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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 51

True/False

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When stating a firm position on various social and political issues, corporate policies often commit company profits to back these positions.

A) True
B) False

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Question 52

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The Hum-dinger Corporation recently instituted a corporate ethics code. The president of the company realizes that ethical relationships are based on:

A) fairness and honesty.
B) strict penalties for illegal activities.
C) a full-time compliance officer monitoring employee behavior.
D) watchdogs and whistleblowers.

E) A) and B)
F) C) and D)

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Question 53

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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. -Bo's view tends to lean toward the concerns of investors, first and foremost. This is the view taken by .

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

Enforcement is perhaps the most important step in an effective code of ethics.

Ethical dilemmas in business:

Ethical behavior refers to the standards that are accepted by society as right or wrong.

It can be very difficult to maintain a balance between ethics and goals such as pleasing stakeholders.

"Actions speak louder than words!", is an old saying that refers to the fact that people's actions - how they act as opposed to what they say - are often testament to their true ethical values.

The social audit is:

People should look at each situation individually and decide for themselves if it is right or wrong.

One problem with conducting a social audit is:

A code of ethics designed to avoid criminal misconduct is an example of a compliance-based ethics code.

Legal behavior and ethical behavior are basically the same.

An important step in improving U.S. business ethics is for companies to hire whistleblowers.

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. -Sirly recommends a marketing strategy aimed at increasing sales through the development of a positive corporate image. He suggests the first step towards this goal is to identify and evaluate the firm's programs for community involvement. Sirly is calling for a to be completed.

Insider trading involves:

A business should be managed ethically to keep existing customers and attract new customers.

Due to the fact that American ethical standards are very clear-cut, international suppliers do not have difficulty adhering to them.

Which of the following statements is not one of the six steps recommended by experts for improving ethical behavior at work?