Chapter 4 Responding to the Ethical and Social Environment

TRUEFALSE

1. Ethics are cultural beliefs about whether behavior, actions, or decisions are right or wrong.

(A) True

(B) False

Answer : (B)

2. After Japan won the World Cup one of its players apologized profusely for appearing to criticize
the coach. American athletes in many sports criticize fellow players, coaches, and managers. This is
an example of how ethical behavior is similar across cultures.

(A) True

(B) False

Answer : (B)

3. A manager who discriminates against a fifty year old man in hiring is exhibiting both unethical
and illegal behavior.

(A) True

(B) False

Answer : (A)

4. Secrecy and confidentiality are major considerations in the relationship of the employee to the
firm.

(A) True

(B) False

Answer : (A)

5. A manager paying an employee less than he deserves, simply because the manager knows the
employee cannot afford to quit or risk losing his job by complaining, might be considered unethical.

(A) True

(B) False

Answer : (A)
6. If competitors from different countries are giving bribes to get contracts in developing countries,
it is acceptable under U.S. law that a U.S. company can do the same if it can show competitive
reasoning.

(A) True

(B) False

Answer : (B)

7. A code of ethics will ensure ethical behavior by employees.

(A) True

(B) False

Answer : (B)

8. Trust is indispensable to any business transaction.

(A) True

(B) False

Answer : (A)

9. The ethical norm justice, means whether a particular act optimizes what is best for the
organization's constituencies.

(A) True

(B) False

Answer : (B)

10. Procedural justice refers to people's perceptions of the fairness with which rewards and other
valued outcomes are distributed within the organization.

(A) True

(B) False

Answer : (B)

11. Informational justice relates to the degree of fairness people see in how they are treated by
others in their organization.

(A) True
(B) False

Answer : (B)

12. Westerman is an American company that makes cylindrical steel containers used to safely ship
uranium. A Westerman executive is accused of bribing Russian officials to win contracts. This would
be illegal in the U.S., but is permissible in Russia.

(A) True

(B) False

Answer : (B)

13. The existence of laws and regulations makes it necessary for companies that strive to be
responsible to their stakeholders to concentrate first and foremost on government.

(A) True

(B) False

Answer : (B)

14. The Sarbanes-Oxley Act requires CIOs to personally vouch for the truthfulness and fairness of
their firms' financial disclosures.

(A) True

(B) False

Answer : (B)

15. Information technology and privacy continues to be an ethical issue.

(A) True

(B) False

Answer : (A)

16. Organizations themselves do not have ethics.

(A) True

(B) False

Answer : (A)
17. The Internet is also seen as having the potential to play an important role in natural resource
conservation, as many e-commerce businesses and transactions are reducing both energy costs and
pollution.

(A) True

(B) False

Answer : (A)

18. The highest degree of social responsibility that an organization can exhibit is referred to as the
proactive stance.

(A) True

(B) False

Answer : (A)

19. Organizations that take an obstructionist approach to social responsibility meet their basic legal
obligations but nothing more.

(A) True

(B) False

Answer : (B)

20. Our government uses the tax codes to indirectly influence our behavior.

(A) True

(B) False

Answer : (A)

21. The Food and Drug Administration's focus on consumer-related concerns is a form of direct
regulation.

(A) True

(B) False

Answer : (A)

22. One way the government regulates or tries to influence businesses is by using political action
committees.

(A) True
(B) False

Answer : (B)

23. Awarding funds or gifts to individuals is called philanthropic giving.

(A) True

(B) False

Answer : (B)

24. The extent to which an organization and its members follow basic ethical standards of behavior
is called legal compliance.

(A) True

(B) False

Answer : (B)

25. Blowing your own horn is the disclosure by an employee of the illegal or unethical conduct on
the part of others within the organization.

(A) True

(B) False

Answer : (B)

26. A corporate social audit is a formal and thorough analysis of the effectiveness of a firm's social
performance.

(A) True

(B) False

Answer : (A)

MULTICHOICE

27. Someone's ethical standards are developed as a child in response to his or her

(A) parents' and other adults' behavior.

(B) peers.

(C) religious beliefs.

(D) parents' and other adults' behavior and peers.

(E) All of these are correct

Answer : (E)

28. Kweku Adoboli was arrested after losing $2.3 billion of UBS global equities. Adoboli's actions
were

(A) legal and ethical.

(B) moral.

(C) legal but unethical.

(D) illegal and unethical.

(E) illegal but ethical.

Answer : (D)

29. Women in Saudi Arabia have been arrested for driving. Their actions are

(A) legal and ethical.

(B) moral.

(C) legal but unethical.

(D) illegal and unethical.

(E) illegal but ethical.

Answer : (E)

30. Congressman Anthony Weiner resigned after sending naked pictures of himself to adult women
who were not his wife. His actions were

(A) legal and ethical.

(B) justified.

(C) legal but unethical.

(D) illegal and unethical.

(E) illegal but ethical.

Answer : (C)

31. Under U.S. law, it is illegal for a U.S. firm operating in a foreign country to pay bribes to get
what it needs. Natives of some of those same countries consider the payment of bribes to be
perfectly acceptable. Which of the following influences may account for this difference?

(A) Cultural differences

(B) Economic influences

(C) Religious influences

(D) Educational systems

(E) All of these choices

Answer : (A)

32. The National Football League Players Association agreed to a salary cap. This is an example of
how the

(A) culture affects employees.

(B) employees and organization treat other economic agents.

(C) organization treats the employees.

(D) employees treat the organization.

(E) code of ethics affects employees.

Answer : (D)

33. Which of the following is NOT an example of a situation in which a manager is likely to be called
upon to make an ethical decision regarding the relationship of the firm to the employee?

(A) Hiring and firing

(B) Customer relations

(C) Working conditions

(D) Garnishment of wages

(E) Drinking or drug problem

Answer : (B)

34. Some companies require employees to only use their company cell phones for work related
activities. Companies can check phone records, but it is a tedious process that would be unnecessary
as long as employees do the right thing. This is an example of how employees treat the organization
regarding ______.

(A) conflicts of interest

(B) secrecy

(C) confidentiality

(D) honesty

(E) all of the above

Answer : (D)

35. The Nation Football League executives shorted unrestricted free agency requirements from six
seasons to four, which gave individual players greater mobility and negotiating power. This is an
example of how the

(A) culture affects employees.

(B) employees and organization treat other economic agents.

(C) organization treats the employees.

(D) employees treat the organization.

(E) code of ethics affects employees.

Answer : (C)

36. The mayor of NYC convinced the Rent Guidelines Board to approve a rent freeze. Landlords
complained, but could not change it. This is an example of the

(A) relationship of the employee to the environment.

(B) relationship of the employee to the firm.

(C) relationship of the firm to the employee.

(D) relationship of the firm to other economic agents.

(E) relationship of the firm to its competitors.

Answer : (D)

37. All of the following issues stem from how employees treat the organization EXCEPT

(A) conflicts of interest.

(B) wages and working conditions.

(C) secrecy and confidentiality.

(D) employee honesty.

(E) misappropriation of organizational resources.

Answer : (B)

38. Advertising for Abercrombie and Fitch uses overt sexuality to sell clothes. Ads for Abercrombie,
the pre-teen sizes, are only moderately less sexual and products include swim wear with padding in
the chest. Many people object to this advertising. This is an example of the relationship of the

(A) employee to the firm.

(B) firm to the employee.

(C) firm to the environment.

(D) firm to competitors.

(E) employee to the environment.

Answer : (C)

39. Which of the following is an important factor in how the organization treats economic agents?

(A) Competitors

(B) Unions

(C) Customers

(D) Owners/stockholders

(E) All of these choices

Answer : (E)

40. The primary economic agents of interest for an organization include

(A) customers.

(B) competitors.

(C) supplies.

(D) dealers.

(E) All of these choices

Answer : (E)

41. According to the concept of managerial ethics, which of the following is NOT considered an
economic agent?

(A) Competitors
(B) Suppliers

(C) Unions

(D) Regulatory agencies

(E) Owners/stockholders

Answer : (D)

42. The University of Michigan rented the stadium to a couple, both graduates, for their wedding on
the fifty yard line. The couple said it was a dream come true. This is an example of

(A) the treatment of the organization by the individual

(B) organization culture.

(C) the treatment of other agents by the organization.

(D) the organizational environment.

(E) the treatment of employees by the organization.

Answer : (C)

43. Imagine that you are a manufacturer of athletic shoes. Within the organizational context, which
of the following ethical behaviors can occur?

(A) Government officials inspect employee working conditions.

(B) Regulatory agents monitor the company's adherence to ADA regulations.

(C) Competitor promotes a low-cost, well-made golfing shoe.

(D) Each employee follows his or her own personal code of ethics.

(E) All of these choices

Answer : (E)

44. Which of the following is NOT a way in which the organizational context contributes to the use
of unethical practices?

(A) A manager becomes aware of an unethical practice, but allows it to continue.

