Chapter 2 Organizational Justice, Ethics, and Corporate Social Responsibility
2.1 Multiple Choice Questions
1) The study of peopleʹs perception of and reactions to fairness and unfairness in organizations is
known as A) organizational ethics. B) ethical standards. C) corporate responsibility D)
organizational justice.
Answer: D
Diff: 3 Page Ref: 34 LO: 1
2) Distributive justice focuses on peopleʹs beliefs that A) they have been valued by others in an
organization. B) they have received fair amounts of valued work-related outcomes. C) the
organization acts impartially when deciding pay and benefit issues. D) the outcomes they receive
have been determined fairly.
Answer: B
Diff: 5 Page Ref: 34 LO: 1
3) According to ________ justice, people will be dissatisfied with their pay when it falls below expected
standards. A) comparative B) informational C) distributive D) procedural
Answer: C
Diff: 3 Page Ref: 34 LO: 1
4) Not paying people what they deserve or asking them to work ʺoff the clockʺ contributes to feelings
of A) unethical behavior. B) organizational equity. C) informational injustice. D) distributive
injustice.
Answer: D
Diff: 7 Page Ref: 34 LO: 1
5) The fact that people will better accept outcomes when they have had some input into determining them is
known as A) the fair process effect. B) informational justice. C) the participative process. D)
organizational equity.
Answer: A
Diff: 5 Page Ref: 36 LO: 1
6) ________ justice refers to the process by which outcomes are determined. A) Comparative B) Instrumental
C) Procedural D) Distributive
Answer: C
Diff: 3 Page Ref: 37 LO: 1
7) ________ justice involves peopleʹs perceptions of the fairness of the manner in which they are treated by
other
people such as authority figures. A) Interpersonal B) Distributive C) Procedural D) Informational
Answer: A
Diff: 3 Page Ref: 37 LO: 1
8) Informational justice refers to peopleʹs perceptions of A) the lack of bias involved when an organization
makes decisions. B) the accuracy of the information an organization provides to outside parties. C) the
fairness of the information used as the basis for making decisions. D) the timeliness with which
management distributes information to members of the organization.
Answer: C
Diff: 5 Page Ref: 37 LO: 1
9) According to social scientists, what are the fundamental beliefs regarding what is right or wrong, good or
bad? A) Religious beliefs B) Moral values C) Social responsibilities D) Personal ethics
Answer: B
Diff: 5 Page Ref: 41 LO: 3
10) An employeeʹs fundamental beliefs about what is good or bad are influenced by A) the culture of the
organization. B) the personʹs religious background. C) training in ethical standards. D) observations of
leadersʹ behavior.
Answer: B
Diff: 5 Page Ref: 41 LO: 3
11) Whereas ________ refers to fundamental beliefs about what is right or wrong, ________ refers to standards
of
conduct. A) attitudes; justice B) world religions; behavioral inclination C) ethical values; morality D) moral
values; ethics
Answer: D
Diff: 9 Page Ref: 41-42 LO: 3
12) Which of the following is the best definition of ethics? A) Standards of conduct that guide peopleʹs
decisions and behavior B) Moral values that determine behavior C) Philosophical principles that are
universal in their applications D) Fundamental beliefs about what is right and what is wrong
Answer: A
Diff: 5 Page Ref: 42 LO: 3
13) The culture of the organization, the behavior of the leaders, and group norms collectively impact an
employeeʹs A) behavior. B) moral values. C) standards of conduct. D) ethics.
Answer: A
Diff: 5 Page Ref: 42 LO: 3
14) Businesses have found that the long-term impact of promoting ethical behavior includes A) increased
operating costs. B) a reputation for pious and self-righteous posturing. C) an inability to attract and
retain ethical employees. D) improved financial performance.
Answer: D
Diff: 6 Page Ref: 43 LO: 3
15) The False Claims Act of 1986 A) provides guidelines for penalizing organizations involved in illegal
activities. B) focuses on the fiduciary responsibilities of boards of directors. C) protects whistleblowers
who report fraudulent behavior against U.S. government agencies. D) penalizes corporate officers who
submit fraudulent accounting data.
Answer: C
Diff: 6 Page Ref: 44 LO: 3
16) Which of the following prohibits organizations from paying bribes to foreign officials for purposes of
getting
business? A) Sarbanes-Oxley Act B) Foreign Corrupt Practices Act C) False Claims Act D) Davis-Bacon Act
Answer: B
Diff: 6 Page Ref: 44 LO: 3
17) The Federal Sentencing Guidelines for Organizations (1991) guide judges when A) sentencing directors of firms
who file false accounting data. B) imposing fines on organizations whose employees engage in criminal
acts. C) penalizing employees who fail to report illegal activities of executives. D) setting jail terms for
CEOs who engage in unethical conduct.
Answer: B
Diff: 8 Page Ref: 44-45 LO: 3
18) The ________ initiated reforms in the standards by which public companies report financial data. A) Federal
Prosecutions of Business Organizations Act B) Sarbanes-Oxley Act C) Davis-Bacon Act D) False Claims Act
Answer: B
Diff: 6 Page Ref: 44-45 LO: 3
19) The theory of cognitive moral development was developed by A) William Taylor. B) Abraham Maslow. C)
J.M. Kaplan. D) Lawrence Kohlberg.
