Deck 10: Ethical Problems of Organizations

Question 1

The definition of conflict for an organization is similar to that for an individual; that is, if a stakeholder thinks that an organization's judgment is biased because of a relationship it has with another firm, a conflict could exist.

Answer 1

True

Question 2

Only since Enron's collapse have ethicists and business professionals really been concerned about the increasing focus on "short-term" earnings.

Answer 2

False

Question 3

Reference : Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Owners, customers, and employees.

Answer 3

b

Question 4

In his speech to Congress on consumers in 1962, President John F. Kennedy outlined four consumer "rights": the right to buy, the right to pay, the right to choose, and the right to be informed.

Question 5

It's clear that the system for advertising drugs and bringing them to market poses huge ethical issues for the drug companies, many of which have been admired for their ethical reputations.

Question 6

Reference : Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Communication Commission (FCC)

Question 7

For customers, products and services should be produced and delivered by companies according to the "dual care" theory.

Question 8

Because stakeholders' interests frequently do not overlap, an organization is able to focus on one stakeholder at a time.

Question 9

Reference : Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Reserve Board

Question 10

Reference : Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
Occupational Safety and Health Administration (OSHA)

Question 11

Reference : Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Opinion formers, community, and authorities.

Question 12

One of the most common faults in ethical decision making is to focus on the long-term consequences of a decision.

Question 13

Reference : Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Environmental Protection Agency (EPA)

Question 14

Reference : Matching Key Stakeholders and Regulatory Agencies
a) Guard rights of shareholders
b) Guard rights of consumers
c) Guard rights of employees
d) Guard rights of the community
The Federal Trade Commission

Question 15

The real proportion of wrong-doers is probably quite small.

Question 16

Reference : Matching Key Terms and Definitions
a) Stakeholders
b) Primary stakeholder
c) Secondary stakeholder
Individuals who have an interest/claim in what the organization does or how it performs.

Question 17

Ethical disasters in corporations often start as small issues and it is either denial or mismanagement that causes seemingly minor situations to mushroom into huge legal, ethical, and public relations nightmares.

Question 18

Despite Johnson & Johnson's best efforts to respond to its customers by pulling Tylenol off shelves, the product has never regained its market share.

Question 19

At the turn of the last century, consumers didn't even have the right to sue a manufacturer for a defective product.

Question 20

Conflicts involving organizations are more damaging than those who involve individuals.

Question 21

The pharmaceutical industry has found that advertising directly to the consumer minimizes problems experienced earlier with consumers regarding their confidence in products.

Question 22

In ethical decision-making and particularly in cases dealing with product safety, firms are best served when they consider the long-term consequences of a decision.

Question 23

The subject of ethics in advertising is a cloudy one, simply because there are varying opinions of exactly what truth is, and furthermore, what responsible is.

Question 24

Which of these is not a primary stakeholder?

A) Owners
B) Community
C) Customers
D) Employees

Question 25

Taking care of shareholders also means ultimately taking care of other key stakeholder groups.

Question 26

For Global Trading, a securities investment company, which of the following is considered a secondary stakeholder?

A) Owners
B) Community
C) Customers
D) Employees

Question 27

For ABC Manufacturing operating in seven countries, which of the following is considered a primary stakeholder?

A) Opinion formers
B) Community
C) Authorities
D) Employees

Question 28

According to some observers, products and services should be produced and delivered by companies according to the "due care" theory. Which of these elements if part of this theory?

A) Color combination
B) Choice
C) Pay
D) Notification

Question 29

In his speech to Congress on consumers in 1962, President John F. Kennedy outlined all of these consumer "rights" EXCEPT:

A) the right to safety
B) the right to be heard
C) the right to pay
D) the right to choose

Question 30

The idea that consumers have the right to safety, right to be heard, right to choose, and right to be informed came from ____________ in ________.

A) Theodore Roosevelt; 1930.
B) The Food and Drug Act; 1906.
C) John F. Kennedy; 1962.
D) George W. Bush; 2004.

Question 31

In this classic example of a company treating its employees responsibly, ____________ was the first company to offer company-paid vacations, stock ownership plans, employee suggestion program, and the guaranteed employment plan. This company has not laid off employees in the United States since 1948.

A) McWane, Inc.
B) Lincoln Electric
C) Scott Paper Company
D) Manville Corporation

Question 32

One of the most disturbing environmental bombshells was the revelation that Enron and MF Global funded organizations to cast doubt on scientists' growing consensus that the planet is experiencing global warming for the earth's inhabitants.

