Chapter 4 Full Test Bank Ethics and Social Responsibility

Contemporary Management, 11e (Jones)

Chapter 4 Ethics and Social Responsibility

1) Aaron works in the accounting department for a large manufacturing company. His manager instructed him to record a transaction in an incorrect manner to increase the revenue for the fiscal year. Aaron is pondering whether to report this issue to a higher-level manager. He is experiencing an ethical dilemma.

2) Laws are fixed principles, but ethics are not.

3) Stockholders are the group that bears the responsibility to decide which goals an organization should pursue to most benefit stakeholders.

4) Josiah is comfortable with his decision he made at work 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 of ethics.

5) The moral rights rule states that people should put the community's interests above the company's.

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

7) Websites that allow free downloading of songs and movies illustrate the "tragedy of the commons" because there is pursuit of self-interest with no consideration for societal interest.

8) Maria is a member of a trade group that has a code of ethics, otherwise known as organizational ethics, for its members to follow.

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

10) Don decided to close his factory and move production to increase the company's profits even though this caused hardship for his employees and the community. Don's decision is not only legal but also socially responsible behavior.

11) Eleanor has witnessed her manager harassing a coworker on multiple occasions. Eleanor knows that she should report the incidents to a superior manager, but she is hesitant to report the inappropriate behavior because she thinks she could lose her job. This example illustrates a(n)

A) justice rule.

B) ethical dilemma.

C) moral dilemma.

D) utilitarian rule.

E) moral rights rule.

12) ________ are the moral principles and beliefs about what is the right or appropriate way to behave.

A) Societal norms

B) Laws and regulations

C) Ethics

D) Values and norms

E) Individual values

13) Brenda, the CEO of a manufacturing company, knew that her company followed the Environmental Protection Agency's (EPA) regulations for purifying waste water; however, new research found that those regulations where not strict enough and the drinking water would be affected. Brenda relied on her ________ and told the plant manager to go beyond the EPA's required level to assure that the company waste did not affect the community.

A) moral scruples

B) occupational ethics

C) practical rules

D) environmental principles

E) social justice views

14) The essential problem when solving moral dilemmas is

A) ethics and laws are fixed principles.

B) ethical beliefs remain constant as time passes.

C) there are no absolute or indisputable rules or principles to decide whether an action is ethical.

D) everyone agrees on what is ethical or unethical.

E) ethics evolve over time, but laws related to ethical beliefs remain constant.

15) Smoking marijuana is illegal in many states; therefore, smoking marijuana is

A) unethical.

B) ethical.

C) possibly unethical or ethical, depending on the circumstances.

D) always ethical when used for medical purposes, whether it is legal or not.

E) always unethical when used for medical purposes, whether it is legal or not.

16) Jonathon is a(n) ________, meaning he is both an employee of the company and a customer of its products.

A) stockholder

B) shareholder

C) stakeholder

D) owner

E) community member

17) One thing that it is important to remember about stockholders is they

A) are usually regarded as the most critical stakeholder group.

B) are least interested in the company's profits.

C) 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) are responsible for using a company's financial, capital, and human resources to increase its performance and thus its stock price.

E) play an important role, but are not the company's only stakeholder group.

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

A) Community members

B) Suppliers

C) Stockholders

D) Customers

E) Distributors

19) ________ have/has the right to expect a good return or reward by investing their human capital to improve a company's performance.

A) Customers

B) Distributors

C) Suppliers

D) The Community

E) Managers

20) ________ are the stakeholder group with the most responsibility for deciding the goals of the organization.

A) Stockholders

B) Customers

C) Managers

D) Operational-level employees

E) Consultants

21) ________ 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

22) A company can act ethically toward employees and meet their expectations by

A) improving their products over time and providing guarantees to customers about the integrity of their products.

B) selling customers quality products at a fair price and providing good after-sales service.

C) maximizing the stockholders' return on investments.

D) creating an occupational structure that fairly and equitably rewards organization members for their contributions.

E) implementing a high-power distance culture and discouraging decentralized decision making.

23) The board and top managers of a nonprofit organization have considerable latitude to decide how they will spend the organization's resources because

A) they are a private foundation.

B) the organization does not have shareholders.

C) they are typically small organizations.

D) they receive contributions and government grants.

E) all monies earned are pumped back into the business.

24) Tax reform legislation signed into law by President Trump in late 2017 included a new 21% excise tax on ________ for salaries over $1 million.

A) nonprofit employers

B) public company CEOs

C) small business employees

D) government employees

E) companies with overseas branches

25) The town in which a large dog food company has its headquarters is referred to as

A) a community.

B) the company's constituency.

C) stockholders.

D) the company's labor force.

E) the company's social conscience.

26) The ________ stakeholder group is often considered to be the most critical.

