Deck 3: Ethics and Social Responsibility

Question 1

The two types of integrity testing currently used by employers are overt integrity tests and personality-based integrity tests.

Answer 1

True

Question 2

Stakeholders are people or groups with an interest in a company's actions.

Answer 2

True

Question 3

There is general agreement regarding what is socially responsible corporate behavior.

Answer 3

False

Question 4

In order to ensure that a company's ethics code will encourage ethical decision making and behavior, companies need to accomplish two objectives. The first is to communicate the codes to others both within and outside the company. The second is to develop practical ethical standards and procedures specific to the company's line of business.

Question 5

The concept of magnitude of consequences is the total harm or benefit derived from an ethical decision.

Question 6

Under the U.S. Sentencing Commission Guidelines, companies without compliance programs can pay fines many times larger than companies with established compliance programs.

Question 7

The shareholder model holds that management's most important responsibility is long-term survival (not just maximizing profits). According to the shareholder model, long-term survival is achieved by satisfying the interests of multiple corporate stakeholders (not just shareholders).

Question 8

All adults reach the postconventional stage of morality.

Question 9

Concentration of effect is how much an act affects the average person.

Question 10

Ethics is the set of moral principles or values that defines right and wrong for a person or group.

Question 11

Proximity of effect is the time between an act and the consequences the act produces.

Question 12

The stakeholder model holds that the only responsibility that businesses have is to maximize profits.

Question 13

The shareholder model and the stakeholder model are two techniques for determining to whom organizations should be socially responsible.

Question 14

Under the U.S. Sentencing Commission Guidelines, companies can be prosecuted and punished for the illegal or unethical actions of employees even if management didn't know about the unethical behavior.

Question 15

Kohlberg's three phases of moral development (in the appropriate order)are law and order, instrumental exchange, and universal principle.

Question 16

The level of agreement on whether behavior is good or bad is defined as the level of ethical acceptance.

Question 17

The first step in establishing an ethical climate in a company is for managers to act ethically themselves.

Question 18

Under the U.S. Sentencing Commission Guidelines, a culpability score is a way of assigning blame to a company.

Question 19

People at the postconventional level of moral development make moral decisions based on selfish reasons.

Question 20

Probability of effect is the chance that something will happen and then result in harm to others.

Question 21

What does it mean when the text says that the U.S. Sentencing Guidelines use a "carrot and stick" approach?

A)The method of punishment is similar to Halloween "trick or treat" practices.
B)The Guidelines reward quick-responding reactive organizations.
C)The Guidelines offer lower fines to companies that take proactive steps.
D)The Guidelines ask companies not to emphasize just one area of ethical behavior.
E)none of these

Question 22

IAG (Individualized Apparel Group)formally closed its H. Freeman factory in Philadelphia in May. Jim Brubaker, IAG's division president of clothing, informed the workers of this closing one month earlier, in April. Due to ____, this decision produced strong ethical intensity.

A)resource consequences
B)magnitude of influence
C)temporal immediacy
D)probability of response
E)all of these

Question 23

Ethical intensity depends on all of the following EXCEPT ____.

A)temporal immediacy
B)probability of effect
C)proximity of effect
D)social commitment
E)concentration of effect

Question 24

Ethical intensity depends in part upon ____.

A)magnitude of dilemma
B)social acceptance
C)intent of the manager
D)probability of synergy
E)temporal immediacy

Question 25

The media would be an example of a secondary stakeholder group for an organization.

Question 26

Which of the following organizations are covered by the U.S. Sentencing Commission Guidelines?

A)a manufacturer of barbecue grills
B)a natural gas supplier
C)a chain of movie theaters
D)a grocery wholesaler
E)all of these

Question 27

Which of the following statements about ethics is true?

A)Acting ethically is always easier than any other form of action.
B)Employees assume no risk when they conduct themselves ethically.
C)Ethics can be specifically defined, like other laws.
D)If an act is legal, it must by definition be ethical.
E)Ethics is the set of moral principles or values that defines right and wrong for a person or group.

Question 28

What term describes the degree of concern people have about an ethical issue?

A)ethical intensity
B)social consensus
C)temporal immediacy
D)magnitude of consequences
E)ethical valence

Question 29

Companies will be considered unethical if they do not perform their discretionary responsibilities.

Question 30

The ____ determined that companies can be prosecuted and punished for the illegal or unethical actions of employees even if management didn't know about the unethical behavior.

A)U.S. Sentencing Commission Guidelines
B)U.S. Supreme Court
C)U.S. Department of Labor
D)U.S. Equal Employment Opportunity Commission
E)Federal Trade Commission

Question 31

To create a compliance program that is acceptable under the U.S. Sentencing Guidelines, a company should ____.

