Strategy Chapter 9 – Flashcards

According to integrative social contracts theory, the ethical standards a company should try to uphold: a. should be based on standards where local ethical norms take precedence over universal ethical norms. b. are governed by each country's Code of Required Ethical Conduct—which sets forth that each individual/group/business/organization has a "social contract" to observe the ethical and moral standards that the country has adopted. c. are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not—but universal ethical norms take precedence over local ethical norms. d. are governed by the school of ethical universalism e. are governed primarily by principles advocated by the school of ethical relativism and secondarily by principles advocated by the school of ethical universalism.

Which one of the following is not among the good business reasons why companies should be public-spirited and devote time and resources to social responsibility initiatives, environmental sustainability and being good corporate citizens? a. Socially responsible actions yield internal benefits (particularly as concerns employee recruiting, workforce retention, and training costs) and can improve operational efficiency. b. Well-conceived social responsibility strategies work to the advantage of shareholders. c. A business is obligated to act as a responsible citizen and do its fair share to promote the general welfare; otherwise it is in violation of its implied contract with society and subject to both heavy fines and an excess profits tax. d. Acting in a socially responsible manner reduces the risk of reputation-damaging incidents. e. A strong, visible social responsibility strategy gives a company an edge in differentiating itself from rivals and in appealing to those consumers who prefer to do business with companies that are good corporate citizens.

According to the school of ethical universalism: a. all societies and countries are obligated to rely on the universally-applicable ethical principles of right and wrong set forth in the United Nations' Code of Ethical and Moral Behavior in determining what constitutes ethical behavior and what constitutes unethical behavior. b. in those instances where basic moral standards really do not vary significantly according to local cultural beliefs, traditions, religious convictions, or time and circumstance, there exists a common set of ethical standards that applies to the members of all societies, all companies, and all businesspeople. c. the standards and principles for judging what is ethical and what is unethical are universal and absolute, leaving no room for deviation from country to country or circumstance to circumstance. d. concepts of what constitutes ethical behavior and unethical behavior are dictated by subjectively-provable moral principles but not by objectively-provable moral principles. e. concepts of right and wrong are universal within countries/societies but not across countries or cultures.

According to the ethical relativism school of thought: a. businesses have the flexibility to set their own standards for deciding whether the payment of bribes/kickbacks is ethically acceptable or not. b. whether the payment of bribes/kickbacks is ethically acceptable or not hinges upon the ethical standards that each industry establishes for its member businesses. c. if the payment of bribes/kickbacks is legal in a particular country, then it is ethical for a company to pay bribes/kickbacks in conducting its business activities in that country, no matter what the legality of paying bribes/kickbacks happens to be in other countries. d. it is very clear that the payment of bribes and kickbacks is ethically impermissible even in those countries and situations where it is the local custom to engage in such payments. e. if the payment of bribes/kickbacks is acceptable in a particular culture/society/country, then it is ethical for a company to pay bribes/kickbacks in conducting its business activities in that culture/society/country.

A multinational company operating in some countries where bribery and kickback payments are an entrenched local custom and are not considered unethical is well-advise to: a. reject the underlying principles of both the school of ethical universalism and the school of ethical relativism and adopt the principles of integrative social contracts theory. b. avoid the payment of bribes and kickbacks in all countries and in all circumstances if the payment of bribes and kickbacks is forbidden in its code of ethical conduct and if top management is serious about enforcing this prohibition. c. ignore the underlying principles of the school of ethical universalism. the school of ethical relativism, and integrative social contracts theory and do whatever it takes to avoid impairing the company's financial performance and competitive standing. d. follow the principles of the school of ethical relativism in deciding whether to engage in paying bribes or kickbacks. e. take the position that it ethically permissible for its personnel to pay bribes and kickbacks in countries where such payments are customary but ethically impermissible for its personnel to make such payments elsewhere. is abdicating responsibility

Ethical principles in business: a. concern the values and behaviors that a company should expect its personnel to observe and display in the course of doing their jobs. b. are generally less permissive than the ethical principles for society at large. c. are universal and do not vary significantly from country to country. d. are generally more permissive than the ethical principles for society at large. e. are not materially different from ethical principles in general because business actions must be judged in the context of society's standards of what is ethically right and wrong, not by a special set of rules that apply just to business conduct.

