Deck 4: Business Ethics and Corporate Social Responsibility

Question 1

Companies that engage in cynical CSR believe that the only social responsibility of business is to pay taxes and obey the law.

Answer 1

False
Explanation: In the cynical approach to CSR, a company accused of irresponsible behavior promotes itself as being socially responsible without making substantial improvements in its business practices.

Question 2

NGOs are nonprofit groups that provide charitable services or promote causes such as workers' rights and environmental protection.

Answer 2

True
Explanation: NGOs are nonprofit groups that provide charitable services or promote causes such as workers' rights and environmental protection.

Question 3

A situation in which an individual makes a decision that is morally wrong or illegal is an ethical dilemma.

Answer 3

False
Explanation: Ethical lapse refers to a situation in which an individual or a group makes a decision that is morally wrong, illegal, or unethical.

Question 4

Business and society are mutually dependent; therefore,choices that weaken one or the other will ultimately weaken both.

Question 5

Philanthropy involves social contributions that are directly aligned with a company's business strategy.

Question 6

Conflicts of interest involve business decisions that might be influenced by the potential for personal gain.

Question 7

When someone uses the justice approach as a way to resolve an ethical dilemma,he or she seeks the greatest good for the most people.

Question 8

"Environmental" causes are often as much about human health and safety as they are about forests,rivers,and wildlife.

Question 9

Cap and trade programs try to balance free-market economics with government intervention.

Question 10

According to what might be termed the minimalist view,businesses should be involved in making social policy and spending the public's money.

Question 11

Widespread concern for the environment dates to the 1960s when ecology entered mainstream discussion.

Question 12

Culture is not a determinant of ethical behavior.

Question 13

A company accused of irresponsible behavior that promotes itself as being socially responsible without improving its business practices is said to have a cynical CSR.

Question 14

The degree to which information flows freely within an organization is termed as insider trading.

Question 15

In proactive CSR,company leaders believe they have responsibilities beyond making a profit,and they back up their beliefs and proclamations with actions taken on their own initiative.

Question 16

All businesses have the capacity to cause harm to employees,customers,other companies,their communities,and investors.

Question 17

Corporate social responsibility (CSR)embodies the concept that a business has obligations to society beyond the pursuit of profit.

Question 18

Ethics are principles and standards of moral behavior that are accepted by society as "right" or "wrong."

Question 19

Whistle-blowing is illegal.

Question 20

Making a morally wrong decision is not the same thing as an ethical lapse.

Question 21

Which of the following is an example of insider trading?

A) The marketing manager of a company is accused of using company resources for personal use.
B) An executive receives a compensation comprising of cash, paid expenses, and shares of the company.
C) An employee hacks the firm's computer networks, systems, and databases to obtain customer records so that he can sell the information to rival firms.
D) The chief executive officer of an IT company purchases shares in the company as he learns that the company is being taken over by a leading, global IT firm.
E) A firm disseminates fraudulent information in chat rooms, forums, Internet boards, and via email, with the purpose of causing a dramatic price increase in thinly traded stocks of the company.

Question 22

The ________ to resolving ethical dilemmas involves choosing the option that delivers the most good for the most people (or protects the most people from a negative outcome).

A) justice approach
B) utilitarian approach
C) individual rights approach
D) individual responsibilities approach
E) common good approach

Question 23

One of the fundamental consumer rights that form the basis of much of the consumer-related legislation in the United States is the right to know the lowest available price of a good in the local market.

Question 24

President John F.Kennedy announced a "bill of rights" for consumers,laying the foundation for a wave of consumer-oriented legislation.

Question 25

________ are the principles and standards of moral behavior that are accepted by society as right versus wrong.

A) Mandates
B) Ethics
C) Business mindset
D) Etiquette
E) Philanthropy

Question 26

A company insider's disclosure that exposes illegal or unethical behavior by others within the organization is ________.

A) illegal
B) insider trading
C) unethical
D) philanthropic
E) whistle-blowing

Question 27

A situation in which you must choose between two conflicting but arguably valid alternatives would be known as a(n)________.

A) insider trading
B) ethical lapse
C) corporate opportunity
D) ethical dilemma
E) conflict of interest

Question 28

Which of the following statements is TRUE regarding ethical decision-making?

