robbins mgmt11 tb05

Management, 11e (Robbins/Coulter)

Management, 11e (Robbins/Coulter)

Chapter 5 Managing Social Responsibility and Ethics

1) According to the classical view of social responsibility, management's only social responsibility is to maximize profits.

Answer: TRUE

Page Ref: 124

Topic: What Is Social Responsibility?

Objective: 1

Difficulty: Easy

Classification: Conceptual

2) The most outspoken advocate of the classical view of organizational social responsibility is Milton Friedman.

Answer: TRUE

Page Ref: 124


Objective: 1

Difficulty: Easy


3) According to the socioeconomic view, managers' social responsibilities go beyond making profits to include protecting and improving society's welfare.

Answer: TRUE

Page Ref: 125


Objective: 1

Difficulty: Easy


4) When a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities, it is said to be socially responsive.

Answer: FALSE

Page Ref: 125


Objective: 1

Difficulty: Easy


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

Answer: TRUE

Page Ref: 126


Objective: 1

Difficulty: Easy


6) Possession of resources is an argument for social responsibility.

Answer: TRUE

Page Ref: 126


Objective: 1

Difficulty: Easy


7) An organization is said to adopt the market approach to going green when it responds to the environmental demands made by its stakeholders.

Answer: FALSE

Page Ref: 128

Topic: Green Management

Objective: 2

Difficulty: Easy


8) The activist approach to going green is when an organization looks for ways to protect the earth's natural resources.

Answer: TRUE

Page Ref: 128


Objective: 2

Difficulty: Easy


9) The legal approach to going green is also known as the dark green approach.

Answer: FALSE

Page Ref: 128

Objective: 2

Difficulty: Easy


10) In the preconventional stage of moral development, individuals make a clear effort to define moral principles apart from the authority of the groups to which they belong or of society in general.

Answer: FALSE

Page Ref: 130

Topic: Managers and Ethical Behavior

Objective: 3

Difficulty: Easy


11) At the conventional level of moral development, ethical decisions rely on maintaining expected standards and living up to the expectations of others.

Answer: TRUE

Page Ref: 130

Objective: 3

Difficulty: Easy


12) At the principled level of moral development, an individual values the rights of others and upholds absolute values and rights regardless of the majority's opinion.

Answer: TRUE

Page Ref: 131

Objective: 3

Difficulty: Easy


13) The term "values" refers to the principles and beliefs that define what is right and wrong behavior.

Answer: FALSE

Page Ref: 131


Objective: 3

Difficulty: Easy


14) People with an internal locus of control believe that what happens to them is due to luck or chance.

Answer: FALSE

Page Ref: 131

Objective: 3

Difficulty: Easy


15) An organization's structural design, its goals, performance appraisal systems, and reward allocation procedures influence the ethical choices of employees.

Answer: TRUE

Page Ref: 132

Objective: 3

Difficulty: Easy


16) When employees are evaluated only on outcomes, they may be pressured to do whatever is necessary to look good on the outcomes, and not be concerned with how they got those results.

Answer: TRUE

Page Ref: 132


Objective: 3

Difficulty: Easy


17) The Global Compact is a document created by the United Nations outlining principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption.

Answer: TRUE

Page Ref: 134


Objective: 3

Difficulty: Easy


18) The Organization for Economic Co-Operation and Development developed a global code of ethics.

Answer: FALSE

Page Ref: 135


Objective: 3

Difficulty: Easy


19) Employees who raise ethical concerns or issues to others inside or outside the organization are called social activists.

Answer: FALSE

Page Ref: 140

Topic: Social Responsibility and Ethics Issues in Today's World

Objective: 5

Difficulty: Easy


20) Under the Sarbanes-Oxley Act, whistle-blowers in the United States who report suspected corporate violations of laws now have broad protection from reprisals and retaliation.

Answer: TRUE

Page Ref: 140


Objective: 5

Difficulty: Easy


21) Social obligation is the obligation of a business to meet its ________.

A) social and technological responsibilities

B) economic and social responsibilities

C) technological and economic responsibilities

D) economic and legal responsibilities

Answer: D

Page Ref: 124


Objective: 1

Difficulty: Easy


22) The ________ view of social responsibility holds that management's only social responsibility is to maximize profits.

A) socioeconomic

B) classical

C) contemporary

D) sociolegal

Answer: B

Page Ref: 124


Objective: 1

Difficulty: Easy


23) The most outspoken advocate of the classical view of social responsibility is economist and Nobel laureate ________.

A) George Stigler

B) Arthur F. Burns

C) Homer Jones

D) Milton Friedman

Answer: D

Page Ref: 124


Objective: 1

Difficulty: Easy


24) Under the concept of social obligation, the organization does what is required by the ________.