A) managers

B) employees

C) customers

D) stockholders

E) suppliers

27) Stefan is confronted with a serious ethical dilemma. He responds with a solution that creates 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

28) The utilitarian 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 an impartial manner.

D) can be communicated with no reluctance.

E) increases the financial effectiveness of the organization.

29) 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

30) "Do unto others as you would have them do unto you," is an example of the ________ principle.

A) utilitarian

B) moral rights

C) justice

D) practical

E) fundamental

31) The ________ rule states that an ethical decision is one in which rewards and harms are distributed in a fair and impartial way.

A) justice

B) moral rights

C) utilitarian

D) practical

E) moral scruples

32) When Bob calculates the yearly bonuses for his employees, he pays particular attention to the individual employee scores to ensure that they are based on performance and not favoritism. Which ethical rule is Bob following?

A) practical

B) moral scruples

C) utilitarian

D) justice

E) moral rights

33) Under the practical rule, for a business decision to be ethical, a manager would NOT be reluctant to communicate the 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 would be unaware of the harmful implications of the decision.

E) he or she could blame the top management of the firm.

34) 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.

35) Shia makes some changes in the production process to ensure employees can perform tasks without endangering their health and safety. Shia is employing the moral rights rule to

A) seek to protect the rights and 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.

36) One managerial implication of the justice model is that to be ethical, 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) the personal situation of employees.

E) the greatest good for the greatest number of people.

37) An ethical dilemma for managers is that decisions that will protect the rights of some stakeholders often will hurt the rights of others. This most closely relates to the ________ rule of ethical decision making.

A) practical

B) moral scruples

C) utilitarian

D) justice

E) moral rights

38) The practical rule of ethical decision making

A) emphasizes distributing benefits and harms in an equitable way.

B) 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) requires managers to determine the fair or unfair rules and procedures for distributing outcomes to stakeholders.

D) 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) ensures that managers will take into account the interests of all the stakeholders.

39) When Frida was determining if her decision was ethical, she asked herself, "Would the people with whom I have a significant personal relationship, such as family members, friends, or even managers in other organizations, approve of the decision?" Frida was demonstrating which rule of ethical decision making?

A) practical

B) moral scruples

C) utilitarian

D) justice

E) moral rights

40) A website offered free streaming and downloading of movies, games, and music. It was eventually shut down by the courts. Websites like these demonstrate that the pursuit of self-interest can lead to a(n) ________, 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.

A) moral dilemma

B) "tragedy of the commons"

C) ethical dilemma

D) credo

E) war of attrition

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

A) tragedy of the commons

B) ethical dilemma

C) moral dilemma

D) credo

E) concept of individual ethics

42) ________ is a person's confidence and faith in another person's goodwill.

A) Trust

B) Reputation

C) Social responsibility

D) Moral standing

E) Emotional value

43) Lana wasn't sure if her coworker Branson was correct when she said it was ok to take work home, but she had faith in Branson's ability to make good decisions, so she took the work home and hoped her boss wouldn't be mad. Lana was displaying

A) self-interest.

B) unethical behavior.

C) trust in Branson.

D) trust in her boss.

E) rule breaking.

44) ________ is the esteem or high repute that individuals or organizations gain when they behave ethically.

A) Trust

B) Reputation

C) Social responsibility

D) Moral standing

E) Emotional value

45) ________ ethics are the 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.

A) Societal

B) Occupational

C) Individual

D) Organizational

E) Governmental

46) Gerald's Jewelry has a deep moral commitment to act responsibly in its sourcing of precious metals and gemstones. This is an example of ________ ethics.

A) societal

B) individual

C) organizational

D) occupational

E) governmental

47) Bo gives a talk to his employees about standards that govern how members of their profession should conduct themselves. He is talking about ________ ethics.

A) societal

B) occupational

C) individual

D) organizational

E) governmental

48) When all companies and their managers in a society behave in a socially responsible way, business increases, quality of life increases, and

A) a climate of caring will pervade.

B) lawlessness all but ceases to exist.

C) people look after their own interests.

D) small business starts increase.

E) inflation decreases.

49) Which country is known for being one of the most ethical countries in the world?

A) Brazil

B) the United States

C) Nigeria

D) Japan

E) New Zealand

50) After a lengthy investigation, Legrand lost his license to practice law on charges of accepting bribes. Most likely, Legrand violated his ________ ethics.

A) environmental

B) occupational

C) individual

D) organizational

E) governmental

51) Wanda's doctor put her on a new medication because he gets a kickback from the pharmaceutical company for every prescription he writes, in spite of the fact that it isn't the best medication for Wanda. Her doctor violated his ________ ethics.

A) environmental

B) occupational

C) individual

D) organizational

E) governmental

52) When faced with an ethical dilemma as a manager, Sanjay tries to reflect on his upbringing to decide between right and wrong. Sanjay is reflecting on ________ ethics.

