Business A Practical Introduction by Williams Test Bank

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Business A Practical Introduction by Williams Test Bank

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WITH ANSWERS
Business A Practical Introduction by Williams Test Bank
SAMPLE QUESTIONS

 

Business: A Practical Introduction (Williams/Sawyer/Berston)

Chapter 2  Ethics and Social Responsibility

 

1) The economic, legal, ethical, and philanthropic responsibilities that comprise Carrolls social responsibility pyramid apply only to organizations.

Answer:  FALSE

Explanation:  Organizations and their employees can and should demonstrate these themes in their behaviors.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

2) Attitudes about ethical behaviors and practices are universal across cultures.

Answer:  FALSE

Explanation:  Cultural attitudes about ethical behavior vary; what is acceptable in one country may be unethical or even illegal in another country.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

3) Ethics are principles of right and wrong that influence behavior.

Answer:  TRUE

Explanation:  Both ethics and laws address the concepts of right and wrong.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

4) A situation in which people have to decide whether to pursue an action that may benefit them or their organization but which is unethical or illegal is called double jeopardy.

Answer:  FALSE

Explanation:  This situation is known as an ethical dilemma.

Page Ref: 36

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

5) Illegal use of private company information to further ones own fortunes or those of family and friends is called backroom dealing.

Answer:  FALSE

Explanation:  This behavior is known as insider trading.

Page Ref: 37

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

6) Enhancing your personal wealth through insider trading may be unethical, but it is not illegal.

Answer:  FALSE

Explanation:  Insider trading is both unethical and illegal. Many people have paid fines or served jail time for this behavior.

Page Ref: 37

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

7) Signing the MBA oath is required of every U.S. student upon completion of graduate study in business.

Answer:  FALSE

Explanation:  The MBA oath is a voluntary student-led pledge to serve the greater good.

Page Ref: 37

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

8) Written standards guiding employees on appropriate ways to treat stakeholders and prohibiting conflicts of interest are called a code of ethics.

Answer:  TRUE

Explanation:  A code of ethics is a set of standards for behavior that all employees must know. It helps employees to be aware of treating stakeholders ethically and to know what to do when conflicts of interest arise.

Page Ref: 40

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

9) Compliance-based ethics codes enable responsible employee conduct mainly by creating a supportive environment for such behavior.

Answer:  FALSE

Explanation:  Integrity-based codes focus on creating supportive environments for appropriate behavior.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

10) Companies that prevent employee criminal misconduct through control and punishment often utilize compliance-based ethics codes.

Answer:  TRUE

Explanation:  Compliance-based ethics codes attempt to prevent criminal misconduct by increasing control and punishing violators.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

11) Marcia is the ethics officer at her company. Her job is to ensure that values initiatives and compliance activities take precedence in the companys decision-making processes.

Answer:  FALSE

Explanation:  The ethics officer works to integrate ethics, values, compliance, and business conduct activities into the organizations decision making.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

12) A whistleblower who reports misconduct to authorities is someone within the offending organization.

Answer:  TRUE

Explanation:  A whistleblower is an employee of the offending organization.

Page Ref: 42

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

13) An arrangement in which cash from newer investors is used to pay off older investors is called multilevel marketing.

Answer:  FALSE

Explanation:  This arrangement is known as a Ponzi scheme.

Page Ref: 42

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

14) Under the Sarbanes-Oxley Act of 2002, whistleblowers are protected from retaliation by their employers.

Answer:  TRUE

Explanation:  This is one of the nine principal provisions of the act.

Page Ref: 43

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

15) Only large corporations should be concerned with practicing social responsibility.

Answer:  FALSE

Explanation:  Companies arent separate from society; businesses of every size benefit from being socially responsible.

Page Ref: 44

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

16) A company cannot succeed by doing social good.

Answer:  FALSE

Explanation:  Many businesses have realized economic benefits through practicing social responsibility.

Page Ref: 45

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

17) Blended value measures the outcome of all business investments in both economic and social realms.

Answer:  TRUE

Explanation:  Both for-profit and nonprofit organizations can apply this measure of performance.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

18) A systematic assessment of a companys performance in implementing socially responsible programs is called a blended value audit.

Answer:  FALSE

Explanation:  This type of assessment is a social audit.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

19) The positions a company takes on political and social issues are documented in its code of ethics.

