Chapter 5

Chapter 5

Ethics and

Social Responsibility

5.

4.

6.

3.

2.

8.

7.

1.

True/False Questions

Timberland’s focus on philanthropy costs the company more than $2 million in sales each year.

Answer: True Level: 2 Page: 155 Type: F

Enron, in mid-2000 was America’s 7 th

largest corporation.


Ethics, found between the domains of law and free choice, is the code of moral principles that governs any individual or groups.


Free choice lies between the domains of codified law and ethics.

Answer: False Level: 2 Page: 157 Type: F

If something is not illegal, it must be ethical.


An ethical dilemma arises in a situation when each alternative choice or behavior is undesirable because of potentially harmful ethical consequences.


An individual who must make an ethical choice in an organization is called the moral agent.


Most ethical dilemmas involve a conflict between the needs of the part and the whole.

Chapter Five * Ethics and Social Responsibility

Test Bank * Page 124

9.


Utilitarian, individualism, moral-rights, and objective dualism are the four approaches that guide ethical decision-making.


10. Objective dualism is the ethical concept that argues that moral behaviors produce the greatest good for the greatest number of people.


11. The basis for the recent trend among companies to police employee personal habits such as alcohol and tobacco consumption on the job is called the utilitarian ethic.


12. Monitoring the Internet to maintain the company’s ethical climate and workplace productivity could be considered part of an individualistic approach.


13. The ethical concept that acts are moral when they promote the individual's best long term interests, which ultimately leads to the greater good, is known as the moral rights approach.


14. In the individualism approach, the right of free speech must be considered.


15. Individualism is popular in the highly organized society of today because it supports immediate self-gain.


16. Rights that should be considered in the moral rights approach include the right of free consent, the right to privacy, and the right of freedom of conscience.


17. Procedural justice requires that different treatment of people not be based on arbitrary characteristics.




18. The justice approach is closest to the thinking underlying the domain of free choice.


19. Most of the laws guiding human resource management are based on the individualism approach.


20. Individuals, at the preconvention level, are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences.


21. At the principled level, individuals are concerned with external rewards and punishments.


22. The concept that individuals should be compensated for the cost of their injuries by the party responsible, and also that individuals should not be held responsible for matters over which they have no control, is considered procedural justice.


23. An individual at the postconventional level lives up to expectations of others, fulfills duties and obligations of social systems, and upholds law.


24. Principled level of moral development is also referred to as the postconventional level.


25. The majority of managers operate at the preconventional level of personal moral development.


26. According to your text, approximately 20% of American adults ever reach the postconventional level of moral development.


27. The great majority of managers operate at level two, the conventional level.




28. Women's sense of integrity seems to be entwined with an ethic of care; hence, they may be ideally suited for the servant leadership needed in today's organizations.

Answer: True Level: 2 Page: 163-164 Type: F

29. The only aspect of an organization that influences ethics is culture.


30. Social responsibility is management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organization.


31. A stakeholder is any group within or outside the organization that has a stake in the organization's performance.


32. All stockholders of an organization are its stakeholders but not all stakeholders are its stockholders.


33. Special interest groups include trade associations, political action committees and consumerists.

Answer: True

34. Important stakeholders in corporations include the government and the community.

Answer: True

Level: 1

Level: 1

Page: 167

Page: 167

Type: F

Type: F

35. When Earth Day was first celebrated in 1980, environmentalists were considered by most business leaders to be an extremist fringe group.


36. Economic, legal, ethical, and discretionary responsibilities are the four areas of social responsibility can evaluate corporate social performance.


37. Ethical behavior occurs when decisions enable an individual or company to gain at the



3.

2. expense of society.


38. A formal statement of the organization's values regarding moral principles and governing its response to social values is called a code of ethics.


Multiple Choice Questions

1. ______ refers to the code of moral principles and values that govern behaviors with respect to what is right and wrong. a. b. c. d. e.

Social responsibility

Free domain

Ethics

Codified law

Discretionary responsibility

Answer: c Level: 1 Page: 156 Type: F

Ethics deals with values that are a part of corporate culture and shapes decisions concerning social responsibility with respect to the environment.

