Question 1

Economist Milton Friedman argues that management should

Accepted Answer

Friedman believes that the primary responsibility of management is to maximize profits for shareholders. He argues that social responsibility should not be a priority for businesses and that they should focus solely on financial returns.

Question 2

Large investors in companies

Accepted Answer

Large investors in companies have significant holdings in the company and therefore have a higher stake in the company's performance. They want a reasonable financial return on their investment and have the power to influence management through the board of directors or by voicing their concerns at shareholder meetings. This influence can include pressuring the boards of directors to dismiss CEOs if they are not satisfied with the company's performance.

Question 3

The Rainforest Action Network (RAN), People for the Ethical Treatment of Animals (PETA), and the National Council of Churches are examples of which type of stakeholder group?

Accepted Answer

These organizations are social activist groups. RAN focuses on environmental issues, PETA on animal rights, and the National Council of Churches on social justice and human rights issues.

Question 4

Business ethics is the same thing as laws.

Accepted Answer

Business ethics refers to the moral principles and values that guide behavior in the business world, whereas laws are rules and regulations enforced by the government to ensure social order and protect individual rights. While some ethical principles may be codified into laws, not all ethical standards are mandated by law.

Question 5

In recognizing the importance of having officers set examples for enlisted personnel, the U.S. military holds officers to a higher standard of conduct than other military personnel.

Accepted Answer

The U.S. military does hold officers to a higher standard of conduct than other military personnel, in order to set a good example for enlisted personnel. This is seen as an important part of maintaining discipline and morale within the armed forces.

Question 6

A firm that has let social responsibility dominate its business strategy in a way that distracted management's attention from earning profits is

Accepted Answer

Ben & Jerry's Ice Cream is known for their strong social responsibility values and mission, often prioritizing initiatives such as fair trade sourcing and environmental sustainability. While these values have garnered significant praise and an ethical reputation for the brand, there have been criticisms that these priorities have at times detracted from the company's focus on profitability.

Question 7

Eli Lilly & Company's policy that employees may not conduct business with a company with which they or their relatives are associated, unless Eli Lilly has given specific approval and authorization, is an example of an ethical policy statement.

Accepted Answer

The policy statement shows a commitment to avoiding conflicts of interest and maintaining the integrity of business dealings.

Question 8

Which of the following is not a benefit of social responsibility?

Accepted Answer

While the other options list benefits of social responsibility, option C states a potential drawback - that resources that could have been used to improve the business may be diverted to social responsibility projects.

Question 9

When Colgate-Palmolive adopted a failing junior high school in Harlem and contributed funds and personnel to renovate and restructure the school, they were using which approach to dealing with stakeholders?

Accepted Answer

Colgate-Palmolive's decision to adopt the junior high school in Harlem and invest resources into improving it is an example of a proactive strategy. This approach involves actively seeking out and responding to the needs and concerns of stakeholders before they become problematic. By addressing issues preemptively, companies can build positive relationships with stakeholders and avoid potential conflicts or crises.

Question 10

When companies use the courts or lobby against legislation, which approach are they using to deal with a stakeholder?

Accepted Answer

By using the courts or lobbying against legislation, companies are taking a confrontational approach to dealing with a stakeholder. This strategy involves actively challenging or opposing the stakeholder, rather than attempting to accommodate their interests or mitigate potential harm after the fact.

Question 11

Organizational stakeholders

Accepted Answer

Organizational stakeholders can be individuals or groups who have an interest or influence in the organization, either internal or external. This includes customers, employees, suppliers, investors, government agencies, and local communities. Therefore, option C is the best choice. Options A, B, and D are incorrect as they are too limiting in scope and do not encompass all possible stakeholders.

Question 12

The justice approach is more flexible than other ethical approaches because it recognizes that standards of fairness vary depending on the individuals involved in the decision.

Accepted Answer

The justice approach is more flexible than other ethical approaches because it recognizes that standards of fairness vary depending on the individuals involved in the decision.

Question 13

When Levi Strauss lost market share and profits decreased in the late 1990s, shareholders blamed the CEO for

Accepted Answer

The answer of When Levi Strauss lost market share and...

Question 14

When McDonald's opposes an increase in the minimum wage, which stakeholder group are they trying to influence?

Accepted Answer

McDonald's is trying to influence the government's decision to increase the minimum wage. As a stakeholder, McDonald's is primarily concerned with their costs and profits, which would be negatively impacted by an increase in the minimum wage. By opposing the increase, they are attempting to influence government policy in a way that would benefit them financially.