A) society

B) stakeholders

C) environment

D) law

Answer: D

Page Ref: 124


Objective: 1

Difficulty: Easy


25) The ________ view is that management's social responsibility goes beyond making profits to include protecting and improving society's welfare.

A) sociotechnical

B) socioeconomic

C) sociolegal

D) sociopolitical

Answer: B

Page Ref: 125


Objective: 1

Difficulty: Easy


26) ________ is defined as a business firm's intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society.

A) Social obligation

B) Social responsibility

C) Social screening

D) Values-based management

Answer: B

Page Ref: 125


Objective: 1

Difficulty: Easy


27) The aspect that differentiates social responsibility from other similar concepts is that it adds a(n) ________.

A) ethical imperative

B) legal imperative

C) political imperative

D) technical imperative

Answer: A

Page Ref: 125


Objective: 1

Difficulty: Easy


28) In the United States a company that meets federal pollution control standards and does not discriminate in hiring, promotion, and pay is generally meeting its ________.

A) social screening requirements

B) green management requirements

C) social obligation

D) social responsibility

Answer: C

Page Ref: 125


Objective: 1

Difficulty: Easy


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

A) meeting its social obligation

B) meeting its social screening requirements

C) being socially responsive

D) adopting green management

Answer: C

Page Ref: 125


Objective: 1

Difficulty: Easy


30) A U.S. business that provides on-site childcare facilities for employees is ________.

A) being socially responsive

B) fulfilling its social obligations

C) adopting social screening

D) practicing green management

Answer: A

Page Ref: 125

Objective: 1

Difficulty: Easy


31) Which of the following examples reflects a socially responsible action by an organization?

A) Ford Motor Company became the first automaker to endorse a federal ban on sending text messages while driving.

B) Apple has eliminated lead-lined glass monitors from its product line and pioneered reduced-sized packaging that leverages recyclable materials.

C) Fed Ex provided the Federal Emergency Management Agency (FEMA) with a radio antenna to set up communications in the immediate aftermath of Hurricane Katrina.

D) UPS has a company-wide policy that urges employees to volunteer during natural disasters and other crises.

Answer: B

Page Ref: 125

AACSB: Analytic Skills

Objective: 1

Difficulty: Moderate

Classification: Application

32) According to the ________ argument on social responsibility, businesses should be socially responsible because responsible actions are the right thing to do.

A) public expectation

B) ethical obligation

C) public image

D) long-run profit

Answer: B

Page Ref: 126


Objective: 1



33) The belief that business involvement can help solve difficult social problems is the ________ argument on social responsibility.

A) public expectation

B) public image

C) better environment

D) possession of resources

Answer: C

Page Ref: 126


Objective: 1



34) Which of the following arguments on social responsibility states that businesses should address social problems before they become serious and costly to correct?

A) superiority of prevention over cures

B) possession of resources

C) accountability

D) skills

Answer: A

Page Ref: 126

Objective: 1



35) Which of the following arguments on social responsibility states that a business is socially responsible only when it pursues its economic interests?

A) costs

B) violation of profit maximization

C) superiority of prevention over cures

D) too much power

Answer: B

Page Ref: 126


Objective: 1

Difficulty: Easy


36) Which of the following arguments on social responsibility states that pursuing social goals hurts a business's economic productivity?

A) image

B) dilution of purpose

C) costs

D) lack of skills

Answer: B

Page Ref: 126


Objective: 1



37) Which of the following arguments on social responsibility states that there is no direct line of responsibility for social actions?

A) dilution of purpose

B) stockholder interest

C) too much power

D) lack of accountability

Answer: D

Page Ref: 126


Objective: 1



38) The process of applying social and environmental criteria to an investment decision is known as ________.

A) green management

B) value-based management

C) community investing

D) social screening

Answer: D

Page Ref: 127


Objective: 1

Difficulty: Easy


39) Managers who consider the impact of their organization on the natural environment are said to be practicing ________.

A) value-based management

B) ethics-based management

C) conventional management

D) green management

Answer: D

Page Ref: 127


Objective: 2

Difficulty: Easy


40) There are four approaches that organizations can take in order to go green. Which of the following is NOT a part of those approaches?

A) legal approach

B) market approach

C) stakeholder approach

D) operations approach

Answer: D

Page Ref: 128


Objective: 2

Difficulty: Easy


41) In which of the following approaches of going green does the organization exhibit the least environmental sensitivity?

A) light green approach

B) deep green approach

C) market approach

D) stakeholder approach

Answer: A

Page Ref: 128

Objective: 2

Difficulty: Easy


42) In the ________ approach of going green, organizations respond to the environmental preferences of customers.

