Deck 3: Social Responsibility and Ethics in Strategic Management

Question 1

Economist Milton Friedman has argued that a business's only responsibility is to

A) maximize profits and stay within the rules of the game.
B) sustain its market share.
C) promote the welfare of society.
D) satisfy its employees.
E) satisfy its customers.

Answer 1

A

Question 2

The term "social responsibility," according to Archie Carroll,can be viewed as a combination of an

A) organization's ethical and discretionary responsibilities.
B) organization's legal and ethical responsibilities.
C) organization's economic and ethical responsibilities.
D) organization's financial and economic responsibilities.
E) organization's legal and discretionary responsibilities.

Answer 2

A

Question 3

As societal values evolve,it is likely that the ________ responsibilities of today may become the ________ responsibilities to tomorrow.

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

Answer 3

C

Question 4

According to Archie Carroll,the responsibilities defined by government in laws for management to obey are

A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.
E) discretionary responsibilities.

Question 5

Friedman referred to the social responsibility of business as a "fundamentally subversive doctrine."

Question 6

Archie Carroll's four responsibilities listed in order of priority are

A) legal, economic, ethical, and discretionary.
B) legal, ethical, discretionary, and economic.
C) economic, legal, ethical, and discretionary.
D) economic, ethical, discretionary, and legal.
E) ethical, economic, legal, and discretionary.

Question 7

Archie Carroll proposes that managers in companies have four responsibilities: economic,legal,ethical,and discretionary.

Question 8

A 2012 survey of 169 CFOs at publicly traded companies in the United States found what percent intentionally misrepresented their economic performance primarily to influence stock price?

A) 1%
B) 20%
C) 40%
D) 60%
E) 90%

Question 9

Who said that the social responsibility of business is a "fundamentally subversive doctrine" and that the one social responsibility of business is "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game..."?

A) Adam Smith
B) Edward Freeman
C) Archie Carroll
D) William C. Norris
E) Milton Friedman

Question 10

According to Archie Carroll,the responsibilities that management of a business organization assumes which are purely voluntary obligations are

A) legal responsibilities.
B) ethical responsibilities.
C) financial responsibilities.
D) economic responsibilities.
E) discretionary responsibilities.

Question 11

Archie Carroll contends that the primary goal of business is profit maximization.

Question 12

Which one of the following is not one of the arguments against social responsibility as used by economist Milton Friedman?

A) Spending money for social responsibility is spending the stockholder's money for a general social interest.
B) Businesses can actually do very little in terms of social responsibility.
C) Spending money on social responsibility is acting from motives other than economic and may, in the long run, cause harm to the very society the firm is trying to help.
D) There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.
E) Through taking on the burden of social costs, the organization becomes less efficient, causing price increases or postponement of growth.

Question 13

According to Archie Carroll,the responsibility that management of a business organization has to produce goods and services of value to society so that the firm may repay its creditors and stockholders is called

A) legal responsibilities.
B) ethical responsibilities.
C) economic responsibilities.
D) financial responsibilities.
E) discretionary responsibilities.

Question 14

The concept that proposes private corporations have responsibilities to society that extend beyond making a profit is known as

A) flexible responsibility.
B) social responsibility.
C) social flexibility.
D) managerial responsibility.
E) profit maximization.

Question 15

Being socially responsible

A) does not influence a company's overall reputation.
B) has opened doors in local communities.
C) cannot enhance consumers' perceptions of the firm.
D) has a negative effect on the firm's financial performance.
E) cannot be balanced with profit maximization.

Question 16

Milton Friedman's position on social responsibility

A) proposes that a lack of social responsibility results in increased government regulations.
B) appears to be losing traction with business executives.
C) suggests that a lack of social responsibility reduces a firm's efficiency.
D) explains why firms are using their socially responsible actions for competitive advantage.
E) mirrors Carroll's position.

Question 17

Society generally expects firms to work with employees and the company to plan for layoffs.This is an example of which of Archie Carroll's responsibilities?

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

Question 18

Which of the following is not one of the examples provided as an organizational benefit received from being socially responsible?

A) They can attract outstanding employees who prefer working for a socially responsible firm.
B) They are more likely to be welcomed into a foreign country.
C) They are more likely to attract capital infusions from investors who view reputable companies as desirable long-term investments.
D) They are guaranteed to maximize resource productivity and reduce the average payback period of investment.
E) Their environmental concerns may enable them to charge premium prices and gain brand loyalty.

Question 19

The concept of social responsibility proposes that a corporation has responsibilities to society that extend beyond making a profit.

Question 20

Providing daycare centers to employees is an example of which of Archie Carroll's responsibilities?

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

Question 21

The first step in stakeholder analysis is to

A) identify primary stakeholders.
B) monitor what all the stakeholders want.
C) identify the stakeholders with an indirect stake in the corporation.
D) estimate the effect on each stakeholder group from any particular strategic decision.
E) identify the influence of each stakeholder group.

Question 22

The broader concept of sustainability is closely aligned with Carroll's view of social responsibility.

Question 23

A study concerning social responsibility indicates that socially responsible firms are more likely to be welcomed into another country.