Answer: a

The decision to produce a new product by Osh Kosh is in the a. b. c. d. e. a. b. c. d. e. internal/external external/external internal/internal external/internal none of the above domain of codified law. domain of free choice. domain of ethics. domain of compensatory justice. domain of social responsibility.

Answer: b

Level: 2 Page: 156

Level: 2 Page: 157

Type: F

Type: A



8.

7.

5.

6.

4. The decision by the CSX to downsize and reduce its labor force is in the a. b. c. d. e. domain of codified law. domain of free choice. domain of ethics. social responsibility. none of the above.

Answer: b Level: 2 Page: 157 Type: A

In the domain of ethical behavior, obedience is to a. b. c. d. e. enforceable norms and standards. oneself. laws prescribed by the legal system. unenforceable norms and standards. the organization.

Answer: d Level: 2 Page: 157 Type: F a. b. c. d. e.

A new drug has not been approved by the FDA to sell in the U.S. because further testing is needed. The company has a chance to sell its product in another country immediately to start recovering the costs of R & D and production three years ahead of time. This example places the decision in which of the categories from the text?

The ethical domain

The domain of free choice

The legal domain

The obstructive category

The protective domain

Answer: a Level: 3 Page: 157 Type: A

A(n) ______ is the individual who must make an ethical choice in an organization a. b. c. d. e. the symbolic leader an obstructive manager the defensive individual the moral agent an authoritarian manager

Answer: d Level: 1 Page: 157 Type: F

Carol is a manager at Softest Tissue Corporation. She is faced with an interesting problem. One of her employees has been cheating the company out of expense money.

Carol must decide whether or not to fire this employee. In this role, Carol is acting as



9. a. b. c. d. e. a moral agent. an ethical theorist. a symbolic leader. an authoritarian leader. an obstructive manager.


The assumption that "If it's not illegal, it must be ethical," ignores which of the following? a. b. c. d. e.

Domain of codified law

Domain of ethics

Domain of free choice


Domain of symbolism

Answer: b Level: 2 Page: 157 Type: F

10. A situation that arises when all alternative choices or behaviors have been deemed undesirable because of the potentially negative ethical consequences, making it difficult to distinguish right from wrong, is considered a. b. c. d. e. a moral agent. a social responsibility. an ethical dilemma. an ethical standard. discretionary responsibility.

Answer: c Level: 2 Page: 157

11. A normative approach to ethical decision making a. b. c. d. e.

Type: F reduces ethical dilemmas to easy-to-understand formulas. uses various approaches to describe guiding values for decisions. states that everyone must use their employer's value system at work. dictates only one way to choose to resolve dilemmas. none of the above.


12. The approach is the ethical concept that moral behaviors produce the greatest good for the greatest number. a. defensive



b. c. d. e. justice utilitarian individualism moral-rights


13. Ritchie’s Robots decided to continue operations at one plant while shutting down another.

The decision was justified on the basis of what was best for the total corporation. This is an example of the a. b. c. d. e. utilitarian approach. individualism approach. moral-justice approach. justice approach. illegal approach.


14. Grant is a manager at Computer-Care Company. He is expected to consider the effort of each decision alternative on all parties and select the one that optimizes the satisfaction for the greatest number of people. This is an example of the a. b. c. d. e. utilitarian approach. individualism approach. moral-justice approach. justice approach. soft-line managerial approach.


15. Which ethical approach are companies citing to justify their policing of employee's personal habits on and off the job, such as alcohol and tobacco consumption? a. b. c. d. e.

Justice approach

Utilitarian approach

Individualism approach

Moral-justice approach



16. The ethic was the basis for the state of Oregon's decision to extend Medicaid to 400,000 previously ineligible recipients by refusing to pay for high-cost, high-risk procedures.



a. b. c. d. e. justice moral-rights obstructive individualism utilitarian

Answer: e Level: 2 Page: 159 Type: F

17. An example of ______ is when everyone is pursuing self-direction, the greater good is ultimately served because people learn to accommodate each other in their own long-term interest. a. b. c. d. e. utilitarian approach individualism approach moral-justice approach justice approach social responsibility

Answer: b Level: 2 Page: 159-160 Type: F

18. The golden rule "do unto others as they would do unto you" is a. b. c. an example of the utilitarian approach to ethical behavior. representative of the moral-justice approach to moral decision making. an example of the values that guide the individualism approach to ethical behavior. d. e. silly and outdated. an example of the justice approach to ethical behavior.