A) legal

B) market

C) stakeholder

D) activist

Answer: B

Page Ref: 128


Objective: 2

Difficulty: Easy


43) In the ________ approach of going green, an organization works to meet the environmental demands

of its employees, suppliers, or community.

A) deep green

B) light green

C) market

D) stakeholder

Answer: D

Page Ref: 128


Objective: 2

Difficulty: Easy


44) Which of the following approaches of going green reflects the highest degree of environmental sensitivity and is also a good illustration of the social responsibility of the organization?

A) legal approach

B) market approach

C) stakeholder approach

D) activist approach

Answer: D

Page Ref: 128


Objective: 2

Difficulty: Easy


45) Many companies around the globe voluntarily report their efforts in promoting environmental sustainability using the guidelines developed by the ________.

A) United Nations

B) Environmental Protection Agency

C) Global Reporting Initiative

D) Organization for Economic Co-operation and Development

Answer: C

Page Ref: 129

Objective: 2

Difficulty: Easy


46) Which of the following ISO standards is related to quality management?

A) ISO 9000

B) ISO 14000

C) ISO 8000

D) ISO 15000

Answer: A

Page Ref: 129

Objective: 2

Difficulty: Easy


47) Which of the following ISO standards is related to environmental management?

A) ISO 7000

B) ISO 14000

C) ISO 16000

D) ISO 8000

Answer: B

Page Ref: 129

Objective: 2

Difficulty: Easy


48) One way to evaluate a company's green actions is to use the ________ list of the most sustainable corporations in the world.

A) Global 100

B) Global 90

C) Global 80

D) Global 70

Answer: A

Page Ref: 129

Objective: 2

Difficulty: Easy


49) To be named on the Global 100 list, which is announced each year at the ________, a company has to display a superior ability to effectively manage environmental and social factors.

A) Global Reporting Council

B) World Economic Forum

C) United Nations Economic and Social Council

D) World Social Forum

Answer: B

Page Ref: 129

Objective: 2

Difficulty: Easy


50) ________ defined as the principles and beliefs that define right and wrong decisions and behavior.

A) Whistle-blowing is

B) Entrepreneuring is

C) Ethics is

D) Values are

Answer: C

Page Ref: 130

Objective: 3

Difficulty: Easy


51) At the ________ level of moral development, a person's choice between right or wrong is based on personal consequences from outside sources, such as physical punishment, reward, or exchange of favors.

A) preconventional

B) conventional

C) principled

D) elevated

Answer: A

Page Ref: 130

Objective: 3

Difficulty: Easy


52) At the ________ level of moral development, ethical decisions rely on maintaining expected standards and living up to the expectations of others.

A) principled

B) conventional

C) conscientious

D) preconventional

Answer: B

Page Ref: 130

Objective: 3

Difficulty: Easy


53) At the ________ level of moral development, individuals define moral values apart from the authority of the groups to which they belong or society in general.

A) conventional

B) established

C) principled

D) preconventional

Answer: C

Page Ref: 130

Objective: 3

Difficulty: Easy


54) In which of the stages of moral development do individuals stick to rules to avoid physical punishment and follow rules only when doing so is in their immediate interest?

A) conventional stage

B) principled stage

C) elevated stage

D) preconventional stage

Answer: D

Page Ref: 131

Objective: 3



55) In which of the following stages of moral development do individuals live up to what is expected by people close to them and maintain conventional order by fulfilling obligations to which they have agreed?

A) conscientious stage

B) conventional stage

C) principled stage

D) preconventional stage

Answer: B

Page Ref: 131

Objective: 3



56) In which of the following stages of moral development do individuals value rights of others and upholding absolute values and rights regardless of the majority's opinion?

A) preconventional stage

B) conventional stage

C) principled stage

D) established stage

Answer: C

Page Ref: 131

Objective: 3



57) ________ represent basic convictions about what is right and wrong.

A) Dogmas

B) Values

C) Cultures

D) Beliefs

Answer: B

Page Ref: 131

Objective: 3

Difficulty: Easy


58) ________ measures the strength of a person's convictions.

A) Moral development

B) Locus of control

C) Ego strength

D) Social desirability

Answer: C

Page Ref: 131


Objective: 3

Difficulty: Easy


59) John Doe is employed with the IT department in Abel and Associates, that provides financial consultancy services to several wealthy investors. He is approached by a shady investor who offers attractive incentives for stealing some sensitive information regarding the investment patterns of one of the clients of the company. Which of the following statements best reflects John's thoughts if he is at the preconventional level of moral development?

A) If I do go through with the act, I will be letting down my manager and coworkers badly.

B) My job is to protect the information that this company deals in and I should not violate my duties.

C) I am liable to be criminally prosecuted for my involvement in stealing the information.

