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Chapter 5--Managing Ethics and Social Responsibility

Student: ___________________________________________________________________________

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Ethics, found between the domains of law and free choice, is the code of moral principles that go erns any indi idual or groups. !rue "alse

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"ree choice lies between the domains of codified law and ethics. !rue "alse

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%f something is ethical, it must not be illegal. !rue "alse

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'lthough public confidence in business managers is at an all-time low, politics, sports, and non-profit organi(ations ha e not been affected. !rue "alse

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Managers carry a tremendous responsibility for setting the ethical climate in an organi(ation and can act as role models for others. !rue "alse

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'n ethical dilemma arises in a situation when each alternati e choice or beha ior is undesirable because of potentially harmful ethical conse*uences. !rue "alse

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!he moral agent is an indi idual who must ma,e an ethical choice in an organi(ation. !rue "alse

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!he irtue ethics approach to ethical decision ma,ing sidesteps debates about what is right, good, or .ust and bases decisions on pre ailing standards of the profession and the larger society, ta,ing the interests of all sta,eholders into account. !rue "alse

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Most ethical dilemmas in business in ol e a conflict between sta,eholders and shareholders. !rue "alse

10 !he irtue ethics approach to ethical decision ma,ing says that moral beha ior stems from personal . irtues. !rue "alse 1

11 1tilitarian, indi idualism, moral-rights, and ob.ecti e dualism are the four approaches that guide . ethical decision-ma,ing. !rue "alse 1# !he basis for the recent trend among companies to police employee personal habits such as alcohol and . tobacco consumption on the .ob is called the utilitarian ethic. !rue "alse 1$ Monitoring the %nternet to maintain the company2s ethical climate and wor,place producti ity could be . considered part of an indi idualistic approach. !rue "alse 1& !he ethical concept that acts are moral when they promote the indi idual2s best long term interests, . which ultimately leads to the greater good, is ,nown as the moral rights approach. !rue "alse 15 !he ethical concept that argues that moral beha iors produce the greatest good for the greatest number . of people is ob.ecti e dualism. !rue "alse 1) %ndi idualism is popular in the highly organi(ed society of today because it supports immediate self. gain. !rue "alse 1+ !he right of free consent, the right to pri acy, and the right of freedom of conscience are rights that . should be considered in the moral rights approach. !rue "alse 1- Compensatory .ustice argues that an employees compensation should be based on indi idual . performance. !rue "alse 1/ 3rocedural .ustice re*uires that rules be stated clearly, consistently and impartially enforced, and . administered fairly. !rue "alse #0 4e el $ of the 3ersonal Moral 5e elopment model is Con entional. . !rue "alse #1 !he 3recon entional le el of 3ersonal Moral 5e elopment li es up to e6pectations of others, upholds . laws, and fulfills duties and obligations of the social system. !rue "alse #

## %ndi iduals, at the precon entional le el, are concerned with e6ternal rewards and punishments and . obey authority to a oid detrimental personal conse*uences. !rue "alse %ndi iduals are concerned with e6ternal rewards and punishments at the principled le el. !rue "alse 'n indi idual at the postcon entional le el li es up to e6pectations of others, fulfills duties and obligations of social systems, and upholds law. !rue "alse !he great ma.ority of managers operate at le el two, the con entional le el. !rue "alse 3rincipled le el of moral de elopment is also referred to as the postcon entional le el. !rue "alse !he ma.ority of managers operate at the precon entional le el of personal moral de elopment. !rue "alse 'ppro6imately #07 of 'merican adults, according to your te6t, ne er reach the postcon entional le el of moral de elopment. !rue "alse Social responsibility is management2s obligation to ma,e choices and ta,e actions that will contribute to the welfare and interests of society as well as the organi(ation. !rue "alse Social responsibility co ers a narrow range of issues, many of which are unambiguous with respect to right or wrong. !rue "alse %mportant sta,eholders in corporations include the go ernment and the community. !rue "alse ' sta,eholder is any group within or outside the organi(ation that has a sta,e in the organi(ation2s performance. !rue "alse 'll sta,eholders of an organi(ation are its stoc,holders but not all stoc,holders are its sta,eholders. !rue "alse $

