Business, 12th Edition solutions manual and test bank by William M. Pride | Robert J. Hughes | Jack R. Kapoor
Chapter 2a—Being Ethical and Socially Responsible
ESSAY
1. Define business ethics.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 37
OBJ: LO: 2-1 NAT: BUSPROG: Ethics TOP: Business Ethics Defined
KEY: Bloom's: Analysis
2. Why are fairness and honesty in business important ethical concerns? Give examples.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 37
OBJ: LO: 2-2 NAT: BUSPROG: Ethics TOP: Ethical Issues
KEY: Bloom's: Analysis
3. What are the major ethical issues businesspeople face?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 37
OBJ: LO: 2-2 NAT: BUSPROG: Ethics TOP: Ethical Issues
KEY: Bloom's: Evaluation
4. What are the three major sets of factors believed to affect ethical behavior in an organization?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: pp. 39-40
OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Knowledge
5. What are some of the social factors that affect ethical decisions?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 40
OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Synthesis
6. How can the government encourage ethical behavior? Give an example.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Challenging REF: p. 41
OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Synthesis
7. Why is it easier for managers to make ethical decisions when business is good and profits are high than when business is not so good and profits are in trouble?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 41
OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Synthesis
8. Define a code of ethics. Do codes cover every business situation?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 41
OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
9. What might be the personal and social consequences of whistle-blowing within one’s own firm?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 42
OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
10. What are a few examples of companies acting socially responsible?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: pp. 42-44
OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Comprehension
11. Define the doctrine of caveat emptor.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 48
OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Knowledge
12. How do the working conditions at factories today differ from those at factories of the 1920s?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 47
OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
13. What are the two views of social responsibility? Explain.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 49
OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
14. How does the economic model of social responsibility differ from the socioeconomic model of social responsibility?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Challenging REF: p. 49
OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
15. What would proponents of the socioeconomic model argue to support their position?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Challenging REF: p. 50
OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Synthesis
16. What would opponents of the socioeconomic model argue to support their position?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Challenging REF: p. 50
OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Synthesis
17. Define consumerism. How have the rights of consumers changed since 1930?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 51
OBJ: LO: 2-7 NAT: BUSPROG: Ethics TOP: Consumerism
KEY: Bloom's: Analysis
18. Explain the six basic rights of consumers.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: pp. 51-52
OBJ: LO: 2-7 NAT: BUSPROG: Ethics TOP: Consumerism
KEY: Bloom's: Knowledge
19. What actions may consumers take in the marketplace if they do not consider a firm to be exercising social responsibility?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 52
OBJ: LO: 2-7 NAT: BUSPROG: Ethics TOP: Consumerism
KEY: Bloom's: Synthesis
20. What are the three major consumerism forces today?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 52
OBJ: LO: 2-7 NAT: BUSPROG: Ethics TOP: Consumerism
KEY: Bloom's: Knowledge
21. What is an affirmative action program? Be certain to detail the objectives of such programs in your answer.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 55
OBJ: LO: 2-8 NAT: BUSPROG: Ethics TOP: Employment Practices
KEY: Bloom's: Knowledge
22. Why did Congress create the Equal Employment Opportunity Commission?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 56
OBJ: LO: 2-8 NAT: BUSPROG: Ethics TOP: Employment Practices
KEY: Bloom's: Analysis
23. Why is pollution of concern to most citizens? Why are some businesspeople particularly concerned about pollution?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 57
OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
24. Describe the four types of pollution. Who should pay for a clean environment?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: pp. 57-61
OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
25. What sort of information should be included in a social audit? Who would prepare the audit? How would such a document be used?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Challenging REF: pp. 61-62
OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Evaluation
26. How should social responsibility programs be funded? Explain your answer.
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 62
OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
27. What are the four steps in developing a program of social responsibility?
ANS:
Answer not provided.
PTS: 1 DIF: Difficulty: Moderate REF: p. 62
OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Knowledge
MULTIPLE CHOICE
Excellent Air Inc. (EAI)
Excellent Air Inc. is a well-known establishment in the airline business. It is currently one of the top firms in the industry. The company prides itself on good customer service and being concerned with the broader societal good. EAI management is concerned not only with doing things right, but also with doing the right things. Many of its decisions reflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethical behavior to the press instead of to EAI management. As a result, the company made sure its employees knew the firm’s guidelines on fixing ethical issues. EAI also developed a code of conduct based on standards that continue to be upheld within the company. Since the code of conduct has been put in place, there have been much fewer ethical violations.
Although employee salaries at EAI are not as high as those at competing firms, the company experiences very low employee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but that also results in higher profits. If EAI can maintain the relationship it has built with its employees and customers, it will have little difficulty keeping up its remarkable success.
28. Refer to Excellent Air Inc. The principles that EAI chooses to pride itself on show that the company has
| a. | a moral minority. |
| b. | cultural diversity. |
| c. | social responsibility. |
| d. | caveat emptor. |
| e. | a social audit. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 47 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
29. Refer to Excellent Air Inc. Initially, employees were not willing to go to EAI management with ethical issues but would instead report them to the press. This is an example of
| a. | whistle-blowing. |
| b. | a social audit. |
| c. | poor employees. |
| d. | opportunity emptor. |
| e. | a narc. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
30. Refer to Excellent Air Inc. To fix the ethical issue problems, EAI management should have implemented all of the following guidelines for making ethical decisions except which one?
| a. | Listen and learn. |
| b. | Identify the ethical issue. |
| c. | Create and analyze options. |
| d. | Create an industry benchmark. |
| e. | Explain your decision and resolve any differences that arise. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
31. Refer to Excellent Air Inc. Since the company created its code of conduct, employees have limited ____, or amount of freedom to perform an unethical act.
| a. | time |
| b. | responsibility |
| c. | moral dilemmas |
| d. | unethical options |
| e. | opportunity |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Evaluation
32. Refer to Excellent Air Inc. EAI’s creation of its code of conduct demonstrated its application of moral standards to business situations, which is also known as
| a. | moral responsibility. |
| b. | social consciousness. |
| c. | social responsibility. |
| d. | moral consciousness. |
| e. | business ethics. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 37 OBJ: LO: 2-1 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
XYZ Coffee
Nancy is a highly respected person within her community. She is Hispanic in a largely Caucasian-populated area. Since Nancy was looking for a new job, she went to a new company in the area called XYZ Coffee, where she applied for a position. After the interview, Nancy felt confident that she would be hired because of her qualifications. However, she did not get a call back. Initially, Nancy did not think twice about it, but she felt differently when she visited the same coffee store later to purchase something for a friend. The company had hired an inexperienced Caucasian male with a history of unemployment. At this point, Nancy was quite aggravated, but she left the issue alone.
She ended up asking an associate for an espresso machine. The employee informed Nancy where the machine was located and retrieved it for her. Nancy asked if there were any other espresso machines of higher quality. When the associate said no, Nancy purchased the item and left. After she gave the gift to her friend, she noticed a much better quality espresso machine that someone else had given her. Nancy asked where they had purchased it, and they responded, “XYZ Coffee.”
33. Refer to XYZ Coffee. Nancy is a(n) ____ within her community.
| a. | outcast |
| b. | active member |
| c. | minority |
| d. | bad influence |
| e. | unethical person |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Knowledge
34. Refer to XYZ Coffee. If Nancy were Caucasian and the company employees were mostly Hispanic, the way she was treated would be referred to as
| a. | affirmative action. |
| b. | legal discrimination. |
| c. | simply unethical. |
| d. | reverse discrimination. |
| e. | a perfect match. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
35. Refer to XYZ Coffee. Before he got his job, another description for the employee who was hired over Nancy would be
| a. | hard-core unemployed. |
| b. | minority. |
| c. | whistle-blower. |
| d. | caveat emptor. |
| e. | consumerist. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: pp. 56-57 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Knowledge
36. Refer to XYZ Coffee. Which basic consumer right was infringed when Nancy bought the espresso machine?
| a. | The right to safety |
| b. | The right to be heard |
| c. | The right to service |
| d. | The right to respect |
| e. | The right to choose |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
37. Refer to XYZ Coffee. Nancy’s right to product options in buying an espresso machine is known as
| a. | caveat emptor. |
| b. | consumerism. |
| c. | affirmative action. |
| d. | social audit. |
| e. | business ethics. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Scenario Questions KEY: Bloom's: Analysis
38. The Jackson Springs Coal Mine recently discovered that the mine was contaminating the local drinking water. Cleaning up the mine and the surrounding areas would probably bankrupt the mine, causing the loss of hundreds of local jobs, but doing nothing would endanger the health of the community. The mine faces a serious ____ decision.
| a. | business |
| b. | ethical |
| c. | environmental |
| d. | social responsibility |
| e. | cost |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 37 OBJ: LO: 2-1 NAT: BUSPROG: Ethics
TOP: Business Ethics Defined KEY: Bloom's: Evaluation
39. Business ethics
| a. | is laws and regulations that govern business. |
| b. | is the application of moral standards to business situations. |
| c. | do not vary from one person to another. |
| d. | is most important for advertising agencies. |
| e. | is well-defined rules for appropriate business behavior. |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 37 OBJ: LO: 2-1 NAT: BUSPROG: Ethics
TOP: Business Ethics Defined KEY: Bloom's: Knowledge
40. The study of the morality of choices made by people is known as
| a. | ethics. |
| b. | business ethics. |
| c. | freedom of choice. |
| d. | moral aptitude. |
| e. | standard of behavior. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 37 OBJ: LO: 2-1 NAT: BUSPROG: Ethics
TOP: Business Ethics Defined KEY: Bloom's: Knowledge
41. Brant promised to repair Carolyn’s car on Thursday. After picking up the necessary part at a junkyard, he discovered he could not do the job after all and that the junkyard would not buy back the part. Carolyn does not know about these developments. However, she thinks Brant will be finished with her car sometime today. What should Brant do?
| a. | Try to repair the car even though he does not really know how. |
| b. | Try to repair the car so he can at least get his money’s worth out of it. |
| c. | Call Carolyn to inform her of the problem, and recommend a reputable repair shop. |
| d. | Fake an emergency and contact Carolyn on Monday. |
| e. | Stall for time to read up on car repairs so he can practice on Carolyn’s car. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
42. Customers expect a firm’s products to
| a. | boost sales. |
| b. | be profitable. |
| c. | earn a reasonable return on investment. |
| d. | be available everywhere. |
| e. | be safe, reliable, and reasonably priced. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Knowledge
43. Investors expect management to do all of the following except
| a. | consult them on ethical decisions. |
| b. | increase sales. |
| c. | boost the company’s profit. |
| d. | increase the return to the investor. |
| e. | make sensible financial decisions. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Knowledge | Bloom's: Analysis
44. Tony Shinn is applying for a mortgage to purchase his first home. His credit rating is mediocre due to several late payments on his credit cards and car loan. He is upset because his friend Jerry was offered an interest rate 3 percent less than what Tony was offered by the same mortgage company. This mortgage company’s actions were
| a. | unethical¾both Tony and Jerry should have been charged the same interest rates, regardless of their credit histories. |
| b. | ethical¾this is just a part of doing business because credit history is an important indicator of future payments. |
| c. | illegal¾subjective factors may not be used when determining which credit offers may be extended to certain customers. |
| d. | unethical if Tony is a minority and Jerry is not. |
| e. | unethical and illegal¾customers must all be treated the same. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
45. Metabo-Miracle offers a guaranteed weight loss of 10 pounds in one week without dieting or exercise. Thousands of customers purchase the products and about 200 call in with complaints that the product was ineffective. What action should Metabo-Miracle take?