Question 24

The first step in stakeholder analysis is identifying those who have only an indirect stake in the corporation.

Question 25

Being known as a socially responsible firm may provide a company with social capital that can be used for competitive advantage.

Question 26

All of the following are considered primary stakeholders EXCEPT

A) customers.
B) governments.
C) employees.
D) shareholders.
E) creditors.

Question 27

Which of the following companies was cited by the text as an example of a company which does its best to consider its responsibilities to its primary and secondary stakeholders when making strategic decisions?

A) McDonald's
B) Maytag
C) Johnson & Johnson
D) Microsoft
E) Enron

Question 28

Ethical responsibilities are voluntary obligations a corporation assumes.

Question 29

Discuss Crane and Matten's concept of sustainability with regard to Carroll's view of ethics.

Question 30

Which of the following statements is not true concerning secondary stakeholders?

A) Secondary stakeholders are those who have only an indirect stake in the corporation, but who are affected by corporate activities.
B) Secondary stakeholders may include non-governmental organizations (like Greenpeace) and trade associations.
C) Because the corporation's relationship with each of these stakeholders is usually not covered by any written or verbal agreement, there is room for misunderstanding.
D) Aside from competitors, secondary stakeholders are not usually monitored by the corporation in any systematic fashion.
E) Secondary stakeholders have sufficient bargaining power to directly affect the corporation's activities.

Question 31

Explain the difference between Milton Friedman and Archie Carroll's approaches to the responsibilities of business.

Question 32

The difference between ethical and discretionary responsibilities is that few people expect an organization to fulfill ethical responsibilities.

Question 33

All of the following are considered secondary stakeholders EXCEPT

A) governments.
B) suppliers.
C) competitors.
D) trade associations.
E) activists.

Question 34

In order for a business to be sustainable,it must satisfy which of Carroll's responsibilities?

A) economic
B) legal
C) ethical
D) discretionary
E) all of the above

Question 35

The Dow Jones Sustainability Index includes

A) environmental, economic, and quality sustainability.
B) industry, environmental, and economic factors.
C) environmental, economic, and social sustainability.
D) ethical, economic, and social sustainability.
E) environmental, ethical, and quality sustainability.

Question 36

According to Carroll,legal responsibilities are defined by governments in laws that management is expected to obey.

Question 37

In any one strategic decision,the interests of one stakeholder group seldom conflict with another.

Question 38

Stakeholders are all constituencies that affect and are affected by the achievement of the firm's objectives.

Question 39

An overarching strategy that explicitly communicates the firm's ethical relationship with its stakeholders is

A) an enterprise strategy.
B) a corporate strategy.
C) a stockholders strategy.
D) a functional strategy.
E) a strategic audit.

Question 40

Target's efforts to offer brands from companies with ethical track records and community involvement help the retailer attract socially concerned younger consumers.This is an example of

A) social capital.
B) sustainability.
C) a legal responsibility.
D) environmental scanning.
E) industry analysis.

Question 41

Former Enron Vice-President Sherron Watkins used the ________ analogy to explain why executives at Enron engaged in unethical and illegal actions.

A) borrowing earnings
B) Napoleon complex
C) moral relativism
D) frogs in boiling water
E) distributive justice

Question 42

All of the following reasons provide rationale for unethical behavior EXCEPT

A) the impact of cultural norms and values.
B) differences in values between business people and key stakeholders.
C) ambiguous rules.
D) agreement among stakeholders and business people that unethical behavior is acceptable.
E) difficulty of one group to understand another's actions.

Question 43

All of the following are one of the four types of moral relativism EXCEPT

A) naive relativism.
B) role relativism.
C) principled relativism.
D) social group relativism.
E) cultural relativism.

Question 44

Blindly following orders reflects which type of moral relativism?

A) naive relativism
B) role relativism
C) principled relativism
D) cultural relativism
E) social group relativism

Question 45

Of the six values measured by the Allport-Vernon-Lindzey Study of Values test,both U.S.and British executives consistently score highest on ________ values and lowest on ________ values.

A) religious and theoretical; economic and social
B) religious and economic; political and social
C) economic and political; social and religious
D) social and religious; aesthetic and political
E) religious; economic

Question 46

Secondary stakeholders have a direct connection with the corporation and have sufficient bargaining to directly affect corporate activities.

Question 47

As opposed to rule-based countries,relationship-based countries tend to

A) be more transparent and have a higher degree of corruption.
B) be more transparent and have a lower degree of corruption.
C) be less transparent and have a lower degree of corruption.
D) be less transparent and have a higher degree of corruption.
E) have the same transparency and same degree of corruption.

Question 48

The ________ has been measuring the state of ethics in organizations since 2007.

A) The Annenberg Public Policy Center
B) The Kauffman Foundation
C) The Gates Foundation
D) Ethics Resource Center
E) U.S. Government

Question 49

Some people claim that morality is relative to some personal,social,or cultural standard and that there is no method for deciding whether one decision is better than another.This is called

A) ethical relativity.
B) moral philosophy.
C) comparative ethics.
D) cultural imperialism.
E) moral relativism.