A)establish standards and procedures to meet the company's business needs
B)put upper-level managers in charge of the compliance program
C)encourage employees to report violations
D)train employees on standards and procedures
E)do all of these

Question 32

The U.S. Sentencing Commission Guidelines impose smaller fines on companies that ____.

A)have never before violated ethics principles
B)have already established a specific type of compliance program
C)have already established an affirmative action program
D)were unaware of the unethical behavior of employees
E)are not concerned with the ethical behavior of employees

Question 33

The categories of social responsibility for a company are economic, legal, ethical, and discretionary.

Question 34

According to the U.S. Sentencing Commission Guidelines, what is one method used to determine the level of the offense (i.e., the seriousness of the problem)?

A)examining the personal codes of ethics of top managers of offending companies
B)examining the loss incurred by the victims
C)determining how much competitive advantage was created
D)looking at industry standards
E)doing all of these

Question 35

The Department of Defense doesn't classify pilferage as a major problem, as its annual inventory losses run $1-2 billion a year. The intentional theft and sale of defense secrets would have greater ethical intensity than this pilferage due to ____.

A)magnitude of consequences
B)magnitude of influence
C)location immediacy
D)probability of response
E)all of these

Question 36

According to the stakeholder model of social responsibility, no stakeholder groups are more or less important than any other.

Question 37

All four areas of social responsibility for companies (economic, legal, ethical, and discretionary)are equally important to a company's overall level of social responsibility.

Question 38

If a catalog retailer promised customers it would not sell their personal information (addresses, phone numbers, e-mail addresses, etc.)to another direct marketing company, and it did, the catalog retailer would be found guilty of invasion of privacy. Its sentence would be determined by ____.

A)the Internet Compliancy Act
B)specific Supreme Court rulings
C)the Federal Trade Act
D)the Cellar-Kefauver Act of 1995
E)the U.S. Sentencing Commission Guidelines

Question 39

A company using a reactive strategy to respond to demands for social responsibility will do less than society expects.

Question 40

When addressing issues of high ____ , managers are more aware of the impact their decisions have on others, they are more likely to view the decision as an ethical decision, and they are more likely to worry about doing the right thing.

A)social consensus
B)ethical intensity
C)temporal immediacy
D)proximity of effect
E)ethical temporality

Question 41

____ integrity tests indirectly estimate employee honesty by measuring psychological traits.

A)Overt
B)Psychographic-based
C)Covert
D)Personality-based
E)Attitudinal

Question 42

According to Kohlberg's model of moral development, people at the ____ use internalized ethical principles to solve ethical dilemmas.

A)amoral level
B)preconventional level
C)unconventional level
D)postconventional level
E)conventional level

Question 43

The three stages of moral development identified by Kohlberg are ____.

A)amoral level, moral level, and post-moral level
B)preconventional level, conventional level, and postconventional level
C)introductory stage, growth stage, and maturity stage
D)individual stage, organizational stage, and industry-wide stage
E)unconventional level, preconventional level, and postconventional level

Question 44

Shell Oil Company's plan to sink an abandoned offshore oil-storage buoy had a massive effect on employee motivation and recruitment. The number of qualified people applying for jobs at Shell plummeted, and many employees looked for positions in other companies. The plan caused much greater harm than Shell's managers had ever imagined it would. In other words, the plan had a much greater ____ than predicted.

A)synergistic effect
B)impact proximity
C)concentration of synergy
D)magnitude of consequences
E)temporal munificence

Question 45

Which of the following is an objective of ethics training?

A)develop employee awareness about ethics
B)push ethics training throughout the entire organization
C)teach employees a practical model of ethical decision making
D)achieve credibility with employees
E)achieve all of these

Question 46

The last step in the basic model of ethical decision making is to ____.

A)monitor the results
B)determine benchmarks
C)act
D)make a choice
E)select an ethical leader

Question 47

Managers can use integrity tests to _____.

A)select and hire ethical employees
B)force the use of the principle of distributive justice when dealing with customers
C)differentiate primary and secondary stakeholders
D)determine which principle of ethical decision making is most appropriate to the situation
E)assess the ethical intensity of an issue

Question 48

According to Kohlberg's model of moral development, people at the ____ make decisions that are based on selfish reasons.

A)amoral level
B)preconventional level
C)conventional level
D)postconventional level
E)unconventional level

Question 49

The basic model of ethical decision-making ____.

