.

A. a moral rights debate

 

B. an ethical issue

 

C. kyosei

 

D. an avoidance situation

 

E. greenwashing

 

39. Rafael believes that everyone should uphold honesty, justice, and kindness so that society can function at its best. Which ethical system best fits Rafael’s beliefs?

A. Relativism

 

B. Egoism

 

C. Universalism

 

D. Ethnocentrism

 

E. Utilitarianism

 

40. Moral philosophy refers to the _____.

A. system of rules that governs the ordering of values

 

B. system of ethical ideas that depends on kyosei and human dignity

 

C. system that promotes the greatest good for the greatest number

 

D. principles, rules, and values people use in deciding what is right or wrong

 

E. principles needed to prevent, detect, and punish legal violations

 

41. Brittany works as a receptionist for a medical office. Some of the doctors have asked her to tell patients that they are in an appointment when in fact they are playing golf. She wants to quit the job because she hates to lie to people and believes that all people should uphold certain values that society needs to function. Which of the following best describes the ethical system used by Brittany?

A. Egoism

 

B. Ethnocentrism

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

 

42. The Caux Principles are based on two ethical ideals

A. fairness and equality.

 

B. self-fulfillment and sharing.

 

C. unity and respect.

 

D. kyosei and human dignity.

 

E. honesty and happiness.

 

43. _____ considers acceptable behavior to be that which maximizes benefits for the individual.

A. Egoism

 

B. Ethnocentrism

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

 

44. The management of an organization follows the ideology that if they work keeping in mind the company’s own economic self-interest, the total wealth of the society will be maximized. Which of the following best describes the ethical system used by the organization?

A. Ethnocentrism

 

B. Relativism

 

C. Egoism

 

D. Universalism

 

E. Utilitarianism

 

45. Utilitarianism is centered around the idea that

A. ethical ideas depend on kyosei and human dignity.

 

B. an ethical system should define acceptable behavior as that which maximizes consequences for the individual.

 

C. an ethical system with no rules will help bring out the best of people.

 

D. ethical behavior should be based on the opinions and behaviors of relevant other people.

 

E. the greatest good for the greatest number should be the overriding concern of decision makers.

 

46. Which of the following statements best describes relativism?

A. The greatest good for the greatest number should be the overriding concern of decision makers.

 

B. Acceptable behavior is that which maximizes benefits for the individual.

 

C. Ethical behavior should be based on the opinions and behaviors of relevant other people.

 

D. What is moral goes beyond conventional rules and also comes from what a mature person with good “moral character” would deem right.

 

E. All rules and laws should be based in the Judeo-Christian system.

 

47. _____ acknowledges the existence of different ethical viewpoints and uses norms as guidelines.

A. Virtue ethics

 

B. Relativism

 

C. Universalism

 

D. Utilitarianism

 

E. Egoism

 

48. When he stays in hotels, Jamal packs whatever towels he hasn’t dirtied into his suitcase. Because all his friends do the same thing, he thought it was acceptable to do so. In this scenario, which of the following ethical systems has Jamal used to rationalize his decision?

A. Egoism

 

B. Virtue ethics

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

 

49. Omar acknowledges the importance of the conventional rules of society, but he wants to hold himself to a higher standard, according to the principles that he has decided are moral and ethical. Which of the following best describes the system that Omar uses?

A. Business ethics

 

B. Virtue ethics

 

C. Relativism

 

D. Utilitarianism

 

E. Egoism

 

50. Which of the following is one of Kohlberg’s stages of cognitive moral development?

A. Unconventional

 

B. Emotional

 

C. Relative

 

D. Principled

 

E. Developed

 

51. According to Kohlberg’s model of cognitive moral development, people in which of the following stages tend to make decisions based on rewards and punishments and immediate self-interest?

A. Principled stage

 

B. Conventional stage

 

C. Righteous stage

 

D. Preconventional stage

 

E. Unconventional stage

 

52. Steve is a marketing agent who determines his work behavior solely on whether he thinks he can do actions without receiving immediate punishment from his boss. According to Kohlberg, which of the following stages of moral development does Steve’s behavior exemplify?

A. Principled stage

 

B. Conventional stage

 

C. Righteous stage

 

D. Preconventional stage

 

E. Unconventional stage

 

53. Jessie’s behavior is typically guided by what she thinks would be acceptable to her parents. According to Kohlberg, which of the following stages of moral development does Jessie’s behavior exemplify?

A. Utilitarian stage

 

B. Conventional stage

 

C. Principled stage

 

D. Preconventional stage

 

E. Conclusive stage

 

54. A person who sees beyond authority, laws, and norms and follows his own self-chosen ethical principles is most likely to be in the _____ stage of Kohlberg’s model of cognitive moral development.

A. utilitarian

 

B. conventional

 

C. principled

 

D. preconventional

 

E. intermediate

 

55. Which of the following statements about the Sarbanes-Oxley Act is true?

A. It was passed in 1992.

 

B. It requires strict adherence to accounting rules.

 

C. It gives senior managers power to not sign off on financial results.

 

D. It is intended to maintain truth in advertising.

 

E. It requires whistleblowers to be fired.

 

56. The top executives of Granite Financial have established processes to review the company’s financial dealings and communications with customers to make sure everything is legal and honest yet remain focused on profits. These processes are part of the company’s _____.

A. corporate social responsibility

 

B. ethical climate

 

C. ecocentric management

 

D. legal responsibility

 

E. moral obligation

 

57. Which of the following is a danger sign that organizations may be allowing or even encouraging unethical behavior?

A. Excessive emphasis over long-term consideration over short-term revenues

 

B. Failure to establish a written code of ethics

 

C. An informal corporate structure

 

D. Flexible timings that allow employees to choose their hours of work

 

E. Multiple levels of supervision and monitoring

 

58. Which of the following is a question associated with the “sunshine” ethical framework?

A. How would your mother feel if she knew you had committed those actions?

 

B. How would you feel if your actions were reported on the front page of a newspaper?

 

C. How would you feel if you were on the receiving end of those actions?

 

D. How would a lawyer evaluate the actions you are considering taking?

 

E. How would a moral philosopher evaluate the actions you are considering taking?

 

59. Which of the following should be done for constructing an effective ethics code?

A. Keep it complex, formal, and rigid so that employees realize how serious it is.

 

B. Make it as catchy and clever as possible.

 

C. Involve only the legal department and top executives in writing the statement.

 

D. Let the employees construct the ethics code according to their ideologies.

 

E. Focus on real-life situations that employees can relate to.

 

60. An ethics program that is designed by corporate counsel to detect, prevent, and punish legal violations is called a(n) _____ ethics program.

A. life-cycle-based

 

B. compliance-based

 

C. integrity-based

 

D. sunshine-framework

 

E. responsibility-based

 

61. Compliance-based ethics programs are typically designed by _____.

A. corporate counsel

 

B. employees

 

C. top executives

 

D. stockholders/owners

 

E. focus groups of customers

 

62. Compliance-based ethics programs

A. are company mechanisms designed to instill in people a personal responsibility for ethical behavior.

 

B. are designed by corporate counsel to prevent, detect, and punish legal violations.

 

C. define ethical behavior as that which maximizes consequences for the individual.

 

D. define ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

 

E. are designed by the employees to define what ethical standards they should follow.

 

63. Integrity-based ethics programs involve _____.

A. stated ethics, rules, and policies

 

B. corporate social responsiveness

 

C. a set of guiding principles

 

D. monitoring and punishment

 

E. discretionary social responsibility

 

64. Going beyond legal compliance with ADA standards and training people to understand that individuals with disabilities also have valued abilities is an example of a(n) _____ ethics program.

A. compliance-based

 

B. integrity-based

 

C. egoism-based

 

D. competency-based

 

E. utilitarianism-based

 

65. Making ethical decisions takes moral _____, which helps a person realize that an issue has ethical implications.

A. certainty

 

B. actionability

 

C. awareness

 

D. judgment

 

E. character

 

66. Having the strength and persistence to act in accordance with one’s ethics despite the challenges is referred to as moral _____.

A. awareness

 

B. judgment

 

C. certainty

 

D. action

 

E. character

 

67. According to John Rawls, only a person ignorant of his own identity can make a truly ethical decision. This thought process is based on _____.

