Test Bank For Business and Society Stakeholders Ethics Public Policy 15th Edition Lawrence

Chapter 03 Corporate Social Responsibility and Citizenship True / False Questions 1. Corporate social responsibility is the idea that businesses interact with the organization's stakeholders for social good while they pursue economic goals. True False 2. The capability of corporations to influence government, the economy, and society, based on their organizational resources is called the big business principle. True False 3. Huge businesses can disproportionately influence politics, shape tastes, and dominate public discourse. True False 4. Corporate power says that in the long run, those who do not use power in ways that society considers responsible will tend to lose it. True False 5. The concept of corporate social responsibility is rooted in the meaning "to pledge back," creating a commitment to give back to society and the organization's stakeholders. True False 6. Being socially responsible means that a company must abandon its other missions. True False 7. Corporate citizenship refers to a set of beliefs stating that socially responsible behavior is a good idea. True False 8. Global corporate citizenship activities help companies create value, reputation, and competitive advantage. True False 9. Enlightened self-interest is the idea that the wealthiest members of society should be charitable toward those less fortunate. True False 10. One of the most appealing arguments in favor of corporate social responsibility for business supporters is that voluntary social acts may head off increased government regulation. True False 11. An argument against corporate social responsibility is that it imposes unequal costs among competitors. True False 12. Global corporate citizenship refers to putting an organization's commitment to social and environmental responsibility into practice locally. True False 13. In the first stage of corporate citizenship, the elementary stage, managers are uninterested and uninvolved with social issues. True False 14. A social audit is a systematic evaluation of an organization's social, ethical, and environmental performance. True False 15. When a company publishes the results of a social audit they are meeting the demands of local governments' taxation policies. True False Multiple Choice Questions 16. Corporate power refers to: A. The capability of competitors to influence legislation, trade, and the stock market, based on their organizational resources. B. The capability of politicians to influence corporations, employees, and unions, based on their organizational resources. C. The capability of corporations to influence government, the economy, and society, based on their organizational resources. D. The capability of CEOs to influence product development, employee morale, and currency indices, based on their organizational resources. 17. The iron law of responsibility says that: A. In the long run, those who do not use power responsibly will lose it. B. In the short run, sacrifice social goals for economic goals. C. Law is most important, more than social or economic responsibility. D. In the long run, economic responsibility leads to social responsibility. 18. Which of the following statements is true about corporate social responsibility? A. Businesses should monitor and prevent social problems in advance of their becoming major issues. B. A company should seek maximum profits from its operations in order to provide the best for society. C. Corporations should be accountable for any actions that affect people, their communities, and the environment. D. Both A and C, but not B. 19. Which of the following companies is being the most socially responsible? A. A company trying its best to operate in a way which will help local students get education and jobs. B. A company halting its production of toxic gases after it discovered that people objected to this practice and threatened legal action. C. A company trying to maximize its profits and then contributing to an environmental protection fund. D. A company changing its product design to comply with regulatory mandates. 20. Modern corporations should be socially responsible because they: A. Are responsible to the stockholders of the company. B. Create jobs, influencing the lives of employees. C. Are highly profitable. D. Generate dividends for the company stockholders. 21. Good corporate citizens: A. Strive to conduct all business dealings in an ethical manner. B. Make a concerted effort to balance the needs of all stakeholders. C. Work to protect the environment. D. All of the above. 22. When a company puts its commitment to social and environmental responsibility into practice worldwide, not only locally or regionally it is called: A. Corporate Social Responsibility. B. Global Sustainability. C. Global Corporate Citizenship. D. Community Investing. 23. Business leaders, like automaker Henry Ford developed these programs to support the recreational and health needs of their employees. A. Corporate social responsibility programs. B. Corporate citizenship programs. C. Social networking programs. D. Paternalistic programs. 24. Philanthropic funding and public relations are two examples of corporate social responsibility: A. Drivers of the Corporate Social Responsiveness phase. B. Policy instruments of the Corporate Social Stewardship phase. C. Policy instruments of the Corporate Social Responsiveness phase. D. Drivers of the Charity Principle phase. 25. Stakeholder partnerships, high-tech communication networks, and sustainability audits are examples of: A. Corporate social stewardship. B. Corporate social responsiveness. C. Corporate/Business Ethics. D. Corporate/Global Citizenship. 26. Which of the following is not a driver of the Corporate Social Responsiveness phase of Corporate Social Responsibility? A. Religious/ethnic beliefs. B. Social unrest/protest. C. Stakeholder pressures. D. Public policy/government regulations. 