D) Going through with this act would be highly unfair not just to the client, but also to my employers.

Answer: C

Page Ref: 131


Objective: 3



60) John Doe is employed with the IT department in Abel and Associates, that provides financial consultancy services to several wealthy investors. He is approached by a shady investor who offers attractive incentives for stealing some sensitive information regarding the investment patterns of one of the clients of the company. Which of the following statements best reflects John's thoughts if he is at the principled level of moral development?

A) My job is to protect the information that this company deals in and I should not be violating my duties.

B) By stealing from another person, I will be in violation of the moral standards I've come to expect of myself.

C) If my involvement is detected, my friends and family would be humiliated by my actions.

D) If I am convicted for this crime, I will surely be imprisoned and will probably never be employed anywhere else.

Answer: B

Page Ref: 131


Objective: 3



61) ________ is the degree to which people believe they control their own fate.

A) Ego strength

B) Locus of control

C) Social responsibility

D) Social obligation

Answer: B

Page Ref: 132


Objective: 3

Difficulty: Easy


62) What can be said about a manager who believes that she worked hard and met the productivity goals of her organization despite unfavorable conditions?

A) She has an external locus of control.

B) She has a high ego strength.

C) She has a low ego strength.

D) She has an internal locus of control.

Answer: D

Page Ref: 132



Objective: 3

Difficulty: Easy


63) Which of the following organizations is best suited to promote ethical behavior in its employees?

A) An organization that has a reward and punishment system that depends on specific goal outcomes.

B) An organization that has formal rules and regulations in place.

C) An organization that wants its employees to achieve their goals at any cost.

D) An organization that has a performance appraisal system that focuses exclusively on outcomes.

Answer: B

Page Ref: 132


Objective: 3



64) Which of the following is true concerning the impact of organizational culture on ethical behavior?

A) An organization with low conflict tolerance encourages ethical behavior.

B) An organization with strong culture encourages high ethical standards.

C) An organizational culture that is high in conflict tolerance encourages unethical behavior.

D) An organizational culture that is high in control encourages unethical behavior.

Answer: B

Page Ref: 132


Objective: 3



65) A student who never considers breaking into an instructor's office to steal an accounting exam didn't think twice about asking a friend who took the same course from the same instructor last semester what questions were on the exam. What does this example illustrate?

A) This example illustrates the concept of issue intensity.

B) The student involved has an internal locus of control.

C) The student involved has a strong ego strength.

D) This example illustrates the concept of value-based management.

Answer: A

Page Ref: 133


Objective: 3



66) Which of the following is NOT one of the six determinants that are relevant in deciding issue intensity?

A) consensus of wrong

B) discovery of the act

C) probability of harm

D) immediacy of consequences

Answer: B

Page Ref: 133


Objective: 3

Difficulty: Easy


67) The Foreign Corrupt Practices Act makes it illegal for U.S. firms to ________.

A) make any cash payment for deferential treatment in a foreign transaction

B) make any payment over 5 percent of total cost toward administrative overhead in foreign transactions

C) knowingly corrupt a foreign official

D) knowingly pay a foreign clerical or ministerial employee in exchange for service

Answer: C

Page Ref: 134


Objective: 3



68) ________ is a document created by the United Nations outlining principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption.

A) The Global Reporting Initiative

B) The Global Compact

C) The Global Convention

D) The Global Ethics

Answer: B

Page Ref: 134


Objective: 3

Difficulty: Easy


69) Freedom of association and the effective recognition of the right to collective bargaining are the Global Compact principles in the area of ________.

A) anti-corruption

B) human rights

C) labor standards

D) the environment

Answer: C

Page Ref: 134


Objective: 3

Difficulty: Easy


70) The idea that businesses should eliminate discrimination in respect to employment and occupation is a Global Compact principle in the area of ________.

A) anticorruption

B) human rights

C) environment

D) labor standards

Answer: D

Page Ref: 134


Objective: 3

Difficulty: Easy


71) The centerpiece of the ________ efforts is the Anti-Bribery Convention that was the first global instrument to combat corruption in cross-border business deals.

A) Organization for Economic Co-operation and Development's

B) Institute of Global Ethics'

C) Ethics and Compliance Officer Association's

D) United Nations'

Answer: A

Page Ref: 135

Objective: 3

Difficulty: Easy


72) Which of the following is NOT a way for management to reduce unethical behavior?

A) select individuals with high ethical standards

B) establish codes of conduct

C) provide ethics training

D) monitor employee telephone calls

Answer: D

Page Ref: 135

Topic: Encouraging Ethical Behavior

Objective: 4

Difficulty: Easy


73) A ________ is a formal statement of an organization's primary values and the ethical rules it expects its employees to follow.

