Deck 3: Ethics and Social Responsibility in Strategic Management

Question 1

Cultural norms and values can guide ethical behavior.

Answer 1

True

Question 2

The theory of vital responsibility proposes that a private corporation has responsibilities to society that extend beyond making a profit.

Answer 2

False

Question 3

Discretionary responsibilities are voluntary obligations a corporation assumes.

Answer 3

True

Question 4

Primary stakeholders have a direct connection with the corporation and have sufficient bargaining to directly affect corporate activities.

Question 5

According to Carroll, legal responsibilities are defined by governments in laws that management is expected to obey.

Question 6

Relationship-based countries tend to be more transparent and have a lower degree of corruption than do rule-based countries.

Question 7

Friedman referred to the social responsibility of business as a "fundamentally subversive doctrine."

Question 8

A study concerning social responsibility indicates that socially-responsible firms are more likely to be welcomed into another country.

Question 9

The difference between ethical and discretionary responsibilities is that few people expect an organization to fulfill ethical responsibilities.

Question 10

Corporation stakeholders are all constituencies that are affected by the achievement of the firm's objectives.

Question 11

"Let the buyer beware" is a traditional saying in free market capitalism.

Question 12

Archie Carroll contends that the primary goal of business is profit maximization.

Question 13

There is no truth to the comment that "business ethics" is an oxymoron.

Question 14

Cultural relativism is reflected in the statement, "When in Rome, do as the Romans do."

Question 15

Archie Carroll proposes that managers in companies have only a discretionary responsibility.

Question 16

The broader concept of sustainability is closely aligned with Friedman's view of social responsibility.

Question 17

The first step in stakeholder analysis is identifying those who have only an indirect stake in the corporation.

Question 18

In any one strategic decision, the interests of one stakeholder group can conflict with another.

Question 19

Being known as a socially responsible firm may provide a company with social capital, the goodwill of key stakeholders, that can be used for competitive advantage.

Question 20

A company may have some stakeholders of which it is only marginally aware.

Question 21

The term "social responsibility" , according to Carroll, can be viewed as a combination of an

A)organization's ethical and discretionary responsibilities.
B)organization's legal and ethical responsibilities.
C)organization's economic and ethical responsibilities.
D)organization's financial and economic responsibilities.
E)organization's legal and discretionary responsibilities.

Question 22

Kohlberg's preconventional level is characterized by a person's adherence to an internal moral code.

Question 23

The Golden Rule is the essence of one of Immanuel Kant's approaches to resolving ethical dilemmas.

Question 24

Which one of the following is NOT one of the arguments against social responsibility as used by economist Milton Friedman?

A)Spending money for social responsibility is spending the stockholder's money for a general social interest.
B)Businesses can actually do very little in terms of social responsibility.
C)Spending money on social responsibility is acting from motives other than economic and may, in the long-run, cause harm to the very society the firm is trying to help.
D)There is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.
E)Through taking on the burden of social costs, the organization becomes less efficient, causing price increases or postponement of growth.

Question 25

The justice approach to ethics proposes that actions and plans should be judged by their consequences.

Question 26

According to Carroll, the responsibility that management of a business organization has to produce goods and services of value to society so that the firm may repay its creditors and stockholders is called

A)legal responsibilities.
B)ethical responsibilities.
C)financial responsibilities.
D)economic responsibilities.
E)discretionary responsibilities.

Question 27

According to Carroll, the responsibility that management of a business organization assumes which are purely voluntary obligations are

A)legal responsibilities.
B)ethical responsibilities.
C)financial responsibilities.
D)economic responsibilities.
E)discretionary responsibilities.

Question 28

A problem with the utilitarian approach to ethics is the difficulty in recognizing all the benefits and the costs of any particular decision.

Question 29

Law refers to formal codes that permit or forbid certain behaviors and may or may not enforce ethics or morality.

Question 30

According to Carroll, the responsibilities defined by government in laws for management to obey are

A)legal responsibilities.
B)ethical responsibilities.
C)financial responsibilities.
D)economic responsibilities.
E)discretionary responsibilities.

