Deck 5: Social Responsibility and Managerial Ethics

Question 1

Socially responsible businesses tend to have less secure long-run profits.

Answer 1

False

Question 2

A business must meet economic, legal and ethical obligations to fulfil its social obligation.

Answer 2

False

Question 3

The most outspoken advocate of the classical view of organisational social responsibility is Milton Friedman.

Answer 3

True

Question 4

The classical view of organisational social responsibility is that management's only social responsibility is to maximise profits.

Question 5

The socioeconomic view of the responsibility of management states that a manager should pursue profits at all times.

Question 6

One argument against businesses championing social responsibility issues is that businesses already have too much power.

Question 7

The socioeconomic view of corporate responsibility suggests that ________.

A)shareholders are the only responsibility
B)corporations are independent entities
C)maximising profits is the first priority while social responsibility is the second priority
D)corporations are responsible to the larger society
E)organisations have an ethical, but no legal, responsibility to anyone except shareholders

Question 8

In the arguments for and against social responsibility, 'discouragement of further government regulation' is an argument for social responsibility.

Question 9

Which of the following is associated with the classical view of social responsibility?

A)economist Robert Reich
B)concern for social welfare
C)shareholder financial return
D)voluntary activities
E)ethical behaviours

Question 10

Though the outcomes are not perfectly measured, the majority of research studies show there is no negative relationship between corporate social involvement and economic performance.

Question 11

According to the textbook, 'social responsibility' and 'social responsiveness' are the same thing.

Question 12

The classical view of social responsibility is that management's only social responsibility is to ________.

A)follow government dictates
B)maximise profits
C)not concern itself with pollution
D)meet industry quality standards
E)meet the requirements of all stakeholders

Question 13

Proponents of the socioeconomic view of social responsibility believe that business organisations are ________.

A)not independent entities responsible only to shareholder
B)just merely economic institutions
C)to be leaders in social responsibility
D)not to be involved in social responsibility, but to maximise profits for stakeholders
E)concerned principally with the interest of shareholders

Question 14

In the socioeconomic view of organisational social responsibility, managers are responsible for protecting and improving society's welfare in addition to making a profit.

Question 15

'Social screening' is a process used by mutual share funds to identify ethical or 'green' companies.

Question 16

Scenario-based questions: What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
Refer to What Would You Do? (Scenario).If you (as head of the company)made your decision based on what was best for the shareholders, you would be operating with the ________ view of social responsibility.

A)neoclassical
B)classical
C)conservative
D)socioeconomic
E)contemporary

Question 17

Research has found that corporations' social responsibility is unrelated to future financial performance.

Question 18

To maintain competitive advantage, large global corporations may look to lower their costs and be more competitive by outsourcing to countries where human rights are ________.

A)not a high priority
B)monitored by Amnesty International
C)a high priority
D)not approved by the Australian Government
E)known to be held in high esteem

Question 19

In the classical view of social responsibility, managers are responsible to any group affected by the organisation's decisions and actions.

Question 20

According to Milton Friedman, which of the following is NOT a potential result of spending an organisation's resources on 'social good'?

A)redistribution of assets
B)reduced profits and dividends
C)losses by employees
D)reduced business costs
E)lower sales

Question 21

Scenario-based questions: What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
Refer to What Would You Do? (Scenario).As you think about your options, you review what you know about the arguments supporting the socioeconomic view.They include all the following EXCEPT ________.

A)the time frame argument which contends that managers should be concerned with maximising financial returns over the long run
B)it is managers' responsibility to protect society's welfare by not polluting, not discriminating, not engaging in deceptive advertising
C)when managers decide on their own to spend their organisation's resources for the 'social good', they are adding to the costs of doing business
D)the classical view flies in the face of reality.Modern business organisations are no longer merely economic institutions
E)modern society expects and even encourages businesses to become involved in social, political and legal issues

Question 22

Which argument for social responsibility puts forth the belief that by becoming socially responsible businesses can expect to have less government regulation?