19. ______ is NOT a normative ethics approach? a. b. c. d. e.



Social responsibility approach

Moral-rights approach

All of the above are normative approaches as described in the text.

Answer: c Level: 2 Page: 159-160 Type: F

20. Human beings have fundamental rights and liberties that cannot be taken away by another individual's decision. This ethical decision making approach is known as the a. b. c. utilitarian approach. individualism approach. moral-rights approach.



d. e. dualism approach.

None of the above.


21. Which of these refers to the ethical concept that moral decisions are those that best maintain the rights of those people affected by them? a. b. c. d. e.


Justice approach



Discretionary responsibility approach


22. Which of the following is NOT one of the moral rights that could be considered during decision-making? a. b. c. d. e.

The right to free consent

The right to invade privacy

The right to free speech

The right of freedom of conscience

The right to life and safety


23. The concept that different treatment of people should not be based on arbitrary characteristics is referred to as a. b. c. d. e. procedural justice. compensatory justice. distributive justice. organizational justice. moral-justice.

Answer: c Level: 1 Page: 160

24. Individualism is most closely related to a. b. social responsibility. free choice. c. d. e. economic responsibility. codified law. togetherness.

Type: F




25. Which approach to ethical decision-making is consistent with due process, free consent, privacy, freedom of conscience and free speech? a. b. c.



Utilitarian approach d. e.

Justice approach

Dual-economic approach

Answer: a Level: 2 Page: 160 Type: F

26. Sexual harassment is unethical because it violates an important part of which approach to ethical behavior? a. b. c. d. e.

The utilitarian approach

The individualism approach

The justice approach

The moral-rights approach

The defensive approach


27. The ethical decision approach that requires persons to be guided by standards of equity, fairness and impartiality is the a. b. c. d. e. moral-rights approach. individualism approach. utilitarian approach. justice approach. discretionary responsibility


28. The moral rights approach that deals with individuals refraining from carrying out any order that violates their moral or religious norms is the a.

right of free consent. b.

right to privacy. c.

right of freedom of conscience. d.

right of free speech. e.

right of due process.




29. Sexual harassment is unethical because it violates the a.

right of free consent. b.

right to privacy. c.

right of freedom of conscience. d.

right of free speech. e.

right of due process.


30. All of these are of concern to managers, under the justice approach, EXCEPT a. b. c. d. e. compensatory justice. distributive justice. procedural justice. obstructive justice. all of the above.

Answer: d Level: 1 Page: 160-161 Type: F

31. Disk Replacement Services has just completed a procedure manual to handle employee grievances. One of the main criteria is to make it clear to employees that rules will be administered fairly and consistently. Disk Replacement operates on a. b. c. d. e. the procedural justice approach. the utilitarian approach. the individual approach. the defensive approach. the free-choice approach.


32. Which of these refers to procedural justice? a. The concept that different treatment of people should not be based on arbitrary characteristics b. c.

The concept that rules should be clearly stated and consistently and impartially enforced

The concept that individuals should be compensated for the cost of their injuries by the party responsible

The concept that people should be treated differently

None of the above d. e.


33. The concept that the party responsible should compensate individuals for the cost of their



injuries is referred to as a. b. c. d. e. distributive justice. injury justice. procedural justice. organizational justice. compensatory justice.


34. The thinking underlying the domain of is the closest to the justice approach. a. b. c. d. e. social responsibility free choice law discretionary responsibility ethics


35. Most of the laws guiding human resource management are based on the a. b. c. utilitarian approach. moral-rights approach. individualism approach. d. e. justice approach. collectivism approach.


