Deck 4: Ethics and Social Responsibility

Question 1

According to the moral rights rule, managers should choose the course of action that best protects and upholds their personal rights.

Answer 1

False
Explanation:Under the moral rights rule, managers should choose the course of action that best protects and upholds the rights of all stakeholders.

Question 2

Managers are a vital stakeholder group because they are responsible for using a company's resources to increase its performance and thus its stock price.

Answer 2

True
Explanation:Managers are a vital stakeholder group because they are responsible for using a company's financial, capital, and human resources to increase its performance and thus its stock price.

Question 3

Steve has noticed that there has been an error in his weekly pay stub and the company has unknowingly paid him too much. Steve is pondering whether to report this issue or not. This is an example of an ethical dilemma.

Answer 3

True
Explanation:One type of ethical dilemma is the quandary people find themselves in when they have to decide if they should act in a way that might help another person or group and is the right thing to do, even though doing so might go against their own self-interest. Author: An ethical dilemma does not necessarily involve self-interest. Any time one must choose an action that will benefit or harm two or more entities (usually but not necessarily people) unequally, that can be an ethical dilemma.

Question 4

Employees are stakeholders of a company.

Question 5

When faced with a serious ethical dilemma, Michael chose a solution that created the greatest good for the greatest number of people. Michael used the utilitarian rule.

Question 6

Though laws often change, ethical principles remain constant and do not change over time.

Question 7

Customers are stakeholders of an organization, but managers are not.

Question 8

The local communities in which an organization operates are seldom considered as stakeholders of the organization.

Question 9

When making business decisions, managers must consider the claims of stockholders exclusively.

Question 10

Under the utilitarian rule, an ethical decision is that which creates the greatest good for the greatest number of people.

Question 11

Customers are often regarded as the most important stakeholder group.

Question 12

Moral principles or beliefs about what is the right or appropriate way to behave are known as ethics.

Question 13

The people and groups affected by how a company and its managers behave are called its stakeholders.

Question 14

Under the moral rights rule, an ethical decision is one that distributes benefits and harms among people and groups in an equitable way.

Question 15

Decisions that managers take to protect the rights of some stakeholders often hurt the rights of others.

Question 16

Business ethics are only important because the failure of a company can solely have catastrophic effects on the goals of the company.

Question 17

Ethical beliefs lead to the development of laws and regulations.

Question 18

Absolute rules exist to determine how individuals should behave in every situation.

Question 19

Stockholders seek to maximize the return on their investment and therefore show interest in the ethical practices of a company.

Question 20

From a moral rights perspective, managers should consider courses of action that are profitable to the company.

Question 21

When one person starts to profit by behaving unethically, it encourages other people to act in the same way.

Question 22

A company's stance on social responsibility is the way its managers and employees view their obligation to make decisions that promote the well-being of stakeholders and society as a whole.

Question 23

Employees are much more likely to act ethically when a credo does not exist or is avoided.

Question 24

Web sites like Napster that allow free downloading of songs and movies illustrate the "tragedy of the commons" because pursuit of self-interest only destroys societal interest.

Question 25

Under the justice rule, managers should determine fair rules and procedures for distributing outcomes to stakeholders.

Question 26

Stockholders play a crucial role in determining a company's ethics.

Question 27

An obstructionist approach displays the highest level of social responsibility.

Question 28

An organization's code of ethics is shaped by the ethics of the top managers of the organization.

Question 29

If a company's top managers consistently endorse the ethical principles in its corporate credo, they can prevent employees from going astray.

Question 30

Applying the practical rule to analyze a business decision ensures that managers are taking into account the interests of all stakeholders.

Question 31

People typically confront ethical issues when weighing their personal interests against the effects of their actions on others.

Question 32

_____ are thoughts and feelings that tell people what is right or wrong.

A) Moral scruples
B) Ethical dilemmas
C) Aesthetics
D) Norms
E) Reiterations

Question 33

Jim is comfortable with his decision and would have no problem with people reading about it on the front page of a morning paper. This indicates that he is following the practical rule.

