ch. 2 Business Ethics and Social Responsibility

Question 1

Social Audit

Answer 1

___ is the term used to describe a firm’s formal examination of its social responsibility programs.

Question 2

Equal Employment Opportunity Commission (EEOC)

Answer 2

The ___ is the federal commission created to aid in the elimination of job discrimination while increasing job opportunities for women and minorities.

Question 3

code of conduct

Answer 3

A ___ is a formal statement that defines how the organization expects and requires employees to resolve ethical questions.

Question 4

family leave

Answer 4

Employers with 50 or more employees must provide ___, an unpaid leave of up to 12 weeks to deal with new births, adoptions, or illness of workers or their relatives.

Question 5

consumerism

Answer 5

___ is the demand that business give proper consideration to consumer wants and needs when making decisions, and is based on the belief that consumers have certain rights.

Question 6

recycling

Answer 6

___ is reprocessing of reusable materials.

Question 7

conflict of interest

Answer 7

Employees should be careful to avoid the appearance of any ___ that is, any situation where a business decision benefiting one person has the potential to harm another person.

Question 8

corporate philanthropy

Answer 8

Many argue that social responsibility to the general public means businesses should give back to the communities in which they earn profits through ___.

Question 9

product liability

Answer 9

The responsibility that manufacturers face for injuries or damages caused by their products are called ___.

Question 10

sustainable

Answer 10

Environmental issues such as renewable sources of clean energy an developing ___ agriculture are major environmental concerns for firms wishing to protect the environment.

Question 11

whistle blowing

Answer 11

___ has occurred when an employee discloses to the media or government authorities any suspected illegal, immoral, or unethical practices of the organization.

Question 12

integrity

Answer 12

___ is demonstrated by people who adhere to deeply felt ethical principles in business situations.

Question 13

Sarbanes-Oxley Act

Answer 13

Congress enacted the ___ to further protect investors from unethical accounting practices. Among other things, this law requires a special oversight board to regulate public accounting firms that audit the financial records of corporations.

Question 14

sexual harassment

Answer 14

___ can include unwelcome sexual advances, requests for sexual favors as a condition of employment or promotion, and/or the creation of what feels like a “hostile” work environment due to unwelcome flirting, lewd comments, or obscene jokes.

Question 15

sexism

Answer 15

___ is a type of discrimination in which people are treated differently in the workplace due to their gender.

Question 16

business ethics

Answer 16

___ deals with standards of conduct and moral values that arise in any work environment.

Question 17

discrimination

Answer 17

The biased treatment of a job candidate or employee in the workplace is known as ___.

Question 18

social responsibility

Answer 18

In addition to making a profit, there are obligations businesses have to the wider society, known as ___.

Question 19

green marketing

Answer 19

Companies who work to promote environmentally safe products and production methods are engaged in ___.

Question 20

stakeholders

Answer 20

Customers, employees, and investors are example of ___.

Question 21

T//F
Social responsibility refers to management’s consideration of the societal as well as the economic effects of its decisions

Answer 21

True

Question 22

T//F

Deciding what is right or wrong in business is generally a clear-cut choice

Answer 22

False

Question 23

T//F

Social responsibility and ethical conduct generally cost more than they create in business value

Answer 23

False

Question 24

T//F

Codes of conduct and ethical standards are playing an increasingly important role in the operation of today’s firms

Answer 24

True

Question 25

T//F

Employees, customers, government, and the general public all have a stake in the performance of today’s organizations

Answer 25

True

Question 26

MC
Individual ethics in the workplace are influenced by:
a. ethical training
b. all of these answer choices are correct
c. behaviors of managers
d. the organization’s culture

Answer 26

b. all of these answer choices are correct

Question 27

MC
A firm’s ability to behave ethically depends on:
a. the ethical values of the firm’s executives
b. the ethical values of the firm’s employees
c. a climate within the organization that promotes ethical conduct
d. all of these answers are correct

Answer 27

d. all of these answers are correct

Question 28

MC
Unrealistic goals set by managers:
a. can promote unethical behavior
b. is common among U.S. firms
c. makes the firm more competitive
d. all of these answers are correct

Answer 28

a. can promote unethical behavior

Question 29

MC
Managers who behave unethically:
a. might possibly have an indirect influence on employees to behave similarly
b. are commonly reported by employees
c. enforce the code of conduct
d. are more likely to be promoted

Answer 29

a. might possibly have an indirect influence on employees to behave similarly

Question 30

Fill-in
In the ___ stage of ethical development, individuals primarily consider their own needs, desires, and personal consequences in making ethical decisions.