36. Which of these is true about the ethical decisions made by individuals working in organizations? a. b. c. d. e.

They are based only on the individual's integrity.

They are influenced by a combination of personal values and company culture.

They utilize only that individual's personal needs and family influences.

They are made by evaluating the organization's best interest.

They are dictated by law.


37. In what stage of personal moral development is a person mostly concerned with external rewards and personal consequences of an action? a. b.

Preconventional

Conventional



c. d. e.

Principled

Discretionary

None of the above


38. Most people have learned to conform to expectations of good behavior expected by colleagues, family, friends, and society. They are in what stage of moral development? a. b. c. d. e.

Preconventional

Conventional

Discretionary

Principled

Traditional


39. The preconventional stage of moral development is best illustrated by which of these? a. b.

Everybody else is doing it, so it must be okay.

What would my boss think if I did this? c. d. e.

I know this is not right, and I will not do it, even if everyone else is.

What am I going to get from making this decision?

All of the above

Answer: d Level: 3 Page: 161 Type: A

40. The conventional stage of moral development is best described by which of the following statements? a. b. c. d. e.

I won't do that because the boss will be upset with me.

Everybody else is doing it, so it must be okay.

I know this is not right, and I will not do it, even if everyone else is.

What am I going to get from making this decision?

All of the above

Answer: b Level: 2 Page: 161 Type: A

41. The ______ leadership style matches with the preconventional level of personal moral development. a. b. autocratic team oriented c. d. servant leadership guiding/encouraging e. transforming



Answer: a

42. development.

Level: 3 Page: 161 Type: F

leadership style matches with the conventional level of personal moral a. b. c. d. e.

Autocratic

Coercive

Transforming

Team oriented

Servant


43. Which of the following employee behaviors matches with the preconventional level of personal moral development? a. b. c. d. e.

Work group collaboration

Task accomplishment

Empowered employees

Full participation

Transforming


44. Which of these employee behaviors matches with the conventional level of personal moral development? a. b.

Task accomplishment

Empowered employees c. d.


Full participation e. Act in own interest


45. Which of the following is NOT included in the model of personal moral development described in your text? a. b. c. d. e.

Preconventional level

Conventional level

Principled level

Postconventional level

All of the above are included in the model




46. The ______ stage is the stage of personal moral development in which an individual develops an internal set of standards and values. a. b. c. d. e. preconventional conventional principled discretionary social


47. People making decisions based on an internal set of beliefs that has more meaning to them than the expectations of others a. b. c. d. e. are in the preconventional level of moral development. are in the conventional level of moral development. are in the principled level of moral development. do not care what people think of them. none of the above.

Answer: c Level: 2 Page: 161-162 Type: F

48. Which leadership style matches with the postconventional level of personal moral development? a. b. c. d. e.

Team oriented

Autocratic

Guiding/encouraging

Coercive

Servant leadership


49. Which of these employee behaviors matches with the postconventional level of personal moral development? a. b.

Empowered employees, full participation

Task accomplishment c. d. e.

Act in own interest


Autocratic

Answer: a Level: 3 Page: 162

50. The great majority of managers operate at the

Type: F



a. b. c. d. e. preconventional level. principled level. conventional level. postconventional level. autocratic level.

Answer: c

51. Only about development.

Level: 2 Page: 162 Type: F

percent of American adults reach the level-three stage of moral a. b. c. d. e. two four eleven fifteen twenty


52. Regarding the levels of personal moral development, the majority of managers operate at the ______ level. a.

preconventional b.

autocratic c.

postconventional d.

conventional e.

transformative


53. American managers working in different cultures need __________ and __________ when faced with difficult situations. a.

sensitivity, training b.

diligence, cross-cultural management c.

training, strong goals d.

sensitivity, openness e.

openness, cross-cultural management


54. Ethical standards can be affirmed and communicated through __________ and

__________. a.

ceremonies, public awards



b.

management direction, public awards c.

management direction, employee empowerment d.

employee empowerment, ceremonies e.

ceremonies, management direction


55. ______ is a major force that influences ethics in an organization. a. b. c. d. e.