A) When an employee is unable to make a decision because more than one side of an issue can be supported with valid arguments, it is called an ethical lapse.
B) The disclosure of information by a company insider that exposes unethical behavior by others within the organization is called an ethical lapse.
C) Stakeholders' needs often conflict, requiring managers to make tough decisions about resource allocation.
D) Making objective decisions will lead to ethical lapses.
E) When the question of what is right and what is wrong is clear, ethical decisions are easy to implement.

Question 29

A leading pharmaceutical company found that a newly launched,over-the-counter drug might have certain negative side effects such as mood changes,which were not identified during the clinical trials.To avoid unnecessary losses,the company does not inform the public about the probable side effects.In this example,the company ________.

A) was involved in insider trading
B) lacked transparency
C) had a consumerist approach
D) had a utilitarian approach
E) failed to take affirmative action

Question 30

An employee at Cleveland Medical Center informs the media of certain health law violations and negligence that lead to documented illness and even death in certain cases.This is an example of ________.

A) insider trading
B) whistle-blowing
C) affirmative action
D) consumerism
E) strategic CSR

Question 31

________ refers to a written statement setting forth the principles that guide an organization's decisions.

A) Code of ethics
B) Limited liability agreement
C) Employee procedure policy
D) Statement of sustainable development
E) Statement of corporate opportunity

Question 32

The use of unpublicized information that an individual gains from the course of his or her job,in order to benefit from fluctuations in the stock market,is called ________.

A) a code of ethics
B) whistle-blowing
C) insider trading
D) utilitarianism
E) strategic CSR

Question 33

Which of the following is an example of whistle-blowing?

A) An employee discloses confidential information about the company to a rival firm for personal gain.
B) An employee suggests some process changes to his manager that he claims will increase the productivity of the team.
C) An employee avoids taking ownership of his mistakes by blaming it on his co-workers.
D) An employee informs the manager that some of his team members are misusing confidential customer details from the company database.
E) An employee who is unsatisfied with his performance appraisal requests his manager for a re-evaluation of his performance.

Question 34

The Occupational Safety and Health Act of 1970 set mandatory standards for safety and health and established the Occupational Safety and Health Administration (OSHA)to enforce them.

Question 35

The CEO of a company considers offshoring some of its production to another country with lower labor costs.This decision would favor the company's customers who will benefit from lower prices.The shareholders also stand to benefit from lower production costs,which could increase sales,profits,or both,probably leading to increases in share prices.However,some employees will lose their jobs,and morale is likely to suffer among those employees who keep theirs.In this situation,the CEO faces a(n)________.

A) ethical dilemma
B) ethical lapse
C) strategic CSR
D) defensive CSR
E) cognitive dissonance

Question 36

In 1965,the Federal Cigarette Labeling and Advertising Act was passed,requiring all cigarette packs to carry the Surgeon General's warnings.

Question 37

The term "disability," as used in the federal Americans with Disabilities Act,means only those people with physical handicaps,such as hearing or vision loss or loss of mobility.

Question 38

The CEO of a pharmaceutical firm learns that the FDA is going to deny approval for one of the company's drugs.He knows this will have a negative effect on the company's stock,so he quickly tells his broker to sell all of his shares of company stock before the news is announced.This is an example of ________.

A) strategic CSR
B) whistle-blowing
C) utilitarianism
D) a code of ethics
E) insider trading

Question 39

Which of the following statements is TRUE regarding whistle-blowing?

A) Whistle-blowing is the normal channel through which employees can address issues involving unethical or illegal behavior within their companies.
B) Whistle-blowing refers to the use of unpublicized information that an individual gains from the course of his or her job to benefit from fluctuations in the stock market.
C) Whistle-blowing occurs when employees share confidential company information with external agents for personal gain.
D) The federal and state laws governing whistle-blowing are simple and clear, so they are easy for employees and employers to understand.
E) Although whistle-blowing is sometimes characterized as "ratting on" colleagues or managers, it has an essential function.

Question 40

________ refers to the degree to which information flows freely within an organization,among managers and employees,and outward to stakeholders.