A)has five steps
B)provides a method for analyzing the ethical climate
C)can be used to determine which principle of ethical decision making is appropriate to the situation
D)begins with a diagnosis of the situation
E)is not accurately described by any of these

Question 50

Mark Graf, a security specialist at the Rocky Flats nuclear facility outside Denver, became alarmed about the temporary removal of 450 kilograms of plutonium oxide from a vault-like room to a "soft room" protected by drywall that you could punch a hole through. Graf eventually had to take his concerns to the media before the plutonium was stored once again in a safe location. Graf actions can be described as a(n)____.

A)whistleblower
B)ethical ombudsman
C)secondary stakeholder
D)covert stakeholder
E)secondary shareholder

Question 51

When the Chicago-based Club Aluminum Company was facing bankruptcy, one of the changes its new CEO made was to create a(n)____ for all employees to follow in their business and professional lives. It read, "Of the things we think, say, and do: (1)Is it the truth? (2)Is it fair to all concerned? (3)Will it build goodwill and better friendships? (4)Will it be beneficial to all concerned?"

A)overt statement of integrity
B)new vision
C)mission statement of principle
D)statement of utilitarianism
E)code of ethics

Question 52

Due to ____ , the intentional pollution of a metropolitan water supply would have greater ethical intensity than insider trading in which a few participants netted less than $10,000.

A)social consensus
B)magnitude of consequences
C)temporal immediacy
D)probability of effect
E)all of the choices contribute to high ethical intensity in the situation described

Question 53

To encourage more ethical decision making in an organization, its managers should ____.

A)carefully select and hire new employees
B)establish a specific code of ethics
C)create an ethical climate
D)train employees in how to make ethical decisions
E)Mangers should do all of the choices.

Question 54

According to Kohlberg's model of moral development, people at the ____ make decisions that conform to societal expectations.

A)unconventional level
B)preconventional level
C)conventional level
D)postconventional level
E)amoral level

Question 55

All of the following are important factors in the creation of an ethical business climate EXCEPT ____.

A)personal examples set by company management
B)official approval of the company's ethics code by government regulators
C)fair but consistent punishment of violators
D)a reporting system that encourages whistleblowers to report potential ethics violations
E)top management's active involvement in ethics training program

Question 56

In May 2005, U.S. Attorney Michael J. Sullivan announced that the United States had settled civil claims arising out of a suit that alleged Oracle Corporation had violated the False Claims Act in connection with billing the federal government for software training services. The U.S. government learned about the overcharging from a former Oracle vice president. The vice president acted as a(n)____.

A)whistleblower
B)ethical ombudsman
C)secondary stakeholder
D)covert stakeholder
E)secondary shareholder

Question 57

A(n)____ is a written test that estimates employee honesty by directly asking job applicants what they think or feel about theft or about punishment of unethical behaviors.

A)situational-based integrity test
B)personality-based integrity test
C)behavioral integrity test
D)framed integrity test
E)overt integrity test

Question 58

____ is strong when decisions have large, certain, immediate consequences and when we are physically or psychologically close to those affected by the decision.

A)Ethical variance
B)The level of ethical involvement
C)Ethical intensity
D)Norm compliance
E)Situational morality

Question 59

Doug has a low-paying job for a telecommunications company. Every day when he goes home from work, Doug puts a headset, a stapler, or something similar in his lunch box and takes it home with him. Doug sees nothing wrong with his behavior since he feels he is being paid less than he should. In terms of Kohlberg's stages of moral development, Doug is operating at which level?

A)conventional
B)legally mandated
C)preconventional
D)postconventional
E)internalization

Question 60

After identifying the problem in the basic model of ethical decision-making, the next step is to ____.

A)diagnose the situation
B)identify the constituents
C)determine alternative solutions
D)analyze your options
E)create a forecast of what is to be accomplished

Question 61

The two general categories of stakeholders are ____ stakeholders and ____ stakeholders.

A)primary; secondary
B)reactive; proactive
C)business; nonbusiness
D)relevant; irrelevant
E)pioneering; selective

Question 62

Kowalski's Markets, a local supermarket chain in Minneapolis, expanded by purchasing four existing stores. One of the stores was located in Minneapolis's Camden neighborhood, a lower-class community unlike the store's typical upscale customer demographic. Rather than sell the property, the owners decided they had a(n)____ to provide a neighborhood grocery store to that community.

A)equitable responsibility
B)legal stakeholder duty
C)fiscal responsibility
D)organizational responsibility
E)social responsibility

Question 63

The ____ model holds that the only social responsibility that businesses have is to maximize profit.

A)economic
B)stakeholder
C)shareholder
D)accounting
E)fiscal

Question 64

Secondary stakeholders are important to a company because ____.