Culture

The reward system

Emphasis on legal and professional standards

Leadership and decision processes

The extent to which the company cares for its people


56. The obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization is referred to as a. b. organizational responsibility. social responsibility. c. d. e. discretionary responsibility. economic responsibility. none of the above.


57. Which of these is true about the policy a bank adopts toward its investing of depositor's money? a. b. c.

It is an expression of its philosophy of social responsibility.

It is important only to the community.

It has no ethical implications. d. e.

Answer: a

58. Which of these is true about a company with a sense of social responsibility? a. b.

Level: 2 Page: 166 Type: A

It would be most concerned with the cost of pollution control devices.

It would only care about their stockholders and employees. c. d.

It would represent its personal state of moral development.

All of the above

It would install safety control devices before the government required them.

It would wait until the government required smokestack scrubbers. e. It would follow the competitors.



Answer: c Level: 3 Page: 166 Type: A

59. Explicit rules, the reward system, the extent to which the company cares for its people, the selection system, and leadership and decision process all have a major impact on a.

world trade. b.

company’s finances. c.

conventional level. d.

ethics. e.

professionalism.


60. Any group within or outside the organization that has a stake in the organization's performance is called a. b. a supplier. an international customer. c. d. a stakeholder.

OPEC. e. a trade association.


61. Primary stakeholders of an organization include a. b. employees. customers. c. d. e. investors and shareholders. suppliers. all of the above.


62. All of the following are examples of special interest groups EXCEPT a. b. c. d. e. professional associations. trade associations. political action committees. courts. consumerists.


63. What type of a stakeholder would a nature conservation group be for a paper



manufacturing company? a. b. c. d. e.

Supplier

Competitor

Employee

Special interest group

None of the above


64. When organizations take the highest level of green, they take a(n) __________ approach. a.

legal b.

stakeholder c.

activist d.

market e.

extended


65. Economic development that generates wealth and meets the needs of their current generation while focusing on future generations is often labeled __________. a.

ethical management b.

activist strategy c.

sustainability d.

market strategy e.

future management


66. According to the book's model for judging corporate social performance, social responsibility is divided into what into four sections? a. b.

Ethical, legal, technical, and rational

Mandatory, technical, discretionary, and economic c. d.

Legal, mandatory, economic, and ethical

Discretionary, legal, economic, and ethical e. None of the above


67. Salomon Brothers' purely profit-maximizing view is an extreme version of a. b. ethical responsibility. discretionary responsibility.



c. d. e. economic responsibility. legal responsibility. moral responsibility.

Answer: c Level: 2 Page: 171 Type: A

68. Which of these is considered a decision that enables an individual or company to benefit at society's expense? a. b. c. d. e.

A legal behavior

An unethical behavior

An economic responsibility

A discretionary responsibility

A responsible behavior


69. __________ includes behavior that is not always written down and may actually not serve an organization’s bottom-line. a.

Legal responsibility b.

Economic responsibility c.

Ethical responsibility d.

Discretionary responsibility e.

None of the above

Answer: c Level: 2 Page 172 Type: F

70. McDonald's helping to feed victims of the 1992 Los Angeles riots is an example of a. b. voluntary organizational behavior. discretionary responsibility. c. d. e. proactive response towards social demands. all of the above. a and b only.


71. With respect to appropriate corporate behavior, what society deems ______ as important. a. b. ethical responsibility discretionary responsibility c. d. e. economic responsibility legal responsibility moral responsibility




72.

__________ responsibility is purely voluntary and is guided by a company’s desire to make social contributions not mandated by economics, law, or ethics. a.

Ethical b.

Economic c.

Legal d.

Discretionary e.

Stakeholder


73. ______ is the responsibility that goes beyond societal expectations to contribute to the community welfare. a. b. c. d. e.

Ethical responsibility


Economic responsibility

Legal responsibility

Technical responsibility


74. Speeches, company publications and personal actions of senior management regarding their commitment to ethical values for a company is an example of a. b. c. d. e. a code of ethics. leadership by example. an ethical structure. a principle-based statement of corporate values. leadership by speech.