A) mission statement

B) code of purpose

C) code of ethics

D) vision statement

Answer: C

Page Ref: 136


Objective: 4

Difficulty: Easy


74) The primary debate about ethics training programs is whether ________.

A) ethics can be taught

B) ethics causes misconduct

C) the programs cover misconduct outside the workplace

D) the programs give unethical individuals more ammunition

Answer: A

Page Ref: 138


Objective: 4



75) Employees who raise ethical concerns or issues in an organization are known as ________.

A) employee-volunteers

B) whistle-blowers

C) entrepreneurs

D) philanthropist

Answer: B

Page Ref: 140

Objective: 5

Difficulty: Easy


76) The ________ Act offers some legal protection to whistle-blowers. It has a provision wherein any manager who retaliates against an employee for reporting violations faces a stiff penalty of a 10-year jail sentence.

A) Sarbanes-Oxley

B) Glass-Steagall

C) Taft-Hartley

D) Landrum-Griffin

Answer: A

Page Ref: 140

Objective: 5

Difficulty: Easy


77) A ________ is an individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches.

A) delator

B) social entrepreneur

C) philanthropist

D) whistle-blower

Answer: B

Page Ref: 141


Objective: 5

Difficulty: Easy


78) If Google asks twenty-five members of its executive team to spend a full day at their annual team-building retreat building a house in Las Vegas with Habitat for Humanity, the executives would be engaging in employee ________.

A) volunteering efforts

B) entrepreneuring efforts

C) whistle-blowing efforts

D) administrating efforts

Answer: A

Page Ref: 142

Objective: 5

Difficulty: Easy


Two Opposing Views of Social Responsibility (Scenario)The board of directors of Acme Generating Corporation is meeting to consider the construction of a new electricity generation facility somewhere along the Muspetan River basin. The city of Muspetan has a high Air Pollution Index and the increasing amount of garbage is adding to the city's woes. Director Appleton would like the facility to be a coal-burning plant located in a remote area because the cost involved is moderate. Director Witworth wants a nuclear plant because this will not add to the city's already serious pollution problem, while taking care of its electricity requirements. Director Jossleman wants a plant that uses combustible fuels collected from the city's garbage. He wants the plant to be located near the downtown government area so that the steam could be used for heating the government buildings after it has passed through the generating turbines.

79) Director Witworth is following which of the social responsibility views?

A) market view

B) activist view

C) classical view

D) socioeconomic view

Answer: D

Page Ref: 124



Objective: 1



80) Director Appleton is following which of the social responsibility views?

A) legal view

B) stakeholder view

C) classical view

D) socioeconomic view

Answer: C

Page Ref: 125



Objective: 1



81) Director Jossleman is being mostly ________.

A) socially guarded

B) socially focused

C) socially obligated

D) socially responsive

Answer: D

Page Ref: 125



Objective: 1



An Academic Question (Scenario)

As a university student your institution's social principles and practices reflect on you as a stakeholder in the organization. Therefore, it is your right to question how some of these practices should be evaluated in relation to the social issues that the school is addressing.

82) If your university was paying minimum wage when necessary and applying the minimum legal standards to its employees' work environment, it would be said to have fulfilled its ________.

A) social obligation

B) social responsibility

C) social responsiveness

D) social expectation

Answer: A

Page Ref: 125



Objective: 1



83) 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

Answer: C

Page Ref: 125



Objective: 1



84) Your university has tried to promote the establishment of shared values so that all members will understand its beliefs. The university has established ________ management.

A) values-based

B) issue-based

C) leadership-based

D) goal-based

Answer: A

Page Ref: 132



Objective: 3



The Environmental Study (Scenario)

You have just been challenged by your supervisor to study and report your findings on approaches that organizations use when dealing with the environment and when pursuing the goal of going green. Your boss tells you to study the four major approaches, differentiate among them, and report to him in a week.

85) Under what approach do organizations exhibit little environmental sensitivity, and simply obey laws, rules and regulations?

A) stakeholder approach

B) market approach

C) legal approach


Answer: C

Page Ref: 128


Objective: 2



86) What approach deals with an organization responding to the environment because of the preferences of its customers?


B) market approach

C) legal approach


Answer: B

Page Ref: 128


Objective: 2



87) Under what approach does the organization work to meet the environmental demands of multiple groups of people including employees, suppliers, or the community?


B) market approach

C) legal approach


Answer: A

Page Ref: 128


Objective: 2



88) Under what approach is the organization driven to look for ways to respect and preserve the earth and its natural resources?