Which one of the following are major drivers of unethical managerial behavior: a. Overzealous pursuit of wealth and other selfish interests, heavy pressures on company managers to meet or beat performance targets, and a company culture that puts profitability and good business performance ahead of ethical behavior b. Lax government enforcement of ethical standards and ethical conduct, intense competitive pressures, and corrupt public officials (most of whom accept bribes in order not to prosecute businesspeople who engage in unethical behavior) c. The excessively strong profit motive that pervades the business community, the ethically corrupt nature of most businesspeople, a lack on the part of many companies to implement and enforce codes of ethical conduct, and a laxness among public officials to prosecute businesspeople who engage in unethical behavior d. The drive among most businesses to maximize profits and return on capital investment, the excessive bonuses and stock options that top executives can earn if company profits are excellent, and a widespread belief in the business community that ethical behavior is not necessary or even relevant e. Intense competitive pressures, a lack on the part of many companies to implement and enforce codes of ethical conduct, the excessively strong profit motive that pervades the business community, and the obscenely high bonuses and stock options paid to top executives

The categories of managerial morality include: a. moral managers, immoral managers, and amoral managers. b. mostly ethical managers, somewhat ethical managers, and totally unethical managers. c. managers who are "true believers" in high ethical standards, managers who claim to believe in high ethical standards but who nonetheless engage in unethical behavior whenever they deem it in their best economic interest to do so, and if-it-is-legal-then-it-is-ethical managers. d. managers with high ethical standards, managers with some ethical standards in some (maybe most)situations, and totally corrupt managers. e. managers with lots of integrity, managers with some integrity, and managers with no integrity.

The notion of social responsibility as it applies to businesses concerns: a. a company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large. b. societal expectations that a company will charge fair prices and earn fair profits. c. the responsibility that all businesses have to operate in a manner that promotes environmental sustainability and the overall best long-term interest of society. d. a company's duty to put the public interest and the well-being of society ahead of shareholder interests. e. a company's duty to charge fair prices, pay fair wages, treat all employees with dignity and respect, and operate in a manner that benefits society at large.

Which one of the following is not a particularly sound or valid reason why deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky practice? a. An unethical strategy and/or unethical conduct on the part of company personnel can badly damage a company's reputation b. Unethical behavior can be very costly in terms of fines and penalties, legal and investigative costs, customer defections, lower employee morale, and higher employee turnover and recruiting costs c. Pursuing an unethical strategy is generally not in the best long-term interest of shareholders d. Most consumers are very ethically-aware and will quickly stop purchasing the products of any company that engages in shady behavior e. Both an unethical strategy and unethical conduct are morally wrong and reflect badly on the character of the company personnel involved

The use of child labor is a. is ethically permissible business behavior according to the school of ethical relativism, so long as employed children under the age of 14 are paid the legal minimum wage and do not work more than 8 hours per day or 40 hours per week. b. may be ethically permissible according to the school of ethical relativism (based on the rule of "when in Rome do as the Romans do") but does not qualify as ethically permissible business behavior according to the school of ethical universalism because in most societies, especially modern industrialized countries, such a practice is not in keeping with generally acceptable standards of business behavior. c. is socially unacceptable in virtually all countries and in all business circumstances, and hence does not constitute an ethically acceptable business practice based on the principles of ethical universalism, ethical relativism, or integrative social contracts theory. d. may be within the standards of ethically permissible business behavior according to both the schools of ethical relativism and ethical universalism. e. may be ethically permissible in some special business circumstances according to the school of ethical universalism but is never ethically permissible business behavior according to the school of ethical relativism.