| a. | It should immediately remove its products from the market, fully refund the thousands of customers’ money, and close its business. |
| b. | It should use persuasive techniques to get the 200 disappointed customers to try the product again each time it fails in order to decrease refunds. |
| c. | It should explain to the customers that they misused the product and try to sell them more of the product. |
| d. | It should discuss the product failure with the customers and then provide them with a full refund of their purchase price. |
| e. | It should ignore the customers’ complaints and hope they will tire of calling and writing letters. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
46. Ranee is a businessperson who works for a successful and admired Fortune 500 company. About how often is Ranee likely to encounter ethical issues in the workplace?
| a. | Once or twice during her career |
| b. | About two to three times per year |
| c. | Approximately once a month |
| d. | Almost every week |
| e. | On a daily basis |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
47. Mattel, the maker of Barbie dolls, frequently shows television ads aimed at children on Saturday mornings, when many children are known to watch cartoons. Some of these ads mix cartoon-type animation and “real” shots of the dolls so that it is sometimes difficult for even an adult to determine what the doll can or cannot do. This most likely represents
| a. | a conflict of interest. |
| b. | an ethical problem because children may be deceived about what Barbie can do. |
| c. | an ethical concern for many creditors of Mattel. |
| d. | illegal payoffs, if parents are getting more than they actually know they are paying for. |
| e. | that Mattel employees need better working conditions and higher pay. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
48. Employees of Copley Pharmaceutical, Inc., falsified drug manufacturers’ reports to the FDA. These actions taken by Copley’s employees were
| a. | moral. |
| b. | normal. |
| c. | in the best interests of the shareholders. |
| d. | unethical. |
| e. | in the best interests of the employees. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
49. You are the executive vice president for Cooper Tire, the sixth largest U.S. tire maker. You have the responsibility to locate land for a new distribution center in Mississippi, and you own over 1,000 acres of land near one site in Tupelo. This could create for you
| a. | a code of ethics. |
| b. | the usual decision-making problems of cost versus benefit to Cooper Tire. |
| c. | a wonderful, ethical opportunity to make a lot of money. |
| d. | an ethical opportunity to move the distribution center to your hometown. |
| e. | a conflict of interest. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 39 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
50. Taking credit for others’ ideas or work or not meeting one’s commitments in a mutual agreement are ethical issues concerning
| a. | fairness and honesty. |
| b. | organizational relationships. |
| c. | conflict of interest. |
| d. | communications. |
| e. | freedom of choice. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 38 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
51. Bribes are
| a. | unethical. |
| b. | ethical only under certain circumstances. |
| c. | uncommon in many foreign countries. |
| d. | economic returns. |
| e. | ethical. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 40 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Knowledge
52. When medical research indicated that a high-fiber diet might help reduce one’s risk of colon cancer, a few producers of fiber cereals suggested in their advertisements that if you eat fiber cereal, you will not get cancer. This is an example of
| a. | an unethical organizational relationship. |
| b. | a conflict of interest. |
| c. | social responsibility. |
| d. | unethical communications. |
| e. | ethical persuasion. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 39 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
53. Publisher’s Clearing House has a policy that no employees or their family members are eligible to win the big sweepstakes. This policy was likely implemented to
| a. | shrink the pool of possible winners, which increases each individual’s odds of winning. |
| b. | prevent employees from accepting gifts or bribes from other employees. |
| c. | encourage more magazine sales. |
| d. | avoid an apparent conflict of interest. |
| e. | satisfy the families of Publisher’s Clearing House employees. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 40 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Evaluation
54. You are the decision maker for purchasing office equipment in your organization. One sales representative privately offers you season tickets to the Chicago Bears if you help him out. This tactic is
| a. | a corporate discount. |
| b. | a common business practice. |
| c. | a bribe. |
| d. | personal selling. |
| e. | ethical. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 41 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
55. A large computer manufacturer forbids its executives and managers from serving as directors or officers for Intel Corporation or any other corporation from which it might purchase component parts. The company is trying to prevent
| a. | their employees from having other jobs. |
| b. | a conflict of interest. |
| c. | trade secrets from being revealed. |
| d. | losing its executives to other organizations. |
| e. | fairness and honesty. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 39 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
56. For health-related companies such as Weight Watchers, one of the most frequent ethical issues related to communications that they face is
| a. | deception. |
| b. | providing too much information. |
| c. | seeking FDA approval. |
| d. | experiments on animals. |
| e. | safe packaging. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 39 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
57. What specific area of business communications presents ethical questions by sometimes containing false and misleading messages for adults and especially children?
| a. | Press releases |
| b. | Newspaper articles |
| c. | Consumer Reports’ rankings |
| d. | Advertising |
| e. | Audited financial reports |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 39 OBJ: LO: 2-2 NAT: BUSPROG: Ethics
TOP: Ethical Issues KEY: Bloom's: Analysis
58. The ____ factor affecting ethical behavior includes one’s moral values and central attitudes.
| a. | individual |
| b. | social |
| c. | opportunity |
| d. | moral |
| e. | ethical |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Knowledge
59. At Ledbetter Industries, employees are allowed one-hour lunches, but it has become common that most stroll back fifteen minutes late every day. The factor affecting the ethical behavior of Ledbetter’s employees is
| a. | individual. |
| b. | social. |
| c. | opportunity. |
| d. | code of ethics. |
| e. | whistle-blowing. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Analysis
60. All of the following are factors that affect the level of ethical behavior in an organization except
| a. | individual factors. |
| b. | social factors. |
| c. | opportunity. |
| d. | demographic factors. |
| e. | moral values. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: pp. 39-40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Knowledge
61. Publix, a southeastern grocery store chain, has signs saying that tips are not accepted and employees are all informed of this policy. However, many of the baggers commonly accept tips from customers anyway and they often compare to see who makes the most. The factor affecting the ethical behavior of Publix’s employees is
| a. | individual. |
| b. | social. |
| c. | opportunity. |
| d. | demographic. |
| e. | internal code. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Evaluation
62. What are the three sets of factors that influence the standards of behavior in an organization?
| a. | Organizational norms, circumstances, morals |
| b. | Peer pressure, attitudes, social factors |
| c. | Historical factors, management attitudes, opportunity |
| d. | Opportunity, individual factors, social factors |
| e. | Financial factors, opportunity, morals |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Analysis
63. At Victoria’s Secret, managerial approval is required whenever an employee makes a purchase at the store using an employee discount. Which factor affecting ethical behavior is Victoria’s Secret seeking to control?
| a. | Individual |
| b. | Social |
| c. | Moral |
| d. | Circumstantial |
| e. | Opportunity |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Analysis
64. Ed works in a position where there is very little supervision. In fact, although he considers himself ethical, he figures he could go away for a week without anyone noticing. Which general set of factors is most likely to influence Ed’s ethical behavior?
| a. | Individual |
| b. | Social |
| c. | Moral |
| d. | Circumstantial |
| e. | Opportunity |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Analysis
65. If a company deals with violations of its ethical codes ____, the opportunity to be unethical will be reduced.
| a. | leisurely and lightly |
| b. | firmly and consistently |
| c. | on a case-by-case basis |
| d. | quietly and erratically |
| e. | frequently and severely |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 40 OBJ: LO: 2-3 NAT: BUSPROG: Ethics
TOP: Factors Affecting Ethical Behavior KEY: Bloom's: Analysis
66. Suppose that when making decisions with ethical content, an executive for the Coca-Cola Company always considers whether she would be comfortable explaining her decision after the fact to a national TV audience. Such thinking
| a. | is clearly a way to shift responsibility and should be avoided. |
| b. | encourages ethical decision making. |
| c. | is likely to be illegal. |
| d. | would encourage legal payoffs to university officials for making Coke the official on-campus drink. |
| e. | violates several international laws. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
67. Rose Martinez walked into her office and found a large, extravagant bouquet on her desk. Before she had time to read the card, her secretary said it was from Mr. Tanner at Zero Corporation. The secretary knew Mr. Tanner was trying to negotiate a sales deal with the company. Thus, she remarked that the beautiful flowers should help Ms. Martinez make her decision. Although Ms. Martinez did not know how to respond to Mr. Tanner’s gift, she thought an answer might be in her company’s
| a. | sales procedures. |
| b. | sales manual. |
| c. | employee handbook. |
| d. | code of ethics. |
| e. | sales training tapes. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
68. What is probably the most effective way for a company to encourage ethical behavior?
| a. | Hire employees who are ethical and in agreement with the company’s views. |
| b. | Have ethics training sessions for interested employees. |
| c. | Threaten employees with immediate termination for unethical behavior. |
| d. | Post signs discouraging sexual harassment and discrimination. |
| e. | Develop and enforce a written code of ethics for the organization. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
69. The American Apparel Manufacturers Association exerts pressure on its members to comply with the ethical standards of the industry and provides information and benefits for textile companies. This company is an example of a(n)
| a. | regulatory agency. |
| b. | government agency. |
| c. | trade association. |
| d. | industry organization. |
| e. | membership club. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
70. The Healthcare Financial Management Association expects its code of ethics to provide all of the following benefits except
| a. | create an outline for ethical policies and standards. |
| b. | encourage employees to behave ethically. |
| c. | communicate the company’s expectations to the employees. |
| d. | describe what to do in every ethical situation. |
| e. | detail the punishment that will be given for an ethical breech. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
71. As a result of the Bhopal incident, in which a toxic gas leak killed thousands of people, leading officials at Union Carbide have dedicated themselves to operating their business ethically. Ways in which the company can encourage ethical behavior include all of the following except
| a. | formalizing a corporate code of ethics. |
| b. | encouraging whistle-blowing. |
| c. | holding ethics training sessions. |
| d. | requiring that ethical behavior be profitable. |
| e. | promoting open decision making. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: pp. 41-44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Evaluation
72. The human resources manager at Swingline, Inc., a manufacturer of office staplers, wants to encourage a more ethical climate in the organization. A likely way for Swingline to do this is to
| a. | make certain that Swingline has a company code of ethics that is enforced. |
| b. | add an ethics department whose job is to constantly watch employees to be certain they behave. |
| c. | develop a system of security cameras, telephone monitoring, and one-way mirrors to be certain that employees behave appropriately. |
| d. | avoid any mention of ethics to employees so that they will not think unethical thoughts. |
| e. | do none of the above. All of these practices are illegal because they take away an employee’s constitutional right of free choice. |
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Evaluation
73. Megan Miller is an ethics officer at a large financial institution. She likely performs all of the following duties except
| a. | coordinating ethical conduct. |
| b. | providing advice to employees when they are uncertain. |
| c. | giving top management advice about their decisions. |
| d. | encouraging all employees to be whistle-blowers. |
| e. | determining the punishment for ethical violations. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