Question 33

Which of these occurs when you believe that your roommates' judgment might be clouded because of a relationship he has with your best friend?

A) Notification issues
B) Conflict of interest
C) Right to be informed
D) Due care theory violation

Question 34

In the United States, with its complex web of private and public insurers, consumers pay the cheapest cost of prescription drugs in the world and, in fact, the consumers in the rest of the world make up the discounted prices paid by the U.S. consumers.

Question 35

In a classic example of failing to protect its employees, ___________ knew asbestos caused cancer as early as 1930. However, the company lied to its employees and used several tactics to cover-up the product's effects.

A) Johnson & Johnson
B) A.H. Robbins
C) Manville Corporation
D) McWane, Inc.

Question 36

In this example of a conflict of interest, ________ conducted a series of off-the-books partnerships that were used to hide the organization's debt and inflate its stock price. The partnerships were managed by the company's executives who stood to profit the most from the transactions.

A) Merrill Lynch
B) Enron
C) Citicorp
D) Adelphia

Question 37

Which of these is not a secondary stakeholder?

A) Opinion formers
B) Community
C) Authorities
D) Employees

Question 38

The first real consumer law took effect in 1916 when, in _____, a consumer was given the right to sue the company for a defective product.

A) Merrill Lynch v. Blodgett
B) MacPherson v. Buick Motor Company
C) Wilson v. General Electric
D) Emerson v. Adelphia

Question 39

Toyota, like Johnson & Johnson, halted production in response to its concerns for its customers.

Question 40

Life Tool Manufacturing has a system in place to recall products that prove to be dangerous at some time after manufacture and distribution. This represents which element of the due care theory?

A) Packaging, labeling, and warnings
B) Quality control
C) Production
D) Notification

Question 41

Which is the most basic employee right in the workplace? a. Right to privacy
B) Right to freedom of speech
C) Right to a safe workplace
D) Right to fair treatment

Question 42

Commonsense Corporate Governance Principles include all of these EXCEPT: a. Truly reciprocal corporate boards are vital to effective governance, so all boards should be beholden to the CEO or management
B) Diverse boards make better decisions, so every board should have members with complimentary and diverse skills, backgrounds, and experiences
C) Every board needs a strong leader who is independent of management
D) Effective governance requires constructive engagement between a company and its shareholders

Question 43

For the public, the top three factors in corporate reputation are : a. transparent and honest practices, trustworthiness, and high-quality products and services
B) transparent and honest practices, community philanthropy, and high quality products and services
C) trustworthiness, high-quality products, and a no-layoff policy
D) trustworthiness, high-quality products, and a 90-day customer return policy

Question 44

Some of the most egregious cases of workers being injured or killed on the job involve ________ companies. a. financial
B) electric utility
C) internet
D) heavy manufacturing companies and mining

Question 45

Which of the following was created in an attempt to protect workers from hazards in the workplace? a. OSHA
B) EPA
C) FCC
D) EEOC

Question 46

The due care theory involves at least the elements set out below. a. products and services meet all government regulations and specifications
B) ability to return the product if dissatisfied for any reason
C) products should be inspected regularly for quality
D) manufacturers should institute a system to recall products that prove dangerous after distribution
E) a & b
F) a, c, & d

Question 47

In a 2012 survey, _____ were in a dead heat as the least trusted institutions in the U.S., and public confidence in them could be measured in single digits.

A) lawyers and accountants
B) CEOs and Boards of Directors
C) Wall Street and Congress
D) the White House and Congress

Question 48

Companies face a myriad of stakeholders that often have conflicting interests. Briefly describe a company or an incident that demonstrates how stakeholders' conflicting interests can lead to unethical behavior.

Question 49

Organizations have many ethical obligations to their employees including a. right to privacy, right to a safe workplace, right to promotional opportunities
B) right to privacy, right to a safe workplace, right to freedom of speech
C) right to a safe workplace, right to freedom of speech, right to promotional opportunities
D) right to a safe workplace, right to freedom of speech, right to three weeks vacation
E) right to fair treatment, right of privacy, right to c-level opportunities if they earned their MBA

Question 50

Which agency's goal is to protect the environment from the activities of businesses and individuals? a. OSHA
B) EPA
C) FCC
D) EEOC