Chapter 5--Managing Ethics and Social Responsibility

Student: ___________________________________________________________________________

1. Ethics, found between the domains of law and free choice, is the code of moral principles that governs
any individual or groups. 
 
True    False
 
2. Free choice lies between the domains of codified law and ethics. 
 
True    False
 
3. If something is ethical, it must not be illegal. 
 
True    False
 
4. Although public confidence in business managers is at an all-time low, politics, sports, and non-profit
organizations have not been affected. 
 
True    False
 
5. Managers carry a tremendous responsibility for setting the ethical climate in an organization and can act
as role models for others. 
 
True    False
 
6. An ethical dilemma arises in a situation when each alternative choice or behavior is undesirable because
of potentially harmful ethical consequences. 
 
True    False
 
7. The moral agent is an individual who must make an ethical choice in an organization. 
 
True    False
 
8. The virtue ethics approach to ethical decision making sidesteps debates about what is right, good, or just
and bases decisions on prevailing standards of the profession and the larger society, taking the interests of
all stakeholders into account. 
 
True    False
 
9. Most ethical dilemmas in business involve a conflict between stakeholders and shareholders. 
 
True    False
 
10. The virtue ethics approach to ethical decision making says that moral behavior stems from personal
virtues. 
 
True    False
 

1
11. Utilitarian, individualism, moral-rights, and objective dualism are the four approaches that guide ethical
decision-making. 
 
True    False
 
12. The basis for the recent trend among companies to police employee personal habits such as alcohol and
tobacco consumption on the job is called the utilitarian ethic. 
 
True    False
 
13. Monitoring the Internet to maintain the company's ethical climate and workplace productivity could be
considered part of an individualistic approach. 
 
True    False
 
14. The ethical concept that acts are moral when they promote the individual's best long term interests, which
ultimately leads to the greater good, is known as the moral rights approach. 
 
True    False
 
15. The ethical concept that argues that moral behaviors produce the greatest good for the greatest number of
people is objective dualism. 
 
True    False
 
16. Individualism is popular in the highly organized society of today because it supports immediate self-
gain. 
 
True    False
 
17. The right of free consent, the right to privacy, and the right of freedom of conscience are rights that
should be considered in the moral rights approach. 
 
True    False
 
18. Compensatory justice argues that an employees compensation should be based on individual
performance. 
 
True    False
 
19. Procedural justice requires that rules be stated clearly, consistently and impartially enforced, and
administered fairly. 
 
True    False
 
20. Level 3 of the Personal Moral Development model is Conventional. 
 
True    False
 
21. The Preconventional level of Personal Moral Development lives up to expectations of others, upholds
laws, and fulfills duties and obligations of the social system. 
 
True    False
 
2
22. Individuals, at the preconventional level, are concerned with external rewards and punishments and obey
authority to avoid detrimental personal consequences. 
 
True    False
 
Individuals are concerned with external rewards and punishments at the principled level. 
 
True    False
 
An individual at the postconventional level lives up to expectations of others, fulfills duties and
obligations of social systems, and upholds law. 
 
True    False
 
The great majority of managers operate at level two, the conventional level. 
 
True    False
 
Principled level of moral development is also referred to as the postconventional level. 
 
True    False
 
The majority of managers operate at the preconventional level of personal moral development. 
 
True    False
 
Approximately 20% of American adults, according to your text, never reach the postconventional level of
moral development. 
 
True    False
 
Social responsibility is management's obligation to make choices and take actions that will contribute to
the welfare and interests of society as well as the organization. 
 
True    False
 
Social responsibility covers a narrow range of issues, many of which are unambiguous with respect to
right or wrong. 
 
True    False
 
Important stakeholders in corporations include the government and the community. 
 
True    False
 
A stakeholder is any group within or outside the organization that has a stake in the organization's
performance. 
 
True    False
 
All stakeholders of an organization are its stockholders but not all stockholders are its stakeholders. 
 
True    False
 
3
 Special interest groups include trade associations, political action committees and consumerists. 
 
True    False
 
Economic development that generates wealth and meets the needs of the current population while
preserving the environment for the needs of future generations refers to sustainability. 
 
True    False
 
Economic, legal, ethical, and discretionary responsibilities are the four areas of social responsibility
which can be used to evaluate corporate social performance. 
 
True    False
 
Economic responsibility, carried to the extreme, is called the profit-maximizing view. 
 
True    False
 
Economic responsibility defines what society deems as important with respect to appropriate corporate
behavior. 
 
True    False
 
Ethical responsibility includes behaviors that are not necessarily codified into law and may not serve the
corporation's direct economic interests. 
 
True    False
 
Ethical behavior occurs when decisions enable an individual or company to gain at the expense of
society. 
 