74. Which of the following is the most effective way to encourage ethical business behavior?
| a. | Pass government regulations. |
| b. | Provide guidelines from trade associations. |
| c. | Include an ethics clause in a labor contract. |
| d. | Establish and enforce a corporate code of ethics. |
| e. | Rely on employees to blow the whistle. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 41 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
75. Tom stormed into the office, exclaiming, “That’s the last straw! I've experienced unethical behavior at this company one time too many. I’ll be calling the press immediately.” It appears that Tom is about to engage in
| a. | an unethical practice. |
| b. | corporate ethics. |
| c. | whistling. |
| d. | trumpeting. |
| e. | whistle-blowing. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Knowledge
76. Informing the press or government officials about unethical practices within one’s organization is called
| a. | unethical behavior. |
| b. | whistling. |
| c. | whistle-blowing. |
| d. | trumpeting. |
| e. | a company violation. |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Knowledge
77. A whistle-blower is a person who
| a. | announces the beginning and end of a work shift. |
| b. | praises his or her own accomplishments. |
| c. | does public relations work for a company. |
| d. | accepts responsibility when a company is in trouble with the government. |
| e. | reports illegal or unethical conduct within his or her organization. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Knowledge
78. When faced with an ethical conflict, a manager should always
| a. | ask the boss what to do, then do it without question. |
| b. | consider only what is best for the company. |
| c. | look at which decision will make the stockholder the most money today. |
| d. | worry only about what the law has to say, then take legal action because it will produce the least public outcry. |
| e. | think about his or her own ethics; the company’s ethics; and the interest of employees, stockholders, and customers. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
79. After consulting his company’s code of ethics, Mark is still unsure of whether or not the decision he is about to make is ethical. Which of the following actions would be most appropriate?
| a. | Ask his wife what she would do in this situation. |
| b. | Calculate the decision’s bottom-line impact and do whatever increases profit the most. |
| c. | Determine whether coworkers, suppliers, and customers would approve of the action. |
| d. | Go with his gut feeling because Mark considers himself to be an ethical individual. |
| e. | Avoid making the decision and any other decision with ethical implications. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Evaluation
80. Which of the following scenarios provides the best example of whistle-blowing?
| a. | Jonathon fails to meet his sales quota for the month and is reported to the regional manager for special review. |
| b. | Christine tells her husband about illegal environmental dumping she suspects her company is doing. |
| c. | William gives an interview on NBC’s Dateline about the opportunities available at his company. |
| d. | Geena speaks to her boss about how uncomfortable she is with the sexual jokes one of her coworkers frequently tells at the office. |
| e. | Marie has grown tired of her company’s unsafe practices and reports them to OSHA, a governmental agency that regulates safety. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 42 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Evaluation
81. Dell’s global outreach programs that help bring technology to underserved communities in various parts of the world is an example of
| a. | social responsibility. |
| b. | business ethics. |
| c. | code of ethics. |
| d. | consumerism. |
| e. | affirmative action programs. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Analysis
82. The recognition that business activities affect society and the consideration of that impact when making business decisions is referred to as
| a. | business ethics. |
| b. | corporate ethics. |
| c. | code of ethics. |
| d. | community responsibility. |
| e. | social responsibility. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Knowledge
83. Social responsibility
| a. | has little or no associated costs. |
| b. | can be extremely expensive and provides very little benefit to a company. |
| c. | has become less important as businesses become more competitive. |
| d. | is generally a crafty scheme to put competitors out of business. |
| e. | is costly but provides tremendous benefits to society and the business. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Knowledge
84. Which of the following examples least represents the definition of social responsibility?
| a. | Home Depot provides resources and volunteers for Habitat for Humanity. |
| b. | GE supports food banks and helps renovate homeless shelters. |
| c. | Military members pledge a portion of their salary to the United Way. |
| d. | Avon donates a portion of its profits to breast cancer research. |
| e. | AT&T supports education, health, and the environment through donations and volunteers. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 44 OBJ: LO: 2-4 NAT: BUSPROG: Ethics
TOP: Encouraging Ethical Behavior KEY: Bloom's: Evaluation
85. In 1915, Amanda Groves, mother of seven, lost her husband in a horrible industrial accident that could have easily been prevented. Soon after, Amanda decided to take legal action against the company. What obstacle did she likely have to encounter?
| a. | Although going to court would be relatively inexpensive, Amanda is not very likely to win the case. |
| b. | It is likely that her legal action would result in the closure of the factory, thereby destroying the economy in her town for her friends and relatives. |
| c. | Although Amanda is likely to win such a strong case against the company, she will not be able to afford to go to court. |
| d. | The company responsible is likely to improve its working conditions significantly and make Amanda look like a liar. |
| e. | She will find out that court is very expensive, and her chances of winning are extremely slim. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 47 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
86. Kenneth’s great-great-grandfather worked in the steel industry in the early 1900s. Which most likely describes the amount of time Kenneth’s great-great-grandfather worked per week?
| a. | He was lucky to have the job at all and probably got to work only twenty hours per week. |
| b. | He shared his job with another individual and worked thirty hours per week. |
| c. | He worked a standard week of forty hours. |
| d. | He worked over sixty hours a week. |
| e. | He spent about sixteen hours a day, six days a week at the factory. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 47 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
87. Dorothy McRae worked at a meat packing plant during the 1920s. What would she have been most surprised to see happening at the plant?
| a. | Employees earning vacation time |
| b. | Horrible working conditions |
| c. | The organization of labor unions |
| d. | Frequent accidents resulting in injury and death |
| e. | Employees working long hours |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 47 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
88. Early government regulations prior to 1920 that affected American business include all of the following except the
| a. | Interstate Commerce Act. |
| b. | Sherman Antitrust Act. |
| c. | Federal Trade Commission Act. |
| d. | Clayton Antitrust Act. |
| e. | Sarbanes-Oxley Act. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 47 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
89. As far as business is concerned, six of the most important federal laws passed between 1887 and 1914 supported
| a. | foreign trade. |
| b. | increased production. |
| c. | increased competition. |
| d. | elimination of unions. |
| e. | more social responsibility. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 47 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
90. Caveat emptor
| a. | is a French term that implies laissez-faire. |
| b. | implies disagreements over peer evaluations. |
| c. | is a Latin phrase meaning “let the buyer beware.” |
| d. | is a Latin phrase meaning “let the seller beware.” |
| e. | is a Latin phrase meaning “the cave is empty.” |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Knowledge
91. Melissa purchases a DVR recorder at a store that sells refurbished merchandise. The store has a big sign stating “Caveat Emptor” posted out front and at the cash register. This sign most likely translates to a policy of
| a. | refunds or exchanges at any time with a receipt. |
| b. | 100 percent satisfaction guaranteed with all merchandise. |
| c. | all sales are final (no refunds or exchanges). |
| d. | buying, selling, or trading electronic goods. |
| e. | selling only French-manufactured products. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
92. Before the 1930s, most government involvement in day-to-day business was aimed at
| a. | nonpayment of income taxes. |
| b. | discrimination. |
| c. | protection of the free-market system. |
| d. | consumer rights. |
| e. | employment practices of factories. |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Analysis
93. Harold Finn III and his son, father, and grandfather gathered last week to compare notes on the business. Harold's grandfather started the business in 1928. His father became active in 1947, Harold in 1965, and his son in 1983. During their conversations, they discovered that some things about the past were similar to conditions today, although many others were quite different. An example of the differences is that after the 1930s,
| a. | government protection of workers and consumers increased. |
| b. | working conditions deteriorated quickly to the current condition. |
| c. | there was a period of laissez-faire business conditions. |
| d. | consumer groups diminished and became almost non-existent. |
| e. | businesses were free to operate pretty much as they chose. |
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Evaluation
94. In the first three decades of the twentieth century, working conditions were horrible as well as dangerous, and abuses were common. Most people of the time believed these abuses would be rectified by
| a. | strict government action to punish the offenders. |
| b. | a shift to a communist economy. |
| c. | consumer advocacy groups who promoted social responsibility. |
| d. | competition and interaction in the marketplace. |
| e. | returning to a less industrialized society. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Evaluation
95. Which president led the way in creating programs to improve the working and social conditions in the United States in the 1930s?
| a. | Teddy Roosevelt |
| b. | Calvin Coolidge |
| c. | Franklin Roosevelt |
| d. | Woodrow Wilson |
| e. | Herbert Hoover |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Knowledge
96. What led most directly to increased government involvement with regulating business and its dealings with society?
| a. | The Industrial Revolution |
| b. | President Kennedy’s consumer bill of rights |
| c. | The collapse of the oil industry |
| d. | The Great Depression |
| e. | The end of World War I |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 48 OBJ: LO: 2-5 NAT: BUSPROG: Ethics
TOP: The Evolution of Social Responsibility in Business KEY: Bloom's: Knowledge
97. With whom does social responsibility of business have to begin?
| a. | Government |
| b. | Management |
| c. | Consumers |
| d. | Consumer protection groups |
| e. | Society |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Knowledge
98. The manager of a large chain recently spoke to a group of college students about being successful in the business world. He focused particularly on the importance of fulfilling the purpose of the business organization: that is, to produce and market profitable products needed by society. In so doing, he indicated that a stockholder, not the society as a whole, invests in a corporation to earn a return on his or her investment and that a firm is legally obligated to act in stockholders’ interests. What concept do the manager’s comments reveal?
| a. | Socioeconomic model of social responsibility |
| b. | Economic model of social responsibility |
| c. | Strictest model of social responsibility |
| d. | Consumerism |
| e. | Rights of employees |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Synthesis
99. The economic model of social responsibility places primary emphasis on
| a. | quality of life. |
| b. | active government involvement. |
| c. | conservation of natural resources. |
| d. | economic return. |
| e. | the balance of economic return and social return. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Synthesis
100. The economic model of social responsibility was developed in a period when the primary concern of firms was
| a. | long-term success and profitability. |
| b. | improving the quality of life. |
| c. | short-run profits and survival. |
| d. | complete customer satisfaction and expansion. |
| e. | having safe and satisfied employees. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
101. The manager of a successful local restaurant believes his responsibilities are to provide delicious meals and excellent service, provide jobs, comply with laws and the IRS, and earn a respectable profit on the restaurant. These are the manager’s only concerns. What concept does this indicate?
| a. | Socialism |
| b. | The economic model of social responsibility |
| c. | The socioeconomic model of social responsibility |
| d. | Consumer protectionism |
| e. | A lack of social responsibility |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
102. “We are busy producing and marketing profitable products for society to enjoy! Now you want us to provide legal services, day-care centers, and counseling for AIDS victims and alcohol and drug abusers. If we do all these things, what role will the government, church, and family play?” exclaimed the vice president of Milam Corporation. This manager’s comments reveal what concept?