Question 31

Moral relativism could enable a person to justify almost any sort of decision or action, so long as it is not declared illegal.

Question 32

According to Kohlberg's levels of moral development, the conventional level is characterized by considerations of society's laws and norms.

Question 33

Who said that the social responsibility of business is a "fundamentally subversive doctrine" and that the one social responsibility of business is "to use its resources and engage in activities designed to increase its profits so long as it stays with the rules of the game..."?

A)Adam Smith
B)Edward Freeman
C)Archie Carroll
D)William C. Norris
E)Milton Friedman

Question 34

The concept that proposes private corporations have responsibilities to society that extend beyond making a profit is known as

A)flexible responsibility.
B)social responsibility.
C)social flexibility.
D)managerial responsibility.
E)Profit maximization

Question 35

Society generally expects firms to work with employees and the company to plan for layoffs.This is an example of which of Carroll's responsibilities?

A)economic
B)legal
C)justice
D)ethical
E)discretionary

Question 36

Research indicates that when faced with a question of ethics, managers tend to ignore codes of ethics and try to solve their dilemma on their own.

Question 37

Economist Milton Friedman has argued that a business's only responsibility is to

A)maximize profits and stay within the rules of the game.
B)sustain its market share.
C)promote the welfare of society.
D)satisfy its employees.
E)satisfy its customers.

Question 38

Carroll's four responsibilities listed in order of priority are

A)legal, economic, ethical, and discretionary.
B)legal, ethical, discretionary, and economic.
C)economic, legal, ethical, and discretionary.
D)economic, ethical, discretionary, and legal.
E)ethical, economic, legal, and discretionary.

Question 39

Kohlberg places 80 percent of U.S.adults in the principled level of development.

Question 40

A code of ethics denotes how employees should behave on the job.

Question 41

Which of the following statements is true concerning secondary stakeholders?

A)Secondary stakeholders are those who have only an indirect stake in the corporation, but who are affected by corporate activities.
B)Secondary stakeholders usually include non-governmental organizations (like Greenpeace)and trade associations.
C)Because the corporation's relationship with each of these stakeholders is usually not covered by any written or verbal agreement, there is room for misunderstanding.
D)Aside from competitors, secondary stakeholders are not usually monitored by the corporation in any systematic fashion.
E)all of the above

Question 42

The Dow Jones Sustainability Index includes

A)environmental, economic, and quality sustainability.
B)industry, environmental, and economic sustainability.
C)environmental, economic, and social sustainability.
D)ethical, economic, and social sustainability.
E)environmental, ethical, and quality sustainability.

Question 43

All of the following are considered secondary stakeholders EXCEPT

A)governments.
B)competitors.
C)suppliers.
D)trade associations.
E)activists.

Question 44

Vice President Sherron Watkins used the ________ analogy to explain why executives at Enron engaged in unethical and illegal actions.

A)borrowing earnings
B)Napoleon complex
C)Moral relativism
D)Frogs in boiling water
E)all of the above

Question 45

In order for a business to be sustainable, it must satisfy which of Carroll's responsibilities?

A)economic
B)legal
C)ethical
D)discretionary
E)all of the above

Question 46

As opposed to rule-based countries, relationship-based countries tend to

A)be more transparent and have a higher degree of corruption.
B)be more transparent and have a lower degree of corruption.
C)be less transparent and have a lower degree of corruption.
D)be less transparent and have a higher degree of corruption.
E)have the same transparency and same degree of corruption.

Question 47

Which of the following companies was cited by the text as an example of a company which does its best to consider its responsibilities to its primary and secondary stakeholders when making strategic decisions?

A)McDonald's
B)Johnson & Johnson
C)Maytag
D)Microsoft
E)Enron

Question 48

Providing day-care centers to employees is an example of which of Carroll's responsibilities?

A)economic
B)legal
C)justice
D)ethical
E)discretionary

Question 49

Which of the following is one of the most common reasons given by surveyed executives for bending the rules to attain their objectives?

