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Bus130 ch4 MC – Flashcards

Rebecca Baker

7 July 2022

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question

Deceptive advertising and promotion of inferior products are examples of __________ ethical issues. A. accounting B. marketing C. social D. finance E. economic

answer

B These are two major issues related to marketing ethics.

question

Unlike other business functions like accounting or finance, people in marketing are often singled out as the root cause of ethical concerns because A. they are trained in the art of effective persuasive communication. B. they are not considered to be as quantitatively skilled as accounting and finance people. C. they interact directly with consumers. D. the problems that occurred at Enron, Tyco, and WorldCom were caused by marketers. E. doing a good job of marketing requires some degree of unethical behavior.

answer

C Marketers' actions receive more scrutiny because they are responsible for most of the firm's external connections.

question

Products that may damage the environment, the use of sweatshop labor, and the marketing of dangerous products are examples of A. internal, controllable marketing issues. B. issues that don't even need to be discussed in ethical firms. C. marketing issues but not ethical issues. D. marketing ethical issues. E. ethical issues but not marketing issues.

answer

D These are examples of ethical issues of concern to marketers. Even in a firm with a strong ethical climate, some business opportunities that arise may raise ethical concerns and need to be considered in the context of the firm's ethical values.

question

In a recent Gallup survey, which of the following professions was rated lowest in ethical standards? A. Car salespeople B. Lawyers C. Senators D. Real estate agents E. Medical doctors

answer

A In the study shown in the text, car salespeople were rated the least ethical professionals.

question

Janice was disturbed to find that the real estate company she had just started working for did not have a(n) __________, the starting point for creating a strong ethical climate. A. ethical behavior seminar B. set of ethical values C. employment contract D. social responsibility program E. ethical activity bonus

answer

B The first step in creating a strong ethical climate is to establish a set of shared ethical values that the company and its employees will respect when doing business.

question

The Johnson & Johnson Credo acknowledges the company's responsibility to A. users of its products, its employees, the community, and its stockholders. B. its stockholders first, its managers, its employees, and its suppliers and vendors. C. domestic markets, other countries in the developed world, and finally countries in the developing world. D. users of its products, the researchers who develop the products, regulators, and its stockholders. E. doctors, nurses, insurance companies, and users of its products.

answer

A The opening of the Credo, quoted in the text, mentions all users of its products (including doctors and nurses), its employees, the communities in which employees live, and its stockholders.

question

The Johnson & Johnson Credo A. was a response to the Tylenol incident. B. proved ineffective when the company needed to act in the Tylenol crisis, which was a clear lesson to other companies to update similar documents. C. was copied by all other pharmaceutical companies. D. offers an extremely detailed description of potential problems for the company. E. has guided the firm since it was written in the 1940s.

answer

E Robert Wood Johnson wrote the Credo in 1943, and it has guided J&J through several crises.

question

When Johnson & Johnson removed all Tylenol from the shelves after some containers were tampered with, poisoning and killing seven people, the company A. sacrificed short-term profits for long-term credibility. B. was forced to do so following extensive consumer outcry. C. was ordered to do so by the Food and Drug Administration. D. felt that nothing could stop Tylenol from losing most of its customers. E. developed plans to sell the returned Tylenol bottles in less developed countries.

answer

A J&J immediately withdrew Tylenol from the shelves when the problem was discovered, sacrificing short-term profits but protecting their customers' welfare.

question

Jacqueline was pleased to read a paraphrasing of the Golden Rule, "Do unto our customers as you would have them do unto you," as part of her new employer's mission statement. Next, Jacqueline expects to find in the firm's employee handbook A. a summary of recent Supreme Court business ethics cases. B. a statement that she needs to decide how the Golden Rule applies to her job on her own, without any influence from her employer. C. explicit rules governing the firm's transactions. D. a list of employee concerns. E. a list of benefits offered to employees.

answer

C A firm wishing to create a strong ethical climate needs to establish a set of ethical values shared by the firm, and follow that with explicit rules for the implementation of the values in the firm's business.

question

Almost every organization includes values and ethics as part of their mission statement and includes a set of explicit rules in the company's employee handbook. Once the rules are in place there must be: A. a system of controls that rewards appropriate behavior and punishes inappropriate behavior. B. a Web site where employees can vent their frustration over lapses in ethical behavior. C. weekly reminder seminars to enforce guidelines. D. commitment from customers to accept these rules. E. all of these

answer

A It is not enough to develop rules; the reward system must also be set up to encourage the desired behaviors and punish infractions.

