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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 71

Multiple Choice

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Which of the following terms describes someone who reports illegal or unethical behavior?

A) whistleblower
B) horn blower
C) watch tower sentinel
D) integrity watchdog

E) A) and B)
F) C) and D)

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Question 72

Multiple Choice

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When it comes to social responsibility, some people feel that "before you can do good, you must do well." This reflects a firm's primary responsibility to its:

A) customers.
B) investors.
C) employees.
D) community.

E) None of the above
F) A) and B)

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Question 73

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The Motorola story told in the Reaching Beyond our Borders box demonstrates how a corporation's perception of ethical behavior may not be everyone's reality.

Some critics of corporate social responsibility view spending money on CSR as:

"Hear no evil, see no evil, speak no evil" is the best policy for U.S. firms to follow in their dealings with corrupt foreign suppliers.

Due to their significant economic power, large multinational firms can ignore the ethical standards of a society without consequences.

A friend offers to share with you a term paper previously prepared for her Introduction to Business class last semester. When you tell her that it wouldn't be fair, she reminds you of your habit of reading an entire Harry Potter book at the local bookstore without paying for the book. Which ethics-based question would be most helpful in evaluating these situations?

A high-level manager gathers his team of supervisors together to create a new office policy that will affect all employees at the company. After receiving a verbal nod from the supervisors, he then proceeds to pass around a written form of the new policy and asks all members of the team to initial it. He explains to the supervisors that the new policy will be posted in the break rooms on each floor of corporate headquarters. If you were a part of this work team, which question would you ultimately ask yourself before initialing your approval of this policy?

Businesses with a formal code of ethics are less common now than in the past.

A recent study revealed that most Americans have:

Which of the following people would be most in favor of CSR (Corporate Social Responsibility) ?

About 10 years ago, there were several bank mergers. Shortly after Big Bucks Bank bid on The Bank of Plenty, a story hit the local newspapers about the investigation into the purchase of several thousand shares of stock of the Bank of Plenty by three of its top executives, just prior to the announcement that Big Bucks Bank planned to buy Bank of Plenty. Upon close examination by the SEC (Securities and Exchange Commission) it was determined that the stock purchases were an illegal maneuver on the part of these executives. This is an example of insider trading. The executives were "banking" on the stock price rising sharply when the purchase announcement was made public.

The Green Movement:

According to the Legal Briefcase box, "Paying the Price", the Enron case was a landmark because it demonstrated clearly that company regulations and policies always represent the best interests of all employees, and not only those employees holding the highest company positions.

An ethic of care is based on a sense of responsibility to reduce actual harm or suffering.

Several outside groups regularly monitor the activities of Metro Chemical Corporation. These groups are interested in the firm's involvement - and enforcement of their ethical and social responsibility policies. Who of the following is the least likely to be among the "watchdog" groups?

The question "Is it legal?" establishes ethical behavior.

Laws that protect us from fraud, theft and violence determine ethical behavior.

Insider trading provides the information needed for the securities markets to operate fairly and efficiently.

Mini-Case Harry, Sirly, and Bo are in the midst of a heated discussion. As the chief operating officers of the U-Scream Ice Cream Corporation, they are reviewing the latest financial reports. Intense competition has resulted in deceased profits. Each of the three officers has their own view of how to reverse the current trend. Harry suggests cutting costs by firing union employees and hiring replacement workers at lower wages. He has directed the firm's attorney to find a loophole in the contract that will allow for this action. Sirly protests, stating that Harry's proposal is unethical and unfair. Sirly feels that every stakeholder should be treated equally, and that profiting at the expense of others is foolhardy. Bo, agreeing in part with Sirly, states, "We must be sensitive to all affected parties, but clearly our primary goal is to make a profit for our owners." In an attempt to resolve the conflict between Harry and Sirly, Bo offers an alternative suggestion: reduce the firm's charitable contributions until acceptable profit levels are realized. Sirly is outraged and reminds Bo of the social responsibilities that U-Scream Ice Cream has to the community, environment, suppliers, employees, and stockholders. -On which of the three "ethics check questions" would Harry primarily focus?