B) market approach

C) legal approach


Answer: D

Page Ref: 128


Objective: 2



Summing Up Social Responsibility (Scenario)Max Proffit, director of research and development for National Products Company, that is into producing hiking gears has learned that a new material has been developed in his department that appears to make the ropes and slings more durable. He has discussed this development with his two assistants, Susie Merriweather and Moe Gaines, and Rush Onward, vice president of product development. Susie has stated her opposition to the use of the new material because its durability has not yet been tested and has not been certified by the company's third-party testing laboratory. Moe argues that the initial tests that their R&D department completed indicate minimal problems with durability. Rush states that in several meetings he has recently attended, the company president had repeatedly emphasized the need to increase earnings per share. Rush tells Max that a decision has to be made within the week about the new material's use by the Company.

89) Moe Gaines's support of using the new uncertified material is an indication that he ________.

A) has a weak ego strength

B) supports social screening

C) is in favor of green management

D) is following the company's code of ethics

Answer: A

Page Ref: 131


Objective: 3



90) If Max resists his impulse to okay the use of the uncertified material because of the need for increased earnings per share he ________.

A) is a social entrepreneur

B) has a strong ego strength

C) is a whistle-blower

D) has an external locus of control

Answer: B

Page Ref: 131


Objective: 3



91) Susie's opposition to the use of the new uncertified material is an indication that she ________.

A) is a supporter of the classical view of social responsibility

B) is interested in quitting her job

C) has an internal locus of control

D) has a weak ego strength

Answer: C

Page Ref: 131


Objective: 3



Ethics Training (Scenario)

You are an employee of a very large company, Behemoth Inc. Several employees routinely have lunch at a local restaurant where most drink alcoholic beverages before returning to work. In addition to this inappropriate behavior, several male coworkers call female employees "babes" and freely use racial slurs. There have been many complaints and the company has decided to use these issues as ethical training examples.

92) How can managers identify the ethically questionable applicants even before they became part of the workforce?

A) by hiring friends who apply

B) by asking candidates to prove that they can complete more work in less time

C) by favoring candidates who come with a reference from existing employees

D) by asking the candidates to go through interviews, tests, and background checks

Answer: D

Page Ref: 135



Objective: 4



93) The company brings in help from outside to evaluate decisions and management practices in relation to the organization's code of ethics. These evaluations are called ________.

A) social responsibility mechanisms

B) social protective mechanisms

C) independent social audits

D) independent impact assessments

Answer: C

Page Ref: 139


Objective: 4



94) Compare and contrast the ideas of social obligation, social responsiveness, and social responsibility.

Answer: Social obligation occurs when a firm engages in social actions because of its obligation to meet its economic and legal responsibilities. The organization does only what it is obligated to do and nothing more. This idea reflects the classical view of social responsibility that says that management's only social responsibility is to maximize profits. In contrast to social obligation, however, both social responsiveness and social responsibility reflect the socioeconomic view. According to this view a manager's social responsibilities go beyond making profits to include protecting and improving society's welfare. This view is based on the belief that corporations are not independent entities responsible only to stockholders, but have an obligation to the larger society. Social responsiveness occurs when a company engages in social actions in response to some popular social need. Managers are guided by social norms and values and make practical, market-oriented decisions about their actions. A socially responsible organization views things differently. It goes beyond what it is obligated to do or chooses to do because of some popular social need and does what it can to help improve society because it is the right thing to do. Social responsibility is defined as a business's intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society. A socially responsible organization does what is right because it feels it has an ethical responsibility to do so.

Page Ref: 124-125


Objective: 1



95) List and discuss five arguments in favor of business social responsibility and five arguments against it.

Answer: Arguments in favor of business social responsibility include:

a. Public expectations - Public opinion now supports businesses pursuing economic and social goals.

b. Long-run profits - Socially responsible companies tend to have more secure long-run profits.

c. Ethical obligation - Businesses should be socially responsible because responsible actions are the right thing to do.

d. Public image - Businesses can create a favorable public image by pursuing social goals.

e. Better environment - Business involvement can help solve difficult social problems.

f. Discouragement of further governmental regulation - By becoming socially responsible, businesses can expect less government regulation.

g. Balance of responsibility and power - Businesses have a lot of power and an equally large amount of responsibility is needed to balance against that power.

h. Stockholder interests - Social responsibility will improve a business's stock price in the long run.

i. Possession of resources - Businesses have the resources to support public and charitable projects that need assistance.

j. Superiority of prevention over cures - Businesses should address social problems before they become serious and costly to correct.

Arguments against business social responsibility include:a. Violation of profit maximization - Business is being socially responsible only when it pursues its economic interests.

b. Dilution of purpose - Pursuing social goals dilutes business's primary purpose of achieving economic productivity.

c. Costs - Many social responsibility actions do not cover their costs and someone must pay those costs.

d. Too much power - Businesses have a lot of power already and if they pursue social goals they will have even more power.

e. Lack of skills - Business leaders lack the necessary skills to address social issues.

f. Lack of accountability - There are no direct lines of accountability for social actions.

