Deck 10: Ethical Problems of Organizations

Question 1

Only since Enron's collapse have ethicists and business professionals really been concerned about the increasing focus on "short-term" earnings.

Answer 1

False

Question 2

Because stakeholders' interests frequently do not overlap, an organization is able to focus on one stakeholder at a time.

Answer 2

False

Question 3

Reference: Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Trade Commission

Answer 3

b

Question 4

It's clear that the system for advertising drugs and bringing them to market poses huge ethical issues for the drug companies, many of which have been admired for their ethical reputations.

Question 5

The real proportion of wrong-doers is probably quite small.

Question 6

In ethical decision-making and particularly in cases dealing with product safety, firms are best served when they consider the long-term consequences of a decision.

Question 7

Reference: Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Owners, customers, and employees.

Question 8

The definition of conflict for an organization is similar to that for an individual ; that is, if a stakeholder thinks that an organization's judgment is biased because of a relationship it has with another firm, a conflict could exist.

Question 9

Ethical disasters in corporations often start as small issues and it is either denial or mismanagement that causes seemingly minor situations to mushroom into huge legal, ethical, and public relations nightmares.

Question 10

Reference: Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Communication Commission (FCC)

Question 11

Reference: Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Reserve Board

Question 12

Reference: Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Individuals who have an interest/claim in what the organization does or how it performs.

Question 13

Reference: Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Opinion formers, community, and authorities.

Question 14

Despite Johnson & Johnson's best efforts to respond to its customers by pulling Tylenol off shelves, the product has never regained its market share.

Question 15

At the turn of the last century, consumers didn't even have the right to sue a manufacturer for a defective product.

Question 16

Conflicts involving organizations are more damaging than those who involve individuals.

Question 17

One of the most common faults in ethical decision making is to ignore the long-term consequences of a decision.

Question 18

Toyota, like Johnson & Johnson, halted production in response to its concerns for its customers.

Question 19

Reference: Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Environmental Protection Agency (EPA)

Question 20

Reference: Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
Occupational Safety and Health Administration (OSHA)

Question 21

For the public, the top three factors in corporate reputation are : a. transparent and honest practices, trustworthiness, and high-quality products and services
B) transparent and honest practices, community philanthropy, and high quality products and services
C) trustworthiness, high-quality products, and a no-layoff policy
D) trustworthiness, high-quality products, and a 90-day customer return policy

Question 22

Which of these is not a primary stakeholder?

A) Owners
B) Community
C) Customers
D) Employees

Question 23

Companies face a myriad of stakeholders that often have conflicting interests. Briefly describe a company or an incident that demonstrates how stakeholders' conflicting interests can lead to unethical behavior.

Question 24

The pharmaceutical industry has found that advertising directly to the consumer minimizes problems experienced earlier with consumers regarding their confidence in products.

Question 25

In a classic example of failing to protect its employees, ___________ knew asbestos caused cancer as early as 1930. However, the company lied to its employees and used several tactics to cover-up the product's effects.

A) Johnson & Johnson
B) A.H. Robbins
C) Manville Corporation
D) McWane, Inc.

Question 26

In this classic example of a company treating its employees responsibly, ____________ was the first company to offer company-paid vacations, stock ownership plans, employee suggestion program, and the guaranteed employment plan. This company has not laid off employees in the United States since 1948.

A) McWane, Inc.
B) Lincoln Electric
C) Scott Paper Company
D) Manville Corporation

Question 27

In this example of a conflict of interest, ________ conducted a series of off-the-books partnerships that were used to hide the organization's debt and inflate its stock price. The partnerships were managed by the company's executives who stood to profit the most from the transactions.

A) Merrill Lynch
B) Enron
C) Citicorp
D) Adelphia

Question 28

Organizations have many ethical obligations to their employees including a. right to privacy, right to a safe workplace, right to promotional opportunities
B) right to privacy, right to a safe workplace, right to freedom of speech
C) right to a safe workplace, right to freedom of speech, right to promotional opportunities
D) right to a safe workplace, right to freedom of speech, right to three weeks vacation
E) right to fair treatment, right of privacy, right to c-level opportunities if they earned their MBA

Question 29

Which of these is not a secondary stakeholder?

A) Opinion formers
B) Community
C) Authorities
D) Employees

Question 30

The due care theory involves at least the elements set out below. a. products and services meet all government regulations and specifications
B) ability to return the product if dissatisfied for any reason
C) products should be inspected regularly for quality
D) manufacturers should institute a system to recall products that prove dangerous after distribution
E) a & b
F) a, c, & d
G) all of the above

Question 31

In a 2012 survey, _____ were in a dead heat as the least trusted institutions in the U.S., and public confidence in them could be measured in single digits.

A) lawyers and accountants
B) CEOs and Board of directors
C) Wall Street and Congress
D) White House and Congress

Question 32

The idea that consumers have the right to safety, right to be heard, right to choose, and right to be informed came from ____________ in ________.

A) Theodore Roosevelt; 1930.
B) The Food and Drug Act; 1906.
C) John F. Kennedy; 1962.
D) George W. Bush; 2004.