Answer 30

preconventional

Question 31

Fill-in
An individual who can move beyond self-interest and duty, who considers the needs of the wider society, and who can employ ethical principles in a variety of situations, has attained the ___ stage of ethical development.

Answer 31

postconventional

Question 32

Fill-in

Those who are aware of and respond to their duty to others have achieved the ___ stage of ethical development.

Answer 32

conventional

Question 33

T//F

Top management plays a critical role in developing an organizational culture that encourages ethical behavior

Answer 33

True

Question 34

T//F

Most companies today don’t have a code of conduct

Answer 34

False

Question 35

T//F

A company’s code of conduct is informal, but employees are still expected to adhere to them

Answer 35

False

Question 36

T//F

A firm whose managers set unrealistic goals for employees might possibly be inviting unethical behavior

Answer 36

True

Question 37

T//F

Social audits are formal procedures that identify and evaluate all company activities that relate to social issues

Answer 37

True

Question 38

T//F
Quantitative economic measures such as employment levels, sales, and profits are irrelevant in evaluating a firm’s social performance

Answer 38

False

Question 39

T//F

Conducting a social audit can help a firm measure its progress in meeting social responsibility objectives

Answer 39

True

Question 40

T//F
AT&T’s commitment to hiring military veterans is an example of the company’s concern for equal opportunity employment

Answer 40

True

Question 41

T//F
The American with Disabilities Act makes discrimination against the disabled in public accommodations, transportation, and telecommunications illegal

Answer 41

True

Question 42

T//F
American firms have found a significant competitive advantage in developing a culturally diverse and highly skilled workforce

Answer 42

True

Question 43

T//F
To avoid sexual harassment problems, many firms have established policies and employee education programs aimed to preventing such violations

Answer 43

True

Question 44

T//F

As a way to practice corporate philanthropy, organizations often require their employees to volunteer during off hours

Answer 44

False

Question 45

T//F
The EEOC was created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin

Answer 45

True

Question 46

T//F
Employers with 50 or more employees must provide unpaid leave annually for any employee who wants time off for the birth or adoption of a child; to become a foster parent; or to care for a seriously ill relative, spouse, or self if he or she has a serious health condition or injury

Answer 46

True

Question 47

T//F
Sexism, or discrimination based solely on a person’s gender, has been completely eliminated in today’s global business environment

Answer 47

False

Question 48

T//F

Businesses have both a legal and an ethical requirement to eliminate sexual harassment in the workplace

Answer 48

True

Question 49

T//F
Corporate philanthropy encompasses all efforts corporations take in order to give back to the communities in which they conduct business

Answer 49

False

Question 50

T//F
Because investors are willing to take risks, there are no ethical requirements for managers to protect investor interests

Answer 50

False

Question 51

T//F

Investors have legal recourse when they believe that management has not dealt honestly with them

Answer 51

True

Question 52

T//F
The Office of Internet Enforcement protects the rights of businesses to promote their products online in any manner they choose

Answer 52

False

Question 53

T//F
The Securities and Exchange Commission is the federal agency responsible for investigating alleged unethical or illegal financial behavior of publicly traded firms

Answer 53

True

Question 54

T//F

Businesses are responsible for providing information to their consumers regarding any potentially dangerous products

Answer 54

True

Question 55

T//F
Social audits measure a firm’s performance relating to such issues as employment practices, environmental responsibility, and philanthropy

Answer 55

True

Question 56

T//F
While managers may conduct internal audits on social responsibility, public opinion rarely has any real impact on business practices

Answer 56

False

Question 57

T//F
Numerous state and federal laws related to consumerism have been established since President John F. Kennedy addressed the concept in 1962

Answer 57

True

Question 58

T//F
Cigarettes and alcoholic beverages are examples of potentially harmful products about which corporations should inform their consumers

Answer 58

True

Question 59

T//F

Green marketing targets consumers who care whether or not businesses demonstrate environmental responsibility

Answer 59

True

Question 60

T//F

Business ethics deal with the right and wrong actions that arise in any business environment