True    False
 
Unfortunately, discretionary responsibility is involuntary and is mandated by economics, law, or ethics. 
 
True    False
 
A formal statement of the organization's values regarding moral principles and governing its response to
social values is called a code of ethics. 
 
True    False
 
Principle-based statements define fundamental values and contain general language about company
responsibilities, quality of products, and treatment of employees. 
 
True    False
 
Policy-based statements generally outline the procedure to be used in specific ethical situations. 
 
True    False
 

4
 One of the newest positions in organizations is the chief operating officer, a response to widespread
financial wrongdoing in recent years. 
 
True    False
 
A chief ethics officer is a company executive who oversees all aspects of ethics and legal compliance. 
 
True    False
 
Ethics training programs are not an important supplement as long as a well-written code of ethics exists. 
 
True    False
 
The disclosure by an employee of illegal, immoral, or illegitimate practices by the organization is called
whistle-blowing. 
 
True    False
 
Managers are often concerned good citizenship will hurt performance. 
 
True    False
 
Managers who are essentially ethical individuals make up the first pillar of an ethical organization. 
 
True    False
 
Which of the following refers to the code of moral principles and values that govern behaviors with
respect to what is right and wrong? 
 
A.  Social responsibility
B.  Free domain
C.  Ethics
D.  Codified law
E.  Discretionary responsibility
 
Individualism is most closely related to: 
 
A social
.  responsibility.
B.  free choice.
C economic
.  responsibility.
D.  codified law.
E.  togetherness.
 
An organization's decision to produce a new product is in the: 
 
A.  domain of codified law.
B.  domain of free choice.
C.  domain of ethics.
D.  domain of compensatory
justice.
E.  domain of social responsibility.
5
 
A new drug has not been approved by the FDA to sell in the U.S. because further testing is needed. The
company has a chance to sell its product in another country immediately to start recovering the costs of R
& D and production three years ahead of time. This example places the decision in which of the
categories from the text? 
 
A.  The ethical domain
B. The domain of free
choice
C.  The legal domain
D. The obstructive
category
E.  The protective domain
 
The assumption that "If it's not illegal, it must be ethical," ignores which of the following? 
 
A.  Domain of codified
law
B.  Domain of ethics
C.  Domain of free choice
D. Discretionary
responsibility
E.  Domain of symbolism
 
The decision by ABC International to downsize and reduce its labor force is in the: 
 
A domain of
.  codified law.
B. domain of free
choice.
C. domain of
ethics.
D. social
responsibility.
E.  none of these.
 
A recent poll found that _____ percent of people surveyed say corporate America’s moral compass is
pointing in the wrong direction. 
 
A.  10
B.  29
C.  52
D.  76
E.  98
 

6
 A situation that arises when all alternative choices or behaviors have been deemed undesirable because of
the potentially negative ethical consequences, making it difficult to distinguish right from wrong, is
considered: 
 
A.  a moral agent.
B.  a social responsibility.
C.  an ethical dilemma.
D.  an ethical standard.
E.  discretionary responsibility.
 
Which of the following is a(n) is the individual who must make an ethical choice in an organization? 
 
A.  The symbolic leader
B.  An obstructive manager
C.  The defensive individual
D.  The moral agent
E.  An authoritarian manager
 
Anne Chinoda, top executive at Florida Blood Centers, is under pressure to resign because she took a
$71,000 pay increase just months before she laid off 42 employees. Chinoda’s decision lies in the: 
 
A domain of
.  codified law.
B. domain of free
choice.
C. domain of
ethics.
Ddomain of
.  social
responsibility.
E.  none of these.
 
Sharon is a manager at Softest Tissue Corporation. She is faced with an interesting problem. One of her
employees has been cheating the company out of expense money. Sharon must decide whether or not to
fire this employee. In this role, Sharon is acting as: 
 
A.  a moral agent.
B.  an ethical theorist.
C.  a symbolic leader.
D.  an authoritarian leader.
E.  an obstructive manager.
 

7
 A normative approach to ethical decision making: 
 
Areduces ethical
. dilemmas to
easy-to-
understand
formulas.
Buses various
. approaches to
describe guiding
values for
decisions.
Cstates that
. everyone must
use their
employer's
value system at
work.
Ddictates only
. one way to
choose to
resolve
dilemmas.
E.  none of these.
 
Which approach is the ethical concept that moral behaviors produce the greatest good for the greatest
number? 
 
A.  Defensive
B.  Justice
C.  Utilitarian
D. Individualis
m
E.  Moral-rights
 
Robbie's Robots decided to continue operations at one plant while shutting down another. The decision
was justified on the basis of what was best for the total corporation. This is an example of the: 
 
A. utilitarian
approach.
B. individualism
approach.
C. moral-justice
approach.
D.  justice approach.
E.  illegal approach.
 