27. Which of the following examples does not show a company guided by enlightened self-interest? A. A company providing the best quality product at a fair price. B. A company providing assistance to employees who attend evening college. C. A company breaking past records by maximizing quarterly profits. D. A company vice-president invited to attend a local community's town planning meeting. 28. Reason(s) for adopting an enlightened self-interest approach is (are): A. Reasonable short-run costs are incurred, but socially responsible activities are promoted. B. The public's attitude toward the company is positive in the long run. C. The stockholders' pressures for short-run profits are satisfied. D. All of the above. 29. When undertaking social initiatives, a company: A. Must take out social responsibility insurance. B. Will always receive long-term profits. C. May sacrifice short-term profits. D. Risks going bankrupt in nearly all cases. 30. Which of the following is an argument in favor of corporate social responsibility? A. Lowers economic efficiency and profit. B. Discourages government regulation. C. Places responsibility on business rather than individuals. D. Imposes unequal costs among competitors. 31. According to Barlow v. A.P. Smith Manufacturing: A. The laws prohibited charitable contributions, at that time. B. Charitable contributions were bad corporate investments for the short term. C. Socially responsible actions must be approved by a majority of the firm's stakeholders. D. Socially responsible actions are an investment in the future, thus an allowable expense. 32. Positive reputation can be valued as an intangible corporate: A. Asset. B. Liability. C. Charity. D. Expense. 33. The costs of corporate social responsibility may ultimately be passed on to the: A. Supplier through discounts. B. Consumer through high prices. C. Investor through stock splits. D. Taxpayers by the government. 34. Which of the following is an argument against corporate social responsibility? A. Requires skills businesses may lack. B. Creates an imbalance between corporate power and its economic responsibility. C. Improves business value and reputation. D. A majority of stockholders are against it. 35. Proponents against corporate social responsibility feel that public officials, not business people, should solve societal problems because: A. Business people do not have the skill-set to solve societal problems. B. The private sector is not mandated to solve these issues. C. Both A and B. D. None of the above. 36. An emerging business model that attempts to strategically balance the interests of all stakeholders to solve social and environmental problems is called: A. Balanced Corporation. B. B Lab. C. B Corporation. D. CSR Corporation. 37. Companies demonstrate global corporate citizenship by: A. Building reactive stakeholder partnerships. B. Finding business opportunities that serve society. C. Integrating concern for both financial and social performance. D. Both B and C, but not A. 38. BSR (formerly Business for Social Responsibility) helps its 300 member companies: A. Lobby Congress for socially responsible legislation. B. Discover tax shelters for social program expenditures. C. Conduct social audits. D. Develop sustainable business strategies. 39. Some companies have created a department of corporate citizenship to: A. Adopt the United Nations' Global Compact Principles. B. Decentralize under common leadership wide-ranging corporate citizenship functions. C. Centralize under common leadership wide-ranging corporate citizenship functions. D. Narrow the job of the public relations office. 40. This inter-American organization (North and South America) was created to unite organizations focusing on corporate social responsibility from Canada to Chile. A. Business for Social Responsibility. B. Canadian Business for Social Responsibility. C. Forum Empresa. D. Foundacion Empresay Sociedad. 41. The issue of reactive management policies occurs in which stage of global corporate citizenship? A. Transforming. B. Engaged. C. Integrated. D. Innovative. 42. Managers responding to the needs of the local education system as a normal or routine aspect of its operations is an example of an organization in the: A. Innovative stage. B. Integrated stage. C. Transforming stage. D. Engaged stage. 43. Global social audit standards concentrate on: A. Internally focused economic benefits for the firm. B. Externally focused social benefits for the environment. C. Externally focused social benefits for key stakeholders. D. All of the above. 44. Which of these is not an objective of the Global Reporting Initiative (GRI)? A. Combining long-term profitability with ethical goals, social justice, and environmental care. B. Measuring social performance across companies. C. Providing tax incentives for global corporate citizens. D. Reflecting the interests of business, labor, civil society, and financial markets. 45. The most significant motivator of corporate social reporting is: A. Government reporting requirements. B. Ethical concerns. C. Financial concerns. D. Employee demand. Short Answer Questions 46. Describe the iron law of responsibility. 47. Explain why a business should seek to balance its economic, legal and social obligations. 48. Define and provide an example of a business practicing enlightened self-interest. 49. Provide three arguments in favor of corporate social responsibility. 50. Provide three arguments against corporate social responsibility. 51. Global corporate citizenship is more than espoused values; it requires action. Discuss some of the ways forward-thinking companies are changing to improve their ability to act as responsible citizens. 52. What is a social audit? Describe one of the three ways audit standards can be created. Chapter 03 Corporate Social Responsibility and Citizenship Answer Key True / False Questions 1. Corporate social responsibility is the idea that businesses interact with the organization's stakeholders for social good while they pursue economic goals. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 2. The capability of corporations to influence government, the economy, and society, based on their organizational resources is called the big business principle. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 3. Huge businesses can disproportionately influence politics, shape tastes, and dominate public discourse. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 4. Corporate power says that in the long run, those who do not use power in ways that society considers responsible will tend to lose it. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 5. The concept of corporate social responsibility is rooted in the meaning "to pledge back," creating a commitment to give back to society and the organization's stakeholders. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 6. Being socially responsible means that a company must abandon its other missions. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 7. Corporate citizenship refers to a set of beliefs stating that socially responsible behavior is a good idea. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 8. Global corporate citizenship activities help companies create value, reputation, and competitive advantage. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 9. Enlightened self-interest is the idea that the wealthiest members of society should be charitable toward those less fortunate. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 10. One of the most appealing arguments in favor of corporate social responsibility for business supporters is that voluntary social acts may head off increased government regulation. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 11. An argument against corporate social responsibility is that it imposes unequal costs among competitors. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 12. Global corporate citizenship refers to putting an organization's commitment to social and environmental responsibility into practice locally. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 13. In the first stage of corporate citizenship, the elementary stage, managers are uninterested and uninvolved with social issues. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-05 Distinguishing among the sequential stages of global corporate citizenship. 14. A social audit is a systematic evaluation of an organization's social, ethical, and environmental performance. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-06 Understanding how businesses assess and report their social performance. 15. When a company publishes the results of a social audit they are meeting the demands of local governments' taxation policies. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-06 Understanding how businesses assess and report their social performance. Multiple Choice Questions 16. Corporate power refers to: A. The capability of competitors to influence legislation, trade, and the stock market, based on their organizational resources. B. The capability of politicians to influence corporations, employees, and unions, based on their organizational resources. C. The capability of corporations to influence government, the economy, and society, based on their organizational resources. D. The capability of CEOs to influence product development, employee morale, and currency indices, based on their organizational resources. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 17. The iron law of responsibility says that: A. In the long run, those who do not use power responsibly will lose it. B. In the short run, sacrifice social goals for economic goals. C. Law is most important, more than social or economic responsibility. D. In the long run, economic responsibility leads to social responsibility. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 18. Which of the following statements is true about corporate social responsibility? A. Businesses should monitor and prevent social problems in advance of their becoming major issues. B. A company should seek maximum profits from its operations in order to provide the best for society. C. Corporations should be accountable for any actions that affect people, their communities, and the environment. D. Both A and C, but not B. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 19. Which of the following companies is being the most socially responsible? A. A company trying its best to operate in a way which will help local students get education and jobs. B. A company halting its production of toxic gases after it discovered that people objected to this practice and threatened legal action. C. A company trying to maximize its profits and then contributing to an environmental protection fund. D. A company changing its product design to comply with regulatory mandates. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 20. Modern corporations should be socially responsible because they: A. Are responsible to the stockholders of the company. B. Create jobs, influencing the lives of employees. C. Are highly profitable. D. Generate dividends for the company stockholders. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 21. Good corporate citizens: A. Strive to conduct all business dealings in an ethical manner. B. Make a concerted effort to balance the needs of all stakeholders. C. Work to protect the environment. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 22. When a company puts its commitment to social and environmental responsibility into practice worldwide, not only locally or regionally it is called: A. Corporate Social Responsibility. B. Global Sustainability. C. Global Corporate Citizenship. D. Community Investing. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 23. Business leaders, like automaker Henry Ford developed these programs to support the recreational and health needs of their employees. A. Corporate social responsibility programs. B. Corporate citizenship programs. C. Social networking programs. D. Paternalistic programs. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 24. Philanthropic funding and public relations are two examples of corporate social responsibility: A. Drivers of the Corporate Social Responsiveness phase. B. Policy instruments of the Corporate Social Stewardship phase. C. Policy instruments of the Corporate Social Responsiveness phase. D. Drivers of the Charity Principle phase. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 25. Stakeholder partnerships, high-tech communication networks, and sustainability audits are examples of: A. Corporate social stewardship. B. Corporate social responsiveness. C. Corporate/Business Ethics. D. Corporate/Global Citizenship. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 26. Which of the following is not a driver of the Corporate Social Responsiveness phase of Corporate Social Responsibility? A. Religious/ethnic beliefs. B. Social unrest/protest. C. Stakeholder pressures. D. Public policy/government regulations. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 27. Which of the following examples does not show a company guided by enlightened self-interest? A. A company providing the best quality product at a fair price. B. A company providing assistance to employees who attend evening college. C. A company breaking past records by maximizing quarterly profits. D. A company vice-president invited to attend a local community's town planning meeting. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 28. Reason(s) for adopting an enlightened self-interest approach is (are): A. Reasonable short-run costs are incurred, but socially responsible activities are promoted. B. The public's attitude toward the company is positive in the long run. C. The stockholders' pressures for short-run profits are satisfied. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 29. When undertaking social initiatives, a company: A. Must take out social responsibility insurance. B. Will always receive long-term profits. C. May sacrifice short-term profits. D. Risks going bankrupt in nearly all cases. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 30. Which of the following is an argument in favor of corporate social responsibility? A. Lowers economic efficiency and profit. B. Discourages government regulation. C. Places responsibility on business rather than individuals. D. Imposes unequal costs among competitors. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 31. According to Barlow v. A.P. Smith Manufacturing: A. The laws prohibited charitable contributions, at that time. B. Charitable contributions were bad corporate investments for the short term. C. Socially responsible actions must be approved by a majority of the firm's stakeholders. D. Socially responsible actions are an investment in the future, thus an allowable expense. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 32. Positive reputation can be valued as an intangible corporate: A. Asset. B. Liability. C. Charity. D. Expense. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 33. The costs of corporate social responsibility may ultimately be passed on to the: A. Supplier through discounts. B. Consumer through high prices. C. Investor through stock splits. D. Taxpayers by the government. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 34. Which of the following is an argument against corporate social responsibility? A. Requires skills businesses may lack. B. Creates an imbalance between corporate power and its economic responsibility. C. Improves business value and reputation. D. A majority of stockholders are against it. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 35. Proponents against corporate social responsibility feel that public officials, not business people, should solve societal problems because: A. Business people do not have the skill-set to solve societal problems. B. The private sector is not mandated to solve these issues. C. Both A and B. D. None of the above. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 36. An emerging business model that attempts to strategically balance the interests of all stakeholders to solve social and environmental problems is called: A. Balanced Corporation. B. B Lab. C. B Corporation. D. CSR Corporation. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 37. Companies demonstrate global corporate citizenship by: A. Building reactive stakeholder partnerships. B. Finding business opportunities that serve society. C. Integrating concern for both financial and social performance. D. Both B and C, but not A. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 38. BSR (formerly Business for Social Responsibility) helps its 300 member companies: A. Lobby Congress for socially responsible legislation. B. Discover tax shelters for social program expenditures. C. Conduct social audits. D. Develop sustainable business strategies. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 39. Some companies have created a department of corporate citizenship to: A. Adopt the United Nations' Global Compact Principles. B. Decentralize under common leadership wide-ranging corporate citizenship functions. C. Centralize under common leadership wide-ranging corporate citizenship functions. D. Narrow the job of the public relations office. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 40. This inter-American organization (North and South America) was created to unite organizations focusing on corporate social responsibility from Canada to Chile. A. Business for Social Responsibility. B. Canadian Business for Social Responsibility. C. Forum Empresa. D. Foundacion Empresay Sociedad. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 41. The issue of reactive management policies occurs in which stage of global corporate citizenship? A. Transforming. B. Engaged. C. Integrated. D. Innovative. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-05 Distinguishing among the sequential stages of global corporate citizenship. 42. Managers responding to the needs of the local education system as a normal or routine aspect of its operations is an example of an organization in the: A. Innovative stage. B. Integrated stage. C. Transforming stage. D. Engaged stage. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-05 Distinguishing among the sequential stages of global corporate citizenship. 43. Global social audit standards concentrate on: A. Internally focused economic benefits for the firm. B. Externally focused social benefits for the environment. C. Externally focused social benefits for key stakeholders. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 03-06 Understanding how businesses assess and report their social performance. 44. Which of these is not an objective of the Global Reporting Initiative (GRI)? A. Combining long-term profitability with ethical goals, social justice, and environmental care. B. Measuring social performance across companies. C. Providing tax incentives for global corporate citizens. D. Reflecting the interests of business, labor, civil society, and financial markets. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 03-06 Understanding how businesses assess and report their social performance. 45. The most significant motivator of corporate social reporting is: A. Government reporting requirements. B. Ethical concerns. C. Financial concerns. D. Employee demand. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 03-06 Understanding how businesses assess and report their social performance. Short Answer Questions 46. Describe the iron law of responsibility. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-01 Understanding the role of big business and the responsible use of corporate power in a democratic society. 47. Explain why a business should seek to balance its economic, legal and social obligations. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 48. Define and provide an example of a business practicing enlightened self-interest. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-02 Knowing when the idea of corporate social responsibility originated and investigating how a company's purpose or mission can integrate social objectives with economic and legal objectives. 49. Provide three arguments in favor of corporate social responsibility. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 50. Provide three arguments against corporate social responsibility. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-03 Examining the key arguments for and against corporate social responsibility. 51. Global corporate citizenship is more than espoused values; it requires action. Discuss some of the ways forward-thinking companies are changing to improve their ability to act as responsible citizens. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-04 Defining global corporate citizenship and recognizing the rapidly evolving management practices to support global citizenship. 52. What is a social audit? Describe one of the three ways audit standards can be created. Answers may vary. Difficulty: 3 Hard Learning Objective: 03-06 Understanding how businesses assess and report their social performance. Chapter 06 Organizational Ethics True / False Questions 1. Personal values and moral character play key roles in improving a company's ethical performance. True False 2. In most companies, a moral atmosphere cannot be detected. True False 3. In a benevolence ethical climate, the interests of the company's employees and external stakeholders most likely would be given high priority. True False 4. Managers, as major decision-makers, are one of the keys to whether a company will act ethically or unethically. True False 5. It is impossible for multiple ethical climates to exist within one organization. True False 6. All ethics issues in business are the same. True False 7. Honesty, integrity and accuracy are absolute requirements of the accounting function. True False 8. The American Institute of Certified Public Accountants Code directs accountants to be responsible to their clients and their profession, but not to the public. True False 9. Marketing ethics include having concern for consumer health and safety issues. True False 10. The majority of large U.S. corporations do not have codes of ethics. True False 11. In the United States, most ethics policies are primarily based on the company's mission and vision. True False 12. Ethics training is typically the most costly element of an ethics program. True False 13. According to a recent Transparency International survey, Denmark and New Zealand are two countries that are least likely to be subjected to bribery. True False 14. Today, more companies than ever, are turning to formal ethics audits to measure the quality of their ethics programs. True False 15. Bribery is found in nearly every sector of the global marketplace, but can be worse in some parts of the world. True False Multiple Choice Questions 16. The core components upon which a company's ethical performance depends include: A. The values and virtues of the managers. B. The personal character of the managers and employees. C. The traditions, attitudes, and business practices built into a company's culture. D. All of the above. 17. The unspoken understanding among employees of what is and is not acceptable behavior is called: A. Ethical climate. B. Efficiency. C. Success. D. Rites and rituals. 18. If a manager approaches ethical issues with a self-centered approach, emphasis will be on: A. Integrity. B. Social relationship. C. Economic efficiency. D. Laws. 19. Which of the following is not an example of an ethical criterion? A. Egoism. B. Concern for others. C. Principle. D. Corporate driven. 20. If a manger approaches ethics with benevolence in mind, he or she would stress what? A. Friendly relations with an employee. B. Company rules and procedures. C. Laws and professional codes. D. Economic efficiency. 21. Which ethical criterion is described by the idea that a company should strive for efficiency? A. Egoism. B. Benevolence. C. Principle. D. Business-centered. 22. By law, the financial records of publicly held companies are required to be: A. Managed by an accounting department of at least five CPAs. B. Summarized in the employee manual for new hires. C. Reviewed quarterly by the IRS. D. Audited by a certified professional accounting firm. 23. All of the following are commitments of the Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants except: A. The Public Interest. B. Objectivity and Independence. C. Due Process. D. Due Care. 24. A member of the Chartered Financial Analyst Institute (CFA) must: A. Promote the integrity of and uphold the rules governing global capital markets. B. Act with integrity, competence, diligence, respect, and in an ethical manner with the public. C. Maintain and improve their professional competence. D. All of the above. 