Understanding Canadian Business 10Th Canadian Edition By William G Nickels - Test Bank

Understanding Canadian Business 10Th Canadian Edition By William G Nickels – Test Bank

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Sample Questions Are Posted Below

Chapter 05

Ethics and Social Responsibility

True / False Questions

Ethical behaviour requires more than following the law.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

Legal behaviour and ethical behaviour are basically the same.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

Many immoral and unethical acts fall well within our laws.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

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

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Ethical behaviour requires individuals to decide for themselves what is right and wrong in each situation they face.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Given the level of diversity within Canada, agreement on common standards of ethical behaviour is unachievable.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Unethical behaviour is restricted to for-profit businesses only.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Ethical behaviour involves the clear and easy choice of right and wrong actions toward others.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

The question “Is it legal?” establishes ethical behaviour.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Ethics are the standards of moral behaviour.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Trying to make decisions that will benefit all parties involved is consistent with the question “How will it make me feel about myself?”
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us

The most basic question in business ethics is, “Is it legal?”
TRUE

Legal behaviour includes more aspects of our relationships with others than does ethical behaviour.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us

Legal behaviour is a first step toward ethical behaviour.
TRUE

Ethical behaviour looks at treating others fairly.
TRUE

An ethical manager’s decisions are based on the following questions: “Is it legal?” and “Is it profitable?”
FALSE

Behaviour that is in conflict with your values and sense of right and wrong can damage your self-esteem.
FALSE

Barney extends his lunch break beyond the allotted time. Wilma uses the office telephone for an unauthorized personal phone call. Fred misrepresents his product to a potential customer. All of these are examples of unethical behaviour.
TRUE

Business behaviour determines the ethics of society. We can improve society’s moral and ethical behaviour by first making a commitment to improving business’ moral and ethical behaviour.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us

In reality, ethical behaviour depends on the situation. For example, in negotiating a contract with your employees, the way they win higher wages is by you losing the fight to hold down labour costs. Often, it is a win-lose relationship.
FALSE

Trust between workers and managers must be based on a foundation of fairness, honesty, openness, and moral integrity.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

A growing number of people feel that an employee’s ethics are a personal matter and have nothing to do with management.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

The majority of CEOs believe that employee misconduct results from a failure in organizational leadership in establishing ethical standards.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Management can create an environment in which unethical behaviour can develop.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Corporate values, like personal values, are learned by observing what others do.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Effective corporate values start with employees and develop throughout the organization to include top management.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Corporate standards can lead to unethical behaviour.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Integrity-based ethics codes are based on avoiding legal punishment.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards

The number of companies with formal, written codes of conduct is steadily increasing.
TRUE

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

Compliance-based ethics codes focus on preventing unlawful behaviour by increasing control and by penalizing wrongdoers.
TRUE

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

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards

An integrity-based ethics code moves beyond legal compliance in order to create a “do-the-right-thing” climate.
TRUE

Dewy Cheatum encourages his employees to create and use legal loopholes to gain a competitive advantage. This is both legal and consistent with the compliance-based code of ethics.
TRUE

The brewers of Molson beer encourage their customers to drink responsibly and “know when to say when.” This reflects a compliance-based approach to ethics.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards

Cigarette producers label their products with warnings of potential health hazards. This is an example of a compliance-based code of ethics.
TRUE

The purpose of the Sarbanes-Oxley Act in the United States is to provide financial rewards for whistleblowers.
FALSE

As a manager you are responsible for the unethical behaviour of your employees.
TRUE

Avoiding lawsuits is one reason to manage a firm ethically.
TRUE

The Federal Accountability Act (FAA) provides ethics guidelines to all organizations operating in Canada with more than 500 employees.
FALSE

Written ethics codes influence employees more than management’s tolerance or intolerance of ethical misconduct.
FALSE

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

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

People who report illegal or unethical behaviour are known as whistleblowers.
TRUE

An ethics officer serves both as a counsellor and as an investigator.
TRUE

Individuals who can set a positive tone, relate well to others, and communicate effectively, make the most effective ethics officers.
TRUE