A)discouragement of further government regulation
B)shareholder interests
C)public expectations
D)public image
E)possession of resources

Question 23

The belief that the costs of social activity are passed on as higher prices to consumers is known as which argument against a firm's being socially responsible?

A)violation of profit maximisation
B)dilution of purpose
C)costs
D)lack of skills
E)lack of accountability

Question 24

The belief that 'the normal result of strong community relations and business image, producing continuing profitability', is known as which argument for social responsibility?

A)public image
B)balance of responsibility and power
C)long-run profits
D)shareholder interests
E)possession of resources

Question 25

________ is defined as a business firm's obligation, beyond that required by law and economics, to pursue long-term goals that are good for society.

A)Social obligation
B)Social responsibility
C)Social screening
D)Value-based management
E)Social autonomy

Question 26

The belief that businesses that help solve difficult social problems is known as which argument for social responsibility?

A)ethical obligation
B)public image
C)better environment
D)possession of resources
E)superiority of prevention over cures

Question 27

Scenario-based questions: Welcome to the Real World
As a recent business graduate from a prestigious business school, Malcolm joined a firm where managers identify popular social needs such as community service and environmental concerns in addition to making a profit.In this organisation, managers respond to what they feel are important social needs.
Refer to Welcome to the Real World (Scenario).One reason Malcolm chose this particular firm was because of the firm's ability to adapt to changing societal conditions.This is referred to as _____.
(A)socioeconomic view
(B)social responsiveness
(C)social responsibility
(D)ethics
(E)obligations

Question 28

Scenario-based questions: Welcome to the Real World
As a recent business graduate from a prestigious business school, Malcolm joined a firm where managers identify popular social needs such as community service and environmental concerns in addition to making a profit.In this organisation, managers respond to what they feel are important social needs.
Refer to Welcome to the Real World (Scenario).As Malcolm learns more about the organisation and their commitment to social responsibility, he learns there is also a cost to being socially responsible.Which of the following is an argument Malcolm might encounter against being socially responsible?

A)there is no direct line of accountability for social action
B)public opinion no longer supports businesses pursuing social goals
C)businesses can negatively impact their public image by being too socially active
D)businesses should conduct a cost/benefit analysis when deciding which social problem to address
E)all social action should be supported by government regulation

Question 29

Scenario-based questions: What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
Refer to What Would You Do? (Scenario).Which view of social responsibility suggests that your decision should be based first on what will enable your wood products company long-term survival and, only secondly, profit maximisation?

A)neoclassical
B)classical
C)socioeconomic
D)conservative
E)contemporary

Question 30

Scenario-based questions: What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
Refer to What Would You Do? (Scenario).If you decided to stop sales and investigate the product because you felt you had an obligation to society as well as shareholders, you would be operating under which view of social responsibility?

A)neoclassical
B)classical
C)socioeconomic
D)conservative
E)contemporary

Question 31

The belief that businesses have the financial, technical and managerial resources to support needed public projects is known as which argument for social responsibility?

A)public expectations
B)ethical obligations
C)public image
D)better environment
E)possession of resources

Question 32

The belief that social problems should be addressed before they reduce a firm's goal of producing goods and services is known as which argument for social responsibility?

A)public expectations
B)long-run profits
C)shareholder interests
D)possession of resources
E)superiority of prevention over cures

Question 33

Scenario-based questions: Welcome to the Real World
As a recent business graduate from a prestigious business school, Malcolm joined a firm where managers identify popular social needs such as community service and environmental concerns in addition to making a profit.In this organisation, managers respond to what they feel are important social needs.
Refer to Welcome to the Real World (Scenario).When Malcolm's managers and co-workers use social criteria to make decisions, including investment decisions, what is being utilised in the decision-making process?

A)expectation management
B)profit maximisation
C)social screening
D)socioeconomic views
E)classical view of responsibility

Question 34

The belief that business should be responsible because such actions are right for their own sake is known as which argument for social responsibility?

