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Indicate whether the statement is true or false.
1. The CSR approach to ethical decision making sidesteps debates about what is right, good, or just and bases decisions on
prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account.
a. True
b. False
2. Principle-based statements define fundamental values and contain general language about company responsibilities,
quality of products, and treatment of employees.
a. True
b. False
3. Ethics is the code of moral principles and values that governs the behaviors of a person or group with respect to what is
right or wrong.
a. True
b. False
4. Approximately 20 percent of American adults, according to your text, never reach the postconventional stage of moral
development.
a. True
b. False
5. A chief ethics officer is a company executive who oversees all aspects of ethics and legal compliance.
a. True
b. False
6. Economic responsibility, carried to the extreme, is called the profit-maximizing view.
a. True
b. False
7. Economic responsibility defines what society deems as important with respect to appropriate corporate behavior.
a. True
b. False
8. If something is ethical, it must not be illegal.
a. True
b. False
9. Economic development that generates wealth and meets the needs of the current generation while preserving the
environment and society so that future generations can meet their needs as well refers to sustainability.
a. True
b. False
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10. One of the most pressing ethical dilemmas facing managers today is that of competitive intelligence, which is
increasingly gained through social media.
a. True
b. False
11. The ethical concept that acts are moral when they promote the individual’s best long-term interests, which ultimately
leads to the greater good, is known as the moral rights approach.
a. True
b. False
12. Ethical responsibility includes behaviors that are not necessarily codified into law and may not serve the corporation’s
direct economic interests.
a. True
b. False
13. Procedural justice holds that rules should be clearly stated and consistently and impartially enforced.
a. True
b. False
14. Social responsibility covers a narrow range of issues, many of which are unambiguous with respect to right or wrong.
a. True
b. False
15. Most ethical dilemmas in business involve a conflict between stakeholders and shareholders.
a. True
b. False
16. The majority of managers operate at the preconventional level of personal moral development.
a. True
b. False
17. In one study, organizational psychologist Adam Grant found that the single biggest predictor of a team’s effectiveness
was incentives such as bonuses and vacation time.
a. True
b. False
18. The moral agent is an individual who must make an ethical choice in an organization.
a. True
b. False
19. Free choice lies between the domains of codified law and ethics.
a. True
b. False
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20. Corporate social responsibility is management’s obligation to make choices and take actions that will contribute to the
welfare and interests of society, not just the organization.
a. True
b. False
21. Important stakeholders in corporations include the government and the community.
a. True
b. False
22. Individuals at the preconventional level are concerned with external rewards and punishments and obey authority to
avoid detrimental personal consequences.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
23. Disk Replacement Services has just completed a procedure manual to handle employee grievances. One of the main
criteria is to make it clear to employees that rules will be administered fairly and consistently. Disk Replacement operates
on the:
a. procedural justice approach.
b. utilitarian approach.
c. individualism approach.
d. defensive approach.
e. free-choice approach.
24. Statements that define fundamental values and reference organizational responsibilities, quality of products, and
treatment of employees are often called:
a. principle-based.
b. policy-based.
c. ethically based.
d. codified.
e. codes of organizational integrity.
25. Any group or person within or outside the organization that has some type of investment or interest in the
organization’s performance and is affected by the organization’s actions is called:
a. a supplier.
b. an international customer.
c. a stakeholder.
d. OPEC.
e. a trade association.
26. Caleb is a manager at Computer-Care Company. He is expected to consider the effect of each decision alternative on
all parties and select the one that optimizes the satisfaction for the greatest number of people. This is an example of the:
a. utilitarian approach.
b. individualism approach.
c. moral-justice approach.
d. justice approach.
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e. soft-line managerial approach.
27. When everyone is pursuing self-direction, the greater good is ultimately served because people learn to accommodate
each other in their own long-term interest. This is an example of the:
a. utilitarian approach.
b. individualism approach.
c. moral-justice approach.
d. justice approach.
e. social responsibility.
28. The __________ leadership style matches with the preconventional level of personal moral development.
a. autocratic
b. team-oriented
c. servant leadership
d. guiding/encouraging
e. transforming
29. Which of the following responsibilities is purely voluntary and is guided by a company’s desire to make social
contributions not mandated by economics, law, or ethics?
a. Ethical
b. Economic
c. Legal
d. Discretionary
e. Stakeholder
30. Which of the following concepts argues that organizations can find innovative ways to create wealth at the same time
they are preserving natural resources?
a. Preservation
b. Conservation
c. Environmentalism
d. Protectionism
e. Sustainability
31. An organization’s decision to hire for an open position is in the domain of:
a. codified law.
b. free choice.
c. ethics.
d. compensatory justice.
e. social responsibility.