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

To be effective, an organization’s code of ethics needs to be communicated to outsiders such as suppliers, subcontractors, and customers.
TRUE

Businesses can avoid ethical dilemmas by requiring written contracts with their employees, customers, and owners.
FALSE

Corporate social responsibility refers to the concern businesses have for their employees.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility

Corporate philanthropy refers to the position a firm takes on issues that affect society.
FALSE

A charitable donation by a corporation is an example of corporate philanthropy.
TRUE

Ethical behaviour will allow a firm to meet its corporate social responsibility.
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility

Minority hiring practices and pollution control are both areas of corporate responsibility.
TRUE

Corporate philanthropy refers to the position a firm takes on social and political issues.
FALSE

Businesses can have either a positive or negative impact on society, although the news coverage tends to focus on the negative.
TRUE

A business that takes a public position on a political issue is exercising corporate social responsibility.
TRUE

Defining a socially responsible company is complicated. There does not appear to be a consensus on what, precisely, is involved in being socially responsible.
TRUE

“My only social responsibility is to make a profit. I will show my concern for society by providing my customers with a product that they need and desire.” This statement is consistent with the concept of corporate social responsibility.
FALSE

At a recent town hall meeting, citizens expressed concern regarding the impact of a proposed new gambling casino. The owner of the proposed casino responds, “I don’t know what all of this fuss is about. I’m just a businessman trying to earn a profit, provide new jobs, and pay taxes.” His response reflects a commitment to corporate social responsibility.
FALSE

A new law requiring businesses to give 90-day notice of their plans to close an office or factory was recently enacted. This action indicates the public’s desire for businesses to behave in a socially responsible manner.
TRUE

Promoting social justice is a responsibility of society, not businesses.
FALSE

Both the strategic and pluralist approaches recognize the responsibility of management to optimize profits.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility

Being responsible to your customers may require your firm to provide more information regarding your product than the law demands.
TRUE

One responsibility of business is to satisfy customers by offering them goods and services of real value.
TRUE

Studies show that consumers are not concerned about the socially conscious behaviour of the firms with which they do business.
FALSE

Ethical behaviour comes at the expense of stockholder wealth.
FALSE

In the discussion of corporate social responsibility, stakeholders and stockholders refer to the same group.
FALSE

Investors can profit from choosing to invest their money in companies whose goods and services benefit the community and the environment.
TRUE

Insider trading occurs when employees of a company use private company information to profit in the stock market.
TRUE

Insider trading provides the information needed for the securities market to operate fairly and efficiently.
FALSE

Out-Tel, a computer chip manufacturer, knowingly sold defective chips and failed to notify customers of the potential problems. When the problem became public knowledge, the firm’s stock price fell dramatically. This illustrates the value that investors place on the ethical behaviour of businesses.
TRUE

Businesses have a social responsibility to create jobs.
TRUE

In the long run, a firm’s loyalty to their employees can pay off financially.
TRUE

Retribution or ‘getting even’ is one of the most powerful incentives for good people to do bad things.
TRUE

A recent study revealed that employee theft has increased dramatically, however it is still insignificant compared to shoplifting.
FALSE

Businesses are partially responsible for promoting social justice.
TRUE

Today we are seeing more and more organizations and governments making efforts to reverse years of neglect to the environment.
TRUE

A firm’s triple-bottom line looks at a company’s positive economic contributions, as well as the environmental and social value they add and destroy.
TRUE

A social audit attempts to measure a firm’s progress in the area of worker-management relations.
FALSE

A problem with conducting a social audit is establishing procedures for measuring a firm’s activities and its effects on society.
TRUE

As a response to the federal government sponsorship scandal, the federal government now requires social audits of all Canadian businesses.
FALSE

Sustainable development is the enterprise growth process whereby companies expand and increase profit margins over time.
FALSE

Charges of unethical business practices are common outside Canada.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility

The ethical standards by which international political leaders are judged are less strict today than they were in years past.
FALSE

Many Canadian companies are demanding socially responsible behaviour from their international suppliers.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility

Canadian businesses are not socially responsible for the activities of a foreign supplier.
FALSE