question

Which of the following types of unethical behavior are likely to be observed in marketing environments? A. High pressure sales techniques. B. Deceptive sales tactics. C. Misrepresentation of company data. D. Misleading advertising. E. All of these.

answer

E These are all examples of unethical behavior marketing managers have reported observing.

question

New real estate disclosure regulations require sellers and their agents to tell prospective buyers about any existing problems. Previously, they were only expected to answer buyers' questions. The new regulation addressed the marketing ethical problem of A. high-pressure sales techniques. B. deceptive pricing tactics. C. misrepresentation of company data. D. misleading advertising. E. withholding information.

answer

E Previously, real estate agents could withhold information from buyers unless the buyers explicitly asked for it.

question

Edward is seriously considering developing his entry-level marketing position into a full-fledged career. His mentor suggested he learn and demonstrate the Ethical Values in the AMA Code of Ethics. Which of the following is not one of those Ethical Values? A. Honesty when dealing with customers and stakeholders. B. Fairness in balancing the needs of both buyers and sellers. C. Respect for the human dignity of all stakeholders. D. Dedication to increasing the return on investment for shareholders. E. Citizenship to fulfill economic, legal, philanthropic and social responsibilities strategically.

answer

D While corporations do have a duty to their shareholders, the AMA Code of Ethics does not deal with this issue.

question

Elizabeth has developed a promotional campaign for a client that promises a hefty return for her cashpoor business. While the campaign does not violate any laws, it might be considered manipulative and misleading, especially when targeted toward senior citizens. If Elizabeth were to consult the AMA Code of Ethics she would discover that: A. unusually creative campaigns can be prioritized above ethical concerns if the client or firm is in financial danger. B. if her client approves the campaign, she does not need to worry about ethical issues. C. the General Norms and Ethical Values are too vague to be useful, and she should rely on her own personal ethics. D. her campaign might be difficult to justify ethically, despite its creativity and its ability to meet both her needs and those of her client. E. there are few practical guidelines in situations like these.

answer

D As in the saying, "The ends do not justify the means," the fact that the campaign might be successful does not eliminate ethical concerns. The AMA Code of Ethics should provide useful guidance.

question

The AMA Code of Ethics is silent with regard to: A. regulators. B. customers. C. economically vulnerable segments such as children and the elderly. D. consultants. E. none of these. The AMA Code of Ethics mentions each of these.

answer

E The AMA Code of Ethics offers guidance on dealing with all of the above- mentioned groups.

question

When making decisions, managers often have to decide between doing what is beneficial for them (and possibly the firm) in the short run, and doing what is right and beneficial for the firm and for society in the long run. To address this conflict, a firm A. must evaluate its quarterly profit statement from an ethics standpoint. B. must state its long-term goals in general terms, so as to not interfere with managers' short-term goals. C. must always put society's needs ahead of the firm's needs. D. must ensure that long-term goals are aligned with the short-term goals of each individual within the firm. E. do all of these.

answer

D The firm does not need to always put society's needs above its own; however, it is important to ensure that short-term behavior supports long-term goals.

question

After a rash of embarrassing and potentially illegal activities in her organization, Jane decides to evaluate the organization's ethical standards and practices. Jane will assess: A. whether or not the organization has a strong ethical climate. B. what explicit rules exist for governing the firm's transactions. C. the current code of ethics. D. what system is in place for rewarding and punishing behavior. E. all of these

answer

E All of these factors must be in place, and implemented well, in order to maximize the likelihood that employees will behave ethically and in accordance with the firm's values.

question

One of Big Ben Clock Company's customers has complained to the home office about high-pressure sales tactics used by one of Big Ben's sales representatives. The company's code of ethics explicitly directs sales personnel not to engage in such practices. The manager of Big Ben will likely: A. assess whether or not the organization has a strong ethical climate. B. determine what explicit rules exist for governing the firm's transactions. C. review the current code of ethics to see if it is explicit enough. D. determine an appropriate punishment for the sales representative. E. all of these

answer

D In this case, the manager is not evaluating the sufficiency of existing ethical standards. Instead, the manager is dealing with a violation of an explicit requirement of the existing standards. In this case, unless there is reason to believe that the violation did not actually occur, the manager should consider appropriate punishment.