A. ethical shielding

 

B. the veil of understanding

 

C. the veil of ignorance

 

D. ethical certainty

 

E. ethical ignorance

 

68. The process for ethical decision making begins with

A. defining the complete moral problem.

 

B. developing an ethical framework and determining the economic outcomes.

 

C. considering the legal requirements and evaluating the legal duties.

 

D. understanding all moral standards and recognizing all moral impacts.

 

E. proposing a convincing moral solution.

 

69. Which of the following is most likely to be the last step in an ideal ethical decision-making process?

A. Defining the complete moral problem.

 

B. Developing an ethical framework.

 

C. Determining the legal requirements.

 

D. Understanding all moral standards.

 

E. Proposing a moral solution.

 

70. Moral judgment involves

A. knowing which actions are required by law.

 

B. knowing which actions are morally defensible.

 

C. realizing that an issue has ethical implications.

 

D. having the strength to act in accordance with your ethics.

 

E. adopting the values of the most relevant moral leaders.

 

71. To behave ethically, an individual will require not just moral awareness and moral judgment but also

A. social capital.

 

B. competitive intelligence.

 

C. creative thinking.

 

D. moral character.

 

E. technical skills.

 

72. Which of the following plays a role in the moral awareness involved in identifying an act as unethical, the moral judgment to fully consider the repercussions, and the moral character to take the ethical action?

A. Courage

 

B. Legitimacy

 

C. Intelligence

 

D. Compliance

 

E. Knowledge

 

73. Which of the following is true of whistleblowing?

A. The road for whistleblowers is easy and painless.

 

B. Whistleblowers are often encouraged by their company to go public.

 

C. Whistleblowers are seldom given undesirable assignments.

 

D. Many whistleblowers suffer consequences such as being ostracized.

 

E. The Sarbanes-Oxley Act prohibits whistleblowing.

 

74. Telling others, inside or outside the organization, about wrongdoing is called _____.

A. ethical shadowing

 

B. whistleblowing

 

C. egoism

 

D. ethical interference

 

E. moral consequences

 

75. Corporate social responsibility is the _____.

A. ethical system stating that all people should uphold certain values that society needs to function

 

B. obligation toward society assumed by business

 

C. system that defines acceptable behavior as that which maximizes consequences for the individual

 

D. ideology that the greatest good for the greatest number should be the overriding concern of decision makers

 

E. maximization of shareholder wealth

 

76. Old Salt, a manufacturer of various snack chips, changed its packaging to a more eco-friendly material. Additionally, it has reduced the water used in its production processes. Old Salt states that these actions make the earth a “better place to eat.” In this scenario, Old Salt is participating in _____.

A. deregulation

 

B. corporate entrepreneurship

 

C. maximizing customer actualization

 

D. corporate social responsibility

 

E. corporate wealth enhancement

 

77. Which of the following responsibilities sits at the top of the pyramid of global corporate social responsibility and performance?

A. Legal

 

B. Economic

 

C. Moral

 

D. Ethical

 

E. Philanthropic

 

78. _____ responsibilities of business are to produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

A. Economic

 

B. Legal

 

C. Financial

 

D. Philanthropic

 

E. Ethical

 

79. Within the pyramid of global corporate social responsibility and performance, doing what is required by global stakeholders is categorized as a(n) _____ responsibility.

A. economic

 

B. legal

 

C. financial

 

D. philanthropic

 

E. ethical

 

80. Which of the following levels of corporate social responsibility of business includes meeting societal expectations that are not written as law?

A. Economic

 

B. Legal

 

C. Social

 

D. Philanthropic

 

E. Ethical

 

81. Which of the following responsibilities of business did Pork producer Smithfield Foods take on by discontinuing the practice of confining sows in gestation crates during pregnancy, conforming to external expectations though not legally required?

A. Financial responsibility

 

B. Economic responsibility

 

C. Ethical responsibility

 

D. Legal responsibility

 

E. Philanthropic responsibility

 

82. Which level of the pyramid of global corporate social responsibility and performance represents a company’s efforts to be a good global corporate citizen, such as supporting community programs?

A. Economic responsibility

 

B. Legal responsibility

 

C. Ethical responsibility

 

D. Philanthropic responsibility

 

E. Financial responsibility

 

83. Which of the following levels of the pyramid of global corporate social responsibility and performance represents a company’s requirement to be profitable?

A. Economic responsibility

 

B. Relative responsibility

 

C. Ethical responsibility

 

D. Philanthropic responsibility

 

E. Legal responsibility

 

84. The order of the levels in the pyramid of global corporate social responsibility and performance from bottom to top is _____.

A. economic, legal, philanthropic, and ethical

 

B. ethical, economic, legal, and philanthropic

 

C. economic, legal, ethical, and philanthropic

 

D. legal, economic, ethical, and philanthropic

 

E. philanthropic, economic, legal, and ethical

 

85. Home Depot supports Habitat for Humanity, a nonprofit that builds affordable housing for those struggling with poverty, housing, or homelessness. Donation to such an organization is an example of _____ responsibility.

A. economic

 

B. legal

 

C. conventional

 

D. ethical

 

E. philanthropic

 

86. A(n) _____ has five higher goals that balance self-interest with responsibility to others.

A. utilitarian education

 

B. universalism education

 

C. transcendent education

 

D. integrity-based ethics program

 

E. compliance-based ethics program

 

87. Which of the following is a goal of a transcendent education?

A. Persuasion

 

B. Independence

 

C. Empathy

 

D. Candidness

 

E. Persistence

 

88. Which of the goals of a transcendent education involves viewing success not merely as personal gain, but as a common victory?

A. Empathy

 

B. Generativity

 

C. Mutuality

 

D. Civil aspiration

 

E. Intolerance of ineffective humanity

 

89. As one of the goals of a transcendent education, speaking out against unethical actions is called _____.

A. empathy

 

B. generativity

 

C. mutuality

 

D. civil aspiration

 

E. intolerance of ineffective humanity

 

90. As one of the goals of transcendent education, learning how to give as well as take, to others in the present as well as to those in the future is called _____.

A. empathy

 

B. generativity

 

C. mutuality

 

D. civil aspiration

 

E. intolerance of ineffective humanity

 

91. Zach believes that it is important to do more than just avoid lying. He also tries to use his words to encourage others and promote understanding. Which goal of transcendent education does this behavior most closely represent?

A. Empathy

 

B. Generativity

 

C. Mutuality

 

D. Civil aspiration

 

E. Intolerance of ineffective humanity

 

92. Advocates of corporate social responsibility argue that

A. organizations ought to be profit seeking and that when they concentrate on this motive, they will benefit society.

 

B. organizations’ only responsibilities are clearly defined by the laws and regulations imposed upon them.

 

C. organizations’ responsibilities are to attempt to satisfy all relevant stakeholders’ interests.

 

D. it is unethical for unelected business leaders to spend shareholders’ money on projects unconnected to key business interests.

 

E. organizations have a wider range of responsibilities that extend beyond the production of goods and services at a profit.

 

93. _____ has as its primary goal the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

A. Corporate social responsibility

 

B. Life-cycle analysis

 

C. Ecocentric management

 

D. Transcendent education

 

E. Integrity-based ethics program

 

94. Economic growth and development that meet present needs without harming the needs of future generations is known as _____.

A. ecocentric management

 

B. risk management

 

C. sustainable growth

 

D. resource management

 

E. ecocentric growth

 

95. _____ is a process of analyzing all inputs and outputs, through the entire “cradle-to-grave” life of a product, to determine the total environmental impact of the production and use of a product.

A. Ecocentric management

 

B. Life-cycle analysis

 

C. Sustainable growth

 

D. SWOT analysis

 

E. Trend analysis

 

  Scenario A: An insurance company faces an ethical dilemma. A faulty computer program designed to evaluate insurance claims has been denying a high number of valid claims. A meeting has been arranged where senior management would decide how to handle the situation. The people at the table have varying views of what action to take and why.
Han wants to report the error and reimburse the affected customers immediately because he believes he could end up being fired if the company’s reputation suffers because of the issue.
Jamila wants to report the error because it is the honest thing to do, and therefore necessary.
After hearing his colleagues’ opinions, Keith says he is willing to do whatever the more experienced managers in the group recommend.
Several other managers believe the company should correct the problem going forward but not do anything about the customers who lost out on past payments.

 

96. Which of the following best describes the ethical system used by Jamila to make her decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

97. Which of the following best describes the ethical system used by Han to make his decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

98. Which of the following best describes the ethical system used by Keith to make his decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

99. Assume the meeting ends with the managers deciding not to do anything about the customers who are owed money for past claims. Lori, an employee who was present in the meeting, disagrees with the decision and gives an anonymous tip to a newspaper reporter about the unethical behavior. Which of the following best describes the action taken by Lori?

A. Whistleblowing

 

B. Relativism

 

C. Ethnocentrism

 

D. Shadowing

 

E. Unethical stance

 

  Scenario B: Suppose a manager faces a question regarding how to handle a defective piece of equipment that his company sold. Telling the customer would cost him a substantial amount of money. At the same time, if the equipment fails, it could lead to serious injury of the customer. The manager is going to choose between three options presented by colleagues:

Option 1: Keep quiet about the defect.
Option 2: Talk to others and see what they would have done in the same situation.
Option 3: Disclose the defect and suggest alternatives because it is the honest thing to do.