32. __________ means that managers are honest and trustworthy, fair in their dealings with employees and customers,
and behave ethically in both their personal and professional lives.
a. Ethical leadership
b. Followership
c. Corporate espionage
d. Command-and-control approach
e. Concern for production leadership
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33. All of the following are examples of special interest groups, EXCEPT:
a. professional associations.
b. trade associations.
c. political action committees.
d. courts.
e. consumerists.
34. A new drug has not been approved by the FDA to sell in the United States because further testing is needed. The
company has a chance to sell its product in another country immediately to start recovering the costs of research and
development and production three years ahead of time. This example places the decision in which of the following
categories?
a. Ethical domain
b. Domain of free choice
c. Legal domain
d. Obstructive category
e. Protective domain
35. A situation that arises when all alternative choices or behaviors have been deemed undesirable because of the
potentially negative ethical consequences, making it difficult to distinguish right from wrong, is considered:
a. a moral agent.
b. a social responsibility.
c. an ethical dilemma.
d. an ethical standard.
e. discretionary responsibility.
36. The profit-maximizing view of economic responsibility is advocated by:
a. Milton Friedman.
b. Arthur Anderson.
c. Donald Trump.
d. Warren Buffett.
e. Steve Jobs.
37. Which of the following best illustrates the preconventional stage of moral development?
a. Everybody else is doing it, so it must be okay.
b. What would my boss think if I did this?
c. I know this is not right, and I will not do it, even if everyone else is.
d. What am I going to get from making this decision?
e. How would I feel if my decision was on the front page of the paper?
38. The relationship between social responsibility and financial performance has been shown to be:
a. nonexistent.
b. positive.
c. negative.
d. not important.
e. a reflection of top leadership.
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39. The thinking underlying the domain of _________ is the closest to the justice approach.
a. social responsibility
b. free choice
c. law
d. discretionary responsibility
e. ethics
40. The base of the corporate social responsibility pyramid is:
a. discretionary responsibility.
b. ethical responsibility.
c. legal responsibility.
d. economic responsibility.
e. personal responsibility.
41. Which of the following employee behaviors matches with the conventional level of personal moral development?
a. Task accomplishment
b. Empowered employees
c. Work group collaboration
d. Full participation
e. Act in own interest
42. Robbie’s Robots decided to continue operations at one plant while shutting down another. The decision was justified
on the basis of what was best for the total corporation. This is an example of the:
a. utilitarian approach.
b. individualism approach.
c. moral-justice approach.
d. justice approach.
e. illegal approach.
43. When the USS Indianapolis sank after being torpedoed, one Navy pilot disobeyed orders and risked his life to save
men who were being picked off by sharks. The Navy pilot was operating from the __________ level of moral
development.
a. preconventional
b. conventional
c. postconventional
d. lowest
e. conservative
44. A recent poll found that over _____ percent of people surveyed say corporate America’s moral compass is pointing in
the wrong direction.
a. 10
b. 30
c. 50
d. 75
e. 95
Enter the appropriate word(s) to complete the statement.
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45. A __________ is an individual responsible for making an ethical choice.
46. The __________ approach to ethical decision making sidesteps debates about what is right, good, or just and bases
decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into
account.
47. When values and standards are written into the legal system, it is referred to as __________.
48. __________ generally outline the procedures to be used in specific ethical situations, such as marketing practice,
conflicts of interest, and observance of laws.
49. Employee disclosure of illegal, unethical, or illegitimate practices on the employer’s part is known as __________.
50. The __________ approach asserts that human beings have fundamental rights and liberties that cannot be taken away
by an individual’s decision.
51. __________ justice requires that rules should be clearly stated and consistently and impartially enforced.
52. A general statement of principle is often called a __________.
53. Most managers operate at the __________ level.
54. The __________ approach to economic responsibility means that economic gain is the only social responsibility and
can lead companies into trouble.
55. At the __________ level of personal moral development, individuals are most concerned with external rewards and
punishments.
56. A(n) __________ is a formal statement of the company’s values concerning ethics and social issues; it communicates
to employees what the company stands for.
57. Organizational __________ means that an organization pursues a positive human impact, moral goodness, and
unconditional society betterment for its own sake.
58. A(n) __________ is any group or person within or outside the organization that has some type of investment or
interest in the organization’s performance and is affected by the organization’s actions.
59. List three examples of primary stakeholders.
60. List the five approaches to ethical decision making that are relevant to managers.
61. List the four responsibilities of corporate social performance.
62. Briefly explain the justice approach to ethics and then explain the three types of justice.
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63. Explain the differences between principle-based statements and policy-based statement in an organization’s code of
ethics.
64. What is corporate social responsibility? Why is it considered a difficult concept to grasp?
65. Define ethics and explain how the domain of ethics relates to law and free choice.
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Answer Key
1. False
2. True
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26. a
27. b
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