question

Compared to the average company, firms with strong ethical climates tend to A. employ more business development consultants. B. offer more goods and services. C. be more socially responsible. D. invest more in sales training software. E. have higher turnover.

answer

question

One of All Army Credit Union's customers complained to the home office about huge fees assessed to his account that were not mentioned when he opened the account. The manager of All Army Credit Union should begin handling the situation by: A. assess whether or not the organization has a strong ethical climate. B. determine what explicit rules exist for governing the firm's transactions. C. review the current code of ethics to see if it is explicit enough. D. determine an appropriate punishment for the staff member who generated the fees. E. all of these

answer

B In this case, the manager is not evaluating the sufficiency of existing ethical standards. Instead, the manager is using the standards to evaluate what happened. It is too soon to punish the employee who generated the fees. Perhaps the fees were proper, and the customer was misinformed about fees when opening the account. A good starting point is to investigate the rules that apply to the situation, and then determine what went wrong.

question

Compared to the average company, firms with strong ethical climates tend to: A. employ more business development consultants. B. offer more goods and services. C. be more socially responsible. D. invest more in sales training software. E. all of these

answer

C A strong ethical climate and social responsibility often (though not always) go hand in hand.

question

Many executives and corporate boards of directors do not perceive social responsibility as part of their mission or responsibility. These business leaders consider corporate social responsibility to be A. a basic requirement of any business. B. the equivalent of the AMA ethical value, "Do no harm." C. the key to operational effectiveness. D. a component of basic business ethics. E. beyond the norms of corporate ethical behavior.

answer

E Some managers believe that firms should focus on increasing shareholder value and need not concern themselves with social responsibility.

question

Being socially responsible is generally considered A. a good thing to do only if a company is profitable. B. inappropriate for most firms in today's challenging markets. C. beyond the norms of corporate ethical behavior. D. a necessary part of every firm's strategy. E. the responsibility of corporate-sponsored foundations who can effectively concentrate a firm's good deeds.

answer

C While corporate social responsibility programs can benefit both society and the firm itself, these programs are generally considered "above and beyond" and are not a necessity for every firm.

question

For his class in ethics, Isaac examined the practices of a number of nationally focused and international firms to determine how ethics and corporate social responsibility were being practiced. He found: A. firms could be both ethical and socially responsible. B. firms could be ethical and yet not socially responsible. C. firms could be neither ethical nor socially responsible and still be part of the business community. D. firms could have questionable ethical practices yet donate money to the community for socially responsible causes. E. all of these.

answer

E Ethics and social responsibility are separate ideas, and a firm can do a good job of neither, either, or both.

question

Ironically, while the leaders of Enron Corporation were manipulating the company's finances for their personal benefit, the company was a major donor to Houston area charities. Enron had unethical business practices, but was also A. practicing marketing ethics. B. falsifying the company's finances through charitable donations. C. creating a local ethical business climate. D. demonstrating corporate social responsibility. E. manipulating the public sentiment for its own benefit.

answer

D Enron was exhibiting unethical behavior through its financial manipulation, while at the same time demonstrating social responsibility through its charitable donations.

question

The Ethical Decision-Making Framework includes all of the following steps EXCEPT A. identify issues. B. promote the firm's corporate social responsibility efforts. C. gather information and identify stakeholders. D. brainstorm and evaluate alternatives. E. choose a course of action.

answer

B Corporate social responsibility is separate from the Ethical Decision-Making Framework.

question

Garrett has just purchased a beer distributorship. He wants to increase the visibility of his firm in local markets, but he knows there are a number of regulations and socially accepted practices associated with promoting alcoholic beverages. According to the Framework for Ethical Decision Making, the first thing Garrett should do is to A. identify issues. B. promote the firm's corporate social responsibility efforts. C. gather information and identify stakeholders. D. brainstorm and evaluate alternatives. E. choose a course of action.

answer

A Identifying potential ethical issues is the first step in the ethical decision making process.