Answer:  FALSE

Explanation:  Positions on political and social issues are part of an organizations corporate policy.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

20) Cause-related marketing involves a partnership between a business and a nonprofit organization.

Answer:  TRUE

Explanation:  Cause-related marketing is a commercial activity in which a business forms a partnership with a charity or nonprofit to support a worthy cause, product, or service.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

21) Social entrepreneurship is limited to the nonprofit sector.

Answer:  FALSE

Explanation:  Social entrepreneurship is a social value-creating activity that occurs within or across for-profit or nonprofit sectors.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

22) Sustainability focuses on both the present and the future.

Answer:  TRUE

Explanation:  Sustainability is economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Page Ref: 48

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

23) Illegal behavior can impact a companys profits.

Answer:  TRUE

Explanation:  A companys illegal behavior can lower its stock price and sales. Employee fraud also costs companies about 5 percent of earnings.

Page Ref: 49

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

24) Business ethics do not impact investor behavior.

Answer:  FALSE

Explanation:  One survey found that 74 percent of people said their perception about a companys honesty influenced their decision to buy its stock.

Page Ref: 49

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

25) Stockholders who resent a companys social responsibility activities are logically focused on maximizing their profits.

Answer:  FALSE

Explanation:  Studies show that profitability is enhanced by a companys reputation for honesty and corporate citizenship.

Page Ref: 50

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

26) Sweatshops do not exist in the United States.

Answer:  FALSE

Explanation:  Some U.S. garment factories, upholstery shops, and farms employing illegal immigrants operate under sweatshop conditions.

Page Ref: 51

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

27) Participating in community activities offers no marketing or promotional value for a business.

Answer:  FALSE

Explanation:  Donations of branded products, employee teams wearing company logos, and similar activities all offer promotional value while benefitting the community.

Page Ref: 51

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

28) The Global Compact promoting social and environmental practices for business was established by the United Nations.

Answer:  TRUE

Explanation:  The Global Compact has ten principles addressing human rights, labor standards, anti-corruption, and the environment.

Page Ref: 52

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

29) Global climate change has no impact on economic development.

Answer:  FALSE

Explanation:  One economist reported that potential costs and risks of climate change are equivalent to losing at least 5 percent of global gross domestic product annually.

Page Ref: 53

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

30) Members of the Millennial generation are generally passive and uninvolved in social issues.

Answer:  FALSE

Explanation:  Members of the Millennial generation are considered the most activist generation since the 1930s and 1940s.

Page Ref: 54

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Easy

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

31) Which of the following is NOT a component of business-ethics scholar Archie B. Carrolls global social responsibility pyramid?

  1. A) to obey the law
  2. B) to honor competitors
  3. C) to make a profit
  4. D) to be ethical
  5. E) to be a good global corporate citizen

Answer:  B

Explanation:  B) Carrolls pyramid does not single out business perspectives toward competitors.

Page Ref: 34

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

32) How is making a profit incorporated into Carrolls global social responsibility pyramid?

  1. A) It is defined as shareholder responsibility.
  2. B) It is defined as legal responsibility.
  3. C) It is defined as economic responsibility.
  4. D) It is defined as philanthropic responsibility.
  5. E) It is defined as ethical responsibility.

Answer:  C

Explanation:  C) By being successful and profitable, businesses offer many benefits to society, such as employment and tax revenue.

Page Ref: 34

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

33) Which of the following lists the elements of Carrolls global corporate social responsibility pyramid in order from highest to lowest priority?

  1. A) be a good corporate citizen > obey the law > make a profit > be ethical
  2. B) make a profit > be ethical > obey the law > be a good corporate citizen
  3. C) make a profit > obey the law > be ethical > be a good corporate citizen
  4. D) obey the law > be ethical > be a good corporate citizen > make a profit
  5. E) make a profit > be a good corporate citizen > obey the law > be ethical

Answer:  C

Explanation:  C) Carrolls social responsibility obligations for organizations emphasize making profits, followed by legal responsibility, ethical responsibility, and good citizenship.

Page Ref: 34

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

34) Each of the following activities is considered both illegal and unethical EXCEPT which?

  1. A) consumer fraud
  2. B) cash payments to avoid taxes
  3. C) cancelling a company retirement plan
  4. D) embezzlement
  5. E) sexual harassment

Answer:  C

Explanation:  C) Cancelling a companys retirement plan may be unethical, but it is legal.

Page Ref: 34

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

35) Which of the following is subject to formalized enforcement by a controlling authority?