25. All of the following are considered to be ethical issues for marketing professionals except: A. Fostering trust in the marketing system. B. Embracing ethical values. C. Doing no harm. D. Ignoring market fair dealing. 26. Ethical challenges for information technology employees include: A. Data privacy. B. Laptop speed. C. Copyright protection. D. Both A and C, but not B. 27. When attempting to build ethical safeguards into the company, businesses can take the following specific approaches: A. Institutional and Legal. B. Legal and Practical. C. Compliance and Integrity. D. Value-based and Consequentialism. 28. Building ethical safeguards into a company's everyday routines is called: A. Change management. B. Justifying ethics. C. Institutionalizing ethics. D. Ethical awareness. 29. A company that channels employee behavior in a lawful direction by emphasizing the threat of detection and punishment is: A. Operating under the compliance-based approach. B. Practicing "tone at the top." C. Operating under the integrity-based approach. D. Operating under the instrumental policy approach. 30. Integrity-based ethics programs: A. Seeks to avoid legal sanctions. B. Combines concern for the law with an emphasis on employee responsibility. C. Threatens employees with punishment for non-compliance with the ethics program. D. Are predominately implemented within the European Union. 31. A giant step is taken toward improving ethical performance throughout the company when: A. The firm hires a university ethics professor to lecture employees on moral philosophy. B. The Justice Department launches an investigation of the firm's pricing practices. C. Senior-level managers signal to employees that they believe ethics is a high priority. D. A consumer hot line is created and staffed 24 hours a day. 32. Business managers need a set of ethical guidelines to help them: A. Understand the changing customs throughout the world. B. Justify the resolution which best helps them. C. Identify and analyze the nature of the ethical problem. D. None of the above. 33. Ethics policies typically cover all of the following issues except: A. Developing guidelines for accepting or refusing gifts from suppliers. B. Encouraging discriminatory personnel practices. C. Avoiding conflict of interest. D. Maintaining the security of proprietary information. 34. Most ethics or compliance officers are generally entrusted to: A. Act as a liaison between the company and the Securities and Exchange Commission. B. Reduce the risks to the company of employee misconduct. C. Annually distribute copies of the company's code of ethics to all interested stakeholders. D. Arrange for ethics training for employees at a nearby university. 35. Which type of employee is most likely to report ethical issues in the workplace? A. Rank and file. B. Middle managers. C. Executives. D. Temporary workers. 36. The most effective ethics programs utilize which of the following? A. Written policy. B. Posters. C. Quick reference guides. D. All of the above. 37. The critical component in installing an effective ethics program is: A. To allow all employees the freedom to act as they wish. B. In hiring an expensive ethics consultant. C. The integration of various ethics safeguards into a comprehensive program. D. Maintaining the position as the industry sales leader. 38. Which company ethics safeguard is commonly implemented as an employee "helpline"? A. Top management commitment. B. Code of ethics. C. Reporting mechanisms. D. Compliance tracking. 39. Which of these components are not considered during a risk assessment audit to gauge the effectiveness of a firm's ethics programs? A. The financial bottom line. B. Top management commitment. C. Training programs. D. Ethical policies. 40. Ethisphere Magazine recognizes and rewards ethical leadership and business practices worldwide according to their: A. Regulatory Percentage Track (RPT). B. Ethics and Leadership Radar (ELR). C. Quality Measurement (QM). D. Ethical Quotient (EQ). 41. Recipients of the corporate ethics awards show that: A. Awards are based on economic power, not ethical performance. B. Firms can be financially successful and ethically focused. C. Being legally compliant results in receiving an ethics award. D. Improving ethical performance is very costly, but bolsters a firm's reputation. 42. The purpose of the Institute of Business Ethics' mobile application "Say No Toolkit" is to: A. Monitor inter-office dating. B. Always get the lowest prices on supplies. C. Minimize the risk of corruption. D. Avoid drugs in the workplace. 43. Which U.S. Act prohibits executives representing U.S.-based companies from paying bribes to foreign government officials, political parties, or political candidates? A. The USA Patriot Act. B. The U.K. Bribery Act. C. The Corruption of Foreign Officials Act. D. The U.S. Foreign Corrupt Practices Act. 44. Which of these statements is true about the U.K. Bribery Act? A. Provides an exemption for "facilitating payments". B. Contains a strict liability offense for failure to prevent bribery by commercial organizations. C. Prohibits bribery only for government officials. D. Requires that improper actions be made "corruptly." 45. Which country recently enacted new laws to counter bribery and corruption? A. Russia. B. Somalia. C. Brazil. D. Argentina. Short Answer Questions 46. Define ethical climate. Discuss the differences and similarities among the ethical climates outlined in the textbook. 47. How are firms honored for their efforts to create an ethical climate? Provide examples of role model companies and what efforts they took to develop effective ethics programs. 48. Not all ethics issues in business are the same. Discuss the distinct ethical issues across three different organizational functions. Highlight details of the professional codes of conduct for each. 49. Construct a comprehensive ethics program using four of the five ethical safeguards identified in the textbook. 