question

Hisaoki picks up the local newspaper and reads a stinging letter to the editor criticizing his beverage company for supporting a sporting event for handicapped children. The letter writer is critical of a banner displayed at the event, with the logos of alcoholic beverages and Hisaoki's company name. Hisaoki never considered that this problem might arise. In the Framework for Ethical Decision Making, Hisaoki's company failed to A. identify issues. B. promote the firm's corporate social responsibility efforts. C. gather information and identify stakeholders. D. brainstorm and evaluate alternatives. E. choose a course of action.

answer

A Hisaoki failed to identify possible ethical issues in advertising alcoholic beverages at a child-related event.

question

A new law in South Carolina makes it illegal for people under the age of 18 to smoke cigarettes. Previously, the law banned sales of cigarettes to anyone under age 18, but not smoking. Which of the following types of companies would be unlikely to have to incorporate this change into the Ethical Decision-Making Framework? A. Restaurants B. Convenience stores C. Dance clubs D. Bars E. All of these would have to incorporate the change.

answer

E It might seem at first that convenience stores would not have an issue, since they are places where people buy cigarettes but don't necessarily smoke them. But under the old law, it would be permissible for someone eighteen or over to buy cigarettes for a sixteen-year-old. Under the new law, this is no longer true.

question

A recent court ruling banned the use of terms such as "light, low tar, natural, or mild" by tobacco companies. The stakeholders for this decision are the: A. shareholders. B. employees. C. customers. D. marketing managers. E. all of these

answer

E Stakeholders are individuals who have a stake in the decision. Shareholders can be affected if sales are impacted; the same is true of employees and marketing managers. Customers will be affected as well, if they used to specifically seek cigarettes with those descriptions.

question

Many corporations are shifting from defined benefit to defined contribution retirement programs. When considering changes to retirement programs, the primary stakeholders are the A. shareholders. B. employees. C. customers. D. marketing managers. E. competition.

answer

B The primary stakeholders are the employees whose retirement programs are changing.

question

When Bernie Ebbers, WorldCom's CEO, was convicted of financial crimes, WorldCom was forced to merge with MCI. One of the ramifications of this merger was the loss of WorldCom's sponsorship of the Sea Pines Heritage PGA golf tournament. The tournament funds the Heritage Foundation, a major community charity. This example illustrates A. the need to identify issues. B. that the impact of unethical actions can reach far beyond the corporation. C. that unethical firms cannot be socially responsible. D. the lack of information needed to make ethical decisions. E. the questionable advantage of social responsibility.

answer

B The impact of the CEO's behavior reached beyond his company, affecting members of the community who formerly benefited from the work of the Heritage Foundation.

question

When auditing expenses claimed by the university president, the auditors found extravagant spending on $1,000 per night hotels, banquets, and gourmet restaurants. The president was fired, alumni donations declined, and staff members—who were disturbed by the extravagance while staff salaries were frozen— quit their jobs. This example illustrates A. that universities are more corrupt than companies. B. that the extravagant spending should have been kept quiet to minimize damage to the university. C. that the impact of unethical actions can affect the organization in unanticipated ways. D. the need to identify issues. E. the lack of information needed to make ethical decisions.

answer

C Hushing up the unethical behavior is not a solution; among other things, if the matter were ever to become public, the embarrassment to the university would be far greater than if they dealt with the situation from the start. The example shows, though, that unethical actions can harm an organization in a variety of ways.

question

The Harvest County School Board is concerned about deteriorating school facilities, combined with a shrinking budget. The board began by studying the issue, and then identified parents, children, teachers, staff, and taxpayers as groups who have a vested interest in the problem. The school board has listened to each group's concerns. In the Ethical Decision-Making Framework, its next action should be to A. identify issues of concern to lawmakers. B. assess impact of its actions beyond the classroom. C. engage in brainstorming and evaluate alternatives. D. choose a course of action. E. evaluate the legal ramifications.

answer

C The school board has completed the first two steps of the Ethical Decision-Making Framework. The third step is to assemble the stakeholders to brainstorm and evaluate alternatives.

question

After a firm has identified the various stakeholders and their issues and gathered available data related to an ethical decision making situation, __________ should engage in brainstorming and evaluation of alternatives. A. the senior managers most involved B. key customers C. elected officials D. all parties relevant to the decision E. any individuals with competing interests

answer

D All relevant parties should participate in brainstorming and evaluation.

