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| 1 | |
Ethical principles in business |
| | A) | concern the behavioral guidelines a company's top management and board of directors set for company personnel regarding "what is right" and "what is wrong" in conducting the company's business. |
| | B) | deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner. |
| | C) | are not materially different from ethical principles in general and serve as a moral compass for business conduct. |
| | D) | are arrived at by picking and choosing among the consensus ethical standards of society to come up with a set of ethical standards that apply directly to operating a business. |
| | E) | involve behavioral guidelines for balancing the interests of non-owner stakeholders (customers, employees, suppliers, and the communities in which the company has operations) against the interests of company shareholders. |
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| 2 | |
According to the school of ethical universalism, |
| | A) | what behaviors are "ethically right" and "ethically wrong" vary across religions, but the boundaries of what is ethical or not are universal within religions. |
| | B) | concepts of right and wrong universally apply to all business situations within a given country but can vary across countries or cultures. |
| | C) | ethical guidelines exist only when there is universal agreement as to what behaviors are "ethically right" and "ethically wrong"; anything not universally viewed as unethical is thus within the bounds of what is ethically permissible. |
| | D) | some concepts of what is right and what is wrong are universal and transcend almost all cultures, societies, and religions—hence where there is common ground, there is a basis for using a common set of ethical standards to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances. |
| | E) | all societies and countries have some definition of what is ethically permissible (in this sense ethics are universal); however, the definitions of what is ethically permissible vary according to the prevailing religious doctrines in each country. |
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| 3 | |
The thesis that since different societies and cultures have divergent values and standards of what is "ethically right" and "ethically wrong" it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores |
| | A) | is the basis for the theory of ethical variation. |
| | B) | defines what is meant by "ethical non-universalism." |
| | C) | is the foundation of "integrated social contracts theory." |
| | D) | is a view that characterizes the school of ethical relativism. |
| | E) | is the reason why codes of ethical and social morality have been established country by country. |
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| 4 | |
Under ethical relativism |
| | A) | there are multiple sets of ethical standards. |
| | B) | there is a "one-size-fits-all" set of authentic ethical standards. |
| | C) | the preferred set of ethical standards is the one which society at large has put in place in the form of laws and regulations. |
| | D) | the prevailing set of ethical standards come to be established via a system of "integrated social contracts." |
| | E) | no ethical standards are ever truly "authentic"—they exist only to the extent that there is a temporary shared conviction among company managers and company personnel that a particular behavior is either ethically permissible or ethically impermissible. |
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| 5 | |
Paying bribes and kickbacks to expedite winning orders from customers or to facilitate business transactions |
| | A) | is a clear violation of ethical standards only if one is an advocate of the school of ethical relativism. |
| | B) | is ethically acceptable according to "integrated social contract theory." |
| | C) | is a clear violation of ethical principles in all countries. |
| | D) | is one of the thorniest ethical problems that multinational companies face because of cross-country variability in whether such payments are in accord with local customs and social mores. |
| | E) | is ethically acceptable according to both the school of ethical relativism and the school of ethical universalism, provided the payment of such bribes and kickbacks is permitted by local laws. |
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| 6 | |
The prevailing view of the school of ethical universalism is that |
| | A) | all different societies and countries have essentially the same ethical standards of right and wrong in the conduct of business affairs, despite somewhat different customs and traditions. |
| | B) | basic human nature is the same everywhere and thus the same standards of what's ethical and what's not resonate with peoples of most societies regardless of local traditions and customs. |
| | C) | concepts of right and wrong are universally defined by religious principles. |
| | D) | concepts of right and wrong are universal within countries but not across countries and cultures. |
| | E) | concepts of right and wrong are universal as applied to a given ethical issue or any one particular set of circumstances—that is, there's a universally correct way to handle every ethics-related situation. |
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| 7 | |
According to integrated social contracts theory, |
| | A) | the views and principles of the school of ethical universalism are definitely wrong; the correct view is that ethics is a matter of personal responsibility not a matter of management concern. |
| | B) | the ethical standards a company should try to uphold are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not. |
| | C) | the standards of what is ethically permissible and what is not should be based on a code of ethical and moral conduct which each society/country/culture adopts and then enacts into law. |
| | D) | the standards of what is ethically permissible should be determined by the terms of an "ethics contract" which each company employee signs as a condition of employment. |
| | E) | the only valid ethical standards are those which are universal—and then only if the standards are not absolute and provide some wiggle room according to the circumstances of the each situation. |