Special interest groups include trade associations, political action committees and consumerists. !rue "alse Economic de elopment that generates wealth and meets the needs of the current population while preser ing the en ironment for the needs of future generations refers to sustainability. !rue "alse Economic, legal, ethical, and discretionary responsibilities are the four areas of social responsibility which can be used to e aluate corporate social performance. !rue "alse Economic responsibility, carried to the e6treme, is called the profit-ma6imi(ing iew. !rue "alse Economic responsibility defines what society deems as important with respect to appropriate corporate beha ior. !rue "alse Ethical responsibility includes beha iors that are not necessarily codified into law and may not ser e the corporation2s direct economic interests. !rue "alse Ethical beha ior occurs when decisions enable an indi idual or company to gain at the e6pense of society. !rue "alse 1nfortunately, discretionary responsibility is in oluntary and is mandated by economics, law, or ethics. !rue "alse ' formal statement of the organi(ation2s alues regarding moral principles and go erning its response to social alues is called a code of ethics. !rue "alse 3rinciple-based statements define fundamental alues and contain general language about company responsibilities, *uality of products, and treatment of employees. !rue "alse 3olicy-based statements generally outline the procedure to be used in specific ethical situations. !rue "alse &

8ne of the newest positions in organi(ations is the chief operating officer, a response to widespread financial wrongdoing in recent years. !rue "alse ' chief ethics officer is a company e6ecuti e who o ersees all aspects of ethics and legal compliance. !rue "alse Ethics training programs are not an important supplement as long as a well-written code of ethics e6ists. !rue "alse !he disclosure by an employee of illegal, immoral, or illegitimate practices by the organi(ation is called whistle-blowing. !rue "alse Managers are often concerned good citi(enship will hurt performance. !rue "alse Managers who are essentially ethical indi iduals ma,e up the first pillar of an ethical organi(ation. !rue "alse 9hich of the following refers to the code of moral principles and alues that go ern beha iors with respect to what is right and wrong: '. ;. C. 5. E . Social responsibilit y "ree domain Ethics Codified law 5iscretionary responsibility

%ndi idualism is most closely related to< '. social respo nsibil ity.

; free . choice. C economic responsibilit y. 5 codified . law. E togetherne . ss. 'n organi(ation2s decision to produce a new product is in the< '. ;. C. 5 . E . domain of codified law. domain of free choice. domain of ethics. domain of compensatory .ustice. domain of social responsibility.

' new drug has not been appro ed by the "5' to sell in the 1.S. because further testing is needed. !he company has a chance to sell its product in another country immediately to start reco ering the costs of R = 5 and production three years ahead of time. !his e6ample places the decision in which of the categories from the te6t: '. !he ethical domain ; !he domain of free . choice C !he legal domain . 5 !he obstructi e . category E !he protecti e . domain

!he assumption that >%f it2s not illegal, it must be ethical,> ignores which of the following: '. ; . C . 5 . E . 5omain of codified law 5omain of ethics 5omain of free choice 5iscretionary responsibility 5omain of symbolism

!he decision by ';C %nternational to downsi(e and reduce its labor force is in the< '. domai n of codifi ed law. ; domain of . free choice. C domain of . ethics. 5 social . responsibilit y. E none of . these. ' recent poll found that ????? percent of people sur eyed say corporate 'merica@s moral compass is pointing in the wrong direction. ' . ; . C . 5 . E . 1 0 # / 5 # + ) / -

' situation that arises when all alternati e choices or beha iors ha e been deemed undesirable because of the potentially negati e ethical conse*uences, ma,ing it difficult to distinguish right from wrong, is considered< '. ; . C. 5. E . a moral agent. a social responsibility. an ethical dilemma. an ethical standard. discretionary responsibility.

9hich of the following is aAnB is the indi idual who must ma,e an ethical choice in an organi(ation: '. ; . C . 5. E . !he symbolic leader 'n obstructi e manager !he defensi e indi idual !he moral agent 'n authoritarian manager

'nne Chinoda, top e6ecuti e at "lorida ;lood Centers, is under pressure to resign because she too, a C+1,000 pay increase .ust months before she laid off &# employees. Chinoda@s decision lies in the< '. domai n of codifi ed law. ; domain of . free choice. C domain of . ethics. 5domain of social responsibility . E none of . these. -

Sharon is a manager at Softest !issue Corporation. She is faced with an interesting problem. 8ne of her employees has been cheating the company out of e6pense money. Sharon must decide whether or not to fire this employee. %n this role, Sharon is acting as< '. ; . C . 5 . E . a moral agent. an ethical theorist. a symbolic leader. an authoritarian leader. an obstructi e manager.