question

After a firm has identified the various stakeholders and their issues and gathered available data related to an ethical decision making situation, all parties relevant to the decision should engage in A. legal discourse. B. a vote, with the majority deciding the best course of action. C. reidentification of issues. D. choosing a course of action. E. brainstorming and evaluation of alternatives.

answer

E It is too soon to make a choice--at this point, the involved parties should brainstorm and evaluate alternatives.

question

After a firm has identified the various stakeholders and their issues and gathered the available data, all parties relevant to the decision should engage in brainstorming and evaluation of alternatives. __________ then review and refine these alternatives, and choose a course of action. A. Managers B. The firm's lawyers C. Key customers D. Community leaders E. All stakeholders

answer

A Although all stakeholders should be involved in the earlier steps of the process, management is responsible for choosing the final course of action.

question

Darwin's company is facing a difficult ethical issue. The firm has identified the various stakeholders and their issues and gathered the available data. Everyone with an interest in the issue has engaged in brainstorming and evaluation of alternatives. Management reviewed and refined the alternatives. It should now choose the course of action that A. maximizes profits. B. creates the least possible publicity. C. involves the fewest employees. D. minimizes costs. E. seems best after weighing the concerns of all stakeholders.

answer

E The purpose of the earlier stages of the process is to identify stakeholders' issues and generate possible solutions. The final stage is to weigh this information and select the alternative that does the best job of addressing the issues.

question

Rock-Bend Company is considering buying out a competing firm and closing most of the competitor's factories. The firm has identified the various stakeholders and their issues and gathered the available data. Everyone with an interest in the issue has engaged in brainstorming and evaluation of alternatives. Management reviewed and refined the alternatives, and then chose a course of action. If the managers are not confident about the decision, they should A. lower their offering price for the competing firm. B. reexamine their alternatives. C. consult customers. D. trust their instincts and move forward. E. choose the least risky option.

answer

B Perhaps the chosen course of action is not truly the best choice. By re-examining the alternatives, the firm may find a better choice.

question

Which of the following is NOT one of the questions typically asked in the Ethical Decision-Making Metric? A. Can we live with this decision alternative? B. Have we thought broadly about any and all ethical issues associated with the decision? C. Does this decision respect the rights, dignity, and profits of stockholders? D. Does this decision uphold relevant conventional moral values? E. Does this decision produce the most good and the least harm to the relevant stakeholders?

answer

C Stockholders are different from stakeholders--stakeholders are those who will be impacted by the decision. Stockholders may in some cases be among the stakeholders for a decision.

question

Which of the following questions is typically asked in the Ethical Decision-Making Metric? A. Can we live with this decision alternative? B. Have we thought broadly about any and all ethical issues associated with the decision? C. Does this decision respect the rights and dignity of stakeholders? D. Does this decision uphold relevant conventional moral values? E. all of these

answer

E These are all questions included in the metric.

question

Frank found himself in the midst of an ethical dilemma at work, and was using an ethical decisionmaking metric like the one shown in the text to clarify his professional and personal values. Frank was most likely in which phase of the Ethical Decision Making Framework? A. Identifying the issues B. Separating personal from business ethics C. Gathering information and identifying stakeholders D. Brainstorming and evaluating alternatives E. Choosing a course of action

answer

E Frank was probably ready to make a decision, and wanted to test the decision to see if it was the right one.

question

The Carteret Realty Company represents a developer who wants to purchase a piece of property owned by a city in order to develop it into an apartment complex. To make the venture profitable, the developer is asking the city to use its power of eminent domain to force owners of some run-down houses near the property to sell their land to the developer. From the perspective of Carteret Realty Company, which of the following questions from the Ethical Decision-Making Matrix might be of concern? A. Have we involved as many possible people who have a right to offer input into this action? B. Have we thought broadly about any and all ethical issues associated with the decision? C. Does this decision respect the rights and dignity of stakeholders? D. Does this decision uphold relevant conventional moral values? E. all of these

answer

E These are all reasonable questions. The homeowners are stakeholders in this decision, and there are serious ethical and moral concerns in forcing them to leave their homes in order to allow the developer to profit.

question

When looking at ethical issues associated with the strategic marketing planning process, questions A. should only be addressed during the evaluation stage. B. should never be asked; only managers should deliberate marketing ethical issues. C. vary at each stage of the process. D. are never asked during the implementation stage. E. always follow a standard format.

