WORKSHEET 2
Chapter 2:
Practicing Ethical Behavior and
Social Responsibility
READ THE FOLLOWING VERY CAREFULLY
Learning Objectives
1. Discuss what it means to practice good business ethics and highlight three
factors that influence ethical behavior
2. Identify three steps that businesses are taking to encourage ethical behavior and
explain the advantages and disadvantages of whistle-blowing
3. List four questions you might ask yourself when trying to make an ethical
decision
4. Explain the difference between an ethical dilemma and an ethical lapse
5. Discuss the relationship between corporate social responsibility and profits
6. Discuss how businesses can become more socially responsible
7. Outline activities the government and businesses are undertaking to improve the
environment
Summary of Learning Objectives
1. Discuss what it means to practice good business ethics and highlight three
factors that influence ethical behavior.
Businesspeople that practice good business ethics obey all laws and regulations,
compete fairly and honestly, communicate truthfully, and do not cause harm to
others by putting themselves ahead of others, or by placing themselves in a
conflict of interest situation. Of the many factors that influence your ethical
behavior, the three most common are: cultural differences, knowledge of the
facts and consequences involving a decision or action; and the ethical practices
and commitment to ethical behavior at your place of work.
2. Identify three steps that businesses are taking to encourage ethical behavior
and explain the advantages and disadvantages of whistle blowing.
Businesses are adopting codes of ethics, appointing ethics officers, and
establishing ethics hot lines. In spite of these efforts, if illegal, unethical, or
harmful practices persist, an employee way need to blow the whistle or disclose
such problems to outsiders. Doing so may force the company to stop the
problematic practices. But bringing these issues into the public eye has
consequences. It can hurt the company’s reputation, take manager’s time,
damage employee morale, and impact the informant’s job with the company.
3. List four questions you might ask yourself when trying to make an ethical
decision.
When making ethical decisions ask yourself: (1) Is the decision legal? (Does it
break any law?), (2) Is it balanced? (Is it fair to all concerned?), (3) Can you live
with it? (Does it make you feel good about yourself?), (4) Is it feasible? (Will it
35
work in the real world?).
4. Explain the difference between an ethical dilemma and an ethical lapse.
An ethical dilemma is an issue with two conflicting but arguably valid sides,
whereas an ethical lapse occurs when an individual makes a decision that is
illegal, immoral, or unethical.
5. Discuss the relationship between corporate social responsibility and profits.
For years, many companies believed that the only role of a company was to
make money, and that social problems were the concern of the state. It was
believed that socially responsible companies could not be profitable. But
supporters of social responsibility now argue that a company has both an
obligation to society beyond the pursuit of profits and that companies can be
both socially responsible and profitable. In fact, being a socially responsible
company can help improve profits and being profitable can help companies stick
to their social mission.
6. Discuss how businesses can become more socially responsible.
Companies can conduct social audits to assess whether their performance is
socially responsible; they can engage in cause-related marketing by using a
portion of product sales to help support worthy causes; and they can become
philanthropic by donating their money, time, goods, or services to charitable,
humanitarian, or educational institutions. Companies can also protect and
improve the environment by taking a variety of actions to reduce pollution.
They can become good citizens by considering consumers’ needs and respecting
their four basic rights: the right to safe products, the right to be informed—
which includes the right to know a product’s contents, use, price, and dangers;
the right to choose which products to buy; and the right to be heard, such as the
right to voice a complaint or concern. They can look out for a company’s
investors and protect the value of their interests. And they can foster good
employee relationships by treating employees fairly and equally, and by
providing a safe working environment.
7. Outline activities the government and businesses are undertaking to
improve the environment.
In 1970 the government set up the Environmental Protection Agency to regulate
the disposal of hazardous wastes and to clean up polluted areas. Many
individual states have also passed their own tough clean air laws. Companies are
taking these steps to improve the environment: (1) Considering them a part of
everyday business and operating decisions, (2) making environmental staff
members full-fledged partners in improving competitiveness, (3) measuring
environmental performance, (4) tying compensation to environmental
performance, (5) determining environmental costs before they occur, (6)
considering the environmental impact of the product-development process, (7)
helping suppliers improve their environmental performance, and (8) conducting
training and awareness programs.
36
PLEASE DO THE FOLLOWING TEST AND
ANSWER THE ESSAY QUESTIONS (50 POINTS )
MULTIPLE CHOICE QUESTIONS
1-Ethics is defined as ______.
a) Standards of moral behavior
b) Principles that are accepted by society
c) Rights vs. wrongs
d) All of the above
2-In order for a business to be considered ethical it must ______.
a) Pursue profits & be a good citizen
b) Not cause harm to others & pursue profits
c) Communicate truthfully & not cause harm to others
d) Obey all laws and regulations & donate time and money
3-Using confidential non-public information for personal gain is known as
______.
a) Insider trading
b) Creative accounting
c) Code of ethics violation
d) Conflict of interest
4- Which of the following factor(s) influence ethical behavior?
a) Knowledge
b) Cultural differences
c) Organizational behavior
d) All of the above
.