Page Ref: 126


Objective: 1



96) Explain the four approaches that organizations can take with respect to environmental issues and going green.

Answer: a. Legal approach - This approach is also known as the light green approach. Under this approach, organizations simply do what is required legally. They exhibit little environmental sensitivity. They obey laws, rules, and regulations without legal challenge. This approach illustrates social obligation.

b. Market approach - As an organization becomes more sensitive to environmental issues, it may adopt this approach. Here, organizations respond to the environmental preferences of their customers. Whatever customers demand in terms of environmentally-friendly products is what the organization provides. This approach illustrates social responsiveness.

c. Stakeholder approach - Here, the organization works to meet the environmental demands of multiple stakeholders such as employees, suppliers, or community. This approach also illustrates social responsiveness.

d. Activist approach - If an organization pursues this approach, it looks for ways to protect the earth's natural resources. It is also known as the dark green approach. This approach reflects the highest degree of environmental sensitivity and illustrates social responsibility.

Page Ref: 128


Objective: 2



97) Identify and describe the three levels and six stages of moral development.

Answer: An individual's moral development can be divided into three levels, each having two stages. At each successive stage, an individual's moral judgment becomes less dependent on outside influences and more internalized.

The three levels of moral development are preconventional, conventional, and principled.

At the preconventional level, an individual's choice between right or wrong is based on personal consequences from outside sources, such as physical punishment, reward, or exchange of favors. This level includes stage 1 where an individual sticks to the rules to avoid punishment and stage 2 where the individual follows the rules only when doing so is in his or her immediate interest.

At the conventional level, ethical decisions rely on maintaining expected standards and living up to the expectations of others. The third and fourth stages are in the conventional level. In stage 3, an individual tries to live up to what is expected by people close to him or her. In stage 4, an individual tries maintaining conventional order by fulfilling obligations to which he has agreed.

At the principled level, an individual defines moral values apart from the authority of the groups to which he or she belongs. The 5th and 6th stages are a part of this level. At stage 5, an individual values the rights of others and upholds absolute values and rights regardless of the majority's opinion. Finally, at stage 6, an individual follows his or her self-chosen ethical principles even if they violate the law.

Page Ref: 130-131


Objective: 3



98) Outline the two individual characteristics that play a role in determining whether a person behaves ethically.

Answer: Values and personality are the two individual characteristics that play a role in determining whether a person behaves ethically. Each person comes to an organization with a relatively entrenched set of personal values, which represent basic convictions about what is right and wrong. An individual's values develop from a young age based on what he or she sees and hears from parents, teachers, friends, and others. Thus, employees in the same organization often possess very different values. Values are broad and cover a wide range of issues.

Two personality variables that influence an individual's actions according to his or her beliefs about what is right or wrong are ego strength and locus of control.

Ego strength measures the strength of a person's convictions. People with high ego strength are likely to resist impulses to act unethically and instead follow their convictions. Individuals high in ego strength are more likely to do what they think is right and be more consistent in their moral judgments and actions than those with low ego strength.

Locus of control is the degree to which people believe they control their own fate. People with an internal locus of control believe they control their own destinies. They are more likely to take responsibility for consequences and rely on their own internal standards of right and wrong to guide their behavior. They are also more likely to be consistent in their moral judgments and actions. People with an external locus believe what happens to them is due to luck or chance. They are less likely to take personal responsibility for the consequences of their behavior and more likely to rely on external forces.

Page Ref: 131

Objective: 3



99) Write a short essay on the structural variables that can influence employees' ethical behavior.

Answer: An organization's structural design can influence whether employees behave ethically. Those structures that minimize ambiguity and uncertainty with formal rules and regulations and those that continuously remind employees of what is ethical are more likely to encourage ethical behavior. Other structural variables that influence ethical choices include goals, performance appraisal systems, and reward allocation procedures.

Although many organizations use goals to guide and motivate employees, those goals can create some unexpected problems. One study found that people who do not reach set goals are more likely to engage in unethical behavior, even if they do or do not have economic incentives to do so.

An organization's performance appraisal system also can influence ethical behavior. Some systems focus exclusively on outcomes, while others evaluate means as well as ends. When employees are evaluated only on outcomes, they may be pressured to do whatever is necessary to look good on the outcomes, and not be concerned with how they got those results.

Closely related to the organization's appraisal system is how rewards are allocated. The more that rewards or punishment depend on specific goal outcomes, the more employees are pressured to do whatever they must to reach those goals, perhaps to the point of compromising their ethical standards.