answer

C Different questions must be asked at each stage of the strategic marketing planning process.

question

Denny is considering the question, "Did our actions have a negative impact on any stakeholder group?" Denny is addressing marketing ethical issues in the __________ phase of the strategic marketing planning process. A. planning B. control C. implementation D. brainstorming E. situation analysis

answer

B This question evaluates the outcome of marketing decisions, which takes place in the control phase.

question

Every year, General Mills issues a report discussing how the firm has performed against its own standards of ethical conduct. This report is part of General Mills' __________ phase of their strategic marketing planning process. A. planning B. implementation C. control D. evolution E. marketing mix

answer

C General Mills is evaluating its performance, which is a part of the control phase.

question

The success of Newman's Own in making substantial contributions to thousands of charities has shown that businesses can create value by combining a mission dedicated to supporting charities with: A. licensing its name to other organizations. B. licensing the name of other famous products to expand its offerings. C. making organic products profitable. D. offering value to customers who want to enjoy good-tasting products. E. All of these.

answer

E All of these are aspects of Newman's strategy.

question

Chris's firm is considering marketing an HIV/AIDS treatment and home-testing kits. Which of the following represents a potential ethical issue for the firm? A. The firm could sell this kit at a very high price, based on its potential value, but doing so would make it too expensive for many at-risk individuals to afford. B. A positive test result--whether correct, or a "false positive"--could lead to severe depression or even suicide. C. A customer could run the test incorrectly and get a "false negative" result, causing an infected individual to think that treatment was unnecessary. D. The firm may have to include counseling with the kit, which could affect its marketability. E. All of these issues have ethical dimensions.

answer

E This question shows the wide range of ethical questions that can arise from a firm's decisions about new products.

question

Charges that firms are using "sweatshop" labor to produce their products are likely to occur during the __________ phase of the strategic marketing planning process. A. planning B. implementation C. control D. evolution E. marketing mix

answer

B The implementation phase is where the marketing mix is implemented, and is thus the place where the use of sweatshop labor becomes a public issue.

question

Multinational corporations are recognizing their responsibility to the people who make their products A. when public attention might embarrass the corporation. B. if the local government suggests that the company pay bribes to officials. C. even if they aren't their employees. D. unless another firm actually employs the workers. E. when it suits them financially.

answer

C When firms outsource production to manufacturers in other countries, it does not absolve them of responsibility for the working conditions in the factory.

question

During the __________ phase of the strategic marketing planning process, marketers utilize systems to check whether each potential ethical issue raised in earlier phases was addressed. A. implementation B. control C. planning D. assessment E. social responsibility

answer

B The firm assesses its performance regarding ethics during the control phase.

question

When the local school district decided to build an elementary school less than a mile from Kaolinic Chemical's factory, the plant manager decided to develop an emergency response plan in case of an accident. The manager recognized that a quick, organized response to a crisis would benefit the firm's ___________ with the community and its customers. A. reputation B. credibility C. level of trust D. long-term relationships E. all of these

answer

E Developing an emergency response plan may take time and effort and might cost the firm money, but a disaster for which the firm was unprepared--but could have been--will cost far more in lost credibility and reputation.

question

What is the one consistent aspect of all the ethical scenarios at the end of Chapter 3? A. They all involve men. B. There is no one "right" answer to any of them. C. Each situation could have been avoided. D. A lack of government regulation was a major cause of each ethical issue. E. Good marketing could have kept these issues from ever arising.

answer

B Ethical decisions are difficult precisely because they rarely have a clear "right" answer. Instead, managers must choose between conflicting outcomes while considering the impact on all stakeholders.

question

Alicia has been asked to approve a marketing campaign which, although it is not illegal, promotes food products to children. She is concerned that the food products are not particularly nutritious, although they are not as bad for children as some others sold by competitors. She reviews the tests in the Ethical Decision-Making Metric, and she decides her best course of action is to A. ignore the metric as unworkable, since the campaign might pass some of the tests and fail others. B. consider the profit potential first; then explore the vague tests in the metric. C. not worry about the children; their parents are likely to make the buying decision, and they should be able to decide for themselves. D. put the campaign on hold while she explores with the staff how they approached the ethical issues. E. consult the firm's code of ethics for guidance and leave personal ethical considerations out of the decision-making process.

