Chapter 04 – Demanding Ethical and Socially Responsible Behavior
229. Business is under pressure from society to be more socially responsible. However,
even the strongest advocates for corporate responsibility can’t seem to agree:
A. on what social responsibility involves.
B. who should be policing business’ behavior.
C. if all businesses, large and small, should be held to the same standards.
D. if politicians should be held to the same standards of behavior.
Feedback: Society is demanding more ethical and moral leadership from business. However,
there is uncertainty as to what being socially responsible involves.
230. One factor causing businesses to vigorously enforce ethical standards is the:
A. desire to eliminate employee turnover.
B. fear of negative publicity.
C. focus on criminal penalties.
D. evasion of social audit measurements.
Feedback: Union officials, environmentalists, and socially conscious investors put pressure
on companies to comply with ethical guidelines or face negative publicity.
4-89
244. During the 2010 Gulf Oil Spill, former BP CEO, Tony Hayward, was quoted as
saying: “I want my life back!” Although he apologized for this remark in a later
statement, the original message remained in the thoughts of many, particularly under the
circumstances that 11 persons lost their lives; several communities experienced extreme
devastation; many fishing industry businesses lost their livelihood; and dead sea life
washed up on the shores of several southern states and Mexico. In terms of corporate
social responsibility, which of the following statements would you like to share with Tony
Hayward?
A. We should repeat well-known economist Milton Friedman’s statement that the only
social responsibility of business is to make money for stockholders.
B. The company’s CSR (corporate social responsibility) approach lacked whistleblowers
that would expose exactly who was responsible for the crisis, most likely, the company
that made the oil rig.
C. Ethical standards begin with a company’s management and the messages they send.
CSR takes into account investors, employees, and society and the environment.
D. The best CSR approach to deter bad publicity would be to quickly list all the good
things this company has done for society over the past five years.
Feedback: People (including employees) learn standards and values from watching others.
Organizational ethics begin at the top. Unethical conduct in business is often attributable to
leadership failure. CSR applies to investors, employees, and society and the environment.
245.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
When Bagel Works employs in-store recycling, composting, and uses nontoxic cleaners,
Bagel Works is participating in:
A. corporate philanthropy.
B. corporate social initiatives.
C. corporate responsibility.
D. corporate policy.
Feedback: Corporate responsibility includes everything from hiring minority workers to
making safe products, minimizing pollution, using energy wisely, and providing a safe work
environment—essentially everything that has to do with acting responsibly within society.
246. Top management at Big Bend Motorcycle Company is convinced that the company
has a social responsibility to its community. Management believes that the firm can have
the greatest impact in this area through cash contributions to nonprofit organizations. This
is an example of:
A. graduated payments.
B. corporate philanthropy.
C. structure and strategy.
D. short run profit maximization.
Feedback: Corporate philanthropy includes charitable donations to nonprofit groups of all
kinds.
4-91
247. Larson HVAC, a heating and cooling company headquartered in Milwaukee,
Wisconsin, permits its employees to volunteer for nonprofit organizations, as part of their
paid company time. According to recent findings, which of the following statements
explains this company’s action?
A. Several smaller firms do not have enough work to keep employees busy. They fear
that employees will quit and go to work elsewhere during a time of low unemployment.
They protect their pool of skilled labor.
B. Employers are learning that millennial employees are physically stronger. They would
rather permit them to work on nonprofit construction sites and other laborious projects,
than build them a gym at the company site.
C. Companies find it less costly to permit employees to volunteer for food pantries and
other nonprofit organizations in their area of operation, rather than make large
philanthropic contributions.
D. employee time is measured as going further for social causes than monetary
contributions.
Feedback: As a strategy for acting socially responsibly and meeting their corporate
philanthropic obligations, employers are finding it less costly to allow employees to volunteer
on company time.
248.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-92
Before it was publicly known that IBM was going to take over Lotus Development, an
IBM secretary told her husband, who told two co-workers, who told friends, relatives,
business associates, and even a pizza delivery man. A total of 25 people received the
information and traded on this tip to make a profit. These people were:
A. really smart.
B. insider trading.
C. stealing from IBM.
D. acting fairly.
Feedback: Insider trading involves insiders (such as the secretary) using private company
information to further their own fortunes or those of their family and friends.
249. Blake Mycoskie started a shoe business known as TOMS. As a social entrepreneur,
Mr. Mycoskie takes the concept of ___________________ to a new level. TOMS social
causes are directly related to the firm’s expertise: selling shoes.
A. social auditing
B. corporate social initiative
C. corporate policy
D. corporate philanthropy
Feedback: Corporate social initiative differs from traditional philanthropy because it utilizes
the competencies of a business to provide help in emergency situations.
250.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-93
Management’s philosophy at Apple, Inc. has often stated that a fit body contributes to
more productivity at work. Apple provides exercise facilities at most of its sites across
America, and permits employees to use a half-hour of work time each day to relieve stress
through exercise. This serious position on physical fitness is part of Apple’s
___________.
A. corporate philanthropy
B. corporate policy
C. community mediation services
D. participative funding
Feedback: Corporate policy is the dimension of social responsibility that refers to a firm’s
position on a social and/or political issue.
251. Idle Time Gaming, Inc., would like its employees, customers, and the general public
to be aware of the activities and programs it has achieved for the community over the past
year. The company might consider performing a:
A. contributory analysis.
B. responsibility review.
C. social audit.
D. annual payment report.
Feedback: A social audit is a systematic evaluation of an organization’s progress toward
implementing programs that are socially responsible and responsive.
252.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-94
Several outside groups regularly monitor the activities of Metro Chemical Corporation.
These groups are interested in the firm’s involvement and enforcement of their ethical and
social responsibility policies. Who of the following is the least likely to be among the
“watchdog” groups?
A. The financial officer of a church with funds invested in the chemical company.
B. Overseers from the World Trade Organization (WTO).
C. A student in environmental engineering attending a local college.
D. The president of the union representing the workers at the chemical company.
Feedback: The five types of groups that serve as “watchdogs” are (1) socially conscious
investors, (2) social conscious research organizations, (3) environmentalists, (4) union
officials, and (5) customers.
253. High Mountain Brewers has adopted the slogan, “Cool, Clean, and Green” to promote
its product line of specialty beers and company image. However, upon closer inspection, a
group of concerned citizens including some former employees are protesting that the
company is anything but “green”. According to the Thinking Green box, titled,
“Sustainable or Suspect: Greenwashing”, the group is accusing the brewer of
__________.
A. green gauging
B. environmental stewardship
C. not adhering to government regulations which stipulate exactly what a firm must be
able to prove in order to be green
D. green washing
Feedback: This firm is “green washing”, using deceptive practices of marketing and
advertising so as to position the firm as green, when it is not really performing environmental
stewardship.
254.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
Last week, the Local Citizens for a Greener America sent a formal document to Chipper’s
Golf Resort asking the private club to measure its carbon footprint and publicly disclose
the amount of fertilizer and other carbon emitting substances that is uses on its two award
winning golf courses. LCGA is an example of ___________.
A. an employee organization that has emerged at the resort
B. a watchdog group
C. a disgruntled non-profit organization that has a beef against golfers
D. a public interest group that is demonstrating social responsibility
Feedback: Watchdog groups monitor how well businesses enforce their ethical and social
responsibilities. Environmentalist groups are one type of watchdog group that is gaining in
popularity.