Answer: D
Diff: 4 Page Ref: 46 LO: 4
20) During the preconventional level of moral reasoning, people interpret what is right A) from the
perspectives of others. B) based on their religious beliefs. C) with reference to the Golden Rule. D) as
whatever avoids punishment.
Answer: D
Diff: 6 Page Ref: 46 LO: 4
21) People at the ________ level of moral reasoning determine what is right by considering the safety
and welfare
of society as a whole. A) postconventional B) situational C) conventional D) Golden Rule
Answer: C
Diff: 6 Page Ref: 46 LO: 4
22) People who are at the postconventional level of moral reasoning A) are judged to be ethically
superior. B) judge what is right and wrong in terms of their societal obligations. C) do what they
are convinced is truly right, even if others disagree. D) are unable to function in modern business
organizations.
Answer: C
Diff: 7 Page Ref: 47 LO: 4
23) In terms of unethical thinking, the ʺbottom-lineʺ mentality reasons that A) financial success is the
only value to be considered. B) anything is right if the public can be made to see it as right. C)
good ethics is good business. D) what is ethical is dependent upon the consequences of the
actions.
Answer: A
Diff: 7 Page Ref: 47 LO: 4
24) What is the purpose of an ethics audit? A) To clearly articulate the companyʹs ethical expectations to
employees B) To assess the morality of the employeesʹ behavior C) To provide strategies for
ensuring ethical conduct throughout the company D) To describe what the organization stands
for
Answer: B
Diff: 6 Page Ref: 49 LO: 5
25) The concept of corporate responsibility involves A) attempting to meet prevailing legal and ethical
standards. B) embracing values that promote the greater welfare of society at large. C) paying
wages and benefits that exceed the going market rate. D) developing products and services that
improve the lives of citizens.
Answer: B
Diff: 5 Page Ref: 54 LO: 6
2.2 True/False Questions
1) Corporate social responsibility primarily involves meeting the prevailing legal and ethical
standards. Answer: FALSE
Diff: 5 Page Ref: 33 LO: 6
2) Organizational ethics is defined as the study of peopleʹs perceptions of and reactions to fairness and
unfairness in organizations. Answer: FALSE
Diff: 6 Page Ref: 34 LO: 2
3) Distributive justice is concerned with employees getting their fair share of work-related outcomes. Answer:
TRUE
Diff: 5 Page Ref: 34 LO: 1
4) Employeesʹ perceptions of the fairness of performance appraisal procedures have an impact on distributive
justice. Answer: FALSE
Diff: 5 Page Ref: 35 LO: 1
5) Workers are more likely to follow their employerʹs rules when they have reason to believe that the
organizationʹs procedures are inherently fair. Answer: TRUE
Diff: 5 Page Ref: 35 LO: 1
6) To be fair, the procedures used as the basis for making a decision about one person must be applied equally
to making a decision about others. Answer: TRUE
Diff: 3 Page Ref: 36 LO: 1
7) The fair process effect results, in part, from giving employees a voice in making decisions about matters
that concern them. Answer: TRUE
Diff: 5 Page Ref: 36 LO: 1
8) In terms of interpersonal justice, people are sensitive to how fairly they have been treated by other people
such as authority figures. Answer: TRUE
Diff: 2 Page Ref: 37 LO: 1
9) An employee is less likely to accept a lower-than-expected pay increase if it is preceded by a poor
performance rating. Answer: FALSE
Diff: 9 Page Ref: 37 LO: 1
10) The practice of gathering and processing information in an effort to figure out how fairly we are treated is
called fairness monitoring. Answer: TRUE
Diff: 3 Page Ref: 37 LO: 1
Managing Behavior in Organizations, 6e (Greenberg) --CVC --8/1/2012 --Page
15
11) When employees are given full information about an upcoming pay freeze, they are more likely to start
looking for a new job. Answer: FALSE
Diff: 6 Page Ref: 37 LO: 1
12) When managers use bureaucratic controls, employees are likely to monitor by procedural
justice. Answer: TRUE
Diff: 7 Page Ref: 38 LO: 2
13) Scientists have found that there is no biological basis to peoplesʹ reactions to
fairness. Answer: FALSE
Diff: 5 Page Ref: 39 LO: 2
14) Ethics is about standards of conduct, not moral
values. Answer: TRUE
Diff: 3 Page Ref: 42 LO: 3
15) The Foreign Corrupt Practices Act of 1991 prohibits U.S. employers from hiring undocumented
workers. Answer: FALSE
Diff: 6 Page Ref: 44 LO: 3
16) The Sarbanes-Oxley Act was passed in 2002 in response to accounting scandals such as what occurred at
Enron. It initiated reforms in the standards by which public companies report accounting data. Answer:
TRUE
Diff: 6 Page Ref: 44 LO: 3
17) According to Kohlberg, the majority of adults do what is right in order to avoid
punishment. Answer: FALSE
Diff: 6 Page Ref: 46 LO: 4
18) People at the conventional level of moral development determine what is right and wrong in terms of
complex philosophical principles of duty, justice, and rights. Answer: FALSE
Diff: 8 Page Ref: 46 LO: 4
19) The behavior of people at the postconventional level of moral development judge what is right and wrong
in terms of what is good for society as a whole. Answer: FALSE
Diff: 8 Page Ref: 47 LO: 4
20) The ʺMadison Avenueʺ mentality suggests that anything is right if the public can be made to see it as
right. Answer: TRUE
Diff: 5 Page Ref: 47 LO: 4
Managing Behavior in Organizations, 6e (Greenberg) --CVC --8/1/2012 --Page