| a. | The socioeconomic model of social responsibility |
| b. | The economic model of social responsibility |
| c. | The strictest model of social responsibility |
| d. | The need to preserve management rights |
| e. | Consumerism |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
103. By establishing Ronald McDonald Houses, temporary lodging for individuals with seriously ill family members, McDonald’s has committed itself to more than just shareholder wealth maximization. The corporation’s active role in improving societal conditions suggests that it is responsive to which of the following arguments?
| a. | Corporate resources should be devoted to maximizing profits, not to solving society’s problems. |
| b. | Individual businesses should not be responsible for solving problems that affect all of society. |
| c. | Socially responsible actions by business firms increase the role of government in business. |
| d. | Businesses are ill-equipped to handle today’s complex social issues. |
| e. | Social responsibility promotes environmental stability and long-run profitability. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
104. The socioeconomic model of social responsibility places primary emphasis on
| a. | quality of life. |
| b. | production. |
| c. | economic return. |
| d. | exploitation of natural resources. |
| e. | profit. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
105. You have been asked to complete this year’s social responsibility report for the insurance industry. Which of the following statements would you include as a valid indication of socially responsible activities in this industry?
| a. | This year, we sold more insurance policies than in the previous two years. |
| b. | This year marked a 200 percent increase in the number of new insurance products and services available to customers. |
| c. | To date, few women and minorities hold management positions in the insurance industry. |
| d. | This year, more than 300,000 volunteer hours were contributed by companies through loaned executives and release-time (time off) arrangements. |
| e. | Fewer than one-eighth of the companies’ charitable contributions go to people-related activities. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
106. Which of the following statements reflects the socioeconomic model of social responsibility?
| a. | “I did it my way!” ¾Frank Sinatra |
| b. | “It's easier and better to ban smoking than to risk multimillion-dollar lawsuits.” ¾a university professor |
| c. | “It's an absolutely preposterous proposal. The idea that any corporation has the right to reach beyond company gates to what you could even describe as the bedroom of the employee is ridiculous.” ¾a spokesperson for the Tobacco Institute |
| d. | “In the private sector, employers can get away with quite a bit.” ¾an attorney |
| e. | “We will not allow our motion pictures to be shown in any movie house in South Africa unless it is fully integrated.” ¾the president of United International Pictures Corporation |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
107. Roger, a bank manager, holds the economic model of social responsibility view. What is he most likely to say about the connection between taxes and social responsibility?
| a. | Because he is a responsible man, he pays his taxes and does not try to cheat the IRS. |
| b. | Although taxes contribute to social welfare, it is only the beginning of his bank's responsibility to society. |
| c. | Taxes are a required evil from which he sees very little benefit in his community. |
| d. | By making a profit and paying taxes that meet the needs of society, Roger has fulfilled his social responsibility. |
| e. | It is better to make a small profit and therefore pay less taxes than to contribute to social responsibility. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
108. Joe, a restaurant supplies and equipment business manager, believes in the economic model of social responsibility. Which of the following would most likely be a quote from Joe in relation to social responsibility?
| a. | “What a waste of time for everyone!” |
| b. | “I fully support it.” |
| c. | “That is someone else's job.” |
| d. | “It's expensive, but worth it.” |
| e. | “Not in my line of work.” |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 52 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
109. Long-distance providers are becoming increasingly concerned about certain activities within their industry. Various companies come together voluntarily to implement new standards of social responsibility that members must abide by. What seems to be the primary motivation in this case for an increased interest in social responsibility?
| a. | Because corporations are creations of society, they are responsible for giving back to the communities in which they operate. |
| b. | These companies have realized it is in their best interest to increase their social responsibility before they are once again subject to stricter regulations. |
| c. | These companies are using social responsibility as a means to increase their profitability, both short term and long term. |
| d. | Long-distance providers have started taking pride in their industry and its record for social responsibility. |
| e. | They feel a responsibility to their stockholders, employees, the government, investors, and society as a whole. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Evaluation
110. Which of the following is an argument for increased social responsibilities?
| a. | Because business is part of our society, it cannot ignore social issues. |
| b. | Management must be concerned with providing a return on owners’ investments. |
| c. | Corporate time and money should be used to maximize profits. |
| d. | Individual businesses should not be expected to solve society’s problems. |
| e. | Social issues are the responsibility of government officials. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
111. The socioeconomic model of social responsibility
| a. | holds that society will benefit most when business is left alone to produce and market profitable products. |
| b. | emphasizes that social responsibility is someone else’s responsibility. |
| c. | holds that a firm is legally obligated to act in the economic interests of its stockholders. |
| d. | states that managers who concentrate on profit indirectly fulfill their social responsibilities. |
| e. | emphasizes profits as well as the effect of business decisions on society. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 49 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
112. All of the following are arguments against increased social responsibility except
| a. | social issues are the responsibility of government officials elected for that purpose. |
| b. | companies should maximize profits, not solve society’s problems, with their time, money, and talent. |
| c. | because social problems affect society in general, businesses should not be expected to solve these problems. |
| d. | social responsibility by firms can prevent increased government intervention. |
| e. | business managers are primarily responsible to stockholders and providing them a good return. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
113. Which of the following best describes the trend in social responsibility models used by companies?
| a. | Most companies are changing from a socioeconomic approach to an economic approach to social responsibility. |
| b. | There has really been no pattern of change over the last century because most companies take a socioeconomic approach. |
| c. | There has been a sporadic shift back and forth between the economic and socioeconomic model as the best business solution. |
| d. | Relatively little transformation has left the economic model as the philosophy for most businesses. |
| e. | More companies have been bypassing the economic model in favor of the socioeconomic model in recent years. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
114. Which of the following is an argument against social responsibility?
| a. | Business has resources needed to tackle today’s complex social issues. |
| b. | Because business is a part of our society, it cannot ignore social issues. |
| c. | Corporate time, money, and talent should be used to maximize profits. |
| d. | By helping resolve social issues, business can create a more stable environment. |
| e. | Socially responsible decision making by firms can prevent increased government intervention. |
ANS: C PTS: 1 DIF: Difficulty: Easy
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
115. Primary emphasis in the economic model of social responsibility is on
| a. | quality of life. |
| b. | conservation of resources. |
| c. | market-based decisions. |
| d. | production. |
| e. | firm’s and community’s interests. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
116. Karen is the assistant manager of a midsized logistics firm. She believes her manager, Michael, has become carried away with supporting nonprofit organizations and encouraging employees to do community service. What argument would Karen most likely use to turn Michael to her point of view?
| a. | Socially responsible decision making by firms can prevent increased government regulation. |
| b. | Social problems affect society in general, so it is important to protect our society. |
| c. | The company’s time and money should be spent maximizing the owner’s wealth, not solving society’s problems. |
| d. | By contributing to social issues, business will decrease its opportunity for long-run profitability. |
| e. | The logistics business has unique resources that could be used to address serious social issues. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 50 OBJ: LO: 2-6 NAT: BUSPROG: Ethics
TOP: Two Views of Social Responsibility KEY: Bloom's: Analysis
117. By ensuring that products are safe and reliable, the Food and Drug Administration and the Consumer Product Safety Commission are taking part in a movement known as
| a. | protectionism. |
| b. | consumerism. |
| c. | product activism. |
| d. | socialism. |
| e. | product liability management. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
118. Which president stated that consumers have the right to safety, to be informed, to choose, and to be heard?
| a. | Franklin D. Roosevelt |
| b. | Dwight D. Eisenhower |
| c. | Lyndon B. Johnson |
| d. | John F. Kennedy |
| e. | George H. Bush |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
119. ____ is all activities undertaken to protect the rights of consumers.
| a. | Consumerism |
| b. | Bill of rights |
| c. | Lobbying |
| d. | Caveat emptor |
| e. | Protectionism |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
120. What two additional rights have been added to Kennedy’s original consumer bill of rights?
| a. | Right to choose and right to satisfaction |
| b. | Right to listen and right to education |
| c. | Right to consumer education and right to service |
| d. | Right to service and right to privacy |
| e. | Right to reparation and right to privacy |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
121. The Audi 5000S was investigated because of reported instances of unintended acceleration. The investigating body concluded that the acceleration was not a result of a system malfunction but was due instead to driver error. However, they also said that the awkward placement of the brake and accelerator pedals was the primary contributor to these driver errors. By designing this part of the 5000S in an ergonomically inefficient manner, Audi ignored which of the four basic rights of consumers?
| a. | The right to be informed |
| b. | The right to choose |
| c. | The right to safety |
| d. | The right to be heard |
| e. | The right to comfort |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
122. Whirlpool fails to provide an instruction manual with a certain type of new washing machine. Which basic consumer right does Whirlpool’s action violate?
| a. | The right to convenience |
| b. | The right to choose |
| c. | The right to be heard |
| d. | The right to safety |
| e. | The right to courteous service |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
123. Erin decides to try out her new iron on the pesky wrinkles she has on her legs. She suffers rather severe burns and is infuriated with the manufacturer because she feels her right to safety has been violated. Is Erin correct?
| a. | Yes, the right to safety implies that a customer will never be injured by a product. |
| b. | Yes, the iron should have been recalled when this defect was first discovered. |
| c. | No, products must be safe for their intended use, and Erin’s experiment was clearly beyond the intended use. |
| d. | No, as long as the instructions mentioned that when ironing skin burns sometimes occur, they are not to blame. |
| e. | No, the company instead violated her right to choose. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
124. MasterCard sends a customer a memo that discloses the true cost of borrowing with each billing statement. It does this because it realizes that the customer has the right to
| a. | choose. |
| b. | obtain credit. |
| c. | be heard. |
| d. | be informed. |
| e. | safety. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
125. The motion picture industry uses a rating system to describe the content of its movies. Movies are accompanied by ratings such as PG (parental guidance suggested) or R (not suitable for those under 17). This rating system satisfies consumers’ right to
| a. | be heard. |
| b. | safety. |
| c. | be informed. |
| d. | censorship. |
| e. | watch what they want to watch. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
126. A credit card company is offering an annual percentage rate of 3.9 percent. However, the company fails to mention that this is an introductory rate, and when consumers receive their bills after six months the rate increases to 21.9 percent. The consumers feel their right to ____ has been abused.
| a. | be treated fairly |
| b. | be informed |
| c. | safety |
| d. | be heard |
| e. | service |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
127. One reason American business must be concerned about product safety is that
| a. | labor unions will demand better contracts. |
| b. | the government will increase its requirements for disclosure. |
| c. | consumers demand safe products. |
| d. | companies will be banned from competing. |
| e. | limitations will be placed on the sale of products. |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
128. Product labels on detergent that indicate ingredients and laundering methods are examples of which provision of Kennedy’s consumer bill of rights?
| a. | The right to be heard |
| b. | The right to choose |
| c. | The right to purchase |
| d. | The right to be informed |
| e. | The right to safety |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
129. Wonder Bread advertised that its bread “builds strong bodies.” This claim was considered deceptive and thus a violation of the consumer’s right to ____. The claim was a violation not because it was untrue but because the same claim was true of other breads, and people seeing the advertisement might have thought that Wonder Bread was unique.