answer

D If Alicia has concerns arising out of her personal ethics, she needs to pause and ask more questions before making a go/no-go decision.

question

The Ethical Decision-Making Metric II (Exhibit 3.8): A. is a realistic tool to use as long as the firm's profits are not in jeopardy. B. is a good tool for evaluating personal ethics, but fails as a basis for evaluating a firm's actions. C. will be ineffective unless the questions are answered objectively and honestly. D. places the burden on the firm's code of ethics and the actions of senior management. E. can only be used for small, uncomplicated ethical issues.

answer

C The metric offers a set of six tests of an ethics-related decision, reflecting on the decision in a variety of ways. These tests will not be helpful unless all relevant information is considered honestly and without bias.

question

Johnson and Johnson recently realized that at least 1,000 lots of products specifically children's medication Tylenol, Motrin, Zyrtec and Benadryl contained too high a concentration of their active ingredient. In order to behave ethically, Johnson and Johnson should: A. continue production and sale of the products while investigating. B. delay further production until the issue is identified. C. recall defective products that have been sold. D. delay further production until the issue is identified and recall defective products already sold. E. sell the products, but with a warning label suggesting that smaller doses be taken.

answer

D The Ethical Decision-Making Metric asks, among other things, whether or not the decision produces the most good and the least harm to the relevant stakeholders. Sales must be stopped, and purchased products recalled, to avoid harming children who might take the drugs.

question

The Henry Ford Health System (a health care provider) has set strict limits for pharmaceutical representatives, and will no longer allow doctors in its system to accept free lunches, gifts, or other perks from the pharmaceutical representatives. The Henry Ford Health System probably established this policy because A. it reduces the possibility that the Henry Ford Health System might make unethical purchasing decisions. B. it ensures that Henry Ford Health System is both ethical and socially responsible. C. it ensures that Henry Ford Health System is ethical, but not necessarily socially responsible. D. it ensures that Henry Ford Health System is socially responsible, but not necessarily ethical. E. it was trying to save money.

answer

A By setting clear policies, Henry Ford Health System reduces the risk of having unethical purchasing practices; however, this one action cannot ensure that the company is ethical. The action has nothing to do with social responsibility.

question

When Toyota owners began to report problems with sticking accelerator pedals and non-functioning brakes, Toyota at first ignored or rejected the claims. Eventually, the company evaluated the issue. Which of the four steps of the Ethical Decision-Making Framework was Toyota performing when it recalled several of its 2007-2010 models? A. Assess risk B. Identify issues C. Gather information and identify stakeholders D. Brainstorm and evaluate alternatives E. Choose a course of action

answer

E When using the Ethical Decision-Making Framework, the first step is to identify the issues. The next three steps are to gather information, brainstorm/evaluate alternatives, and finally to choose a course of action. Toyota, in its recall, had chosen a course of action.

question

Walmart is leaving no stone unturned in its attempt to position itself as the retail industry's sustainability leader. As explained in Adding Value 3.3, identify the specific requirements Walmart's suppliers must satisfy to help Walmart to achieve its goal. A. Merchandise must be labeled to prove that throughout the process it has upheld regulations for being environmentally friendly. B. Factories must become 20% more energy efficient by 2012. C. Factories must include "Walmart Sustainability Initiative" labels. D. Factories must keep the air conditioning set no lower than 77 degrees Fahrenheit. E. All of these.

answer

B Adding Value 3.3 mentions the requirement that factories become more energy efficient. The other options are not discussed.

question

For every consumer who purchases a pair of TOMS shoes for $55.00, the company promises that a child will receive a pair of shoes. TOMS shoes is actively engaging in A. corporate social responsibility. B. business ethics. C. marketing ethics. D. environmental marketing. E. overpricing its products.

answer

A TOMS shoes is engaged in corporate social responsibility by making shoes available to poor children.

question

If Sadaf decides to sell the best ice cream on earth, and intends to establish a strong ethical climate in her organization, during which phase of the strategic marketing planning process should she introduce ethical considerations? A. Planning Phase B. Implementation Phase C. Control Phase D. Experience Phase E. Ethics Phase

answer

A Firms should begin establishing an ethical climate at the planning phase by including ethical statements in the firm's mission or vision statements.