 

100. Which of the following terms best describes the ethical approach used in option 1?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

101. Which of the following terms best describes the ethical approach used in option 2?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

102. Which of the following options best describes the ethical approach used in option 3?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

 

  Scenario C: Diana and Eli, managers from different departments at Greater Midwest Credit Union, are discussing the troubling behavior of a credit union employee. Diana says that it is the responsibility of high-level managers to take steps and prevent legal wrongdoing by punishing offenders. However, Eli believes that every individual should take personal responsibility for his or her own behavior and that everyone needs to understand how to do the right thing.

 

103. In Scenario C, each of the managers tends to be responsible for creating a different _____ in their respective departments.

A. legal responsibility

 

B. ethical climate

 

C. sustainable growth

 

D. organizational structure

 

E. corporate culture

 

104. Which of the following types of ethics program does Diana prefer for the company?

A. Associate-based

 

B. Compliance-based

 

C. Integrity-based

 

D. Systems-based

 

E. Consensus-based

 

105. Which of the following types of ethics program does Eli prefer for the company?

A. Associate-based

 

B. Compliance-based

 

C. Integrity-based

 

D. Systems-based

 

E. Consensus-based

 

  Scenario D: Lily and Amare are colleagues who witnessed one of their team members, Elspeth, making a personal purchase over the Internet, which is prohibited in their company. The management had previously announced that those who report wrongdoing of fellow employees will be rewarded. Lily decided not to report Elspeth’s act to the management since it was done after hours. However, Amare decided to do so with the hope of being rewarded.

 

106. In Scenario D, according to Kohlberg’s model of cognitive moral development, Lily can be categorized as being in the _____ stage.

A. preconventional

 

B. conventional

 

C. principled

 

D. unconventional

 

E. operational

 

107. In Scenario D, according to Kohlberg’s model of cognitive moral development, Amare can be categorized as being in the _____ stage.

A. preconventional

 

B. conventional

 

C. principled

 

D. unconventional

 

E. operational

 

  Scenario E: Senior management at Futura Development is attending a corporate retreat, and the first item for discussion is corporate social responsibility (CSR). The group has discussed this before and then shot it down because it generally costs Futura’s shareholders in the form of reduced distributions. But the new VP, Gwen, is about to explain why she believes CSR will actually benefit the shareholders and Futura management alike. Her team begins the presentation with a discussion of CSR, both its current definition and reconciliation of past views. Sergei then discusses the importance of being a good global corporate citizen by supporting the local school system. Madison takes the floor to make the case for doing what is expected by global stakeholders even though there are no laws requiring those actions. Finally Gwen wraps the discussion up by defining why Futura should take legal responsibility for the firm’s performance.

 

108. In Scenario E, Sergei’s presentation most likely focuses on the _____ responsibility of the firm.

A. economic

 

B. legal

 

C. ethical

 

D. financial

 

E. philanthropic

 

109. In Scenario E, Madison’s presentation most likely focused on the _____ responsibility of the firm.

A. economic

 

B. legal

 

C. ethical

 

D. social

 

E. philanthropic

 

110. Gwen’s presentation most likely centered on taking which of the following actions?

A. Production of goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

 

B. Obeying all laws that affect Futura’s operations.

 

C. Doing the right thing regardless of what the law says.

 

D. Supporting Sergei’s proposal.

 

E. Engaging in additional behaviors and activities that society finds desirable and that the values of the business support.

 

 

Essay Questions

111. Explain the terms ethical issue, business ethics, and moral philosophy.

 

 

 

 

112. Discuss the five basic types of ethical systems and provide an example for each.

 

 

 

 

113. Describe Kohlberg’s model of cognitive moral development. Give an example for each of the stages.

 

 

 

 

114. Explain the requirements of the Sarbanes-Oxley Act, and describe how some executives have reacted to it.

 

 

 

 

115. Contrast compliance-based ethics programs and integrity-based ethics programs.

 

 

 

 

116. Making ethical decisions takes moral awareness, moral judgment, and moral character. Define each term and explain how you would use it in business.

 

 

 

 

117. Explain the process for ethical decision making.

 

 

 

 

118. Write an essay on whistleblowing.

 

 

 

 

119. Explain the pyramid of global corporate social responsibility and performance.

 

 

 

 

120. Define transcendent education and explain the five higher goals associated with it.

 

 

 

 

121. Build a case for the convergence of profit maximization and corporate social responsibility.

 

 

 

 

122. Explain how environmental issues and sustainability can be business opportunities rather than burdens.

 

 

 

 

123. Explain the idea of a risk society.

 

 

 

 

124. Explain life-cycle analysis and how organizations are using it to pay more attention to the total environmental impact.

 

 

 

 

125. Discuss ecocentric management.

 

 

 

 

Chapter 05 Ethics, Corporate Responsibility, and Sustainability Answer Key

True / False Questions

1. Most people have unconscious biases that favor themselves and their own group.

TRUE

Most people have unconscious biases that favor themselves and their own group. Managers often hire people who are like them, think they are immune to conflicts of interest, take more credit than they deserve, and blame others when they deserve some blame themselves.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Introduction
 

 

2. Values are the rules that govern people’s behavior and identify the “goods” that are worth seeking.

FALSE

Values are principles of conduct, such as caring, being honest, keeping promises, pursuing excellence, showing loyalty, being fair, acting with integrity, respecting others, and being a responsible citizen.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
Topic: Introduction
 

 

3. The ethical system known as egoism is similar to Adam Smith’s concept of the invisible hand in business.

TRUE

According to egoism, acceptable behavior is that which maximizes benefits for the individual. This notion is similar to Adam Smith’s concept of the invisible hand in business. Smith argued that if every organization follows its own economic self-interest, the total wealth of society will be maximized.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

4. According to virtue ethics, moral individuals can transcend society’s rules by applying personal virtues.

TRUE

Virtue ethics is a perspective that goes beyond the conventional rules of society by suggesting that what is moral must also come from what a mature person with good “moral character” would deem right. Society’s rules provide a moral minimum, and then moral individuals can transcend rules by applying their personal virtues such as faith, honesty, and integrity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

5. Individuals can be ethical leaders if they have a strong moral character, regardless of what issues actually get most of their attention.

FALSE

When individuals are both personally moral and are moral managers, they will truly be ethical leaders. They can have strong personal characters, but if they pay more attention to other things, and ethics is managed by benign neglect, they won’t have the reputation as ethical leaders.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

6. Integrity-based ethics programs are primarily concerned with the avoidance of illegality.

FALSE

Integrity-based ethics programs are concerned with the law but also with instilling in people a personal responsibility for ethical behavior. With such a program, companies and people govern themselves through a set of guiding principles that they embrace.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

7. A good process for ethical decision making begins with considering the legal requirements.

FALSE

The process for decision making begins with understanding all moral standards and recognizing all moral impacts.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

8. A transcendent education involves balancing self-interest with responsibility to others.

TRUE

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

9. Profit maximization and corporate social responsibility necessarily lead to opposing corporate policies.

FALSE

Profit maximization and corporate social responsibility used to be regarded as antagonistic, leading to opposing policies. But the two views can converge.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

10. Sustainable growth refers to economic growth and development that meet the organization’s present needs without harming the ability of future generations to meet their needs.

TRUE

Sustainable growth is economic growth and development that meet the organization’s present needs without harming the ability of future generations to meet their needs.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

Multiple Choice Questions

11. Bill, the manager of Just Right Gelato, acts with integrity and honesty because he believes in a system of rules that governs the ordering of values. The system of rules that directs Bill’s behavior is known as _____.

A. compulsion

 

B. philosophy

 

C. law

 

D. ethics

 

E. justice

Ethics is the system of rules that governs the ordering of values. By applying ethical standards that direct them to act with integrity, managers believe that they and their organizations and communities thrive over the long term.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Introduction
 

 

12. A situation, problem, or opportunity in which an individual is obligated to choose among several actions that must be evaluated as morally right or wrong is a(n) _____ issue.

A. moral

 

B. legal

 

C. value

 

D. relative

 

E. ethical

An ethical issue is a situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

13. What are business ethics?

A. Principles of conduct, such as caring, being honest, pursuing excellence, and showing loyalty

 

B. The moral principles and standards that guide behavior in the world of business

 

C. The system of rules that governs the ordering of economic value

 

D. A situation, problem, or opportunity in which a political leader must choose among several actions

 

E. The principles, rules, and values that people use in deciding what is right or wrong for themselves

Business ethics consists of the moral principles and standards that guide behavior in the world of business.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

14. When Pam has to decide whether something is right or wrong, she considers the writings of the ancient teachers Confucius and Marcus Aurelius, whose works she has read many times. These books form the basis of Pam’s _____.

A. moral philosophy

 

B. value system

 

C. ethical situation

 

D. relativism

 

E. egoism

Moral philosophy refers to the principles, rules, and values people use in deciding what is right or wrong.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

15. Which ethical system states that the greatest good for the greatest number should be the overriding concern of decision makers?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

Utilitarianism is an ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

16. Which ethical system was developed by a group of international executives, including business leaders from Japan, Europe, and the United States?