50. Discuss the importance of ethics training at different levels of an organization. Is it more important for mangers to receive ethical training? Why or why not? 51. Define bribery. Explain why certain countries are less likely to participate in such acts. 52. Describe how a firm might implement the "Say No Toolkit" to help combat corruption. How could potential employee resistance be overcome? Could there be any downsides to using the tool? In what ways could the firm benefit? Chapter 06 Organizational Ethics Answer Key True / False Questions 1. Personal values and moral character play key roles in improving a company's ethical performance. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 2. In most companies, a moral atmosphere cannot be detected. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 3. In a benevolence ethical climate, the interests of the company's employees and external stakeholders most likely would be given high priority. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 4. Managers, as major decision-makers, are one of the keys to whether a company will act ethically or unethically. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 5. It is impossible for multiple ethical climates to exist within one organization. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 6. All ethics issues in business are the same. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 7. Honesty, integrity and accuracy are absolute requirements of the accounting function. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 8. The American Institute of Certified Public Accountants Code directs accountants to be responsible to their clients and their profession, but not to the public. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 9. Marketing ethics include having concern for consumer health and safety issues. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 10. The majority of large U.S. corporations do not have codes of ethics. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 11. In the United States, most ethics policies are primarily based on the company's mission and vision. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 12. Ethics training is typically the most costly element of an ethics program. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 13. According to a recent Transparency International survey, Denmark and New Zealand are two countries that are least likely to be subjected to bribery. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 14. Today, more companies than ever, are turning to formal ethics audits to measure the quality of their ethics programs. FALSE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-04 Assessing the strengths and weaknesses of a comprehensive ethics program. 15. Bribery is found in nearly every sector of the global marketplace, but can be worse in some parts of the world. TRUE Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-05 Understanding how to conduct business ethically in the global marketplace. Multiple Choice Questions 16. The core components upon which a company's ethical performance depends include: A. The values and virtues of the managers. B. The personal character of the managers and employees. C. The traditions, attitudes, and business practices built into a company's culture. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 17. The unspoken understanding among employees of what is and is not acceptable behavior is called: A. Ethical climate. B. Efficiency. C. Success. D. Rites and rituals. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 18. If a manager approaches ethical issues with a self-centered approach, emphasis will be on: A. Integrity. B. Social relationship. C. Economic efficiency. D. Laws. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 19. Which of the following is not an example of an ethical criterion? A. Egoism. B. Concern for others. C. Principle. D. Corporate driven. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 20. If a manger approaches ethics with benevolence in mind, he or she would stress what? A. Friendly relations with an employee. B. Company rules and procedures. C. Laws and professional codes. D. Economic efficiency. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 21. Which ethical criterion is described by the idea that a company should strive for efficiency? A. Egoism. B. Benevolence. C. Principle. D. Business-centered. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-01 Classifying an organization's culture and ethical climate. 22. By law, the financial records of publicly held companies are required to be: A. Managed by an accounting department of at least five CPAs. B. Summarized in the employee manual for new hires. C. Reviewed quarterly by the IRS. D. Audited by a certified professional accounting firm. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 23. All of the following are commitments of the Principles of the Code of Professional Conduct of the American Institute of Certified Public Accountants except: A. The Public Interest. B. Objectivity and Independence. C. Due Process. D. Due Care. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 24. A member of the Chartered Financial Analyst Institute (CFA) must: A. Promote the integrity of and uphold the rules governing global capital markets. B. Act with integrity, competence, diligence, respect, and in an ethical manner with the public. C. Maintain and improve their professional competence. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 25. All of the following are considered to be ethical issues for marketing professionals except: A. Fostering trust in the marketing system. B. Embracing ethical values. C. Doing no harm. D. Ignoring market fair dealing. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 26. Ethical challenges for information technology employees include: A. Data privacy. B. Laptop speed. C. Copyright protection. D. Both A and C, but not B. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-02 Recognizing ethics challenges across the multiple functions of business. 