Answer 60

True

Question 61

T//F
A firm must be able to prove that any claim made about the quality or superiority of a good or service has been substantiated

Answer 61

True

Question 62

T//F

Under the Sarbanes-Oxley Act, all corporations are required to have a printed code of ethics

Answer 62

False

Question 63

T//F

It makes good sense to have all employees aware of the firm’s stance on social and ethical issues

Answer 63

True

Question 64

T//F
Education plays an important role in earnings, despite success stories of those who dropped out of college or high school to start businesses

Answer 64

True

Question 65

T//F

Employers are legally responsible for protecting their employees from the sexual harassment of clients and customers

Answer 65

True

Question 66

T//F

Today, there appears to be no significant differences between the average pay of men and women

Answer 66

False

Question 67

T//F
Programs that increase social responsibility and ethical practices in a firm may be good for public relations, but they generally cost more than they create in economic benefits

Answer 67

False

Question 68

T//F
A new shift in the workforce shows that there will soon be more younger people working than those from the baby boomer generation

Answer 68

True

Question 69

MC
In order to promote ethical behavior in an organization:
a. ethical guidelines should be clearly stated and communicated to employees
b. all of these answer choices are correct
c. the organization may design training programs to help employees develop ethical reasoning skills
d. the organization’s structure and business practices should reflect and reinforce ethical values
e. managers must show a personal commitment to ethical values and a willingness to enforce them

Answer 69

b. all of these answer choices are correct

Question 70

MC
The agency charged with ensuring the accuracy of financial statements provided by publicly traded companies is the:
a. EPA
b. EEOC
c. FTC
d. SEC

Answer 70

d. SEC

Question 71

MC
In a social audit:
a. a firm attempts to measure its own performance related to social responsibility
b. outside auditors are called in to evaluate business practices
c. the FTC audits the ethical practices of a firm
d. the government estimates the social costs of individual business actions

Answer 71

a. a firm attempts to measure its own performance related to social responsibility

Question 72

MC
Business responsibilities to the general public include:
a. dealing with public health issues
b. protecting the environment
c. developing a quality workforce
d. all of these answer choices are correct

Answer 72

d. all of these answer choices are correct

Question 73

MC
The Family and Medical Leave Act of 1993:
a. requires firms with 50 or more employees to provide up to 12 weeks of unpaid leave for workers who need to attend to family matters
b. requires firms with 50 or more employees to provide up to 12 weeks of paid leave for workers who need to attend to family matters
c. affects firms with more than 100 employees
d. does not include a guarantee that employees will be returned to an equivalent job when they come back to work

Answer 73

a. requires firms with 50 or more employees to provide up to 12 weeks of unpaid leave for workers who need to attend to family matters

Question 74

MC
Discrimination based on gender:
a. is known as sexual harassment
b. is known as sexism
c. is to be expected in a culturally diverse workforce
d. was outlawed by the Sarbanes-Oxley Act

Answer 74

b. is known as sexism

Question 75

MC
The federal agency charged with ensuring universal access to jobs and ending discrimination in the workplace is the:
a. EPA
b. FTC
c. EEOC
d. SEC

Answer 75

c. EEOC

Question 76

MC
In the U.S. economy, the social responsibility of a firm is evaluated:
a. by consumers who may patronize or avoid a firm based on its behavior
b. all of these are methods for evaluating social responsibility
c. by the firm itself doing a social audit
d. by outside groups who create and monitor standards of corporate performance
e. on the basis of the firm’s contribution to economic growth and employment opportunities

Answer 76

b. all of these are methods for evaluating social responsibility

Question 77

MC
After graduating from trade school, Ann accepted a position as a mechanic in a shop where she is the only woman. After a few months she complained to her supervisor about lewd jokes and sexually explicit posters in the workplace. Her supervisor should:
a. tell Ann to relax and try to be on of the boys
b. listen to Ann and help her adjust to the environment
c. realize that these occurrences can be construed as sexual harassment and need to be addressed
d. realize that women have no place in a work environment that was previously all male

Answer 77

c. realize that these occurrences can be construed as sexual harassment and need to be addressed

Question 78

MC
In the highest level ethical and moral behavior, the individual is able to move beyond mere self-interest and duty and take the larger needs of society into account as well. This stage of ethical development is the:
a. preconventional stage
b. conventional state
c. metaethical stage
d. postconventional stage

Answer 78

d. postconventional stage

Question 79

Maria is a lawyer and recently hired Brian, a paralegal. She tells Brian that she finds him attractive, and promises to assign him to a high profile case if he agrees to have dinner with her.