75. According to your text, Fortune 1,000 companies found that __________ percent address issues of ethics and business conduct in formal corporate documents. a.

50 b.

75 c.

85 d.

90 e.

98




76. A code of__________ is a formal statement of the company’s values concerning ethics and social issues. a.

integrity b.

trust c.

citizenship d.

ethics e.

honesty


77. Statements that define fundamental values and reference organizational responsibilities, products and employees are often called __________. a.

principle-based b.

policy-based c.

ethically-based d.

codified e.

codes of organizational integrity

Answer: c Level: 1

78. An example of an ethical structure is a. b. chief ethics officer.

Page: 176 a formal statement of company values. c. d. an equal opportunity policy. whistle-blowing. e. corporate speech.

Type: F


79. When an official is given the responsibility of overseeing all aspects of ethics and legal compliance. S/he is referred to as a. b. c. d. e. a whistle-blower. a chief ethics officer. vice-president of human resource management. a yes-man. a political play.


80. Which of these is the disclosure by an employee of an illegal activity? a. Tattling



b. c. d. e.

Whistle-blowing

Organizational communication

The filing of a disclosure statement

Snooping


81. Many stakeholders are requiring organizations to report the triple bottom line, which refers to __________, __________, and __________. a.

economic, social, environmental b.

economic, environmental, ethical c.

environmental, social, ethical d.

social, economic, ethical e.

ethical, environmental, legitimate


82. The relationship between social responsibility and financial performance has been shown to be __________. a.

non-existant b.

positive c.

negative d.

not important e.

a reflection of top leadership


83. Leaders who are committed to good business and making a positive impact on society are refered to as __________. a.

social entrepreneurs b.

ethical leaders c.

ethical entrepreneurs d.

philanthropic leaders e.

philanthropic entrepreneurs


84. Organizations can measure social responsibility based on a model which includes a look at the companies behavior based on __________. a.

economics b.

legal behavior c.

ethical decision making



d.

discretionary actions e.

all of the above


Scenario Questions

2.

Scenario—Bryan Stamos

The pressure was on again. Bryan Stamos, the Vice President at McIntyre Hardware, Inc., was receiving requests from men and women inside the firm and outside the firm, asking him to review the company's promotion policies. Of the 52 middle and high level executives, only three were women. The pressure was to review the policies that had led to this perceived imbalance and, if appropriate, take the steps necessary for correction.

1. Using the justice approach for ethical decision-making, the logic of promoting qualified men and women would be supported by a. b. c. d. e. equal rights justice. distributive justice. procedural justice. compensatory justice. all of the above.

Answer: b Type: A

The decision to recruit, hire, train and promote both men and women equally is based on the ethical approach of a. b. c. d. e. utilitarian approach. individualism approach. moral rights approach. all of the above provide the basis. none of the above.

Answer: d Type: A

Short Answer Questions

1. is the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.

Answer: ethics Page: 156



7.

4.

2. When values and standards are written into the legal system, it is referred to as _______.

Answer: codified law Page: 157

3. An arises in a situation when each alternative choice or behavior is undesirable because of potentially harmful ethical consequences.

Answer: ethical dilemma Page: 157

The ________ is an individual responsible for making an ethical choice.

Answer: moral agent Page: 157

5. List the four criteria for ethical decision-making described in the book.

Answer: Utilitarianism, individualism, moral-rights, and justice.

Page: 159

6. The ethical concept that moral behaviors produce the greatest good for the greatest number is referred to as approach.

Answer: utilitarian

The approach contends that acts are moral when they promote the individual's best long-term interests.

Page: 159

8.

Answer: individualism Page: 159

The approach assets that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision.

9.

Answer: moral-rights Page: 160

List three of the six moral rights that should be considered during decision making.

Answer: Students can list any three of the following: the right of free consent, the right to privacy, the right of freedom of conscience, the right of free speech, the right to due process, and the right to life and safety.

Page: 160

10. The approach holds that moral decisions must be based on standards of equity, fairness, and impartiality.



Answer: justice Page: 160

11. ________ justice requires that different treatment of people not be based on arbitrary characteristics.

