Essentials of Strategic Management Ch9

Ethics, Corporate Social Responsibility, Environmental
Sustainability, and Strategy CH9
1 Business ethics encompasses _______________
A) the application of ethical principles and
standards to business activities, behavior, and decisions.
B) a business commitment to safe products,
high worker compensation, and protection of the environment.
C) conducting oneself appropriately in a
business setting.
D) developing a special set of ethical
standards for businesses to observe in conducting their affairs.
E) picking and choosing among various ethical
standards of society to arrive at a set of ethical standards that apply
directly to operating a business.
2
Ethical principles in business _______________
A) concern the behavioral guidelines a
company’s top management and board of directors set for company personnel
regarding “what is right” and “what is wrong” in conducting
the company’s business.
B)deal chiefly with the actions and behaviors
required to operate companies in a socially responsible manner.
C)are arrived at by picking and choosing among
the consensus ethical standards of society to come up with a set of ethica
standards that apply directly to operating a business.
D)are not materially different from ethical
principles in general and have to be judged in the context of society’s
standards of right and wrong, not by a special set of rules that businesspeople
decide to apply to their own conduct.
E) involve behavioral guidelines for balancing
the interests of nonowner stakeholders (customers, employees, suppliers, and
the communities in which the company has operations) against the interests of
company shareholders.
3 Unethical managerial behavior
tends to be driven by such factors as _______________
A) overzealous or obsessive pursuit of
personal gain, wealth, and other self interests; a company culture that puts
the profitability and good business performance ahead of ethical behavior; and
heavy pressures on company managers to meet or beat performance targets.
B) the lack of a company code of ethics.
C) a lack of training in what is ethical and
what is not.
D) onfusing differences between what is
ethical behavior in one’s personal life and what is ethically permissible in
business.
E) All of the above factors.
4 A company’s strategy needs to be ethical
because _______________
A) of the potential for embarrassment to top
management if the company’s unethical behavior is publicly exposed.
B) unethical strategies are inconsistent with
or else weaken the corporate culture.
C) ethics watchdogs are sure to blow the
whistle on the company’s unethical behavior.
D) of the risks of prosecution by governmental
authorities if an unethical strategy is disclosed.
E) a strategy that is unethical not only
damages the company’s reputation but it also can have costly consequences.
5 Which of the following are consequences of
pursuing a strategy that has unethical or shady components?
A) Government fines and penalties.
B) Legal and investigative costs incurred by
the company.
C) Customer defections.
D) Adverse effects on employee productivity.
E) All of these.
6 Notions of right and wrong, fair and unfair,
moral and immoral, ethical and unethical _______________
A) ultimately depend on a person’s own values
and beliefs.
B) ultimately depend on the
circumstances—nothing is really black or white when it comes to ethical
standards.
C) are governed mainly by religious views held
in different geographic regions of the world.
D) are present in all societies,
organizations, and individuals.
E) vary enormously from country to country
across the world.
7 According to the school of ethical
universalism, _______________
A) what behaviors are “ethically
right” and “ethically wrong” vary across religions, but the
boundaries of what is ethical or not are universal within religions.
B) concepts of right and wrong universally
apply to all business situations within a given country but can vary across
countries or cultures.
C) ethical guidelines exist only when there is
universal agreement as to what behaviors are “ethically right” and
“ethically wrong”; anything not universally viewed as unethical is
thus within the bounds of what is ethically permissible.
D) all societies and countries have some
definition of what is ethically permissible (in this sense ethics are
universal); however, the definitions of what is ethically permissible vary
according to the prevailing religious doctrines in each country.
E) many of the same standards of what’s
ethical and what’s unethical resonate with peoples of most societies regardless
of local traditions and cultural norms—hence, to the extent there is common
moral agreement about right and wrong actions, common ethical standards can be
used to judge the conduct of personnel at companies operating in a variety of
country markets and cultural circumstances.
8 The thesis that because different societies
and cultures have divergent values and standards of what is “ethically
right” and “ethically wrong” it is appropriate to judge behavior
as ethical/unethical in the light of local customs and social mores
_______________
A) is the basis for the theory of ethical
variation.
B) defines what is meant by “integrated
social contracts theory.“
C) is a view that characterizes the school of
ethical relativism.
D) accounts for why there is no such thing as
ethical standards for business enterprises.
E) is the reason codes of ethical and social
morality have been established country by country.
9
If one adopts the thinking of the school of ethical relativism,
then _______________
A) there are multiple sets of ethical
standards because what is ethical or unethical depends on local customs and
social mores and can vary from one culture or nation to another.
B) there is a “one-size-fits-all” set
of authentic ethical standards.
C) the preferred set of ethical standards is
the one that society at large has put in place in the form of laws and
regulations.
D) the prevailing ethical standards are the
product of a system of “integrated social contracts.“
E) no ethical standards are ever truly
“authentic”—they exist only to the extent that there is a temporary
shared conviction among company managers and company personnel that a
particular behavior is either ethically permissible or ethically impermissible.
10 Companies that adopt the principle of ethical
relativism in providing ethical guidance to company personnel _______________
A) are able to comply with the varying ethical
standards of the world’s different cultures.
B) have no fair way to judge the ethical ness
of the conduct of company personnel.
C) quickly find themselves on a slippery slope
with no ethical standards or principles of their own.
D) have a uniform code of ethical standards
that is applied globally.
E) end up allowing each company employee to
determine what set of ethical standards to observe.
11 According to integrated social contracts
theory, _______________
A) the views and principles of the school of
ethical universalism are definitely wrong; the
view is that ethics is a matter of personal responsibility not a matter
of management concern.