The economic power of large multinational firms allows them to ignore the ethical standards of a society without consequences.
FALSE

Canadian businesses and consumers have little influence over the behaviour of businesses from other countries.
FALSE

Applying the ethical standards of Canada to foreign firms is more difficult than judging the behaviour of Canadian firms.
TRUE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility

“Hear no evil, see no evil, speak no evil” is the best policy for Canadian firms to follow in their dealings with corrupt foreign suppliers.
FALSE

While “doing the right thing” is an admirable code of ethics, there are no international organizations dealing with global ethics and corruption.
FALSE

A product with the FAIRTRADE mark means that it can be sold in foreign countries.
FALSE

Multiple Choice Questions

In 2014, a Conservative Party staffer was found guilty under the Elections Act of willfully preventing a voter from casting a ballot. This is an example of behaviour that is _______.
A.legal but unethical
B. predictable
C. illegal
D. ethical

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

Obeying the law is ________ ethical behaviour.
A.essentially the same as
B. the first step toward
C. the opposite of
D. unlikely to lead to

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

________ refers to the standards of moral behaviour.
A.Legality
B. Responsibility
C. Integrity
D. Ethics

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Ethics and legality are:
A.essentially the same.
B. exactly the same.
C. two different things.
D. the only two steps to consider during any business action.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Legality is:
A.narrower than ethical behaviour.
B. broader than ethical behaviour.
C. the same as ethical behaviour.
D. the only consideration for ethical behaviour.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental

Three questions often help individuals and organizations in deciding if their decisions are ethical. All of the following are ethics check questions, except:
A.Is it legal?
B. Is it balanced?
C. Has it been done before?
D. How will it make me feel about myself?

When discussing moral and ethical issues, it is helpful to remember that ethical behaviour begins with:
A.schools.
B. religious institutions.
C. law enforcement officers.
D. each of us.

The first step when facing an ethical dilemma is to ask:
A.Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. Is it ethical?

Which of the following reflects the desire of an ethical manager to achieve a “win-win” relationship with others?
A.Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. How can I benefit at the expense of others?

Which of these questions can help us avoid a decision that would injure our self-esteem?
A.Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. How can I avoid taking the blame?

Considering the potential impact on others, before actually making a decision that could affect them is consistent with ________ behaviour.
A.legal
B. anti-social
C. ethical
D. self-motivated

Treating others unfairly can result in retaliation from the injured party. This will likely create a:
A.lose-win situation.
B. win-win situation.
C. lose-lose situation.
D. Golden Rule application.

Purposefully understating your firm’s income to avoid paying higher taxes is an example of:
A.an accepted business practice.
B. tax accountants doing their job.
C. illegal behaviour.
D. a firm’s responsibility to its owners.

While it is easy to criticize business for moral and ethical shortcomings, it is important to remember that:
A.when in Rome, do what the Romans do.
B. each of us have moral shortcomings as well.
C. values must sometimes be compromised to satisfy investors’ demand for profits.
D. the ends justify the means.

An ethical dilemma refers to a situation where you must:
A.treat someone unfairly.
B. choose between equally unsatisfactory alternatives.
C. choose between a correct and an incorrect option.
D. balance the concerns of profit and legality.

A Canadian government official has indicated that for a generous contribution to his re-election fund, he would ignore your firm’s apparent violation of several anti-pollution laws. Which of the following “Ethics Check Questions” would you consider first?
A.Is it legal?
B. Is it fair?
C. How will it make me feel about myself?
D. How much do you want?

A friend offers to share with you a term paper she prepared for her “Introduction to Business” class last semester. When you tell her that it wouldn’t be fair, she reminds you of your habit of reading an entire Harry Potter book at the local bookstore without paying for the book. Which ethics-based question would be the most helpful in evaluating these situations?
A.Is it legal?
B. Am I acting fairly?
C. Who wins and who loses?
D. Will I get caught?

