Deck 5: Ethics, Corporate Social Responsibility, and Sustainability

Question 1

Societal business ethics are divorced from personal ethics.

Answer 1

False
Explanation: Societal business ethics are not divorced from personal ethics, which are the generally accepted principles of right and wrong governing the conduct of individuals.

Question 2

An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting.

Answer 2

True
Explanation: Our personal ethical code exerts a profound influence on the way we behave as businesspeople. An individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting.

Question 3

In a business setting, noblesse oblige is taken to mean benevolent behavior that is the responsibility of successful enterprises.

Answer 3

True
Explanation: Noblesse oblige is a French term that refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth. In a business setting, it is taken to mean benevolent behavior that is the responsibility of successful enterprises.

Question 4

The Foreign Corrupt Practices Act originally allowed "facilitating payments" to secure contracts that would not otherwise be secured.

Question 5

The righteous moralist approach to ethics is typically associated with managers from developing and under-developed nations.

Question 6

Most moral philosophers see value in utilitarian and Kantian approaches to business ethics.

Question 7

What is considered normal business practice in one country may be considered unethical in other countries.

Question 8

A firm's organizational culture refers to the values and norms that are shared among employees of an organization.

Question 9

The Friedman doctrine is the belief that ethics are nothing more than a reflection of culture and therefore, a firm should adopt the ethics of the culture in which it is operating.

Question 10

Utilitarian philosophy takes into consideration the principle of justice.

Question 11

Social responsibility refers to the idea that businesspeople should favor decisions that have both good economic and social consequences.

Question 12

The ethical obligations of a multinational corporation toward employment conditions, human rights, environmental pollution, and the use of power are always clear-cut.

Question 13

The utilitarian approach to ethics is a straw men approach to business ethics that has some inherent value, but is unsatisfactory in important ways.

Question 14

International businesses cannot gain economic advantages by making payments to corrupt government officials.

Question 15

The Sullivan principles mandated that GM could operate in South Africa as long as the company complied with the apartheid laws.

Question 16

Cultural relativism suggests that even if slavery is culturally acceptable in a country, a foreign firm operating in that country should avoid using slave labor.

Question 17

Ethical strategies are the accepted principles of right or wrong governing the conduct of businesspeople.

Question 18

Corporations can contribute to the global tragedy of the commons by not pumping pollutants into the atmosphere or dumping them in oceans or rivers.

Question 19

Milton Friedman's basic position is that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

Question 20

Ethical dilemmas are situations in which none of the available alternatives seems ethically acceptable.

Question 21

_____ recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures.

A) Rights theories
B) Utilitarians
C) Cultural relativists
D) Kantian ethics

Question 22

Building an organization culture that places a high value on ethical behavior requires incentive and reward systems.

Question 23

According to Rawls, inequalities are unjust even if the system that produces inequalities is to the advantage of everyone.

Question 24

To establish moral intent, managers need to stand in the shoes of a stakeholder and ask how a proposed decision might impact that stakeholder.

Question 25

To foster ethical behavior, many businesses draft a code of ethics, which is an informal statement of the ethical priorities the company follows.

Question 26

According to the _____, even if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should maintain the standards of the company's home country.

A) cultural relativist
B) righteous moralist
C) utilitarian
D) naïve immoralist

Question 27

The _____ occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.

A) tragedy of the commons
B) moral ignorance
C) noblesse oblige
D) veil of ignorance

Question 28

The _____ outlawed the paying of bribes to foreign government officials to gain business.

A) Convention on Combating Bribery of Foreign Public Officials
B) Foreign Corrupt Practices Act
C) Convention on International Business Transactions
D) Universal Declaration of Human Rights

Question 29

Ethical dilemmas exist because many real-world decisions involve:

A) first-, second-, and third-order consequences that are hard to quantify.
B) people from different cultures.
C) employers and employees.
D) people from different multinational firms.

Question 30

An American firm that sets up production units in China is accused of releasing untreated chemical waste into water bodies. The manager of the firm defends the firm stating that, factories in China set up by French and British firms also release untreated chemical waste into water bodies. What approach to business ethics is the manager using?