8
 Caleb is a manager at Computer-Care Company. He is expected to consider the effort of each decision
alternative on all parties and select the one that optimizes the satisfaction for the greatest number of
people. This is an example of the: 
 
A.  utilitarian approach.
B.  individualism approach.
C.  moral-justice approach.
D.  justice approach.
E.  soft-line managerial approach.
 
Which ethical approach are companies citing to justify their policing of employee's personal habits on
and off the job, such as alcohol and tobacco consumption? 
 
A.  Justice approach
B.  Utilitarian approach
C.  Individualism approach
D.  Moral-justice approach
E.  Discretionary responsibility
 
The decision by Paula Reid, the manager who statted the U.S. Secret Service prostitution scandal in
Catagena, was based largely on  the _____ approach 
 
A.  justice
B. moral-
rights
C. obstructi
ve
D. individua
lism
E.  practical
 
When everyone is pursuing self-direction, the greater good is ultimately served because people learn to
accommodate each other in their own long-term interest is an example of the_____. 
 
A.  utilitarian approach
B. individualism
approach
C. moral-justice
approach
D.  justice approach
E.  social responsibility
 
Which of the following is NOT a normative ethics approach? 
 
A.  Utilitarian approach
B.  Individualism approach
C.  Social responsibility approach
D.  Moral-rights approach
E.  All of these are normative approaches as described in the text.
 

9
 The golden rule "do unto others as they would do unto you" is: 
 
A.  an example of the utilitarian approach to ethical
behavior.
B. representative of the moral-justice approach to moral
decision making.
C. an example of the values that guide the individualism
approach to ethical behavior.
D.  silly and outdated.
E.  an example of the justice approach to ethical behavior.
 
Human beings have fundamental rights and liberties that cannot be taken away by another individual's
decision. This ethical decision making approach is known as the: 
 
A. utilitarian
approach.
B individualism
.  approach.
C. moral-rights
approach.
D. dualism
approach.
E.  none of these.
 
The _____ refers to the ethical concept that moral decisions are those that best maintain the rights of
those people affected by them. 
 
A.  individualism approach
B.  justice approach
C.  utilitarian approach
D.  moral-rights approach
E.  discretionary responsibility approach
 
Which of the following is NOT one of the moral rights that could be considered during decision-
making? 
 
A.  The right to free consent.
B.  The right to invade
privacy.
C.  The right to free speech.
D. The right of freedom of
conscience.
E.  The right to life and safety.
 
_____ to ethical decision-making is consistent with due process, free consent, privacy, freedom of
conscience and free speech. 
 
A.  Moral-rights approach
B.  Individualism approach
C.  Utilitarian approach
D.  Justice approach
E.  Dual-economic approach
10
 
Sexual harassment is unethical because it violates an important part of which approach to ethical
behavior? 
 
A.  The utilitarian approach
B. The individualism
approach
C.  The justice approach
D. The moral-rights
approach
E.  The defensive approach
 
The ethical decision approach that requires persons to be guided by standards of equity, fairness and
impartiality is the: 
 
A.  moral-rights approach.
B.  individualism approach.
C.  utilitarian approach.
D.  justice approach.
E.  discretionary responsibility.
 
The moral rights approach that deals with performing experimental treatment on unconscience trauma
patient is the: 
 
A.  right of free
consent.
B.  right to privacy.
C. right of freedom of
conscience.
D.  right of free speech.
E.  right of due process.
 
Which of the following is not a concern to managers under the justice approach? 
 
A Compensato
.  ry justice
B. Distributive
justice
C. Procedural
justice
D Obstructive
.  justice
E.  All of these
 

11
 _____ refers to the concept that different treatment of people should not be based on arbitrary
characteristics. 
 
A. Procedural
justice
B. Compensatory
justice
C. Distributive
justice
D Organizational
.  justice
E.  Moral-justice
 
Disk Replacement Services has just completed a procedure manual to handle employee grievances. One
of the main criteria is to make it clear to employees that rules will be administered fairly and consistently.
Disk Replacement operates on: 
 
A. the procedural justice
approach.
B.  the utilitarian approach.
C.  the individual approach.
D.  the defensive approach.
E.  the free-choice approach.
 

12
 Which of these refers to procedural justice? 
 
AThe concept that
. different
treatment of
people should
not be based on
arbitrary
characteristics.
BThe concept that
. rules should be
clearly stated and
consistently and
impartially
enforced.
CThe concept that
.individuals
 should be
compensated for
the cost of their
injuries by the
party
responsible.
DThe concept that
. people should be
treated
differently.
E.  None of these.
 