(B) Unethical activity is encouraged as long as it is in the best interests of the firm.

(C) Rewards are provided to those who succeed at the cost of others.

(D) An employee is promoted for finding a way around a legal regulation designed to protect the
environment.
(E) A manager decides to hire a relative to a position for which the relative is qualified.

Answer : (E)

45. Which of the following is part of the organizational context in which ethical/unethical behaviors
occur?

(A) Organizational practices

(B) The regulatory environment

(C) The competitive environment

(D) Personal ethical standards

(E) All of these choices

Answer : (E)

46. Which of the following is the MOST common approach to the management of ethics?

(A) Top management support

(B) A multipage book of organizational policies and procedures

(C) An unwritten code of ethics

(D) A written code of ethics and top management support

(E) government regulation

Answer : (D)

47. Which of the following is the MOST important action that top managers can take to promote
ethical behavior?

(A) Lobby for legislation dealing with ethics

(B) Adhere to ethical standards themselves

(C) Punish those who are unethical

(D) Establish organizational policies

(E) Establish a fair performance appraisal system

Answer : (B)

48. The success of any culture to promote ethical behavior in a society depends on

(A) a national culture that values ethical behavior.

(B) top officials fostering an appropriate culture.

(C) a legal environment that prohibits unethical practices.

(D) an economic environment conducive to ethical practices.

(E) all of these choices.

Answer : (E)

49. Bernard Madoff defrauded clients out of millions of dollars. The probability that Madoff's
employees have high ethical behavior is minimal due to

(A) a national culture that values ethical behavior.

(B) its top management fostering an inappropriate culture.

(C) a legal environment that prohibits unethical practices.

(D) an economic environment conducive to ethical practices.

(E) its low-pressure competitive environment.

Answer : (B)

50. Which of the following represents a major shortcoming associated with the implementation of
codes of ethics and ethics training programs?

(A) They often fail to help people deal with the consequences of their actions.

(B) Usually, they are not very comprehensive in coverage.

(C) Usually, they are too complicated.

(D) They often fail to give specific guidance about what is ethical.

(E) They are often given only lip service by middle management.

Answer : (A)

51. Any effort to enhance an organization's ethical behavior must begin with

(A) the appointment of an ombudsman.

(B) a review of the internal environment.

(C) the development of a formalized code of ethics.

(D) a modification of the ethical codes of employees who interact with stakeholders.

(E) the support of top management.

Answer : (E)

52. Traditionally, experts have suggested a three-step model for applying ethical judgments to
situations that may arise during the course of business activities. The first step is to

(A) gather the relevant factual information.

(B) appoint an ombudsman.

(C) locate a mediator.

(D) determine what is lacking in the organization culture.

(E) determine the most appropriate moral values.

Answer : (A)

53. Joshua is aware that his peers take office supplies home for personal use. To determine if
behavior is ethical Joshua should determine

(A) whether the act optimizes what is best for everyone.

(B) whether the behavior respects the rights of the individuals involved.

(C) whether the behavior is consistent with what he sees as being fair.

(D) whether the behavior is consistent with people's responsibilities to each other.

(E) All of these choices

Answer : (E)

54. The norm of ____ means determining whether the act is consistent with what most people would
see as fair.

(A) caring

(B) justice

(C) rights

(D) virtue

(E) utility

Answer : (B)

55. A college student was accused of sexual assault two years after the incident. He had to defend
himself before a three person board without a lawyer or the ability to ask the accuser questions. The
university expelled him. A lawyer then obtained the accuser's text messages from the evening in
question that clearly showed consent and evidence of another consensual act with a second man
later that night. The university said it followed the Obama administrations guidelines during the
procedure and was maintaining the expulsion. The student was denied ____ justice.

(A) organizational

(B) distributive

(C) procedural

(D) interpersonal

(E) informational

Answer : (C)

56. ____ justice relates to the degree of fairness people see in how they are treated by others in their
organization.

(A) Organizational

(B) Distributive

(C) Procedural

(D) Interpersonal

(E) Informational

Answer : (D)

57. The Sarbanes-Oxley Act requires the ____ to vouch for the truthfulness and fairness of the firms'
financial disclosures.

(A) CEO

(B) CFO

(C) COO

(D) CEO and CFO

(E) CEO, CFO, and COO

Answer : (E)

58. In Major League Baseball, the Cardinals were accused of hacking into the Astros computer
system to steal information. The former General Manager of the Cardinals now worked for the
Astros. The Cardinals had a log of past passwords used by the GM, which enabled front office
executives to enter the Astros' system. The FBI investigated the incident. This is an example of
ethical issues with ______.
(A) technology

(B) leadership

(C) organizational stakeholders

(D) corporate governance

(E) technology and leadership

Answer : (E)

59. The Coca-Cola Foundation awarded grants to communities for water conservation and
community recycling. This is an example of which area of social responsibility?