  1. A) laws
  2. B) ethics
  3. C) morals
  4. D) values
  5. E) social responsibility

Answer:  A

Explanation:  A) Laws are rules of conduct or action formally recognized as binding or enforced by a controlling authority.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

36) What would be considered the most personal driver of appropriate behavior?

  1. A) laws
  2. B) values
  3. C) ethics
  4. D) corporate social responsibility
  5. E) codes

Answer:  B

Explanation:  B) Values are relatively permanent and deeply held underlying beliefs and attitudes guiding behavior. Each person has a distinct set of values; larger groups and cultures also have values.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

37) Which of the following is an example of enforcement of ethical business behavior by a controlling authority?

  1. A) company ethic guidelines
  2. B) boycott by an interest group
  3. C) newspaper editorial by church leaders
  4. D) child labor laws
  5. E) concert promoting fair wages

Answer:  D

Explanation:  D) While all of the options exert varying degrees of behavior on a companys behavior, child labor laws formally enforce ethical treatment of children in the workplace.

Page Ref: 35

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

38) Jack and several of his workmates are wearing bright yellow shirts with their companys logo as they run a 10K team race to help raise money for cancer research. What is Jacks company demonstrating?

  1. A) compliance promotion
  2. B) corporate citizenship
  3. C) ethical responsibility
  4. D) family values
  5. E) stakeholder awareness

Answer:  B

Explanation:  B) Promoting visibility for the companys brand on a team running a charitable race benefits both society and the organizationthe definition of corporate citizenship.

Page Ref: 36

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

39) Being a good corporate citizen is at the top of Carrolls social responsibility pyramid. What does Carroll believe compels businesses to practice this behavior?

  1. A) legal requirements and regulations
  2. B) ethical demands
  3. C) societal expectations
  4. D) opportunities for profit
  5. E) values-based interest groups

Answer:  C

Explanation:  C) Carroll believes that people today expect a business to engage in activities that benefit society.

Page Ref: 36

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

40) Jiao found a competitors proposal for a project her company is also bidding on. She knows using the information can help her team develop a winning proposal, and her company needs the project to avoid staff layoffs. What situation is Jiao facing?

  1. A) insider trading
  2. B) devils bargain
  3. C) ethical dilemma
  4. D) economic responsibility
  5. E) legal conundrum

Answer:  C

Explanation:  C) Jiao must decide whether to use the information to benefit her company and coworkers even though it would be unethical.

Page Ref: 36

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

41) Tim works at a fast-food restaurant and suspects that a coworker may be misreporting his hours worked. Yet one of the stated values of the company is team unity and cohesion, and Tim is afraid that reporting the misreported hours may cause his coworkers to have a poor opinion of him. What is this situation called?

  1. A) moral choice
  2. B) ethical dilemma
  3. C) test of values
  4. D) Hobsons choice
  5. E) test of character

Answer:  B

Explanation:  B) The term for this situation is an ethical dilemma. Both options open to Tim seem defensible, yet both also seem to have ethically undesirable consequences.

Page Ref: 36

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

42) Martin and Helen are discussing their options if they learned private information about an unpopular coworker that would advance their careers at the colleagues expense. Martin says he might capitalize on the opportunity, but Helen says she wouldnt under any circumstances. Helen may be exhibiting what kind of behavior?

  1. A) some false bravado
  2. B) self-righteousness
  3. C) the holier-than-thou effect
  4. D) corporate social responsibility
  5. E) ethical relativity

Answer:  C

Explanation:  C) Under this effect, people overestimate their capacity for proper behavior until faced with an actual challenging situation.

Page Ref: 37

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.1 What is the order of priorities for a businessperson?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

43) Which of the following is NOT one of the primary strategies that organizations can use to foster high ethical standards?

  1. A) encourage an ethical climate through top management staff
  2. B) place covert whistleblowers on staff
  3. C) develop stringent codes for ethical behavior
  4. D) hire trustworthy, responsible employees
  5. E) provide training in ethical conduct

Answer:  B

Explanation:  B) Planting potential whistleblowers is not a formalized strategy for fostering ethical standards in an organization.

Page Ref: 39

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

44) Holly is a top manager at her company. What is likely to be the most effective way for Holly to support an ethical climate in her organization?

