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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 141

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While "doing the right thing" is an admirable code of ethics,there are no international organizations dealing with global ethics and corruption. Several international organizations have entered into agreements to identify common global ethics and to fight corruption.The Organization of American States,the European Union,and the Organization for Economic Cooperation and Development have entered into anti-corruption agreements.

A) True
B) False

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Question 142

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Ethical behavior covers a ________ range of conduct than legal behavior.

A) wider
B) more limited
C) smaller
D) less demanding

E) A) and C)
F) None of the above

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Question 143

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According to the Legal Briefcase box,"Paying the Price",the fate of Arthur Anderson demonstrates that the law will protect your firm from problems due to the wrong-doings of other firms that you do business with. Although the conviction against Arthur Andersen was overturned,the company image was tarnished beyond repair.The company ceased to exist.

Often it is the threat of negative publicity that pressures businesses to enforce their corporate code of ethics. One important thing to remember is that it isn't enough for a company to be right when it comes to ethics and social responsibility.It also has to convince its customers that it's right.

When facing an ethical dilemma,it is often helpful to discuss the situation with your supervisor because ethical decisions will always withstand scrutiny. The ethics check question "How will it make me feel about myself?" focuses our attention on the impact of decisions that go against our sense of right and wrong.Decisions that corrode our self-esteem will ultimately injure the organization.

Upon reading the Legal Briefcase box,"Paying the Price",you should conclude that,

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

Making businesspeople more accountable for company actions may help restore trust in the free-market system and leaders in general. Given the ethical lapses that are so prevalent today,several things can be done to restore trust in the free-market system and leaders in general: (1)those who have broken the law need to be punished accordingly including religious people,government people,and businesspeople; (2)new laws making accounting records more transparent should be passed;and (3)making businesspeople and others more accountable may help.

"Do what I say,not what I do" can be an effective code of conduct to instill corporate values. People learn their standards and values from observing what others do.They seldom adopt values strictly from what others say.

Provide examples that serve to explain the differences between the following terms: (1) corporate responsibility; (2) corporate social initiatives; (3) corporate philanthropy.

The Legal Briefcase box,"Paying the Price" describes situations where:

According to the Legal Briefcase box,"Paying the Price",the Enron case was a landmark because it demonstrated clearly that company regulations and policies always represent the best interests of all employees,and not only those employees holding the highest company positions. Enron's pension regulations prohibited regular employees from selling their stock,but executives had the privilege of selling whenever they saw fit.Clearly,this regulation did not benefit all employees.

A few years ago,several U.S.retailers were sued in Los Angeles courts for human rights abuses associated with contract manufacturers located in the Marianas Islands,a territory of the U.S.government.The accusers wanted the retailers to stop outsourcing the manufacturing of soft goods to manufacturers on the islands that practiced inhumane labor standards.The activists who brought suit against the U.S.firms:

Many businesses have developed internal procedures to enforce their ethical policies.Which of the following is an example of an outside group urging ethical behavior in businesses?

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

Both managers and workers cite low managerial ethics as a major cause of American businesses' competitive woes.

When faced with slow sales and low profits,even managers with strong ethical values may feel pressured to compromise those values. When business is good,ethical decisions are less of a dilemma.When under pressure,however,managers may face more difficult decisions.

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. -Harry is concerned about the legality of firing union workers in order to hire workers willing to work for less pay.Harry values ______________ ethics,but has little concern for other types.

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. Insider trading uses private company information to further insiders' own fortunes or those of family and friends.Regulation FD,the fair disclosure rule now stipulates that companies must provide the same information to everyone.

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 __________.