The concept that the party responsible should compensate individuals for the cost of their injuries is
referred to as: 
 
A.  distributive justice.
B.  injury justice.
C.  procedural justice.
D.  organizational justice.
E.  compensatory justice.
 
The thinking underlying the domain of ____ is the closest to the justice approach. 
 
Asocial
.  respons
ibility
B free
.  choice
C.  law
Ddiscreti
. onary
responsi
bility
E.  ethics
 
13
 Most of the laws guiding human resource management are based on the: 
 
A.  utilitarian approach.
B.  moral-rights approach.
C.  individualism
approach.
D.  justice approach.
E.  collectivism approach.
 
____ is NOT included in the model of personal moral development described in your text. 
 
A.  Preconventional level
B.  Conventional level
C.  Principled level
D.  Postconventional level
E.  All of these are included in the model
 
In what stage of personal moral development is a person mostly concerned with external rewards and
personal consequences of an action? 
 
A. Preconvention
al
B.  Conventional
C.  Principled
D.  Discretionary
E.  None of these
 
The _____ leadership style matches with the preconventional level of personal moral development. 
 
A.  autocratic
B.  team
oriented
C. servant
leadership
D guiding/enco
.  uraging
E.  transforming
 
_____ matches with the preconventional level of personal moral development. 
 
A Work group
.  collaboration
B. Task
accomplishme
nt
C Empowered
.  employees
D. Full
participation
E.  Transforming
 

14
 Which of these employee behaviors matches with the conventional level of personal moral
development? 
 
A. Task
accomplishment
B. Empowered
employees
C. Work group
collaboration
D.  Full participation
E.  Act in own interest
 
Which of the following stages is the stage of personal moral development in which an individual
develops an internal set of standards and values? 
 
APreconv
.  entional
B Conven
.  tional
C. Princip
led
D Discreti
.  onary
E.  Social
 
People making decisions based on an internal set of beliefs that has more meaning to them than the
expectations of others: 
 
Aare in the
. preconventional
level of moral
development.
Bare in the
. conventional
level of moral
development.
Care in the
. principled level
of moral
development.
Ddo not care
.  what people
think of them.
E.  none of these.
 

15
 Which of these employee behaviors matches with the postconventional level of personal moral
development? 
 
AEmpowered
. employees,
full
participation
B Task
.  accomplish
ment
C Act in own
.  interest
DWork group
.  collaboratio
n
E.  Autocratic
 
Regarding the levels of personal moral development, the majority of managers operate at the _____
level. 
 
A. preconvention
al
B.  autocratic
C. postconventio
nal
D.  conventional
E.  transformative
 
The great majority of managers operate at the: 
 
A. preconventional
level.
B.  principled level.
C. conventional
level.
D. postconventional
level.
E.  autocratic level.
 
When the USS Indianapolis sank after being torpedoed, one Navy pilot disobeyed orders and risked is
life to save men who were being picked off by land sharks. The Navy pilot was operating from the _____
level of moral development. 
 
A. preconventio
nal
B.  conventional
C. postconventi
onal
D.  lowest
E.  conservative
 

16
 _____ matches with the postconventional level of personal moral development. 
 
A.  Team oriented
B.  Autocratic
C. Guiding/encouragi
ng
D.  Coercive
E.  Servant leadership
 
Only about _____ percent of American adults reach the level-three stage of moral development. 
 
A.  two
B.  four
C.  eleven
D.  fifteen
E.  twenty
 
Which of these best illustrates the preconventional stage of moral development? 
 
AEverybody
. else is doing
it, so it must
be okay.
BWhat would
. my boss think
if I did this?
CI know this is
. not right, and I
will not do it,
even if
everyone else
is.
DWhat am I
. going to get
from making
this decision?
E.  All of these.
 

17
 The conventional stage of moral development is best described by which of the following statements? 
 
AI won't do that
. because the
boss will be
upset with me.
BEverybody
. else is doing
it, so it must
be okay.
CI know this is
. not right, and I
will not do it,
even if
everyone else
is.
DWhat am I
. going to get
from making
this decision?
E.  All of these.
 
Most people have learned to conform to expectations of good behavior expected by colleagues, family,
friends, and society. They are in what stage of moral development? 
 
A. Preconventi
onal
B. Convention
al
C. Discretiona
ry
D.  Principled
E.  Traditional
 
Any group within or outside the organization that has a stake in the organization's performance is called: 
 
A.  a supplier.
B. an international
customer.
C.  a stakeholder.
D.  OPEC.
E.  a trade association.
 
Primary stakeholders of an organization include: 
 
A.  employees.
B.  customers.
Cinvestors and
.  shareholders.
D.  suppliers.
E.  all of these.
 
18
 All of the following are examples of special interest groups except: 
 
A professional
.  associations.
B. trade
associations.
C political action
.  committees.
D.  courts.
E.  consumerists.
 
