Deck 9: Ethics, corporate Social Responsibility, environmental Sustainability, and Strategy

Question 1

Although exposing children to hazardous work and long work hours is unquestionably deplorable,which of the following,if true,leads to a moral dilemma?

A)Children are not as efficient as adults in doing physically demanding work.
B)Many child laborers come from poverty-stricken families.
C)Banning child labor increases school attendance.
D)Working children learn independence.
E)Use of adults leads to higher labor costs.

Answer 1

B

Question 2

The contentions that (1)many of the same standards of what is ethical and what is unethical resonate with peoples of most cultures,societies,and religions,and (2)to the extent there is common moral agreement about right and wrong actions,there exists a set of common ethical standards to which organizations and individuals can be held accountable are defining beliefs of

A)the school of ethical relativism.
B)the school of ethical universalism.
C)integrated social contracts theory.
D)both the school of ethical relativism and the school of ethical universalism.
E)the school of ethical relativism,the school of ethical universalism,and integrated social contracts theory.

Answer 2

B

Question 3

The results of strategies that cannot pass the test of moral scrutiny often are not manifested in

A)criminal indictment and convictions of company executives.
B)sizable fines.
C)devastating hits to public relations and company reputation.
D)sharp drops in stock prices and lower dividends.
E)increased customer loyalty.

Answer 3

E

Question 4

Notions of right and wrong,fair and unfair,moral and immoral,ethical and unethical

A)vary enormously from religion to religion and country to country across the world.
B)are present in all societies,organizations,and individuals.
C)ultimately depend on the circumstances-nothing is really black or white when it comes to ethical standards.
D)are governed mainly by the thinking and writings of religious clerics at the School of Morally Correct Thinking and Behavior in Geneva,Switzerland.
E)ultimately depend on a person's own values and beliefs.

Question 5

The school of ethical relativism holds that

A)what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country.
B)when there are country or cross-cultural differences in what is considered ethical or unethical in business situations,it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.
C)concepts of right and wrong are always governed by business norms in each country,culture,or society.
D)concepts of right and wrong are always a function of each individual's own set of values,beliefs,and ethical convictions.
E)concepts of right and wrong as they apply to business behavior are always varying shades of gray,never absolute (i.e. ,black or white).

Question 6

A company's unethical behavior may result in the following except

A)buyers will shun the company.
B)the company will have difficulty recruiting and retaining talented employees.
C)the company risks damage to shareholders in the form of lost revenues,higher costs,and lower profits,and the company's reputation will suffer.
D)the company will have to deal with the Sarbanes-Oxley Act of 2002,which requires the company remove the tarnished employees.
E)the company may incur sizable fines.

Question 7

Ethical principles in business

A)deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner.
B)deal chiefly with the rules each company's top management and board of directors make about what is right and what is wrong.
C)are not materially different from ethical principles in general.
D)are generally less stringent than the ethical principles for society at large.
E)are generally more stringent than the ethical principles for society at large.

Question 8

Which of the following is considered to be an intangible or less visible cost that companies may incur when ethical wrongdoing is discovered and punished?

A)Costs of providing remedial education and ethics training to company personnel
B)Civil penalties
C)Legal and investigative costs
D)Loss of reputation
E)Costs of taking corrective actions

Question 9

Which one of the following is not one of the major drivers of unethical managerial behavior?

A)Intense competitive pressures
B)Overzealous pursuit of personal gain,wealth,and other selfish interests
C)A company culture that puts the profitability and good business performance ahead of ethical behavior
D)Heavy pressures on company managers to meet or beat earnings targets
E)The attitude among management that the business of business is business,not ethics

Question 10

Which of the following is considered to be a visible cost that companies may incur when ethical wrongdoing is discovered and punished?

A)Costs of taking corrective actions
B)Civil penalties
C)Legal and investigative costs
D)Costs of providing remedial education and ethics training to company personnel
E)Hits to company reputation and employee productivity

Question 11

The costs incurred when ethical wrongdoing occurs fall into three specific categories and include all except

A)intangible costs such as legal and investigative costs incurred by the company.
B)internal administrative costs associated with ensuring future compliance.
C)intangible costs such as customer defections.
D)less visible costs such as the costs of complying with often harsher government regulation.
E)visible costs to shareholders such as lower stock price.

Question 12

The contention that because different societies and cultures have divergent values and standards of right and wrong,it is appropriate to judge behavior as ethical or unethical in the light of local customs and social mores rather than according to a single set of ethical standards

A)defines what is meant by ethical relativism.
B)defines what is meant by ethical universalism.
C)is the foundation of integrated social contracts theory.
D)is the basis for the theories of both ethical relativism and ethical universalism.
E)is the foundation for all three theories above.

