Chapter 4—The Ethical and Social Environment Key
1. Ethics are cultural beliefs about whether behavior, actions, or decisions are right or wrong.
2. After Japan won the World Cup one of its players apologized profusely for appearing to criticize the coach.
American athletes in many sports criticize fellow players, coaches, and managers. This is an example of how
ethical behavior is similar across cultures.
3. Legal and ethical guidelines suggest that hiring and firing decisions should be based solely on an individual’s
ability to perform the job.
4. Secrecy and confidentiality are major considerations in the relationship of the employee to the firm.
5. The primary agents of interest for an organization besides employees include customers, competitors,
stockholders, suppliers, dealers, and unions.
6. If competitors from different countries are giving bribes to get contracts in developing countries, it is
acceptable under U.S. law that a U.S. company can do the same if it can show competitive reasoning.
7. A code of ethics will ensure ethical behavior by employees.
8. What distinguishes ethical from unethical behavior is often subjective and subject to differences of opinion.
9. All ethical dilemmas can be avoided.
10. Procedural justice refers to people’s perceptions of the fairness with which rewards and other valued
11. Informational justice relates to the degree of fairness people see in how they are treated by others in their
organization.
12. Bernard Madoff defrauded clients out of millions of dollars. This was a failure of ethical leadership.
13. The existence of laws and regulations makes it necessary for companies that strive to be responsible to their
stakeholders to concentrate first and foremost on government.
14. The Sarbanes-Oxley Act requires CIOs to personally vouch for the truthfulness and fairness of their firms’
financial disclosures.
15. Information technology and privacy continues to be an ethical issue.
16. Organizations themselves do not have ethics.
17. The Internet is also seen as having the potential to play an important role in natural resource conservation,
as many e-commerce businesses and transactions are reducing both energy costs and pollution.
18. The highest degree of social responsibility that an organization can exhibit is referred to as the proactive
stance.
19. Organizations that take an obstructionist approach to social responsibility meet their basic legal obligations
but nothing more.
20. Our government uses the tax codes to indirectly influence our behavior.
21. The Food and Drug Administration’s focus on consumer-related concerns are a form of direct regulation.
22. One way the government regulates or tries to influence businesses is by using political action committees.
23. Awarding funds or gifts to individuals is called philanthropic giving.
24. The extent to which an organization and its members follow basic ethical standards of behavior is called
legal compliance.
25. Blowing your own horn is the disclosure by an employee of the illegal or unethical conduct on the part of
others within the organization.
26. A corporate social audit is a formal and thorough analysis of the effectiveness of a firm’s social
performance.
27. Someone’s ethical standards are developed as a child in response to his or her
28. Kweku Adoboli was arrested after losing $2.3 billion of UBS global equities. Adoboli’s actions were
29. Women in Saudi Arabia have been arrested for driving. Their actions are
30. Congressman Anthony Weiner resigned after sending naked pictures of himself to adult women who were
not his wife. His actions were
31. Under U.S. law, it is illegal for a U.S. firm operating in a foreign country to pay bribes to get what it needs.
Natives of some of those same countries consider the payment of bribes to be perfectly acceptable. Which of the
following influences may account for this difference?
32. The National Football League Players Association agreed to a salary cap. This is an example of how the
33. Which of the following is NOT an example of a situation in which a manager is likely to be called on to
make an ethical decision regarding the relationship of the firm to the employee?
34. The treatment of employees by the organization includes which area of ethical concern?
35. The Nation Football League executives shorted unrestricted free agency requirements from six seasons to
four, which gave individual players greater mobility and negotiating power. This is an example of how the
36. The state of Wisconsin took measures to limit the power of state employee unions. This is an example of
the
37. All of the following issues stem from how employees treat the organization EXCEPT
38. Advertising for Abercrombie and Fitch uses overt sexuality to sell clothes. Ads for Abercrombie, the
pre-teen sizes, are only moderately less sexual and products include swim wear with padding in the chest. Many
people object to this advertising. This is an example of the relationship of the
39. Which of the following is an important factor in how the organization treats economic agents?
40. The primary economic agents of interest for an organization include
41. According to the concept of managerial ethics, which of the following is NOT considered an economic
agent?
42. The University of Michigan rented the stadium to a couple, both graduates, for their wedding on the fifty
yard line. The couple said it was a dream come true. This is an example of
43. Imagine that you are a manufacturer of athletic shoes. Within the organizational context, which of the
following ethical behaviors can occur?
