Crafting and Executing Strategy, 22e (Thompson)
Chapter 9 Ethics, Corporate Social Responsibility, Environmental Sustainability, and
Strategy
1) On August 1, 2018, Reddit, an American social news aggregation, web content rating, and
discussion website reported that it had been hacked. A spokesperson for Reddit said publicly,
“Think about whether there’s anything on your Reddit account that you wouldn’t want associated
back to that address.” The company also included instructions for users to remove their Reddit
data. Do Reddit company managers have an obligation to observe ethical norms when crafting
and executing a strategic response to this breach of data security and potential loss of consumer
privacy?
A) No, because ethics in business are generally less stringent than the ethical principles for
society at large.
B) Yes, because ethics in business are generally more stringent than the ethical principles for
society at large.
C) Yes, because ethics in business are not materially different from ethical principles in general.
D) No, because ethics in business only concern the rules each company’s top management and
board of directors make about “what is right” and “what is wrong.”
E) No, because ethics in business deal chiefly with the actions and behaviors required to operate
companies in a socially responsible manner.
2) How do ethical principles apply to businesses?
A) They chiefly deal with the actions and behaviors required to operate companies in a socially
responsible manner.
B) They chiefly deal with the rules each company’s top management and board of directors make
about “what is right” and “what is wrong.”
C) They are not materially different from ethical principles in general.
D) They are generally less stringent than the ethical principles for society at large.
E) They are generally more stringent than the ethical principles for society at large.
3) Ethical principles as they apply to the conduct of personnel and business decisions
A) deal chiefly with standards a company has about what is right and wrong insofar as the
conduct of its business is concerned and about what behaviors are expected of company
personnel.
B) deal chiefly with the behaviors that a company’s board of directors expects of all company
personnel in both their conduct on the job and off the job.
C) involve the rules a company’s top management and board of directors make about “what is
right” and “what is wrong.”
D) deal primarily with the company’s duty to comply with legal requirements and conform to
ethical norms of society, in general.
E) are generally less stringent than the ethical principles for society at large because it is well
understood that businesses should not be expected to operate any differently than what the law
requires of them.
4) Although exposing children to hazardous work and long work hours is unquestionably
deplorable, which of the following, if true, leads to a moral dilemma?
A) Use of adult workers instead leads to higher labor costs.
B) Children are not as efficient as adults in doing physically demanding work.
C) Many child laborers come from poverty-stricken families.
D) Banning child labor increases school attendance.
E) Working children learn independence.
5) The results of strategies that cannot pass the test of moral scrutiny often are NOT manifested
in
A) sharp drops in stock prices and lower dividends.
B) devastating public relations hits.
C) sizable fines.
D) criminal indictment and convictions of company executives.
E) increased customer loyalty.
6) The contentions that (1) many of the same standards of what’s ethical and what’s unethical
resonate with peoples of most societies regardless of local traditions and cultural norms and (2)
to the extent there is common moral agreement about right and wrong actions, common ethical
standards can be used to judge the conduct of personnel at companies operating in a variety of
country markets and cultural circumstances, are defining beliefs of which of the following?
A) the school of ethical relativism but not the school of ethical universalism
B) the school of ethical universalism but not the school of ethical relativism
C) integrative social contracts theory but not the school of ethical universalism
D) the school of ethical relativism and the school of ethical universalism
E) the school of ethical relativism but not integrative social contracts theory
7) The school of ethical universalism holds that
A) concepts of right and wrong are not absolute and leave room for deviation from country to
country or circumstance to circumstance.
B) concepts of right and wrong are universal within countries but not across countries and
cultures.
C) concepts of right and wrong are governed by the Global Code of Ethical and Social Morality.
D) the most fundamental conceptions of right and wrong are universal and apply to members of
all societies, all companies, and all businesspeople.
E) there are multiple sets of standards concerning what is ethically right or wrong that are
universally applicable to citizens of a country.
8) According to the school of ethical universalism
A) concepts of what constitute ethical behavior and unethical behavior are dictated by
subjectively provable moral principles but not by objectively provable moral principles.
B) concepts of right and wrong are universal within countries/societies but not across countries
or cultures.
C) concepts of what is ethical and what is unethical are socially determined, leaving room for
variation from country to country or circumstance to circumstance.
D) to the extent there is common moral agreement about right and wrong actions and behaviors
across multiple cultures and countries, there exists a set of universal ethical standards to which
all societies and all individuals can be held accountable.
E) all societies and countries are obligated to apply universally defined ethical principles of right
and wrong as set forth by a global body that formulates the Code of Ethical Behavior for the
world.
9) Common moral agreement about right and wrong actions and behaviors across multiple
cultures and countries, also known as ethical universalism, gives rise to
A) principles that set forth the traits and behaviors considered virtuous, that is, which a good
person is supposed to believe in and display.