A)organizational performance required it
B)rules were ambiguous or out of date
C)everyone does it
D)pressure from others
E)all of the above

Question 50

According to a recent Harris Poll what percentage of U.S.adults believe that U.S.corporations owe something to their workers and the communities in which they operate and that they should sometimes sacrifice some profit for making things better for their workers and communities?

A)95%
B)5%
C)50%
D)75 %
E)25%

Question 51

As societal values evolve, it is likely that the _________ responsibilities of today may become the _________ responsibilities to tomorrow.

A)economic; ethical.
B)legal; ethical.
C)discretionary; ethical.
D)discretionary; economic.
E)legal; discretionary.

Question 52

Of the six values measured by the Allpot-Vernon-Lindzey Study of Values test, both U.S.and British executives consistently score highest on ________ values and lowest on ________ values.

A)religious and theoretical; economic and social
B)religious and economic; political and social
C)economic and political; social and religious
D)social and religious; aesthetic and political
E)religious; economic

Question 53

Friedman's position on social responsibility

A)proposes that a lack of social responsibility results in increased government regulations.
B)appears to be losing traction with business executives.
C)suggests that a lack of social responsibility reduces a firm's efficiency.
D)explains why firms are using their socially responsibility actions for competitive advantage.
E)mirrors Carroll's position.

Question 54

The Ethics Resource Center found that the percentage of employees who had engaged in one or more unethical and/or illegal actions during the past year was

A)less than 1%.
B)21%.
C)48%.
D)76%.
E)over 98%.

Question 55

The first step in stakeholder analysis is to

A)identify primary stakeholders.
B)monitor what all the stakeholders want.
C)identify the stakeholders with an indirect stake in the corporation.
D)estimate the effect on each stakeholder group from any particular strategic decision.
E)identify the influence of each stakeholder group.

Question 56

Which of the following is NOT one of the examples provided as an organizational benefit received from being socially responsible?

A)They can attract outstanding employees who prefer working for a responsible firm.
B)They are more likely to be welcomed into a foreign country.
C)They are more likely to attract capital infusions from investors who view reputable companies as desirable long-term investment.
D)They are guaranteed to maximize resource productivity and reduce the average payback period of investment.
E)Their environmental concerns may enable them to charge premium prices and gain brand loyalty.

Question 57

Being socially responsibility

A)provides a company with a more positive overall reputation.
B)has opened doors in local communities.
C)has enhanced the company's reputation with consumers.
D)has resulted in cost savings to firms.
E)all of the above.

Question 58

Rule-based governance

A)is generally found in developing nations.
B)relies on publicly verifiable information.
C)relies on implicit agreement.
D)is inherently nontransparent.
E)requires an investment in time and money to build relationships.

Question 59

According to a survey by the Ethics Resource Center, which was not cited as one of the most common questionable behaviors that employees engage in?

A)cutting corners on quality
B)covering up incidents
C)abusing or lying about sick days
D)surfing the web on company time
E)lying to or deceiving customers

Question 60

All of the following are considered primary stakeholders EXCEPT

A)customers.
B)governments.
C)employees.
D)shareholders.
E)creditors.

Question 61

Which company cancelled contracts with 23 factories that did not meet its child-labor standards for suppliers?

A)Levi Strauss
B)Gap International
C)Motorola
D)Enron
E)Johnson & Johnson

Question 62

The approach to ethical behavior which proposes that actions and plans should be judged by their consequences, thus producing the greatest benefit to society with the least harm or the lowest cost is called

A)individual rights approach.
B)mercantilism approach.
C)utilitarian approach.
D)justice approach.
E)moral imperialism approach.

Question 63

According to Kohlberg, the third level of moral development, characterized by a person's adherence to an internal moral code, is called

A)principled.
B)conventional.
C)essential.
D)preconventional.
E)fundamental.

Question 64

Law is defined as

A)formal codes that permit or forbid certain behaviors.
B)a general rule of conduct of personal behavior, based on religious or philosophical grounds.
C)consensually accepted standards of behavior for an occupation, trade, or profession.
D)imposing one's morality upon another.
E)voluntary obligations assumed by an individual or organization.