Question 13

According to the school of ethical universalism,

A)concepts of what constitutes ethical behavior and unethical behavior are dictated by subjectively provable moral principles but not by objectively provable moral principles.
B)concepts of right and wrong are universal within countries or societies but not across countries or cultures.
C)concepts of what is ethical and what is unethical are universal and absolute,leaving no room for deviation from country to country or circumstance to circumstance.
D)to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries,there exists a set of universal ethical standards to which all societies,all companies,and all individuals can be held accountable.
E)all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world.

Question 14

The major drivers of unethical business behavior include

A)pervasive managerial immorality and a general lack of scruples on the part of top executives regarding how customers and suppliers should be treated.
B)corporate cultures that put the bottom line ahead of ethics,heavy pressures on company managers to meet or beat performance targets,and overzealous or obsessive pursuit of wealth accumulation,power,status,and other selfish interests.
C)widespread managerial belief in the ethical relativism school of thinking.
D)an aversion to ethical correctness on the part of top executives and a belief that unethical behavior is unimportant and probably will not be discovered.
E)intense competitive pressures.

Question 15

Unethical business behavior is unlikely to be to be driven by such factors as

A)a managerial mind-set that the business of business is business,not ethics.
B)overzealous pursuit of personal gain,wealth,and other selfish interests.
C)a company culture that puts the profitability and good business performance ahead of ethical behavior.
D)heavy pressures on company managers to meet or beat earnings targets.
E)the need to meet objectives associated with the triple bottom line.

Question 16

A company's strategy needs to be ethical because

A)of the dangers that top management will be embarrassed if the company's unethical behavior is publicly exposed.
B)a strategy that is unethical not only damages the company's reputation,but it can also have costly consequences.
C)everyone is an ethics watchdog,and somebody is sure to blow the whistle on the company's unethical behavior.
D)of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used.
E)unethical strategies are inconsistent with or else weaken the corporate culture.

Question 17

As they apply to business conduct and business decisions,ethical principles

A)deal chiefly with a company's standards about what is right and wrong insofar as the conduct of its business is concerned and about what behaviors are expected of company personnel.
B)deal chiefly with the behaviors that a company's board of directors expects of all company personnel in both their conduct on the job and their conduct off the job.
C)involve the rules a company's top management and board of directors make about what is right and what is wrong.
D)are not materially different from ethical principles in general.
E)are generally less stringent than the ethical principles for society at large because it is well understood that businesses should not be expected to operate any differently from what the law requires of them.

Question 18

Business ethics concerns

A)developing a consensus among companies worldwide as to what ethical principles that businesses should be expected to observe in the course of conducting their operations.
B)what ethical behaviors should be expected of company personnel in the course of doing their jobs.
C)the application of ethical principles and standards to business activities,behavior,and decisions.
D)picking and choosing among the normative ethical standards of society in order to arrive at a set of ethical standards that apply directly to operating a business.

Question 19

Which of the following is considered to be an internal administrative cost that companies may incur when ethical wrongdoing is discovered and punished?

A)Lower stock prices
B)Civil penalties
C)Legal and investigative costs
D)Government fines
E)Costs of taking corrective actions

Question 20

According to the school of ethical universalism,

A)universal ethical principles or norms put limits on what actions and behaviors fall inside the boundaries of what is right and which ones fall outside;such universal norms include honesty,trustworthiness,respecting the rights of others,practicing the Golden Rule,and avoiding unnecessary harm to workers or to the users of the company's product or service.
B)all societies and countries are obligated to apply universally defined ethical principles of right and wrong as set forth in the Global Code of Ethical and Social Morality (which is subscribed to by 150 nations of the world).
C)all societies and countries apply essentially the very same set of universally defined ethical principles of right and wrong in judging the ethical correctness of business behavior.
D)it is only fair that the standards of what's ethical and what's unethical be applied universally to all businesses in all countries irrespective of local business traditions and local business norms.
E)the standards of what constitutes ethical and unethical behavior in business situations are partly universal,but in the main are governed by local business norms.

Question 21

A company that adopts the principle of ethical relativism in providing guidance to company personnel

A)bases its standards of what is ethical and what is unethical on the Global Code of Ethical Conduct first developed in 1935 and since subscribed to by the governments of 180 countries.
B)places itself in a perilous position if it is required to defend these activities to its stakeholders in countries with higher ethical expectations or standards because it has no ethical standards or principles of its own.
C)has no fair way to judge the ethical correctness of the conduct of company personnel.
D)has a one-size-fits-all set of ethical standards.
E)allows each company employee to determine what set of ethical standards to observe.