(A) General social welfare

(B) The natural environment

(C) Organizational stakeholders

(D) The task environment

(E) The internal cultural environment

Answer : (B)

60. Boards of directors are responsible for which area of emerging ethical issues?

(A) Ethical leaders

(B) Ethics issues in information technology

(C) Ethics issues in privacy

(D) Corporate governance

(E) None of these choices

Answer : (D)

61. Many builders are using fiber-cement siding to build houses. This siding is best painted with a
soy-based, environmentally friendly paint. Most paint is not biodegradable because it is made with
petroleum solvents. A builder who decided to build a subdivision with 500 homes and paint each
with the soy-based paint would be an example of which general area of social responsibility?

(A) General social welfare

(B) The natural environment

(C) Legal compliance

(D) The task environment

(E) The internal cultural environment

Answer : (B)

62. When IBM makes large contributions to the performing arts, it is an example of which general
area of social responsibility?

(A) General social welfare

(B) The natural environment

(C) Legal compliance

(D) The task environment

(E) The internal cultural environment

Answer : (A)

63. The inclusion of a biologist in decisions that affect the local community is an example of which
area of social responsibility?

(A) General social welfare

(B) The natural environment

(C) Legal compliance

(D) The task environment

(E) The internal cultural environment

Answer : (B)

64. Judith Cruz, the executive director of the Treasure Coast Food Bank, had a logistics problem.
She contacted Wal-Mart to ask for management advice. Members from Wal-Mart's distribution team
arrived at the food bank, helping it improve its warehousing, sorting, and routing, to allow more food
deliveries per week. The food bank went from serving 42,000 meals per week to more than 100,000
meals. The partnership negates the argument against social responsibility that says

(A) based on their legal status, organizations are technically prohibited from such activities.

(B) such activity detracts from the basic mission society has given business.

(C) social responsibility programs have the potential to create substantial conflicts of interest.

(D) business executives lack the expertise to make decisions about social programs.

(E) there is too much potential for the abuse of the power that corporations have already without
adding to it.

Answer : (D)

65. Which of the following statements is NOT one of the arguments offered in favor of social
responsibility?

(A) Business should fix the problems it creates.

(B) Businesses have resources needed to solve some social problems.

(C) Business executives are uniquely qualified to make decisions about social programs.

(D) Business is a partner in society with the government and the general population.

(E) Corporations have many of the same obligations and privileges as private citizens.

Answer : (C)

66. Which of the following statements is NOT one of the arguments offered in favor of social
responsibility?

(A) Corporations are citizens.

(B) Corporations have ample resources.

(C) Corporations lack expertise.

(D) Corporations create problems and should help solve them.

(E) All of these choices

Answer : (C)

67. Which of the following is NOT one of the arguments offered by those who oppose corporations
habitually engaging in social responsibility programs?

(A) Based on their legal status, organizations are technically prohibited from such activities.

(B) Such activity detracts from the basic mission society has given business.

(C) Social responsibility programs have the potential to create substantial conflicts of interest.

(D) Business executives lack the expertise to make decisions about social programs.

(E) There is too much potential for the abuse of the power that corporations have already without
adding to it.

Answer : (A)
68. The Internet and e-commerce affects the natural environment by

(A) reducing energy costs and pollution.

(B) sending electronic pulses into the air.

(C) increasing package delivery and increasing pollution.

(D) depleting the ozone layer.

(E) decreasing charitable contributions.

Answer : (A)

69. Companies that take a(n) ____ stance to social responsibility cross the ethical or legal line that
separates acceptable from unacceptable practices, and often deny or cover up their actions.

(A) accommodative

(B) reactive

(C) participative

(D) defensive

(E) obstructionist

Answer : (E)

70. Sealed Air packages food, which preserves it and leads to less waste. Sealed Air launched an
initiative in China to package chicken, because more than half of the chicken there spoils before
consumption. Sealed Air's initiative focuses on an untapped market and is an example of the a(n)____
stance toward social responsibility because it helps the environment, farmers, and consumers of
China.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) participative

Answer : (C)

71. All of the following are basic approaches to social responsibility EXCEPT

(A) accommodative stance.

(B) defensive stance.

(C) reactive stance.

(D) proactive stance.