A) Philanthropy
B) Materialism
C) Whistle-blowing
D) Transparency
E) Utilitarianism

Question 41

The manager of a golf course awards a landscaping contract to his brother-in-law's company,even though another company was willing to do the same work for less money.This is an example of ________.

A) defensive CSR
B) code of ethics
C) conflict of interest
D) strategic CSR
E) ethical dilemma

Question 42

A company helps develop the workforce by supporting job-training efforts.This is an example of ________.

A) strategic CSR
B) cap and trade
C) sustainable development
D) philanthropy
E) affirmative action

Question 43

Corporate social responsibility refers to ________.

A) the rules or standards governing the conduct of a person or group
B) a written statement setting forth the principles that guide an organization's decisions
C) the notion that business has obligations to society beyond the pursuit of profits
D) business that operates in a manner that minimizes pollution and resource depletion, ensuring that future generations will have vital resources
E) the movement that pressures businesses to consider consumer needs and interests

Question 44

A ________ CSR is one in which a company accused of irresponsible behavior promotes itself as being socially responsible without making significant improvements in its business practices.

A) minimalist
B) philanthropic
C) strategic
D) proactive
E) cynical

Question 45

A company that takes positive steps to address a particular issue,but only because it has been embarrassed into action by negative publicity,has a ________ CSR.

A) minimalist
B) defensive
C) strategic
D) proactive
E) cynical

Question 46

John,a business owner,refuses to contribute to social causes.He argues that he is an honest,law abiding businessman who never evades his taxes.He states that by providing good quality products at a fair price,he has fulfilled his company's obligation to society.John would be said to have a ________ approach to CSR.

A) defensive
B) minimalist
C) cynical
D) proactive
E) strategic

Question 47

________ involves donating money,employee time,or other resources to various causes without regard for any direct business benefits for the company.

A) Philanthropy
B) Strategic CSR
C) Cap and trade
D) Sustainable development
E) Affirmative action

Question 48

The products of Sports Center,an international sports footwear and apparel chain,are manufactured in sweat factories in China.According to the company president,using sweatshop labor is justified because it delivers the most good for the most people.He mentions that it offers a means of livelihood to children and young adults,as well as supplies good quality apparel to customers at a lower cost.In this example,the president of Sports Center uses which of the following ethical approaches to decision making?

A) affirmative action
B) Kantian ethics
C) individual rights
D) utilitarianism
E) deontological ethics

Question 49

Which of the following is an example of philanthropy?

A) An IT company donates money to an orphanage without expecting any business benefits.
B) A niche gourmet retail store holds free-for-all bakery classes by celebrity chefs in its store.
C) A bookstore arranges free-for-all book readings and autograph sessions with authors of newly published books in stores.
D) A sporting goods retail store holds a sports competition in the neighborhood community center to generate interest in athletics.
E) A pharmaceutical company sponsors a blood donation camp, where it also advertises some of its products.

Question 50

Aston Products Inc.,a cosmetic research,development,and manufacturing firm,conducts a cost-benefit analysis that identifies an underdeveloped area which has cheap labor and low land costs.The firm decides to set up a factory in that area to take advantage of the lower land and labor costs.While setting up the factory,the company also develops infrastructure such as building roads,hospitals,and primary schools.This is an example of ________.

A) philanthropy
B) the minimalistic view
C) affirmative action
D) strategic CSR
E) cap and trade

Question 51

Unlike general philanthropy,strategic CSR ________.

A) promotes an antagonistic business-versus-society mindset
B) leads to weakening of both the business and the society
C) refers to CSR activities that are mandatory according to law
D) is aimed at specific sections of the society that have been historically discriminated against
E) is more likely to be sustained over time

Question 52

Which of the following approaches to resolving ethical dilemmas advocates choosing the option that delivers the most good for the most people?

A) individual rights
B) utilitarianism
C) strategic CSR
D) sustainable development
E) Kantian ethics

Question 53

Nongovernmental organizations are ________.