Question 22

A belief in ethical relativism leads to the conclusion that

A)because ethical standards are subjective,it is perfectly appropriate for each company to define and implement its own ethical principles of right and wrong as concerns the use of underage labor and the payment of bribes and kickbacks.
B)ethical standards are determined objectively (rather than subjectively).
C)whether the payment of bribes and kickbacks should be deemed ethical or unethical depends on the moral standards,values,beliefs,convictions,and business norms that prevail in particular cultures,societies,countries,or circumstances.
D)ethical standards are objective and universal;thus,whether the use of underage labor and the payment of bribes and kickbacks should be deemed ethical or unethical definitely is not dependent on the moral standards,values,beliefs,convictions,and business norms that prevail in particular cultures,societies,countries,or circumstances.
E)standards of right and wrong are governed by what is legal in a given country;thus,whether the use of underage labor and the payment of bribes and kickbacks is ethical or unethical is governed by local law.

Question 23

A manufacturer and marketer of prescription pharmaceuticals decided to raise the price of its anti-malaria drug from $15.00 per dose to $750.00 per dose,a price increase of 5,000 percent.Following a public outcry,the CEO was forced to resign,the company was forced to retract the price hike,and the company's stock price sharply declined.Which of the following has the company incurred?

A)Internal administrative costs but not visible costs
B)Only visible and internal administrative costs
C)Visible and intangible costs
D)Internal administrative costs but not intangible costs
E)Only intangible costs

Question 24

Which of the following should a company not consider in crafting a strategy consistent with corporate social responsibility?

A)Making charitable contributions,donating money and the time of company personnel to community service endeavors,and supporting various worthy organizational causes
B)taking steps to provide suppliers,distributors,and other value chain partners with handsome profit margins
C)initiating actions to build a workforce that is diverse with respect to gender,race,national origin,and other aspects that different people bring to the workplace
D)devoting efforts to employ an ethical strategy and observe ethical principles in operating the business
E)pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant

Question 25

The essence of socially responsible business behavior is

A)encouraging company personnel to run for political offices.
B)balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.
C)undertaking actions to balance the interests of all company stakeholders rather than just exclusively look out for the interests of shareholders.
D)making sizable contributions to political action committees representing the interests of the industry.
E)pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant.

Question 26

Which of the following is not something a company should usually consider in crafting a strategy of social responsibility?

A)Actions to benefit shareholders (such as raising the dividend to boost the stock price)
B)Making charitable contributions and donating money and the time of company personnel to community service endeavors
C)Actions to ensure the company has an ethical strategy and operates honorably and ethically
D)Actions to protect or enhance the environment
E)Actions to create a workforce diversity program

Question 27

Corporate social responsibility (CSR)as it applies to businesses refers to

A)a company's duty to put the public interest ahead of shareholder interests.
B)societal expectations that all company stakeholders will be treated equally and fairly.
C)a company's duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct.
D)the responsibility that top management has for ensuring that the company's actions and decisions are in the best interest of society at large.
E)a company's duty to operate in an honorable manner,provide good working conditions for employees,encourage workforce diversity,be a good steward of the environment,and actively work to better the quality of life in the local communities where it operates and in society at large.

Question 28

Which one of the following is not a part of the business case for why companies should act in a socially responsible manner?

A)Reduced risk of reputation-damaging incidents
B)Increased buyer patronage
C)Internal benefits such as improved workforce retention and operational efficiency
D)Aggressive pursuit of market share,revenues,and profits
E)Shareholders' benefits,such as increased stock price and financial performance

Question 29

According to integrative social contracts theory,the ethical standards a company should try to uphold

A)are governed by the school of ethical universalism.
B)are governed both by (1)a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2)the circumstances of local cultures,traditions,and shared values that further prescribe what constitutes ethically permissible behavior and what does not-but universal norms always take precedence over local ethical norms.
C)are governed by each country's Code of Required Ethical Conduct,which sets forth that each individual,group,business,and organization has a social contract to observe the ethical and moral standards that the country has adopted.
D)should be determined by the company's board of directors.
E)should never be absolute but rather always provide some wiggle room according to the circumstances of the situation.

Question 30

In an attempt to fulfill its corporate social responsibility,which of the following is an activity that a company might consider to enhance the quality of life for its employees?

A)Providing work-at-home opportunities
B)Donating a percentage of its profits to a global charity like UNICEF or the Red Cross
C)Selling products at a discounted price to customers in underdeveloped countries
D)Paying to have litter removed from a state highway
E)Discontinuing business with suppliers that use child labor

Question 31

A multinational automobile manufacturer issues a public statement that the company's vehicle emissions tests had been falsified to meet environmental compliance standards over recent years using software specifically designed for that purpose.Following the news,the company's CEO is replaced,vehicle sales plummet,and the company's stock price sharply declines.Which of the following has the company incurred?