A)the company depends on them for long-term survival
B)they can affect public perceptions and opinions
C)the company is endangered by a termination of their relationship
D)they have the direct power to control management decisions
E)they create an awareness of overt organizational integrity

Question 65

Why is it often difficult for an employee to assume the role of whistleblower?

A)because managers have such broad spans of management
B)because employees fear that they will be punished
C)because of organizational decentralization
D)because of employee empowerment
E)because of the U.S. Sentencing Commission Guidelines

Question 66

According to Milton Friedman, which of the following is a position opposing the stakeholder model of corporate social responsibility?

A)Organizations can act effectively as moral agents for all company shareholders.
B)The time, money, and attention diverted to social causes undermine market efficiency.
C)It is socially responsible for companies to divert their efforts to social causes.
D)The marketplace will ultimately determine the importance of social causes.
E)All of these positions are in accordance with the positions of Milton Friedman.

Question 67

Which of the following is NOT an example of a stakeholder group that an organization must satisfy to assure long-term survival?

A)investors
B)customers
C)the media
D)employees
E)governments

Question 68

According to the ____ model, management's most important responsibility is long-term survival (not just maximizing profits). Long-term survival, according to this model, is achieved by satisfying the interests of multiple corporate stakeholders.

A)economic
B)stakeholder
C)societal
D)social welfare
E)shareholder

Question 69

____ stakeholders are groups, such as shareholders, employees, customers, suppliers, governments, and local communities, on which the organization depends for long-term survival.

A)Primary
B)Secondary
C)Functional
D)Conventional
E)Proactive

Question 70

____ stakeholders are any groups that can influence or be influenced by the company and can affect public perceptions about its socially responsible behavior.

A)Preliminary
B)Secondary
C)Covert
D)Conventional
E)Reactive

Question 71

When media in India informed the public that Coca-Cola products bottled in India contained a high level of certain cancer-causing pesticides, the Indian government immediately ordered Coke to stop production. The Indian government served as a(n)____.

A)primary shareholder
B)primary stakeholder
C)integrated stakeholder
D)secondary stakeholder
E)overt stakeholder

Question 72

Bayer AG, Syndial SpA, Crompton Corp., DuPont Dow Elastomers, and Zeon Chemicals are all international manufacturers of rubber chemicals. They have all been indicted as participants in a price-fixing scheme that drove up the costs of chemicals used to make shoes, tires, and other products. They would be most likely to use the ____ model to justify their actions.

A)economic
B)stakeholder
C)shareholder
D)accounting
E)fiscal

Question 73

In recent years Kowalski's Markets expanded by purchasing four existing stores. One of the stores was located in Minneapolis's Camden neighborhood, a lower-class community unlike the store's typical upscale customer demographic. Rather than sell the property, the owners decided they had an obligation to provide a neighborhood grocery store to that community. Which of the following is an example of a primary stakeholder group for Kowalski's markets?

A)community activists
B)city parks board
C)customers in the Camden neighborhood
D)newspapers that carry ads for stores
E)all of these

Question 74

What is social responsibility?

A)a business's obligation to pursue policies, make decisions, and take actions that benefit society
B)a business tactic used to create relationship bonds with customers
C)what companies are obliged legally to do to protect their external environments
D)a business's responsibility to its shareholders
E)the fact that businesses are responsible for monitoring their social environments so they can satisfy the needs of their customers

Question 75

Historically, ____ responsibility means making a profit by producing a product valued by society. It has been the most basic social responsibility of a business.

A)discretionary
B)ethical
C)legal
D)fiscal
E)economic

Question 76

Which of the following is an example of a stakeholder group that an organization must satisfy to assure long-term survival?

A)suppliers
B)customers
C)employees
D)governments
E)all of these

Question 77

Which of the following statements about whistleblowing is true?

A)Whistleblowing refers to reporting others' ethics violations.
B)Whistleblowing is very difficult for most people to do.
C)Potential whistleblowers often fear that they will be punished.
D)Many federal and state laws protect the rights of whistleblowers.
E)All of these statements about whistleblowing are true.

Question 78

In an article about BP Amoco, its CEO said that the company's commitment to ____ is all about trying to align its policies, values, and behavior with those of the societies in which it operates because, ultimately, superior performance means being in touch.

A)social consensus
B)social munificence
C)social responsibility
D)shareholder responsibility
E)social proximity

Question 79

Various persons or groups with a legitimate interest in a company's actions are called ____.

A)stakeholders
B)shareholders
C)indirect investors
D)boundary spanners
E)gatekeepers

Question 80

According to the stakeholder model, which primary stakeholder group is theoretically most important to the company?

A)investors
B)customers
C)suppliers
D)employees
E)all primary stakeholders are of equal importance