A) publicly traded and owned entities
B) firms that apply sustainable business strategies to achieve their business goals
C) nonprofit groups that provide charitable services or promote causes
D) firms that derive a substantial portion of their income from trade
E) composed primarily of sovereign states (referred to as member states), or of other intergovernmental organizations

Question 54

LK Manufacturing Group,a company that manufactures home appliances,supports a community sports center to nurture the city's athletic talent as well as promote fitness activities,without regard for any direct business benefits.This exemplifies ________.

A) strategic CSR
B) cap and trade
C) sustainable development
D) philanthropy
E) affirmative action

Question 55

Which of the following is TRUE regarding the justice approach to ethics?

A) It refers to treating people equally, or at least fairly, in a way that makes rational and moral sense.
B) It refers to choosing the option that delivers the most good for the most people.
C) It involves making social contributions that are directly aligned with a company's overall business strategy.
D) It emphasizes qualities and conditions that benefit the community as a whole, such as peace and public safety.
E) It refers to the movement that pressures businesses to consider consumer needs and interests.

Question 56

As a part of the UPS Community Internship Program,management candidates volunteer in community programs to help them understand the needs and challenges of various population groups while developing essential skills.This is an example of ________.

A) cap and trade
B) the minimalistic view
C) strategic CSR
D) philanthropy
E) affirmative action

Question 57

Which of the following is TRUE about strategic CSR?

A) It involves donating money, employee time, or other resources to various causes without regard for any direct business benefits for the company.
B) It is an attempt to balance free-market economics with government intervention.
C) It refers to organizational growth that meets the needs of the present without compromising the ability of future generations to meet their own needs.
D) It involves social contributions that are directly aligned with a company's overall business plans.
E) It refers to the argument that firms should indulge in philanthropy only when there is no conflicts of interest with the profitability of the firm.

Question 58

According to the ________ view,the only social responsibility of business is to pay taxes and obey the law.

A) defensive
B) minimalist
C) cynical
D) proactive
E) strategic

Question 59

Which of the following ethical approaches emphasizes desirable character traits such as integrity and compassion?

A) utilitarianism
B) Kantian ethics
C) deontological ethics
D) affirmative action
E) virtue

Question 60

The idea that a business has obligations to society beyond the pursuit of profits is ________.

A) corporate social responsibility
B) utilitarianism
C) philanthropic sustainability
D) ethical minimization
E) opportunistic responsibility

Question 61

Most of the electricity generated in the United States is produced by ________.

A) burning fossil fuels
B) from nuclear power
C) from hydroelectric power
D) from solar power
E) harnessing wind power

Question 62

Publicity efforts that portray a company as being environmentally friendly when its actions speak otherwise are called ________.

A) environmental minimalism
B) quasi-environmentalism
C) greenwashing
D) collectivism
E) proactivism

Question 63

Under ________,lawmakers establish maximum allowable amounts of a pollutant that an industry is allowed to emit and distribute individual allowances to all companies in that industry.

A) sustainable development
B) cap and trade
C) ecological barter
D) environmental control
E) carbon offset projects

Question 64

Toy Land,Inc.was criticized for selling toys that had lead paint and were proven to be harmful for children.The company recalled several batches of toys.It responded to these accusations by changing its logo to include a recycle theme,using advertisements that promoted waste management and recycling,and providing Toy Land,Inc.branded reusable shopping bags at their store.However,the firm did not undertake any specific measures to avoid using toxic materials in its products.This is an example of ________.

A) proactive CSR
B) cynical CSR
C) minimalistic CSR
D) primary CSR
E) philanthropic CSR

Question 65

Which of the following federal legislations limits cardholder liability for unauthorized use?

A) Magnuson-Moss Warranty Act (1975)
B) Fair Credit Reporting Act (1970)
C) Truth in Lending Act (Consumer Protection Credit Act) (1968)
D) Deceptive Mail Prevention and Enforcement Act (1999)
E) Fair Packaging and Labeling Act (1966, 1972)

Question 66

Shopper's Paradise,a department store chain,was accused of working with contractors who use sweatshop labor in their manufacturing units.The company was labeled as promoting unethical business policies.To deal with these criticisms,the company decides to make a large donation to a cancer research foundation,as well as sponsor a health awareness program in the community.Shopper's Paradise would be said to have a ________ approach to CSR.