(E) obstructionist stance.

Answer : (C)

72. When Girl Scouts sell cookies at Shop Rite, they are given a place to stand. When they sell at
Wal-Mart the company eventually donates to their troop. Target does not allow any Girl Scout to sell
cookies in front of stores. Target is an example of the ____ stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (E)

73. Managers who agree with Milton Friedman's economic arguments against social responsibility
will most likely take an approach to social responsibility known as a(n) ____ stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (E)

74. Genzyme is a pharmaceutical company that manufactures Cerdase, a drug that treats a genetic
illness called Gaucher's disease, which is a life-threatening illness that affects 20,000 people
worldwide. A year's supply of the drug costs $200,000. Given what you know about the various
approaches to social responsibility, you might assume that Genzyme takes a(n) ____ stance.

(A) reactive

(B) obstructionist

(C) proactive
(D) accommodative

(E) defensive

Answer : (E)

75. Auto manufacturers are required to attain a certain average fuel-efficiency level for all the cars
they sell. They try to attain the mandated levels, but they also try to get deadline extensions. The
auto makers' approach to social responsibility is a(n) ____ stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (E)

76. When Girl Scouts sell cookies at Shop Rite, they are given a place to stand. When they sell at
Wal-Mart the company eventually donates to their troop. Target does not allow any Girl Scout to sell
cookies in front of stores. Wal-Mart is an example of the ____ stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (C)

77. For firms that do NOT want to take a proactive stance with respect to social responsibility, the
next most responsible position in the eyes of proponents of social responsibility would be a(n) ____
stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive
Answer : (D)

78. Companies that meet their economic and legal responsibilities but do not go beyond them are
exhibiting a(n) ____ approach to social responsibility.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (E)

79. When Girl Scouts sell cookies at Shop Rite, they are given a place to stand. When they sell at
Wal-Mart the company eventually donates to their troop. Target does not allow any Girl Scout to sell
cookies in front of stores. Shop Rite is an example of the ____ stance.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (D)

80. The Siemens Foundation uses money to support and promote the importance of math, science,
and technology education. It is taking a(n) ____ approach to social responsibility.

(A) obstructionist

(B) defensive

(C) accommodative

(D) proactive

(E) reactive

Answer : (D)

81. The firm using a(n) ____ approach to social responsibility meets its obligations and is also willing
to respond to appropriate societal requests.
(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (D)

82. L'Oreal has a foundation responsible for corporate philanthropy. This is a(n) ____ stance.

(A) defensive

(B) accommodative

(C) proactive

(D) reactive

(E) participative

Answer : (C)

83. A firm is taking a(n) ____ stance when it actively looks for ways to benefit society as well as
meeting its obligations and responding to requests.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (C)

84. Politicians caught in extramarital affairs usually deny wrong doing until there is physical
evidence to contradict the politician's claims. This is an example of the ____ approach to
responsibility.

(A) defensive

(B) accommodative

(C) proactive

(D) reactive
(E) participative

Answer : (A)

85. NBD, a financial institution headquartered in Detroit, matches its employees' contributions to
universities and colleges. This is an example of the ____ approach to social responsibility.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (C)

86. Judith Cruz, the executive director of the Treasure Coast Food Bank, had a logistics problem.
She contacted Wal-Mart to ask for management advice. Members from Wal-Mart's distribution team
arrived at the food bank, helping it improve its warehousing, sorting, and routing, to allow more food
deliveries per week. The food bank went from serving 42,000 meals per week to more than 100,000
meals. This is an example of the ____ approach to social responsibility.

(A) reactive

(B) obstructionist

(C) proactive

(D) accommodative

(E) defensive

Answer : (C)

87. The maker of Wrigley chewing gum funded a $10 million ad campaign aimed at getting African
Americans to use doctors for regular healthcare maintenance instead of only when they are sick.
Wrigley is taking a(n) ____ approach to social responsibility.

(A) proactive

(B) offensive

(C) defensive

(D) participative

(E) accommodative
Answer : (A)

88. Business influence on government relies on all EXCEPT which of the following?

(A) Lobbying

(B) Social pressure

(C) Cultural influence

(D) Regulation

(E) Personal contacts

Answer : (D)

89. Which of the following is a basic area of government regulation of business?

(A) Consumer protection

(B) Safety and health of employees

(C) Safety and health of consumers

(D) Environmental protection

(E) All of these choices

Answer : (E)

90. The Environmental Protection Agency is the agency charged with enforcement of many of the
environmental laws in the United States. This agency represents a form of

(A) indirect regulation.