27. When attempting to build ethical safeguards into the company, businesses can take the following specific approaches: A. Institutional and Legal. B. Legal and Practical. C. Compliance and Integrity. D. Value-based and Consequentialism. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 28. Building ethical safeguards into a company's everyday routines is called: A. Change management. B. Justifying ethics. C. Institutionalizing ethics. D. Ethical awareness. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 29. A company that channels employee behavior in a lawful direction by emphasizing the threat of detection and punishment is: A. Operating under the compliance-based approach. B. Practicing "tone at the top." C. Operating under the integrity-based approach. D. Operating under the instrumental policy approach. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 30. Integrity-based ethics programs: A. Seeks to avoid legal sanctions. B. Combines concern for the law with an emphasis on employee responsibility. C. Threatens employees with punishment for non-compliance with the ethics program. D. Are predominately implemented within the European Union. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 31. A giant step is taken toward improving ethical performance throughout the company when: A. The firm hires a university ethics professor to lecture employees on moral philosophy. B. The Justice Department launches an investigation of the firm's pricing practices. C. Senior-level managers signal to employees that they believe ethics is a high priority. D. A consumer hot line is created and staffed 24 hours a day. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 32. Business managers need a set of ethical guidelines to help them: A. Understand the changing customs throughout the world. B. Justify the resolution which best helps them. C. Identify and analyze the nature of the ethical problem. D. None of the above. Accessibility: Keyboard Navigation Difficulty: 3 Hard Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 33. Ethics policies typically cover all of the following issues except: A. Developing guidelines for accepting or refusing gifts from suppliers. B. Encouraging discriminatory personnel practices. C. Avoiding conflict of interest. D. Maintaining the security of proprietary information. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 34. Most ethics or compliance officers are generally entrusted to: A. Act as a liaison between the company and the Securities and Exchange Commission. B. Reduce the risks to the company of employee misconduct. C. Annually distribute copies of the company's code of ethics to all interested stakeholders. D. Arrange for ethics training for employees at a nearby university. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 35. Which type of employee is most likely to report ethical issues in the workplace? A. Rank and file. B. Middle managers. C. Executives. D. Temporary workers. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 36. The most effective ethics programs utilize which of the following? A. Written policy. B. Posters. C. Quick reference guides. D. All of the above. Accessibility: Keyboard Navigation Difficulty: 1 Easy Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 37. The critical component in installing an effective ethics program is: A. To allow all employees the freedom to act as they wish. B. In hiring an expensive ethics consultant. C. The integration of various ethics safeguards into a comprehensive program. D. Maintaining the position as the industry sales leader. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 38. Which company ethics safeguard is commonly implemented as an employee "helpline"? A. Top management commitment. B. Code of ethics. C. Reporting mechanisms. D. Compliance tracking. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-03 Creating effective ethics policies, ethics reporting mechanisms, ethics training programs, and similar safeguards. 39. Which of these components are not considered during a risk assessment audit to gauge the effectiveness of a firm's ethics programs? A. The financial bottom line. B. Top management commitment. C. Training programs. D. Ethical policies. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-04 Assessing the strengths and weaknesses of a comprehensive ethics program. 40. Ethisphere Magazine recognizes and rewards ethical leadership and business practices worldwide according to their: A. Regulatory Percentage Track (RPT). B. Ethics and Leadership Radar (ELR). C. Quality Measurement (QM). D. Ethical Quotient (EQ). Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-04 Assessing the strengths and weaknesses of a comprehensive ethics program. 41. Recipients of the corporate ethics awards show that: A. Awards are based on economic power, not ethical performance. B. Firms can be financially successful and ethically focused. C. Being legally compliant results in receiving an ethics award. D. Improving ethical performance is very costly, but bolsters a firm's reputation. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-04 Assessing the strengths and weaknesses of a comprehensive ethics program. 42. The purpose of the Institute of Business Ethics' mobile application "Say No Toolkit" is to: A. Monitor inter-office dating. B. Always get the lowest prices on supplies. C. Minimize the risk of corruption. D. Avoid drugs in the workplace. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-05 Understanding how to conduct business ethically in the global marketplace. 43. Which U.S. Act prohibits executives representing U.S.-based companies from paying bribes to foreign government officials, political parties, or political candidates? A. The USA Patriot Act. B. The U.K. Bribery Act. C. The Corruption of Foreign Officials Act. D. The U.S. Foreign Corrupt Practices Act. Accessibility: Keyboard Navigation Difficulty: 2 Medium Learning Objective: 06-05 Understanding how to conduct business ethically in the global marketplace. 44. Which of these statements is true about the U.K. Bribery Act? A. Provides an exemption for "facilitating payments". B. Contai