Chapter 11—Incorporating Ethics and Social Responsibility into the Business
TRUE/FALSE
1. Following the Golden Rule that says “Do unto others as you would have them do unto you,” is a
comprehensive answer to ethical dilemmas in the workplace.
2. Entrepreneurs should wait until the venture is profitable before making an investment in social
responsibility.
3. A company’s core values derive from the personal values and beliefs of the founder.
4. The mission statement loosely identifies the company’s objectives.
5. Strategies are the plans for achieving the goals, and ultimately the mission, of the company.
6. An effective ethics program may protect a company from criminal penalties.
7. Ethics derives from the cultural, social, political, and ethnic norms with which we were raised as
children.
8. Ethical issues are the same for managers and leaders regardless of the size of the company.
9. E-commerce minimizes conflicts of interests.
10. Meeting ethical expectations is part of social responsibility.
MULTIPLE CHOICE
1. Recent research has identified four categories of ethical decision making that entrepreneurs face on a
daily basis, including individual values, organization values, external accountability, and ____.
a.
core values
b.
social responsibility
c.
corporate vision
d.
customer satisfaction
e.
None of these choices
2. The work of Paul Adler has determined that ____ is/are a critical first step in identifying and assessing
an ethical dilemma.
a.
accountability
b.
awareness
c.
legality
d.
values
e.
None of these choices
3. In ethics theory, there are generally three broad categories of perspectives about an ethical dilemma:
____, obligations, and utility.
a.
accountability
b.
awareness
c.
ideals
d.
values
e.
actions
4. In ethics theory, ____ analyzes the costs and benefits of potential alternative consequences of action or
inaction.
a.
obligation
b.
ideal
c.
utility
d.
value
e.
outcome
5. ____ in ethical decision making says that “Everyone needs to look out for himself.”
a.
Dogmatism
b.
Egoism
c.
Utility
d.
Relativism
e.
Subjectivism
6. A conflict of interest occurs when a person’s private or personal interests clash with ____.
a.
professional obligations
b.
professional ethics
c.
personal ethics
d.
corporate vision
e.
social responsibility
7. Aristotle, the Greek philosopher, said that ____ is the first of the human virtues because without it, the
others are not possible.
a.
responsibility
b.
vision
c.
courage
d.
hope
e.
None of these choices
8. The process of developing a ____ begins with a company’s self examination to identify values held by
individuals and alert everyone to inconsistencies in how people deal with particular issues.
a.
strategy
b.
vision
c.
value statement
d.
mission statement
e.
code of ethics
9. The question, “Would I be proud if my actions were announced in my local newspaper?” is part of the
____ approach to ethical decision making.
a.
Adler
b.
Kantian
c.
Greek
d.
utilitarian
e.
subjective
10. ____ means operating a business in a way that exceeds the ethical, legal, commercial, and public
expectations that society has of the business.
a.
Ethics
b.
Social responsibility
c.
Vision
d.
BHAG
e.
Mission
11. ____ is/are the fundamental beliefs that a company holds about what is important in business and in
life in general.
a.
A code of ethics
b.
Social responsibility
c.
Vision
d.
Core values
e.
None of these choices
12. A ____ precisely identifies the environment in which the company operates and communicates the
company’s fundamental philosophy.
a.
code of ethics
b.
mission statement
c.
vision
d.
purpose
e.
strategy
13. Peter Drucker always asserted that a company’s ____ should “fit on a t-shirt.”
a.
code of ethics
b.
mission
c.
vision
d.
purpose
e.
strategy
14. Both mission and purpose are derived directly from a company’s vision and ____.
a.
ethics
b.
goals
c.
core values
d.
purpose
e.
strategy
15. An entrepreneur’s personal ____ is really a function of the core values and vision that an entrepreneur
has for his or her life.
a.
code of ethics
b.
mission
c.
strategy
d.
purpose
e.
definition of success
16. The vision that guides a company in the right direction is expressed through its ____.
a.
core values
b.
purpose
c.
mission
d.
goals
e.
All of these choices
17. Which of the following is not an area where ethical dilemmas are typically found?
a.
Conflict of interest
b.
Survival tactics
c.
Stakeholder pressure
d.
Pushing the legal limit
e.
None of these choices; that is, ethical dilemmas arise in all these areas.
18. In order to answer the question “Why does the business exist?” you need to know its ____.
a.
purpose
b.
mission
c.
strategies and tactics
d.
core values
e.
All of these choices
19. A company’s ____ is/are what brings everyone together to achieve a common objective.
a.
vision and values
b.
mission
c.
purpose
d.
strategies and tactics
e.
code of ethics
20. The moral code by which we live and conduct business comes from cultural, social, political, and
ethnic norms with which we were raised as children and is called ____.
a.
ethics
b.
social responsibility
c.
social obligations
d.
corporate policy
e.
vision
21. ____ which is/are the means to execute the strategies, should also be put in place.
a.
Capitalization
b.
Some good tactics or action plans
c.
Employees
d.
A board of directors
e.
A purpose
22. It is important to stick to your ethical code because ____.
a.
the law requires it
b.
that is always the easiest way to do business
c.
an entrepreneur’s reputation is critical to success
d.
an ethical code drives the company’s vision
e.
All of these choices
23. Entrepreneurs who play too close to the edge of legality are in danger of ____.
a.
pushing the limits of the law
b.
running into conflicts of interest
c.
using survival tactics
d.
peer pressure
e.
None of these choices
24. Research has shown that the ethical behavior of employees is very much influenced by ____.
a.
the Golden Rule
b.
the justice approach
c.
a code of ethics
d.
social responsibility
e.
societal norms
25. To ensure that the ethical standards established for the company become part of its culture, you should
do all of the following except ____.
a.
educating employees through workshops.
b.
publically reporting ethical lapses
c.
sharing your code of ethics with customers
d.
modeling ethical behavior
e.
developing a strong ethical code
26. Through giving something back to the community or communities in which it does business, and thus
to society as a whole, a business holds itself to a higher standard of ____.
a.
social responsibility
b.
business ethics
c.
corporate culture
d.
social ventures
e.
core values
27. Paul Brainerd of the Brainerd Foundation in Seattle, Washington, suggests following which socially
responsible rule?
a.
Wait until you are older to become socially responsible
b.
Don’t wait until later in life to begin giving back
c.
Wait until the venture is well established
d.
Go for something huge
e.
None of these choices
28. Entrepreneurs are goal-oriented and tend to cite which of the following as a reason for going into
business?
a.
Money
b.
Prestige
c.
Personal values
d.
Control
e.
Peer pressure
29. All of the following are examples of poor ethics except ____.
a.
not reporting all cash receipts
b.
cheating customers on price
c.
failing to pay bills on time
d.
getting to work late
e.
lying to customers, employees, and suppliers
30. A small company can have a socially responsible impact on its community if it does a few things by
way of preparation. First, the company needs to ____.
a.
create a mission statement
b.
set goals
c.
partner with a for-profit organization
d.
involve only a few people in the organization
e.
None of these choices
SHORT ANSWER
1. Define ethics.
2. Define conflict of interest.
3. Define stakeholders.
4. List some ways in which a company can become socially responsible.
5. Describe the four categories of ethical decision making that entrepreneurs face every day.
6. Discuss the process of developing a code of ethics.
7. Discuss the characteristics that are part of an effective code of ethics.
8. Define core values.
9. Define mission statement.
10. Define the constants of success.