  1. A) hire an ethics officer
  2. B) establish compliance-based ethics codes
  3. C) establish integrity-based ethics codes
  4. D) hire reputable employees
  5. E) lead by example

Answer:  E

Explanation:  E) Policies and codes will lose effectiveness with employees if top managers dont play by the same rules.

Page Ref: 39

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

45) Who sets the tone for ethical behavior in the workplace?

  1. A) ethics officer
  2. B) rank-and-file employees
  3. C) board of directors
  4. D) human resources director
  5. E) top management

Answer:  E

Explanation:  E) Top managers lead by example by practicing ethical behavior in an organization.

Page Ref: 39

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

46) Phyllis is the CEO of Marchland Communications. According to the corporate social responsibility pyramid, what should be the first priority for Phyllis to be working towards?

  1. A) demonstrating ethical behavior
  2. B) making a profit
  3. C) encouraging good corporate citizenship
  4. D) hiring responsible employees
  5. E) complying with the law

Answer:  B

Explanation:  B) Top managers set the tone for ethical behavior in an organization, but the first priority in Carrolls pyramid is earning a profit.

Page Ref: 39

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

47) Georgia is the head of human resources at her company and wants to implement policies toward hiring honest, responsible employees. Which of the following is NOT a useful strategy for Georgia to implement to ensure this goal?

  1. A) limit candidates to referrals from existing employees
  2. B) conduct a battery of personality tests with candidates
  3. C) confirm details of candidate resumes
  4. D) follow up with candidates references
  5. E) use government program tools such as E-Verify

Answer:  A

Explanation:  A) Although current employees may be trustworthy, they may not know all the details of candidates they refer.

Page Ref: 40

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

48) When Mario was hired at a software company, he had to sign a nondisclosure agreement. Nondisclosure agreements are an example of what?

  1. A) ethical performance contracts
  2. B) incentive-based ethics codes
  3. C) compliance-based ethics codes
  4. D) integrity-based ethics codes
  5. E) whistleblower agreements

Answer:  C

Explanation:  C) Compliance-based ethics codes attempt to prevent criminal misconduct by increasing control and punishing violators.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

49) During orientation for his new job, Eduardo read and signed a document listing the companys principles supporting fair play, honesty, diversity, and shared accountability. What kind of ethics code does Eduardos company have?

  1. A) legally grounded
  2. B) compliance-based
  3. C) integrity-based
  4. D) values-based
  5. E) peer-enforced

Answer:  C

Explanation:  C) Integrity-based ethics codes strive to enable responsible conduct by creating an environment that supports appropriate behavior.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

50) Which strategy for encouraging ethical behavior in an organization follows a more punitive approach?

  1. A) top managers supporting an ethical climate
  2. B) running background checks on job candidates
  3. C) establishing integrity-based ethics codes
  4. D) establishing compliance-based ethics codes
  5. E) conducting ethics training for employees

Answer:  D

Explanation:  D) Compliance-based codes attempt to prevent criminal misconduct by increasing control and by punishing violators.

Page Ref: 41

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

51) Which of the following is an example of the general publics outrage playing a role in curbing white-collar crime?

  1. A) conviction of former Enron chief Jeffrey Skilling
  2. B) passage of the Sarbanes-Oxley Act of 2002
  3. C) formation of the Bureau of Consumer Financial Protection
  4. D) proliferation of compliance- and integrity-based ethics codes
  5. E) increased number of corporate whistleblowers

Answer:  B

Explanation:  B) Public outrage at the scope of crimes conducted at companies such as Enron and WorldCom prodded Congress to draft and pass this reform legislation.

Page Ref: 42

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

52) Tayshaun has noticed accounting irregularities in his companys quarterly reports. Significant expenses are missing, making the company look highly profitable despite a dismal economy. After doing more research, he reports this to the state attorney generals office. What is the term applicable to Tayshaun?

  1. A) compliance officer
  2. B) ethics officer
  3. C) enforcer
  4. D) informant
  5. E) whistleblower

Answer:  E

Explanation:  E) A whistleblower is an employee who reports organizational misconduct to the government or the public.

Page Ref: 42

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

53) Jonathan is a new employee at McFarlin pharmaceuticals and has been informed that the company has a nonretaliation policy against whistleblowers. Which of the following would likely NOT warrant attention from Jonathan under this policy?

  1. A) corruption
  2. B) noncompetitive wages
  3. C) fraud
  4. D) safety problems
  5. E) improper waste disposal

Answer:  B

Explanation:  B) Paying noncompetitive wages may be unfair but generally is not a legal or ethical breach warranting whistleblower reports to the government or public.

Page Ref: 42

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

54) Which of the following is NOT a principal provision of the Sarbanes-Oxley Act of 2002?

  1. A) Alteration or destruction of key audit documents is prohibited.
  2. B) Company CEOs and CFOs must personally certify financial reports.
  3. C) Whistleblowers punished by their employers receive back pay and job reinstatement.
  4. D) Companies must draft and all employees sign compliance-based ethics codes.
  5. E) Systems enabling anonymous reporting of accounting issues must be developed.

Answer:  D

Explanation:  D) Ethics codes are not a principal provision of Sarbanes-Oxley.

Page Ref: 43

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

55) The Public Company Accounting Oversight Board created by the Sarbanes-Oxley Act is granted authority under what government entity?

  1. A) Department of Commerce
  2. B) Securities and Exchange Commission
  3. C) Department of Homeland Security
  4. D) Consumer Protection and Safety Commission
  5. E) Department of the Treasury

Answer:  B

Explanation:  B) The commission is charged with overseeing the accounting industry in the United States.

Page Ref: 43

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

56) What is Sarbanes-Oxley an example of?

  1. A) compliance-based ethics code
  2. B) integrity-based ethics code
  3. C) state regulation
  4. D) federal law
  5. E) federal regulation

Answer:  D

Explanation:  D) The Sarbanes-Oxley Act is a law passed by Congress in 2002 to strengthen oversight of corporate practices.

Page Ref: 43

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

57) Under the Sarbanes-Oxley Act, who is required to personally certify the financial reports of an organization?

  1. A) chief executive officer
  2. B) chief financial officer
  3. C) chief executive officer and chief financial officer
  4. D) chief financial officer and board chairman
  5. E) chief executive officer and board chairman

Answer:  C

Explanation:  C) This provision of Sarbanes-Oxley increases the accountability of top management for financial recordkeeping.

Page Ref: 43

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.2 What are four ways organizations can foster high ethical standards?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

58) Which of the following statements is a logical argument in favor of corporate social responsibility?

  1. A) Companies have no relation to society.
  2. B) Companies are legally bound to support society.
  3. C) Companies are not separate from society.
  4. D) Companies are not a component of society.
  5. E) Companies do not contribute to society.

Answer:  C

Explanation:  C) The business sector is deeply integrated into the U.S. social structure.

Page Ref: 44

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

59) Which of the following is NOT an argument in favor of corporate social responsibility (CSR)?

  1. A) Businesses have resources unavailable to nonprofits.
  2. B) Business provides sufficient social value by creating jobs.
  3. C) Business creates social problems and should help solve them.
  4. D) Businesses are not separate from society.
  5. E) Businesses practicing CSR can limit government regulation.

Answer:  B

Explanation:  B) This argument supports the idea that economic development is an acceptable business contribution to society and no other efforts are necessary.

Page Ref: 44

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

60) Who argued against corporate social responsibility by contending that the only social responsibility of a business is to create jobs and expand economic growth?

  1. A) Alan Greenspan
  2. B) Andrew Carnegie
  3. C) Milton Friedman
  4. D) Bill Gates
  5. E) Paul Samuelson

Answer:  C

Explanation:  C) In a famous 1970 article, the late economist Friedman wrote that the social responsibility of business is to make profits.

Page Ref: 45

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

61) The late economist Milton Friedman would eliminate all levels of Carrolls social responsibility pyramid EXCEPT which of the following?

  1. A) economic responsibility
  2. B) legal responsibility
  3. C) environmental responsibility
  4. D) philanthropic responsibility
  5. E) ethical responsibility

Answer:  A

Explanation:  A) Friedman wrote that the social responsibility of business is to make profits. Making profit is the first priority in Carrolls triangle and is known as economic responsibility.

Page Ref: 45

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

62) Who plays the most valuable role in supporting and implementing corporate social responsibility (CSR)?

  1. A) shareholders
  2. B) human resources departments
  3. C) accountants
  4. D) the government
  5. E) top managers

Answer:  E

Explanation:  E) Primarily its top managers who set CSR goals and promote participation.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

63) The nonprofit sector represents 7 percent of the U.S. gross domestic product. This is evidence that businesses in the nonprofit sector do what?