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| 8 | |
Multinational companies that are serious about enforcing a code of ethical conduct that extends to all company employees worldwide |
| | A) | have no special problems given the universal nature of ethical standards. |
| | B) | are misguided in their efforts because it is not possible to write a code of ethical conduct with worldwide applicability. |
| | C) | have an uphill struggle unless they subscribe to the school of ethical relativism. |
| | D) | are mis-guided and doomed to failure, given that a majority of company managers are immoral. |
| | E) | have a big challenge in knowing when to have absolute standards that apply worldwide and when to provide some wiggle room in interpreting and applying ethical standards so as to be responsive to local customs, traditions, and social mores. |
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| 9 | |
The three categories of managers that stand out as concerns their prevailing beliefs in and commitments to ethical and moral principles in business affairs are: |
| | A) | ethically-committed managers, ethically-corrupt managers, and ethically unconcerned managers. |
| | B) | ethically blind managers, ethically immoral managers, and ethically moral managers. |
| | C) | ethically-principled managers, ethically-unprincipled managers, and managers who behave ethically or unethically according to how much they think they can get away with and not get caught. |
| | D) | moral managers, immoral managers, and amoral managers. |
| | E) | trustworthy managers, untrustworthy managers, and sometimes trustworthy/sometimes untrustworthy managers. |
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| 10 | |
Unintentionally amoral managers |
| | A) | are nearly always ethically-principled in their personal behavior but can inadvertently violate the principles of business ethics because they are unsure of the differences between standards of business ethics and standards of personal ethics. |
| | B) | do not violate ethical principles deliberately but rather because they have not been instructed by their superiors to steadfastly observe ethical principles in doing their jobs. |
| | C) | believe that ethical standards apply only to one's personal life but not to conduct in matters of business. |
| | D) | end up sometimes violating ethical principles merely because they are casual about, careless about, or inattentive to the fact that certain kinds of business decisions or company activities are unsavory or may have deleterious effects on others. |
| | E) | end up sometimes violating ethical principles because they believe that whatever is legal is also ethical. |
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| 11 | |
Unethical managerial behavior tends to be driven by such factors as |
| | A) | a willingness on the part of ambition-driven individuals to push ethical principles aside in a personal quest for self gain; a company culture that puts the profitability and good business performance ahead of ethical behavior and doing what's right; and pressures on company managers to meet or beat performance targets. |
| | B) | the lack of a company code of ethics. |
| | C) | a lack of training in what is ethical and what is not. |
| | D) | confusing differences between what is ethical behavior in one's personal life and what is ethically permissible in business. |
| | E) | directives from superiors to pursue increased profits by any means possible. |
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| 12 | |
As discussed in Table 7.1, the underlying belief of the "unconcerned or non-issue" approach to dealing with or managing ethics-related issues and ethics conduct is that |
| | A) | a company needs to make only a token gesture in the direction of having acceptable ethical standards (usually adopting a code of ethics and instituting very light enforcement is sufficient). |
| | B) | the business of business is business not ethics. |
| | C) | unethical behavior should be punished only if it results in a public scandal which cannot be ignored by management. |
| | D) | ethics is a matter of personal responsibility not a matter of management concern. |
| | E) | what is right and what is wrong is a matter for each individual to decide and not something that a company should try to impose on its personnel. |
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| 13 | |
As discussed in Table 7.1, the underlying belief of the "damage control" approach to dealing with or managing ethics-related issues and ethics conduct is that |
| | A) | a company needs to make only a token gesture in the direction of having acceptable ethical standards (usually adopting a code of ethics and instituting very light enforcement is sufficient); the primary objective is to protect the company against any fallout from unethical strategies and behavior. |
| | B) | the business of business is business not ethics. |
| | C) | unethical behavior should be punished only if it results in a public scandal which cannot be ignored by management. |
| | D) | a reputation for high ethical standards is important to every company. |
| | E) | a company does not need a code of ethics so long as top management makes a show of punishing unethical conduct whenever its shady actions are put in the public spotlight. |
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| 14 | |
The challenges (or difficulties) in making the "ethical culture" approach to dealing with or managing ethics-related issues and ethics conduct work satisfactorily include |
| | A) | placing too much emphasis on formal ethics compliance procedures. |
| | B) | putting the locus of moral control on the company's code of ethics. |
| | C) | relying too heavily on peer pressures and cultural norms to enforce the espoused ethical standards and eliminating some or many ethics compliance procedures over time (which can result in moral laxness). |
| | D) | empowering each individual to decide what is the right or ethically appropriate thing to do in the situations they encounter. |
| | E) | making sure that employees fully understand that "what is not expressly forbidden by the culture is allowed. |