According to the school of ethical relativism: a. the standards of what is ethically right and wrong are subjective and can be interpreted in a variety of ways--no one single interpretation exists. b. ethical standards are situation specific--whether an action or behavior should be deemed ethical or unethical hinges on the circumstances surrounding each particular situation, thus permitting the same action to be ethically permissible in one situation but not another due to differing situational circumstances. c. what is ethically permissible in a given country is determined by what is legal in that country--because the laws are different from country-to- country the ethical standards are also different from country-to-country. d. there is no single set of ethical standards because what is deemed ethical or unethical depends on the religious beliefs, historic traditions and customs, core values and beliefs, and behavioral norms that prevail in particular cultures and countries. e. all ethical standards are relative and based on each individual's convictions about what is ethically correct or incorrect.

An immoral manager is one who a. is ethically unprincipled but nonetheless usually observes ethical standards for fear of getting caught and fired. b. believes that good businesspeople cannot spend time watching out for the interests of others and agonizing over "the right thing to do" from an ethical perspective. c. has few scruples, little or no integrity, is driven by single-minded pursuit of what is in his/her own self-interest, and is willing to do most anything he/she believes they can get away with. d. strongly believes that it is perfectly ethical to do whatever is legal. e. is ethically-principled most of the time but who might stoop to unethical behavior if there's low risk of discovery and the action or decision has a sizable positive effect on company profitability.

The moral case for why businesses should act in a socially responsible manner a. is based on the principle that a business lacks moral legitimacy unless it allocates a meaningful fraction of its resources to improving the economic and social well-being of the communities in which it operates. b. is based on the widely-accepted moral principle that every business is obligated to spend a meaningful fraction (roughly 5%) of its pretax profits on promoting the general well-being of society and improving living conditions for the disadvantaged. c. is based on the principle that all businesses have an implied contract with society to exert significant and sincere efforts to give something back to the community. d. boils down to "it's the right thing to do"--ordinary decency, civic-mindedness, and concern for the well-being of society should be expected of any business. e. rests on the belief that improving the well-being of society ranks higher in priority and is certainly more noble than making a profit and serving the interests of shareholders.

A company's environmental sustainability strategy concerns: a. its action plan for reducing global warming. b. its deliberate actions to protect the environment, provide for the longevity of natural resources, maintain ecological support systems for future generations, and guard against ultimate endangerment of the planet. c. its action plan for reducing energy consumption and shifting to renewable energy sources. d. the time and money it plans to spend in collaborating with other businesses to reduce air and water pollution worldwide. e. its plans for promoting organic farming and increased public consumption of organic foods.

Business ethics concerns: a. the application of general ethical principles and standards to the actions and decisions of businesses and the conduct of their personnel. b. adhering to and enforcing the consensus ethical principles that companies worldwide have agreed are appropriate for all businesses and their personnel to observe. c. the socially responsible actions and behaviors that a company and its personnel are expected to display in conducting business activities. d. a set of behavioral standards, usually established by governmental authorities or organizations such as the United Nations, that businesses worldwide are expected to observe in conducting their activities. e. the special set of ethical standards and behaviors that are applicable only to business situations and the conduct of business-related matters.

according to integrative social contracts theory, a. each country's ethical norms and customs form a "social contract" that all individuals, groups, organizations, and businesses in that country have a duty to observe; so long as this social contract is dutifully observed, then it is appropriate for any company or group in that country to specify what other actions may or may not be ethically permissible. b. the Code of Expected Ethical Conduct developed by the United Nations represents a pragmatic and effective compromise of the best parts of the ethical standards advocated by the school of ethical universalism and the ethical standards advocated by the school of ethical relativism. c. universal ethical principles or norms based on the collective views of multiple cultures and societies are no more "authentic" or "ethically correct" or "more right" than the local ethical norms and principles of particular countries—there is no higher-order moral compass. d. it is imperative that a company's code of ethical conduct be sufficiently flexible and allow room for the company to be respectful of and responsive to the ethical standards and norms of the each of the countries in which it operates. e. the ethical standards a company should try to uphold are governed both by (1) a limited number of universal ethical principles widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not.