Question 34

The moral principles and beliefs about what is the right or appropriate way to behave are known as _____.

A) aesthetics
B) laws and regulations
C) ethics
D) terminal values
E) instrumental values

Question 35

The way a company's managers view their duty to make decisions that enhance the well-being of stakeholders is called organizational ethics.

Question 36

"An ethical decision is one that a typical person in a society would think is acceptable" is a statement that reflects the practical rule.

Question 37

Dianna has noticed that there has been an error in her weekly pay stub and the company has unknowingly paid her too much. This example illustrates a(n) _____.

A) moral scruple
B) ethical dilemma
C) empiricism
D) norm
E) logical positivism

Question 38

Trust refers to the esteem or high repute that people or organizations gain when they behave ethically.

Question 39

An accommodative approach acknowledges the need to support social responsibility.

Question 40

When making appointment decisions, it is wise for the board of directors to avoid scrutinizing the reputations and ethical records for top managers.

Question 41

Which of the following statements is true of ethical decision making?

A) Customers are often regarded as the least important stakeholder group.
B) Communities, societies, and nations are independent of the effects of the decisions made by companies.
C) The failure of a company can have catastrophic effects on a community since a general decline in business activity can affect a whole nation.
D) The results of ethical behavior are loss of reputation and resources, and skilled managers and employees leaving the company.
E) When making business decisions, managers must exclusively consider the claims of stockholders.

Question 42

The utilitarian rule states that an ethical decision is a decision that:

A) best protects the rights of people affected.
B) produces the greatest good for the greatest number of people.
C) distributes benefits and harms in an impartial manner.
D) can be communicated with no reluctance.
E) increases the financial effectiveness of the organization.

Question 43

Under the practical rule, a manager would not be reluctant to communicate a decision to people outside the company when:

A) the decision, although unethical, would increase shareholders' wealth.
B) a typical person would consider the decision acceptable.
C) a typical person wouldn't care about the decision.
D) a typical person is unaware of the harmful implications of the decision.
E) he/she could blame the top management of the firm.

Question 44

Simon was confronted with a serious ethical dilemma. He responded with a solution that created the greatest good for the greatest number of people. Which ethical rule best describes his response?

A) Justice
B) Moral Rights
C) Utilitarian
D) Practical
E) Moral Scruples

Question 45

The practical rule states that an ethical decision is one that:

A) best protects the rights of people affected.
B) produces the greatest good for the greatest number of people.
C) distributes benefits and harms in a fair way.
D) can be communicated with no reluctance.
E) is relevant to the financial effectiveness of the organization.

Question 46

The stakeholder group with the most responsibility for deciding the goals of the organization is:

A) stockholders.
B) customers.
C) managers.
D) operational-level employees.
E) consultants.

Question 47

_____ watch the company and its managers closely to ensure that management is working diligently to increase the company's profitability.

A) Entrepreneurs
B) Suppliers
C) Stockholders
D) Angel investors
E) Distributors

Question 48

Web sites like Napster demonstrate that the pursuit of self-interest can lead to a collective disaster when one or more people start to profit from being unethical because this encourages other people to act in the same way. This exemplifies a situation known as the _____.

A) "race to the bottom"
B) "tragedy of the commons"
C) "prisoner's dilemma"
D) "war of attrition"
E) "market for lemons"

Question 49

If Samantha was employing the moral rights rule in her decision making, she would:

A) seek to protect the privileges of people affected.
B) maximize the greatest good for the greatest number of people.
C) distribute benefits in fair ways, but ignore harm.
D) hesitate to communicate to people outside the company for fear of them criticizing her decision.
E) randomly distribute harms and benefits.

Question 50

Which of the following statements is true about stockholders?

