Question 1

Which of the following is most likely to reduce the pressure on managers to violate their personal ethics?

Accepted Answer

Keeping managers close to the parent company helps maintain a consistent ethical culture and support system, reducing the pressure to compromise personal ethics.

Question 2

Who asserted that the only social responsibility of business is to increase profits,so long as the company stays within the rules of law?

Accepted Answer

This statement is commonly associated with the philosophy of Milton Friedman, an American economist who argued that the social responsibility of a business is to maximize profits within the boundaries of the law. Friedman believed that social issues should be left to the government and that businesses should not be burdened with socially responsible goals.

Question 3

Which of the following statements is true of facilitating payments?

Accepted Answer

Facilitating payments, also known as "grease payments," are small payments to secure or expedite routine government actions such as obtaining permits or processing visas. These payments are generally considered unethical, but the Foreign Corrupt Practices Act (FCPA) allows them under certain circumstances. However, having a zero-tolerance approach toward facilitating payments is ethical because it promotes transparency and prevents the normalization of corrupt practices. Thus, option C is the correct statement. The other options are incorrect.

Question 4

The CEO of Gold Chip Software engages in corruption and uses his power in the company to enrich himself and his family members.Consequently,his employees also engage in the same behavior.In this case,the roots of unethical behavior can be traced to

Accepted Answer

The root of unethical behavior in this scenario is organizational leadership. The CEO is engaging in corruption and using his power to enrich himself and his family members, setting an example for his employees to follow. This behavior can create a culture of corruption within the organization.

Question 5

Davis is the manager of a pharmaceutical manufacturing facility in a developing country.The manufacturing unit does not meet the acceptable standards of the manufacturing facility in the home nation.He knows that demanding a better manufacturing unit will raise the cost of the drugs mainly exported to other less developed countries,and hence its price.But he also realizes that by not demanding a better unit,the employees are prone to serious health issues.Davis is facing

Accepted Answer

Davis is facing an ethical dilemma because he has to make a moral choice between two conflicting options. On one hand, he could demand a better manufacturing unit to ensure the safety and well-being of his employees. On the other hand, this would increase the cost of drugs and make them less accessible to other less developed countries. Davis needs to weigh the potential harm to his employees against the harm of making the drugs less accessible to those who desperately need them.

Question 6

Which of the following is most likely to lead to unethical behavior in a business setting?

Accepted Answer

Expatriate managers may experience a lack of social context and cultural support, leading to moral disengagement and unethical behavior. A strong sense of personal ethics (A), providing managers with moral guidance (C), and making social investments (D) are all likely to promote ethical behavior. Advocating noblesse oblige (E), or the belief that the wealthy have a responsibility to act generously towards those less fortunate, may lead to ethical behavior, but it is not as likely to lead to unethical behavior as expatriate managers.

Question 7

Lugnow Inc.paid a sum of $76,000 to an official in the government of Nepotismia to ensure that the company obtained exclusive preferential treatment.The $76,000 can be classified as

Accepted Answer

The $76,000 paid by Lugnow Inc. to the government official in Nepotismia to obtain exclusive preferential treatment is a bribe.

Question 8

Bryan works as a salesman for JumboCorp.Last year his sales target was $3 million and this year in an aggressive bid for growth,the company increased the sales quota for all its salespeople to $5 million,although the market for JumboCorp's product had slowed down.In order to meet his target,Bryan bribed an official of a potential customer.In this context,the roots of his unethical behavior can be traced to

Accepted Answer

Bryan's unethical behavior can be traced to the unrealistic performance goals set by the company, which increased the sales quota despite a slowdown in the market. This put pressure on Bryan to meet the target and led him to resort to unethical means, such as bribery.

Question 9

Which of the following refers to the idea that businesspeople should consider the social consequences of economic actions when making business decisions,and that there should be a presumption in favor of decisions that have both good economic and social consequences?

Accepted Answer

The idea described in the question is known as corporate social responsibility, which involves considering the impact of business decisions on society and the environment, as well as on financial results. It suggests that companies should strive to balance economic success with sustainability and social responsibility.

Question 10

The practice of "gift giving" between the parties to a business negotiation is considered right and proper behavior in many Asian cultures.However,some Westerners view the practice as a form of bribery,and therefore unethical,particularly if the gifts are substantial.This reflects that

Accepted Answer

The difference in perspectives on gift-giving between Asian and Western cultures demonstrates that what is considered ethical behavior can vary across different cultural perspectives. It also suggests that there may not be universal ethical norms that are applicable across all cultures.