  1. A) make a profit
  2. B) contribute economic value to society
  3. C) practice corporate social responsibility
  4. D) have an unbalanced blended value
  5. E) require less philanthropic support

Answer:  B

Explanation:  B) Nonprofit organizations create jobs and consume goods and services.

Page Ref: 46

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

 

64) Assessing the outcome of an organizations investments in both the economic and social realms determines what for an organization?

  1. A) social diversity
  2. B) blended value
  3. C) sustainability
  4. D) philanthropy
  5. E) profitability

Answer:  B

Explanation:  B) Blended value offers a method to judge a business by criteria other than profits.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

65) Seths workgroup is collecting data from various internal departments on financial performance and social responsibility activities. Seth will use the data to determine what attribute of the company?

  1. A) ethical responsibility
  2. B) competitive advantage
  3. C) social entrepreneurship
  4. D) blended value
  5. E) sustainability policies

Answer:  D

Explanation:  D) Blended value measures the outcome of all business investments on both economic and social realms.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

66) What term describes a companys focus on earning profits, doing social good, and fostering environmental consciousness?

  1. A) blended value
  2. B) ethical dilemmas
  3. C) triple bottom line
  4. D) social entrepreneurship
  5. E) social responsibility pyramid

Answer:  C

Explanation:  C) This provides three criteria to measure a companys overall performance.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

67) Luisa runs a fleet of taxis. The company is being pressured by interest groups that believe it does not respect the environment. Luisa has shared anecdotal stories with group reps about the companys pro-environmental activities, but they arent buying it. How might she best convince them that the company is already environmentally responsible?

  1. A) draft a code of environmental ethics
  2. B) offer environmental training for drivers
  3. C) donate funds to an environmental nonprofit
  4. D) conduct a social audit
  5. E) run a cause-related marketing campaign

Answer:  D

Explanation:  D) A social audit will provide a formal assessment of the taxi companys socially responsible programs and activities.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

68) Paul is the CEO of a large technology company. Whenever his talented team proposes a new business initiative, he has the idea analyzed by the accounting department and by a social responsibility director. Paul is making use of what principle?

  1. A) social auditing
  2. B) sustainability
  3. C) blended value
  4. D) social entrepreneurship
  5. E) ethical corporate policy

Answer:  C

Explanation:  C) Blended value measures the outcome of all business investments in terms of economic and social impact.

Page Ref: 46

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

69) A U.S. company produces sports drinks with an image of a soccer ball under the bottle cap. For every cap returned to the company, it donates a specified amount to nonprofit youth fitness programs that have partnered with the company. Which term BEST describes this activity?

  1. A) philanthropy
  2. B) corporate social responsibility
  3. C) cause-related marketing
  4. D) social entrepreneurship
  5. E) sustainable business

Answer:  C

Explanation:  C) Cause-related marketing is a commercial activity in which a business forms a partnership with a charity or nonprofit to support a worthy cause, product, or service.

Page Ref: 47

Learning Outcome:  Explain the role of marketing in organizations

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

 

 

70) Kiva operates a website that enables visitors to provide money to small business owners in developing countries. These microloans are used for buying equipment, enhancing facilities, and promoting other business development. Kiva retains a percentage of donations as revenue. The company is an example of which of the following?

  1. A) cause-related marketing
  2. B) social entrepreneurship
  3. C) corporate philanthropy
  4. D) blended value
  5. E) triple bottom line

Answer:  B

Explanation:  B) Kivas primary focus is on creating social value, not shareholder wealtha defining principle of social enterprise.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

71) What activity deploys free-market principles to solve social problems?

  1. A) corporate social responsibility
  2. B) cause marketing
  3. C) philanthropy
  4. D) social auditing
  5. E) social entrepreneurship

Answer:  E

Explanation:  E) Social entrepreneurs develop and deploy innovative business practices to create social value.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

72) Corporate policy, sustainability, community activities, and cause marketing are all components of which of the following?

  1. A) blended value
  2. B) integrity-based ethics codes
  3. C) social auditing
  4. D) economic responsibility
  5. E) social entrepreneurship

Answer:  C

Explanation:  C) A social audit is a systematic assessment of a companys performance in implementing socially responsible programs.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Synthesis

AACSB:  Ethical Understanding and Reasoning

 

73) The Book Nook is a store run by a nonprofit organization. It accepts donations of used books to sell. Disadvantaged teens run the store and learn firsthand about operating a business. Revenue from the store supports the organizations operations. What is this is an example of?

