Question 1

Which theory of business social responsibility holds that a business owes duties to its various constituencies such as customers and employees in addition to its shareholders?

Accepted Answer

The stakeholder interest theory posits that a business has responsibilities to not just its shareholders, but also to its various stakeholders, including customers, employees, suppliers, and the wider community. Therefore, C is the correct option. The moral minimum theory holds that businesses have only the minimum obligation to meet legal requirements, while the maximizing profits theory states that businesses should focus solely on maximizing profits for shareholders. The moral maximum theory holds that businesses should strive to do the most good for all stakeholders, even at the expense of profits. Corporate citizenship theory is similar to stakeholder interest theory, positing that businesses have social and environmental responsibilities as well.

Question 2

Peter runs an auto air conditioning repair shop.Because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners,auto air conditioning repairers have become subject to numerous new laws and regulations,some of which are costly and burdensome to comply with.Although it costs him more,Peter decides to follow all the statutes and regulations so long as everyone else does the same.Peter has reached his decision in accordance with:

Accepted Answer

The answer of Peter runs an auto air conditioning repair...

Question 3

A business that is willing to sacrifice some income in order to avoid harm to others is applying which theory of the social responsibility of business?

Accepted Answer

The moral minimum theory suggests that a business should make a profit while avoiding causing harm to others, even if it means sacrificing some income.

Question 4

A procedure which can be used to assess the moral health of a corporation is the:

Accepted Answer

The social audit is a systematic evaluation of a corporation's actions and policies with regards to their social responsibility and moral values. It assesses the corporation's impact on society, the environment, and their stakeholders. It provides a comprehensive view of the corporation's ethical performance and can identify areas for improvement. The other options are not established procedures for assessing the moral health of a corporation.

Question 5

Mary owns her own business and has just attended a cash flow management seminar where it was suggested the businesses should delay paying their suppliers as long as absolutely possible even if doing so violates the stated payment terms.Mary decides to continue paying her suppliers on time in accordance with their payment terms because Mary would like her customers to pay her on time.Mary has reached her decision in accordance with:

Accepted Answer

Mary's decision aligns with Kantian ethics, which emphasizes acting according to a set of principles or duties, such as honoring agreements and treating others as one would like to be treated.

Question 6

________,who won the Nobel Prize in economics when he taught at the University of Chicago,advocated the theory of maximizing profits for shareholders.

Accepted Answer

The economist who won the Nobel Prize in Economics while teaching at the University of Chicago, and advocated the theory of maximizing profits for shareholders, is Milton Friedman. Benjamin Stein is an economist, but he never won a Nobel Prize. John Maynard Keynes, Adam Smith, and Arthur Laffer are also economists, but they did not specifically advocate for the theory of maximizing profits for shareholders.

Question 7

It could be argued that the most ethical companies that do the best for society follow parts of which of the following theories?

Accepted Answer

The most ethical companies often follow the moral minimum, which involves doing no harm and adhering to ethical standards, and corporate citizenship, which emphasizes the company's role in contributing positively to society.

Question 8

You,your father and your sister are rock climbing when there is a accident.The three of you are now dangling from a single rope attached by a single cam to the rock face.The cam is slipping due to the combined weight of the three of you.If nothing is done,all three of you will die.You are in the middle and your sister is above you.If your father doesn't have a knife and begs you to cut the rope but you can't because your religion teaches you that taking a life for any reason is wrong,what ethical theory are you exhibiting?

Accepted Answer

The answer of You,your father and your sister are rock...

Question 9

Which theory of social responsibility contends that a business owes only one responsibility,and that is to produce the highest return for its shareholders?

Accepted Answer

The theory of maximize profits contends that a business owes only one responsibility, which is to produce the highest return for its shareholders. This theory views the pursuit of profit as the primary objective of a business, and suggests that businesses should only engage in activities that maximize profits while complying with legal and ethical requirements.

Question 10

A business that undertakes activities that benefit persons who are in no way connected with the business is applying which theory of the social responsibility of business?