According to the school of ethical relativism a. there is no single set of ethical standards because what is deemed ethical or unethical depends on the religious beliefs, historic traditions and customs, core values and beliefs, and behavioral norms that prevail in particular cultures and countries. b. ethical standards are situation specific--whether an action or behavior should be deemed ethical or unethical hinges on the circumstances surrounding each particular situation, thus permitting the same action to be ethically permissible in one situation but not another due to differing situational circumstances. c. all ethical standards are relative and based on each individual's convictions about what is ethically correct or incorrect. d. what is ethically permissible in a given country is determined by what is legal in that country--because the laws are different from country-to- country the ethical standards are also different from country-to-country. e. the standards of what is ethically right and wrong are subjective and can be interpreted in a variety of ways--no one single interpretation exists.

According to the school of ethical universalism: a. it is up to each business to set its own standards for deciding whether the use of underage labor is ethically acceptable or not. b. if the use of underage labor is legal in a particular country, then it is ethical for a company to use underage labor in conducting its business activities in that country, no matter what the legality of using underage labor happens to be in other countries. c. whether the use of underage labor is ethically acceptable or not hinges upon the ethical standards that each industry establishes for its member businesses. d. if the use of underage labor is acceptable in a particular culture/society/country, then it is ethical for a company to use underage labor in conducting its business activities in that culture/society/country. e. there are ample grounds for rejecting the argument that the use of underage labor is ethically permissible in those countries, societies, and situations where child labor is normal and customary.

A company's strategy needs to be ethical because a. unethical strategies weaken the corporate culture. b. there are very high risks of being prosecuted by governmental authorities if an unethical strategy is used. c. a strategy that is unethical in whole or in part is morally incorrect and "the wrong thing to do"; pursuit of an unethical strategy reflects badly on the character of the company personnel involved. d. it is embarrassing to top executives (and can sometimes adversely affect their bonuses and stock option awards) when their company's unethical behavior is publicly exposed. e. unethical strategies raise a company's costs per unit sold and thus lower company profitability.

A amoral manager is one who: a. believes in ethical relativism but not in ethical universalism. b. believes business and ethics are not to be mixed because different rules apply in business as compared to other realms of life. c. believes that businesses ought to be able to do whatever the prevailing laws and regulations allow them to do without being shackled by any ethical considerations. d. believes that ethical standards are governed by societal concepts of right and wrong, not by religious views about rights and wrongs. e. is ethically-principled most of the time but who knowingly and willingly stoops to unethical behavior if there's low risk of discovery and the action or decision has a sizable positive effect on company profitability.

Which one of the following is not a particularly sound or valid reason why deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky business practice? a. Companies that engage in shady behavior usually suffer big drops in profitability and are unlikely to earn attractive profits for as many as 5 to 10 years after their unethical conduct is exposed in the media b. Pursuing an unethical strategy is generally not in the best long-term interest of shareholders and can be very costly in terms of fines and penalties, legal and investigative costs, customer defections, lower employee morale, and higher employee turnover and recruiting costs c. An unethical strategy and/or unethical conduct on the part of company personnel can badly damage a company's reputation d. Companies known to have engaged in unethical conduct have difficulty in recruiting and retaining talented employees e. Buyers shun companies known for their shady behavior

According to the school of ethical universalism: a. whether the payment of bribes/kickbacks is ethically acceptable or not hinges upon the ethical standards that each industry establishes for its member businesses. b. there are ample grounds for rejecting the argument that the payment of bribes and kickbacks is permissible in those countries and situations where it is the local custom to engage in such payments. c. it is up to each businessperson to set his/her own standards for deciding whether the payment of bribes/kickbacks is ethically acceptable or not. d. if the payment of bribes/kickbacks is acceptable in a particular culture/society/country, then it is ethical for a company to pay bribes/kickbacks in conducting its business activities in that culture/society/country. e. if the payment of bribes/kickbacks is legal in a particular country, then it is ethical for a company to pay bribes/kickbacks in conducting its business activities in that country, no matter what the legality of paying bribes/kickbacks happens to be in other countries.