' normati e approach to ethical decision ma,ing< '. reduc es ethica l dilem mas to easytounder stand formu las. uses arious approaches to describe guiding alues for decisions. states that e eryone must use their employer2s alue system at wor,. dictates only one way to choose to resol e dilemmas. E none of . these. /

9hich approach is the ethical concept that moral beha iors produce the greatest good for the greatest number: '. ;. C . 5 . E . 5efe nsi e Dustice 1tilitaria n %ndi idual ism Moralrights

Robbie2s Robots decided to continue operations at one plant while shutting down another. !he decision was .ustified on the basis of what was best for the total corporation. !his is an e6ample of the< '. utilitari an approac h. ; indi idualism . approach. C moral-.ustice . approach. 5 . E . .ustice approach. illegal approach.

Caleb is a manager at Computer-Care Company. Ee is e6pected to consider the effort of each decision alternati e on all parties and select the one that optimi(es the satisfaction for the greatest number of people. !his is an e6ample of the< '. utilitarian approach. indi idualism approach.

; . C moral-.ustice approach. . 5. .ustice approach. E soft-line managerial . approach. 10

9hich ethical approach are companies citing to .ustify their policing of employee2s personal habits on and off the .ob, such as alcohol and tobacco consumption: '. Dustice approach ;. 1tilitarian approach C %ndi idualism approach . 5 Moral-.ustice approach . E 5iscretionary . responsibility !he decision by 3aula Reid, the manager who statted the 1.S. Secret Ser ice prostitution scandal in Catagena, was based largely on the ????? approach '. .ust ice ; moral. rights C obstru . cti e 5 indi id . ualism E practic . al 9hen e eryone is pursuing self-direction, the greater good is ultimately ser ed because people learn to accommodate each other in their own longterm interest is an e6ample of the?????. '. utilitarian approach indi idualism approach moral-.ustice approach .ustice approach

; . C . 5 . E social . responsibility

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9hich of the following is F8! a normati e ethics approach: '. 1tilitarian approach ;. %ndi idualism approach C. Social responsibility approach 5. Moral-rights approach E 'll of these are normati e approaches as described in the . te6t. !he golden rule >do unto others as they would do unto you> is< '. an e6ample of the utilitarian approach to ethical beha ior. ; representati e of the moral-.ustice approach to moral . decision ma,ing. C an e6ample of the alues that guide the indi idualism . approach to ethical beha ior. 5. silly and outdated. E an e6ample of the .ustice approach to ethical . beha ior. Euman beings ha e fundamental rights and liberties that cannot be ta,en away by another indi idual2s decision. !his ethical decision ma,ing approach is ,nown as the< '. utilita rian appro ach. ; indi idualis m approach. C moral-rights . approach. 5 dualism . approach. E none of . these.

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!he ????? refers to the ethical concept that moral decisions are those that best maintain the rights of those people affected by them. '. ;. C. 5. E . indi idualism approach .ustice approach utilitarian approach moral-rights approach discretionary responsibility approach

9hich of the following is F8! one of the moral rights that could be considered during decisionma,ing: '. !he right to free consent. ; !he right to in ade . pri acy. C !he right to free speech. . 5 !he right of freedom of . conscience. E !he right to life and . safety. ????? to ethical decision-ma,ing is consistent with due process, free consent, pri acy, freedom of conscience and free speech. '. Moralrights approach ; %ndi idualism . approach C 1tilitarian approach . 5. Dustice approach E 5ual-economic . approach

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Se6ual harassment is unethical because it iolates an important part of which approach to ethical beha ior: '. !he utilitarian approach ; !he indi idualism . approach C !he .ustice approach . 5 !he moral-rights . approach E !he defensi e . approach !he ethical decision approach that re*uires persons to be guided by standards of e*uity, fairness and impartiality is the< '. moral-rights approach. ; indi idualism approach. . C. utilitarian approach. 5. .ustice approach. E discretionary . responsibility. !he moral rights approach that deals with performing e6perimental treatment on unconscience trauma patient is the< '. right of free consent. right to pri acy.

; . C right of freedom of . conscience. 5 . E . right of free speech. right of due process.

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9hich of the following is not a concern to managers under the .ustice approach: '. Com pens atory .ustic e ; 5istributi . e .ustice C 3rocedura . l .ustice 5 8bstructi . e .ustice E 'll of . these ????? refers to the concept that different treatment of people should not be based on arbitrary characteristics. '. 3roce dural .ustic e ; Compensato . ry .ustice C 5istributi e . .ustice 5 8rgani(atio . nal .ustice E Moral. .ustice

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5is, Replacement Ser ices has .ust completed a procedure manual to handle employee grie ances. 8ne of the main criteria is to ma,e it clear to employees that rules will be administered fairly and consistently. 5is, Replacement operates on< '. the procedural .ustice approach. the utilitarian approach. the indi idual approach. the defensi e approach. the free-choice approach.

