Chapter 4 Ethics and Social Responsibility

TRUEFALSE

1)Nonprofits, partnerships, and labor unions are not covered by the US Sentencing Commission Guidelines for Organizations.

1. True
2. False

 

2. The US Sentencing Commission Guidelines for Organizations cover offenses related to invasion of privacy.

1. True
2. False

 

3. The greater the corporate responsibility in conducting, encouraging, or sanctioning illegal or unethical activity, the lower the culpability score.

1. True
2. False

 

4. People at the preconventional level of moral development use internalized ethical principles to solve ethical dilemmas.

1. True
2. False

 

5. The principle of government requirements states that one should never take an action that does not result in greater good for society.

1. True
2. False

 

6. The principle of distributive justice is designed to protect the poor, the uneducated, and the unemployed. ( A) True

( B) False

 

7. A company must avoid communicating its code of ethics to others outside the company.

1. True
2. False

 

8. Ethics training becomes more credible when top managers teach the initial ethics classes to their subordinates who in turn teach their subordinates.

1. True
2. False

 

9. Organizational culture is key to fostering ethical decision making.

1. True
2. False

 

10. Carrying out discretionary responsibilities is mandatory for every organization.

1. True
2. False

 

11. There is no trade-off between social responsibility and economic performance.

1. True
2. False

 

MULTICHOICE

12. ?The US Sentencing Commission Guidelines for Organizations impose smaller fines on companies that:

1. ?have no history of violation of ethics principles.
2. ?are unaware of the unethical behavior of employees.
3. ?are not concerned with the ethical behavior of employees.
4. ?voluntarily disclose illegal activities to federal authorities.

 

13. Which of the following statements best explains the carrot-and-stick approach of the US ? Sentencing Commission Guidelines for Organizations?

1. Nonprofit organizations are exempted from fines. ?
2. ?Unincorporated organizations and associations are exempted from penalties.
3. Organizations accused of unethical behavior are excused if the management was unaware of ? such behavior.
4. ?Smaller fines are imposed on companies that take proactive steps to encourage ethical behavior.

 

14. ?According to the US Sentencing Commission Guidelines for Organizations, which of the following steps should be followed immediately after the standards and procedures for an effective compliance program have been established?

1. First-line managers should be trained on standards and procedures. ?
2. All employees should be given decision-making authority. ?
3. ?Upper-level managers should take charge of the program.
4. Employees who repeatedly violate standards should be given informal warnings. ?

15. _____ is the degree of concern people have about an ethical issue. ?

1. ?Ethical intensity
2. ?Ethical congruence
3. ?Ethical pluralism

4. Ethical objectivism

 

16. ?When addressing an issue of _____, managers are more aware of the impact their decision will have on others.

1. ?high workplace deviance
2. ?high ethical intensity
3. ?low employee shrinkage
4. ?low personal aggression

 

17. Which of the following factors should be taken into account when determining the ethical ? intensity of an action?

1. ?Conflict of interest
2. ?Peer acceptance
3. Intent of a manager ?
4. Temporal immediacy ?

 

18. Red Spark Inc., a multinational electronics manufacturer, recently came under close scrutiny ? after it was involved in a major money laundering scam. The scam had adversely affected the careers of more than two hundred employees of Red Spark despite the fact that they were not involved in the scam. This scenario illustrates that the scam had a:

1. low probability of effect. ?
2. high peer acceptance. ?
3. low concentration of effect. ?
4. high magnitude of consequences. ?

 

19. ?Delayed product delivery is less of an issue when compared to delivering a faulty product, which can potentially cause harm. This is because delivering a faulty product has a _____.

1. ?high magnitude of consequences
2. low magnitude of influence
3. high cultural effect
4. low probability of effect

 

20. ?According to Kohlberg's stages of moral development, people at the _____ make decisions that are based on selfish reasons.

1. ?conventional level
2. ?unconventional level
3. ?preconventional level
4. postconventional level ?

 

21. ?According to Kohlberg's stages of moral development, people at the _____ make decisions that conform to societal expectations.

1. conventional level ?
2. unconventional level ?
3. preconventional level ?
4. postconventional level ?

 

22. Jason, a police officer, strongly believes in justice and does not accept bribes from others. ? According to Kohlberg's stages of moral development, Jason is operating at the _____ of moral development.

1. preconventional level ?
2. postconventional level ?
3. conventional level ?
4. unconventional level ?

 

23. ?Under the _____, an individual should never take any action that harms the least fortunate people in some way.