A. The Sabanes-Oxley Act

 

B. The Caux Principles

 

C. The Peter Principle

 

D. Kohlberg’s Model

 

E. Corporate Social Responsibility

The Caux Roundtable, a group of international executives based in Caux, Switzerland, worked with business leaders from Japan, Europe, and the United States to create the Caux Principles. Two basic ethical ideals underpin the Caux Principles: kyosei and human dignity. Kyosei means living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

17. Jarrett believes that ethical behavior is anything that provides the maximum benefit for himself. What ethical system does Jarrett subscribe to?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

According to egoism, acceptable behavior is that which maximizes benefits for the individual.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

18. Once a year at the annual employee meeting, the president of Federated Finance reminds everyone of his belief that there are certain values that everyone can agree on, such as honesty, fairness, and respect for life. Which ethical system does the president believe in?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

Universalism states that all people should uphold certain values, such as honesty, that society needs to function. Universal values are principles so fundamental to human existence that they are important in all societies. Examples include rules against murder, deceit, torture, and oppression.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

19. Which philosophy would be the most likely to emphasize that there are different ethics in different cultures?

A. Universalism

 

B. Utilitarianism

 

C. Relativism

 

D. Egoism

 

E. Pragmatism

Under relativism, ethical behavior is based on the opinions and behaviors of relevant other people. Relativism acknowledges the existence of different ethical viewpoints. For example, norms (standards of expected and acceptable behavior) vary from one culture to another.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

20. What do people in the preconventional stage of Kohlberg’s model of cognitive moral development base their decisions on?

A. Expectations held by groups or institutions

 

B. Self-chosen ethical principles

 

C. Laws and regulations

 

D. Rewards and punishment

 

E. Religious or philosophical teachings

People in the preconventional stage make decisions based on rewards and punishments and immediate self-interest.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

21. What does the Sarbanes-Oxley Act, passed in 2002, require of companies?

A. To choose more independent boards of directors

 

B. To use a looser set of accounting rules

 

C. To keep two sets of books, one public and one private

 

D. To have someone other than managers sign off on financial results

 

E. To pay executives large annual bonuses

Congress passed the Sarbanes-Oxley Act in 2002 to improve and maintain investor confidence. The law requires companies to have more independent board of directors, to adhere strictly to accounting rules, and to have senior managers personally sign off on financial results.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

22. The ethical climate of an organization refers to

A. the requirement that companies adhere strictly to accounting rules.

 

B. decisions based on rewards and punishments and immediate self-interest.

 

C. ethical behavior that is based on the opinions and behaviors of relevant other people.

 

D. the processes by which decisions are evaluated and made on the basis of right and wrong.

 

E. an ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

The ethical climate of an organization refers to the processes by which decisions are evaluated and made on the basis of right and wrong.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

23. Which of the following has been identified as a factor that contributes to unethical behavior?

A. Having a written code of ethics

 

B. Believing that ethical problems have complex solutions

 

C. Emphasizing short-term revenues over long-term considerations

 

D. Balancing the demands of all stakeholders rather than giving shareholders priority

 

E. Having written-out procedures for handling ethical problems

Many factors create a climate conducive to unethical behavior, including excessive emphasis on short-term revenues over longer-term considerations, failure to establish a written code of ethics, and a desire for simple, quick fix solutions to ethical problems.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

24. Which of the following statements about compliance-based ethics programs are true?

A. The programs are developed by moral thinkers.

 

B. The programs promote moral excellence in an organization.

 

C. The programs tolerate some illegal behavior.

 

D. The programs emphasize personal responsibility for ethical behavior.

 

E. The programs do not create a moral commitment to ethical conduct.

Compliance-based ethics programs should reduce illegal behavior and help a company stay out of court. But they do not create a moral commitment to ethical conduct; they merely ensure moral mediocrity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

25. Moral awareness involves

A. knowing which actions are required by law.

 

B. knowing which actions are morally defensible.

 

C. realizing that an issue has ethical implications.

 

D. having the strength to act in accordance with your ethics.

 

E. adopting the values of the most relevant moral leaders.

Making ethical decisions takes moral awareness (realizing the issue has ethical implications), moral judgment (knowing what actions are morally defensible), and moral character (the strength and persistence to act in accordance with your ethics despite the challenges).

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

26. A whistleblower is a person who

A. tells others that wrongdoing has occurred.

 

B. encourages others to commit wrongdoing.

 

C. serves as legal counsel for an organization.

 

D. serves as the chief ethical officer of an organization.

 

E. signs off on the financial results of an organization.

Whistleblowing refers to telling others, inside or outside the organization, of wrongdoing.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

27. Which of the following responsibilities lies at the base of the pyramid of global corporate social responsibility and performance?

A. Legal responsibility

 

B. Economic responsibility

 

C. Environmental responsibility

 

D. Ethical responsibility

 

E. Philanthropic responsibility

Social responsibilities of a company can be categorized into economic, legal, ethical, and philanthropic responsibilities. The economic responsibility of business lies at the base of the pyramid of global corporate social responsibility and performance.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

28. Better Mornings Breakfast Foods Inc. donates large quantities of its products to support a free breakfast program at a school in a disadvantaged neighborhood. This program would be listed on which layer of the pyramid of corporate responsibilities?

A. Legal responsibility

 

B. Economic responsibility

 

C. Environmental responsibility

 

D. Ethical responsibility

 

E. Philanthropic responsibility

Philanthropic responsibility consists of additional behaviors and activities that society finds desirable and that are supported by the values of a business. Examples include supporting community projects and making charitable contributions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

29. Which of the following is one of the five higher goals of a transcendent education?

A. Self-awareness

 

B. Independence

 

C. Eloquence

 

D. Tolerance

 

E. Civil aspiration

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

30. According to Milton Friedman, what is the social responsibility of business?

A. To increase profits

 

B. To redistribute wealth

 

C. To preserve the environment

 

D. To spread capitalism

 

E. To improve the quality of life

Nobel Prize-winning economist Milton Friedman stated that “the social responsibility of business is to increase profits.” Friedman contended that organizations may help improve the quality of life as long as such actions are directed at increasing profits.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

31. How has the view of the business community toward environmental issues changed in the twenty-first century?

A. Business now sees such issues as a no-win situation.

 

B. Business now sees such issues as a burden and a cost.

 

C. Business now sees such issues as a business opportunity.

 

D. Business now sees such issues as yesterday’s problem.

 

E. Business now sees such issues as overblown hype.

Business used to look at environmental issues as a no-win situation. Either you help the environment and hurt your business, or you help your business at a cost to the environment. But now a paradigm shift is taking place in corporate environmental management—the deliberate incorporation of environmental values into competitive strategies and into the design and manufacturing of products.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Discuss reasons for businesses’ growing interest in the natural environment.
Topic: The Natural Environment and Sustainability
 

 

32. The creation and distribution of wealth generate by-products that can cause injury, loss, or danger to people and the environment. Because of that, we are said to live in a(n) _____ society.

A. hazardous

 

B. unhealthy

 

C. toxic

 

D. risk

 

E. wasteful

We live in a risk society. That is, the creation and distribution of wealth generate by-products that can cause injury, loss, or danger to people and the environment.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Discuss reasons for businesses’ growing interest in the natural environment.
Topic: The Natural Environment and Sustainability
 

 

33. What is the goal of ecocentric management?

A. To gain green environmental certification to impress consumers and other stakeholders

 

B. To make the organization’s products and services seem environmentally friendly even if they really are not

 

C. To reimburse the people adversely affected by the pollution that the organization’s past economic activities created

 

D. To instill an organizational ethics code that is based on the ethical system known as egoism

 

E. To create sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders

Ecocentric management has as its goal the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

34. _____ in business is considered compatible with the natural ecosystems that generate and preserve life.

A. Relativism

 

B. Sustainability

 

C. Greenwashing

 

D. Development

 

E. Philanthropy

Sustainable growth is economic growth and development that meet the organization’s present needs without harming the ability of future generations to meet their needs. Sustainability is fully compatible with the natural ecosystems that generate and preserve life.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

35. Which of the following terms refers to misleading marketing claims about the environmentally friendly nature of a product?

A. Carbon footprint

 

B. Sustainability

 

C. Greenwashing

 

D. Ecomanagement

 

E. Whistleblowing

Companies can emphasize green attributes in their marketing but need to avoid misleading claims (“greenwashing”) and public backlash.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

36. _____ is the system of rules that governs the ordering of values.