A) They are often regarded as the most critical stakeholder group because if a company cannot attract them to buy its products, it cannot stay in business.
B) They are least interested in the company's profits.
C) They bear the responsibility to decide which goals an organization should pursue to most benefit stakeholders and how to make the most efficient use of resources to achieve those goals.
D) They are responsible for using a company's financial, capital, and human resources to increase its performance and thus its stock price.
E) They have a claim on a company because when they buy its stock or shares, they become its owners.

Question 51

When Bob was calculating the yearly bonuses for his employees, he paid particular attention to the individual employee scores to ensure that they were based on performance and not favoritism. Which ethical rule was Bob following?

A) Practical
B) Moral Scruples
C) Utilitarian
D) Justice
E) Moral Rights

Question 52

Under the _____ rule, an ethical decision is one that best maintains people's fundamental privileges.

A) justice
B) moral rights
C) utilitarian
D) practical
E) moral scruples

Question 53

Which of the following is a method by which a company can act ethically toward employees and meet their expectations?

A) By improving their products over time and providing guarantees to customers about the integrity of their products
B) By selling customers quality products at a fair price and providing good after-sales service.
C) By maximizing the stockholders' return on investments
D) By creating an occupational structure that fairly and equitably rewards organization members for their contributions
E) By implementing a high power distance culture and discouraging decentralized decision making

Question 54

Which of the following statements is true of the practical rule of ethical decision making?

A) This rule emphasizes distributing benefits and harms in an equitable way.
B) This rule states that it is acceptable for a company to choose an unethical action if the action provides the greatest good for the greatest number of people.
C) This rule requires managers to determine the fair or unfair rules and procedures for distributing outcomes to stakeholders.
D) This rule states that an ethical decision is one that a manager will be hesitant or reluctant to communicate to people outside the company because the typical person in a society would think it is unacceptable.
E) This rule ensures that managers will take into account the interests of all the stakeholders.

Question 55

One managerial implication of the justice model is that managers should base their decisions on:

A) the effects the decision can have on stakeholders' rights
B) what provides maximum profits to the company
C) whatever promotes a fair distribution of outcomes
D) arbitrary factors
E) the competitor's decision making strategies

Question 56

The _____ rule is that an ethical decision is one that distributes rewards and harms in a fair way.

A) justice
B) moral rights
C) utilitarian
D) practical
E) moral scruples

Question 57

Which of the following statements is true about ethics?

A) Ethics and laws are fixed principles.
B) Ethical beliefs remain constant as time passes.
C) Laws change to reflect the changing ethical beliefs of a society.
D) Absolute and indisputable rules and principles can be developed to decide whether an action is ethical or unethical.
E) Ethics evolve over time, but laws related to ethical beliefs remain constant.

Question 58

_____ have a claim on an organization because they bring to it their skills, expertise, and experience.

A) Customers
B) Entrepreneurs
C) Suppliers
D) Local communities
E) Managers

Question 59

_____ have the right to expect a good return or reward by investing their human capital to improve a company's performance.

A) Customers
B) Entrepreneurs
C) Suppliers
D) Distributors
E) Managers

Question 60

_____ are frequently in the position of having to juggle the interests of different stakeholders, including themselves.

A) Stockholders
B) Customers
C) Contractors
D) Managers
E) Suppliers

Question 61

Standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and individual rights are called:

A) societal ethics.
B) occupational ethics.
C) individual ethics.
D) organizational ethics.
E) governmental ethics.

Question 62

Which of the following statements is true of organizational ethics?

A) Employees are much more likely to act unethically when a credo exists.
B) Employees are more likely to act unethically when the company's top managers consistently endorse the ethical principles in its corporate credo.
C) Top managers play the least important role in determining a company's ethics.
D) The individual ethics of a company's founders and top managers are especially important in shaping the organization's code of ethics.
E) They are standards that govern how members of a profession, trade, or craft should conduct themselves when performing work-related activities.

Question 63

The guiding practices and beliefs through which a particular firm and its managers view their responsibilities to stakeholders are called _____.