Question 50

Rule-based governance

A) is generally found in developing nations.
B) relies on publicly verifiable information.
C) relies on implicit agreement.
D) is inherently nontransparent.
E) requires an investment in time and money to build relationships.

Question 51

Which of the following is the most common reason given by surveyed executives for bending the rules to attain their objectives?

A) organizational performance required it
B) rules were too rigid
C) no one will know
D) no oversight
E) rules are different for executives than staff

Question 52

According to a 2013 survey by the Ethics Resource Center,which of the following was cited as a significant positive trend?

A) The percentage of firms providing ethical training rose to an all-time high of 81%.
B) Ethics codes are no longer needed.
C) Discipline for ethical violations is decreasing.
D) Fewer companies are reporting abusive behavior.
E) Ethics hotlines for reporting violations are no longer needed.

Question 53

A company may have some stakeholders of which it is only marginally aware and in some cases does not seem interested in appeasing.

Question 54

According to Kohlberg,the first level of moral development,characterized by concern for self,is called

A) principled.
B) conventional.
C) essential.
D) pre-conventional.
E) fundamental.

Question 55

"When in Rome,do as the Romans do" reflects which type of moral relativism?

A) naive relativism
B) role relativism
C) principled relativism
D) cultural relativism
E) social group relativism

Question 56

Role relativism is based on the belief that

A) morality is relative to a particular culture.
B) all moral decisions are deeply personal and each person should be allowed to interpret situations and act on his own moral values.
C) social roles carry with them certain obligations.
D) morality is simply a matter of following the norms of an individual's peer group.
E) a decision is legitimate if it is common practice.

Question 57

According to a 2011 survey by the Ethics Resource Center,which was not cited as one of the most common questionable behaviors that employees engage in?

A) cutting corners on quality
B) misusing company time
C) lying to employees
D) engaging in abusive behavior
E) violating Internet use policies

Question 58

According to Kohlberg,the second level of moral development,characterized by considerations of society's laws and norms,is called

A) principled.
B) essential.
C) conventional.
D) pre-conventional.
E) fundamental.

Question 59

In 2011,the Ethics Resource Center found that ________ percent of employees surveyed had witnessed misconduct at work and ________ percent had reported it.

A) 65; 45
B) 65; 65
C) 60; 20
D) 45; 65
E) 45; 45

Question 60

What is stakeholder analysis? List the three-step process.

Question 61

According to Kohlberg,the third level of moral development,characterized by a person's adherence to an internal moral code,is called

A) principled.
B) conventional.
C) essential.
D) pre-conventional.
E) fundamental.

Question 62

Kohlberg places 80 percent of U.S.adults in the principled level of development.

Question 63

Research indicates that when faced with a question of ethics,managers tend to ignore codes of ethics and try to solve their dilemma on their own.

Question 64

There is no truth to the comment that "business ethics" is an oxymoron.

Question 65

Moral relativism could enable a person to justify almost any sort of decision or action,so long as it is not declared illegal.

Question 66

In support of whistle-blowers,the U.S.False Claims Act gives whistle-blowers what percentage of any damages recovered in cases where the government is defrauded?

A) 1-3%
B) 15-30%
C) 25-45%
D) 50-60%
E) 60-75%

Question 67

Kohlberg's pre-conventional level is characterized by a person's adherence to an internal moral code.

Question 68

Law refers to formal codes that permit or forbid certain behaviors and may or may not enforce ethics or morality.

Question 69

A code of ethics is important to clarify company expectations of employee conduct in various situations and to

A) reduce the burden on the judicial system.
B) make it clear that the company expects its people to recognize the ethical dimensions in decision and actions.
C) promote a high level of societal norms.
D) encourage individuals to strive for good citizenship and corporations to contribute positively to society.
E) minimize the possibility of mandatory regulations.

Question 70

"Let the buyer beware" is a traditional saying by free-market proponents who argue that customers in a free market democracy have the right to choose how they spend their money and live their lives.

Question 71

Managers who want to improve ethical behavior should take actions such as

A) communicate the code of ethics in training programs.
B) emphasize the code of ethics in performance appraisal systems.
C) follow a code of ethical behavior themselves.
D) communicate the code of ethics in policies and procedures.
E) all of the above

Question 72

Discuss some reasons for unethical behavior by business people.

Question 73

Cultural norms and values seldom guide ethical behavior in business.

Question 74

The statement,"When in Rome,do as the Romans do," reflects the essence of cultural relativism.

Question 75

A code of ethics is a useful way to promote ethical behavior.

Question 76

According to a 2011 National Business Ethics survey,what percent of respondents who observed corporate misconduct rated their cultures as weak?

A) 90
B) 70
C) 50
D) 30
E) 10

Question 77

According to Kohlberg,what stage of moral development do the vast majority of people in the United States occupy?

A) principled stage
B) conventional stage
C) essential stage
D) pre-conventional stage
E) fundamental stage

Question 78

What is moral relativism? What are the four types of moral relativism?

Question 79

According to Kohlberg's levels of moral development,the conventional level is characterized by considerations of society's laws and norms.

Question 80

Relationship-based countries tend to be less transparent and have a higher degree of corruption than do rule-based countries.