Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-96
255. Last year the Bank of Plenty, Inc. made an all-out-effort to go paperless. The bank’s
public relations arm promoted the strategy both internally and externally. Customers were
strongly encouraged to utilize the bank’s online banking for all their banking needs.
Customers could sign up for local workshops where employees were dedicated to showing
them how to navigate the bank’s new website and find the information they required. The
bank’s initiative demonstrates:
A. a gimmick for cutting costs that watchdogs will soon uncover.
B. an effort to not be left in the lurches by its competitors who are using state-of-the-art
website technology.
C. an area where the firm can contribute to the green effort, as well as cut costs.
D. a costly effort because at least 50% of all customers still prefer a paper trail due to
safety concerns such as identity theft, when it comes to online banking.
Feedback: Socially conscious companies realize that the green movement is a serious social
issue that needs everyone’s attention. Both product intensive and service oriented firms are
looking for ways to increase profits through green initiatives. Customers appreciate
companies who demonstrate a concern for natural resources. The bank’s efforts emphasize the
need to protect the growth of trees and all things green. It is also a cost cutting measure
because in the past, the cost of paper and mailings for banking institutions was a sizeable
expense.
256.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-97
Enrollment at Tradewinds College (a well-known private institution) has increased by
about 3% each year for three years, even though tuition and fees have gone up to help
defray the cost of new wind turbines installed on campus to generate enough power to
serve the campus buildings and to sell to local business establishments. As a recent
student of contemporary corporate social responsibility, you conclude:
A. new technology such as wind turbines is a huge capital investment for a college. The
effort demonstrates the high cost of environmental programs.
B. although it is a trendy social cause, this effort is not showing good long-term social
responsibility toward the students who will end-up with sizeable future debt.
C. this is a demonstration of corporate philanthropy.
D. students are willing to pay the extra tuition on the short-term because they believe that
the means (the use of innovative technology) will justify the end (a better environment).
Feedback: Environmental quality is a public good that everyone gets to enjoy regardless of
who pays for it. The challenge is for companies and institutions to find the public good that
appeals to their constituents (customers, students, patients, clients).
257. Ethical problems and issues of social responsibility are:
A. unique to firms involved in global trade.
B. unique to the United States.
C. not unique to the United States.
D. less important now than in the past.
258.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-98
When working with international firms, U.S. businesses:
A. tend to ignore the ethics of their international partners.
B. expect socially responsible behavior from their business partners.
C. feel that their responsibility is limited to the United States.
D. try to avoid judging our international business partners by U.S. standards.
259. Top leaders in government and business today are:
A. held to higher ethical standards than in the past.
B. held to less strict moral standards than in the past.
C. less interested in social responsibility than in the past.
D. at odds with the general public in regard to ethical issues.
260. Which of the following is an unresolved ethical issue that surrounds global trade?
A. Product quality
B. Labor standards
C. Transportation issues
D. Time to market issues
261.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-99
The Foreign Corrupt Practices Act deals with:
A. prison labor involved in international trade.
B. high seas piracy that has had a resurgence in the past five years.
C. bribery to obtain business.
D. product safety concerns such as the dog food scare of 2008.
262. International issues of social responsibility and ethical behavior are:
A. the result of greed found in capitalist countries.
B. found primarily in countries with a low standard of living.
C. a concern only of business professors.
D. difficult and not as clear-cut as U.S. firms would like them to be.
Feedback: Ethical problems and issues of social responsibility are not unique to an economic
system or level of income. Although U.S. businesses demand socially responsible behavior
from their international suppliers, ethical standards are not as clear-cut as they would like
them to be. Some question whether U.S. businesses should expect or require international
suppliers to adhere to U.S. law.
263.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-100
Which of the following indicates that U.S. businesses are demanding socially responsible
behavior from their international suppliers?
A. The establishment of the Equal Opportunity Employment Commission
B. The decision of Wal-Mart to open stores globally
C. The decision of Phillips-Van Heusen to cancel orders from suppliers that violate its
ethics code
D. The creation of the North American Free Trade Zone (NAFTA) between the U.S.,
Canada, and Mexico
Feedback: U.S. businesses are demanding that their international suppliers not violate human
rights and environmental standards. Sears, Nike, Dow Chemical, and McDonald’s have all had
social responsibility issues with their international suppliers.
264. According to the Reaching Beyond Our Borders box, titled “Ethical Culture Clash”,
which of the following is true?