; . C . 5 . E .

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9hich of these refers to procedural .ustice: '. !he conce pt that differe nt treatm ent of people should not be based on arbitra ry charac teristic s. !he concept that rules should be clearly stated and consistently and impartially enforced. !he concept that indi iduals should be compensated for the cost of their in.uries by the party responsible. !he concept that people should be treated differently. E Fone of . these.

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!he concept that the party responsible should compensate indi iduals for the cost of their in.uries is referred to as< '. distributi e .ustice. ;. in.ury .ustice. C procedural .ustice. . 5 organi(ational . .ustice. E compensatory . .ustice. !he thin,ing underlying the domain of ???? is the closest to the .ustice approach. '. so ci al re sp on si bi lit y ; free . choi ce C la . w discre tionar y respo nsibil ity E ethi . cs

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Most of the laws guiding human resource management are based on the< '. utilitarian approach. ; moral-rights . approach. C indi idualism . approach. 5 .ustice approach. . E collecti ism . approach. ???? is F8! included in the model of personal moral de elopment described in your te6t. '. ;. C. 5. E . 3recon entional le el Con entional le el 3rincipled le el 3ostcon entional le el 'll of these are included in the model

%n what stage of personal moral de elopment is a person mostly concerned with e6ternal rewards and personal conse*uences of an action: '. 3reco n enti onal ; Con ention . al C 3rincipled . 5 5iscretiona . ry E Fone of . these

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!he ????? leadership style matches with the precon entional le el of personal moral de elopment. '. ; . C . autoc ratic team oriented ser ant leadership

5 guidingGenc . ouraging E transformi . ng ????? matches with the precon entional le el of personal moral de elopment. '. 9or, group collab oratio n

; !as, . accomplish ment Empowered employees 5 "ull . participatio n E !ransformi . ng

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9hich of these employee beha iors matches with the con entional le el of personal moral de elopment: '. ; . C . 5 . E . !as, accompli shment Empowered employees 9or, group collaboration "ull participation 'ct in own interest

9hich of the following stages is the stage of personal moral de elopment in which an indi idual de elops an internal set of standards and alues: '. 3r ec on e nti on al ; Con entio nal C 3rinc . ipled 55iscr etion ary E Soc . ial

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3eople ma,ing decisions based on an internal set of beliefs that has more meaning to them than the e6pectations of others< '. are in the preco n enti onal le el of moral de el opme nt. are in the con entional le el of moral de elopment. Care in the principled le el of moral de elopment. 5do not care what people thin, of them. E none of . these.

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9hich of these employee beha iors matches with the postcon entional le el of personal moral de elopment: '. Emp owe red emp loye es, full parti cipat ion

; !as, accomplis hment C 'ct in own interest 59or, group collaborat ion E 'utocrat . ic Regarding the le els of personal moral de elopment, the ma.ority of managers operate at the ????? le el. '. ;. C . 5 . E . precon entio nal autocratic postcon enti onal con entiona l transformati e

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!he great ma.ority of managers operate at the< '. precon ention al le el. principled le el. con entional le el. postcon entio nal le el.

; . C . 5 .

E autocratic . le el. 9hen the USS Indianapolis san, after being torpedoed, one Fa y pilot disobeyed orders and ris,ed is life to sa e men who were being pic,ed off by land shar,s. !he Fa y pilot was operating from the ????? le el of moral de elopment. '. ; . C . preco n ent ional con entio nal postcon en tional

5. lowest E conser ati . e ????? matches with the postcon entional le el of personal moral de elopment. '. !eam oriented ;. 'utocratic C HuidingGencoura . ging 5. Coerci e E Ser ant . leadership

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8nly about ????? percent of 'merican adults reach the le el-three stage of moral de elopment. '. ;. C . 5 . E . tw o fou r ele en fifte en twen ty

9hich of these best illustrates the precon entional stage of moral de elopment: '. E er ybod y else is doing it, so it must be o,ay. ;9hat would my boss thin, if % did this: % ,now this is not right, and % will not do it, e en if e eryone else is. 9hat am % going to get from ma,ing this decision: E 'll of . these.

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!he con entional stage of moral de elopment is best described by which of the following statements: '. % won2t do that beca use the boss will be upset with me. E erybody else is doing it, so it must be o,ay. % ,now this is not right, and % will not do it, e en if e eryone else is. 9hat am % going to get from ma,ing this decision: E 'll of . these.