A. Ethnocentrism

 

B. Ethics

 

C. Dynamics

 

D. Legitimacy

 

E. Dialectics

Ethics is the system of rules that governs the ordering of values. The premise is that managers, their organizations, and their communities thrive over the long term when the managers apply ethical standards that direct them to act with integrity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Introduction
 

 

37. Who often suffers the most when corporations behave unethically?

A. The top executives

 

B. The consumers

 

C. The rank-and-file employees

 

D. The corporation lawyers

 

E. The board of directors

When corporations behave badly, it’s often not the top executives but the rank-and-file employees who suffer most. In many cases, executives are secured through generous pay and bonus packages. In contrast, employees lose their jobs as the company goes into decline after a scandal.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Introduction
 

 

38. Joan is a traveling sales representative. Most of her colleagues fill out inaccurate expense records in order to be eligible for extra reimbursement. Joan can either do the same thing or record real, accurate expenses. Joan’s situation is an example of _____.

A. a moral rights debate

 

B. an ethical issue

 

C. kyosei

 

D. an avoidance situation

 

E. greenwashing

An ethical issue is a situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

39. Rafael believes that everyone should uphold honesty, justice, and kindness so that society can function at its best. Which ethical system best fits Rafael’s beliefs?

A. Relativism

 

B. Egoism

 

C. Universalism

 

D. Ethnocentrism

 

E. Utilitarianism

Universalism states that all people should uphold certain values, such as honesty, that society needs to function. Universal values are principles so fundamental to human existence that they are important in all societies, such as rules against murder, deceit, torture, and oppression.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

40. Moral philosophy refers to the _____.

A. system of rules that governs the ordering of values

 

B. system of ethical ideas that depends on kyosei and human dignity

 

C. system that promotes the greatest good for the greatest number

 

D. principles, rules, and values people use in deciding what is right or wrong

 

E. principles needed to prevent, detect, and punish legal violations

Moral philosophy refers to the principles, rules, and values people use in deciding what is right or wrong. This is a simple definition in the abstract but often terribly complex and difficult when facing real choices.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

41. Brittany works as a receptionist for a medical office. Some of the doctors have asked her to tell patients that they are in an appointment when in fact they are playing golf. She wants to quit the job because she hates to lie to people and believes that all people should uphold certain values that society needs to function. Which of the following best describes the ethical system used by Brittany?

A. Egoism

 

B. Ethnocentrism

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

Universalism states that all people should uphold certain values, such as honesty, that society needs to function. Universal values are principles so fundamental to human existence that they are important in all societies, such as rules against murder, deceit, torture, and oppression.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

42. The Caux Principles are based on two ethical ideals

A. fairness and equality.

 

B. self-fulfillment and sharing.

 

C. unity and respect.

 

D. kyosei and human dignity.

 

E. honesty and happiness.

Two basic ethical ideals underpin the Caux Principles: kyosei and human dignity. Kyosei means living and working together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and fair competition. Human dignity concerns the value of each person as an end, not a means to the fulfillment of others’ purposes.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

43. _____ considers acceptable behavior to be that which maximizes benefits for the individual.

A. Egoism

 

B. Ethnocentrism

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

According to egoism, acceptable behavior is that which maximizes benefits for the individual. According to its proponents, if everyone follows this system, the well-being of society as a whole should increase.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

44. The management of an organization follows the ideology that if they work keeping in mind the company’s own economic self-interest, the total wealth of the society will be maximized. Which of the following best describes the ethical system used by the organization?

A. Ethnocentrism

 

B. Relativism

 

C. Egoism

 

D. Universalism

 

E. Utilitarianism

According to egoism, acceptable behavior is that which maximizes benefits for the individual. The idea is that if every organization follows its own economic self-interest, the total wealth of society will be maximized.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

45. Utilitarianism is centered around the idea that

A. ethical ideas depend on kyosei and human dignity.

 

B. an ethical system should define acceptable behavior as that which maximizes consequences for the individual.

 

C. an ethical system with no rules will help bring out the best of people.

 

D. ethical behavior should be based on the opinions and behaviors of relevant other people.

 

E. the greatest good for the greatest number should be the overriding concern of decision makers.

Utilitarianism is an ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

46. Which of the following statements best describes relativism?

A. The greatest good for the greatest number should be the overriding concern of decision makers.

 

B. Acceptable behavior is that which maximizes benefits for the individual.

 

C. Ethical behavior should be based on the opinions and behaviors of relevant other people.

 

D. What is moral goes beyond conventional rules and also comes from what a mature person with good “moral character” would deem right.

 

E. All rules and laws should be based in the Judeo-Christian system.

Relativism defines ethical behavior based on the opinions and behaviors of relevant other people. Relativism acknowledges the existence of different ethical viewpoints, often based on norms.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

47. _____ acknowledges the existence of different ethical viewpoints and uses norms as guidelines.

A. Virtue ethics

 

B. Relativism

 

C. Universalism

 

D. Utilitarianism

 

E. Egoism

Relativism defines ethical behavior based on the opinions and behaviors of relevant other people. Relativism acknowledges the existence of different ethical viewpoints, such as norms.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

48. When he stays in hotels, Jamal packs whatever towels he hasn’t dirtied into his suitcase. Because all his friends do the same thing, he thought it was acceptable to do so. In this scenario, which of the following ethical systems has Jamal used to rationalize his decision?

A. Egoism

 

B. Virtue ethics

 

C. Relativism

 

D. Universalism

 

E. Utilitarianism

Relativism defines ethical behavior based on the opinions and behaviors of relevant other people, such as Jamal’s colleagues. Relativism acknowledges the existence of different ethical viewpoints, such as norms.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

49. Omar acknowledges the importance of the conventional rules of society, but he wants to hold himself to a higher standard, according to the principles that he has decided are moral and ethical. Which of the following best describes the system that Omar uses?

A. Business ethics

 

B. Virtue ethics

 

C. Relativism

 

D. Utilitarianism

 

E. Egoism

Virtue ethics is a perspective that goes beyond the conventional rules of society by suggesting that what is moral must also come from what a mature person with good “moral character” would deem right. Society’s rules provide a moral minimum, and then moral individuals can transcend rules by applying their personal virtues such as faith, honesty, and integrity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

50. Which of the following is one of Kohlberg’s stages of cognitive moral development?

A. Unconventional

 

B. Emotional

 

C. Relative

 

D. Principled

 

E. Developed

Kohlberg’s model of cognitive moral development classifies people into categories based on their level of moral judgment. The stages are preconventional, conventional, and principled.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

51. According to Kohlberg’s model of cognitive moral development, people in which of the following stages tend to make decisions based on rewards and punishments and immediate self-interest?

A. Principled stage

 

B. Conventional stage

 

C. Righteous stage

 

D. Preconventional stage

 

E. Unconventional stage

Kohlberg’s model of cognitive moral development classifies people into categories based on their level of moral judgment. People in the preconventional stage make decisions based on rewards and punishments and immediate self-interest.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

52. Steve is a marketing agent who determines his work behavior solely on whether he thinks he can do actions without receiving immediate punishment from his boss. According to Kohlberg, which of the following stages of moral development does Steve’s behavior exemplify?

A. Principled stage

 

B. Conventional stage

 

C. Righteous stage

 

D. Preconventional stage

 

E. Unconventional stage

People in the preconventional stage of Kohlberg’s model of cognitive moral development make decisions based on concrete rewards and punishments and immediate self-interest.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

53. Jessie’s behavior is typically guided by what she thinks would be acceptable to her parents. According to Kohlberg, which of the following stages of moral development does Jessie’s behavior exemplify?

A. Utilitarian stage

 

B. Conventional stage

 

C. Principled stage

 

D. Preconventional stage

 

E. Conclusive stage

People in the conventional stage of Kohlberg’s model of cognitive moral development conform to the expectations of ethical behavior held by groups or institutions such as society, family, or peers.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

54. A person who sees beyond authority, laws, and norms and follows his own self-chosen ethical principles is most likely to be in the _____ stage of Kohlberg’s model of cognitive moral development.

A. utilitarian

 

B. conventional

 

C. principled

 

D. preconventional

 

E. intermediate

People in the principled stage of Kohlberg’s model of cognitive moral development see beyond authority, laws, and norms and follow their self-chosen ethical principles.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

55. Which of the following statements about the Sarbanes-Oxley Act is true?

A. It was passed in 1992.

 

B. It requires strict adherence to accounting rules.

 

C. It gives senior managers power to not sign off on financial results.

 

D. It is intended to maintain truth in advertising.

 

E. It requires whistleblowers to be fired.

Congress passed the Sarbanes-Oxley Act in 2002 to improve and maintain investor confidence. The law requires companies to have more independent board directors, to adhere strictly to accounting rules, and to have senior managers personally sign off on financial results.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

56. The top executives of Granite Financial have established processes to review the company’s financial dealings and communications with customers to make sure everything is legal and honest yet remain focused on profits. These processes are part of the company’s _____.

