MNGT 310 Chapter 4

Which of the following statements about ethics is true?

Ethics is the set of moral principles or values that defines right and wrong for a person or group.

The ____ determined that companies can be prosecuted and punished for the illegal or unethical actions of employees even if management didn’t know about the unethical behavior.

U.S. Sentencing Commission Guidelines.

Which of the following organizations are covered by the U.S. Sentencing Commission Guidelines?

All of these.

If a catalog retailer promised customers it would not sell their information (addresses, phone numbers, e-mail addresses, etc.) to another direct marketing company, and it did, the catalog retailer would be found guilty of invasion of privacy. Its sentence would be determined by ____.

The U.S. Sentencing Commission Guidelines.

The U.S. Sentencing Commission Guidelines impose smaller fines on companies that ____.

Have already established a specific type of compliance program.

According to the U.S. Sentencing Commission Guidelines, what is one method used to determine the level of the offense (i.e., the seriousness of the problem)?

Examining the loss incurred by the victims.

What does it mean when the text says that the U.S. Sentencing Guidelines use a "carrot and stick" approach?

The Guidelines offer lower fines to companies that take proactive steps.

To create a compliance program that is acceptable under the U.S. Sentencing Guidelines, a company should ____.

Do all of these.

When addressing issues of high ____ , managers are more aware of the impact their decisions have on others, they are more likely to view the decision as an ethical decision, and they are more likely to worry about doing the right thing.

Ethical intensity.

What term describes the degree of concern people have about an ethical issue?

Ethical intensity.

Ethical intensity depends on all of the following EXCEPT ____.

Social commitment.

Ethical intensity depends in part upon ____.

Temporal immediacy.

According to a GAO report, the Department of Defense alone maintains an inventory of at least $100 billion in spare parts, clothing, medical supplies, and fuel. Even though the Department of Defense doesn’t classify pilferage as a major problem, its annual inventory shrinkage alone runs $1-2 billion a year. The intentional theft and sale of defense secrets would have greater ethical intensity than this pilferage due to ____.

Magnitude of influence.

IAG (Individualized Apparel Group) formally closed its H. Freeman factory in Philadelphia in May. Jim Brubaker, IAG’s division president of clothing, informed the workers of this closing in April. Due to ____, this decision produced strong ethical intensity.

Temporal immediacy.

Due to ____ , the intentional pollution of a metropolitan water supply would have greater ethical intensity than insider trading in which a few participants netted less than $10,000.

All of these.

____ is strong when decisions have large, certain, immediate consequences and when we are physically or psychologically close to those affected by the decision.

Ethical intensity.

Shell Oil Company’s plan to sink Brent Spar, an abandoned offshore oil-storage buoy, had a massive effect on employee motivation and recruitment. The number of qualified people applying for jobs at Shell plummeted, and many employees looked for positions in other companies. The plan caused much greater harm than Shell’s managers had ever imagined it would. In other words, the plan had a much greater ____ than predicted.

Magnitude of consequences.

The three stages of moral development identified by Kohlberg are ____.

Pre-conventional level, conventional level, and post-conventional level.

Doug has a low-paying job for a telecommunications company. Every day when he goes home from work, Doug puts a headset, a stapler, or something similar in his lunch box and takes it home with him. Doug sees nothing wrong with his behavior since he feels inadequately paid. In terms of Kohlberg’s stages of moral development, Doug is operating at which level?

Pre-conventional.

According to Kohlberg’s model of moral development, people at the ____ make decisions that are based on selfish reasons.

Pre-conventional level.

According to Kohlberg’s model of moral development, people at the ____ make decisions that conform to societal expectations.

Conventional level.

According to Kohlberg’s model of moral development, people at the ____ use internalized ethical principles to solve ethical dilemmas.

Post-conventional level.

To encourage more ethical decision making in an organization, managers should ____.

Do all of these.

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

Overt integrity test.

Managers can use integrity tests to _____.

Select and hire ethical employees.

____ integrity tests indirectly estimate employee honesty by measuring psychological traits.

Personality-based.

When the Chicago-based Club Aluminum Company was facing bankruptcy, one of the changes its new CEO made was to create a(n) ____ for all employees to follow in their business and professional lives. It read, "Of the things we think, say, and do: (1) Is it the truth? (2) Is it fair to all concerned? (3) Will it build goodwill and better friendships? (4) Will it be beneficial to all concerned?"

Code of ethics.

The Code of Ethics for members of the Society of American Foresters instructs them to protect and serve society by inspiring, guiding, and governing members in the conduct of their professional lives. In addition, the society’s code of ethics should ____.

Include standards and procedures specific to the forestry industry.

Which of the following is an objective of ethics training?

Achieve all of these.