A)public expectation
B)ethical obligation
C)public image
D)discouragement of further government regulation
E)balance of responsibility and power

Question 35

The belief that a socially responsible company will be viewed as less risky, and therefore have higher stock value, is known as which argument for social responsibility?

A)long-run profits
B)balance of responsibility and power
C)shareholder interests
D)possession of resources
E)superiority of prevention over cures

Question 36

Scenario-based questions: Welcome to the Real World
As a recent business graduate from a prestigious business school, Malcolm joined a firm where managers identify popular social needs such as community service and environmental concerns in addition to making a profit.In this organisation, managers respond to what they feel are important social needs.
Refer to Welcome to the Real World (Scenario).Malcolm found many arguments for and against the active pursuit of social responsibility.Which of the following is one argument for pursuing social responsibility?

A)profit maximisation
B)dilution of purpose
C)cost
D)public image
E)lack of accountability

Question 37

The belief that businesses are being socially responsible when they attend only to economic interests is known as which argument against a firm's being socially responsible?

A)dilution of purpose
B)violation of profit maximisation
C)costs
D)too much power
E)lack of accountability

Question 38

The belief that the pursuit of social goals restricts economic productivity, its primary purpose and, therefore, may cause society to suffer is known as which argument against a firm's being socially responsible?

A)violation of profit maximisation
B)costs
C)too much power
D)dilution of purpose
E)lack of accountability

Question 39

Which argument for social responsibility puts forth the belief that an imbalance between the large amount of power held by firms and their responsibility is harmful to the public good?

A)public expectation
B)ethical obligation
C)public image
D)discouragement of further government regulation
E)balance of responsibility and power

Question 40

Scenario-based questions: What Would You Do?
Imagine that you are the head of a company that manufactures secondary wood products for the construction industry.Recently, there have been many reports of a plywood subflooring product that has been failing in a number of commercial locations resulting in several complaints about ruined floor coverings and, in one instance, partial collapse of a third floor, which injured three people.Your head of research and development has asked you to stop selling the product and wants to run tests on the product to determine the problem.However, third-quarter earnings reports are due out in two weeks and public knowledge of problems with a lucrative product may delay the financing of the company's expansion plans and also lower stock price.Your dilemma: Do you delay or refuse the product research, thereby enhancing the expansion plans but risking other damage and public safety, or do you immediately stop sales of the product and run the necessary tests, thereby risking the expansion plans?
Refer to What Would You Do? (Scenario).Friedman would argue that if you decided to make any decision other than what is in the best interest of the shareholders, which of the following is likely to occur?

A)increased financial return to shareholders
B)increased profits and dividends
C)increased employee wages and benefits
D)increased consumer prices
E)increased sales

Question 41

In a short essay, list and discuss five arguments in favour of business social responsibility and five arguments against it.

Question 42

Scenario-based questions: An Academic Question
As a university student, you wonder about some of the practices in the university and just how some of its practices should be evaluated in reference to social issues.
Refer to An Academic Question (Scenario).If your university was paying minimum wage, when necessary, and applying the minimum standard to laws, such as affirmative action, it would be said to have fulfilled its ________.

A)social obligation
B)social responsibility
C)social responsiveness
D)social expectation
E)social need

Question 43

Overall, does the evidence suggest that socially responsible behaviours by organisations lower a firm's economic performance?

A)Yes.
B)No.
C)Seems so, but there is not enough evidence at this time to know for sure.
D)It depends on the activity with which the organisation is involved.
E)It depends on the industry.

Question 44

The belief that business leaders should not direct social policy because there is no direct line of social accountability to the public is known as what argument against a firm's being socially responsible?

A)dilution of purpose
B)costs
C)too much power
D)lack of broad public support
E)lack of accountability

Question 45

The belief that firms pursuing social goals would have too much power is known as what argument in opposition to a firm's being socially responsible?

A)costs
B)lack of skills
C)lack of broad public support
D)too much power
E)dilution of purpose

Question 46

When a company does not discriminate in the hiring of minorities, it is meeting its ________.