A)Reduced risk of reputation-damaging incidents
B)Only visible and internal administrative costs
C)Internal benefits such as improved workforce retention and operational efficiency
D)Visible and intangible costs
E)Internal administrative costs but not intangible costs

Question 32

Which of the following is most likely to be morally valid from the perspective of ethical relativism?

A)Agreeing to a country's policy of prohibiting the education of females
B)Employing children under the age of nine as laborers
C)Bribing a government official in an underdeveloped country to obtain a permit to build a hospital
D)Bribing a government official to allow you to transfer gambling winnings to a tax haven
E)Performing genital mutilations on nonconsenting female teens

Question 33

Good corporate citizens

A)go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all.
B)are active participants in the political process.
C)identify up-and-coming managers who have a future in local- or state-level politics.
D)create a democratic workplace in which the voices of lower-level employees are heard through representation on the board of directors.
E)ensure that their workforce is diverse.

Question 34

Companies committed to environmental sustainability

A)consider the commitment to shareholders as a first-order priority,commitment to employees as a second-order priority,and commitment to the environmental protection as a third-order commitment.
B)consider the commitment to the environment as a first-order priority,commitment to employees as a second-order priority,and commitment to shareholders as a third-order commitment.
C)consider the commitment to the environment as a first-order priority,commitment to shareholders as a second-order priority,and commitment to employees as a third-order commitment.
D)undertake initiatives directed at improving the company's triple bottom line,which places importance on economic,environmental,and social metrics.
E)believe that it is important to convince consumers to change buying habits that first consider meeting the consumer's needs to first considering whether the product is environmentally friendly.

Question 35

Which of the following should not be on a company's menu of actions to consider in crafting a strategy of social responsibility?

A)Actions to ensure that the company operates in an honorable and ethical manner
B)Actions to ensure diversity in the workforce
C)Actions (over and above what is required)to protect or enhance the environment,including both those environmental problems stemming from the company's own business activities and those problems outside the company's immediate sphere of operations
D)Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work
E)Actions that place profits and returns to shareholders without respect to commitments to employees,communities,and the environment.

Question 36

Environmental sustainability involves

A)a corporate commitment to go beyond society's expectations for ethical strategies and business behavior to address the unmet noneconomic needs of society.
B)striking a balance between (1)the economic responsibility to reward shareholders with profits, (2)the legal responsibility to follow the laws in countries where it operates, (3)the ethical responsibility to abide by society's moral norms,and (4)the discretionary philanthropic responsibility to contribute to the noneconomic needs of society.
C)deliberate actions to protect the environment,provide for the longevity of resources,maintain ecological support systems for future generations,and guard against the ultimate endangerment of the planet.
D)developing strategies that yield a sustainable competitive advantage that will allow the company to be sustainable for the long term.
E)deliberate actions that companies take in the environmental arena in order to meet the needs of the present while foregoing the needs of the future.

Question 37

Integrative social contracts theory maintains that

A)there is no such thing as moral-free space: all ethical standards are determined by societal norms,and individuals have an implied social contract to live up to these standards.
B)few nations or cultures have a common moral agreement about what is ethically right and wrong.
C)there should be no absolute limits put on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions and behaviors fall outside.
D)first-order universal ethical norms always take precedence over second-order local ethical norms.
E)each country,culture,and society has commonly held views about what constitutes ethically appropriate actions/behaviors;these common standards of what is ethical and what is not combine to form a social contract that all individuals in that country,culture,and society are obligated to observe.

Question 38

Which of the following is not generally on a company's menu of actions to consider in crafting a strategy of social responsibility?

A)Actions to ensure that the company operates in an honorable and ethical manner
B)Actions to build a workforce that is diverse with respect to gender,race,national origin,and perhaps other personal characteristics
C)Actions to look out exclusively for the best interests of shareholders
D)Actions to protect or enhance the environment (apart from what is required by governmental authorities)
E)Actions to create a work environment that enhances the quality of life for employees

Question 39

Which one of the following elements does not typically comprise a company's social responsibility strategy?

A)actions to enhance workforce diversity and make the company a great place to work
B)making charitable contributions and donating the time of company personnel to community service endeavors
C)actions to protect or enhance the environment
D)conscious efforts to ensure that all elements of the company's strategy are ethical and actions to protect or enhance the environment (beyond what is legally required)
E)actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant

Question 40

The contention that ethical standards should be governed both by (1)a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2)the circumstances of local cultures,traditions,and shared values that further prescribe what constitutes ethically permissible behavior and what does not are the basic principles of

A)the school of ethical relativism.
B)the school of ethical universalism.
C)integrative social contracts theory.
D)the global corruption standards published by Transparency International.
E)the Global Code of Ethical and Social Morality developed by the United Nations.