Question 11

Which of the following explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business?

Accepted Answer

The Friedman doctrine, put forth by economist Milton Friedman, explicitly states that businesses should only concern themselves with making profits within the bounds of the law and without deception or fraud. It rejects the idea that businesses should undertake social expenditures beyond those mandated by law.

Question 12

Cadmium Technologies Inc.believes that the sole purpose of its existence is to maximize profits for its stockholders.The firm has often been criticized for not engaging in any social investments.However,the firm has been appreciated for abiding by the laws while earning profits.According to this information,which of the following approaches to ethics is most likely being adopted by Cadmium Technologies?

Accepted Answer

Cadmium Technologies is following the Friedman Doctrine, which asserts that the sole responsibility of a company is to increase profits for its shareholders while playing within the rules and regulations of the law. The firm is criticized for not engaging in any social investments, but it is praised for complying with the law while earning profits.

Question 13

In a business setting,managers sometimes do not realize they are behaving unethically,primarily because they

Accepted Answer

Managers may not consider the ethical dimension of their decisions if they are solely focused on other business variables such as cost, delivery, and product quality. Ignoring the ethical aspect can result in unethical behavior without the manager even realizing it.

Question 14

Which of the following is detrimental to an ethical business setting?

Accepted Answer

Cultures with high masculinity and power distance measures tend to prioritize competition and hierarchy over ethical considerations, which can be detrimental to an ethical business setting. The other options are all beneficial to promoting ethical behavior in a business setting.

Question 15

Unipeg Corporation has uniform high sales targets for its employees all across the globe,regardless of the environmental constraints in each market.Employees are penalized for any shortfall.This has caused many employees to falsify the values of their sales.In this context,the roots of unethical behavior can be traced to

Accepted Answer

The root cause of unethical behavior can be traced to the unrealistic performance goals set by Unipeg Corporation. The high sales targets set by the company are uniform across all markets, ignoring the environmental constraints that may exist. This creates pressure on employees to achieve these targets at any cost, leading some to falsify the values of their sales. This is a classic example of how unrealistic performance goals can lead to unethical behavior.

Question 16

The CEO of United Synergy Inc.,a company in its embryonic stage,believes that unethical behavior will result in premature decline of the company.In order to ensure that the company starts operating in the most ethical manner,the CEO should

Accepted Answer

Hiring employees with strong personal ethics is the most effective way to ensure ethical behavior within the company. These employees are likely to hold themselves and their colleagues accountable for ethical behavior, leading to a company culture that values integrity and honesty. Setting high performance goals or basing decisions solely on business variables may lead to unethical behavior in order to achieve those goals or variables. Shunning the concept of noblesse oblige (the idea that people of higher status have a responsibility to act with generosity and kindness towards those of lower status) does not necessarily promote ethical behavior. Outsourcing to a country with lax business regulations may also lead to unethical behavior in order to cut costs or take advantage of loopholes.

Question 17

In a business setting,the term noblesse oblige refers to

Accepted Answer

Noblesse oblige is a French term that means "nobility obliges." In a business setting, this term refers to the idea that successful enterprises have a responsibility to act benevolently towards society as a whole. This could take the form of corporate social responsibility programs that seek to improve the communities they operate in.

Question 18

Which of the following best exemplifies an ethical dilemma?

Accepted Answer

Andrew's decision to upgrade machines and lay off manual labor poses an ethical dilemma as it involves weighing the benefits of reducing costs for clients against the ethical implications of potentially causing job loss for many people who may not have other employment options.

Question 19

Which of the following best exemplifies noblesse oblige?

Accepted Answer

Noblesse oblige is a French term that means "nobility obligates". It refers to the moral obligation of the wealthy and powerful to act with generosity and benevolence towards those who are less fortunate. Multinational corporations funding schools, universities, and hospitals in developing countries is a good example of noblesse oblige as they are using their resources to improve the well-being of local people.

Question 20

Which of the following is a straw man approach to business ethics?

Accepted Answer

The Friedman doctrine is a straw man approach to business ethics because it argues that the only social responsibility of a business is to increase profits for its shareholders, while ignoring the potential negative impact on society and the environment. This view oversimplifies the relationship between businesses and society, and ignores the ethical implications of decision-making that prioritize profit over other important considerations.

Quiz 5: Ethics, Corporate Social Responsibility, and Sustainability