A)social obligations
B)social responsibilities
C)moral obligations
D)ethical obligations
E)fairness obligations

Question 47

Scenario-based questions: An Academic Question
As a university student, you wonder about some of the practices in the university and just how some of its practices should be evaluated in reference to social issues.
Refer to An Academic Question (Scenario).If your university provides job-share programs, builds a day care facility and only uses recycled paper, it could be said to be ________.

A)fulfilling its social obligation
B)socially aware
C)socially responsive
D)socially image conscious
E)socially needy

Question 48

Affluent societies account for more than 95 per cent of the world's energy and resource consumption.

Question 49

'Social screening' is most commonly related to applying social criteria to investment decisions of ________.

A)pollution equipment
B)capital equipment in new plant
C)pay rises for employees
D)mutual share funds
E)State and Federal Governments

Question 50

In a short essay, compare and contrast the classical view and the socioeconomic view of social responsibility.

Question 51

Scenario-based questions: An Academic Question
As a university student, you wonder about some of the practices in the university and just how some of its practices should be evaluated in reference to social issues.
Refer to An Academic Question (Scenario).Which of the following is NOT a reason why it makes sense for your university to continue to be socially responsive?

A)positive consumer image
B)lower cost
C)more dedicated workforce
D)more motivated workforce
E)less interference from regulators

Question 52

In a short essay, discuss social responsibility and compare and contrast social obligation and social responsiveness.

Question 53

Social responsiveness, when compared to social responsibility, is seen as ________.

A)more philosophical
B)more intangible
C)action-oriented
D)unchanging to social norms
E)meeting its minimum requirements

Question 54

Which of the following terms refers to a firm meeting its economic and legal responsibilities?

A)social responsibility
B)social obligation
C)social responsiveness
D)social duty
E)social standard

Question 55

The belief that business leaders are poorly qualified to address social issues is known as what argument against a firm's being socially responsible?

A)dilution of purpose
B)too much power
C)lack of accountability
D)lack of skills
E)lack of broad public support

Question 56

The aspect that differentiates social responsibility from other similar concepts is that it ________.

A)adds an ethical imperative
B)adds a legal imperative
C)adds a moral imperative
D)considers social norms
E)refers to adapting to changing societal conditions

Question 57

Applying social criteria to investment decisions is a term used to describe ________.

A)social obligation
B)social responsibility
C)social screening
D)value-based management
E)social autonomy

Question 58

The 'activist approach' to 'going green' is when an organisation looks for ways to respect and preserve the earth and its natural resources.

Question 59

When a firm advertises that it only uses recycled paper products, it is ________.

A)meeting its social obligation
B)meeting social responsibilities
C)being socially responsive
D)paying attention to the bottom line
E)attempting to defraud consumers

Question 60

The 'market approach' to 'going green' is when organisations respond to multiple demands of stakeholders.

Question 61

Which of the following is identified by the concept of 'green management'?

A)differential access to capital
B)the cultural impacts of advertising messages
C)the impacts of product development, design and pricing on customers
D)the close link between an organisation's decisions and activities and its impact on the natural environment
E)effect of unions on company success

Question 62

The ________ approach to 'being green' is when an organisation obeys rules and regulations but exhibits little environmental sensitivity.

A)legal
B)market
C)stakeholder
D)responsibility
E)activist

Question 63

At the third stage of the four approaches to being green, the 'stakeholder approach' represents the organisation's expansion of environmental responsibility, and the manager will promote the shareholder's interest by seeking to minimise costs and maximise profits.

Question 64

Scenario-based questions: Welcome to the Real World
As a recent business graduate from a prestigious business school, Malcolm thought he had his work-life views straight.The way he saw it, if a business had to lay people off in order to increase profits in the short run, then that was 'just business'.Unfortunately, Malcolm, now in his first career position, had just been given the responsibility of laying off 20 per cent of his plant.In the year he had worked there, he had learned to like his fellow employees, played on the company soccer team and made many friends.He did not like what he had to do and now questioned his previous convictions.
Refer to Welcome to the Real World (Scenario).From a progressive point of view, now Malcolm felt responsible beyond just shareholders but also to any individual or group impacted by the organisation's decisions and policies, a group known as ________.

