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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 31

True/False

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At Fast-Track Financial Services,it is not unusual for a financial consultant to lose a client to another consultant working out of the same office.Clients have a right to do business with whomever they choose.If it is a high net worth client,with the potential for high commissions on sales,the incentive to steal a fellow co-worker's client exists because the firm's culture has not established integrity based ethics to deter this activity.

A) True
B) False

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Question 32

True/False

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A few years ago,several U.S.clothing manufacturers were sued in Los Angeles courts by watchdog groups who learned of poor working conditions in manufacturing plants on a U.S.territory known as the Marianas Islands.Customers are concerned with human rights abuses and other problems with supplier relationships abroad.

A) True
B) False

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Question 33

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As the number of MNCs (multinational corporations) increases,we are experiencing international ethical dilemmas.One very real concern during the past decade is the human rights abuse in sweatshops where several MNCs contract manufacture their products,in exchange for cheap labor.Several retailers have banned together to set ethical standards in foreign factories.Which of the following statements summarizes the challenges of companies doing business in developing countries and the concerns of their customers?

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.

Making ethical choices is always easy.

Last year the Bank of Plenty,Inc.made an all-out-effort to go paperless.The bank's public relations arm promoted the strategy both internally and externally.Customers were strongly encouraged to utilize the bank's online banking for all their banking needs.Customers could sign up for local workshops where employees were dedicated to showing them how to navigate the bank's new website and find the information they required.The bank's initiative demonstrates:

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.

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

Businesses with a formal code of ethics are less common now than in the past.

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

Considering the potential impact on others prior to making a decision is consistent with ________ behavior.

Which of the following questions will help individuals and organizations when deciding if their decisions are ethical?

Cigarette producers refused to voluntarily place health warnings on their packages.In response,the federal government passed laws requiring health warnings on all cigarette packages.With respect to ethical behavior,this sequence of events is:

"Fair disclosure" refers to a Securities and Exchange Commission rule that states when a publicly traded firm discloses information,it must share it with everyone.

Jake recently invested in a Hottie Potatee franchised business that serves potatoes with all the trimmings.The business needs lots of employees in order to operate effectively.He told you that if he calls the business once each day and tells the employees that he is on his way there,they will be on their best behavior.As he tells it,"It's okay if I really don't make it there,after all,I'm the owner and the business should be able to run without micromanagement." As a recent student of business ethics,you remind Jake that:

In light of the fact that over 60% of all theft in retail stores is committed by employees,New Generations Clothier,Inc. ,requires that managers personally unlock fitting rooms for all sales associates and count the number of items associates take to the fitting rooms.This policy is written in the company manual.Breaking with the policy is grounds for dismissal.It is correct to say that this is part of New Generations' compliance-based ethics.

While telling an abusive joke about an ethnic group may not be unlawful,it is unethical.

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

U.S.businesses have little influence over the behavior of businesses from other countries.

A social audit is a systematic evaluation of an organization's progress toward implementing programs that are profitable.