5-Which of the following approaches to ethical decision-making will yield an
unethical decision?
a) Apply existing laws to the situation
b) Apply the Golden Rule to the situation
c) Strive to treat people impartially and consistently
d) Remain within the letter of the law while intending to manipulate the situation
or mislead people
6- Socially responsible companies face more complex challenges than companies
motivated solely by profit because socially responsible companies _____.
a) Are more highly regulated than just-for-profit companies
b) Engage more frequently with consumers
37
c) Must maximize philanthropy and minimize profit in order to keep their
designation as socially responsible
d) Must prioritize and reconcile conflicting interests of all their stakeholders
7- Some companies emphasize their social responsibility by donating a portion of
product or service sales to worthy causes. This practice is called _____ , and it is
a specific type of _____.
a) Affirmative action; civil rights
b) Cause-related marketing; philanthropy
c) Cause-related marketing; social audit
d) Philanthropy; consumerism
8- More and more companies realize that preventing pollution costs less than
cleaning it up after the fact. Which of the following is NOT an effective method
for supporting the link between environmental performance and a company’s
financial well being?
a) Considering environmental problems a part of everyday business and
operating decisions
b) Determining long-term environmental costs before such costs occur
c) Enhancing profit in order to donate large sums to environmental organizations
d) Tying compensation to environmental performance
9- Consumers’ right to be informed means that businesses must disclose all but which
of the following?
a) Competitors’ costs of goods and services
b) Costs of goods and services
c) Details of purchase contracts
d) Product ingredients
10-Businesses benefit from consumers’ right to be heard because _____.
a) Consumer feedback provides useful information for making new products and
product improvements
b) Consumers are less likely to boycott a product if they can call a customer
service representative and complain
c) Consumers are less likely to boycott a service if they can call a customer
service representative and complain
d) Consumers trust labels
11- Unethical practices of people who sit on the board of directors include all of the
following EXCEPT:
a) Sitting on the boards of too many companies
b) Being under-invested
c) Buying stock of a company where they sit on the board
d) Sitting on boards of companies with which their own firms do business
38
12- People who are relegated to low-paying, menial job positions because of race,
gender, or disability are victims of _____.
a) Affirmative action
b) Business’s right to maximize profit
c) Economic discrimination
d) Free-market economies
13- The text discusses environmental protection as an ethical obligation businesses
owe to society. The assumption here is that environmental protection is
important mainly because _____.
a) It boosts sales by attracting a generally wealthy market segment
b) It costs companies more to clean up pollution than to prevent it
c) It is necessary for humans’ long-term economic, and therefore social,
sustainability
d) Nonhuman organisms deserve the same ethical consideration as do humans
TRUE/FALSE QUESTIONS
14- Employees, investors, customers, suppliers, and society at large are all
examples of shareholders.
15- Johnson & Johnson provides warning labels that strongly caution buyers against
taking Tylenol with alcohol, but the labels do not mention that death from liver
failure is possible if users exceed recommended doses. In this case, the printed
warnings are J & J’s solution to an ethical dilemma, rather than an example of
an ethical lapse.
16- Organizations that devote significant resources to developing ethics codes,
affirmative action plans, and diversity initiatives are called philanthropic.
17- Society pays twice if pollution is combated using after-the-fact methods: once,
in the primary damage done to the natural environment, and again when
companies pass on to consumers the cost of cleaning up the sites.
18-When broadcast television networks warn viewers that the following program
contains material that some may find offensive, the networks are demonstrating
consumers’ right to choose.
19- If a company wishes to send the message that they are looking out for their
investors, the company should establish an audit committee.
39
FILL IN THE BLANK QUESTIONS
20-A(n) _____ is an issue which presents at least two conflicting but arguably valid
sides and brings into conflict the rights of two or more groups of people.
21-When businesspeople cheat on expense accounts it is a clear example of an ethical
_____.
22- Companies that recycle, reduce packaging, and create products that are
environmentally friendly are considered advocates of the _____ movement.
23-Companies that print toll-free telephone numbers and website addresses on
product labels are actively supporting consumers’ ______ by facilitating customer
feedback.
24-_____ is an employee’s disclosure of illegal, unethical, wasteful, or harmful
practices by the company.
25- An unethical practice commonly referred to as ______ occurs when someone
sorts through the company trash looking for sensitive information.
ESSAY QUESTIONS
26-(5 POİNTS) Describe the practices a company would avoid if it wanted to
compete fairly and honestly.
27-(5 POİNTS) Identify three steps that businesses take to encourage ethical
behavior.
28-(5 POINTS) Identify an ethical dilemma in which you were involved.
Analyze if your decision was ethical. Determine which philosophical
approach you used, if any.
29-(5 POİNTS)Explain the difference between an ethical dilemma and an ethical
lapse. Give one example of each.
40
30-(5 POİNTS) Describe three types of activities that socially responsible companies
might engage in.
41
60
62