A)constituents
B)stakeholders
C)employees
D)the public
E)recipients

Question 65

Affluent societies account for ________ of the world's energy and resource consumption.

A)over 75 per cent
B)half
C)20 per cent
D)less than 40 per cent
E)over 90 per cent

Question 66

The ________ approach to 'being green' is when an organisation chooses to respond to multiple demands made by groups in the organisation's external environment.

A)legal
B)market
C)stakeholder
D)responsibility
E)activist

Question 67

The ________ approach to 'being green' is when organisations respond to environmental preferences of their customers.

A)legal
B)market
C)stakeholder
D)responsibility
E)activist

Question 68

A 'supplier' is an example of an organisational stakeholder.

Question 69

According to the four approaches to being 'green', the stakeholder approach includes _____.

A)shareholders
B)human concerns
C)safe products
D)fair prices
E)high-quality products

Question 70

Scenario-based questions: The Environmental Study
You have just been challenged by your supervisor to study and report your findings on approaches that organisations use to being 'green'.Your boss tells you to study the four major approaches, differentiate among them and report to him in a week.
Refer to The Environmental Study (Scenario).What approach deals with an organisation responding to the environment because of the preferences of their customers?

A)stakeholder approach
B)market approach
C)legal approach
D)minimalist approach
E)activist approach

Question 71

According to the four approaches to being 'green', the market approach is noted by an added interest in _____.

A)shareholders
B)human concerns
C)good supplier relations
D)fair prices
E)customers' environmental concerns

Question 72

The recognition of the close link between an organisation's decisions and activities and its impact on the natural environment is referred to as ________.

A)corporate social responsibility
B)social responsiveness
C)shared corporate values
D)ecologically sustainable management
E)stakeholder self-interest

Question 73

Which of the following is NOT one of the four approaches to being green an organisation can take?

A)legal
B)market
C)stakeholder
D)responsibility
E)activist

Question 74

Which of the following approaches toward 'being green' exhibits the highest degree of environmental sensitivity and is a good illustration of social responsibility?

A)legal approach
B)activist approach
C)light green approach
D)stakeholder approach
E)market approach

Question 75

Natural resource depletion, global warming, pollution and toxic wastes are examples of ________.

A)social problems
B)global environmental problems
C)social responsiveness
D)competitive strategies
E)shared corporate values

Question 76

According to the four approaches to being 'green', the activist is interested in _____.

A)shareholders
B)human concerns
C)owners
D)preservation of natural resources
E)profit maximisation

Question 77

The 'stakeholder approach' in terms of the 'shades of green' model is where the organisation works to meet the environmental demands of multiple stakeholders such as employees, suppliers or the community.

Question 78

Scenario-based questions: The Environmental Study
You have just been challenged by your supervisor to study and report your findings on approaches that organisations use to being 'green'.Your boss tells you to study the four major approaches, differentiate among them and report to him in a week.
Refer to The Environmental Study (Scenario).Under what approach do organisations exhibit little environmental sensitivity, obey rules and regulations willingly without legal challenge and even try to use these rules to their own advantage?

A)stakeholder approach
B)market approach
C)legal approach
D)minimalist approach
E)activist approach

Question 79

Which of the following approaches toward 'being green' is a good illustration of social obligation?

A)legal approach
B)market approach
C)stakeholder approach
D)activist approach
E)dark green approach

Question 80

Scenario-based questions: The Environmental Study
You have just been challenged by your supervisor to study and report your findings on approaches that organisations use to being 'green'.Your boss tells you to study the four major approaches, differentiate among them and report to him in a week.
Refer to The Environmental Study (Scenario).Under what approach does an organisation work to meet the environmental demands of multiple groups of people including employees, suppliers or the community?

A)stakeholder approach
B)market approach
C)legal approach
D)minimalist approach
E)activist approach