A) Righteous moralist
B) Utilitarian
C) Naive immoralist
D) Cultural relativist

Question 31

_____ is a French term that refers to honorable and benevolent behavior considered the responsibility of people of high (noble) birth.

A) Bienveillante
B) Honourable
C) Aristocratic
D) Noblesse oblige

Question 32

According to the _____ point-of-view, a firm should adopt the ethics of the culture in which it is operating.

A) cultural relativism
B) righteous moralist
C) naïve immoralist
D) utilitarian approach

Question 33

Talking with _____ is a good way to discern a potential employee's ethical predisposition.

A) human resource personnel
B) prior employers regarding someone's reputation
C) someone's psychologists
D) someone's family

Question 34

Facilitating payments are also known as _____.

A) grease monkeying
B) pocket lining
C) speed money
D) sliding

Question 35

_____ approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate ethical decision making in a multinational enterprise.

A) Cultural relativism
B) The righteous moralist
C) Straw men
D) The naive immoralist

Question 36

Employees in a business often take their cue from _____.

A) other employees
B) business leaders
C) their families
D) government leaders

Question 37

A firm's _____ include customers, suppliers, and lenders.

A) internal stakeholders
B) clients
C) external stakeholders
D) community

Question 38

_____ arguments suggest that improving working conditions beyond the level required by the law and necessary to maximize employee productivity will reduce profits and are therefore not appropriate.

A) Rawls'
B) Kantian
C) Sullivan's
D) Friedman's

Question 39

The _____ approaches to ethics hold that the moral worth of actions or practices is determined by their consequences.

A) naïve immoralist
B) cultural relativist
C) righteous moralist
D) utilitarian

Question 40

Ethics officers are hired by many businesses to make sure that all employees are trained to be ethically aware and that ethical considerations enter the business decision-making process at all levels of the organization.

Question 41

Companies can strengthen the _____ of employees by committing themselves to not retaliate against employees who complain about unethical actions.

A) moral courage
B) code of ethics
C) ethical strategies
D) organizational culture

Question 42

It is in the best interest of prospective employees to find out all they can about the:

A) external stakeholders of an organization.
B) ethical climate in an organization.
C) internal stakeholders of an organization.
D) corporate social responsibility actions of an organization.

Question 43

Which of the following was designed to allow GM to operate ethically in South Africa as long as the company did not obey the apartheid laws in its own South African operations?

A) Sullivan principles
B) The righteous moral system
C) Noblesse oblige
D) Cultural relativism

Question 44

Cultural relativism suggests that:

A) a firm should adopt the ethics of the culture in which it is operating.
B) the only social responsibility of a firm is to increase profits.
C) a firm's ethical policies should remain the same in all cultures.
D) a multinational should follow its home-country cultural practices in all the host-countries where it has operations.

Question 45

An international U.S.-based company sets up a production unit in a developing country with poor environmental regulations. This contributes to the:

A) noblesse oblige situation.
B) inequity aversion.
C) global tragedy of the commons.
D) Friedman effect.

Question 46

The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions excludes:

A) bribes made to secure contracts that would otherwise not be secured.
B) grease payments to gain exclusive preferential treatment.
C) facilitating payments made to expedite routine government action.
D) payments to government officials for special privileges.

Question 47

BP, one of the world's largest oil companies, has made it part of the company policy to undertake "social investments" in the countries where it does business. There was no economic reason for BP to make this social investment, but the company believes it is morally obligated to give something back to the societies that have made their success possible. BP's actions are an example of:

A) cultural relativism.
B) the Friedman doctrine.
C) noblesse oblige.
D) the tragedy of the commons.

Question 48

Facilitating payments are:

A) a direct violation of the Foreign Corrupt Practices Act.
B) permitted so long as they designed only to gain exclusive preferential treatment.
C) used to secure contracts that would otherwise not be secured.
D) permitted under the amended Foreign Corrupt Practices Act.