A) societal ethics
B) occupational ethics
C) individual ethics
D) organizational ethics
E) governmental ethics

Question 64

When faced with an ethical dilemma as a manager, Sam tries to reflect back on his upbringing to decide between right and wrong. Sam is reflecting on _____.

A) societal ethics
B) occupational ethics
C) individual ethics
D) organizational ethics
E) religious ethics

Question 65

A company that expects its managers to behave ethically to the degree that they stay within the law is acting with a(n) _____ approach.

A) accommodative
B) proactive
C) defensive
D) obstructionist
E) offensive

Question 66

After a lengthy investigation, Larry lost his license to practice law on charges of accepting bribes. In all likelihood, Larry probably violated his _____.

A) environmental ethics
B) occupational ethics
C) individual ethics
D) organizational ethics
E) governmental ethics

Question 67

Managers at Enron prevented employees from selling Enron shares in their pension funds while they sold hundreds of millions of dollars' worth of their own Enron stock. This illustrates the _____ approach to social responsibility.

A) accommodative
B) proactive
C) defensive
D) obstructionist
E) offensive

Question 68

When tobacco companies sought to hide evidence that cigarette smoking causes lung cancer, they were exhibiting a(n) _____ approach to social responsibility.

A) accommodative
B) proactive
C) defensive
D) obstructionist
E) offensive

Question 69

Which of the following stakeholder group's individual ethics are important in shaping the organizational code of ethics?

A) Entrepreneurs
B) Customers
C) Community
D) Founders
E) Stockholders

Question 70

Unethical behavior:

A) reduces a company's inefficiency.
B) decreases a company's ineffectiveness.
C) reduces a company's performance.
D) increases the national standard of living.
E) increases national well-being and prosperity.

Question 71

Which of the following approaches is characterized with the highest degree of social responsibility?

A) Accommodative
B) Proactive
C) Defensive
D) Obstructionist
E) Offensive

Question 72

The esteem or high repute that individuals or organizations gain when they behave ethically is called _____.

A) trust
B) reputation
C) social responsibility
D) moral standing
E) emotional value

Question 73

The managers of Lehman Brothers, whose bankruptcy helped propel the 2008-2009 financial crisis, used loopholes in U.K. law to hide billions of dollars of worthless assets in its balance sheet to disguise its poor financial condition. Which of the following approaches to how to be socially responsible is illustrated from this example? Author: I took this change from the questions section above and corrected it. However, I think the sentence was better before the change.

A) Accommodative
B) Proactive
C) Defensive
D) Obstructionist
E) Obligatory

Question 74

Which of the following is least likely to be a source of individual ethics?

A) Family
B) Friends
C) Church
D) Teachers
E) Supervisors

Question 75

The idea that the pursuit of self-interest with no consideration for societal interests leads to disaster is called the _____.

A) "tragedy of the commons"
B) "market for lemons"
C) "halo effect"
D) "race to the bottom"
E) "prisoner's dilemma"

Question 76

Managers who sell their stock in advance of other stockholders because they know that their company's performance is about to fall demonstrate the _____ approach to social responsibility.

A) accommodative
B) proactive
C) defensive
D) obstructionist
E) reactive

Question 77

Bob gave a talk to his employees about standards that govern how members of their profession should conduct themselves. He was talking about _____.

A) societal ethics
B) occupational ethics
C) individual ethics
D) organizational ethics
E) governmental ethics

Question 78

Standards that determine how people view their responsibilities to others and how they should act in situations when their own self-interest is at stake are called _____.

A) societal ethics
B) occupational ethics
C) individual ethics
D) organizational ethics
E) governmental ethics

Question 79

A person's confidence and faith in another person's goodwill is called:

A) trust
B) reputation
C) responsibility
D) moral standing
E) emotional value

Question 80

Which of the following approaches to how to be socially responsible is characterized by low levels of socially responsible behavior? Author: I took this change from the questions section above and corrected it. However, I think the sentence was better before the change.

A) Accommodative
B) Proactive
C) Defensive
D) Obstructionist
E) Obligatory