(B) direct regulation.

(C) legislative mandate.

(D) government coercion.

(E) legislative intervention.

Answer : (B)

91. The Food and Drug Administration (FDA) is an example of which of the following areas of
government regulation?

(A) Consumer protection

(B) Safety and health of employees

(C) Safety and health of consumers

(D) Environmental protection

(E) Investor related issues

Answer : (A)

92. When the SEC brought charges against Bernard Madoff and his CFO, it was exercising its power
of

(A) political favors.

(B) legislative intervention.

(C) indirect regulation.

(D) lobbying.

(E) direct regulation.

Answer : (E)

93. Laws that deal with how agrichemical companies dispose of hazardous wastes are examples of

(A) consumer protection regulation.

(B) fair labor practice.

(C) environmental protection regulation.

(D) safety and health regulation.

(E) legislative intervention.

Answer : (C)

94. The ____ is not a government regulatory agency.

(A) Securities and Exchange Commission

(B) Federal Aviation Administration

(C) Federal Communications Commission

(D) American Civil Liberties Union

(E) Environmental Protection Agency

Answer : (D)
95. All of the following are common approaches that businesses use to influence government
EXCEPT

(A) personal contacts.

(B) rebates.

(C) lobbyists.

(D) donations to PACs.

(E) favors.

Answer : (B)

96. The National Organization of Women works to influence legislators to support NOW's positions.
NOW is a

(A) political action committee.

(B) government stakeholder.

(C) public regulator.

(D) lobbyist.

(E) multinational corporation.

Answer : (D)

97. Which of the following is NOT one of the means by which businesses typically attempt to
influence government?

(A) Favors

(B) Lobbying

(C) Direct contributions to election campaigns

(D) Political action committees

(E) Personal contacts

Answer : (C)

98. The purpose of a political action committee (PAC) is to

(A) lobby on behalf of trade associations.

(B) circumvent laws regarding donations by businesses to election campaigns.

(C) provide opportunities for personal contacts with legislators.

(D) ensure that businesses do not attempt to bribe officials.

(E) prevent businesses from getting excessive tax breaks.

Answer : (B)

99. Which of the following statements about legal compliance is TRUE?

(A) Legal compliance also guarantees ethical compliance.

(B) Despite the name, legal departments are not usually involved with legal compliance issues.

(C) Top management usually retains management of legal compliance issues.

(D) Legal compliance is usually handled by a committee of managers from various functional areas.

(E) Managing legal compliance is usually delegated to the appropriate managers.

Answer : (E)

100. Which of the following is NOT an example of a formal approach to social responsibility?

(A) Legal compliance

(B) Ethical compliance

(C) Evaluative compliance

(D) Philanthropic giving

(E) Ethics committee

Answer : (C)

101. News Corporation is alleged to have tapped phones and bribed police in the UK to get leads on
stories. It failed ____.

(A) legal compliance.

(B) ethical compliance.

(C) evaluative compliance.

(D) philanthropic giving.

(E) rational compliance.

Answer : (A)

102. ____ is the extent to which an organization and its members follow basic moral and legal
standards of behavior.
(A) Legal compliance

(B) Ethical compliance

(C) Evaluative compliance

(D) Philanthropic giving

(E) Rational compliance

Answer : (B)

103. Which of the following represents an attempt to manage social responsibility by means of what
the text calls ethical compliance?

(A) Requiring top financial managers to ensure compliance with securities and banking regulations

(B) Creating a committee to write a code of ethics or review proposals concerning selection and
promotion

(C) Donating money to fund public broadcasting or the performing arts

(D) Consulting the legal department regarding the requirements of a particular statute

(E) Making human resource managers responsible for complying with EEOC standards

Answer : (B)

104. Which of the following is NOT an example of an informal approach to social responsibility?

(A) Whistle-blowing procedures

(B) Ethical compliance

(C) Leadership practices

(D) The organization culture

(E) Treatment of whistleblowers

Answer : (B)

105. John Kopchinski, a former Pfizer sales representative, earned more than $51.5 million as a
result of his lawsuit against the world's biggest drug maker and the record penalty the company
must pay the U.S. government for its massive marketing transgressions. He engaged in

(A) whistle-blowing.

(B) ethical compliance.

(C) leadership practices.

(D) corporate culture modification.

(E) ethical compliance.

Answer : (A)

106. John Kopchinski, a former Pfizer sales representative, earned more than $51.5 million as a
result of his lawsuit against the world's biggest drug maker and the record penalty the company
must pay the U.S. government for its massive marketing transgressions. Kopchinski used whistle-
blowing, a(n) ____, to bring attention to the problem.