The majority of CEOs blame unethical employee conduct on:
A.the breakdown of traditional religious institutions.
B. a failure of leadership to establish ethical standards.
C. the increase in lawsuits used to avoid personal responsibility.
D. the nation’s business schools that tolerate unethical behaviour in students.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Ethical behaviour will result in all of the following, except:
A.greater trust and cooperation between employees and managers.
B. balanced, fair agreements that create benefits for all involved.
C. negative publicity from the news media.
D. improved self-esteem.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Organizational ethics are learned by:
A.attending corporate responsibility seminars.
B. tracking the failures of those who are caught in business scandals.
C. attending business classes and regularly taking notes.
D. observing the actions of others.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

All of the following are reasons why a business should be managed ethically, except:
A.because it is the right thing to do.
B. because strict global regulations require it.
C. to attract new customers and retain existing customers.
D. to please customers, employees, and society.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

A competitive corporate environment:
A.can encourage employees to deceive customers.
B. should focus on improving corporate profit.
C. must be ignored when corporate ethics are developed.
D. can best define ethical behaviour based on current circumstances.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

The Hummer Corporation has recently instituted a corporate ethics code. The president of the company realizes that ethical relationships are based on:
A.trust and cooperation.
B. strict penalties for illegal activities.
C. a well-developed corporate code of ethics.
D. watchdogs and whistleblowers.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly

Establishing a formal code of ethics is:
A.more common with small businesses than large businesses.
B. unnecessary given the level of government regulation.
C. growing in popularity.
D. mandated by the Corporate and Criminal Fraud Accountability Act.

A(n) ________-based ethics code emphasizes the prevention of unlawful behaviour by increasing control and penalizing wrongdoers.
A.legal
B. corporate responsibility
C. compliance
D. integrity

A(n) ________-based ethics code defines corporate values, creates a supportive environment, and stresses shared accountability among employees.
A.social
B. corporate responsibility
C. compliance
D. integrity

After developing a code of ethics, it should be communicated to:
A.everyone with whom the business has dealings.
B. the police in jurisdictions where the business has operations.
C. only senior-level management.
D. stockholders.

The purpose of the Federal Accountability Act is to:
A.ensure that whistle-blowers within the government receive due recognition and reward.
B. protect government employees from reprisal for making good faith allegations of wrongdoing.
C. restrict the investigation of any wrongdoing that occurs within the public sector.
D. ensure that any corporate whistleblower in Canada is reimbursed for lost wages if they are fired by their employers.

Which of the following is not included in a compliance-based ethics code?
A.Increased control over employee actions.
B. Shared accountability among employees.
C. Penalties for wrongdoers.
D. Awareness of the relevant laws.

Which of the following would be a unique focus of an integrity-based ethics code?
A.Increased control over employee actions.
B. Shared accountability among employees.
C. Increased penalties for code violators.
D. Improved awareness of the relevant laws.

As a new employee, Vanessa has heard her boss say, “Do whatever it takes to meet your sales quota. However, anyone caught violating a law will be immediately fired”. Vanessa recognizes this as a(n) ________-based code of ethics.
A.Internet
B. personal responsibility
C. compliance
D. integrity

In an effort to help employees resist the pressure to make an unethical decision, the Johnston Petroleum Company has communicated their code of ethics statement to their suppliers, subcontractors, distributors, and customers. This approach is consistent with a(n):
A.integrity-based ethics code.
B. compliance-based ethics code.
C. response to a government mandate.
D. personal responsibility commitment.

Which of the following terms describes someone who reports illegal or unethical behaviour?
A.Whistleblower
B. Hornblower
C. Watch tower sentinel
D. Integrity watchdog

Whistleblowers from the private sector in Canada:
A.are protected under the Federal Accountability Act.
B. cannot be protected under the Sarbanes -Oxley Act.
C. have no comprehensive protection whatsoever.
D. must organize a union and register with KPMG if they desire whistleblower protection.

All of the following are characteristics of an effective ethics officer, except:
A.a background in human resource management.
B. ability to relate with employees at every level of the company.
C. capacity to serve as a counsellor and an investigator.
D. good communication skills.

