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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 101

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An ethic of care is based on principles like justice, fairness, equality, or authority.

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Question 102

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Out-Tel, a computer chip manufacturer, knowingly sold defective chips and failed to notify customers of the potential problems. When the problem became public knowledge, the firm's stock price fell dramatically. This illustrates the value that investors place on the ethical behavior of businesses.

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Question 103

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Which of the following would be a unique focus of an integrity-based ethics code?

In the Reaching Beyond Our Borders box, the story demonstrates the many ethical similarities between North and South American businesses. This is fortunate for large firms that do business south of the U.S. border. They can depend on their subsidiary firms to have no problems when implementing U.S. company employee policies.

About 10 years ago, there were several bank mergers. Shortly after Big Bucks Bank bid on The Bank of Plenty, a story hit the local newspapers about the investigation into the purchase of several thousand shares of stock of the Bank of Plenty by three of its top executives, just prior to the announcement that Big Bucks Bank planned to buy Bank of Plenty. Upon close examination by the SEC (Securities and Exchange Commission) it was determined that the stock purchases were an illegal maneuver on the part of these executives. This is an example of insider trading. The executives were "banking" on the stock price rising sharply when the purchase announcement was made public.

Several years ago, the garment and soft goods industry agreed to adopt higher ethical standards with respect to contract manufacturers that produce their goods. The leadership agreed that this was a good approach in order to avoid the U.S. government's intervening and creating new laws to force the industry to only work with foreign manufacturers who operate with high ethical standards. This was sensible strategy on the part of the garment and soft goods industry.

A growing number of people feel that an employee's ethics are a personal matter, and have nothing to do with management.

One good reason for managing a business ethically is to help reduce employee turnover.

The boxed material entitled Reaching Beyond Our Borders that told the story about Joe, the telecommunication employee, suggests that U.S. firms operating overseas are:

When it comes to ethics and social responsibility, the public's perception of a firm is as important as what the firm does.

When Angela graduated with a degree in computer science and started her software company, she posted a sign that read, "This company will always operate within the legal limits of the law." Posted where all employees could clearly see it each day, this demonstrated:

Integrity-based ethics codes are based on avoiding legal punishment.

Top leaders in government and business today are:

We describe charitable donations by corporations to nonprofit organizations as __________.

The Enron scandal illustrates the difference between unethical behavior and illegal behavior.

Corporate values, like personal values, are learned by observing what others do.

While "doing the right thing" is an admirable code of ethics, there are no international organizations dealing with global ethics and corruption.

Blake Mycoskie started a shoe business known as TOMS. As a social entrepreneur, Mr. Mycoskie takes the concept of ___________________ to a new level. TOMS social causes are directly related to the firm's expertise: selling shoes.

In the discussion of corporate social responsibility, stakeholders and stockholders refer to the same group.

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