(A) formal organizational dimension

(B) defensive stance toward social responsibility

(C) protective stance toward social responsibility

(D) reactive approach to social responsibility

(E) informal organizational dimension

Answer : (E)

107. Judith Cruz, the executive director of the Treasure Coast Food Bank, had a logistics problem.
She contacted Wal-Mart to ask for management advice. Members from Wal-Mart's distribution team
arrived at the food bank, helping it improve its warehousing, sorting, and routing, to allow more food
deliveries per week. The food bank went from serving 42,000 meals per week to more than 100,000
meals. Cruz says the advice provided by Wal-Mart would have cost hundreds of thousands of dollars
if contracted with a management consulting firm. This is an example of

(A) philanthropic giving.

(B) legal compliance.

(C) organization culture.

(D) ethical compliance.

(E) social compliance.

Answer : (A)

108. Siemens is primarily an engineering company. Employees in the U.S. volunteer to run Siemens
Science Day in schools and hospitals to get children excited about science. The passion for science is
part of the informal organization dimension

(A) leadership.

(B) culture.

(C) ethical compliance.

(D) whistle-blowing.

(E) social compliance.

Answer : (B)

109. Which of the following actions is NOT part of an organization's attempts to evaluate social
performance?

(A) Corporate social audits

(B) Whistle-blowing by employees

(C) Requiring employees to sign agreements to abide by its code of ethics

(D) Reviewing its responses to questionable conduct

(E) Examining the impact that the corporate culture has on the firm's social performance

Answer : (B)

110. As applied to social responsibility, social audits represent what function of management?

(A) Controlling

(B) Organizing

(C) Leading

(D) Directing

(E) Planning

Answer : (A)

111. ____ is a thorough, formal analysis of the effectiveness of a firm's response to social
responsibility.

(A) An ethics review

(B) A legal compliance assessment

(C) A corporate conduct review

(D) A corporate social audit

(E) Whistle-blowing

Answer : (D)
SHORTANSWER

112. The real story of Sam Childers depicted in the movie Machine Gun Preacher shows a
missionary and soldier willing to use violence to protect Sudanese orphans. His use of violence is
a(n) ____________________ dilemma.Answer : ethics

113. ____________________ is an individual's personal beliefs about whether a behavior, action, or

decision is right or wrong.Answer : Ethics

114. A(n) ____________________ occurs when a decision potentially benefits the individual to the
possible detriment of the organization.Answer : conflict of interest

115. Actions of peer managers and top managers, as well as the organization's ____________________,
all contribute to the ethical context of the organization.Answer : culture

116. ____________________ justice refers to the perceived fairness of information used to arrive at
decisions.Answer : Informational

117. ____________________ have become almost commonplace in today's world. Ranging from business
to sports to politics to the entertainment industry, they have rocked stakeholder confidence and
called into question the moral integrity of our society.Answer : Ethical scandals

118. The ____________________ Act requires CEOs and CFOs to personally vouch for the truthfulness
and fairness of their firms' financial disclosures.Answer : Sarbanes-Oxley

119. When Bernard Madoff was on house arrest he started mailing his assets to other people. He
demonstrated a(n) ____________________ stance.Answer : obstructive

120. Fracking is a controversial process of using high pressure to force sand, chemicals, and water
into shale formations to release the natural gas and oil located there. It has greatly increased supply
of natural gas and oil in the United States. European nations put a moratorium on it citing
environmental concerns. The Europeans are primarily concerned with the stakeholder the
____________________ .Answer : natural environment

121. The Tiny Little T-Shirt Company printed 500 shirts at cost for the Helene Cody Foundation 5K
run. The Helene Cody Foundation supports young people in volunteer opportunities that better their
communities. The shirt company used a(n) ____________________ stance.Answer : accommodative

122. Firms that adopt a(n) ____________________ approach take to heart the arguments in favor of
social responsibility. They view themselves as citizens in a society and seek opportunities to
contribute.Answer : proactive

123. The Equal Employee Opportunity Commission is one agency involved in oversight of public
companies. This is a form of ____________________ regulation.Answer : direct

124. Taxes on corporations are a form of ____________________ regulation.Answer : indirect

125. ____________________, or the use of persons or groups to formally represent an organization or

group of organizations before political bodies, is an effective way to influence the
government.Answer : Lobbying
126. Political leaders and corporate executives who meet socially and influence each other are
networking through ____________________.Answer : personal contacts

127. Official approaches to social responsibility include legal compliance, ethical compliance, and
____________________.Answer : philanthropic giving