Which of the following is the most important step to help improve Canada’s business ethics?
A.Middle management support
B. Training
C. Enforcement
D. Identification of the organizational ethics officer

A phone call to a government official by an employee of the XYZ Corporation disclosed the deception and dishonesty of the firm’s accounting records. This employee played the role of a:
A.whistleblower
B. hornblower
C. cheerleader
D. morality officer

Integrity-based ethics codes are similar to compliance-based ethics codes. Which of the following is an objective of compliance-based codes?
A.Avoid criminal misconduct
B. Conform to chosen internal standards
C. Enable responsible employee conduct
D. Accountability

Which step is the most critical to help improve business ethics?
A.Top management must adopt and support a corporate code of conduct.
B. The ethics code must be enforced.
C. An ethics office must be set up.
D. Outsiders must be told about the ethics program.

Corporate social responsibility describes the firm’s:
A.responsibility to their stockholders.
B. ability to plan for the unexpected.
C. commitment to a management training program.
D. concern for the welfare of society.

Which of the following describes charitable donations by corporations to nonprofit organizations?
A.Corporate philanthropy
B. Corporate responsibility
C. Corporate strategy
D. Structural commitment

The position a firm takes on issues that affect the corporation as well as society is known as its:
A.political philanthropy.
B. corporate policy.
C. target posturing.
D. structural positioning.

Corporate ________ encompasses various issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution.
A.responsibility
B. philanthropy
C. diversity
D. structure and strategy

Determining what is involved for a firm to be socially responsible:
A.Can be easily determined considering the goals of the stakeholders.
B. varies even among those who are interested in corporate responsibility.
C. helps government officials develop appropriate legislation.
D. varies from industry to industry.

Top management at Lancer Distributing is convinced that they have a social responsibility to their community. They believe that they can have the greatest impact in this area through cash contributions to nonprofit organizations. This is an example of corporate:
A.guilt payments.
B. philanthropy.
C. structure and strategy.
D. short-run profit maximization.

Those who argue in favour of corporate social responsibility suggest that:
A.you need to justify socially responsible behaviour from an investor’s standpoint only.
B. being socially responsible is all about being ethical.
C. business exists only to make money for shareholders.
D. companies who are perceived as being socially responsible will attract and retain better employees and draw more customers.

Which of the following is a strategy where “companies provide products that appeal to people’s best selves”?
A.Ethical philanthropy
B. Corporate consumerism
C. Ethical consumerism
D. Social entrepreneurship

Which of the following is the dimension of social responsibility that includes enhanced forms of corporate philanthropy that are more directly related to the company’s competencies?
A.Ethical philanthropy
B. Corporate consumerism
C. Ethical consumerism
D. Corporate social initiatives

Management and employees at Boyer Enterprises are given time off each year to work in local charities. This firm clearly practices:
A.corporate philanthropy.
B. social irresponsibility.
C. community mediation services.
D. participative funding.

Corporate ___________ is the concern businesses have for the welfare of society.
A.philanthropy
B. responsibility
C. policy
D. social responsibility

When management’s primary objective is the economic interests of shareholders, this is known as:
A.philanthropy
B. responsibility
C. the strategic approach
D. the pluralistic approach

According to Milton Friedman, businesses can best meet their responsibility to society by:
A.creating markets for domestic products.
B. shifting the blame for product liability cases onto the legal system.
C. supporting their preferred government officials.
D. creating wealth for their stockholders.

One strategy guaranteed to displease your customers is to:
A.delight them with a quality product at a fair price.
B. focus on cost and quality control systems within your organization.
C. practice deception regarding product safety issues.
D. shift the production of goods to foreign facilities and layoff Canadian workers.

Insider trading involves:
A.an Internet activity that establishes a barter exchange system between businesses.
B. investors using private company information to further their own fortunes.
C. the exchange of assets between companies in the same industry.
D. a payment or reward for socially conscious behaviour.

When it comes to social responsibility, some people feel that “before you can do good, you must do well”. This reflects a firm’s primary responsibility is to their:
A.customers.
B. investors.
C. employees.
D. community.

If a business fails in meeting its responsibilities to its employees, all of the following are likely to occur, except:
A.reduced employee turnover.
B. disgruntled workers manipulating budgets and expenses.
C. a loss of employee commitment and trust in the company and its management.
D. employee retaliation by doing the minimum needed to get by.