B) the ethical standards a company should try
to uphold are governed both by (1) a limited number of universal ethical
principles that are widely recognized as putting legitimate ethical boundaries
on actions and behavior in all situations and (2) the circumstances of local
cultures, traditions, and shared values that further prescribe what constitutes
ethically permissible behavior and what does not—however, universal ethical
norms take precedence over local ethical norms.
C) the standards of what is ethically
permissible and what is not should be based on a code of ethical and moral
conduct that each society/country/culture adopts and then enacts into law.
D) the standards of what is ethically
permissible should be determined by the terms of an “ethics contract”
that each company employee signs as a condition of employment.
E) the only valid ethical standards are those
that are universal—and then only if the standards are not absolute and provide
some wiggle room according to the circumstances of the each situation.
12 Integrated social contracts theory maintains
that _______________
A) all ethical standards are determined by
societal norms and individuals have an implied social contract to live up to
these standards.
B) “first order” universal ethical
norms always take precedence over “second order” local ethical norms.
C) there should be no absolute limits put on
what is ethically or morally right.
D) few nations or cultures have common moral
agreement on what is ethically right and wrong.
E) each country/culture/society has commonly
held views about what constitutes ethically appropriate actions/behaviors that
all individuals in that country/culture/society are obligated to observe.
13 The costs companies incur when ethical
wrongdoing is discovered and punished do not primarily include_______________
A) the costs to shareholders in the form of a
lower stock price (and possibly lower dividends).
B) he costs of providing remedial education
and ethics training to company personnel.
C) lost employee morale and higher degrees of
employee cynicism.
D) civil penalties arising from class-action
lawsuits and other litigation aimed at punishing the company for its offense
and the harm done to others.
E) increased dividend pay-out to restore the
trust of its shareholders.
14 The theory of corporate social responsibility
concerns _______________
A) a company’s duty to maximize shareholder
value.
B) the blending of shareholder interests and
employee interests.
C) a company’s duty to establish socially
acceptable core values and to have a strictly enforced code of ethical conduct.
D)the responsibility that top management has
for ensuring that the company’s actions and decisions are in the best interest
of society at large.
E) The company’s responsibility to balance
between strategic actions to benefit shareholders against the duty to be a good
corporate citizen.
15 Which of the following is not generally on a
company’s menu of actions to consider in crafting a strategy of social
responsibility?
A) Efforts to employ an ethical strategy and
observe ethical principles in operating the business.
B) Actions to provide suppliers, distributors,
and other value chain partners with handsome profit margins.
C) Making charitable contributions, supporting
community service endeavors, engaging in broader philanthropic initiatives, and
reaching out to make a difference in the lives of the disadvantaged.
D) Actions to build a workforce that is
diverse with respect to gender, race, national origin, and other aspects that
different people bring to the workplace.
E) Actions to protect the environment and, in
particular, to minimize or eliminate any adverse impact on the environment
stemming from the company’s own business activities.
16 The business case for an ethical strategy
_______________
A) focuses primarily on costs that are
difficult to quantify (for example, customer defections and adverse effects on
employee productivity) but can often be the most devastating.
B) emphasizes that pursuing unethical
strategies not only damages a company’s reputation but can also have costly,
wide-ranging consequences.
C) starts with numerous ethical rules and
guidelines and an environment where employees rely on these rules for moral
guidance.
D) starts with managers who understand there
is big difference between adopting values statements and codes of ethics that
serve merely as window dressing and those that truly paint the white lines for
a company’s actual strategy and business conduct.
E) begins with ethical guidelines that help
send the message that management takes the observance of ethical norms
seriously and that behavior falling outside ethical boundaries will have
negative consequences.
17 Environmental sustainability involves
_______________
A) a corporate commitment to address the unmet
noneconomic needs of society.
B) deliberate actions to protect the
environment, provide for the longevity of natural resources, maintain
ecological support systems for future generations, and guard against the
ultimate endangerment of the planet.
C) striking a balance between (1) the economic
responsibility to reward shareholders with profits, (2) the legal
responsibility by the company to laws in countries where it operates, (3) the
ethical responsibility to abide by society’s moral norms, and (4) the
discretionary philanthropic responsibility to contribute to the noneconomic
needs of society.
D) developing the resource strengths necessary
to develop a sustainable competitive advantage.
E) All of these.
18 Companies committed to environmental
sustainability _______________
A) make major contributions to local civic and
charitable organizations.
B) consider the commitment to the environment
as a “first order” priority, commitment to employees as a
“second order” priority, and commitment to shareholders as a
“third order” commitment.
C) believe it is essential to strike a balance
between shareholder interests and the interests of stakeholders such as
suppliers, customers, employees, and the communities in which they operate.
D) develop and market only products that are
“environmentally friendly.“
E) adopt sustainable business practices that
meet the needs of the present without compromising the ability to meet the
needs of the future.
19 Which one of the following is not a part of
the business case for why companies should act in a socially responsible
manner?
A) A strong commitment to socially responsible
behavior reduces the risk of reputation-damaging incidents.
B) The aggressive pursuit of market share,
revenues, and profits always puts the company in jeopardy of violating
society’s social responsibility expectations.
C) Conceived social responsibility strategies
work to the advantage of shareholders.
D) Socially responsible actions yield internal
benefits (particularly for employee recruiting, workforce retention, and
training costs) and can improve operational efficiency.
E) Social responsibility actions can lead to
increased buyer patronage.
20 The business case for why companies should act
in a socially responsible manner includes such reasons as _______________
A) improving operational efficiency.
B) avoiding criticism from consumer,
environmental, and human rights activist groups.
C) contributing to lower employee turnover and
better worker productivity.
D) the potential for increased buyer
patronage.
E) All of these.