Question 1

A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a:

Accepted Answer

A whistleblower is an employee who exposes illegal or unethical activities within a company or organization. In this case, the Enron Corporation was engaged in deception and dishonesty in their accounting records, and the employee who contacted the government official to disclose this was acting as a whistleblower.

Question 2

The position a firm takes on issues that affect the corporation as well as society is known as its:

Accepted Answer

The position a firm takes on issues that affect the corporation as well as society is known as its corporate policy. This includes the company's stance on social responsibility, environmental issues, ethical behavior, and political involvement. The other options (political philanthropy, target posturing, and structural positioning) are not widely used or recognized terms in relation to a firm's position on social issues.

Question 3

Zach spent several months developing a good relationship with a business client. The client is now buying a significant amount of product from Zach's company, resulting in high commissions for Zach, personally. After checking the sales records for the past six months, a colleague of Zach's started visiting the same client in the hopes of capturing some of the client's business too. Although he considers it "legal and fair game," sales reps in his firm have begun to avoid him because they consider it a violation of:

Accepted Answer

The colleague's actions can be considered a violation of integrity-based ethics, which focuses on principles such as honesty and loyalty in relationships. Developing a good relationship with a client and then using their trust to take business away from a colleague is not ethical behavior. Choice A and B may not necessarily apply in this situation, while choice D is not relevant.

Question 4

Determining what is involved for a firm to be socially responsible:

Accepted Answer

There is no one-size-fits-all definition of corporate social responsibility, and what is considered socially responsible behavior can vary depending on factors such as industry, societal norms, and stakeholder expectations. Therefore, determining what is involved for a firm to be socially responsible can vary even among those who are interested in corporate responsibility.

Question 5

Sharon, a CPA for a large firm, noticed that the company's accounting records drastically overstated the amount of inventory on hand, which led to overstating the assets of the firm. Initially, she brought it to the attention of her supervisor, but when nothing was done to correct the mistake in a timely manner, she decided the best course of action was to report it to the appropriate government official. Although her actions took her outside the company, she was counting on current law, under the ____________, to protect her against company retaliation.

Accepted Answer

The Sarbanes-Oxley Act was enacted to protect whistleblowers like Sharon who report corporate fraud or malfeasance. It includes provisions to protect employees from retaliation, such as termination or demotion, for reporting such actions to the appropriate authorities. The other laws listed do not specifically address whistleblower protection.

Question 6

Insider trading involves:

Accepted Answer

Insider trading is when investors use private company information that is not available to the public to make investment decisions that give them an unfair advantage over other investors. This is considered illegal and unethical.

Question 7

While speaking with his sales force, the director of sales explains, "Anyone caught violating a sales law will be fired." After studying business ethics, you recognize this remark as a reference to the firm's __________ ethics.

Accepted Answer

The remark emphasizes compliance with sales laws, indicating that the firm's ethics are compliance-based.

Question 8

Corporate social responsibility describes the firm's:

Accepted Answer

Corporate social responsibility refers to a company's concern for the welfare of society and not just a focus on profits for their stockholders. This may involve initiatives and programs that benefit employees, the environment, and the community at large.

Question 9

If a business fails to meet its responsibilities to its employees, which of the following is likely to occur?

Accepted Answer

If a business fails to meet its responsibilities to its employees, employees are likely to feel undervalued and unmotivated, leading to a decrease in job satisfaction and productivity. They may also become disengaged and perform only the minimum required to avoid losing their job, resulting in lower quality output.

Question 10

In recent years, progressive firms have embarked upon ____________, where they will commit company resources and expertise toward helping out in emergency type situations.

Accepted Answer

The phrase "commit company resources and expertise toward helping out in emergency type situations" suggests that the firms are engaging in corporate social initiatives, which involve using a company's resources to address social or environmental concerns. Corporate philanthropy (choice A) generally refers to charitable donations made by a company, rather than active involvement in social or environmental issues. Corporate social activism (choice B) refers to advocating for social or environmental issues or taking a public stance on such issues, but may not necessarily involve using company resources to directly address the issue. Social civility (choice C) is not a common term used in the context of corporate social responsibility.

Question 11

Which of the following is not a basic right proposed by former President John
A) The right to be heard
B) The right to be informed
C) The right to a discount
D) The right to safety
F) Kennedy?