A) minimalist
B) strategic
C) proactive
D) defensive
E) philanthropic

Question 67

Since its inception,Whole Foods Market has contributed 5% of its profits to charitable endeavors.At Whole Foods Market,company leaders believe they have responsibilities beyond making a profit.The firm has a ________ approach to CSR.

A) cynical
B) minimalistic
C) primary
D) philanthropic
E) proactive

Question 68

________ is the study of the relationship between organisms and the natural environment.

A) Environmentalism
B) Ecology
C) Energy conservation
D) Ergonomics
E) Sustainability

Question 69

Which of the following statements is TRUE about cap and trade programs?

A) They promote an anti-business perspective.
B) They provide technological solutions to reduce pollution and resource consumption.
C) They force companies to choose the highest-cost means of taking responsibility for their emissions.
D) They try to balance free-market economics with government intervention.
E) They put pressure on businesses to consider consumer needs and interests.

Question 70

The Resource Recovery Act (1970)________.

A) subsidizes pilot recycling plants
B) regulates treatment, storage, transportation, and disposal of hazardous waste
C) establishes a structure for coordinating all federal environmental programs
D) authorizes grants to states for water-pollution control
E) prohibits ocean dumping that could threaten human health or the marine environment

Question 71

The Magnuson-Moss Warranty Act (1975)requires complete written warranties in ordinary language and requires warranties to be ________.

A) applicable for minimum one year
B) supported by the manufacturer
C) supported by the retailer
D) available before purchase
E) contained on package labeling

Question 72

Mark hacks into the database of an e-commerce firm and steals the social security numbers of many of its customers.He then uses these numbers to take loans.This is an example of ________.

A) phishing
B) identity theft
C) spamming
D) brandjacking
E) cybersquatting

Question 73

The ________ establishes procedures for creating geologic repositories of radioactive waste.

A) Clean Air Act
B) Solid Waste Disposal Act
C) Toxic Substances Control Act
D) Nuclear Waste Policy Act
E) Resource Recovery Act

Question 74

Which of the following statements is TRUE?

A) The creation, delivery, use, and disposal of products that society values can be carried out without generating any pollution and consuming any natural resources.
B) Web-based businesses are "clean" because there is no pollution associated with them.
C) Environmental issues are easy and simple, and companies can easily make decisions when faced with such issues.
D) Environmental issues faced by businesses are about forests, rivers, and wildlife; and not about human health and safety.
E) Dealing with environmental issues often requires tough trade-offs, occasional sacrifice, and disruptive change.

Question 75

American Housing Inc.,a construction firm,uses innovative home designs that use insulating building materials aimed at reducing the energy consumption of the apartments and homes it builds.This gives it an edge over other businesses,and is environment friendly as well.This is an example of ________.

A) cap and trade
B) greenwashing
C) consumerism
D) affirmative action
E) sustainable development

Question 76

An eco-friendly health resort claims to be environment friendly,and markets itself as an eco-resort.However,it engages in irresponsible activities such as wastage of water,disposal of plastic and other untreated wastes into the water bodies,and cutting trees in protected areas to expand its facilities.This is an example of ________.

A) environmental minimalism
B) quasi-environmentalism
C) greenwashing
D) collectivism
E) proactivism

Question 77

Which of the following regulatory agencies is responsible for monitoring the hiring practices of companies and can require them to compensate individuals who have been victimized by unfair hiring practices.

A) Federal Employment Commission (FEC)
B) Civil Rights Commission (CRC)
C) Employee Protection Commission (EPC)
D) Employment Regulatory Commission (ERC)
E) Equal Employment Opportunity Commission (EEOC)

Question 78

In ________ CSR,company leaders believe they have responsibilities beyond making a profit,and they back up their beliefs and proclamations with actions taken on their own initiative.

A) proactive
B) cynical
C) minimalistic
D) primary
E) philanthropic

Question 79

________ is defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs.

A) Greenwashing
B) Consumerism
C) Materialism
D) Sustainable development
E) Cap and trade

Question 80

What is the meaning of the term "consumerism"?

A) overspending by customers
B) overspending by corporations
C) pressuring businesses to consider consumer needs
D) pressuring consumers to consider business needs
E) unexpected demand by buyers