Question 49

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 is known as:

A) moral relativism.
B) noblesse oblige.
C) ethical dilemma.
D) social responsibility.

Question 50

Which of the following observations about the Foreign Corrupt Practices Act is true?

A) The act outlawed the paying of bribes to foreign government officials to gain business.
B) There is enough evidence that it put U.S. firms at a competitive disadvantage.
C) The act originally allowed for "facilitating payments."
D) The Nike case was the impetus for the 1977 passage of this act.

Question 51

_____ enables managers to walk away from a decision that is profitable but unethical.

A) Utilitarianism
B) Righteousness
C) Just distribution
D) Moral courage

Question 52

Expatriate managers may experience more than the usual degree of pressure to violate their personal ethics because of which of the following?

A) They are surrounded by their ordinary social context and supporting culture.
B) They are psychologically and geographically closer to the parent company.
C) They may be based in a culture that does not place the same value on ethical norms important in the manager's home country.
D) They may be surrounded by local employees who have more rigorous ethical standards.

Question 53

Identify the INCORRECT statement about environmental regulations.

A) Environmental regulations are often lacking in developing nations.
B) Environmental regulations are similar across developed and developing nations.
C) Developed nations have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, and so on.
D) Inferior environmental regulations in host nations, as compared to home nation, can lead to ethical issues.

Question 54

Which of the following refers to the values and norms that the employees of an organization share?

A) Vision statement
B) Cultural relativism
C) Organization culture
D) Power orientation

Question 55

The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation.

A) Friedman effect
B) noblesse oblige
C) inequity aversion
D) tragedy of the commons

Question 56

According to _____, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

A) the naive immoralist
B) the righteous moralist
C) cultural relativism
D) the Friedman doctrine

Question 57

Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ minors in its subsidiary, even though it is against the multinational's home-country ethics. Which of the following approaches to business ethics would justify the actions of the multinational company?

A) Righteous moralist
B) Cultural relativism
C) The justice theory
D) The rights theory

Question 58

According to the Friedman doctrine:

A) ethics are nothing more than the reflection of culture.
B) a multinational's home-country standards of ethics are inappropriate to follow in foreign countries.
C) businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business.
D) if a manager of a multinational sees that firms from other nations are not following environmental legislation in a host nation, that manager should not either.

Question 59

A situation in which none of the available alternatives seems morally acceptable is called:

A) an ethical dilemma.
B) noblesse oblige.
C) the tragedy of the commons.
D) the free rider problem.

Question 60

Which of the following, in a business setting, is taken to mean benevolent behavior that is the responsibility of successful enterprises?

A) Sullivan's principles
B) Ethical dilemma
C) Tragedy of the commons
D) Noblesse oblige

Question 61

According to John Rawls's difference principle,

A) certain people or institutions are obligated to provide benefits or services that secure the rights of others.
B) fundamental human rights should transcend national borders and cultures.
C) the best decisions are those that produce the greatest good for the greatest number of people.
D) inequalities are justified if they benefit the position of the least-advantaged person.

Question 62

The United Nations Universal Declaration of Human Rights, related to employment, upholds which of the following?

A) The requirement for the formation of trade unions.
B) A sliding pay scale based upon need.
C) Prohibition of trade unions.
D) Protection against unemployment.

Question 63

The righteous moralist suggests that:

A) ethics are nothing more than the reflection of culture.
B) a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
C) the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
D) if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.

Question 64

In its extreme viewpoint, _____ suggests that if a culture supports slavery, it is all right to use slave labor in the country.

A) the Friedman doctrine
B) noblesse oblige
C) righteous moralist
D) cultural relativism

Question 65

According to the naive immoralist,

A) a multinational's home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
B) the social responsibility of business is to increase profits, so long as the company stays within the rules of law.
C) ethics are nothing more than the reflection of a culture.
D) if firms in a host nation do not follow ethical norms then the manager of a multinational should also not follow ethical norms there.

Question 66

Justice theories of business ethics focus on:

A) the moral worth of actions or practices.
B) minimum levels of morally acceptable behavior.
C) fundamental rights and privileges that transcend national boundaries.
D) the attainment of an equitable distribution of goods and services.

