Chapter 2

Question 1

beliefs about what is right and wrong or good and
bad in actions that affect others

Answer 1

Ethics

Question 2

refers to ethical or unethical behaviors by employees
in the context of their jobs

Answer 2

Business ethics

Question 3

behavior that conforms to individual beliefs and
social norms about what’s right and good

Answer 3

Ethical behavior

Question 4

behavior that conforms to individual beliefs and
social norms about what is defined as wrong and
bad

Answer 4

Unethical behavior

Question 5

standards of behavior that guide individual managers
in their work
▪ Behavior toward Employees
▪ Behavior toward the Organization
▪ Behavior toward Other Economic Agents

Answer 5

Managerial Ethics

Question 6

Does a particular act optimize the benefits to those
who are affected by it? (That is, do all relevant parties
receive “fair” benefits?)

Answer 6

Utility

Question 7

Does it respect the rights of all individuals involved?

Answer 7

Rights

Question 8

Is it consistent with what’s fair?

Answer 8

Justice

Question 9

Is it consistent with people’s responsibilities to each
other?

Answer 9

Caring

Question 10

refers to the overall way in which a business
attempts to balance its commitments to relevant
groups and individuals in its social environment

Answer 10

Social responsibility

Question 11

those groups, individuals, and organizations that are
directly affected by the practices of an organization
and who therefore have a stake in its performance

Answer 11

Organizational Stakeholders

Question 12

Treat customers fairly and honestly

Answer 12

Customers

Question 13

Treat employees fairly and respect their dignity and
basic human needs

Answer 13

Employees

Question 14

Follow proper accounting procedures; provide
information to shareholders about financial
performance

Answer 14

Investors

Question 15

recognize the importance of mutually beneficial
partnership arrangements with suppliers

Answer 15

Suppliers

Question 16

– to be socially responsible to their local communities
– recognize that there are multiple sets of stakeholders
in each country where it does business

Answer 16

Local and International Communities

Question 17

– Consumerism—social activism dedicated to
protecting the rights of consumers in their dealings
with businesses

Answer 17

Consumer rights

Question 18

– Collusion—two or more firms collaborate on such
wrongful acts as price fixing
– Price gouging

Answer 18

Unfair pricing

Question 19

a form of social activism dedicated to protecting the
rights of consumers in their dealings with businesses

Answer 19

Consumerism

Question 20

illegal agreement between two or more companies to
commit a wrongful act

Answer 20

Collusion

Question 21

using confidential information to gain from the
purchase or sale of stocks

Answer 21

Insider trading

Question 22

In 2002, the U.S. Congress passed the Sarbanes-
Oxley Act, which requires an organization’s chief
financial officer to personally guarantee the accuracy
of all financial reporting

Answer 22

Misrepresentation of finances

Question 23

involves doing as little as possible and may involve
attempts to deny or cover up violations

Answer 23

Obstructionist Stance

Question 24

company meets only minimum legal requirements in
its commitments to groups and individuals in its social
environment

Answer 24

Defensive Stance

Question 25

a company, if specifically asked to do so, exceeds
legal minimums in its commitments to groups

Answer 25

Accommodative Stance

Question 26

a company actively seeks opportunities to contribute
to the well-being of groups and individuals in its
social environment

Answer 26

Proactive Stance

Question 27

the establishment of laws and rules that dictate what
organizations can and cannot do
– Direct
– Indirect

Answer 27

Regulation

Question 28

special organizations created to solicit money and
then distribute it to political candidates

Answer 28

Political Action Committees (PACs)

Question 29

the use of persons or groups to formally represent an
organization or group of organizations before political
bodies

Answer 29

Lobbying

Question 30

the extent to which the organization conforms to
local, state, federal, and international laws

Answer 30

Legal Compliance

Question 31

the extent to which the members of the organization
follow basic ethical (and legal) standards of behavior

Answer 31

Ethical Compliance

Question 32

the awarding of funds or gifts to charities or other
worthy causes

Answer 32

Philanthropic giving

Question 33

Which of the following best describes social responsibility?

Answer 33

the attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities

Question 33

systematic analysis of a firm’s success in using funds
earmarked for meeting its social responsibility goals

Answer 33

Corporate Social Audit

Question 34

Which of the following best describes ethics?

Answer 34

beliefs about which is right or wrong or good or bad in actions that affect others

Question 35

Which of the following best describes managerial ethics?

Answer 35

standards of behavior that guide managers in their work

Question 36

When evaluating a decision based on the ethical norm of justice, a manager will consider which of the following questions?

Answer 36

Is the decision consistent with what we regard as fair?

Question 37

When evaluating a decision based on the ethical norm of rights, a manager will consider which of the following questions?

Answer 37

Does the decision respect the rights of the individuals involved?

Question 38

During the clinical trial for a new multivitamin, a top researcher discovers a higher than expected occurrence of pancreas and kidney cancer among those taking the drug. Rather than disclosing the information, he tells top management, shreds the reports, and denies any knowledge of the incident when questioned. This is an example of a(n) ________ stance to social responsibility.

Answer 38

obstructionist

Question 39

In the United States, tobacco companies are legally required to include warnings to smokers on their products and to limit advertising to prescribed media. Within the U.S., they follow these rules but use more aggressive methods in countries with no such rules. As such, tobacco companies typically adopt a(n) ________ stance to social responsibility in marketing their products.

Answer 39

defensive

Question 40

Firms that adopt a(n) ________ stance to social responsibility meet their legal requirements and exceed legal minimums when specifically asked.

Answer 40

accommodative

Question 41

The founders of Ben and Jerry’s ice cream established a corporate policy of giving 7 1/2 percent of pre-tax profits to charity. This is an example of a(n) ________ stance to social responsibility.

Answer 41

proactive

Question 42

Which of the following best describes a proactive stance to social responsibility?

Answer 42

a company actively seeks opportunities to contribute to the well being of groups and individuals in its social environment