128. ____________________ compliance is the extent to which a firm lives up to the basic statutory
requirements governing its operations.Answer : Legal

129. ____________________ compliance is the establishment of formal committees to evaluate alleged

ethical misconduct by an employee.Answer : Ethical

130. Abbott Laboratories committed more than $6.5 million to partner with Partners In Health to
address malnutrition in Haiti. This is an example of ____________________.Answer : philanthropic
giving

131. A(n) ____________________ is a formal and thorough analysis of the effectiveness of a firm's social
performanceAnswer : corporate social audit

132. Cheryl D. Eckard worked at GlaxoSmithKline (GSK). She revealed contamination problems at GSK's
manufacturing operations, which led to a $750 million settlement with the U.S. government. GSK was
charged with manufacturing and selling adulterated pharmaceutical products. Eckard was awarded $96
million in 2010. She was a(n)____________________.Answer : whistleblower

133. ____________________, organization culture, and how the organization responds to whistleblowers
all help shape and define people's perceptions of the organization's stance on social
responsibility.Answer : Leadership

ESSAY

134. You will not be able to predict from your job interview what your first ethical dilemma will look
like. So how can you prepare yourself to handle the unknown situation?

Graders Info :

Answer not provided.

135. Describe an ethical dilemma you have faced (it can be as simple as admitting you were
undercharged by a cashier). Illustrate how you applied the ethical decision framework (Figure 4.2)
in making your final judgment of what to do.

Graders Info :

Answer not provided.

136. Briefly describe the three major areas of special concern with respect to managerial ethics.
Graders Info :

Answer not provided.

137. Briefly describe how the organizational context can have an influence on the ethical behavior
of individual participants in the organization.

Graders Info :

Answer not provided.

138. The four ethical norms are utility, rights, justice, and caring. Describe each of them. Which
norm do you subscribe to?

Graders Info :

Answer not provided.

139. Describe the three emerging ethical issues in business today.

Graders Info :

Answer not provided.

140. How does the Sarbanes-Oxley Act affect ethical leadership?

Graders Info :

Answer not provided.

141. Some people are outraged by the National Security Agency's collection of phone information.
Others think that companies like Google, Facebook, and Amazon know even more information about
people. When is the gathering of information on people too much? Explain your reasons.

Graders Info :

Answer not provided.

142. Why should an organization contribute to socially responsible programs?

Graders Info :

Answer not provided.

143. The Obama administration terminated the space shuttle program. It argued that private
business would rise to the challenge of space travel. In the mean time the U.S. will pay Russia to
transport astronauts and the price continues to rise. Use the arguments for and against social
responsibility to examine this decision. Do you agree or disagree with the administration?

Graders Info :

Answer not provided.

144. The Chronicle of Philanthropy reported that corporate giving in 2014 rose 3%, but during the
recession in 2009, it was down by 7.5%. Do you see any flaw in arguing that organizations don't have
the resources for social programs and therefore should not get involved? Explain.

Graders Info :

Answer not provided.

145. Do you think current regulations regarding how corporations influence government, and vice
versa, are adequate? Why?

Graders Info :

Answer not provided.

146. During the Obama administration, the Department of Justice worked to block Boeing
Corporation from moving a facility from a pro-union state to a non-union state. The DOJ's actions
were unprecedented. Boeing is an international company. Was the DOJ's lawsuit ethical? Why?

Graders Info :

Answer not provided.

147. Edward Snowden revealed classified information from the NSA. He was charged with violating
the Espionage Act and theft of government property. He is living in an undisclosed location in Russia
while seeking asylum elsewhere. He has been called a a whistleblower, a dissident, a patriot, and a
traitor. Which term do you think describes him and why?

Graders Info :
Answer not provided.

148. When a company does a social audit, what does it need to review?

Graders Info :

Answer not provided.

MATCH

149. Match the following. You may use a response once, more than once, or not at all.

MATCH

150. Match the following. You may use a response once, more than once, or not at all.

MATCH

151. Match the following. You may use a response once, more than once, or not at all.

MATCH

152. Special Exercises

There are at least six lethal forms of E. coli that can end up in our meat or on our produce that are
so virulent, they hospitalize people and even kill them. However, in the U.S. only one, E. coli
0157:H7, is officially termed an adulterant, which means any ground beef that tests positive for it
cannot be sold for human consumption. There are no requirements for companies to test for the
other lethal strains, and it is not illegal for them to be present in food.

Match each action with what it illustrates. You may use a response once, more than once, or not at
all.