A) societal

B) occupational

C) individual

D) organizational

E) religious

53) The influence of one's family, peers, and upbringing in general can affect a person's ________ ethics.

A) occupational

B) organizational

C) societal

D) business

E) individual

54) ________ ethics are 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.

A) Societal

B) Occupational

C) Individual

D) Organizational

E) Governmental

55) ________ ethics are the guiding practices and beliefs through which a particular firm and its managers view their responsibilities to stakeholders.

A) Societal

B) Occupational

C) Individual

D) Organizational

E) Governmental

56) The individual ethics of a company's ________ are especially important in shaping the organizational code of ethics.

A) employees

B) customers

C) community

D) founders

E) stockholders

57) What 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.

58) Which person is most likely to act unethically?

A) Alaine, who has an ethical manager

B) Ronny, who is struggling financially and has a family to support

C) Morris, who works in a company with a code of ethics

D) Falulah, who is new to the job and is just learning the ropes

E) Nitro, who puts his coworkers' needs above his own

59) It is the responsibility of the ________ to determine if a CEO has the experience and integrity needed to head a company and be entrusted with the capital and wealth of the organization.

A) chief financial officer

B) stockholders

C) employees

D) board of directors

E) ethics ombudsperson

60) ________ is your company views on its duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole.

A) Social responsibility

B) Ethical performance

C) Stakeholder mandate

D) Legal scrutiny

E) Organizational ethics

61) Which type of commitment to social responsibility is characterized by low levels of socially responsible behavior?

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) obligatory

62) Managers are being socially responsible and showing support for their stakeholders when they

A) stop laying employees off.

B) move a factory to a new location if it is polluting the environment.

C) invest in countries that have poor human rights records.

D) decline to help countries develop an economic base if they have poor living standards.

E) allow employees to take time off when they need it.

63) 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. This example illustrates the ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) obligatory

64) Managers at Carpets and Flooring prevented employees from selling the company shares in their pension funds while the managers sold millions of dollars' worth of their own Carpets and Flooring stock. This illustrates the ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

65) Managers at a well-known company sold their stock in advance of other stockholders because they knew that their company's performance was about to fall. This demonstrates the ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) reactive

66) What approach to social responsibility is characterized by the highest level of social responsibility?

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

67) 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

68) A company that expects its managers to behave ethically to the degree that they stay within the law, but no more, is acting with a(n) ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

69) WorldCom gave managers stock options and bonuses even when the company performance was declining, and managers sold their stock in advance of other stockholders. This illustrates the ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

70) According to the ________ approach to social responsibility, companies and their managers behave legally and ethically and try to balance the interests of different stakeholders as the need arises.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

71) Seok's company tries to balance the interests of different stakeholders in relation to the claims of other stakeholders. Which approach to social responsibility is the organization implementing?

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

72) The ________ approach to social responsibility is most likely to be taken by a typical large U.S. company.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

73) Your company sends out an annual questionnaire to learn about the needs of employees and community members and uses organizational resources to promote their interests. This company is using the ________ approach to social responsibility.

A) accommodative

B) proactive

C) defensive

D) obstructionist

E) offensive

74) Companies that use the ________ approach to social responsibility are often at the forefront of campaigns for causes such as a pollution-free environment; recycling and conservation of resources; the minimization or elimination of the use of animals in drug and cosmetics testing; and the reduction of crime, illiteracy, and poverty.

A) accommodative

B) defensive

C) reactive

D) proactive

E) obstructionist

75) Utilizing the ________ approach to social responsibility, the local recycling company actively embraces behaving in socially responsible ways.

A) proactive

B) accommodative

C) obstructionist

D) defensive

E) assertive

76) What tends to happen in countries where organizations are highly socially responsible?

A) Crime rates are high.

B) Unemployment is low.

C) Literacy rates are low.

D) There is less harmony among people.

E) Poverty is high.

77) The ________ has organizationwide authority. Hence, organization members in any department can communicate instances of unethical behavior by their managers or coworkers without fear of retribution.

A) manager

B) stakeholder

C) stockholder

D) nation

E) ethics ombudsperson

78) A(n) ________ is a manager responsible for communicating and teaching ethical standards to all employees and monitoring their conformity to those standards.

A) ethics director

B) ethics manager

C) ethics interpreter

D) ethics ombudsperson

E) stockholder

79) ________ can provide guidance when organization members are uncertain about whether an action is ethical.

A) The communications manager

B) An ethics philosopher

C) The ethics ombudsperson

D) The personnel manager

E) The accommodative manager

80) David is trying to provide a visible means of support to develop an ethical culture in his company. He can do so by creating

A) an ethics ombudsperson position.