All of the following are important factors in the creation of an ethical business climate EXCEPT ____.

Official approval of the company’s ethics code by government regulators.

The last step in the basic model of ethical decision making is to ____.

Act.

After identifying the problem in the basic model of ethical decision making, the next step is to ____.

Identify the constituents.

In May 2005, U.S. Attorney Michael J. Sullivan announced that the United States had settled civil claims arising out of a suit that alleged Oracle Corporation had violated the False Claims Act in connection with billing the federal government for software training services. The U.S. government learned about the overcharging from a former Oracle vice president. The vice president acted as a(n)

Whistleblower.

Former Wal-Mart vice chairman Tom Coughlin allegedly engineered to defraud the company for personal gain. Operations vice president Jared Bowen asserted that information he provided to Wal-Mart spawned the investigation that led to the discovery of Coughlin’s activities. Bowen is suing Wal-Mart because they fired him. His lawsuit is an example of ____.

One of the problems of being a whistle blower.

The basic model of ethical decision making ____.

Is not accurately described by any of these.

Back in 1995, Mark Graf, a security specialist at the Rocky Flats nuclear facility outside Denver, became alarmed about the temporary removal of 450 kilograms of plutonium oxide from a vault-like room to a "soft room" protected by drywall that you could punch a hole through. Graf eventually had to take his concerns to the media before the plutonium was stored once again in a safe location. Graf was a(n) ____.

Whistleblower.

Why is it often difficult for an employee to assume the role of whistleblower?

Because the employees is often the one punished.

Which of the following statements about whistleblowing is true?

All of these statements about whistleblowing are true.

Historically, ____ responsibility means making a profit by producing a product valued by society. It has been the most basic social responsibility of a business.

Economic.

What is social responsibility?

A business’ obligation to pursue policies, make decisions, and take actions that benefit society.

Kowalski’s Markets expanded in 2002 by purchasing four existing stores. One of the stores was located in Minneapolis’ Camden neighborhood, a lower-class community unlike the store’s typical upscale customer demographic. Rather than sell the property, the owners decided they had a(n) ____ to provide a neighborhood grocery store to that community.

Social responsibility.

In an article about BP Amoco, its CEO said that the company’s commitment to ____ is all about trying to align its policies, values, and behavior with those of the societies in which it operates because, ultimately, superior performance means being in touch.

Social responsibility.

Bayer AG, Syndial SpA, Crompton Corp., DuPont Dow Elastomers, and Zeon Chemicals are all international manufacturers of rubber chemicals. They have all been indicted as participants in a price-fixing scheme that drove up the costs of rubber chemicals used to make shoes, tires, and other products. They would be most likely to use the ____ model to justify their actions.

Shareholder.

The ____ model holds that as long as a company is operating legally its only social responsibility is to maximize profits.

Shareholder.

According to Milton Friedman, which of the following is a position opposing the stakeholder model of corporate social responsibility?

The time, money, and attention diverted to social causes undermine market efficiency.

Various persons or groups with a legitimate interest in a company’s actions are called ____.

Stakeholders.

Which of the following is NOT an example of a stakeholder group that an organization must satisfy to assure long-term survival?

The media.

In recent years Kowalski’s Markets expanded by purchasing four existing stores. One of the stores was located in Minneapolis’ Camden neighborhood, a lower-class community unlike the store’s typical upscale customer demographic. Rather than sell the property, the owners decided they had an obligation to provide a neighborhood grocery store to that community. Which of the following is an example of a primary stakeholder group for Kowalski’s markets?

Customers in the Camden neighborhood.

The two general categories of stakeholders are ____ stakeholders and ____ stakeholders.

Primary; secondary.

____ stakeholders are groups, such as shareholders, employees, customers, suppliers, governments, and local communities, on which the organization depends for long-term survival.

Primary.

When media in India informed the public that Coca-Cola products bottled in India contained a high level of certain cancer-causing pesticides, the Indian government immediately ordered Coke to stop production in its Indian bottling plant until further analysis could be done. The Indian government served as a(n) ____.

Primary stakeholder.

According to the ____ model, management’s most important responsibility is long-term survival (not just maximizing profits). Long-term survival, according to this model, is achieved by satisfying the interests of multiple corporate stakeholders.

Stakeholder.

Which of the following is an example of a stakeholder group that an organization must satisfy to assure long-term survival?

All of these.

According to the stakeholder model, which primary stakeholder group is theoretically most important to the company?

All primary stakeholders are of equal importance.

Secondary stakeholders are important to a company because ____.

They can affect public perceptions and opinions.

____ stakeholders are any groups that can influence or be influenced by the company and can affect public perceptions about its socially responsible behavior.

Secondary.