B) principles embodied in international law that all societies and countries are obliged to
practice.
C) principles of right and wrong in judging the ethical correctness of business behavior.
D) standards of what’s ethical and what’s unethical, applicable to all businesses in all countries,
irrespective of local business traditions and local business norms.
E) standards of what constitutes ethical and unethical behavior in business situations that are
partly universal, but in the main are governed by local business norms.
10) If one concurs with the school of ethical universalism, then one believes that
A) many basic moral standards travel well across cultures and countries and really do not vary
significantly according to local cultural beliefs, social mores, religious convictions, and/or the
circumstances of the situation.
B) since ethical standards are subjectively determined, each company has a window within
which it can define and implement its own ethical principles of right and wrong.
C) what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical in
business situations should be judged in light of local customs and social mores and can
legitimately vary from one culture or nation to another.
D) each country should have some degree of latitude in setting its own ethical standards for
judging the ethical correctness of business actions/behaviors within its borders.
E) concepts of right and wrong as they apply to business behavior are purely based on an
individual’s understanding of ethics and differ from person to person.
11) The strength of the beliefs underlying ethical universalism is that
A) ethical universalism recognizes significant variation in basic moral standards according to
local cultural beliefs, local religious beliefs, and social mores.
B) ethical standards are objectively determined by religious and moral experts.
C) what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical is (or
should be) grounded in religious doctrine and applied strictly to all business situations.
D) it draws upon the collective views of multiple societies and cultures to put some clear
boundaries on what constitutes ethical business behavior and what constitutes unethical business
behavior no matter what country or culture a company is operating in.
E) it leaves room for thinking that concepts of right and wrong can be varying shades of gray.
12) Uber’s scandals, tarnished reputation, loss of market share to rival companies, and the ouster
of its co-founder Travis Kalanick was NOT due to
A) inadequate returns to its shareholders owing to the delay of its planned initial public offering
(IPO).
B) unfair competitive practices.
C) inadequate attention to customer safety and data privacy.
D) sexual harassment in the workplace and a toxic workplace culture.
E) price gouging during crises.
13) The school of ethical relativism holds that
A) what constitutes ethical or unethical conduct should be determined by the religious
convictions of each society or each culture within a country.
B) when there are cross-country or cross-cultural differences in what is deemed ethical or
unethical in business situations, it is appropriate for local moral standards to take precedence
over what the ethical standards may be elsewhere.
C) concepts of right and wrong are always governed by business norms in each country, culture,
or society.
D) concepts of right and wrong are always a function of each individual’s own set of values,
beliefs, and ethical convictions.
E) concepts of right and wrong as they apply to business behavior are always absolute and
usually more stringent than universal ethical principles.
14) Ethical relativism implies that
A) Concepts of ethically right and ethically wrong are relative across countries and cultures but
are universal within countries or cultures.
B) Individuals and businesses have a basic right to “moral free space” and it is inappropriate to
specify ethically permissible and ethically impermissible actions and behaviors.
C) There are important occasions when local cultural norms and morality and the circumstances
of the situation determine whether certain behaviors are right or wrong, for there are no absolutes
when it comes to business ethics.
D) Concepts of right and wrong as applied to business situations are always a function of each
company’s own set of values, beliefs, and ethical convictions (as stated in the company’s code of
ethical conduct).
E) Standards of what is ethically right and ethically wrong as applied to business behavior are
determined solely by whatever business norms prevail in a particular company’s home country
and are applicable to its operations in all other countries.
15) PepsiCo’s Global Code of Conduct provides specific guidance concerning how to make
decisions, how to treat others, and how to conduct business globally, organized around four key
operating principles
A) respect in the workplace, ethics in business activities, dealing with situations that call for
bribery, and integrity in the marketplace.
B) integrity in the marketplace, ethics in business activities, global compliance, and
whistleblowing.
C) whistleblowing, global compliance, integrity in the marketplace, and responsibility to
shareholders.
D) global compliance, dealing with situations that call for bribery, integrity in the marketplace,
and responsibility to shareholders.
E) respect in the workplace, integrity in the marketplace, ethics in business activities, and
responsibility to shareholders.
16) The underlying thesis of ethical relativism DOES NOT imply that
A) in a multinational company, application of ethical relativism equates to multiple sets of
ethical standards.
B) there are few absolutes when it comes to business ethics and thus few ethical absolutes for
consistently judging a company’s conduct in various countries and markets.
C) when there are cross-country or cross-cultural differences in ethical standards, it is
appropriate for ethical standards in a company’s home market to take precedence over what the
local ethical standards may be.
D) a company that adopts the principle of ethical relativism and holds company personnel to
local ethical standards necessarily assumes that what prevails as local morality is an adequate
guide to ethical behavior.