Question 65

Some people claim that morality is relative to some personal, social, or cultural standard and that there is no method for deciding whether one decision is better than another.This is called

A)ethical relativity.
B)moral philosophy.
C)comparative ethics.
D)cultural imperialism.
E)moral relativism.

Question 66

A code of ethics was important for two reasons.The first reason is that it clarifies company expectations of employee conduct in various situations, and the second reason is

A)to reduce the burden on the judicial system.
B)that it makes clear that the company expects its people to recognize the ethical dimensions in decision and actions.
C)to promote a high level of societal norms.
D)that it encourages individuals to strive for good citizenship and corporations to contribute positively to society.
E)that it minimizes the possibility of mandatory regulations.

Question 67

Employees who report illegal or unethical behavior on the part of others are known as

A)stakeholders.
B)whistleblowers.
C)moral relativists.
D)retaliators.
E)outside directors.

Question 68

Blindly following orders reflects which type of moral relativism?

A)naive relativism
B)role relativism
C)principled relativism
D)cultural relativism
E)social group relativism

Question 69

Managers who want to improve ethical behavior should take actions such as

A)communicate the code of ethics in training programs.
B)emphasize the code of ethics in performance appraisal systems.
C)follow a code of ethical behavior themselves.
D)communicate the code of ethics in policies and procedures.
E)all of the above

Question 70

Morality is defined as

A)formal codes that permit or forbid certain behaviors.
B)a general rule of conduct of personal behavior, based on religious or philosophical grounds.
C)consensually accepted standards of behavior for an occupation, trade, or profession.
D)imposing one's morality upon another.
E)voluntary obligations assumed by an individual or organization.

Question 71

According to Kohlberg, the first level of moral development, characterized by concern for self, is called

A)principled.
B)conventional.
C)essential.
D)preconventional.
E)fundamental.

Question 72

Specific changes reported by CEOs in a survey by the Business Roundtable Institute for Corporate Ethics included all of the following EXCEPT

A)enhanced internal reporting and communications.
B)ethics hotlines.
C)improved compliance procedures.
D)decreased number of whistleblowers.
E)greater oversight by the board of directors.

Question 73

All of the following reasons provide rationale for unethical behavior EXCEPT

A)the impact of cultural norms and values.
B)differences in values between business people and key stakeholders.
C)ambiguous rules.
D)agreement among stakeholders and business people about what is ethical.
E)difficulty of one group to understand another's actions.

Question 74

According to Kohlberg, in what stage of moral development do the majority of people in the U.S.occupy?

A)principled stage
B)conventional stage
C)essential stage
D)preconventional stage
E)fundamental stage

Question 75

The approach to ethical behavior which proposes that human beings have certain fundamental rights that should be respected in all decisions, thus avoiding interfering with the rights of others is called

A)individual rights approach.
B)mercantilism approach.
C)utilitarian approach.
D)justice approach.
E)moral imperialism approach.

Question 76

All of the following are one of the four types of moral relativism EXCEPT

A)naive relativism.
B)principled relativism.
C)role relativism.
D)social group relativism.
E)cultural relativism.

Question 77

"When in Rome, do as the Romans do" reflects which type of moral relativism?

A)naive relativism
B)role relativism
C)principled relativism
D)cultural relativism
E)social group relativism

Question 78

Role relativism is based on the belief that

A)morality is relative to a particular culture.
B)all moral decisions are deeply personal and each person should be allowed to interpret situations and act on his own moral values
C)social roles carry with them certain obligations.
D)morality is simply a matter of following the norms of an individual's peer group.
E)a decision is legitimate if it is common practice.

Question 79

Ethics is defined as

A)formal codes that permit or forbid certain behaviors.
B)a general rule of conduct of personal behavior, based on religious or philosophical grounds.
C)consensually accepted standards of behavior for an occupation, trade, or profession.
D)imposing one's morality upon another.
E)voluntary obligations assumed by an individual or organization.

Question 80

According to Kohlberg, the second level of moral development, characterized by considerations of society's laws and norms, is called

A)principled.
B)conventional.
C)essential.
D)preconventional.
E)fundamental.