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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 1

True/False

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A firm's net social contribution is a company report that measures the difference between its positive social contributions and its negative social impact.

A) True
B) False

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True

Question 2

Multiple Choice

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Investors, today are realizing financial benefit by:

A) investing in companies who only operate in stable environments.
B) investing in firms that have abundant resources for social initiatives.
C) investing in companies who are committed to a better environment.
D) investing in companies who are leaving a sizeable carbon footprint.

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

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Question 3

Multiple Choice

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A payoff for socially conscious behavior is:

Ethical behavior will result in which of the following?

Recent surveys indicate that students are willing to agree to lower salaries if they know their employer is participating in socially responsible activities.

According to the Legal Briefcase box, "Paying the Price", the Enron case demonstrates the need for more accounting transparency.

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. -If management adopts Bo's suggestion of reducing U-Scream Ice Cream's charitable donations until profits stabilize, the company will essentially reduce its .

When Bagel Works employs in-store recycling, composting, and uses nontoxic cleaners, Bagel Works is participating in:

Insider trading occurs when employees of publicly traded companies use private company information to profit in the stock market.

A(n) -based ethics code defines corporate values; creates a supportive environment, and, stresses shared accountability among employees.

All U.S. companies practice the same ethical standards when dealing with suppliers and contract manufacturers abroad.

Corporate covers issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution.

Business is under pressure from society to be more socially responsible. However, even the strongest advocates for corporate responsibility can't seem to agree:

In reality, ethical behavior depends on the situation. For example, in negotiating a contract with your employees, the way they win higher wages is by your losing the fight to hold down labor costs. You realize it is a win-lose relationship.

Ethical behavior focuses on treating others fairly.

Last year the Bank of Plenty, Inc. made an all-out-effort to go paperless. The bank's public relations arm promoted the strategy both internally and externally. Customers were strongly encouraged to utilize the bank's online banking for all their banking needs. Customers could sign up for local workshops where employees were dedicated to showing them how to navigate the bank's new website and find the information they required. The bank's initiative demonstrates:

Ethical behavior requires more than following the law.

Which of the following is a reason why a business should be managed ethically?

Many individuals today believe that ethical behavior is determined by what is best for them at the time. This is an example of:

The majority of CEOs believe that employee misconduct results from the failure of organizational leadership to establish ethical standards.