A multinational company operating in some countries where bribery and kickback payments are an entrenched local custom and are not considered unethical is well advise to: a. reject the underlying principles of both the school of ethical universalism and the school of ethical relativism and adopt the principles of integrative social contracts theory. b. ignore the underlying principles of the school of ethical universalism. the school of ethical relativism, and integrative social contracts theory and do whatever it takes to avoid impairing the company's financial performance and competitive standing. c. avoid the payment of bribes and kickbacks in all countries and in all circumstances if the payment of bribes and kickbacks is forbidden in its code of ethical conduct and if top management is serious about enforcing this prohibition. d. take the position that it ethically permissible for its personnel to pay bribes and kickbacks in countries where such payments are customary but ethically impermissible for its personnel to make such payments elsewhere. is abdicating responsibility e. follow the principles of the school of ethical relativism in deciding whether to engage in paying bribes or kickbacks.

Which of the following is not an aspect of socially responsible behavior and good corporate citizenship? a. Actions to protect or enhance the environment and, in particular, to minimize or eliminate any adverse impact on the environment stemming from the company's own business activities. b. Actions to build a workforce that is diverse with respect to gender, race, national origin, and perhaps other aspects that different people bring to the workplace c. Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work d. Actions to keep the prices the company charges for its products/services low enough to prevent the company's profits from being viewed by the general public as obscenely high or exorbitant e. Making charitable contributions, donating money and the time of company personnel to community service endeavors, supporting various worthy organizational causes, and reaching out to make a difference in the lives of the disadvantaged

according to integrative social contracts theory, a. a company's first duty and responsibility is to be respectful of and responsive to the ethical standards and norms of the each of the countries in which it operates. b. the Code of Expected Ethical Conduct developed by the United Nations represents a pragmatic and effective compromise of the best parts of the ethical standards advocated by the school of ethical universalism and the ethical standards advocated by the school of ethical relativism. c. universal ethical principles or norms based on the collective views of multiple cultures and societies combine to form a "social contract" that all individuals, groups, organizations, and businesses in all situations have a duty to observe; however, within the boundaries of this social contract, local cultures or groups have the "moral space" to specify what other actions may or may not be ethically permissible. d. each country's ethical norms and customs form a "social contract" that all individuals, groups, organizations, and businesses in that country have a duty to observe; so long as this social contract is dutifully observed in the country, then it is appropriate for any company or group to specify what other actions may or may not be ethically permissible in that particular country. e. the slippery slope of ethical universalism should be rejected and the principles of ethical relativism should be embraced.

According to the school of ethical relativism: a. a "one-size-fits-all" template should always be used to determine the ethical appropriateness of business actions and the behaviors of company personnel. b. what constitutes ethical business behavior and what constitutes unethical business behavior is always relative to some ideal standard that is subject to different interpretation in different countries. c. what constitutes ethical business behavior and what constitutes unethical business behavior is governed by what is legal in a given country. d. differing religious beliefs, historic traditions and customs, core values and beliefs, and behavioral norms across countries and cultures give rise to multiple sets of standards concerning what is ethically right or wrong. e. concepts of right and wrong as applied to business situations are always a function of each company's own set of values, beliefs, and ethical convictions (as stated in the company's code of ethical conduct).

according to the school of ethical universalism: a. only those ethical principles that are widely recognized and agreed-upon worldwide can be used to put valid ethical boundaries on how business activities are conducted. b. the best basis for judging the "ethical correctness" of the actions and behavior of businesspeople is the Code of Ethical and Moral Behavior adopted and advocated by the United Nations. c. concepts of right and wrong are universal within countries but not across countries and cultures. d. the most important standards of what is right and what is wrong resonate with peoples of most societies regardless of local traditions and cultural norms--hence, common ethical standards can be used to judge the conduct of personnel at companies operating in all countries and cultural circumstances. e. concepts of right and wrong are absolute and thus should be used to judge the "ethical correctness" of the behavior of all people in all countries and in all circumstances.