What type of a stakeholder would a nature conservation group be for a paper manufacturing company? 
 
A.  Supplier
B.  Competitor
C.  Employee
D Special
.  interest group
E.  None of these
 
With a philosophy of _____, managers weave environmental and social concerns into every strategic
decision, revise policies and procedures to support these efforts and goals. 
 
A.  sustainability
B.  conservation
C.  ethics
D.  preservation
E.  human concerns
 
_____ is economic development that generates wealth and meets the needs of their current generation
while focusing on future generations. 
 
A.  Ethical
management
B.  Activist strategy
C.  Sustainability
D.  Market strategy
E.  Future management
 
Which of the following concepts argues that organizations can find innovative ways to create wealth at
the same time they are preserving natural resources? 
 
A.  Preservation
B.  Conservation
C. Environmenta
lism
D.  Protectionism
E.  Sustainability
 

19
 The profit-maximizing view of economic responsibility is advocated by _____. 
 
A Milton
.  Friedman
B. Arthur
Anderson
C. Donald
Trump
D. Warren
Buffett
E.  Steve Jobs
 
According to the book's model for judging corporate social performance, social responsibility is divided
into what into four sections? 
 
AEthical, legal,
.  technical, and
rational
BMandatory,
. technical,
discretionary,
and economic
CLegal,
.  mandatory,
economic, and
ethical
DDiscretionary,
.  legal,
economic, and
ethical
E.  None of these
 
With respect to appropriate corporate behavior, what society deems _____ as important. 
 
A.  ethical
responsibility
B. discretionary
responsibility
C. economic
responsibility
D.  legal responsibility
E.  moral responsibility
 
_____ is considered a decision that enables an individual or company to benefit at society's expense. 
 
A.  A legal behavior
B.  An unethical behavior
C. An economic
responsibility
D. A discretionary
responsibility
E.  A responsible behavior
20
 
Which of the following responsibilities is purely voluntary and is guided by a company's desire to make
social contributions not mandated by economics, law, or ethics? 
 
A.  Ethical
B.  Economic
C.  Legal
D. Discretionar
y
E.  Stakeholder
 
_____ is the responsibility that goes beyond societal expectations to contribute to the community
welfare. 
 
A.  Ethical responsibility
B. Discretionary
responsibility
C.  Economic responsibility
D.  Legal responsibility
E.  Technical responsibility
 
_____ means that managers are honest and trustworthy, fair in their dealings with employees and
customers, and behave ethically in both their personal and professional lives. 
 
A.  Ethical leadership
B.  Followership
C.  Corporate espionage
D.  Command-and-control approach
E.  Concern for production leadership
 
A code of _____ is a formal statement of the company's values concerning ethics and social issues. 
 
A.  integrit
y
B.  trust
C. citizens
hip
D.  ethics
E.  honesty
 
Statements that define fundamental values and reference organizational responsibilities, products and
employees are often called _____. 
 
A.  principle-based
B.  policy-based
C.  ethically-based
D.  codified
E.  codes of organizational integrity
 

21
 _____ includes behavior that is not always written down and may actually not serve an organization's
bottom-line. 
 
A. Legal
responsibility
B Economic
.  responsibility
C. Ethical
responsibility
D Discretionary
.  responsibility
E.  None of these
 
Of the following, which may whistle-blowers suffer? 
 
A.  Job loss
B. Ostracism by
coworkers
C Transfer to
.  lower-level
position
D Hostile work
.  environment
E.  All of the above
 
MANAGER'S SHOPTALK in Chapter 5 addresses how today’s companies are trying to teach
sustainablility to new managers by placing them with which of the following types of organizations? 
 
A.  small, entrepreneurial start-ups
B.  Nonprofits in developing countires
C.  Government agencies in developed countries
D.  Tech firms that are developing cutting edge products
E.  Logistics companies that supply products worldwide
 
An example of an ethical structure is: 
 
A. chief ethics
officer.
B a formal statement
.  of company
values.
C. an equal
opportunity
policy.
D.  whistle-blowing.
E.  corporate speech.
 

22
 When an official is given the responsibility of overseeing all aspects of ethics and legal compliance. S/he
is referred to as: 
 
A. a whistle-
blower.
B. a chief ethics
officer.
Cvice-president of
. human resource
management.
D.  a yes-man.
E.  a political play.
 
Which of these is the disclosure by an employee of an illegal activity? 
 