Accepted Answer

Former President John F. Kennedy proposed the basic rights of the right to be heard, the right to be informed, the right to choose, and the right to safety. The right to a discount was not a proposed basic right.

Question 12

Investors, today are realizing financial benefit by:

Accepted Answer

Investing in companies that are committed to a better environment is the best choice as it not only helps the planet but also benefits investors financially in the long run. Many companies are now focusing on sustainable practices and reducing their carbon footprint, which could lead to long-term profitability and investor loyalty. Meanwhile, investing in companies that only operate in stable environments (A) may limit potential growth and returns, and investing in firms with abundant resources for social initiatives (B) may not necessarily translate to financial profitability. Investing in companies that leave a sizable carbon footprint (D) is not advisable as it could lead to reputational risks and future regulatory challenges.

Question 13

All else held equal, socially responsible firms:

Accepted Answer

Socially responsible firms are viewed more favorably by consumers because they are seen as contributing positively to society and the environment. This can improve their brand reputation and increase customer loyalty. However, it does not necessarily mean they will enjoy significantly higher profits or that they will fail to earn sufficient profits for their owners.

Question 14

Companies are using _____________ to communicate their corporate social responsibility actions to their customers.

Accepted Answer

Social media is a popular and effective way for companies to communicate their corporate social responsibility actions to their customers. Through social media platforms such as Twitter, Facebook, and Instagram, companies can easily share their CSR initiatives and interact with their customers in real-time. Social media also allows for the creation of engaging content such as videos, infographics, and blog posts, which can help educate customers about the company's environmental and social commitments.

Question 15

Corporate ________ covers issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution.

Accepted Answer

Corporate responsibility covers a company's ethical and social obligations to its stakeholders, including setting fair employment practices, producing safe products, and minimizing negative environmental impacts. Philanthropy, on the other hand, refers to the charitable contributions or donations a company may make. Diversity refers to fostering a workplace that values and includes individuals from diverse backgrounds. Structure and strategy are more focused on the organization's operational and business goals.

Question 16

We describe charitable donations by corporations to nonprofit organizations as __________.

Accepted Answer

Charitable donations by corporations to nonprofit organizations are typically referred to as corporate philanthropy. This term refers to the practice of donating money or resources to help support various social and environmental causes without any expectation of financial return. While corporate responsibility and corporate strategy are also important concepts within the business world, they do not specifically relate to charitable donations. Structural commitment is not a term commonly used in this context.

Question 17

John was recently hired by Backstreet Books. At the beginning of the first day on the job, his store manager handed him a small booklet consisting of company rules. He was asked to read it and sign and submit the last page, before starting work. Among other things, the rules explicitly discussed reprimands for grievous behavior and dismissal if the firm could prove that the employee was stealing product from the store. This booklet represented the ___________ of the store.

Accepted Answer

The fact that the company has a set of explicit rules and consequences for non-compliance indicates that their ethics are compliance-based. These rules focus on avoiding illegal or unethical behavior and ensuring that employees follow the law and company policies.

Question 18

In an effort to promote the importance of a valuable education, the faculty and staff at the local community college are trained to ask each student about their career preferences, rather than suggest courses that may not benefit the student's future goals. Although it would be tempting to suggest courses just to increase the college's enrollment, employees know that it is more important to serve each student well, even if it means suggesting courses and/or degrees offered at other institutions. This approach is consistent with:

Accepted Answer

This approach is consistent with an integrity-based ethics code, which prioritizes ethical behavior and values over external factors such as profit or enrollment numbers. By considering the individual needs and goals of each student, the faculty and staff are demonstrating a commitment to honesty, fairness, and responsibility.

Question 19

A payoff for socially conscious behavior is:

Accepted Answer

Choosing socially conscious behavior often attracts new and loyal customers who appreciate the company's values and ethical practices. This can lead to increased sales and profits in the long run.

Question 20

Which of the following statements best describes a firm's commitment to its customers?

Accepted Answer

Firms that offer real value will develop a distinctive competitive advantage and gain customers' trust. When a company delivers goods or services that customers perceive to be worth the price, they gain a reputation for providing excellent value. Customers are more likely to choose such a business repeatedly, which results in brand loyalty and increased customer lifetime value. Thus, a company's commitment to providing actual value is critical in maintaining a loyal customer base.

Quiz 4: Demanding Ethical and Socially Responsible Behavior