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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 31

Multiple Choice

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When Bagel Works employs in-store recycling,composting,and uses nontoxic cleaners,Bagel Works is participating in:

A) corporate philanthropy.
B) corporate social initiatives.
C) corporate responsibility.
D) corporate policy.

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

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Question 32

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Recently,a large insurance company in the Midwest made a public commitment toward corporate philanthropy when it dedicated 3% of its profits toward the cultural and environmental concerns of the large metropolitan area that houses its corporate headquarters.The CEO stated,"In honor of several hundred employees that come to work here everyday,we want to give something back." In light of the fact that this is only helping one metropolitan area,the donation falls outside the realm of corporate social responsibility. This is clearly "corporate philanthropy",a form of corporate social responsibility.The firm is committed toward acting responsibly within society.These acts have no physical or political boundaries.

A) True
B) False

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Question 33

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Laws represent the standards of ________ behavior.

Jake and his college friends frequent a small pub on weekends.Last weekend,after a few beers,one of his friends decided to take the salt and pepper shaker from their table because they needed a set at their apartment.In this situation,this was not a particularly questionable activity because it was a restaurant where one pays for these extras. Ethical behavior should not be situationally based.If the act is appropriate behavior,then it is probably appropriate all of the time.This situation however is clearly inappropriate behavior.

A high-level manager gathers his team of supervisors together to create a new office policy that will affect all employees at the company.After receiving a verbal nod from the supervisors,he then proceeds to pass around a written form of the new policy and asks all members of the team to initial it.He explains to the supervisors that the new policy will be posted in the break rooms on each floor of corporate headquarters.If you were a part of this work team,which question would you ultimately ask yourself before initialing your approval of this policy?

Barney extends his lunch break beyond the allotted time.Wilma uses the office telephone for unauthorized personal phone calls.Fred misrepresents his product to a potential customer.All of these are examples of unethical behavior. All three situations violate the ethics-check questions of "Is it legal?","Is it balanced?",and "How will it make me feel about myself?"

A(n) _______ -based ethics code defines corporate values;creates a supportive environment,and,stresses shared accountability among employees.

Dewy Cheatum encourages his employees to create and use legal loopholes to gain a competitive advantage.In keeping within the legal limits of the law,the employees are within their compliance-based ethics rights. The objective of a compliance-based ethics code is to avoid criminal misconduct.

Given the ethical lapses that are prevalent today in our businesses,which of the following can be done to restore trust in the free-market system and leaders in general?

Abby is a stock broker for a large financial services company.A client who works at Sixth Generation Software,Ltd. ,just called to purchase several thousand shares of his company's stock.He reveals to her that the company is about to announce the appointment of a new CEO.Abby asks her client if this information is public knowledge.The reason she asks is to make certain that her client,her company,and she remain in compliance with Regulation FD,the Fair Disclosure rule. The SEC (Securities and Exchange Commission),the organization that monitors all publicly traded companies created Regulation FD,the fair disclosure rule,which says that companies that release any information must share it with everyone,and not just a few.Everyone has the same opportunity to use the information to make financial decisions.

When working with international firms,U.S.businesses:

Corporate social responsibility covers all those social issues outside our businesses that affect customers and the environment,but not internal issues such as employee considerations and work safety.Internal issues are covered by business laws. Corporate responsibility includes everything from hiring minority workers to making safe products,minimizing pollution,using energy wisely,and providing a safe work environment.

An ethic of care is based on a sense of responsibility to reduce actual harm or suffering.

A recent study revealed that most Americans have:

Going green means:

Businesses recognize that pressure to violate ethical standards can come from either inside or outside of the firm.

U.S.businesses claim that unethical business practices are common outside the U.S.

The first step when facing an ethical dilemma is to ask:

According to the Legal Briefcase box,"Paying the Price",the Enron case demonstrates the need for more accounting transparency. Top executives at Enron approved the removal of several billion dollars in debt from the company balance sheet in order to make the return on equity investment appear to be a higher percentage.Arthur Andersen,Enron's outside accounting firm that should have been providing company audits,did not appear to be serving the company in an honest,forthright,and transparent way.

In order to be successful,efforts to improve the ethical behavior of businesses must begin with top management's support of a corporate code of conduct.