A. corporate social responsibility

 

B. ethical climate

 

C. ecocentric management

 

D. legal responsibility

 

E. moral obligation

The ethical climate of an organization refers to the processes by which decisions are evaluated and made on the basis of right and wrong. For example, General Electric’s top executives have demonstrated a commitment to promoting high levels of integrity without sacrificing the company’s well-known commitment to business results.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

57. Which of the following is a danger sign that organizations may be allowing or even encouraging unethical behavior?

A. Excessive emphasis over long-term consideration over short-term revenues

 

B. Failure to establish a written code of ethics

 

C. An informal corporate structure

 

D. Flexible timings that allow employees to choose their hours of work

 

E. Multiple levels of supervision and monitoring

Many factors create a climate conducive to unethical behavior. Excessive emphasis on short-term revenues over longer-term considerations, failure to establish a written code of ethics, and a desire for simple, quick fix solutions to ethical problems are some signs that an organization may be allowing or even encouraging unethical behavior.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

58. Which of the following is a question associated with the “sunshine” ethical framework?

A. How would your mother feel if she knew you had committed those actions?

 

B. How would you feel if your actions were reported on the front page of a newspaper?

 

C. How would you feel if you were on the receiving end of those actions?

 

D. How would a lawyer evaluate the actions you are considering taking?

 

E. How would a moral philosopher evaluate the actions you are considering taking?

One ethics suggestion is to imagine how you would feel if you saw your decision and its consequences on the front page of the newspaper. This “light of day” or “sunshine” ethical framework can be powerful.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

59. Which of the following should be done for constructing an effective ethics code?

A. Keep it complex, formal, and rigid so that employees realize how serious it is.

 

B. Make it as catchy and clever as possible.

 

C. Involve only the legal department and top executives in writing the statement.

 

D. Let the employees construct the ethics code according to their ideologies.

 

E. Focus on real-life situations that employees can relate to.

To make an ethics code effective, do the following: involve those who have to live with the code in writing it; focus on real-life situations that employees can relate to; keep it short, simple, and easy to understand and remember; write about values and shared beliefs that people can really believe in; and set the tone at the top, having executives talk about and live up to the statement.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

60. An ethics program that is designed by corporate counsel to detect, prevent, and punish legal violations is called a(n) _____ ethics program.

A. life-cycle-based

 

B. compliance-based

 

C. integrity-based

 

D. sunshine-framework

 

E. responsibility-based

Ethics programs can range from compliance-based to integrity-based. Compliance-based ethics programs are designed by corporate counsel to prevent, detect, and punish legal violations.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

61. Compliance-based ethics programs are typically designed by _____.

A. corporate counsel

 

B. employees

 

C. top executives

 

D. stockholders/owners

 

E. focus groups of customers

Compliance-based ethics programs are designed by corporate counsel to prevent, detect, and punish legal violations.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

62. Compliance-based ethics programs

A. are company mechanisms designed to instill in people a personal responsibility for ethical behavior.

 

B. are designed by corporate counsel to prevent, detect, and punish legal violations.

 

C. define ethical behavior as that which maximizes consequences for the individual.

 

D. define ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

 

E. are designed by the employees to define what ethical standards they should follow.

Ethics programs can range from compliance-based to integrity-based. Compliance-based ethics programs should reduce illegal behavior and help a company stay out of court.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

63. Integrity-based ethics programs involve _____.

A. stated ethics, rules, and policies

 

B. corporate social responsiveness

 

C. a set of guiding principles

 

D. monitoring and punishment

 

E. discretionary social responsibility

Integrity-based ethics programs go beyond the mere avoidance of illegality; they are concerned with the law but also with instilling in people a personal responsibility for ethical behavior. With such programs, companies and people govern themselves through a set of guiding principles that they embrace.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

64. Going beyond legal compliance with ADA standards and training people to understand that individuals with disabilities also have valued abilities is an example of a(n) _____ ethics program.

A. compliance-based

 

B. integrity-based

 

C. egoism-based

 

D. competency-based

 

E. utilitarianism-based

Integrity-based ethics programs would go further by training people to understand and perhaps change attitudes toward people with disabilities and sending clear signals that people with disabilities also have valued abilities. This effort goes far beyond taking action to stay out of trouble with the law.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

65. Making ethical decisions takes moral _____, which helps a person realize that an issue has ethical implications.

A. certainty

 

B. actionability

 

C. awareness

 

D. judgment

 

E. character

Making ethical decisions takes moral awareness (realizing the issue has ethical implications), moral judgment (knowing what actions are morally defensible), and moral character (the strength and persistence to act in accordance with your ethics despite the challenges).

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

66. Having the strength and persistence to act in accordance with one’s ethics despite the challenges is referred to as moral _____.

A. awareness

 

B. judgment

 

C. certainty

 

D. action

 

E. character

Making ethical decisions takes moral awareness (realizing the issue has ethical implications), moral judgment (knowing what actions are morally defensible), and moral character (the strength and persistence to act in accordance with your ethics despite the challenges).

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

67. According to John Rawls, only a person ignorant of his own identity can make a truly ethical decision. This thought process is based on _____.

A. ethical shielding

 

B. the veil of understanding

 

C. the veil of ignorance

 

D. ethical certainty

 

E. ethical ignorance

The philosopher John Rawls created a thought experiment based on the “veil of ignorance.” A decision maker can tactically apply the veil of ignorance to help minimize personal bias. Rawls maintained that only a person ignorant of his own identity can make a truly ethical decision.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

68. The process for ethical decision making begins with

A. defining the complete moral problem.

 

B. developing an ethical framework and determining the economic outcomes.

 

C. considering the legal requirements and evaluating the legal duties.

 

D. understanding all moral standards and recognizing all moral impacts.

 

E. proposing a convincing moral solution.

Resolving ethical problems should begin with understanding the various moral standards (universalism, relativism, etc.) and recognizing the impacts of the alternatives. The final stage should ideally be proposing a convincing moral solution.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

69. Which of the following is most likely to be the last step in an ideal ethical decision-making process?

A. Defining the complete moral problem.

 

B. Developing an ethical framework.

 

C. Determining the legal requirements.

 

D. Understanding all moral standards.

 

E. Proposing a moral solution.

Resolving ethical problems should begin with understanding the various moral standards (universalism, relativism, etc.) and recognizing the impacts of the alternatives. The final stage should ideally be proposing a convincing moral solution.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

70. Moral judgment involves

A. knowing which actions are required by law.

 

B. knowing which actions are morally defensible.

 

C. realizing that an issue has ethical implications.

 

D. having the strength to act in accordance with your ethics.

 

E. adopting the values of the most relevant moral leaders.

Making ethical decisions takes moral awareness (realizing the issue has ethical implications), moral judgment (knowing what actions are morally defensible), and moral character (the strength and persistence to act in accordance with your ethics despite the challenges).

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

71. To behave ethically, an individual will require not just moral awareness and moral judgment but also

A. social capital.

 

B. competitive intelligence.

 

C. creative thinking.

 

D. moral character.

 

E. technical skills.

Behaving ethically requires not just moral awareness and moral judgment but also moral character, including the courage to take actions consistent with one’s ethical decisions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

72. Which of the following plays a role in the moral awareness involved in identifying an act as unethical, the moral judgment to fully consider the repercussions, and the moral character to take the ethical action?

A. Courage

 

B. Legitimacy

 

C. Intelligence

 

D. Compliance

 

E. Knowledge

Behaving ethically requires not just moral awareness and moral judgment but also moral character, including the courage to take actions consistent with one’s ethical decisions. Courage plays a role in the moral awareness involved in identifying an act as unethical, the moral judgment to fully consider the repercussions, and the moral character to take the ethical action.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

73. Which of the following is true of whistleblowing?

A. The road for whistleblowers is easy and painless.

 

B. Whistleblowers are often encouraged by their company to go public.

 

C. Whistleblowers are seldom given undesirable assignments.

 

D. Many whistleblowers suffer consequences such as being ostracized.

 

E. The Sarbanes-Oxley Act prohibits whistleblowing.

Whistleblowing refers to telling others, inside or outside the organization, of wrongdoing. The road for whistleblowers is rocky. When whistleblowers go public, they are often seen as acting against the company’s interests. Many, perhaps most, whistleblowers suffer consequences such as being ostracized, treated rudely, or given undesirable assignments.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

74. Telling others, inside or outside the organization, about wrongdoing is called _____.

A. ethical shadowing

 

B. whistleblowing

 

C. egoism

 

D. ethical interference

 

E. moral consequences

Telling others, inside or outside an organization, about its wrongdoings, is called whistleblowing. When whistleblowers go public, they are often seen as acting against the company’s interests. Many, perhaps most, whistleblowers suffer consequences such as being ostracized, treated rudely, or given undesirable assignments.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

75. Corporate social responsibility is the _____.

A. ethical system stating that all people should uphold certain values that society needs to function

 

B. obligation toward society assumed by business

 

C. system that defines acceptable behavior as that which maximizes consequences for the individual

 

D. ideology that the greatest good for the greatest number should be the overriding concern of decision makers

 

E. maximization of shareholder wealth

Corporate social responsibility is the obligation toward society assumed by business. It consists broadly of policies and practices that reflect business responsibility for some of the wider societal good.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

76. Old Salt, a manufacturer of various snack chips, changed its packaging to a more eco-friendly material. Additionally, it has reduced the water used in its production processes. Old Salt states that these actions make the earth a “better place to eat.” In this scenario, Old Salt is participating in _____.

A. deregulation

 

B. corporate entrepreneurship

 

C. maximizing customer actualization

 

D. corporate social responsibility

 

E. corporate wealth enhancement

Corporate social responsibility is the obligation toward society assumed by business. It consists broadly of policies and practices that reflect business responsibility for some of the wider societal good.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

77. Which of the following responsibilities sits at the top of the pyramid of global corporate social responsibility and performance?

A. Legal

 

B. Economic

 

C. Moral

 

D. Ethical

 

E. Philanthropic

Social responsibilities of a company can be categorized into economic, legal, ethical, and philanthropic responsibilities. The philanthropic responsibility of business sits at the top of the pyramid of global corporate social responsibility and performance.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

78. _____ responsibilities of business are to produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

A. Economic

 

B. Legal

 

C. Financial

 

D. Philanthropic

 

E. Ethical

Social responsibilities of a company can be categorized into economic, legal, ethical, and philanthropic responsibilities. The economic responsibilities of business are to produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

79. Within the pyramid of global corporate social responsibility and performance, doing what is required by global stakeholders is categorized as a(n) _____ responsibility.

A. economic

 

B. legal

 

C. financial

 

D. philanthropic

 

E. ethical

Legal responsibilities are to obey local, state, federal, and relevant international laws. It involves doing what is required by global stakeholders.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

80. Which of the following levels of corporate social responsibility of business includes meeting societal expectations that are not written as law?

A. Economic

 

B. Legal

 

C. Social

 

D. Philanthropic

 

E. Ethical

Social responsibilities of a company can be categorized into economic, legal, ethical, and philanthropic responsibilities. Ethical responsibilities include meeting other societal expectations, not written as law.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

81. Which of the following responsibilities of business did Pork producer Smithfield Foods take on by discontinuing the practice of confining sows in gestation crates during pregnancy, conforming to external expectations though not legally required?

A. Financial responsibility

 

B. Economic responsibility

 

C. Ethical responsibility

 

D. Legal responsibility

 

E. Philanthropic responsibility

Social responsibilities of a company can be categorized into economic, legal, ethical, and philanthropic responsibilities. Ethical responsibilities include meeting other societal expectations, not written as law.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

82. Which level of the pyramid of global corporate social responsibility and performance represents a company’s efforts to be a good global corporate citizen, such as supporting community programs?

A. Economic responsibility

 

B. Legal responsibility

 

C. Ethical responsibility

 

D. Philanthropic responsibility

 

E. Financial responsibility

Philanthropic responsibilities are behaviors and activities that society finds desirable and that the values of the business support. Examples include supporting community projects and making charitable contributions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

83. Which of the following levels of the pyramid of global corporate social responsibility and performance represents a company’s requirement to be profitable?

A. Economic responsibility

 

B. Relative responsibility

 

C. Ethical responsibility

 

D. Philanthropic responsibility

 

E. Legal responsibility

The economic responsibilities of business are to produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors. It requires the company to be profitable.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

84. The order of the levels in the pyramid of global corporate social responsibility and performance from bottom to top is _____.

A. economic, legal, philanthropic, and ethical

 

B. ethical, economic, legal, and philanthropic

 

C. economic, legal, ethical, and philanthropic

 

D. legal, economic, ethical, and philanthropic

 

E. philanthropic, economic, legal, and ethical

The order of the levels in the pyramid of global corporate social responsibility and performance from bottom to top is economic, legal, ethical, and philanthropic.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

85. Home Depot supports Habitat for Humanity, a nonprofit that builds affordable housing for those struggling with poverty, housing, or homelessness. Donation to such an organization is an example of _____ responsibility.

A. economic

 

B. legal

 

C. conventional

 

D. ethical

 

E. philanthropic

Philanthropic responsibilities are additional behaviors and activities that society finds desirable and that the values of the business support. Examples include supporting community projects and making charitable contributions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

86. A(n) _____ has five higher goals that balance self-interest with responsibility to others.

A. utilitarian education

 

B. universalism education

 

C. transcendent education

 

D. integrity-based ethics program

 

E. compliance-based ethics program

Transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

87. Which of the following is a goal of a transcendent education?

A. Persuasion

 

B. Independence

 

C. Empathy

 

D. Candidness

 

E. Persistence

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

88. Which of the goals of a transcendent education involves viewing success not merely as personal gain, but as a common victory?

A. Empathy

 

B. Generativity

 

C. Mutuality

 

D. Civil aspiration

 

E. Intolerance of ineffective humanity

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity. Mutuality means viewing success not merely as personal gain, but as a common victory.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

89. As one of the goals of a transcendent education, speaking out against unethical actions is called _____.

A. empathy

 

B. generativity

 

C. mutuality

 

D. civil aspiration

 

E. intolerance of ineffective humanity

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity. Intolerance of ineffective humanity means speaking out against unethical actions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

90. As one of the goals of transcendent education, learning how to give as well as take, to others in the present as well as to those in the future is called _____.

A. empathy

 

B. generativity

 

C. mutuality

 

D. civil aspiration

 

E. intolerance of ineffective humanity

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity. Generativity refers to learning how to give as well as take, to others in the present as well as to future generations.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

91. Zach believes that it is important to do more than just avoid lying. He also tries to use his words to encourage others and promote understanding. Which goal of transcendent education does this behavior most closely represent?

A. Empathy

 

B. Generativity

 

C. Mutuality

 

D. Civil aspiration

 

E. Intolerance of ineffective humanity

A transcendent education has five higher goals that balance self-interest with responsibility to others: empathy, generativity, mutuality, civil aspiration, and intolerance of ineffective humanity. Civil aspiration refers to thinking not just in terms of don’ts (lie, cheat, steal, kill), but also in terms of positive contributions.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

92. Advocates of corporate social responsibility argue that

A. organizations ought to be profit seeking and that when they concentrate on this motive, they will benefit society.

 

B. organizations’ only responsibilities are clearly defined by the laws and regulations imposed upon them.

 

C. organizations’ responsibilities are to attempt to satisfy all relevant stakeholders’ interests.

 

D. it is unethical for unelected business leaders to spend shareholders’ money on projects unconnected to key business interests.

 

E. organizations have a wider range of responsibilities that extend beyond the production of goods and services at a profit.

Advocates of corporate social responsibility argue that organizations have a wider range of responsibilities that extend beyond the production of goods and services at a profit. As members of society, organizations should actively and responsibly participate in the community and in the larger environment.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

93. _____ has as its primary goal the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

A. Corporate social responsibility

 

B. Life-cycle analysis

 

C. Ecocentric management

 

D. Transcendent education

 

E. Integrity-based ethics program

Ecocentric management has as its goal the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

94. Economic growth and development that meet present needs without harming the needs of future generations is known as _____.

A. ecocentric management

 

B. risk management

 

C. sustainable growth

 

D. resource management

 

E. ecocentric growth

Sustainable growth is economic growth and development that meet the organization’s present needs without harming the ability of future generations to meet their needs. Sustainability is fully compatible with the natural ecosystems that generate and preserve life.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

95. _____ is a process of analyzing all inputs and outputs, through the entire “cradle-to-grave” life of a product, to determine the total environmental impact of the production and use of a product.

A. Ecocentric management

 

B. Life-cycle analysis

 

C. Sustainable growth

 

D. SWOT analysis

 

E. Trend analysis

Increasingly, firms are paying attention to the total environmental impact throughout the life cycle of their products. Life-cycle analysis (LCA) is a process of analyzing all inputs and outputs, through the entire “cradle-to-grave” life of a product, to determine the total environmental impact of the production and use of a product.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

  Scenario A: An insurance company faces an ethical dilemma. A faulty computer program designed to evaluate insurance claims has been denying a high number of valid claims. A meeting has been arranged where senior management would decide how to handle the situation. The people at the table have varying views of what action to take and why.
Han wants to report the error and reimburse the affected customers immediately because he believes he could end up being fired if the company’s reputation suffers because of the issue.
Jamila wants to report the error because it is the honest thing to do, and therefore necessary.
After hearing his colleagues’ opinions, Keith says he is willing to do whatever the more experienced managers in the group recommend.
Several other managers believe the company should correct the problem going forward but not do anything about the customers who lost out on past payments.