Question 15

When Ben & Jerry's Ice Cream company profits declined and the stock price decreased, the company

Accepted Answer

Ben & Jerry's has always been known for its commitment to social responsibility and ethical business practices. Therefore, it is unlikely that the company would abandon its values due to a decline in profits. It is more likely that the company would continue its socially responsible style and look for ways to restructure the business to boost profits while maintaining its ethical principles. Laying off hundreds of workers would not be consistent with the company's values and mission.

Question 16

Very few large companies provide ethics training to create a more ethical climate.

Accepted Answer

Many large companies provide ethics training as part of their efforts to create a more ethical climate and ensure compliance with laws and regulations.

Question 17

The 1997 Teamsters Union strike against UPS demonstrated the power of which stakeholder group?

Accepted Answer

The 1997 Teamsters Union strike against UPS demonstrated the power of employees, as they were able to negotiate better wages and benefits through collective action. The strike lasted for 16 days and resulted in UPS agreeing to a new labor contract with the union. The other stakeholder groups listed (community, social activist groups, customers) did not have a significant role in this particular strike.

Question 18

Walmart decided not to build stores in several towns in Maine as a result of pressure from which stakeholder group?

Accepted Answer

Walmart often faces opposition from local communities who are concerned about the impact on small businesses and the local economy, leading to decisions not to build stores in certain areas.

Question 19

The approach to dealing with stakeholder concerns that has the highest commitment to social responsibility is

Accepted Answer

The proactive strategy involves anticipating stakeholder concerns and addressing them before they become problematic. This approach demonstrates a high level of commitment to social responsibility and can help build trust with stakeholders. The confrontation strategy, on the other hand, involves actively challenging stakeholder concerns, which can lead to conflict and damage to relationships. The damage control strategy is a reactive approach, which focuses on minimizing the damage caused by an issue or concern, rather than addressing the root cause. The accommodation strategy involves making concessions to stakeholders, which can be seen as a sign of weakness or an admission of guilt. Therefore, the proactive strategy is the best choice for demonstrating a commitment to social responsibility.

Question 20

Organizational stakeholder groups

Accepted Answer

Different stakeholder groups may have different interests and priorities. For example, shareholders may prioritize maximizing profits for their investments while employees may prioritize fair wages and job security. It is important for management to consider and balance the interests of all stakeholder groups.

Answer: B is incorrect because stakeholder groups can have varying levels of vested interests and priorities.

Answer: C is incorrect because stakeholder groups may not always be consistent with management interests.

Answer: D is incorrect because stakeholder groups can exert significant pressure on management through actions such as protests, boycotts, and lawsuits.

Quiz 3: Managing Social Responsibility and Ethics

Economist Milton Friedman argues that management should

Large investors in companies

The Rainforest Action Network (RAN) , People for the Ethical Treatment of Animals (PETA) , and the National Council of Churches are examples of which type of stakeholder group?

Business ethics is the same thing as laws.

In recognizing the importance of having officers set examples for enlisted personnel, the U.S. military holds officers to a higher standard of conduct than other military personnel.

A firm that has let social responsibility dominate its business strategy in a way that distracted management's attention from earning profits is

Eli Lilly & Company's policy that employees may not conduct business with a company with which they or their relatives are associated, unless Eli Lilly has given specific approval and authorization, is an example of an ethical policy statement.

Which of the following is not a benefit of social responsibility?

When Colgate-Palmolive adopted a failing junior high school in Harlem and contributed funds and personnel to renovate and restructure the school, they were using which approach to dealing with stakeholders?

When companies use the courts or lobby against legislation, which approach are they using to deal with a stakeholder?

Organizational stakeholders

The justice approach is more flexible than other ethical approaches because it recognizes that standards of fairness vary depending on the individuals involved in the decision.

When Levi Strauss lost market share and profits decreased in the late 1990s, shareholders blamed the CEO for

When McDonald's opposes an increase in the minimum wage, which stakeholder group are they trying to influence?

When Ben & Jerry's Ice Cream company profits declined and the stock price decreased, the company

Very few large companies provide ethics training to create a more ethical climate.

The 1997 Teamsters Union strike against UPS demonstrated the power of which stakeholder group?

Walmart decided not to build stores in several towns in Maine as a result of pressure from which stakeholder group?

The approach to dealing with stakeholder concerns that has the highest commitment to social responsibility is

Organizational stakeholder groups