Exam 5: Managing Responsibly and Ethically

Managers play an especially important role in business ethics because they set the tone of the culture and are role models for other managers and employees.

When a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities, it is said to be socially responsive.

A __________ is a formal statement of an organization's primary values and the ethical rules it expects its employees to follow.

Refer to the scenario below to answer the following questions. Social Responsibility and Issue Intensity (Scenario) Rick is president of a company that manufactures secondary wood products for the construction industry. Recently, there have been many reports of a plywood sub-flooring product that has been failing in a number of commercial locations, resulting in several complaints about ruined floor coverings and, in one instance, the partial collapse of a floor, which injured three people. The manager of research and development has asked marketing to stop selling the product while he runs some tests to determine the source of the problem. However, third-quarter earnings reports are due out in two weeks and public knowledge of problems concerning this lucrative product are likely to delay the financing of the company's expansion plans and cause stock prices to tumble. Rick has a dilemma. Should he continue to sell the product and delay research efforts in order to maintain the expansion plans, but risk causing more damage and injury? Or should he immediately stop sales of the product and run the necessary tests, thereby placing the expansion plans at risk and causing potential losses for the company's shareholders? -The other managers also agreed that the flooring product was likely to fail again, resulting in further injury. This relates to which determinant of issue intensity?

Refer to the scenario below to answer the following questions. Social Responsibility and Issue Intensity (Scenario) Rick is president of a company that manufactures secondary wood products for the construction industry. Recently, there have been many reports of a plywood sub-flooring product that has been failing in a number of commercial locations, resulting in several complaints about ruined floor coverings and, in one instance, the partial collapse of a floor, which injured three people. The manager of research and development has asked marketing to stop selling the product while he runs some tests to determine the source of the problem. However, third-quarter earnings reports are due out in two weeks and public knowledge of problems concerning this lucrative product are likely to delay the financing of the company's expansion plans and cause stock prices to tumble. Rick has a dilemma. Should he continue to sell the product and delay research efforts in order to maintain the expansion plans, but risk causing more damage and injury? Or should he immediately stop sales of the product and run the necessary tests, thereby placing the expansion plans at risk and causing potential losses for the company's shareholders? -If Rick decides to stop sales and investigate the flooring product because he feels a responsibility toward society as well as shareholders, he would be operating under the __________ view of social responsibility.

Refer to the scenario below to answer the following questions. Approaches to Social Responsibility (Scenario) Marco was confused. His management class was focusing on social responsibility, and his assignment was to find examples of businesses that used different approaches toward social responsibility. He had three good examples but was not sure which case was an example of which concept. The first business was a fishing company that had been subject to protests from environmentalists. In their efforts to balance the interests of shareholders and other stakeholders, the company decided to change their harvesting methods so that dolphins would no longer be caught with the tuna. The second company was a fast-food restaurant whose primary objective was to maximize profits for its owners. Restaurant employees were paid minimum wages and benefits in accordance with local labour laws. The third business was a bank that spent millions of dollars a year on charitable causes. The bank's managers felt they had an ethical responsibility to do the right things and act in ways that are good for society. -Approach taken by managers at the fast-food restaurant is best described as social __________.

A firm that engages in social actions to meet its basic legal and economic responsibilities is taking a social ________ approach.

The social __________ approach to social responsibility is most consistent with the classical view.

Most adults are at the second stage of moral development: following rules only when doing so is in their best interest.

Refer to the scenario below to answer the following questions The Environmental Study (Scenario) You have just been challenged by your supervisor to study and report your findings on approaches that organizations use when dealing with the environment and when pursuing the goal of going green. Your boss tells you to study the four major approaches, differentiate among them, and report to him in a week. -The company brings in help from outside to evaluate decisions and management practices in relation to the organization's code of ethics. These evaluations are called ________.

Ethical reasoning at the __________ level of moral development indicates that moral values reside in maintaining expected standards and living up to the expectations of others.

Organizational culture that is high in conflict tolerance is most likely to encourage high ethical standards.

The values statement of Friendly Airlines emphasizes the importance of serving customers in a friendly, helpful, and caring manner. These values are reflected in its advertising slogan, "You're flying with friends at Friendly Airlines." This illustrates which purpose of shared organizational values?

The stakeholder approach to going green is a good illustration of social obligation because management protects stockholders' interests by following the basic legal requirements to protect the environment.

Refer to the scenario below to answer the following questions The Environmental Study (Scenario) You have just been challenged by your supervisor to study and report your findings on approaches that organizations use when dealing with the environment and when pursuing the goal of going green. Your boss tells you to study the four major approaches, differentiate among them, and report to him in a week. -Under what approach do organizations exhibit little environmental sensitivity, and simply obey laws, rules and regulations?

Which of the following examples reflects a socially responsible action by an organization?

Natural resource depletion, global warming, pollution, and toxic wastes are examples of ________.

The ________ approach to environmental issues is when an organization chooses to respond to multiple demands made by groups in its internal and external environments.

Most adults are at the __________ level of moral development.

Employees with a(n) __________ locus of control are likely to be more consistent in their moral judgments and actions than those with a(n) __________ locus of control.