question

Anupam's company manufactures industrial ladders. He is concerned that consumers who do not understand ladder safety will purchase these extra-tall ladders and injure themselves. During which phase of the strategic marketing planning process should this issue be addressed? A. Control Phase B. Planning Phase C. Implementation Phase D. Design Phase E. Ethics Phase

answer

C During the Implementation phase, the company can discuss targeting decisions and implementing the marketing mix appropriately to minimize this risk. Perhaps safe use of the ladder should be emphasized in marketing communications, or perhaps steps should be taken to discourage consumers from buying these ladders.

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A meat packing company discovers that six months ago it unknowingly distributed meat from a cloned cow. The firm is unaware of any specific risks to humans consuming the meat; however, some scientists have raised questions, and some consumers are afraid of possible future problems. The meat company has to decide whether or not to make this matter public. How should it begin the process of making an ethical decision? A. Brainstorm the available alternatives. B. Ask its managers to vote for or against public disclosure. C. Let the board of directors decide what to do. D. Identify the issues raised by the situation. E. Find out who purchased the meat, and offer them refunds in return for their silence.

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D It is too late to recall the meat--it has been consumed or discarded long ago--so emergency action is neither possible nor necessary. The company should begin the Ethical Decision-Making Framework by identifying all issues raised by this situation. This should happen before attempting to choose a course of action.

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Corporate social responsibility (CSR): A. is becoming more prevalent. B. covers a wide range of activities beyond philanthropic and community-based activities, including marketing, sales and production. C. is one criterion for determining whether a firm should be included in most-admired company rankings. D. is a voluntary activity. E. All of these.

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E All of these are characteristics of corporate social responsibility in today's business climate.

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Critics of corporate social responsibility (CSR) maintain that: A. CSR is unnecessary. B. the goal of the firm is to make a profit and any other goal is inappropriate. C. stockholders do not benefit from corporate citizenship programs. D. the benefits are hard to quantify and are at best unclear. E. All of these

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E These are all common criticisms of corporate social responsibility programs.

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If Melissa decides to sell the best ice cream on earth, and intends to establish a strong ethical climate in her organization, during which phase of the strategic marketing planning process should she introduce ethical considerations? A. Planning B. Implementation C. Control D. Experience E. Ethics

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Which of the following is not one of the key inputs a firm needs to understand and appreciate in terms of corporate social responsibility (CSR)? A. Consumers B. Company C. Cause D. Community E. None of these is a key input; these are outputs.

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D The key inputs are the consumer, the company, and the cause or issue.

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Elena is the CEO of a small manufacturing firm. She is concerned with meeting the investment objectives of the firm's shareholders, and sees no value in corporate social responsibility. Elena's attitude is A. insupportable in the 21st century. B. consistent with the views of other critics of corporate social responsibility. C. typical of nearly all manufacturers. D. a reaction to regulatory directives of the U.S. government. E. unethical.

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B Other critics of CSR agree with Elena, feeling that the first responsibility is to the shareholders and that CSR programs add little to the bottom line. But many companies disagree.

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How might a technology company like Apple ensure that it behaves in a socially responsible way towards its employees? A. By paying at least minimum wage when the law requires it. B. By adhering to government-mandated safety standards in the workplace. C. By ensuring that pay practices are fair at all levels of the company. D. By ensuring that its packaging materials are recyclable. E. Social responsibility isn't relevant where employees are concerned; they are paid for their work and that's enough.

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How might a technology company like Apple ensure that it behaves in a socially responsible way towards its customers? A. By protecting the privacy of personal information collected on its website. B. By adhering to government-mandated safety standards in its stores. C. By ensuring that it pays its employees fairly. D. By ensuring that its packaging materials are recyclable. E. Social responsibility isn't relevant where customers are concerned; it has to do with serving society as a whole.

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How might Starbucks ensure that it behaves in a socially responsible way towards members of its supply chain? A. By paying its employees minimum wage as required by law. B. By using cups made from recycled paper. C. By offering healthy drinks and snacks in its stores. D. By purchasing coffee beans from suppliers who pay coffee growers a fair price. E. Social responsibility isn't relevant where channel partners are concerned; it has to do with serving society as a whole.

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