Under the stakeholder model, ____ would be an example of a stakeholder group that does not engage in regular transactions with the company and is not critical to its long-term survival but can still affect public perceptions and opinions about the company’s socially responsible behavior.

The media.

Which of the following is a secondary stakeholder group?

The media.

When media in India informed the public that Coca-Cola products bottled in India contained a high level of certain cancer-causing pesticides, they were acting in the role of ____.

Secondary stakeholders.

Video Arts Inc., a Chicago-based business training company, is currently marketing The Grapevine, a 30-minute training video designed to teach companies how to deal with and prevent damaging gossip. Which of the following is an example of a secondary stakeholder group for Video Arts?

Business magazines that run ads for the training video.

Shell’s efforts to sink Brent Spar, an abandoned offshore oil-storage buoy, were derailed by Greenpeace in Germany, which mounted a well-orchestrated public relations blitz that caused Shell’s gasoline sales to plunge by 50 percent at some German stations. This is an example of how ____ stakeholders can influence organizational strategy.

Secondary.

A consumer advocacy group is critical of ads by the U.S. Postal Service (USPS) that claim its Priority Mail is a low-cost, two-day service while failing to disclose that first-class letters generally reach their destination just as quickly and for a tenth the cost. The consumer advocacy group wants the USPS to take ____ responsibility for its actions and do what is right.

Ethical.

Bayer AG, Syndial SpA, Crompton Corp., DuPont Dow Elastomers, and Zeon Chemicals are all international manufacturers of rubber chemicals. They have all been indicted as participants in a price-fixing scheme that drove up the costs of rubber chemicals used to make shoes, tires, and other products. These companies ignored their ____ responsibility to society.

Legal.

____ are the expectations that a company will voluntarily serve a social role beyond its economic, legal, and ethical responsibilities.

Discretionary responsibilities.

Companies are not considered unethical if they do not perform their ____ responsibilities.

Discretionary.

In 2001, ramin wood was listed in Indonesia as an endangered species. (Ramin is used to make pool cues and picture frames.) Thus, the exporting of the wood must be regulated by the government. In spite of attempts to control the sale of ramin wood, the wood is still being carried across Indonesia’s national borders and sold in Malaysia where government officials pretend the wood was legally acquired. Companies that buy the illegally-gotten wood in Malaysia are ignoring their ____ responsibility to society.

Legal.

Which of the following statements about social responsibility is true?

Economic and legal responsibilities play a larger role in a company’s social responsibility.

Lever’s most successful product in India is Fair & Lovely, a skin whitening agent that is sold to dark-skinned women in India to help them find a better husband and a better job. Lever is emphasizing its ____ responsibility to make a profit and ignoring its ____ responsibility to help women realize that their appearances are superficial.

Economic; discretionary.

For some time now, GlaxoSmithKline (GSK) has been making anti-AIDS drugs like Retrovir and Epivir available in hard-hit areas of Africa at up to 75 percent off the global price. But that wasn’t enough for AIDS prevention groups, which were outraged by GSK’s decision to use the World Trade Organization’s (WTO’s) patent protection rules to take action against governments importing lower-cost versions.AIDS prevention groups saw GSK’s use of WTO regulation as acting at which level of social responsibility?

Economic.

For some time now, GlaxoSmithKline (GSK) has been making anti-AIDS drugs like Retrovir and Epivir available in hard-hit areas of Africa at up to 75 percent off the global price. By providing the drugs at a fraction of their usual costs, GSK was acting at which level of social responsibility?

Discretionary.

When media in India informed the public that Coca-Cola products bottled in India contained a high level of certain cancer-causing pesticides, Coke responded by saying that all of India’s water was contaminated and that it was not doing anything wrong by using the local water supply. What kind of a strategy did Coke use to respond to its social responsibility problems?

Reactive strategy.

A U.S. metals broker advertises "95 percent of orders shipped from stock" even though the company has no warehouses and no inventory. When questioned about the truth of the ad, the broker responded, "We do ship 95 percent of our orders from stock, but it is from suppliers’ stocks, not ours." To respond to this ethical question, the broker used a(n) ____ strategy.

Reactive.

Bayer AG was indicted as a participant in an international price-fixing scheme that drove up the costs of rubber chemicals used to make shoes, tires, and other products. Bayer AG paid its fine but did not admit culpability. Instead, the company announced that paying the fine was less costly than litigation. Bayer AG implemented a(n) ____ strategy.

Reactive.

The social responsiveness strategy that could be considered essentially a public relations approach is the ____ strategy.

Defensive.

A company implementing a(n) ____ strategy would choose to accept responsibility for a problem and do all that society expects to solve problems.

Accomodative.

A company implementing a(n) ____ strategy would demonstrate the greatest willingness on the part of the company to meet or exceed society’s expectations.

Proactive.