A.  Tattling
B. Whistle-
blowing
COrganizatio
.  nal
communica
tion
DThe filing
. of a
disclosure
statement
E.  Snooping
 
_____ is not part of the structures and systems pillar of an ethical organization. 
 
A.  Corporate culture
B.  Code of ethics
C.  Ethics committee
D.  Whistle-blowing
mechanisms
E.  Rewarding ethical behavior
 
Examples of unethical behavior toward _____ include a hostile work environment and violations of
health and safety rules. 
 
A.  customers
B.  financiers
C.  society
D.  suppliers
E.  employees
 

23
 The relationship between social responsibility and financial performance has been shown to be _____. 
 
A.  non-existent
B.  positive
C.  negative
D.  not important
E.  a reflection of top leadership
 
Which of these is true about the policy a bank adopts toward its investing of depositor's money? 
 
AIt is an
. expression of
its philosophy
of social
responsibility.
BIt is important
.  only to the
community.
CIt has no
.  ethical
implications.
DIt would
. represent its
personal state
of moral
development.
E.  All of these.
 
The obligation of organization management to make decisions and take actions that will enhance the
welfare and interests of society as well as the organization is referred to as: 
 
Aorganizational
.  responsibility.
B. social
responsibility.
C discretionary
.  responsibility.
D economic
.  responsibility.
E.  none of these.
 

24
 Scenario - Larry Campbell

The pressure was on again. Larry Campbell, the Vice President at ToolTime Hardware, Inc., was
receiving requests from men and women inside the firm and outside the firm, asking him to review the
company's promotion policies. Of the 52 middle and high level executives, only three were women. The
pressure was to review the policies that had led to this perceived imbalance and, if appropriate, take the
steps necessary for correction.

The decision to recruit, hire, train and promote both men and women equally is based on the ethical
approach of _____.
a. utilitarian approach.
b. individualism approach.
c. moral rights approach.
d. all of these provide the basis.
e. none of these.

 
 
Scenario - Larry Campbell

The pressure was on again. Larry Campbell, the Vice President at ToolTime Hardware, Inc., was
receiving requests from men and women inside the firm and outside the firm, asking him to review the
company's promotion policies. Of the 52 middle and high level executives, only three were women. The
pressure was to review the policies that had led to this perceived imbalance and, if appropriate, take the
steps necessary for correction.

Using the justice approach for ethical decision-making, the logic of promoting qualified men and women
would be supported by:
a. equal rights justice.
b. distributive justice.
c. procedural justice.
d. compensatory justice.
e. all of these.

25
 Scenario - Larry Campbell

The pressure was on again. Larry Campbell, the Vice President at ToolTime Hardware, Inc., was
receiving requests from men and women inside the firm and outside the firm, asking him to review the
company's promotion policies. Of the 52 middle and high level executives, only three were women. The
pressure was to review the policies that had led to this perceived imbalance and, if appropriate, take the
steps necessary for correction.

A(n) _______ would outline the procedures Larry should use in this and other ethical situations.
a. principle-based statement
b. code of ethics
c. corporate credo
d. policy-based statement
e. ethics committee

 
 
_____ is the code of moral principles and values that govern the behaviors of a person or group with
respect to what is right or wrong. 
 
________________________________________
 
When values and standards are written into the legal system, it is referred to as _____. 
 
________________________________________
 
A(n) _____ arises in a situation when each alternative choice or behavior is undesirable because of
potentially harmful ethical consequences. 
 
________________________________________
 
The _____ is an individual responsible for making an ethical choice. 
 
________________________________________
 
The ethical concept that moral behaviors produce the greatest good for the greatest number is referred to
as _____ approach. 
 
________________________________________
 
The _____ approach contends that acts are moral when they promote the individual's best long-term
interests. 
 
________________________________________
 

26
 The _____ approach assets that human beings have fundamental rights and liberties that cannot be taken
away by an individual's decision. 
 
________________________________________
 
The _____ approach holds that moral decisions must be based on standards of equity, fairness, and
impartiality. 
 
________________________________________
 
_____ justice requires that different treatment of people not be based on arbitrary characteristics. 
 
________________________________________
 
_____ justice requires that rules should be clearly stated and consistently and impartially enforced. 
 
________________________________________
 
_____ justice argues that individuals should be compensated for the cost of their injuries by the party
responsible. 
 
________________________________________
 
The _____ approach to ethical decision making says that moral behavior stems from personal virtues. 
 
________________________________________
 
The _____ approach to ethical decision making sidesteps debates about what is right, good, or just and
bases decisions on prevailing standards of the profession and the larger society, taking the interests of all
stakeholders into account. 
 
________________________________________
 
A decision to monitor employees’ nonwork activities violates the right to _____. 
 
________________________________________
 
At the _____ level of personal moral development, individuals are most concerned with external rewards
and punishments. 
 