| a. | safety |
| b. | be heard |
| c. | be informed |
| d. | choose |
| e. | life |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
130. An instruction pamphlet detailing steps for the care and use of a new electric appliance would fulfill which provisions of Kennedy’s consumer bill of rights?
| a. | The right to safety and the right to be informed |
| b. | The right to be instructed and the right to safety |
| c. | The right to be aware and the right to choose |
| d. | The right to choose and the right to vote |
| e. | The right to be heard and the right to sue |
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
131. The statement “Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous to Your Health” supports the consumers’ rights to
| a. | safety and to be informed. |
| b. | life and to be informed. |
| c. | choose and to safety. |
| d. | work and to be informed. |
| e. | safety and to be heard. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
132. Citizens have a right to demonstrate against unfair rate increases and safety violations as well as other issues. In doing so, they exercise their right to
| a. | be heard. |
| b. | be informed. |
| c. | safety. |
| d. | choose. |
| e. | vote. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
133. Steve had a problem with a coffee maker he purchased recently. He has been trying for days to speak with the company by calling its toll-free number, but it rings forever or sends him through a long menu with no opportunity to speak to an individual or to leave a message. Steve feels his basic consumer right to ____ has been violated.
| a. | safety |
| b. | be informed |
| c. | be heard |
| d. | choose |
| e. | privacy |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Evaluation
134. In the 1970s, the Pinto, a subcompact car manufactured by Ford, was known to catch on fire when rear-ended, even at inner-city speeds. This stripped consumers of their right to
| a. | choose. |
| b. | be informed. |
| c. | be protected. |
| d. | be heard. |
| e. | safety. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 51 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
135. When Ford discovered the fault with its Pinto model that caused the car to explode easily when hit from the rear, what action should it have taken to preserve basic consumer rights?
| a. | Ford should have performed a cost benefit analysis to determine whether it would save more money by doing nothing or by rectifying the problem. |
| b. | Ford should have launched a campaign warning consumers of the defect so they would avoid getting in accidents. |
| c. | Ford should have warned consumers of the explosions, recalled all of the defective automobiles, and corrected the problem. |
| d. | Ford should have quietly ignored the problem and phased the Pinto out of its automobile lineup. |
| e. | Ford should have redesigned the automobile to make it safer for consumers in the future. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Evaluation
136. If Casio were to buy out all other calculator manufacturers, what consumer right would be at stake?
| a. | The right to choose |
| b. | The right to be heard |
| c. | The right to safety |
| d. | The right to service |
| e. | The right to be informed |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
137. Lisa buys a new pillow and rips off the manufacturer’s tag. She then reads the tag and is amused at its warning that, under penalty of law, the tag should not be removed and the pillow could cause suffocation. What consumer right is the manufacturer guarding against?
| a. | The right to consumer education |
| b. | The right to choose |
| c. | The right to be informed |
| d. | The right to be heard |
| e. | The right to courteous service |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: pp. 51-52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
138. What does the government encourage in order to protect the consumer’s right to choose?
| a. | Competition |
| b. | Monopolies |
| c. | Trust laws |
| d. | Divestitures |
| e. | Cooperation |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
139. The right to be heard implies that companies should listen to consumer complaints and
| a. | thank them for their time. |
| b. | give them a full refund. |
| c. | do whatever the consumer requests. |
| d. | do nothing¾just listening is enough. |
| e. | take appropriate action. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
140. Anne’s new necklace breaks the day after she purchases it. She tries to get it fixed or replaced and feels that she has been given the runaround by both the retailer and the manufacturer of the necklace. She is treated rudely and finally told she will have to drive two hours to a company-approved repair center to have the necklace fixed. Anne is certain that her consumer right to ____ has been ignored by both companies.
| a. | be heard |
| b. | safety |
| c. | be informed |
| d. | service |
| e. | consumer education |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Analysis
141. When DVR recorders were first introduced, the price was very high, thereby preventing the average consumer from purchasing one. Today, however, as a result of increased competition in the market, generally consumers can afford one because they are significantly cheaper. By reducing the price of these products and ensuring a large number of product offerings, competition has promoted consumers’ right to
| a. | inexpensive products. |
| b. | be informed. |
| c. | be heard. |
| d. | quality products. |
| e. | choose. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Evaluation
142. Which president stated that consumers have the right to consumer education?
| a. | Franklin D. Roosevelt |
| b. | John F. Kennedy |
| c. | Lyndon B. Johnson |
| d. | Gerald R. Ford |
| e. | Bill Clinton |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
143. Which president stated that consumers have the right to service?
| a. | Franklin D. Roosevelt |
| b. | John F. Kennedy |
| c. | Lyndon B. Johnson |
| d. | Gerald R. Ford |
| e. | Bill Clinton |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
144. The major forces in consumerism are
| a. | individual consumer advocates. |
| b. | consumer organizations. |
| c. | consumer education programs. |
| d. | consumer laws. |
| e. | all of the above. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
145. Louise registers for a consumer education course at her high school. She is likely to learn about all of the following topics except
| a. | how to prepare for a successful job interview. |
| b. | what to consider when purchasing a car. |
| c. | the provisions of consumer protection laws. |
| d. | the available sources of consumer information. |
| e. | Kennedy's consumer bill of rights. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 52 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
146. Major advances in consumerism have come through
| a. | federal legislation. |
| b. | state legislation. |
| c. | local legislation. |
| d. | business firms. |
| e. | trade organizations. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 54 OBJ: LO: 2-7 NAT: BUSPROG: Ethics
TOP: Consumerism KEY: Bloom's: Knowledge
147. You were hired as a television anchorwoman this year. After a few months your supervisor demoted you because you were said to be too old, unattractive, and not deferential enough to men. You believe this supervisor has violated your right to
| a. | safety and security. |
| b. | be heard. |
| c. | be informed. |
| d. | life. |
| e. | equal treatment in the workplace. |
ANS: E PTS: 1 DIF: Difficulty: Moderate
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
148. A plan designed to increase the number of minority employees within an organization is known as
| a. | the Dodd-Frank Act. |
| b. | the Civil Rights Act. |
| c. | a social responsibility program. |
| d. | an affirmative action program. |
| e. | the Bill of Rights. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Knowledge
149. Susan Scholz was fired from her sales clerk’s job at the Walgreens store in North Mall after refusing to work on Sundays. The Christian Reformed Church, of which she was a member, prohibited working on Sunday. Therefore, she did not go to work on those days even though she was scheduled to do so. Susan filed a lawsuit against the company because she felt her rights had been violated. Which right(s) was/were violated?
| a. | The rights to be heard and to work |
| b. | The rights to safety and to be informed |
| c. | The rights to be informed and to be heard |
| d. | The rights to life and to work |
| e. | The right to equal treatment in the workplace |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Evaluation
150. Which of the following accurately describes the objective of affirmative action?
| a. | If 30 percent of the local population is Hispanic, then 30 percent of a company’s engineers should be Hispanic. |
| b. | If 55 percent of the local population is female, then 55 percent of all companies’ employees should be female throughout all levels of the organizations. |
| c. | If 20 percent of the engineers in the local area are African American, then a company should have about 20 percent African American employees on its engineering staff. |
| d. | If 40 percent of the engineers available locally are African American, then a company should have about 1 out of 10 African American engineers. |
| e. | If 40 percent of the local population is Hispanic, the school systems should have 40 percent Hispanic teachers. |
ANS: C PTS: 1 DIF: Difficulty: Challenging
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Evaluation
151. One problem affirmative action programs have encountered is
| a. | that not all businesspeople favor such programs. |
| b. | identification of minority groups. |
| c. | the government’s reclassification of groups. |
| d. | completing the required paperwork. |
| e. | training the hard-core unemployed. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 55 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
152. A government agency with the power to investigate complaints of discrimination and to sue firms practicing employment discrimination is known as the
| a. | Better Business Bureau. |
| b. | National Alliance of Business. |
| c. | Civil Service Commission. |
| d. | Equal Employment Opportunity Commission. |
| e. | Interstate Commerce Commission. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
153. What have the courts ruled about quotas as a part of affirmative action programs?
| a. | Courts have confirmed their usefulness in correcting past failures. |
| b. | Courts have restricted the use of quotas to certain occupations with severe obstacles to overcome. |
| c. | Courts have ruled the quotas unconstitutional and condemned companies for using them. |
| d. | Courts have supported the use of quotas on a wide basis throughout the United States. |
| e. | Courts have ruled quotas unconstitutional but commended their purpose. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
154. Historically a discrepancy exists between the pay for women and men of equal qualifications. Which statement most accurately describes this inequality?
| a. | Although the pay discrepancy between men and women used to be quite large, it is nonexistent today. |
| b. | Despite threats of legal action, women still make significantly less than men of equal background. |
| c. | So much has been done to correct this discrepancy that women, on average, earn more than men of equal qualifications. |
| d. | The discrepancy in pay has shifted back and forth the last three decades; that is, sometimes women are paid more and sometimes men are paid more. |
| e. | Women and men of equal qualifications have, for the past two decades, made approximately the same amount of money from similar occupations. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Evaluation
155. What are the two major problems that affirmative action programs have faced?
| a. | Quotas and lack of acceptance by some businesspeople |
| b. | Unrealistic expectations and strict enforcement |
| c. | Lack of enforcement and lack of acceptance |
| d. | Reverse discrimination and lawsuits |
| e. | Quotas and the EEOC |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
156. Elizabeth believes her company has discriminated against her because her minority coworkers, who are less qualified, have been promoted ahead of her. Which agency should Elizabeth contact?