16
21) The purpose of a code of ethics is to assess the morality of a companyʹs behavior in order to identify
irregularities. Answer: FALSE
Diff: 3 Page Ref: 49
LO: 4
22) By themselves, codes of ethics have only limited effectiveness in regulating ethical behavior in
organizations. Answer: TRUE
Diff: 6 Page Ref: 50
LO: 4
23) Corporate responsibility is not concerned with legal requirements and respect for individuals. It
concentrates instead on the well-being of the community at large and the environment. Answer:
FALSE
Diff: 7 Page Ref: 54
LO: 6
24) Although ʺdoing well by doing goodʺ is a popular idea, there is no consistent evidence that socially
responsible companies perform better than those that are less socially responsible. Answer: TRUE
Diff: 9 Page Ref: 56
LO: 6
25) The virtuous circle suggests that socially responsible companies perform well financially
because they are supported by customers and investors. As a result, they become wealthier
and even more philanthropic. Answer: TRUE
Diff: 8 Page Ref: 57
LO: 6
2.3 Essay Questions 1) Distinguish among the following: justice, moral values, ethics, and social responsibility as
they apply to managerial decision making.
Answer: Organizational justice is the study of peopleʹs perceptions of fairness in organizations. Managers
need to be concerned with how decisions are made and the manner in which they are
communicated. Moral values refer to peopleʹs fundamental beliefs in what is right and wrong.
Moral values often are based on someoneʹs religious background. It is not the role of
management to teach morality. Ethics refers to standards of conduct that guide peopleʹs
decisions and behavior. Management needs to establish standards of ethical behavior, train the
employees, and monitor compliance. Social responsibility refers to organizational decisions that
exceed ethical, legal, and public expectations. It often involves philanthropic activities to serve
the wider community.
Diff: 9 Page Ref: 33-57
LO: 1,3,6
2) Assume that you are a plant manager of an automobile parts manufacturer, and you have been directed
to lay off 20 employees. With reference to the discussion of organizational justice, how should you
achieve this?
Answer: Organizational justice addresses the perceived fairness of how these decisions are made. As manager, you
need to consider employeesʹ level of satisfaction with the outcome -how they feel about the decisions
concerning who is laid off and who is retained (distributive justice). Employees also are concerned about the
fairness with how the decisions are made -are they random, or based on performance, length of service,
favoritism, or nepotism (procedural justice)? Interpersonal justice refers to how the employees are treated
during the process. People tend to accept adverse decisions if they have positive feelings about their
employers and supervisors. Informational justice refers to the employeesʹ perceptions of the fairness of the
information used as the basis for making the decisions. If, for example, the decisions are based on merit, do
they believe that the appraisal procedure gives a fair measure of performance?
Diff: 7 Page Ref: 39-40
LO: 1
3) Do you believe that good ethics is good business? Explain your answer. Answer: People promoting ethical
behavior in business argue that ethical decision making is good for business. Benefits of being ethical include:
1
Improved financial performance: People prefer to deal with ethical organizations.
2
Reduced operating costs: Efforts to protect the natural environment also help save money.
3
Enhanced corporate reputation: Customers are loyal to businesses perceived as being ethical.
4
Increased ability to attract and retain employees: People like to feel proud of where they work.
Diff: 6 Page Ref: 43-44
LO: 3
4) You have been appointed chair of a task force created to establish an ethics program for your
corporation. What should be included in this program?
Answer: The task force needs to develop a code of ethics describing what the organization stands for and the
general rules of conduct expected of its employees. Training programs should be developed to reinforce
the corporationʹs ethical values. An ethics audit should be conducted to investigate and document
incidents of dubious ethical conduct. The corporation needs to appoint an ethics officer, a high-ranking
organizational official who is expected to ensure ethical conduct throughout the organization. Finally,
the task force should establish a mechanism for communicating ethical standards to all employees.
Diff: 7 Page Ref: 49-50
LO: 4
5) Some have argued that the only responsibility for management is to make as much money as possible
for the shareholders. Others argue that a corporation has an obligation to be socially responsible. How
would you respond?
Answer: Organizations need to obey the law and to act ethically. Corporate social responsibility involves more.
Advocates claim that an organization has an obligation to the community in which it operates -locally,
nationally, and/or globally. This may include such activities as developing environmentally-friendly
products and contributing to philanthropic causes. It has been suggested that socially responsible
companies perform well financially due to the ʺvirtual circle,ʺ whereby they attract customers and
investors.
Diff: 9 Page Ref: 56-57
LO: 6