A. Corporate ethics are intended to be consistent with cultural ethics.
B. Corporate ethics have priority over corporate profit.
C. Corporate profits have priority over corporate ethics.
D. Corporate ethics can clash with cultural ethics.
Feedback: Joe, an employee of Motorola, falsified receipts for living expenses in order to be
able to provide money for his family’s education. Joe felt that this was necessary to honor the
memory of his late father. Motorola was concerned about Joe’s apparent lack of integrity.
265.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-101
The boxed material entitled “Reaching Beyond Our Borders” that told the story about Joe,
the Motorola engineer, suggests that U.S. firms operating overseas are:
A. Not as flexible on social issues as local employees would like them to be.
B. Exploiting employees by working them long hours at low pay.
C. Complying with the ethical standards of the people they employ, in the countries in
which they are operating.
D. Responding to their stockholders desire for profits.
Feedback: The story demonstrates a culture clash between business ethics abroad and
business ethics practiced in the U.S. Joe, an engineer with Motorola used the housing
allowance provided by his employer (Motorola) for other expenses that did not fall under the
area of living accommodations. If Joe worked in the U.S., it would be highly unethical to
falsify expense reports in order to receive the housing stipend. Joe did not consider it an
offense in South America.
266. J. D. started working for an export trading company right out of college. His job took
him to Asia on several occasions, where he interacted with manufacturers and got to
practice his limited Chinese. He was amazed to see the difference in working conditions in
the developing nations where he visited, compared to similar operations in the U.S. The
expectations of workers were not the same. J.D.’s experience is an example of:
A. corporate philanthropy differences in different countries.
B. social responsibility differences between similar firms, but in different countries.
C. difference in corporate social initiatives in foreign nations.
D. the need for whistleblowers abroad.
Feedback: Developing nations do not have the same labor standards as well-developed
nations. In order to get ahead, employees in developing nations are willing to work in what is
often considered poor working conditions to workers in the U.S. Job choices are meager.
Workers are willing to work for long hours, in poor conditions, for a few cents more each
hour.
267.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
As the number of MNCs (multinational corporations) increases, we are experiencing
international ethical dilemmas. One very real concern during the past decade is the human
rights abuse in sweatshops where several MNCs contract manufacture their products, in
exchange for cheap labor. Several retailers have banned together to set ethical standards
in foreign factories. Which of the following statements summarizes the challenges of
companies doing business in developing countries and the concerns of their customers?
A. MNCs must subjectively determine the local “living wage,” which is usually more than
the local legal wage in developing countries. Customers surveyed say they are willing to
pay a few dollars more to improve working conditions in sweatshops.
B. Economically sensitive customers want companies to pass along cost savings to them,
at all costs – even if the products are made through offshore outsourcing. Companies want
to please customers, first!.
C. Most multinational corporations have made no attempt to improve working standards at
sweatshop type factories. They will turn a blind eye to the problem unless U.S. law is
passed to force the issue. Customers understand that legal limits come before ethical
standards.
D. MNCs cannot be expected to demand socially responsible behavior from their suppliers
– including foreign sweatshops. When doing business abroad, the U.S. company does not
need to comply with U.S. law when its supplier(s) is not in the U.S. or on U.S. territory.
Feedback: Companies must act ethically and responsibly toward employees who produce
their goods and services. They must make certain that foreign producers agree to a living
wage – a wage that provides enough for employees to provide for themselves and their
families. Customers claim they will pay a higher price if they know the difference is passed
on to the employees who made the goods.
4-103
268. Explain the difference between a compliance-based ethics code and an integrity-based
ethics code.
269. Identify and discuss the five types of groups that serve as “watchdogs” regarding how
well companies enforce their ethical and social responsibility policies.
4-104
270. Identify the six-step approach to achieve a long-term improvement of business ethics.
271.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-105
Identify the three questions that an ethics-based manager should ask when facing a
potentially unethical action, and provide an example situation where you would use these
questions to evaluate a decision.
272.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
4-106
Identify and discuss the social responsibilities of a firm, to three of the four stakeholder
groups described in your textbook.
273.
Chapter 04 – Demanding Ethical and Socially Responsible Behavior
Provide examples that serve to explain the differences between the following terms: (1)
corporate responsibility; (2) corporate social initiatives; (3) corporate philanthropy.
4-108
274. Harry is concerned about the legality of firing union workers in order to hire workers
willing to work for less pay. Harry values ______________ ethics, but has little concern
for other types.
A. integrity-based
B. compliance-based
C. socially-based
D. policy-based
Feedback: A compliance-based ethics code emphasizes preventing unlawful behavior by
seeking legal advice and following the letter of the law.