Environmental quality is:
A.a pluralistic approach
B. a public good
C. a private resource
D. a role for only the public sector

Environmental quality is considered to be a public good. This means that:
A.ultimately it is the public that pays for environmental clean-up.
B. businesses have a responsibility to minimize their environmental pollution.
C. everyone enjoys a cleaner environment regardless of who pays for it.
D. society places a higher value on private goods and services.

The triple-bottom line measures:
A.social audit performance.
B. profits, people, and places.
C. economic, social, and environmental parameters.
D. public private partnerships.

The purpose of a(n) ________ is to evaluate an organization’s progress toward implementing programs to achieve social responsibility.
A.accountability review
B. social audit
C. federal disclosure statement
D. annual report

Which of the following activities would generally not be included in the social audit of a business?
A.Support for higher education, the arts, and non-profit groups.
B. Employee-related activities.
C. Comparisons of profits versus the profits of other firms.
D. Consumer activities such as product safety, honest advertising, and fair pricing.

Many businesses have developed internal procedures to enforce their ethical policies. Which of the following is an example of an outside group urging ethical behaviour in businesses?
A.Management teams
B. Union officials
C. Suppliers
D. Foreign trade representatives

Sustainable development means:
A.using processes to sustain a business through good times and bad.
B. implementing a social audit.
C. selling your product in the developing world.
D. implementing environmental, economic, and social considerations into decision-making.

One problem of conducting a social audit is:
A.that most businesses are really not very concerned with these issues.
B. determining what should be measured and how to calculate the effect on society.
C. the primary focus of management is on the interests of stakeholders.
D. governmental “red-tape.”

One factor causing businesses to vigorously enforce ethical standards is the:
A.desire to eliminate employee turnover.
B. fear of negative publicity.
C. focus on criminal penalties.
D. evasion of social audit measurements.

Doogood Corporation would like its employees, customers, and the general public to be aware of the activities and programs they have done for the community over the past year. The company might consider doing a:
A.contributory analysis.
B. responsibility review.
C. social audit.
D. annual payment report.

Several outside groups regularly monitor the activities of Metro Chemical Corporation. These groups are interested in the firm’s involvement and enforcement of their ethical and social responsibility policies. Who of the following is the least likely to be among the “watchdog” groups?
A.The financial officer of a church with funds invested in the chemical company.
B. Overseers from the World Trade Organization (WTO).
C. A student of environmental engineering attending a local college.
D. The president of the union representing the workers at the chemical company.

Ethical problems and issues of social responsibility are:
A.unique to firms involved in global trade.
B. unique to Canada.
C. not unique to Canada.
D. less important now than in the past.

When working with international firms, Canadian businesses:
A.tend to ignore the ethics of their international partners.
B. expect socially responsible behaviour from their business partners.
C. feel that their responsibility is limited to Canada.
D. try to avoid judging their international business partners by Canadian standards.

Issues of social responsibility and ethical behaviour are:
A.the result of greed found in capitalist countries.
B. found primarily in countries with a low standard of living.
C. a concern only of business professors.
D. found in many different countries.

The Fairtrade mark on a package indicates that:
A.the company must not be involved in weapons or tobacco businesses.
B. the company has contributed to the development of disadvantaged producers and workers.
C. the company must behave ethically.
D. the company cannot participate in insider trading.

__________ has been accused by human rights and labour groups of treating its workers poorly while lavishing millions of dollars on star athletes to endorse its products.
A.McDonald’s
B. Sears
C. Phillips-Van Heusen
D. Nike

Stories of political leaders accepting bribes in return for their influence have occurred worldwide. Unlike the past, these leaders have been forced to resign under intense public pressure. This indicates that:
A.politicians and religious leaders are above the law.
B. people are demanding higher standards of their leaders.
C. it is important not to get caught accepting a bribe.
D. the WTO has established global standards.

Short Answer Questions

Given the ethical lapses that are so prevalent today, what can be done to restore trust in the free-market and leaders in general?