44. Which of the following is NOT a way in which the organizational context contributes to the use of unethical
practices?
45. Which of the following is part of the organizational context in which ethical/unethical behaviors occur?
46. Which of the following is the MOST common approach to the management of ethics?
47. Which of the following is the MOST important action that top managers can take to promote ethical
behavior?
48. The success of any culture to promote ethical behavior in a society depends on
49. Bernard Madoff defrauded clients out of millions of dollars. The probability that the employees of Madoff’s
have high ethical behavior is minimal due to
50. Which of the following represents a major shortcoming associated with the implementation of codes of
ethics and ethics training programs?
51. Any effort to enhance an organization’s ethical behavior must begin with
52. Traditionally, experts have suggested a three-step model for applying ethical judgments to situations that
may arise during the course of business activities. The first step is to
53. Joshua is aware that his peers take office supplies home for personal use. To determine if behavior is ethical
Joshua should determine
54. The norm of ____ means determining whether the act is consistent with what most people would see as fair.
55. ____ justice refers to people’s perceptions of the fairness with which rewards and other valued outcomes are
distributed within the organization.
56. ____ justice relates to the degree of fairness people see in how they are treated by others in their
organization.
57. The Sarbanes-Oxley Act requires the ____ to vouch for the truthfulness and fairness of the firms’ financial
disclosures.
58. Target selected 42 schools to receive new libraries. This is an example of which area of social
responsibility?
59. The Coca-Cola Foundation awarded grants to communities for water conservation and community
recycling. This is an example of which area of social responsibility?
60. Boards of directors are responsible for which area of emerging ethical issues?
61. Many builders are using fiber-cement siding to build houses. This siding is best painted with a soy-based,
environmentally friendly paint. Most paint is not biodegradable because it is made with petroleum solvents. A
builder who decided to build a subdivision with 500 homes and paint each with the soy-based paint would be an
example of which general area of social responsibility?
62. When IBM makes large contributions to the performing arts, this is an example of which general area of
social responsibility?
63. The inclusion of a biologist in decisions that affect the local community is an example of which area of
social responsibility?
64. Judith Cruz, the executive director of the Treasure Coast Food Bank, had a logistics problem. She contacted
Wal-Mart to ask for management advice. Members from Wal-Mart’s distribution team arrived at the food bank,
helping it improve its warehousing, sorting, and routing, to allow more food deliveries per week. The food bank
went from serving 42,000 meals per week to more than 100,000 meals. The partnership negates the argument
against social responsibility that says
65. Which of the following statements is NOT one of the arguments offered in favor of social responsibility?
66. Which of the following statements is NOT one of the arguments offered in favor of social responsibility?
67. Which of the following is NOT one of the arguments offered by those who oppose corporations habitually
engaging in social responsibility programs?
68. The Internet and e-commerce affects the natural environment by
69. Companies that take a(n) ____ stance to social responsibility cross the ethical or legal line that separates
acceptable from unacceptable practices, and often deny or cover up their actions.
70. New York passed a law requiring no smoking in bars and restaurants. Owners who pressure bartenders and
waiters to sell to people who are smoking in order to keep profits high are taking a(n)____ stance toward social
responsibility.
71. All of the following are basic approaches to social responsibility EXCEPT
72. When Girl Scouts sell cookies at Shop Rite, they are given a place to stand. When they sell at Wal-Mart the
company eventually donates to their troop. Target does not allow any Girl Scout to sell cookies in front of
stores. Target is an example of the ____ stance.
73. Managers who agree with Milton Friedman’s economic arguments against social responsibility will most
likely take an approach to social responsibility known as a(n) ____ stance.
74. Genzyme is a pharmaceutical company that manufactures Cerdase, a drug that treats a genetic illness called
Gaucher’s disease, which is a life-threatening illness that affects 20,000 people worldwide. A year’s supply of
the drug costs $200,000. Given what you know about the various approaches to social responsibility, you might
assume that Genzyme takes a(n) ____ stance.
75. Auto manufacturers are required to attain a certain average fuel-efficiency level for all the cars they sell.
They try to attain the mandated levels, but they also try to get deadline extensions. The auto makers’ approach to
social responsibility is a(n) ____ stance.