Question 67

A multinational company is accused of paying bribes to the government of a host country to obtain permission to build a production factory. The public relations manager of the company defends the company's actions as being ethically sound; he states that in the host country, paying bribes to government officials is the accepted norm and is in keeping with the social practices in the host country. The public relations manager is using which of the following philosophical doctrines to defend the actions of the company?

A) The Friedman doctrine
B) Righteous moralist
C) Noblesse oblige
D) Cultural relativism

Question 68

Rawls' philosophy that inequalities are justified if they benefit the position of the least-advantaged person is known as the:

A) inequality principle.
B) equity principle.
C) difference principle.
D) ignorance veil principle.

Question 69

External stakeholders:

A) are individuals or groups who own the business.
B) include all employees, the board of directors, and stockholders.
C) typically comprise customers, suppliers, lenders, etc.
D) are individuals or groups who work for the business.

Question 70

According to the _____ approach, the best decisions are those that produce the greatest good for the greatest number of people.

A) naive immoralist
B) Friedman doctrine
C) Kantian ethics
D) utilitarian

Question 71

The utilitarian approach to business ethics suggests that:

A) people should be treated as ends and never purely as means to the ends of others.
B) the moral worth of actions or practices is determined by their consequences.
C) people have dignity and need to be treated as such.
D) human beings have fundamental rights and privileges that transcend national cultures.

Question 72

An American manager in Colombia routinely pays off the local drug lord to guarantee that his plant will not be bombed and that none of his employees will be kidnapped. The manager argues that such payments are ethically defensible because everyone is doing it. The manager's argument exemplifies which of the following ethical approaches?

A) Naive immoralist
B) Kantian ethics
C) Righteous moralist
D) Noblesse oblige

Question 73

Which of the following is an example of an external stakeholder?

A) Employees
B) Customers
C) Stockholders
D) The board of directors

Question 74

The products of Carmen Stores, an international sports apparel chain, are manufactured in sweat factories in China. According to the company president, using sweatshop labor offers a means of livelihood to children and young adults, as well as supplies good quality apparel to customers at a lower cost. She asserts that the actions of the company are justified because it results in the benefit of the maximum number of people. The company president's argument is based on which of the following ethical viewpoints?

A) The righteous moralist
B) The Friedman doctrine
C) Kantian approach to business ethics
D) Utilitarian approach to business ethics

Question 75

The Kantian approach to ethics suggests that:

A) human beings have fundamental rights and privileges that transcend national boundaries.
B) the moral worth of actions or practices is determined by their consequences.
C) people should be treated as ends and never purely as means to the ends of others.
D) ethics are nothing more than the reflection of culture.

Question 76

Which of the following persons believed that people should be treated as ends and never purely as means to the ends of others?

A) John Stuart Mill
B) Immanuel Kant
C) Milton Friedman
D) David Hume

Question 77

Which of the following statements is true about the United Nations Universal Declaration of Human Rights?

A) It transcends national borders.
B) It states that human rights are culturally determined.
C) It states that an action is judged desirable if it leads to the best possible balance of good consequences over bad consequences.
D) It states that the only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

Question 78

According to John Rawls:

A) each person should be permitted the maximum amount of basic liberty compatible with a similar liberty for others.
B) freedom of speech and assembly is the single most important component in a justice system.
C) equal basic liberty is impossible in a pure market economy.
D) ethics is culturally determined.

Question 79

Identify the correct statement about the rights theories.

A) Human beings have fundamental rights and privileges that transcend national boundaries.
B) The moral worth of actions or practices is determined by their consequences.
C) People should be treated as ends never purely as means to the ends of others.
D) The only social responsibility of business is to increase profits, so long as the company stays within the rules of law.

Question 80

Article 1 of the United Nations Universal Declaration of Human Rights states: All human beings are born free and equal in dignity and rights. This best echoes:

A) cultural relativism.
B) Friedman doctrine.
C) the righteous moralist approach.
D) Kantian ethics.