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Most people ha e learned to conform to e6pectations of good beha ior e6pected by colleagues, family, friends, and society. !hey are in what stage of moral de elopment: '. 3rec on e ntion al Con enti onal 5iscretio nary 3rinciple d !radition al

; . C . 5 . E .

'ny group within or outside the organi(ation that has a sta,e in the organi(ation2s performance is called< '. a supplier. ; an international . customer. C a sta,eholder. . 5. 83EC. E a trade . association. 3rimary sta,eholders of an organi(ation include< '. empl oyee s. ; customer . s. Cin estors and shareholde rs. 5 suppliers . . E all of . these.

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'll of the following are e6amples of special interest groups e6cept< '. profes sional associ ations .

; trade . associations . C political action committees. 5. courts. E consumeris . ts. 9hat type of a sta,eholder would a nature conser ation group be for a paper manufacturing company: '. Suppli er ; Competitor . C Employee . 5 Special . interest group E Fone of . these 9ith a philosophy of ?????, managers wea e en ironmental and social concerns into e ery strategic decision, re ise policies and procedures to support these efforts and goals. '. sustain ability conser ation

; . C. ethics 5 preser ation . E human . concerns

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????? is economic de elopment that generates wealth and meets the needs of their current generation while focusing on future generations. '. Ethical manage ment ; 'cti ist strategy . C. Sustainability 5 Mar,et strategy . E "uture . management 9hich of the following concepts argues that organi(ations can find inno ati e ways to create wealth at the same time they are preser ing natural resources: '. ; . C . 5 . E . 3reser ation Conser ati on En ironmen talism 3rotectioni sm Sustainabili ty

!he profit-ma6imi(ing iew of economic responsibility is ad ocated by ?????. '. Milt on "rie dma n 'rthur 'nderso n 5onald !rump

; . C .

5 9arren . ;uffett E Ste e . Dobs #/

'ccording to the boo,2s model for .udging corporate social performance, social responsibility is di ided into what into four sections: '. Ethica l, legal, techni cal, and ration al Mandatory, technical, discretionary, and economic C4egal, mandatory, economic, and ethical 55iscretionary, legal, economic, and ethical E Fone of . these 9ith respect to appropriate corporate beha ior, what society deems ????? as important. '. ethical responsib ility ; discretionary . responsibility C . 5 . E . economic responsibility legal responsibility moral responsibility

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????? is considered a decision that enables an indi idual or company to benefit at society2s e6pense. '. ; . C . 5 . ' legal beha ior 'n unethical beha ior 'n economic responsibility ' discretionary responsibility

E ' responsible . beha ior 9hich of the following responsibilities is purely oluntary and is guided by a company2s desire to ma,e social contributions not mandated by economics, law, or ethics: '. ; . C. 5 . E . Ethic al Economi c 4egal 5iscretion ary Sta,ehold er

????? is the responsibility that goes beyond societal e6pectations to contribute to the community welfare. '. Ethical responsibili ty 5iscretionary responsibility Economic responsibility 4egal responsibility

; . C . 5 . E !echnical . responsibility

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????? means that managers are honest and trustworthy, fair in their dealings with employees and customers, and beha e ethically in both their personal and professional li es. '. ;. C. 5 . E . Ethical leadership "ollowership Corporate espionage Command-and-control approach Concern for production leadership

' code of ????? is a formal statement of the company2s alues concerning ethics and social issues. '. int egr ity ;. trust C citi(e . nship 5 . E . ethic s hones ty

Statements that define fundamental alues and reference organi(ational responsibilities, products and employees are often called ?????. '. principle-based ;. policy-based C. ethically-based 5. codified E codes of organi(ational . integrity

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????? includes beha ior that is not always written down and may actually not ser e an organi(ation2s bottom-line. '. 4egal respo nsibili ty ; Economic responsibilit y C Ethical . responsibilit y 55iscretionar y responsibilit y E Fone of . these 8f the following, which may whistle-blowers suffer: '. Dob loss ; 8stracism by . cowor,ers C !ransfer to lower-le el position 5 Eostile wor, . en ironment E 'll of the . abo e

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M'F'HER2S SE83!'4I in Chapter 5 addresses how today@s companies are trying to teach sustainablility to new managers by placing them with which of the following types of organi(ations: '. small, entrepreneurial start-ups ;. Fonprofits in de eloping countires C Ho ernment agencies in de eloped countries . 5 !ech firms that are de eloping cutting edge . products E 4ogistics companies that supply products . worldwide 'n e6ample of an ethical structure is< '. chief ethics officer.

;a formal statement of company alues. C an e*ual . opportunity policy. 5 whistle. blowing. E corporate . speech. 9hen an official is gi en the responsibility of o erseeing all aspects of ethics and legal compliance. SGhe is referred to as< '. a whistle blower. ; a chief ethics . officer. C ice-president of human resource management. 5 a yes-man. . E a political . play. $&

9hich of these is the disclosure by an employee of an illegal acti ity: '. !att ling ; 9histle. blowing C8rgani(at ional communi cation 5 !he filing of a disclosur e statement E Snoopi . ng ????? is not part of the structures and systems pillar of an ethical organi(ation. '. ;. C. 5 . E . Corporate culture Code of ethics Ethics committee 9histle-blowing mechanisms Rewarding ethical beha ior

E6amples of unethical beha ior toward ????? include a hostile wor, en ironment and iolations of health and safety rules. '. ; . C. 5 . E . cust ome rs financie rs society supplier s employe es

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!he relationship between social responsibility and financial performance has been shown to be ?????. '. non-e6istent ;. positi e C. negati e 5. not important E a reflection of top . leadership 9hich of these is true about the policy a ban, adopts toward its in esting of depositor2s money: '. %t is an e6pre ssion of its philo soph y of socia l respo nsibil ity.

;%t is important only to the community. C%t has no ethical implication s. %t would represent its personal state of moral de elopmen t. E 'll of . these.

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!he obligation of organi(ation management to ma,e decisions and ta,e actions that will enhance the welfare and interests of society as well as the organi(ation is referred to as< '. organi (ation al respo nsibili ty.

; social . responsibilit y. C discretionary responsibility . 5 economic responsibilit y. E none of . these.

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Scenario - Larry Campbell !he pressure was on again. 4arry Campbell, the Jice 3resident at !ool!ime Eardware, %nc., was recei ing re*uests from men and women inside the firm and outside the firm, as,ing him to re iew the company2s promotion policies. 8f the 5# middle and high le el e6ecuti es, only three were women. !he pressure was to re iew the policies that had led to this percei ed imbalance and, if appropriate, ta,e the steps necessary for correction. !he decision to recruit, hire, train and promote both men and women e*ually is based on the ethical approach of ?????.
a. b. c. d. e. indi idualism approach. moral rights approach. all of these pro ide the basis. none of these.

utilitarian appro

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Scenario - Larry Campbell !he pressure was on again. 4arry Campbell, the Jice 3resident at !ool!ime Eardware, %nc., was recei ing re*uests from men and women inside the firm and outside the firm, as,ing him to re iew the company2s promotion policies. 8f the 5# middle and high le el e6ecuti es, only three were women. !he pressure was to re iew the policies that had led to this percei ed imbalance and, if appropriate, ta,e the steps necessary for correction. 1sing the .ustice approach for ethical decisionma,ing, the logic of promoting *ualified men and women would be supported by<
a. b. c. d. e. distributi e .ustice. procedural .ustice. compensatory .ustice. all of these.

e*ual rights .ust

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Scenario - Larry Campbell !he pressure was on again. 4arry Campbell, the Jice 3resident at !ool!ime Eardware, %nc., was recei ing re*uests from men and women inside the firm and outside the firm, as,ing him to re iew the company2s promotion policies. 8f the 5# middle and high le el e6ecuti es, only three were women. !he pressure was to re iew the policies that had led to this percei ed imbalance and, if appropriate, ta,e the steps necessary for correction. 'AnB ??????? would outline the procedures 4arry should use in this and other ethical situations.
a. b. c. d. e. principle-based code of ethics corporate credo policy-based statement ethics committee

????? is the code of moral principles and alues that go ern the beha iors of a person or group with respect to what is right or wrong. ???????????????????????????????????????? 9hen alues and standards are written into the legal system, it is referred to as ?????. ???????????????????????????????????????? 'AnB ????? arises in a situation when each alternati e choice or beha ior is undesirable because of potentially harmful ethical conse*uences. ???????????????????????????????????????? !he ????? is an indi idual responsible for ma,ing an ethical choice. ???????????????????????????????????????? !he ethical concept that moral beha iors produce the greatest good for the greatest number is referred to as ????? approach. ???????????????????????????????????????? &0

!he ????? approach contends that acts are moral when they promote the indi idual2s best long-term interests. ???????????????????????????????????????? !he ????? approach assets that human beings ha e fundamental rights and liberties that cannot be ta,en away by an indi idual2s decision. ???????????????????????????????????????? !he ????? approach holds that moral decisions must be based on standards of e*uity, fairness, and impartiality. ???????????????????????????????????????? ????? .ustice re*uires that different treatment of people not be based on arbitrary characteristics. ???????????????????????????????????????? ????? .ustice re*uires that rules should be clearly stated and consistently and impartially enforced. ???????????????????????????????????????? ????? .ustice argues that indi iduals should be compensated for the cost of their in.uries by the party responsible. ???????????????????????????????????????? !he ????? approach to ethical decision ma,ing says that moral beha ior stems from personal irtues. ???????????????????????????????????????? !he ????? approach to ethical decision ma,ing sidesteps debates about what is right, good, or .ust and bases decisions on pre ailing standards of the profession and the larger society, ta,ing the interests of all sta,eholders into account. ???????????????????????????????????????? ' decision to monitor employees@ nonwor, acti ities iolates the right to ?????. ???????????????????????????????????????? 't the ????? le el of personal moral de elopment, indi iduals are most concerned with e6ternal rewards and punishments. ???????????????????????????????????????? 3eople learn to conform to the e6pectations of good beha ior that are set by peers and society at the ????? le el. ????????????????????????????????????????

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%ndi iduals at the ????? le el are guided by an internal set of alues and standards and will e en disobey rules or laws that iolate these principles. ???????????????????????????????????????? Most managers operate at the ????? le el. ???????????????????????????????????????? Management2s obligation to ma,e choices that will contribute to the well being of both the organi(ation and society is ,nown as ?????. ???????????????????????????????????????? 'AnB ????? is any group within or outside the organi(ation that has a sta,e in the organi(ation2s performance. ???????????????????????????????????????? 8rgani(ations that are ????? responsible consider the effects of their actions on all sta,eholder groups and may in est in a number of philanthropic causes that benefit sta,eholders. ???????????????????????????????????????? ????? refers to interacting with the community in which a company does business in a way that ma,es money for the company but also impro es the long-term well-being of the community. ???????????????????????????????????????? !he ????? approach to economic responsibility means that economic gain is the only social responsibility and can lead companies into trouble. ???????????????????????????????????????? 9hen a company does .ust what is necessary to satisfy legal re*uirements, it falls under the ????? approach in shades of green. ???????????????????????????????????????? ????? responsibility is purely oluntary and guided by a company2s desire to ma,e social contributions not mandated by economics, law, or ethics. ???????????????????????????????????????? 'AnB ????? is a formal statement of the company2s alues concerning ethics and social issuesK it communicates to employees what the company stands for. ???????????????????????????????????????? ????? generally outline the procedures to be used in specific ethical situations, such as mar,eting practice, conflicts of interest, and obser ance of laws. ???????????????????????????????????????? &#

' group of e6ecuti es assigned to o ersee the organi(ation2s ethics by ruling on *uestionable issues and disciplining iolators is referred to as aAnB ?????. ???????????????????????????????????????? ????? programs help employees deal with ethical *uestions and translate the alues stated in a code of ethics into e eryday beha ior. ???????????????????????????????????????? Employee disclosure of illegal organi(ation acti ities is ,nown as ?????.. ???????????????????????????????????????? !he relationship between social responsibility and financial performance has been shown to be ?????. ???????????????????????????????????????? 4ist three of the si6 moral rights that should be considered during decision ma,ing.

4ist the four criteria for ethical decision-ma,ing described in the boo,.

4ist three e6amples of primary sta,eholders.

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4ist the four responsibilities of corporate social performance.

5efine ethics and e6plain how the domain of ethics relates to law and free choice.

4ist the four approaches that are used to describe alues for guiding ethical decision ma,ing. ;riefly describe each.

;riefly e6plain the .ustice approach to ethics and then e6plain the three types of .ustice.

4ist and define the stages of moral de elopment.

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9hat is social responsibility: 9hy is it considered a difficult concept to grasp:

E6plain the concept of a sta,eholder and list fi e common sta,eholders.

4ist and define the criteria of corporate social responsibility.

E6plain the differences between principle-based statements and policy-based statement in an organi(ation2s code of ethics.

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Chapter 5--Managing Ethics and Social Responsibility Iey


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; ; C E 5 5 ' C E ' 5 5 ; 5 ; ' 5 ' C E ; ' ; ; E E ; ' ; d b d Ethics codified law

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ethical dilemma moral agent utilitarian indi idualism moral-rights or moral rights .ustice 5istributi e 3rocedural Compensatory irtue ethics practical pri acy precon entional con entional postcon entional principled con entional or second social responsibility sta,eholder socially social sustainability profit-ma6imi(ing legal 5iscretionary code of ethics 3olicy-based statements ethics committee Ethics training whistle-blowing positi e Students can list any three of the following< the right of free consent, the right to pri acy, the right of freedom of conscience, the right of free speech, the right to due process, and the right to life and safety. 1tilitarianism, indi idualism, moral-rights, and .ustice. %n estors, shareholders, employees, customers, and suppliers are all e6amples of primary sta,eholders. economic responsibility, legal responsibility, ethical responsibility, and discretionary responsibility

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Ethics is the code of moral principles and alues that go ern the beha iors of a person or a group with respect to what is right or wrong. %n Codified 4aw, the alues and standards are written into the legal system and enforceable in the courts. %n free choice, the law has no say and the indi idual or group has complete freedom. !he domain of ethics is found between Codified 4aw and free choice. 9hile written laws do not bind ethics, still there are standards of conduct based upon shared principles and alues. 1tilitarian approach is the ethical concept that moral beha iors produce the greatest good for the greatest number. %ndi idualism approach is the ethical concept that acts are moral when they promote the indi idual2s best long-term interests. !his will e entually lead to the greatest good. Moral-rights approach is the ethical concept that moral decisions are those that best maintain the rights of those people affected by them. Dustice approach is the ethical concept that moral decisions must be based on standards of e*uity, fairness, and impartiality. !he .ustice approach is the ethical concept that moral decisions must be based on standards of e*uity, fairness, and impartiality. 5istributi e .ustice re*uires that different treatment of people be based only on substanti e differences and not be based on arbitrary characteristics. 3rocedural .ustice re*uires that all rules be administered fairly. Rules should be clearly stated and consistently enforced. Compensatory .ustice re*uires that indi iduals should be compensated for the cost of their in.uries by the party responsible and that indi iduals not be held responsible for matters o er which they ha e no control. 'ccording to the model in the boo,, there are three stages of moral de elopment. 5uring the precon entional stage Ale el 1B, indi iduals are mostly concerned with e6ternal rewards and punishments. !hey obey authority in order to a oid punishment. %ndi iduals conforming to the e6pectations of others characteri(e the second le el, the con entional stage. "ulfilling social and interpersonal obligations is important. 't the postcon entionalGprincipled stage Ale el $B, an indi idual2s beha ior is directed by an internal set of alues and beliefs. !hese alues are more important than the e6pectations of others. Social responsibility is management2s obligation to ma,e choices and ta,e actions that will contribute to the welfare and interests of society as well as the organi(ation. %t can be a difficult concept to grasp because different people ha e different beliefs as to what will impro e society2s well being and it co ers a range of ambiguous issues with respect to right or wrong. ' sta,eholder is any indi idual or group of people, inside the organi(ation or outside the organi(ation, that has a sta,e or direct interest in that organi(ation2s performance. Sta,eholders inside the organi(ation include the employees, the managers, and the stoc,holders. Sta,eholders outside the organi(ation include customers, suppliers, regulatory agencies, and creditors. !here are four criteria of corporate social responsibility. !he first criterion of social responsibility is economic responsibility. !he organi(ation2s basic responsibilities are to produce the goods and pro ide the ser ices that society wants, while at the same time ma6imi(ing profits and wealth for owners and stoc,holders. !he second criterion is legal responsibilities. !hrough its laws, each society has defined what it considers to be appropriate corporate beha ior. 'ccording to this criterion, businesses are e6pected to fulfill their economic goals within the law. Ethical responsibilities ma,e up the third criterion. !hese include beha iors not necessarily codified into law, nor do they necessarily ser e the organi(ation2s direct economic interests. 5iscretionary responsibilities, the fourth criterion, are entirely oluntary and are guided by the organi(ation2s desire to ma,e a social contribution not mandated by economics, law, andGor ethics. 3rinciple-based statement are designed to affect corporate cultureK they define fundamental alues and contain general language about company responsibilities, *uality of products, and treatment of employees. Heneral statements of principle are often called corporate credos. 3olicy-based statements generally outline the procedures to be used in specific ethical situations. !hese situations include mar,eting practices, conflicts of interest, obser ance of laws, proprietary information, political gifts, and e*ual opportunities.

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