| a. | National Alliance of Business |
| b. | Affirmative Action Council |
| c. | Equal Employment Opportunity Commission |
| d. | Federal Trade Commission |
| e. | Fair Employment Practices Agency |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 56 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
157. Bill Phillips dropped out of high school the day he turned sixteen. Over the next seven years he had brief employment, only a month or two, at a lawn mowing business. Bill could be classified as
| a. | a juvenile delinquent. |
| b. | terminally unemployable. |
| c. | a moocher. |
| d. | hard-core unemployed. |
| e. | a minority. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: pp. 56-57 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
158. Which organization was established to train the hard-core unemployed?
| a. | Better Business Bureau |
| b. | Equal Employment Opportunity Commission |
| c. | Environmental Protection Agency |
| d. | Affirmative Action Committee |
| e. | National Alliance of Business |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Knowledge
159. The National Alliance of Business is a combined effort between
| a. | the EEOC and local government. |
| b. | participating businesses and government. |
| c. | government and all businesses. |
| d. | businesses and the EEOC. |
| e. | instructors and students. |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Knowledge
160. Bob Johnson has a tenth-grade education and has been employed only once, for a very short period of time, since quitting school five years ago. His poor education and chronic history of unemployment suggest that he could be helped greatly by contacting the
| a. | National Alliance of Business. |
| b. | Equal Employment Opportunity Commission. |
| c. | local Chamber of Commerce. |
| d. | American Federation of Labor. |
| e. | Affirmative Action Bureau. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 57 OBJ: LO: 2-8 NAT: BUSPROG: Ethics
TOP: Employment Practices KEY: Bloom's: Analysis
161. When people in an industrialized society contaminate the environment, the action is called
| a. | wasteful. |
| b. | recycling. |
| c. | redesign. |
| d. | disposal. |
| e. | pollution. |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
162. The agency charged with protecting our environment is the
| a. | National Alliance of Business. |
| b. | Interstate Commerce Commission. |
| c. | National Recovery Administration. |
| d. | Environmental Protection Agency. |
| e. | Civilian Conservation Corps. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
163. The federal act which provided over $7 billion to the EPA to protect and promote “green” jobs and a healthier environment is the
| a. | National Environmental Policy Act. |
| b. | Resource Recovery Act. |
| c. | Resource Conservation and Recovery Act. |
| d. | American Recovery and Reinvestment Act. |
| e. | Clean Air Act. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 58 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
164. The federal agency charged with enforcing laws to protect the environment is the
| a. | National Environmental Commission. |
| b. | Resource Recovery Alliance. |
| c. | Pollution Control Committee. |
| d. | Environmental Protection Agency. |
| e. | Clean Air Agency. |
ANS: D PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
165. Over the past several decades, concern for the environment has
| a. | been relatively steady because people expect to live in a clean and safe environment. |
| b. | increased significantly because pollution became a threat to life and health. |
| c. | been carefully handled by businesses because they are the primary source of pollutants. |
| d. | become stronger in the United States but not yet in the rest of the world. |
| e. | decreased because today’s industrialized processes are naturally more environmentally friendly. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
166. Jennifer, a recent college graduate, has always been concerned about protecting the environment and now hopes to play a major role in seeing that legislation for protecting the environment is enforced. With whom should Jennifer seek employment?
| a. | A large, environmentally friendly corporation |
| b. | The Equal Employment Opportunity Commission |
| c. | The Environmental Protection Agency |
| d. | A recycling center |
| e. | The Commission for Cleaner Air |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
167. HGR Chemical Company believes the environmental regulations for its industry are much more stringent than necessary, which likely means
| a. | they are impossible to comply with. |
| b. | they will not improve the quality of the drinking water. |
| c. | they are unfair to chemical plants. |
| d. | they are too expensive to comply with. |
| e. | HGR is not concerned with the environment. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
168. The law that established the Environmental Protection Agency was the
| a. | National Environmental Policy Act of 1970. |
| b. | Clean Air Amendment of 1970. |
| c. | Resource Recovery Act of 1970. |
| d. | Resource Conservation and Recovery Act of 1984. |
| e. | Clean Air Act Amendment of 1977. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 58 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
169. Residents around Lake Gunter have been warned not to drink their water because it contains some unknown chemical contaminant that could be harmful. What is this called?
| a. | Pollution |
| b. | Negligence |
| c. | Carelessness |
| d. | Recovery |
| e. | Biological disaster |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
170. Which of the following is the most important legislation in improving the condition of U.S. waters?
| a. | National Environmental Policy Act |
| b. | Clean Water Act |
| c. | Water Quality Improvement Act |
| d. | Water Pollution Control Act |
| e. | Resource Conservation and Recovery Act |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
171. The governments of the United States and Canada have recently signed an agreement to cooperate in eliminating acid rain. Their efforts are primarily an attempt to reduce
| a. | water pollution. |
| b. | hazardous waste. |
| c. | noise pollution. |
| d. | land pollution. |
| e. | northern precipitation. |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 57 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
172. When sulfur emitted by smokestacks combines with moisture in the atmosphere to form acids that are spread by the wind, ____ results.
| a. | air pollution |
| b. | fire |
| c. | acid rain |
| d. | emissions |
| e. | wet pollution |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 59 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
173. What is the major source of human emissions of air pollution in the upper atmosphere?
| a. | Aircraft |
| b. | Automobiles |
| c. | Acid rain |
| d. | Volcanoes |
| e. | Factories |
ANS: A PTS: 1 DIF: Difficulty: Moderate
REF: p. 59 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
174. What specific gas is internationally considered a top concern for air pollution?
| a. | Carbon monoxide |
| b. | Nitrogen dioxide |
| c. | Carbon dioxide |
| d. | Greenhouse gas |
| e. | Hydrogen monoxide |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 59 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
175. Which type of pollution has seen the least improvement since environmental issues became important?
| a. | Land |
| b. | Air |
| c. | Ocean |
| d. | Water |
| e. | Factory |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
176. Congress created the ____ in 1980 to help pay for cleaning up land polluted with chemicals and toxic wastes.
| a. | Environmental Protection Agency |
| b. | Land Pollution Act |
| c. | Clean-Up Fund |
| d. | Landfill Recovery Fund |
| e. | Superfund |
ANS: E PTS: 1 DIF: Difficulty: Easy
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
177. Kathy has noticed that the airport in her city is away from where most people live and work, and it takes a while to get there. This location was probably strategically designed to reduce
| a. | air pollution. |
| b. | noise pollution. |
| c. | highway traffic. |
| d. | air traffic. |
| e. | land pollution. |
ANS: B PTS: 1 DIF: Difficulty: Moderate
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
178. Dinesh lives in Phoenix where he hears almost daily reports about the high levels of ozone along with suggestions on when individuals should purchase gasoline. As he views the hazy condition in the sky, he decides the government is basically ignoring environmental problems. Which statement best describes the government’s involvement?
| a. | The government relies mostly on businesses to control various types of pollution and expects them to cover the costs. |
| b. | Although the government has established several environmental agencies, actual spending on reducing pollution is only about $100 million per year. |
| c. | The government is delegating most of the responsibility for a cleaner environment to individuals and nonprofit organizations. |
| d. | The government is encouraging technology that will eliminate pollution but not supporting this research financially. |
| e. | The government is spending several billions of dollars a year to reduce various types of pollution. |
ANS: E PTS: 1 DIF: Difficulty: Challenging
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Evaluation
179. A major way technology affects land pollution is the potential for
| a. | worsening the problem. |
| b. | creating resource scarcity. |
| c. | decreasing pollution problems. |
| d. | exploitation. |
| e. | increasing pollution control. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
180. Noise pollution can be reduced by
| a. | cleaning up land polluted with chemicals and industrial waste. |
| b. | modifying machinery and equipment. |
| c. | banning strip-mining of coal. |
| d. | nonselective cutting of forests. |
| e. | the development of agricultural land for housing and industry. |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
181. Residents living near Los Angeles International Airport complained to the city that the airport was guilty of ____ pollution.
| a. | land |
| b. | noise |
| c. | air |
| d. | water |
| e. | business |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
182. The Noise Control Act of 1972 established noise emission standards for all of the following except
| a. | aircraft. |
| b. | airports. |
| c. | railroads. |
| d. | intracity cab services. |
| e. | interstate motor carriers. |
ANS: D PTS: 1 DIF: Difficulty: Moderate
REF: p. 60 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Knowledge
183. Gabriel is an environmentalist with very strong beliefs about who should pay for environmental cleanup. What is most likely to be Gabriel’s view?
| a. | He believes that tax money should be used for environmental cleanup because everyone contributes to pollution. |
| b. | He feels that there should be a governmental tax imposed on every item to cover the cost of its pollution. |
| c. | He feels that individuals, not businesses, should foot the bill for environmental cleanup because individuals are the ones who benefit. |
| d. | He feels environmental costs are a part of doing business, which should be paid by businesses and in turn by higher prices for consumers. |
| e. | He believes those who are concerned about the environment and pollution should pay the costs. |
ANS: D PTS: 1 DIF: Difficulty: Challenging
REF: p. 61 OBJ: LO: 2-9 NAT: BUSPROG: Ethics
TOP: Concern for the Environment KEY: Bloom's: Analysis
184. A program to implement social responsibility in business begins with
| a. | total commitment of top management. |
| b. | careful planning. |
| c. | appointment of a director. |
| d. | a board of directors meeting. |
| e. | conducting a social audit. |
ANS: A PTS: 1 DIF: Difficulty: Easy
REF: p. 61 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
185. Babkok Corporation set up an effective program for social responsibility. Its top managers developed a policy statement outlining key areas of concern. This statement will serve as a guide for other employees as they become involved in the program. Now
| a. | a committee of managers should be appointed to plan the program. |
| b. | employees should be appointed to submit suggestions to management. |
| c. | a top-level executive should be appointed to direct implementation of the program. |
| d. | employees should evaluate the program. |
| e. | the program director should prepare a social audit for the firm at specified intervals. |
ANS: A PTS: 1 DIF: Difficulty: Challenging
REF: p. 61 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
186. Which of the following is not one of the steps in developing and implementing a program of social responsibility?
| a. | Planning |
| b. | The social audit |
| c. | Commitment of employees |
| d. | Appointment of a director |
| e. | Commitment of top executives |
ANS: C PTS: 1 DIF: Difficulty: Moderate
REF: p. 61 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
187. Travis is in charge of writing a report for his company that talks about the quality and safety of his company’s products, business practices, involvement in the community, human resources, and efforts to reduce pollution. This is called a(n)
| a. | ethics report. |
| b. | social audit. |
| c. | compliance review. |
| d. | responsibility policy. |
| e. | citizenship report. |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 62 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
188. A social audit is a
| a. | review of the costs of operating a social program. |
| b. | report of what a business has done and is doing about social issues. |
| c. | review of a tax statement by the Internal Revenue Service. |
| d. | review of management’s social activity for the year. |
| e. | report filed by social sector accountants. |
ANS: B PTS: 1 DIF: Difficulty: Easy
REF: p. 62 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Knowledge
189. The company you work for recently has committed itself to implementing a program of social responsibility. After the company has gotten the commitment of top executives, planned the program, and appointed a program director, you suggest that a(n) ____ be prepared periodically to evaluate the success of the program.
| a. | research report |
| b. | social audit |
| c. | ethics evaluation |
| d. | departmental memorandum |
| e. | social actions report |
ANS: B PTS: 1 DIF: Difficulty: Challenging
REF: p. 62 OBJ: LO: 2-10 NAT: BUSPROG: Ethics
TOP: Implementing a Program of Social Responsibility KEY: Bloom's: Analysis
CHAPTER 2
Being Ethical and Socially Responsible
Instructor MAnual Resources
2.1 A Word from the Authors........................................................................................ 41
2.2 Transition Guide....................................................................................................... 41
2.3 Quick Reference Guide............................................................................................ 43
2.4 Learning Objectives................................................................................................. 44
2.5 Brief Chapter Outline............................................................................................... 44
2.6 Comprehensive Lecture Outline.............................................................................. 45
2.7 Textbook Answer Keys............................................................................................ 58
2.7a Return to Inside Business....................................................................... 58
2.7b Review Questions................................................................................... 58
2.7c Discussion Questions............................................................................. 61
2.7d Video Case 2.1: Scholfield Honda—Going Green with Honda............. 62
2.7e Case 2.2: Unilever’s Plan for Green and Clean Growth........................ 62
2.7f Building Skills for Career Success........................................................ 63
2.8 Quizzes I and II......................................................................................................... 66
2.9 Answer Key for Quizzes I and II ............................................................................ 69
2.10 Classroom Exercises................................................................................................ 69
2.10a Homework Activities............................................................................. 69
2.10b Classroom Activities.............................................................................. 70
2.10c Exercise Handouts.................................................................................. 70
2.1 A WORD from the Authors
The material on ethics and social responsibility is presented early in the text to underscore the importance of business’s role in our society. In this context, we define business ethics and discuss the major factors believed to influence the level of ethical behavior in an organization. We also examine several types of ethical issues.