  1. A) social entrepreneurship
  2. B) sustainability
  3. C) corporate social responsibility
  4. D) cause-related marketing
  5. E) philanthropy

Answer:  A

Explanation:  A) The nonprofit is operating an innovative business model to provide social value through youth development.

Page Ref: 47

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

74) Which of the following is NOT included in a social audit of a company?

  1. A) community activities
  2. B) sustainability
  3. C) cause-related marketing
  4. D) quarterly earnings
  5. E) corporate policy

Answer:  D

Explanation:  D) A social audit only examines the performance of socially responsible programs; it does not look at economic performance.

Page Ref: 48

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

75) Marcia runs a foundation that is endowed by a large corporation. She reviews grant proposals from nonprofit organizations and distributes funds to them based on the corporations social priorities. What activity best describes Marcias work?

  1. A) sustainability
  2. B) cause marketing
  3. C) philanthropy
  4. D) corporate social responsibility
  5. E) social entrepreneurship

Answer:  C

Explanation:  C) Philanthropy is the practice of making charitable donations to benefit humankind.

Page Ref: 48

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

 

76) The Snack-O Company redesigned its packaging to use 15 percent less paper. It also switched to a paper supplier that plants two trees for every one cut down. The company has decreased its paper costs and its use of natural resources. This is an example of what practice?

  1. A) philanthropy
  2. B) cause marketing
  3. C) value blending
  4. D) sustainability
  5. E) social entrepreneurship

Answer:  D

Explanation:  D) Sustainability meets present economic needs without compromising the ability of future generations to meet their own needs.

Page Ref: 48

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Application

AACSB:  Ethical Understanding and Reasoning

 

77) Which of the following is likely the primary driver for a wealthy individual who practices large-scale philanthropy?

  1. A) ethics
  2. B) values
  3. C) laws
  4. D) social entrepreneurship
  5. E) policy

Answer:  B

Explanation:  B) Values are deeply held underlying beliefs and attitudes that determine peoples behavior.

Page Ref: 48

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Difficult

Objective:  2.3 What are corporate social responsibility, blended value, and social auditing?

Classification:  Synthesis

AACSB:  Ethical Understanding and Reasoning

 

78) All of the following are negative consequences suffered by a companys illegal behavior EXCEPT which?

  1. A) decreased stock values
  2. B) lower sales growth
  3. C) higher resource costs
  4. D) negative stock returns
  5. E) expensive lawsuits

Answer:  C

Explanation:  C) Legal action filed by victims of illegal behavior may impact profits, and social perceptions may lower sales and share values, but supplier prices should not be impacted by corporate activities; these are market-driven.

Page Ref: 49

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

79) What does employee fraud cost companies out of their earnings?

  1. A) 1 percent
  2. B) 3 percent
  3. C) 5 percent
  4. D) 8 percent
  5. E) 10 percent

Answer:  C

Explanation:  C) Employee fraud costs companies 5 cents of every dollar in revenue, clearly impacting profits.

Page Ref: 49

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Concept

AACSB:  Ethical Understanding and Reasoning

 

 

80) How can bad behavior by a company impact the first priority in Carrolls corporate social responsibility triangle?

  1. A) Shady accounting practices are unethical.
  2. B) Underpayment of wages is illegal.
  3. C) Employee fraud lowers profits.
  4. D) Spoiling the environment shows poor values.
  5. E) Ignoring the community is poor corporate citizenship.

Answer:  C

Explanation:  C) The first priority of Carrolls model is to earn profits. Most bad behaviors by a business organization can impact its profits.

Page Ref: 49

Learning Outcome:  Discuss the roles of ethics and corporate responsibility in business

Difficulty:  Moderate

Objective:  2.4 In what ways do customers, owners, employees, suppliers, and the community benefit from corporate social responsibility (CSR)?

Classification:  Synthesis

AACSB:  Ethical Understanding and Reasoning

81) Despite protests from shareholders, a large Southern manufacturing company hired Hannah for the new position of corporate social responsibility director. After three years on the job, what is the most likely impact of Hannahs work?

  1. A) Sales increased, but profitability and share value decreased.
  2. B) Sales stayed flat and employee satisfaction decreased.
  3. C) Profitability, share value, and employee satisfaction increased.
  4. D) Sales increased, but profits stayed flat.
  5. E) Profitability increased, but employee satisfaction decreased.

Answer:  C

Explanation:  C) A

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