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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 81

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Opponents of CSR (Corporate Social Responsibility)argue that firms who use their profits to promote social causes are not being fair to investors who provided the funds for the purpose of financial gain.

A) True
B) False

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Question 82

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Making businesspeople more accountable for company actions may help restore trust in the free-market system and leaders in general.

A) True
B) False

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Question 83

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U.S.businesses consider The Foreign Corrupt Practices Act as legislation that has helped increase their profits abroad.

Which of the following terms describes someone who reports illegal or unethical behavior?

When WorldCom used intentional accounting irregularities to make the company look more profitable than it actually was,it:

All else held equal,socially responsible firms:

As the process of going green grows in popularity,measuring the greenness of a company is simpler.

Applying the ethical standards of the U.S.to foreign firms is a difficult process for U.S.firms.

Since most ethics violations are small and rather insignificant in nature,employees need to understand that addressing these issues is secondary to making profits.CEOs may be justified in putting these on the back-burner,waiting for more convenient moments to address them.

If a business fails to meet its responsibilities to its employees,which of the following is likely to occur?

The brewers of Budweiser beer encourage their customers to drink responsibly and "know when to say when." This reflects a compliance-based approach to ethics.

Some critics of corporate social responsibility view spending money on CSR as:

To improve America's business ethics:

Making accounting records more transparent may help restore trust in the free-market system and leaders in general.

Compliance-based ethics codes are based on preventing unlawful behavior.

The question "Is it legal?" establishes ethical behavior.

A whistleblower is a person who:

A list of "watchdogs" (including customers,socially conscious investors,and environmentalists)monitor how well firms enforce their ethical and social responsibility policies.

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 __________.

After developing a code of ethics,it should be communicated to: