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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 121

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Before it was publicly known that IBM was going to take over Lotus Development, an IBM secretary told her husband, who told two co- workers, who told friends, relatives, business associates, and even a pizza delivery man. A total of 25 people received the information and traded on this tip to make a profit. These people were:

A) really smart.
B) insider trading.
C) stealing from IBM.
D) acting fairly.

E) A) and B)
F) C) and D)

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Question 122

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The ethical standards by which international political leaders are judged are more lenient today than they were in years past.

A) True
B) False

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Question 123

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

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

Several years ago, the garment and soft goods industry agreed to adopt higher ethical standards with respect to contract manufacturers that produce their goods. The leadership agreed that this was a good approach in order to avoid the U.S. government from intervening and creating new laws to force the industry to only work with foreign manufacturers who operated with high ethical standards. This was sensible strategy on the part of the garment and soft goods industry.

Some investors believe it makes financial as well as moral sense to invest in companies whose practices promote sensitivity towards the environment.

A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a:

You are in a business meeting at work that requires your group to make an ethical decision. Your willingness to post the final decision on the bulletin board in the break room for all to see passes the test: "How will it make me feel about myself?"

People need to make a living. Under this circumstance, one of the best social programs a firm can offer is:

Zorn Enterprises, a successful property management firm in Pennsylvania donates all reusable and recyclable goods left by past tenants. Besides these contributions, each year, Zorn sponsors a neighborhood clean-up day in the areas where it owns properties, complete with gardening tools that become prizes and a volunteer picnic. Zorn Enterprises is an example of how a small firm can demonstrate .

The Legal Briefcase box, "Paying the Price" talks about illegal acts committed by executives at Enron, WorldCom, and Tyco International. This discussion demonstrates that business crimes are clearly illegal according to law, but seldom do they affect the operations of firms.

John was recently hired by Backstreet Books, an eclectic bookstore in a large college town. At the beginning of the first day on the job, his store manager handed him a small booklet consisting of company rules. He was asked to read it and sign and submit the last page, before starting work. Among other things, the rules explicitly discussed reprimands for grievous behavior and dismissal if the firm could prove that the employee was stealing product from the store. This booklet represented the of the store.

Getting even is one of the most powerful incentives for good people to do bad things.

Applying the ethical standards of the U.S. to foreign firms is a difficult process for U.S. firms.

Which of the following is an unresolved ethical issue that surrounds global trade?

Although college graduates would prefer to work for socially responsible companies,

Following an ethics-based approach to decision making will normally lead to higher:

The difference between an organization's positive social contributions and its negative social impacts is called their:

In order to avoid insider trading, the SEC (Securities and Exchange Commission) has adopted a new rule called that requires publicly traded companies to release information to everyone in a timely manner, rather than just to a few persons.

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