Answer: Distributive Page: 160

12. _______ justice requires that rules should be clearly stated and consistently and impartially enforced.

Answer: Procedural Page: 161

13. justice argues that individuals should be compensated for the cost of their injuries by the party responsible.

Answer: Compensatory Page: 161

14. At the _______ level of personal moral development, individuals are most concerned with external rewards and punishments.

Answer: preconventional Page: 161

15. People learn to conform to the expectations of good behavior that are set by peers and society at the _______ level.

Answer: conventional Page: 161

16. Individuals at the _______ level are guided by an internal set of values and standards and will even disobey rules or laws that violate these principles.

Page: 161 Answer: postconventional or principled

17. Most managers operate at the ________ level.

Answer: conventional or second Page: 162

18. ________ is not the only aspect of an organization that influences ethics, but it is a major force because it defines company values.

Answer: Culture Page: 165

19. Management's obligation to make choices that will contribute to the well being of both the organization and society is known as _______.

Answer: social responsibility Page: 166



20. A is any group within or outside the organization that has a stake in the organization's performance.

Answer: stakeholder Page: 166

21. List three examples of primary stakeholders.

Answer: Investors, shareholders, employees, customers, and suppliers are all examples of primary stakeholders.

Page: 167

22. Organizations that are _______ responsible consider the effects of their actions on all stakeholder groups and may invest in a number of philanthropic causes that benefit stakeholders.

Answer: socially Page: 168

23. _________ __ has become an integral part of organizational strategy for many organizations because of the collaboration of corporations and environmental activist groups.

Answer: Environmentalism Page: 169

24. ___________ is a phrase used to evaluate a company’s commitment to environmental responsibility.

Answer: Shades of green Page: 169

25. When a company does just what is necessary to satisfy legal requirements, it falls under the _______ approach.

Answer: legal Page: 169

26. The ______ approach represents a growing awareness of and sensitivity to environmental concerns.

Answer: market Page: 169

27. Companies that attempt to answer the environmental concerns of various stakeholder groups would use the _______ approach.

Answer: stakeholder Page: 170

28. The ______ approach is taken by organizations that actively search for ways to conserve the Earth’s resources.



Answer: activist Page: 170

29. List the four responsibilities of corporate social performance.

Answer: economic responsibility, legal responsibility, ethical responsibility, and discretionary responsibility

Page: 171

30. responsibility is purely voluntary and guided by a company's desire to make social contributions not mandated by economics, law, or ethics.

Answer: Discretionary

31. List the three pillars of an ethical organization.

Page: 173

Answer: ethical individuals, ethical leadership, and organizational structures and systems

Page: 175

32. A is a formal statement of the company's values concerning ethics and social issues; it communicates to employees what the company stands for.

Answer: code of ethics Page: 176

33. __________ generally outline the procedures to be used in specific ethical situations, such as marketing practice, conflicts of interest, and observance of laws.

Answer: Policy-based statements Page: 176

34. A group of executives assigned to oversee the organization's ethics by ruling on questionable issues and disciplining violators is referred to as a(n) .

Answer: ethics committee Page: 177

35. ________ programs help employees deal with ethical questions and translate the values stated in a code of ethics into everyday behavior.

Answer: Ethics training Page: 177

36. Employee disclosure of illegal organization activities is known as _______.

Answer: whistle-blowing Page: 177



Essay Questions

1. Define ethics and explain how the domain of ethics relates to law and free choice.

ANSWER:

Ethics is the code of moral principles and values that govern the behaviors of a person or a group with respect to what is right or wrong. In Codified Law, the values and standards are written into the legal system and enforceable in the courts. In free choice, the law has no say and the individual or group has complete freedom. The domain of ethics is found between Codified Law and free choice. While written laws do not bind ethics, still there are standards of conduct based upon shared principles and values.

Level: 2 Page: 156-157

2. List the four approaches that are used to describe values for guiding ethical decision making. Briefly describe each.

ANSWER:

Utilitarian approach is the ethical concept that moral behaviors produce the greatest good for the greatest number.