Those who have broken the law need to be punished accordingly. Arrest business leaders, put them in handcuffs and take them to jail. This will show the public that it is time to get serious about legal and ethical behaviour in business. Write new laws making accounting records more transparent and more laws making businesspeople and others more accountable.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality

Identify and discuss the three questions that an ethics-based manager should ask when facing a potentially unethical action.
A) Is it legal? Am I violating any law or company policy? Regardless of the situation, this is the most basic step in an ethics-based management system.
B) Is it balanced? Am I acting fairly? Would I want to be treated this way? If a situation arises where one party wins everything at the expense of another party, the future may bring retaliation from the loser. While every situation cannot be completely balanced, it is important for the health of business relationships that we avoid major imbalances over time. An ethics-based manager maintains a win-win attitude.
C) How will it make me feel about myself? Will I feel proud when my family learns of my decision? Decisions that go against our sense of right and wrong make us feel bad and cause us to lose our self-esteem.

When faced with an ethical dilemma it might be helpful to ask yourself, is it legal? Give an example of a situation where you could ask yourself, am I violating any law or company policy?

Whether you are thinking about having a drink and then driving home, gathering marketing intelligence, designing a product, hiring or firing employees, etc.

Explain the difference between a compliance-based ethics code and an integrity-based ethics code.
Compliance-based ethics codes emphasize preventing unlawful behaviour by increasing control and penalizing wrongdoers. The primary focus is to conform to outside standards, (laws and regulations), and avoid criminal misconduct.
B. An integrity-based code of ethics defines the organization’s guiding values, creates an environment that supports ethically sound behaviour, and stresses a shared accountability among employees. There is still a requirement to conform to outside standards, but that is just a starting point. Integrity-based ethics codes move beyond legal compliance to create a “do-it-right” climate that emphasizes core values, such as honesty and fair play.

Identify the six-step approach to achieve a long-term improvement of business ethics.

1) Top management must adopt and unconditionally support an explicit corporate code of conduct.
2) Employees must understand that expectations for ethical behaviour begin at the top and that senior management expects all employees to act accordingly.
3) Managers and others must be trained to consider the ethical implications of all business decisions.
4) An ethics office must be set up with phone lines to allow employees to report questionable activities.
5) Suppliers, subcontractors, distributors, and customers must be told about the ethics program. Often pressure to put aside ethical considerations comes from outsiders, and it helps employees resist such pressure when everyone knows what the ethical standards are.
6) The ethics must be strictly enforced with timely action if any rules are broken.

Why should a business be managed ethically?

To maintain a good reputation; to keep existing customers; to attract new customers; to avoid lawsuits; to reduce employee turnover; to avoid government intervention; to please customers, employees, and society; to do the right thing.

Identify and discuss the social responsibilities of a firm to three stakeholder groups.

Customers. Businesses are responsible to satisfy customers by offering them goods and services of real value.
Investors. According to Milton Friedman, businesses are responsible to generate profits for their owners and investors. Some people believe that before “you can do good, you must do well”.
Employees. Firms have the responsibility to create jobs in which hard work and talent are respected and fairly rewarded.
Society and the Environment. Business organizations are responsible to create new wealth, promote social justice, and to improve the quality of the environment.

Businesses demonstrate corporate responsibility towards what four types of stakeholders?

Customers, investors, employees, society and the environment.

Give an example of where the Canadian government has been involved with business in environmental issues.

Syncrude and ducks, Sydney Tar Ponds

Identify and discuss the five types of groups that serve as “watchdogs” regarding how well companies enforce their ethical and social responsibility policies.

1) Socially conscious investors who insist that companies extend the firm’s own high standards to all their suppliers.
2) Socially conscious research organizations, such as Ethisphere.
3) Environmentalists who apply pressure by naming names of companies that don’t abide by the environmentalists’ standards.
4) Union officials who hunt down violations and force companies to comply to avoid negative publicity.
5) Customers who take their business elsewhere if a company demonstrates unethical and socially irresponsible practices.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-13 Social Auditing

Understanding Canadian Business 10Th Canadian Edition By William G Nickels - Test Bank

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Understanding Canadian Business 10Th Canadian Edition By William G Nickels - Test Bank

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