1. principle of government requirements
2. principle of personal virtue
3. principle of utilitarian benefits
4. ?principle of distributive justice

 

24. ?Managers can use overt integrity tests to _____.

1. ?select and hire ethical employees
2. ?assess the ethical intensity of an issue
3. differentiate between the ethics of primary and secondary stakeholders ?
4. reinforce the ethical principle of individual rights ?

 

25. A(n) _____ is a written test that estimates job applicants' honesty by directly asking them what ? they think or feel about theft or about punishment of unethical behaviors.

1. situation-based integrity test ?
2. personality-based integrity test ?
3. covert integrity test ?
4. overt integrity test ?

26. ?For a code of ethics to encourage ethical decision making and behavior in a company, _____.

1. the code must contain broad rather than specific guidelines ?
2. the code of ethics should revolve around legal factors and not organizational values ?
3. the management must ensure that the code of ethics does not include customers' and ? shareholders' interests
4. the management must develop practical ethical standards and procedures specific to the ? company's line of business

 

27. Which of the following is an objective of ethics training?

1. To achieve credibility with employees
2. To enforce flexible ethical standards
3. To discourage employees from reporting violations
4. ?To delegate decision-making authorities to all employees

 

28. ?In a basic model of ethical decision making, after a problem has been identified, the next step is to _____.

1. diagnose the situation?
2. identify the constituents ?
3. analyze the available options ?
4. develop alternative solutions ?

 

29. The last step in a basic model of ethical decision making is to _____. ?

1. diagnose the situation ?
2. ?analyze alternatives
3. act on the situation ?
4. ?monitor the results

 

30. According to the _____, the only social responsibility that businesses have is to maximize profits. ?

1. economic model ?
2. stakeholder model ?
3. shareholder model ?
4. ?accounting model

 

31. Which of the following is an argument put forth by economist Milton Friedman? ?

1. A law represents the minimal moral standards of society, so an individual should never take any action that violates the law.
2. It is unethical to take any action that is not in an organization's long-term self-interest.
3. It is socially irresponsible for companies to divert time, money, and attention from maximizing profits to social causes and charitable organizations.
4. ?An individual's ethical decision is based on his or her level of moral development.

 

32. ?Which of the following stakeholder groups does not engage in regular transactions with a company?

1. ?Customers
2. ?Governments
3. ?Local communities
4. Special interest groups ?

 

33. Secondary stakeholders are important to a company because: ?

1. they are critical to the company's long-term survival. ?
2. they can affect public perceptions about socially responsible behavior. ?
3. they are involved in day-to-day transactions with the company. ?
4. they have the direct power to control management decisions. ?

 

34. ?Horizon Inc., a local electronics manufacturing company, produces a significant amount of electronic waste every day. The company disposes the waste in the ocean despite strict government regulations regarding waste disposal. This scenario illustrates that Horizon has failed to fulfill its _____.

1. economic responsibility ?
2. political responsibility ?
3. legal responsibility ?
4. ?discretionary responsibility

 

35. Teeny Toys Inc., a chain of toy stores, has decided to donate free toys to orphanages across the United States. This scenario illustrates that the company is aiming at fulfilling its _____.

1. discretionary responsibility
2. ?legal responsibility
3. ?ethical responsibility
4. ?economic responsibility

36. ?A(n) _____ is a social responsiveness strategy in which a company does less than society expects.

1. ?discretionary strategy
2. reactive strategy ?
3. ?proactive strategy
4. accommodative strategy ?

 

37. When ten customers of Niall's Eatery fell seriously ill after dining at the restaurant, the issue ? was noticed by the public. The public demanded that the restaurant's kitchen be thoroughly inspected and the patients be compensated. However, the management at Niall's Eatery denied all claims that the customers had fallen ill by consuming the food served by the restaurant.

Furthermore, the management was against any inspection on the kitchen. Which of the following social responsiveness strategies is the restaurant using?

1. ?Reactive strategy
2. Proactive strategy ?
3. ?Defensive strategy
4. Accommodative strategy ?

 

38. Maxwell Lights Inc., a fireworks company, has workers operating under dangerous working ? conditions. Last year, one of its workers died on the job. Nevertheless, the company took a long time to acknowledge its responsibility for the accident. The worker's family was compensated only after several months. Moreover, the money received by the worker's family was only half of what they should have actually been paid. Which of the following social responsiveness strategies is the company using?

1. ?Reactive strategy
2. Defensive?   strategy