E) according to the ethical relativism school of thinking, a “one-size-fits-all” template for
judging the ethical appropriateness of business actions and the behaviors of company personnel
does not exist.
17) According to the advocates of ethical relativism,
A) if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in a
particular culture/society/country, then a case can be made that it is morally correct and ethical
for a company to use these practices in conducting its business activities in that
culture/society/country.
B) each company should have the flexibility to set its own standards for deciding whether the use
of underage labor and/or the payment of bribes/kickbacks are ethically acceptable or not.
C) if the use of underage labor and/or the payment of bribes/kickbacks are not legal but locally
acceptable in a particular country, then it is morally correct and ethical for a company to use
these practices in that country.
D) each industry should go by standards established by competitors for deciding whether the use
of underage labor and/or the payment of bribes/kickbacks are ethically acceptable or not.
E) it is very clear that the use of underage labor or the payment of bribes and kickbacks are
ethically impermissible—local customs, behavioral norms, and traditions absolutely cannot be
taken into account.
18) A belief in ethical relativism leads to the conclusion that
A) since ethical standards are subjective, it is perfectly appropriate for each company to define
and implement its own ethical principles of right and wrong as concerns the use of underage
labor and the payment of bribes and kickbacks.
B) ethical standards are determined objectively (rather than subjectively).
C) whether the use of underage labor and the payment of bribes/kickbacks should be deemed
ethical or unethical depends on the moral standards, values, and business norms that prevail in
particular cultures, societies, countries, or circumstances.
D) ethical standards are objective and universal—thus whether the use of underage labor and the
payment of bribes and kickbacks should be deemed ethical or unethical is definitely not
dependent on the moral standards, values, and business norms that prevail in particular cultures,
societies, countries, or circumstances.
E) standards of right and wrong are governed by what is legal in a given country—thus whether
the use of underage labor and the payment of bribes and kickbacks are ethical or unethical is
governed by local law.
19) The degree of cross-country variability in paying bribes and kickbacks to grease business
transactions
A) violates ethical principles of right and wrong in all countries.
B) is ethically acceptable according to the principle of ethical universalism and ethically
unacceptable according to the principle of ethical relativism.
C) is acceptable to immoral managers but not to amoral managers.
D) is one of the thorniest ethical problems that multinational companies face because paying
bribes is normal and customary in some countries and ethically or legally forbidden in others.
E) is more acceptable in dealing with a company’s suppliers than in dealing with a company’s
customers.
20) Multinational companies that forbid the payment of bribes and kickbacks in their codes of
ethical conduct and that are serious about enforcing this prohibition
A) are generally advocates of the ethical relativism school of thought.
B) are misguided in their efforts because bribes and kickbacks are really no different from
tipping for service at restaurants as you pay for a service rendered.
C) face a particularly vexing problem of losing business to competitors that have no scruples—
an outcome that penalizes ethical companies and company personnel.
D) are out-of-step with business reality given that the preponderance of company managers are
immoral.
E) are in a distinct minority compared to companies that view the payment of bribes and
kickbacks as a legitimate or permissible practice.
21) According to the ethical relativism school of thinking,
A) there can be no one-size-fits-all template (set of authentic ethical norms) against which to
gauge the conduct of company personnel, due to cross-cultural differences in ethical standards.
B) a company should have a different set of ethical standards for each country in which it
operates.
C) only respected religious experts can provide companies with a higher order moral compass.
D) the best source of ethical standards in each country where the company operates is that
country’s adopted Code of Required Ethical Conduct.
E) since there can be no one-size-fits-all set of authentic ethical norms, it is appropriate for each
company to hold company personnel to observing the company’s code of ethical conduct.
22) Codes of conduct based on ethical relativism ARE NOT ethically problematic for
multinational companies if they
A) create a maze of conflicting ethical standards.
B) justify conflicting ethical standards for operating in different countries.
C) establish little moral basis for establishing ethical standards for a company worldwide.
D) restrict enforcement of ethical standards worldwide.
E) create standards that mostly relate to ethical codes in a company’s home market, which might
trigger compliance issues in the local market.
23) Companies that adopt the principle of ethical relativism in providing ethical guidance to
company personnel
A) base their standards of what is ethical and what is unethical in the company’s home market.
B) may quickly find themselves on a slippery slope with no higher order moral compass if they
operate in countries where ethical standards vary considerably from country to country.
C) have no fair way to judge the ethical correctness of the conduct of company personnel.
D) have a one-size-fits-all set of ethical standards.
E) end up allowing each company employee to determine what set of ethical standards to
observe.
24) The contention that ethical standards should be 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 are the basic principles of
A) the school of ethical relativism.
B) the school of ethical universalism.
C) the global corruption standards published by Transparency International.
D) integrative social contracts theory.
E) the Global Code of Ethical and Social Morality developed by the United Nations.