B) ethical beliefs that remain rigidly constant.

C) strict leadership rules for the top management.

D) a plan for minimum compensation benefits.

E) a strong human resources team.

81) ________ encourage employees to behave in a socially responsible manner.

A) Stakeholder claims

B) Conflicting interpersonal relations

C) Tougher selection processes

D) Ethical organizational cultures

E) High compensation benefits

82) Philamena has noticed that her operations manager has been using unethical practices to reap personal benefits at the expense of the company's customers. She will most likely approach the ________ to report the matter without fear of retribution.

A) CEO

B) human resources manager

C) consumer court

D) legal advisor

E) ethics ombudsperson

83) Emmanuel and his human resources team have adapted several existing company policies. Because he is unsure if all these policies can be implemented on ethical grounds, his team would best approach a(n) ________ to resolve the matter.

A) consumer court

B) legal advisor

C) ethics ombudsperson

D) HR manager

E) ethical philosopher

84) Pasha works for a manufacturing company in a small town. He reports to his manager that the company is not fulfilling its commitment to the community to reduce pollutants. His manager tells him to ignore the issue and not tell anyone. This is an example of a(n) ________ approach to social responsibility.

A) defensive

B) accommodative

C) reactive

D) obstructionist

E) proactive

85) Stockholders are interested in how a company operates because they

A) are responsible for the organization's capital resources.

B) are responsible for the organization's financial resources.

C) want to maximize the return on their investment.

D) provide input for the goals of the organization.

E) want to make sure the organization makes the most efficient use of resources.

86) Define ethical dilemma, moral scruples, and ethics, and explain how they are related. Give a real-life example for each of these terms.

87) Your employee who does the purchasing for a chain of hair salons you own has suggested buying a cheaper hair-coloring product that contains harmful chemicals. Is this a legal issue or an ethical one? Explain how ethical and legal issues are related when making business decisions.

88) Ethical standards for behavior change over time. Give an example of an ethical standard that may be changing in the culture in which you presently live, and explain whether recent laws have kept up with that new standard for ethical behavior.

89) Zoe frequently streams movies from a website that offers free programs. She doesn't realize that the website doesn't have permission to make the copyrighted content available and that she is illegally using copyrighted content. Explain how this behavior could lead to a tragedy of the commons if Zoe encourages others to stream movies from the website.

90) Jackie's work computer was not working properly, so without permission, Jackie used her coworker's computer to complete some administrative tasks. While she was logged into the coworker's computer, Jackie noticed that her coworker was using the computer for personal use to get emails, download files, and visit social media sites. Jackie wants to warn her coworker about the strict rule in the department that employees cannot use company computers for personal use, but she is hesitant to say something. Explain how this situation is an ethical dilemma for Jackie.

91) Think about the school system you attended. Give specific examples of each of the six types of stakeholders that existed in that school system.

92) Is the issue of ethics different for nonprofits than for-profit companies? Why or why not? Give specific examples in your answer.

93) Explain how an organization affects the prosperity of a local community. Do local organizations have a responsibility to contribute to local community organizations?

94) Suppose you are an accountant for a large publicly traded company. You discover an error in the financial records that makes the company look more profitable. Your manager tells you to correct the error and reissue a financial statement for the stockholders. Which of the four ethical rules did the manager apply to this situation? Explain the reason for your answer.

95) Catherine owns a start-up company that manufactures inexpensive clothing made in the United States. Using the four rules for ethical decision making, discuss how Catherine might operate her business differently depending on which rule she adhered to.

96) Describe at least three negative results that occur when a company makes unethical decisions and managers lead the company with unethical behavior. Provide an example of a company that showed unethical behavior.

97) Your company has been caught participating in some questionable practices with an important overseas supplier. A report by a watch dog group found that employees at an overseas manufacturing plant you rely on for your products earn a wage that is barely enough to sustain them, work overtime without an increase in their hourly wage, and work in unsafe conditions. What are the potential consequences of this news on the company and its stakeholders? What would you recommend that your company do to repair its reputation?

98) Describe why employees and managers choose to act unethically instead of following the company's code of ethics. Who is most likely to act unethically in a company?

99) Label each scenario as one of the four main sources of managerial ethics.

A. Paulo lives in a country that prizes its internalized norms of fairness and justice for its citizens.

B. Ralph is a physician who is a member of the American Medical Association. He scrupulously follows its code of ethics and standards for behavior.

C. Sophia believes that when she is at work, she needs to spend her time on company matters. When her daughter's teacher called to discuss her daughter's grades during work hours, she asked if it would be possible to wait until after work.

D. Rhonda struggles with the fact that her company does animal testing on its products because she believes that it is inhumane.

100) Using the four approaches to how to be socially responsible, provide an example of a real company to differentiate among them.