Question 41

Explain how companies committed to environmental sustainability are able to address society's concerns about protecting the environment while lowering costs and/or creating value for customers.

Question 42

Which one of the following is false as concerns the merits of why acting in a socially responsible manner is good business?

A)Companies with good reputations for contributing time and money to bettering society are better able to attract and retain employees compared to companies with tarnished reputations.
B)There is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance.
C)To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation,a company may win additional patronage.
D)Operating in a socially responsible manner protects the company from consumer,environmental,and human rights activist groups that are quick to criticize businesses whose behavior they consider to be out of line.
E)Well-conceived social responsibility strategies help avoid or preempt legal and regulatory actions that could prove costly to the company.

Question 43

Good corporate citizens do not

A)meet legal,ethical,and economic responsibilities imposed by shareholders.
B)identify up-and-coming managers who have a future in local- or state-level politics.
C)seek to improve standards of communities in which they operate.
D)attempt to sustain profitability for stakeholders while in the pursuit of social responsibility.
E)pursue discretionary activities that contribute to the betterment of society,especially in areas where government has chosen not to focus its efforts or has fallen short.

Question 44

Explain what is meant by the "triple bottom line."

Question 45

Good corporate citizens

A)provide work-from-home options to working mothers residing in distant locations.
B)develop and market products that are solely environmentally friendly.
C)identify up-and-coming managers who have a future in local- or state-level politics.
D)create a democratic workplace whereby the voices of lower-level employees are heard through representation on the board of directors.
E)go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all.

Question 46

Discuss briefly what is meant by the terms ethical universalism and ethical relativism.Where does integrative social contracts theory fit into the debate about ethical standards? Which of the three schools of thought stands on the strongest ground?

Question 47

What are the chief causes of unethical strategies and unethical business behavior?

Question 48

Identify and briefly describe the three main drivers of unethical strategies and unethical managerial and business behavior.

Question 49

Explain the difference between ethical universalism and integrative social contracts theory.Which school of thought do you think is most valid? Explain the reasons for your answer.

Question 50

What is the essence of the theory of corporate social responsibility (CSR)? How does the CSR theory differ from the concept of corporate citizenship?

Question 51

What is the business case for why a company should pursue ethical strategies?

Question 52

Explain the key tenets of the concept of environmental sustainability.How does striving for environmental sustainability impact strategic initiatives involving a company's shareholders,its employees,and the environment?

Question 53

Which one of the following is not a part of the business case for why companies should act in a socially responsible manner?

A)Every business has a moral duty to be a good corporate citizen.
B)Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.
C)Acting in a socially responsible manner is in the overall best interest of shareholders.
D)To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation,a company may win additional patronage.
E)Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting,workforce retention,training,and improved worker productivity).

Question 54

What are the strengths and weaknesses of the thesis that ethical standards are (or should be)universal?

Question 55

What is meant by integrative social contracts theory? How does such an approach ensure a strong commitment to business ethics in companies with international operations?

Question 56

What is the difference between ethics and business ethics?

Question 57

Explain the difference between the school of ethical universalism and the school of ethical relativism.

Question 58

Sourcing a supply from a small,women-owned business is an example of a corporate social responsibility action to

A)support philanthropy.
B)ensure honorable and ethical action.
C)promote workforce diversity.
D)enhance employee well-being.
E)protect and sustain the environment.

Question 59

Which of the following statements regarding a company's CSR and sustainability strategies is false?

A)While the strategies and actions of all socially responsible companies have sameness in the sense of drawing on the same categories of socially responsible behavior,each company's version of being socially responsible is unique.
B)A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5 percent (or more)of pretax profits on social responsibility initiatives.
C)Social responsibility strategies linked to a company's customer value proposition or key value chain activities may help build competitive advantage.
D)The jury is still out on the correlation between CSR and stock price performance and competitive advantage.
E)Well-conceived social responsibility strategies help avoid or preempt legal and regulatory actions that could prove costly to the company.

Question 60

Ethical relativism equates to sometimes conflicting sets of ethical standards.True or false? Explain your answer.

Question 61

There is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance.Comment.

Question 62

Why should a company endeavor to be socially responsible in its actions and conduct?

Question 63

Explain what is meant by sustainable business practices,and using that explanation,provide three examples of companies that pursue sustainability strategies.