 

96. Which of the following best describes the ethical system used by Jamila to make her decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Universalism states that all people should uphold certain values, such as honesty, that society needs to function. Jamila makes the decision on the basis that it is the honest and necessary thing to do; therefore universalism best describes her stance.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

97. Which of the following best describes the ethical system used by Han to make his decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Egoism is an ethical system defining acceptable behavior as that which maximizes benefits for the individual. In this case, Han tries to keep himself from being blamed and fired for the problem.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

98. Which of the following best describes the ethical system used by Keith to make his decision?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Relativism defines ethical behavior based on the opinions and behaviors of relevant other people. Keith makes the decision because he wants to go along with the other managers; therefore relativism best describes his stance.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

99. Assume the meeting ends with the managers deciding not to do anything about the customers who are owed money for past claims. Lori, an employee who was present in the meeting, disagrees with the decision and gives an anonymous tip to a newspaper reporter about the unethical behavior. Which of the following best describes the action taken by Lori?

A. Whistleblowing

 

B. Relativism

 

C. Ethnocentrism

 

D. Shadowing

 

E. Unethical stance

Whistleblowing refers to telling others, inside or outside the organization, of wrongdoing. This is what Lori does in the given scenario.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

  Scenario B: Suppose a manager faces a question regarding how to handle a defective piece of equipment that his company sold. Telling the customer would cost him a substantial amount of money. At the same time, if the equipment fails, it could lead to serious injury of the customer. The manager is going to choose between three options presented by colleagues:

Option 1: Keep quiet about the defect.
Option 2: Talk to others and see what they would have done in the same situation.
Option 3: Disclose the defect and suggest alternatives because it is the honest thing to do.

 

100. Which of the following terms best describes the ethical approach used in option 1?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Egoism is an ethical system defining acceptable behavior as that which maximizes benefits for the individual, which in this case is keeping a substantial amount of money.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

101. Which of the following terms best describes the ethical approach used in option 2?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Relativism defines ethical behavior based on the opinions and behaviors of relevant other people, which is what is being employed in option 2.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

102. Which of the following options best describes the ethical approach used in option 3?

A. Universalism

 

B. Egoism

 

C. Utilitarianism

 

D. Relativism

 

E. Virtue ethics

Universalism states that all people should uphold certain values, such as honesty, that society needs to function. This is the rationale behind option 3.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

  Scenario C: Diana and Eli, managers from different departments at Greater Midwest Credit Union, are discussing the troubling behavior of a credit union employee. Diana says that it is the responsibility of high-level managers to take steps and prevent legal wrongdoing by punishing offenders. However, Eli believes that every individual should take personal responsibility for his or her own behavior and that everyone needs to understand how to do the right thing.

 

103. In Scenario C, each of the managers tends to be responsible for creating a different _____ in their respective departments.

A. legal responsibility

 

B. ethical climate

 

C. sustainable growth

 

D. organizational structure

 

E. corporate culture

The ethical climate of an organization refers to the processes by which decisions are evaluated and made on the basis of right and wrong.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

104. Which of the following types of ethics program does Diana prefer for the company?

A. Associate-based

 

B. Compliance-based

 

C. Integrity-based

 

D. Systems-based

 

E. Consensus-based

Compliance-based ethics programs are designed by corporate counsel to prevent, detect, and punish legal violations. Program elements include establishing and communicating legal standards and procedures, assigning high-level managers to oversee compliance, auditing and monitoring compliance, reporting criminal misconduct, punishing wrongdoers, and taking steps to prevent offenses in the future.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

105. Which of the following types of ethics program does Eli prefer for the company?

A. Associate-based

 

B. Compliance-based

 

C. Integrity-based

 

D. Systems-based

 

E. Consensus-based

Integrity-based ethics programs go beyond the mere avoidance of illegality; they are concerned with the law but also with instilling in people a personal responsibility for ethical behavior, which Eli exhibits in the scenario.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

  Scenario D: Lily and Amare are colleagues who witnessed one of their team members, Elspeth, making a personal purchase over the Internet, which is prohibited in their company. The management had previously announced that those who report wrongdoing of fellow employees will be rewarded. Lily decided not to report Elspeth’s act to the management since it was done after hours. However, Amare decided to do so with the hope of being rewarded.

 

106. In Scenario D, according to Kohlberg’s model of cognitive moral development, Lily can be categorized as being in the _____ stage.

A. preconventional

 

B. conventional

 

C. principled

 

D. unconventional

 

E. operational

Individuals differ in this regard. Kohlberg’s model of cognitive moral development classifies people into categories based on their level of moral judgment. People in the principled stage see beyond authority, laws, and norms and follow their self-chosen ethical principles.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

107. In Scenario D, according to Kohlberg’s model of cognitive moral development, Amare can be categorized as being in the _____ stage.

A. preconventional

 

B. conventional

 

C. principled

 

D. unconventional

 

E. operational

Individuals differ in this regard. Kohlberg’s model of cognitive moral development classifies people into categories based on their level of moral judgment. People in the preconventional stage make decisions based on concrete rewards and punishments and immediate self-interest.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

  Scenario E: Senior management at Futura Development is attending a corporate retreat, and the first item for discussion is corporate social responsibility (CSR). The group has discussed this before and then shot it down because it generally costs Futura’s shareholders in the form of reduced distributions. But the new VP, Gwen, is about to explain why she believes CSR will actually benefit the shareholders and Futura management alike. Her team begins the presentation with a discussion of CSR, both its current definition and reconciliation of past views. Sergei then discusses the importance of being a good global corporate citizen by supporting the local school system. Madison takes the floor to make the case for doing what is expected by global stakeholders even though there are no laws requiring those actions. Finally Gwen wraps the discussion up by defining why Futura should take legal responsibility for the firm’s performance.

 

108. In Scenario E, Sergei’s presentation most likely focuses on the _____ responsibility of the firm.

A. economic

 

B. legal

 

C. ethical

 

D. financial

 

E. philanthropic

Philanthropic responsibilities are additional behaviors and activities that society finds desirable and that the values of the business support. Sergei discussing the importance of being a good global citizen by supporting the local school system focuses on the philanthropic responsibility of the firm.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

109. In Scenario E, Madison’s presentation most likely focused on the _____ responsibility of the firm.

A. economic

 

B. legal

 

C. ethical

 

D. social

 

E. philanthropic

Ethical responsibilities include meeting other societal expectations, not written as law. It involves doing what is expected by global stakeholders. This is what Madison is most likely to focus on.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

110. Gwen’s presentation most likely centered on taking which of the following actions?

A. Production of goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.

 

B. Obeying all laws that affect Futura’s operations.

 

C. Doing the right thing regardless of what the law says.

 

D. Supporting Sergei’s proposal.

 

E. Engaging in additional behaviors and activities that society finds desirable and that the values of the business support.

Legal responsibilities are to obey local, state, federal, and relevant international laws. This is likely to have been the central theme of Gwen’s presentation.

 

AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

Essay Questions

111. Explain the terms ethical issue, business ethics, and moral philosophy.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

112. Discuss the five basic types of ethical systems and provide an example for each.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

113. Describe Kohlberg’s model of cognitive moral development. Give an example for each of the stages.

Answers will vary.

 

AACSB: Ethics
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-01 Describe how different ethical perspectives guide decision making.
Topic: Ethics
 

 

114. Explain the requirements of the Sarbanes-Oxley Act, and describe how some executives have reacted to it.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

115. Contrast compliance-based ethics programs and integrity-based ethics programs.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain how companies influence their ethics environment.
Topic: Ethics
 

 

116. Making ethical decisions takes moral awareness, moral judgment, and moral character. Define each term and explain how you would use it in business.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

117. Explain the process for ethical decision making.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

118. Write an essay on whistleblowing.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Outline a process for making ethical decisions.
Topic: Ethics
 

 

119. Explain the pyramid of global corporate social responsibility and performance.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

120. Define transcendent education and explain the five higher goals associated with it.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

121. Build a case for the convergence of profit maximization and corporate social responsibility.

Answers will vary.

 

AACSB: Ethics
Blooms: Evaluate
Difficulty: 3 Hard
Learning Objective: 05-04 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
 

 

122. Explain how environmental issues and sustainability can be business opportunities rather than burdens.

Answers will vary.

 

AACSB: Ethics
Blooms: Analyze
Difficulty: 3 Hard
Learning Objective: 05-05 Discuss reasons for businesses’ growing interest in the natural environment.
Topic: The Natural Environment and Sustainability
 

 

123. Explain the idea of a risk society.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Discuss reasons for businesses’ growing interest in the natural environment.
Topic: The Natural Environment and Sustainability
 

 

124. Explain life-cycle analysis and how organizations are using it to pay more attention to the total environmental impact.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

125. Discuss ecocentric management.

Answers will vary.

 

AACSB: Ethics
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Identify actions managers can take to manage with the environment in mind.
Topic: The Natural Environment and Sustainability
 

 

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