As in Chapter 1, we turn to American history to trace the evolution of socially responsible business practices. Next, we define and contrast two contemporary views of social responsibility: the economic model and the socioeconomic model. In the process, we present arguments both for and against increased social responsibility in business. We consider social changes in three specific
areas: consumerism, employment practices, and the environment. We identify public and private agencies that regulate or monitor business practices in these areas, including the Equal Employment Opportunity Commission and the Environmental Protection Agency. Finally, we outline the steps in the development and implementation of an effective corporate program for social responsibility.
2.2 Transition Guide
New in Chapter 2: Being Ethical and Socially Responsible
· A new Inside Business feature describes how Panera cares about its communities by “suggested funding levels” rather than specific prices for its meals.
· New URL information about the student Web site is provided in the first part of the chapter.
· Information has been added about John and Timothy Rigas of Adelphia Communications Corp. and how Adelphia’s investors lost more than $60 billion.
· A new Personal Apps describes how business ethics apply to customers, managers, and employees.
· In the “Fairness and Honesty” section, information about how more than 1,500 clients of Anderson’s Ark and Associates lost about $31 million has been added.
· The Ethical Challenges and Successful Solutions feature has been deleted.
· The whistle-blowing section has been updated, and the Whistleblower Protection Act of 1989 is now included in the discussion.
· In the “Social Responsibility” section, the General Mills Foundation’s philanthropic activities are revised and updated.
· A discussion of IBM’s Corporate Service Corps., a “corporate version” of the Peace Corps, is now included.
· A new example of GE’s $20 million grant to Milwaukee Public Schools to improve academic achievement is now included.
· Charles Schwab Foundation’s philanthropic efforts are updated.
· A new example of how ExxonMobil celebrated 2011 International Women’s Day by granting $6 million to support economic opportunities for women around the world has been added.
· A new example of how AT&T responded to the high school drop-out crisis with a $100 million philanthropic program is given.
· The Sustaining the Planet feature about major companies and nonprofit groups has been deleted.
· A new Personal Apps explains that we should keep consumer rights in mind when we shop around for goods and services or have a problem with a purchase.
· A new Ethical Success or Failure? feature reveals how everything we do online is being tracked by business.
· Figure 2.3, “Comparative Income Levels,” has been updated to reflect the latest census data available.
· Figure 2.4, “Relative Earnings of Male and Female Workers,” has been updated to reflect the latest census data available.
· A new Sustaining the Planet feature describes how Xerox approaches its corporate social responsibility and citizenship by designing waste-free products.
· The Spotlight feature, “Recession and Responsibility,” has been deleted.
· British Petroleum’s 2012 settlement to pay out $7.8 billion has been added to the discussion of the Deepwater Horizon disaster.
· A new Entrepreneurial Success feature describes how growing numbers of young entrepreneurs are starting businesses with the goal of using their skills for a socially responsible purpose.
· The Entrepreneurial Success feature about recycling entrepreneurs has been deleted.
· A new Return to Inside Business featuring Panera Cares is provided at the end of the chapter.
· A new Case 2.2 describes Unilever’s plan for green and clean growth.
· The Building Skills for Career Success section contains a new Social Media Exercise.
· The Exploring the Internet feature in Building Skills for Career Success has been deleted.
2.3 QUICK REFERENCE GUIDE
| Instructor Resource | Location |
| Transition Guide | IM, pp. 41–42 |
| Learning Objectives | Textbook, p. 35; IM, p. 44 |
| Brief Chapter Outline | IM, pp. 44–45 |
| Comprehensive Lecture Outline | IM, pp. 45–57 |
| Ethical Success or Failure? Is Personal Data Really Private? | Textbook, p. 53 |
| At Issue: How should employers deal with proselytizing? | IM, p. 55 |
| Sustaining the Planet Social Responsibility at Xerox | Textbook, p. 59 |
| Entrepreneurial Success Social Entrepreneurs of Tomorrow | Textbook, p. 61 |
| Inside Business Panera Cares About Its Communities | Textbook, p. 36 |
| Return to Inside Business | Textbook, p. 63 Questions and Suggested Answers, IM, p. 58 |
| Marginal Key Terms List | Textbook, p. 64 |
| Review Questions | Textbook, p. 64 Questions and Suggested Answers, IM, pp. 58–61 |
| Discussion Questions | Textbook, p. 65 Questions and Suggested Answers, IM, pp. 61–62 |
| Video Case 2.1 (Scholfield Honda—Going Green with Honda) and Questions | Textbook, p. 65 Questions and Suggested Answers, IM, p. 62 |
| Case 2.2 (Unilever’s Plan for Green and Clean Growth) and Questions | Textbook, p. 66 Questions and Suggested Answers, IM, pp. 62–63 |
| Building Skills for Career Success | Textbook, pp. 66–67 Suggested Answers, IM, pp. 63–65 |
| IM Quiz I & Quiz II | IM, pp. 66–68 Answers, IM, p. 69 |
| Classroom Exercises | IM, pp. 69–70 |
2.4 Learning Objectives
After studying this chapter, students should be able to:
1. Understand what is meant by business ethics.
2. Identify the types of ethical concerns that arise in the business world.
3. Discuss the factors that affect the level of ethical behavior in organizations.
4. Explain how ethical decision making can be encouraged.
5. Describe how our current views on the social responsibility of business have evolved.
6. Explain the two views on the social responsibility of business and understand the arguments for and against increased social responsibility.
7. Discuss the factors that led to the consumer movement and list some of its results.
8. Analyze how present employment practices are being used to counteract past abuses.
9. Describe the major types of pollution, their causes, and their cures.
10. Identify the steps a business must take to implement a program of social responsibility.
2.5 Brief Chapter Outline
I. Business Ethics Defined
II. Ethical Issues
A. Fairness and Honesty
B. Organizational Relationships
C. Conflict of Interest
D. Communications
III. Factors Affecting Ethical Behavior
A. Individual Factors Affecting Ethics
B. Social Factors Affecting Ethics
C. “Opportunity” as a Factor Affecting Ethics
IV. Encouraging Ethical Behavior
A. Government’s Role in Encouraging Ethics
B. Trade Associations’ Role in Encouraging Ethics
C. Individual Companies’ Role in Encouraging Ethics
V. Social Responsibility
VI. The Evolution of Social Responsibility in Business
A. Historical Evolution of Business Social Responsibility
VII. Two Views of Social Responsibility
A. The Economic Model
B. The Socioeconomic Model
C. The Pros and Cons of Social Responsibility
1. Arguments for Increased Social Responsibility
2. Arguments Against Increased Social Responsibility
VIII. Consumerism
A. The Six Basic Rights of Consumers
1. The Right to Safety
2. The Right to Be Informed
3. The Right to Choose
4. The Right to Be Heard
5. Additional Consumer Rights
B. Major Consumerism Forces
IX. Employment Practices
A. Affirmative Action Programs
B. Training Programs for the Hard-Core Unemployed
X. Concern for the Environment
A. Effects of Environmental Legislation
1. Water Pollution
2. Air Pollution
3. Land Pollution
4. Noise Pollution
B. Who Should Pay for a Clean Environment?
XI. Implementing a Program of Social Responsibility
A. Developing a Program of Social Responsibility
1. Commitment of Top Executives
2. Planning
3. Appointment of a Director
4. The Social Audit
B. Funding the Program
2.6 Comprehensive Lecture Outline
Most managers today are finding ways of balancing a growing agenda of socially responsible activities with the drive to generate profits.
I. BUSINESS ETHICS DEFINED. Ethics is the study of right and wrong and of the morality of choices individuals make. Business ethics is the application of moral standards to business situations.
Teaching Tip: Ask students how they decide what is right and what is wrong. Is there an internal mechanism or process they use or a code? Follow up by asking where they learned their personal code.
II. ETHICAL ISSUES. Businesspeople face ethical issues every day, and some of these issues can be difficult to assess. These issues arise out of a business’s relationship with investors, customers, employees, creditors, and competitors.
A. Fairness and Honesty. Fairness and honesty in business are important ethical concerns. Businesspeople must obey all laws and regulations as well as refrain from knowingly deceiving, misrepresenting, or intimidating others.
B. Organizational Relationships. It may be tempting to place personal welfare above the welfare of others or of the organization. Relationships with customers and co-workers often create ethical problems such as taking credit for others’ ideas or work, not meeting one’s commitments, and pressuring others to behave unethically.
C. Conflict of Interest. Conflict of interest results when a businessperson takes advantage of a situation for his or her own personal interest rather than for the employer’s interest.
D. Communications. Business communications, especially advertising, can present ethical questions. Advertisers must take precautions to guard against deception.
III. FACTORS AFFECTING ETHICAL BEHAVIOR. The factors that affect the level of ethical behavior in organizations are individual, social, and opportunity. (See Figure 2.1.)
A. Individual Factors Affecting Ethics
1. Individual Knowledge of an Issue. A decision maker with a greater amount of knowledge regarding a situation may take steps to avoid ethical problems, whereas a less-informed person may take action unknowingly that leads to an ethical quagmire.
2. Personal Values. An individual’s moral values and central, value-related attitudes also clearly influence his or her business behavior.
3. Personal Goals. The types of personal goals an individual aspires to and the manner in which these goals are pursued have a significant impact on that individual’s behavior in an organization.
B. Social Factors Affecting Ethics
1. Cultural Norms. A person’s behavior in the workplace, to some degree, is determined by cultural norms, and these social factors vary from one culture to another.
2. Co-workers. The actions and decisions of co-workers constitute another social factor believed to shape a person’s sense of business ethics.
3. Significant Others. The moral values and attitudes of “significant others”—spouses, friends, and relatives—can also affect an employee’s perception of what is ethical and unethical behavior in the workplace.
4. Use of the Internet. Even the Internet presents new challenges for firms whose employees enjoy easy access to sites through convenient high-speed connections at work. An employee’s behavior online can be viewed as offensive to co-workers and possibly lead to lawsuits against the firm if employees engage in unethical behavior on controversial Web sites not related to their job.
Teaching Tip: A classroom can be considered a workplace for the time students are there. Ask students to take a minute and write down three examples of ethical behavior in the classroom and three examples of unethical behavior. Beyond the obvious cheating issues, students may mention things such as one student constantly monopolizing the instructor’s time, etc.
C. “Opportunity” as a Factor Affecting Ethics
1. Presence of Opportunity. Opportunity refers to the amount of freedom an organization gives an employee to behave unethically if he or she makes that choice.
2. Ethical Codes. The existence of an ethical code and the importance management places on this code are other determinants of opportunity.