Individualism approach is the ethical concept that acts are moral when they promote the individual’s best long-term interests. This will eventually lead to the greatest good.

Moral-rights approach is the ethical concept that moral decisions are those that best maintain the rights of those people affected by them.

Justice approach is the ethical concept that moral decisions must be based on standards of equity, fairness, and impartiality.


Briefly explain the justice approach to ethics and then explain the three types of justice. 3.

ANSWER:

The justice approach is the ethical concept that moral decisions must be based on standards of equity, fairness, and impartiality. Distributive justice requires that different treatment of people be based only on substantive differences and not be based on arbitrary characteristics. Procedural justice requires that all rules be administered fairly. Rules should be clearly stated and consistently enforced. Compensatory justice requires that individuals should be compensated for the cost of their injuries by the party responsible and that individuals not be held responsible for matters over which they have no control.




4. List and define the stages of moral development.

5.

ANSWER:

According to the model in the book, there are three stages of moral development. During the preconventional stage (level 1), individuals are mostly concerned with external rewards and punishments. They obey authority in order to avoid punishment. Individuals conforming to the expectations of others characterize the second level, the conventional stage. Fulfilling social and interpersonal obligations is important. At the postconventional/principled stage (level 3), an individual's behavior is directed by an internal set of values and beliefs. These values are more important than the expectations of others.


What is social responsibility? Why is it considered a difficult concept to grasp?

ANSWER:

Social responsibility is management’s obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organization.

It can be a difficult concept to grasp because different people have different beliefs as to what will improve society’s well being and it covers a range of ambiguous issues with respect to right or wrong.


6. Explain the concept of a stakeholder and list five common stakeholders.

ANSWER:

A stakeholder is any individual or group of people, inside the organization or outside the organization, that has a stake or direct interest in that organization's performance.

Stakeholders inside the organization include the employees, the managers, and the stockholders. Stakeholders outside the organization include customers, suppliers, regulatory agencies, and creditors.


7. Describe the four shades of green that evaluates commitment to environmental responsibility.

ANSWER:



9.

The first shade of shades of green is the legal approach. The legal approach is defined as an organization that does just what is necessary to satisfy legal requirements and managers shows little concern for environmental issues. The second shade is the market approach. Here there is a growing awareness of and sensitivity to environmental concerns that will satisfy customers. The third shade is the stakeholder approach. The stakeholder approach is achieved when an organization attempts to solve environmental problems of various stakeholder groups. The highest shade of green is the activist approach. This approach is taken by actively searching for ways to conserve the Earth’s resources.


8. List and define the criteria of corporate social responsibility.

ANSWER:

There are four criteria of corporate social responsibility. The first criterion of social responsibility is economic responsibility. The organization's basic responsibilities are to produce the goods and provide the services that society wants, while at the same time maximizing profits and wealth for owners and stockholders. The second criterion is legal responsibilities. Through its laws, each society has defined what it considers to be appropriate corporate behavior. According to this criterion, businesses are expected to fulfill their economic goals within the law. Ethical responsibilities make up the third criterion. These include behaviors not necessarily codified into law, nor do they necessarily serve the organization's direct economic interests. Discretionary responsibilities, the fourth criterion, are entirely voluntary and are guided by the organization's desire to make a social contribution not mandated by economics, law, and/or ethics.


Describe each of the three pillars of an ethical organization.

ANSWER:

The three pillars are ethical individuals, ethical leadership, and organizational structures and systems. Ethical individuals are managers who possess honesty and integrity. People inside and outside the organization trust these managers. Ethical leadership is shown through ethical actions. Leaders need to make a commitment to ethical values and help others throughout the organization embody and reflect those values. Organizational structures and systems are the set of tools that managers use to shape values and promote ethical behavior throughout the organization. Examples of these are codes of ethics, ethical structures, and whistle-blowers.




Chapter 5

Chapter 5

Ethics and

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Chapter 5

Chapter 5

Ethics and

Social Responsibility

True/False Questions

Multiple Choice Questions

Scenario Questions

Scenario—Bryan Stamos

Short Answer Questions

Essay Questions

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