________________________________________
 
People learn to conform to the expectations of good behavior that are set by peers and society at the
_____ level. 
 
________________________________________
 
Individuals at the _____ level are guided by an internal set of values and standards and will even disobey
rules or laws that violate these principles. 
 
________________________________________
 

27
 Most managers operate at the _____ level. 
 
________________________________________
 
Management's obligation to make choices that will contribute to the well being of both the organization
and society is known as _____. 
 
________________________________________
 
A(n) _____ is any group within or outside the organization that has a stake in the organization's
performance. 
 
________________________________________
 
Organizations that are _____ responsible consider the effects of their actions on all stakeholder groups
and may invest in a number of philanthropic causes that benefit stakeholders. 
 
________________________________________
 
_____ refers to interacting with the community in which a company does business in a way that makes
money for the company but also improves the long-term well-being of the community. 
 
________________________________________
 
The _____ approach to economic responsibility means that economic gain is the only social
responsibility and can lead companies into trouble. 
 
________________________________________
 
When a company does just what is necessary to satisfy legal requirements, it falls under the _____
approach in shades of green. 
 
________________________________________
 
_____ responsibility is purely voluntary and guided by a company's desire to make social contributions
not mandated by economics, law, or ethics. 
 
________________________________________
 
A(n) _____ is a formal statement of the company's values concerning ethics and social issues; it
communicates to employees what the company stands for. 
 
________________________________________
 
_____ generally outline the procedures to be used in specific ethical situations, such as marketing
practice, conflicts of interest, and observance of laws. 
 
________________________________________
 
A group of executives assigned to oversee the organization's ethics by ruling on questionable issues and
disciplining violators is referred to as a(n) _____. 
 
________________________________________
 
28
 _____ programs help employees deal with ethical questions and translate the values stated in a code of
ethics into everyday behavior. 
 
________________________________________
 
Employee disclosure of illegal organization activities is known as _____.. 
 
________________________________________
 
The relationship between social responsibility and financial performance has been shown to be _____. 
 
________________________________________
 
List three of the six moral rights that should be considered during decision making. 
 

 
 
List the four criteria for ethical decision-making described in the book. 
 

 
 
List three examples of primary stakeholders. 
 

29
 List the four responsibilities of corporate social performance. 
 

 
 
Define ethics and explain how the domain of ethics relates to law and free choice. 
 

 
 
List the four approaches that are used to describe values for guiding ethical decision making. Briefly
describe each. 
 

 
 
Briefly explain the justice approach to ethics and then explain the three types of justice. 
 

30
 List and define the stages of moral development. 
 

 
 
What is social responsibility? Why is it considered a difficult concept to grasp? 
 

 
 
Explain the concept of a stakeholder and list five common stakeholders. 
 

 
 
List and define the criteria of corporate social responsibility. 
 

31
 Explain the differences between principle-based statements and policy-based statement in an
organization's code of ethics. 
 

