Part A

Question 1 In making decisions for United Merchandising Company, Joy uses a cost-benefit analysis. This is a major part of
Duty-based ethics
Kantian ethics
Natural rights theory
Utilitarianism.

Question 2 Today, critics of the corporation argue for various corporate governance reform proposals to improve the legal, moral, and socially responsible behavior of the corporation. Which of the following is the most convincing argument FOR these proposals?
Corporate managers should never have any duty other than to maximize profits for the shareholders
Market forces invariably operate to deter any corporate misbehavior
Existing law already establishes clear standards for what is and is not moral corporate behavior globally
These corporate governance reform proposals will help the company to act in a moral manner, especially when the law is silent or vague as to the legality of an action.

Question 3 A procedure which can be used to assess the moral health and practices of a corporation is the:
Social audit.
Valdez checkup.
Corrupt practices inventory.
Moral audit.

Question 4 Which of the following is the most accurate statement?
An employee is morally required to "blow the whistle" but only when his or her employer is acting in a clearly illegal manner.
To act in a moral manner, the whistleblowing employee must immediately bring his or her concerns about the employer's alleged wrongful conduct to the media.
A company should require a written acknowledgment that the employee has received a copy of the ethics code.
One major problem with the Utilitarian ethical theory is that it does not take a sufficiently broad stakeholder approach to decision-making in business.

Question 5 A business that continues to operate its domestic factories in order to avoid layoffs rather than shift its production to lower cost facilities overseas is most directly applying which value?
Legal positivism
Profit maximization
Stakeholder interests
Moral Heroism.

Question 6 Applying Aristotle's Doctrine of the Mean to corporate social responsibility, one can best say that:
A company should give generously to local charities or else it will get a reputation in the community for being mean.
A company need not get involved in civic and community affairs and give to charities unless legally obligated to do so.
A company should focus on profit first but also do "good deeds" in the community but in a prudent manner.
A company should require its employees to donate their own money and time to charities but make sure that the company gains the good reputation from their efforts.

Question 7 Big Greene Company is considering introducing a new product to replace an existing product. The new product would result in increased revenues, but slightly lower overall profits because the product will cause injury to a few users and Big Green will issue warnings and compensate persons who are injured. The introduction of this product would best be a proper decision pursuant to:
Ethical egoism
Kantian ethics
Ethical relativism
Corporate social responsibility.

Question 8
Eva, the chief executive officer of Federated Corporation, wants to ensure that the company's activities are legal and achieve the greater good. The best course for Eva and her company is to act in

Ignorance of the law

Regard for the firm's shareholders only

Their own self-interest

None of the above.

Question 9
Maria works in the public relations department of National Sales Company. Her job includes portraying National's activities in their "best light." In this context, ethical egoism can be described as

Actions that produce a favorable financial outcome

Whatever saves National's "face"

A Machiavellian mind-set

All of the above.

Question 10
Mandatory, random, observed drug testing by an employer ethically could be deemed:

a. Moral pursuant to Ethical Egoism for the employer if it conducts the testing in a careful and proper manner and as a result reduces accidents, lost time at work, and health care costs.

b. Moral pursuant to Utilitarianism if the drug testing reduces illegal drug use in society for the betterment of the people as a whole even though some people may feel their rights to privacy have been or may be infringed upon.

c. Immoral pursuant to Kantian ethics if some people feel that mandatory, random, observed drug testing is a disrespectful and demeaning act and an invasion of their privacy.

d. All of the above.

Part B

Question 1
Lea, a vice-president of International Pharmaceuticals, Inc., does not apply Utilitarianism to business moral issues. One major problem with this ethical theory is that it

Advocates social change through violent revolution when people are not treated justly

Forces the individual to conform to the norms of society as to what it means to be socially responsible

Justifies human costs that some may find morally unacceptable

Promotes utopian societies such as Plato's conception of the Just State.

Question 2
What is a FALSE statement regarding corporate social responsibility?

A. It may be in the long-term self-interest of a company to be known as a "socially responsible" one?

B. Companies acting in a prudent socially responsible manner should produce "sustainability" for the companies and society as a whole.

C. Most state corporation statutes forbid companies from being socially responsible since any corporate profits must go to the owners of the corporation, the shareholders, and not the community or charities.

D. A company is well-advised to strategically align its social responsible activated with its mission, image, and long-term objectives.

Question 3
The best approach to social responsibility for business today would be to emulate:

a. Robin Hood of "Merry Olde England" days (who stole from the rich to give to the poor, and who became a big hero)

b. Marie Antoinette, Queen of France during the Revolution (who said, when told the poor had no bread to eat, said "Let them eat cake," and who, alas, was beheaded)

c. Francis of Assisi, the son of a rich Italian merchant, who gave away everything to the poor, including the clothes he was wearing, and thus walked around Assisi naked (but who later became a Saint)

d. Home Depot for focusing prudently and primarily on Habitat for Humanity in their charitable giving and community help efforts.

Question 4
What is TRUE about state corporate constituency statutes?

A. They allow the board of directors to take into consideration the values of other stakeholders in addition to the shareholders in making business decisions.

B. They forbid the board of directors to take into consideration the values of other stakeholders since the shareholders, as the owners of the corporation, must be the board's sole and exclusive focus.

C. They mandate that the boards of directors must consider the values of other stakeholders in making corporate decisions.

D. They require that companies incorporated in the state must donate 3-5% of their pre-tax profits for socially responsible activities.

Question 5
Someone who argues that General Motors owes an obligation to take into account the interests of the community where it has its Michigan factories in decisions involving the plant is arguing most directly for which theory to be applied to business?

Machiavellian ethics

Corporate social responsibility

Maximizing profits

Legal misfeasance

Question 6
Social responsibility theories:

Are generally classified as modern ethical versions of Utilitarianism

Determine the moral worth of an action regardless of their consequences

Are largely precise legalistic formulations

Classify corporate social responsibility as typically the corporation engaging in community and civic affairs in a prudent manner.

Part C

Question 1
Silvano is a successful entrepreneur but his company is not involved in any civic affairs or charitable activities in the local community. Silvano likely could be characterized as:

Guilty of legal nonfeasance and subject to prosecution.

Immoral pursuant to the Last Resort principle for not "lending a hand" in the community.

Immoral pursuant to Legal Positivism.

Socially irresponsible.

Question 2
A decision by Best Merchandise Company to market a product in a certain way is being challenged in court. Best Merchandise has a better chance of defending its action if it can show that its action was

In good faith

In its own best interest

Socially responsible

Very profitable for the company.

Question 3
Social responsibility today is best described as:

Merely an "academic" matter since there are typically no legal consequences for acting in a socially non-responsive matter.

Part of a company's moral obligation to be altruistic.

A real and practical concern for a business executive.

Not an issue for the World Bank since it is a global financial institution.

Question 4
Which statement is incorrect regarding the application of the term "social responsibility" to business?

Social responsibility by business in the form of civic and charitable contributions to the local community usually is legally required when a local government is suffering a budget deficit.

Today's business executives and managers are well advised to pay attention on the changing perceptions in society as to what constitutes socially responsible behavior by business.

Social responsibility is the notion that a person or business should get involved in civic and charitable affairs in the community.

Social responsibility can include a business seeking to obtain good publicity and a good reputation in the community for its charitable and civic contributions.