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| 15 | |
Companies that adopt a compliance mode or that are serious about company employees observing high ethical standards usually do such things as |
| | A) | making the company's code of ethics a visible and regular part of communications with employees. |
| | B) | having ethics training programs and giving ethics awards to employees for outstanding efforts to create an ethical climate and improve ethical performance. |
| | C) | appointing a chief ethics officer or ethics ombudsperson charged with giving guidance on ethics matters and/or instituting formal procedures for investigating alleged ethics violations. |
| | D) | conducting ethics audits to measure and document compliance. |
| | E) | All of these. |
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| 16 | |
Which one of the following is not a particularly valid justification for why a company's strategy should be ethical? |
| | A) | An unethical strategy can put a company's reputation at risk and do lasting damage, especially when the misdeeds get into the public spotlight and make media headlines. |
| | B) | An ethical strategy is in the best interest of shareholders. |
| | C) | An unethical strategy reflects badly on the character of the company personnel involved. |
| | D) | Shareholders profits are not greatly reduced by using ethical strategies. |
| | E) | A strategy that is unethical in whole or in part is morally wrong. |
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| 17 | |
Which of the following is not something a company should normally consider in crafting a social responsibility strategy? |
| | A) | Actions to promote workforce diversity |
| | B) | Actions to raise worker wages and salaries and/or provide attractive incentive compensation for good performance |
| | C) | The resources it will devote to charitable contributions, community service endeavors, various worthy organizational causes, and reaching out to make a difference in the lives of the disadvantaged |
| | D) | Actions to protect or enhance the environment (over and above whatever efforts are required by law and by regulators) |
| | E) | Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work |
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| 18 | |
Which one of the following is not part of the moral case for why businesses should act in a socially responsible manner? |
| | A) | Because businesses operate on the basis of an implied "social contract" with society—according to the terms of this implied contract, society grants a business the right to conduct its business affairs and pursue a profit for the goods or services it provides and, in return for its "license to operate", a business is obligated to act as a responsible citizen and do its part to better the well-being of society |
| | B) | Because "it's the right thing to do" |
| | C) | Because it is unjust for a company to be so greedy as to not use a portion of the revenues collected from customers (who are a part of society at large) to finance company efforts to do good deeds on behalf of society (and thereby demonstrate its goodwill towards customers) |
| | D) | Because businesses have a duty to be good corporate citizens and do their part in striving to better the interests and well-being of employees, local communities, and society at large |
| | E) | Because ordinary decency, civic-mindedness, and concern for the well-being of society should be expected of any business |
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| 19 | |
Which one of the following is not a sound reason why acting in a socially responsible manner is "good business"? |
| | A) | Company actions to behave in a socially responsible manner (1) causes company employees to adopt the company's cultural norms and ethical standards and (2) reduces the likelihood that company personnel will engage in unethical behavior. |
| | B) | A company's socially responsible behavior can reduce the likelihood that it will become a target for pressure group action (which can be important if a company has a high profile brand and could easily attract scrutiny from concerned outsiders should shady or unsavory company actions come to their attention). |
| | C) | A company's socially responsible behavior can fortify its reputation with customers and cause them to become more loyal patrons of the company's products or services |
| | D) | A company's socially responsible behavior can cause some employees to feel better about working for the company, thus acting to lower turnover and boost worker productivity. |
| | E) | Companies with deservedly good reputations for contributing time and money to the betterment of society are better able to attract and retain high-caliber employees compared to companies with tarnished reputations. |
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| 20 | |
Which of the following statements regarding a company's social responsibility strategy is not true? |
| | A) | The essence of socially responsible business behavior is that a company should strive to balance the benefits of strategic actions to benefit shareholders against any possible adverse impacts on other stakeholders (employees, suppliers, customers, local communities, and society at large) and, further, to proactively mitigate any harmful effects on the environment that its actions and business may have. |
| | B) | The combination of socially responsible endeavors a company elects to pursue defines its social responsibility strategy. |
| | C) | Unless a company's social responsibility initiatives become part of the way it operates its business every day, the initiatives are unlikely to catch fire and be fully effective. |
| | D) | There's a one-size-fits-all social responsibility strategy because all socially responsible companies are choosing from the same menu of actions (those shown in Figure 7.2). |
| | E) | Business leaders who want their companies to be regarded as socially responsible must see that their companies operate ethically and also display a social conscience in decisions that affect company stakeholders and the environment. |
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