32
 Chapter 5--Managing Ethics and Social Responsibility Key
 
1. TRUE
 
2. FALSE
 
3. FALSE
 
4. FALSE
 
5. TRUE
 
6. TRUE
 
7. TRUE
 
8. FALSE
 
9. FALSE
 
10. TRUE
 
11. FALSE
 
12. TRUE
 
13. FALSE
 
14. FALSE
 
15. FALSE
 
16. FALSE
 
17. TRUE
 
18. FALSE
 
19. TRUE
 
20. FALSE
 
21. FALSE
 
22. TRUE
 
 FALSE
 
 FALSE
 
 TRUE
 
 TRUE
 
 FALSE
 
 TRUE
 
 TRUE
 
 FALSE
 

1
 TRUE
 
 TRUE
 
 FALSE
 
 TRUE
 
 TRUE
 
 TRUE
 
 TRUE
 
 FALSE
 
 TRUE
 
 FALSE
 
 FALSE
 
 TRUE
 
 TRUE
 
 TRUE
 
 FALSE
 
 TRUE
 
 FALSE
 
 TRUE
 
 TRUE
 
 TRUE
 
 C
 
 B
 
 B
 
 A
 
 B
 
 B
 
 D
 
 C
 
 D
 
 C
 
 A
 
 B
 
 C
 
 A
 
2
 A
 
 B
 
 E
 
 B
 
 C
 
 C
 
 C
 
 D
 
 B
 
 A
 
 D
 
 D
 
 A
 
 D
 
 C
 
 A
 
 B
 
 E
 
 C
 
 D
 
 E
 
 A
 
 A
 
 B
 
 C
 
 C
 
 C
 
 A
 
 D
 
 C
 
 C
 
 E
 
 E
 
 D
 
3
 B
 
 B
 
 C
 
 E
 
 D
 
 D
 
 A
 
 C
 
 E
 
 A
 
 D
 
 D
 
 B
 
 D
 
 B
 
 A
 
 D
 
 A
 
 C
 
 E
 
 B
 
 A
 
 B
 
 B
 
 E
 
 E
 
 B
 
 A
 
 B
 
 d
 
 b
 
 d
 
 Ethics
 
 codified law
 
4
 ethical dilemma
 
 moral agent
 
 utilitarian
 
 individualism
 
 moral-rights  or  moral rights
 
 justice
 
 Distributive
 
 Procedural
 
 Compensatory
 
 virtue ethics
 
 practical
 
 privacy
 
 preconventional
 
 conventional
 
 postconventional principled
 
 conventional  or  second
 
 social responsibility
 
 stakeholder
 
 socially
 
 social sustainability
 
 profit-maximizing
 
 legal
 
 Discretionary
 
 code of ethics
 
 Policy-based statements
 
 ethics committee
 
 Ethics training
 
 whistle-blowing
 
 positive
 
 Students can list any three of the following: the right of free consent, the right to privacy, the right of freedom of conscience, the right of free speech,
the right to due process, and the right to life and safety.
 
 Utilitarianism, individualism, moral-rights, and justice.
 
 Investors, shareholders, employees, customers, and suppliers are all examples of primary stakeholders.
 
 economic responsibility, legal responsibility, ethical responsibility, and discretionary responsibility
 

5
 Ethics is the code of moral principles and values that govern the behaviors of a person or a group with respect to what is right or wrong. In Codified
Law, the values and standards are written into the legal system and enforceable in the courts. In free choice, the law has no say and the individual or
group has complete freedom. The domain of ethics is found between Codified Law and free choice. While written laws do not bind ethics, still there
are standards of conduct based upon shared principles and values.
 
 Utilitarian approach is the ethical concept that moral behaviors produce the greatest good for the greatest number.

Individualism approach is the ethical concept that acts are moral when they promote the individual's best long-term interests. This will eventually
lead to the greatest good.

Moral-rights approach is the ethical concept that moral decisions are those that best maintain the rights of those people affected by them.

Justice approach is the ethical concept that moral decisions must be based on standards of equity, fairness, and impartiality.
 
 The justice approach is the ethical concept that moral decisions must be based on standards of equity, fairness, and impartiality. Distributive justice
requires that different treatment of people be based only on substantive differences and not be based on arbitrary characteristics. Procedural justice
requires that all rules be administered fairly. Rules should be clearly stated and consistently enforced. Compensatory justice requires that individuals
should be compensated for the cost of their injuries by the party responsible and that individuals not be held responsible for matters over which they
have no control.
 
 According to the model in the book, there are three stages of moral development. During the preconventional stage (level 1), individuals are mostly
concerned with external rewards and punishments. They obey authority in order to avoid punishment. Individuals conforming to the expectations of
others characterize the second level, the conventional stage. Fulfilling social and interpersonal obligations is important. At the
postconventional/principled stage (level 3), an individual's behavior is directed by an internal set of values and beliefs. These values are more
important than the expectations of others.
 
 Social responsibility is management's obligation to make choices and take actions that will contribute to the welfare and interests of society as well
as the organization.

It can be a difficult concept to grasp because different people have different beliefs as to what will improve society's well being and it covers a range
of ambiguous issues with respect to right or wrong.
 
 A stakeholder is any individual or group of people, inside the organization or outside the organization, that has a stake or direct interest in that
organization's performance. Stakeholders inside the organization include the employees, the managers, and the stockholders. Stakeholders outside the
organization include customers, suppliers, regulatory agencies, and creditors.
 
 There are four criteria of corporate social responsibility. The first criterion of social responsibility is economic responsibility. The organization's
basic responsibilities are to produce the goods and provide the services that society wants, while at the same time maximizing profits and wealth for
owners and stockholders. The second criterion is legal responsibilities. Through its laws, each society has defined what it considers to be appropriate
corporate behavior. According to this criterion, businesses are expected to fulfill their economic goals within the law. Ethical responsibilities make up
the third criterion. These include behaviors not necessarily codified into law, nor do they necessarily serve the organization's direct economic
interests. Discretionary responsibilities, the fourth criterion, are entirely voluntary and are guided by the organization's desire to make a social
contribution not mandated by economics, law, and/or ethics.
 
 Principle-based statement are designed to affect corporate culture; they define fundamental values and contain general language about company
responsibilities, quality of products, and treatment of employees. General statements of principle are often called corporate credos. Policy-based
statements generally outline the procedures to be used in specific ethical situations. These situations include marketing practices, conflicts of interest,
observance of laws, proprietary information, political gifts, and equal opportunities.