Page Ref: 132

Objective: 3



100) Discuss the importance of an organization's culture as a factor that determines an employee's ethical behavior.

Answer: An organization's culture consists of shared organizational values. These values reflect what the organization stands for and what it believes in as well as create an environment that influences employee behavior ethically or unethically. When it comes to ethical behavior, a culture most likely to encourage high ethical standards is one that is high in risk tolerance, control, and conflict tolerance. Employees in such a culture are encouraged to be aggressive and innovative, are aware that unethical practices will be discovered, and feel free to openly challenge expectations they consider to be unrealistic or personally undesirable.

Because shared values can be powerful influences, many organizations are using values-based management, in which the organization's values guide employees in the way they do their jobs.

An organization's managers play an important role here. They are responsible for creating an environment that encourages employees to embrace the culture and the desired values as they do their jobs. People look to see what those in authority are doing and use that as a benchmark for acceptable practices and expectations.

A strong culture exerts more influence on employees than a weak one. If a culture is strong and supports high ethical standards, it has a powerful and positive influence on the decision to act ethically or unethically.

Page Ref: 132-133


Objective: 3



101) What is the Global Compact? What are the 10 principles outlined in it?

Answer: The Global Compact is a document created by the United Nations outlining principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption. It serves as a guide to being ethical in international business.

The 10 principles outlined in it are:

Human Rights:

Principle 1: Support and respect the protection of international human rights within

their sphere of influence.

Principle 2: Make sure business corporations are not complicit in human rights abuses.

Labor Standards:

Principle 3: Freedom of association and the effective recognition of the right to

collective bargaining.

Principle 4: The elimination of all forms of forced and compulsory labor.

Principle 5: The effective abolition of child labor.

Principle 6: The elimination of discrimination in respect to employment and occupation.

Environment:

Principle 7: Support a precautionary approach to environmental challenges.

Principle 8: Undertake initiatives to promote greater environmental responsibility.

Principle 9: Encourage the development and diffusion of environmentally friendly

technologies.

Anti-Corruption:

Principle 10: Businesses should work against corruption in all its forms, including

extortion and bribery.

Page Ref: 134

Objective: 3



102) In a short essay, discuss some of the ways in which managers can encourage ethical behavior and create a comprehensive ethics program.

Answer: Employee selection - The selection process (interviews, tests, and background checks) can be viewed as an opportunity to learn about an individual's level of moral development, personal values, ego strength, and locus of control. However, a carefully designed selection process is not foolproof and, even under the best circumstances, individuals with questionable standards of right and wrong may be hired. Such an issue can be overcome if other ethics controls are in place.

Code of ethics and decision rules - A code of ethics is a formal statement of an organization's values and the ethical rules it expects employees to follow. It is a popular choice for reducing ambiguity about what is and is not ethical.

Leadership - Doing business ethically requires a commitment from top managers. They are the ones who uphold the shared values and set the cultural tone. They are role models in terms of both words and actions. Top managers also set the tone by their reward and punishment practices. The choices of whom and what are rewarded with pay increases and promotions send a strong signal to employees.

Job goals and performance appraisal - Under the stress of unrealistic goals, otherwise ethical employees may feel they have no choice but to do whatever is necessary to meet those goals. Also, goal achievement is usually a key issue in performance appraisal. If performance appraisals focus only on economic goals, ends will begin to justify means. To encourage ethical behavior, both ends and means should be evaluated.

Independent social audits - These evaluate decisions and management practices in terms of the organization's code of ethics. To maintain integrity, auditors should be responsible to the company's board of directors and present their findings directly to the board. This arrangement gives the auditors clout and lessens the opportunity for retaliation from those being audited.

Protective mechanisms - Employees who face ethical dilemmas need protective mechanisms so they can do what is right without fear of reprimand. An organization might designate ethical counselors for employees facing an ethics dilemma. Many organizations appoint ethics officers who design, direct, and modify the organization's ethics programs as needed.

Page Ref: 135-139

Objective: 4

Difficulty: Difficult


103) Who are whistle-blowers? What can managers do to protect them?

Answer: Whistle-blowers are individuals who raise ethical concerns or issues in an organization. These individuals are a key part of a company's ethics program.

It is important for managers to assure employees who raise ethical concerns that they will face no personal or career risks.

In order to facilitate this, managers can set up toll-free ethics hotlines. Managers also need to create a culture where bad news can be heard and acted on before it is too late. The Sarbanes-Oxley Act offers some legal protection to whistle-blowers. According to one of its provisions, any manager who retaliates against an employee for reporting violations faces a stiff penalty of a 10-year jail sentence.

Page Ref: 140

Objective: 5

Difficulty: Easy


1Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall

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