Accepted Answer

The theory of corporate citizenship suggests that businesses should not only focus on maximizing profits but also contribute to the welfare of the society by undertaking activities that benefit individuals who are not directly connected with the business. This theory emphasizes the importance of businesses being responsible corporate citizens and taking an active role in working towards the betterment of society.

Question 11

The four theories of social responsibility of business discussed in the text can best be described as:

Accepted Answer

The four theories of social responsibility of business discussed in the text (economic, legal, ethical, and philanthropic) are policies on which laws should be based, and more than one of these policies might be proper depending on the situation. They are not laws themselves and do not necessarily conflict with each other, so options A, B, and C are incorrect. Option E is also incorrect because it suggests that only one theory is correct, when in reality different circumstances may call for different approaches.

Question 12

Peter runs an auto air conditioning repair shop.Because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners,auto air conditioning repairers have become subject to numerous new laws and regulations,some of which are costly and burdensome to comply with.This results in much higher costs for air conditioning repairs for many owners of older cars.By not following some of these regulations,Peter can repair these older cars at a much lower cost.Peter believes that the good that comes from the reduced repair costs outweighs the resulting incremental damage to the environment,and thus decides to not follow the regulations.Peter has reached his decision in accordance with:

Accepted Answer

Peter's decision is based on the utilitarian principle of maximizing overall happiness or well-being. He believes that providing affordable repair options to car owners will result in a greater good or benefit for the majority of people, even if it means ignoring some environmental regulations. This is consistent with the utilitarian ethical framework that focuses on achieving the greatest good for the greatest number of people.

Question 13

You,your father and your sister are rock climbing when there is a accident.The three of you are now dangling from a single rope attached by a single cam to the rock face.The cam is slipping due to the combined weight of the three of you.If nothing is done,all three of you will die.You are in the middle and your sister is above you.If your father takes out a knife and cuts the rope,sending himself to his death but saving you and your sister,what ethical theory has he exhibited?

Accepted Answer

Utilitarianism is an ethical theory that suggests the best action is the one that maximizes overall happiness or well-being. By sacrificing himself to save you and your sister, the father is choosing the action that results in the greatest good for the greatest number.

Question 14

Which of the theories of the social responsibility of business includes obligations of a business to parties other than shareholders?

Accepted Answer

Both stakeholder interest and corporate citizenship theories include obligations to parties other than shareholders, such as employees, customers, and the community.

Question 15

In the case in which Wal-Mart was sued by Samara Brothers under the Lanham Act for selling knockoff clothes designed by Samara Brothers,what did the Supreme Court rule?

Accepted Answer

The answer of In the case in which Wal-Mart was...

Question 16

Some proponents of corporate social responsibility argue that a corporation's duty is to make a profit while avoiding causing harm to others.This theory of social responsibility is called the moral ________.

Accepted Answer

The theory that a corporation's duty is to make a profit while avoiding causing harm to others is known as the moral minimum. The other options are either unrelated concepts or do not accurately describe this theory.

Question 17

The theory of business social responsibility that holds that a business has a duty to generally do good for society is:

Accepted Answer

The theory of business social responsibility that holds that a business has a duty to generally do good for society is called corporate citizenship. This theory suggests that businesses should not only focus on maximizing profits but also act in the interest of society as a whole. Therefore, the best choice is D - corporate citizenship.

Question 18

The Delaware Court system has adopted a policy whereby everyone,regardless of occupation,is required to serve on jury duty.The policy in the past was that attorneys,judges,teachers,and certain other occupations were exempt due to their jobs.These exemptions have been abolished and now everyone is treated the same.What ethical theory has Delaware adopted?

Accepted Answer

The answer of The Delaware Court system has adopted a...

Question 19

Which of the following actions is/are consistent with the "maximizing profits" theory of the social responsibility of business?

Accepted Answer

The answer of Which of the following actions is/are consistent...

Question 20

A business that is concerned solely with the financial implications of alternate courses of actions is applying which theory of the social responsibility of business?

Accepted Answer

The theory of maximizing profits focuses solely on the financial implications of alternate courses of action and is a narrow view of social responsibility of business. Under this theory, businesses are only responsible for making profits for their shareholders and are not concerned with broader social or environmental issues.

Quiz 8: Ethics and Social Responsibility of Business