Answer 79

Under the Civil Rights Act (1964), Maria is acting unlawfully. The act of telling Brian that he is attractive, and “bribing” him with a better work assignment is a form of sexual harassment. Asking for personal time (dinner), may create a hostile work environment for Brian, which is considered a form of sexual harassment. It is unlawful for Maria to harass Brian because of his sex. Harassment can include “sexual harassment” or unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Question 80

An administrative assistant who is in a wheelchair is denied a job because the employer has no restroom that can accommodate a wheelchair.

Answer 80

Under the Americans with Disabilities Act (1991) prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities. This employer is obligated to make the appropriate accommodations so that the qualified candidate can work despite her disability.

Question 81

Jill is an executive administrator and John is interviewing for the position of assistant administrator. Jill informs John that although she is impressed with his resume and communication skills, she cannot offer him the job because of his commitments with the National Guard, which might put him in a position where he would have to leave for overseas for long periods of time.

Answer 81

Under the Uniformed Services Employment and Reemployment Rights Act (1994), Jill is acting unethically in her decision to deny John a position for the sole reason of his participation in the National Guards. John has the right to not only obtain employment for which he is qualified, but also expect that his position will be available once he returns from any service duties.

Question 82

Patty is the owner of her own small business. She is a smoker, and has always felt free to smoke in her own office. She hires a worker who objects to cigarette smoke in the work environment. The Environmental Protection Agency has identified second-hand smoke as a public health risk.

Answer 82

Patty may have to start smoking outside, even though this is her business. As the employer, if she exposes employees to second-hand smoke she may later be held liable for any smoke-related illness an employee develops. There are workplace smoking laws by state, and the labor or employment department within the state should have up-to-date information about such laws. Smoke-sensitive workers may also ask for an accommodation, which may include installing additional ventilation systems, restricting smoking to outside areas or special rooms, and segregating smokers and nonsmokers.

Question 83

In a small business environment, ethical issues can result from hiring, firing, and dealing with employees. Conflicts of interest can arise which cause ethical issues and dilemmas, particularly in family may run businesses. Discuss the ways personal family issues can interfere with business decisions and the ethical issues and conflicts of interest that can result.

Answer 83

Personal family issues, including, but not limited to personality conflicts, power struggles, money issues, and years of history, can interfere with business decisions, which can impact employees who are non-family members.

Question 84

Short Essay Questions.

What are the components of a company’s approach to social responsibility and ethics?

Answer 84

Engaging in corporate philanthropy, anticipating and managing risks, and identifying opportunities to create value by doing the right thing. Business managers have a whole range of responsibilities. They include:

a. Responsibilities to employees. Such issues as equal opportunity, fair pay, a safe work environment, attention to the diversity of the work force, and prevention of sexual harassment and sexism.
b. Protection of the environment. Business managers today need to be concerned with minimizing pollution, recycling, promoting sustainable environmental practices, conservation of scarce resources, and proper disposal of toxic waste.
c. Responsibilities to consumers. Business managers have an obligation to make certain that products are safe, and that they have been truthful in advertising and labeling. They also need to insure that consumers are informed and heard.
d. Responsibilities to the general public. In addition to environmental protection, today’s business manager should be aware of public health issues and other needs of society that business may be in a unique position to meet. This includes practicing corporate philanthropy and social responsibility.

Question 85

Short Essay Questions.

Describe the role of the Equal Employment Opportunity Commission (EEOC).

Answer 85

The Equal Employment Opportunity Commission (EEOC) was created to increase job opportunities for women and minorities and to help end discrimination based on race, color, religion, disability, gender, or national origin in any personnel action. To enforce fair-employment laws, it investigates charges of discrimination and harassment and files suit against violators. The EEOC can also help employers set up programs to increase job opportunities for women, minorities, people with disabilities, and people in other protected categories. While in the past the EEOC has focused on this type of individual situation, currently it is addressing what it terms “systemic discrimination,” which it defines as “a pattern or practice, policy and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic location.” A systemic discrimination charge usually becomes a class-action suit, which costs considerably more to defend than an individual lawsuit.