3. Enforcement. The degree of enforcement of company policies, procedures, and ethical codes is a major force affecting opportunity.
IV. ENCOURAGING ETHICAL BEHAVIOR. Most authorities agree that there is room for improvement in business ethics. A more problematic issue is whether business can be made more ethical in the real world.
A. Government’s Role in Encouraging Ethics. The government can establish acceptable levels of behavior by passing more stringent regulations. For example, the Sarbanes-Oxley Act of 2002 gives those who report corporate misconduct sweeping new legal protection.
B. Trade Associations’ Role in Encouraging Ethics. Trade associations can, and often do, provide ethical guidelines for their members to follow.
C. Individual Companies’ Role in Encouraging Ethics
1. Codes of ethics that companies provide to their employees are perhaps the most effective way to encourage ethical behavior. A code of ethics is a written guide to acceptable and ethical behavior as defined by an organization that outlines uniform policies, standards, and punishments for violations.
2. However, codes cannot possibly cover every situation.
a) Companies must also create an environment in which employees recognize the importance of following the written code.
b) Managers must provide direction by fostering communication, actively encouraging ethical decision making, and training employees to make ethical decisions.
c) Assigning an ethics officer who coordinates ethical conduct gives employees someone to go to if they aren’t sure of the right thing to do.
d) An ethics officer meets with employees and top management to provide ethical advice, establishes and maintains an anonymous confidential service to answer questions about ethical issues, and takes action on ethics code violations.
3. See Figure 2.2 for Texas Instruments’ code of ethics.
4. Unethical practices often become ingrained in an organization.
5. Employees with high personal ethics may take a controversial step called whistle-blowing—informing the press or government officials about unethical practices within one’s organization.
a) Whistle-blowing can have serious repercussions for an employee.
b) The Sarbanes-Oxley Act of 2002 protects whistle-blowers who report corporate misconduct. Any executive who retaliates against a whistle-blower can be held criminally liable and imprisoned for up to 10 years.
c) The Whistleblower Protection Act of 1989 protects federal employees who report an agency’s misconduct.
6. When firms set up anonymous ethical hotlines to handle ethically questionable situations, employees may be more likely to engage in whistle-blowing.
7. When firms create an environment that educates employees and nurtures ethical behavior, whistle-blowing is greatly reduced because fewer ethical problems arise.
8. See Table 2.1 for general guidelines for making ethical decisions.
V. SOCIAL RESPONSIBILITY
A. Social responsibility is the recognition that business activities have an impact on society and the consideration of that impact in business decision making.
1. Social responsibility can cost companies a considerable amount of money, but it is also good business.
B. Examples of Socially Responsible Organizations
1. Through Young Eagles, underwritten by S. C. Johnson, Phillips Petroleum, Lockheed Martin, Jaguar, and other corporations, 22,000 volunteer pilots take a half million youngsters on free flights to teach flying basics.
2. The General Mills Foundation, created in 1954, is one of the largest U.S. company-sponsored foundations and has awarded over $535 million to communities since its creation. Millions of dollars have been donated to Feeding America.
3. Dell’s outreach programs include projects that bring technology to underserved communities around the world. Globally, the Michael and Susan Dell Foundation has contributed more than $700 million to improve student performance and increase access to education.
4. Improving public schools around the world continues to be IBM’s top social priority. Its efforts are focused on preparing the next generation of leaders and workers. IBM launched the World Community Grid in 2004. It combines excess processing power from thousands of computers in a virtual supercomputer that enables researchers to gather and analyze unprecedented quantities of data aimed at advancing research on genomics, diseases, and natural disasters. IBM’s Corporate Service Corps. is a group of high performing employees that provide technology-related assistance to foreign governments and communities including economic development, health care, and entrepreneurship.
5. General Electric Company (GE) has a long history of supporting the communities where its employees work and live through its unique combination of resources, equipment, and employee and retiree volunteers. The company devotes its efforts in philanthropy to making communities around the world stronger. For example, the GE Foundation awarded $20 million to Milwaukee Public Schools as part of GE’s Developing Futures™ in Education program to help students compete in a global economy.
6. With the help of dedicated Schwab volunteers, the Charles Schwab Foundation provides programs and funding to help adults and children learn the basics of financial literacy. Since 1993, the Schwab Foundation has distributed an average of $4 million a year to 2,300 nonprofit organizations.
7. Improving basic literacy skills in the United States is among the Verizon Foundation’s major priorities because of its enormous impact on education, health, and economic development. Recently, Verizon employees and retirees donated more than 608,000 hours of service and, with the Verizon Foundation, contributed over $25 million in combined matching gift funds, making Verizon Volunteers one of the largest corporate volunteer incentive programs in the United States.
8. ExxonMobil’s commitment to education spans all levels of achievement. The National Math and Science Initiative and the Mickelson ExxonMobil Teachers Academy are programs emphasizing long-term educational improvement. The company supports new generations pursuing studies and careers in math and science. Recently, ExxonMobil employees and retirees contributed a total of $238 million to communities worldwide. In addition, the company celebrated 2011 International Women’s Day by granting $6 million to support economic opportunities for women around the world.
9. AT&T has built a tradition of supporting education, health and human services, the environment, public policy, and the arts in the communities it serves. Since 1984, AT&T has invested more than $600 million in support of education. To respond to the high school drop-out crisis, AT&T launched Aspire, a $100 million job shadowing program that has reached more than 23,000 students in over 200 cities.
10. At Merck & Co., Inc., the Patient Assistance Program makes the company’s medicines available to low-income Americans and their families at no cost. For over 50 years, Merck has provided its medicines completely free of charge to people in need through this program. Since 1957, the Merck Company Foundation has contributed more than $560 million to develop programs that help improve the health and well-being of people around the world.
These are just a few illustrations from a long list of companies big and small that attempt to behave in socially responsible ways.
VI. THE EVOLUTION OF SOCIAL RESPONSIBILITY IN BUSINESS
A. Historical Evolution of Business Social Responsibility. During the first quarter of the twentieth century, businesses were free to operate pretty much as they chose.
1. Working conditions were often deplorable by today’s standards.
a) The average work week exceeded 60 hours in most industries.
b) There was no minimum-wage law.
c) There were no employee benefits.
d) Work areas were crowded and unsafe, and industrial accidents were the rule rather than the exception.
2. During this period, consumers were generally subject to the doctrine of caveat emptor, a Latin phrase meaning “let the buyer beware.”
a) Victims of unscrupulous business practices could take legal action, but going to court was very expensive and consumers rarely won their cases.
b) There were no consumer groups or government agencies to hold sellers responsible for their activities.
3. Prior to the 1930s, government became involved in day-to-day business activities only when there was an obvious abuse of the free-market system and competition was endangered. (See Table 2.2 for a list of early government regulations affecting business.)
B. The collapse of the stock market on October 29, 1929, triggered the Great Depression and years of economic problems for the United States.
1. Public pressure mounted for government to “do something” about the economy and about worsening social conditions.
2. As a result, laws were passed to correct what many viewed as monopolistic abuses of big business, and various social services were provided for individuals.
VII. TWO VIEWS OF SOCIAL RESPONSIBILITY. Government regulation and public awareness are external forces that have increased the social responsibility of business. But business decisions are made within the firm—and there, social responsibility begins with the attitude of management. There are two models of social responsibility.
A. The Economic Model. The economic model of social responsibility holds that society will benefit most when business is left alone to produce and market profitable products that society needs.
B. The Socioeconomic Model. The socioeconomic model of social responsibility holds that business should emphasize not only profits but also the impact of its decisions on society.
C. The Pros and Cons of Social Responsibility. The merits of the economic and socio-economic models have been debated for years. Each side seems to have four arguments.
1. Arguments for Increased Social Responsibility. Proponents of the socioeconomic model offer the following arguments:
a) Business cannot ignore social issues because business is a part of our society.
b) Business has the technical, financial, and managerial resources needed to tackle today’s complex social issues.
c) By helping to resolve social issues, business can create a more stable environment for long-term profitability.
d) Socially responsible decision making by business firms can prevent increased government intervention, which would force businesses to do what they fail to do voluntarily.
2. Arguments Against Increased Social Responsibility. Opponents of the socioeconomic model offer these arguments:
a) Business managers are responsible primarily to stockholders, so management must be concerned with providing a return on owners’ investments.
b) Corporate time, money, and talent should be used to maximize profits, not to solve society’s problems.
c) Social problems affect society in general, so individual businesses should not be expected to solve these problems.
d) Social issues are the responsibility of government officials who are elected for that purpose and who are accountable to the voters for their decisions.
3. Table 2.3 compares the economic and socioeconomic viewpoints in terms of business emphasis.
4. Today, few firms are either purely economic or purely socioeconomic in outlook; most have chosen some middle ground between the two.
a) However, our society generally seems to want—and even to expect—some degree of social responsibility from business.
b) Thus, within this middle ground between the two extremes, businesses are leaning toward the socioeconomic view.
VIII. CONSUMERISM. Consumerism consists of all those activities that are undertaken to protect the rights of consumers. The consumer movement issues fall into three categories: environmental protection, product performance and safety, and information disclosure.
A. The Six Basic Rights of Consumers. During the 1960s, President John F. Kennedy declared that the consumer was entitled to a new “bill of rights.”
1. The Right to Safety. The right to safety means that products purchased by consumers must be safe for their intended use, include thorough and explicit directions for proper use, and have been tested by the manufacturer to ensure product quality and reliability. American business firms must be concerned about product safety for several reasons.
a) Federal agencies have the power to force businesses that make or sell defective products to take corrective actions.
b) Consumers and the government have been winning an increasing number of product-liability lawsuits against sellers of defective products.
c) The consumer is demanding safe products.
2. The Right to Be Informed. The right to be informed means that consumers must have access to complete information about a product before they buy it. In addition, manufacturers must inform consumers about the potential dangers of using their products.
3. The Right to Choose. The right to choose means that consumers have a choice of products, offered by different manufacturers and sellers, to satisfy a particular need.
a) The government has encouraged competition through antitrust legislation.
b) Competition and the resulting freedom of choice provide an additional benefit for consumers by reducing prices.
4. The Right to Be Heard. The right to be heard means that someone will listen and take appropriate action when customers complain.
a) Today, businesses are listening more attentively, and many larger firms have consumer relations departments that can easily be contacted via toll-free phone numbers.
b) Most large cities and some states have consumer affairs offices to act on citizens’ complaints.
5. Additional Consumer Rights. In 1975, President Ford added the right to consumer education which entitles people to be fully informed about their rights as consumers. In 1994, President Clinton added the sixth right—the right to service, which entitles consumers to convenience, courtesy, and responsiveness from manufacturers and suppliers.
Teaching Tip: Go to the Federal Trade Commission’s site and view the rights provided to consumers (http://www.ftc.gov/consumer). Students may want to know about these rights.
B. Major Consumerism Forces. Major advances in consumerism have come through federal legislation. Major federal laws that have been passed since 1960 to protect consumer rights are listed and described in Table 2.4.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was passed by the House of Representatives to protect consumers and investors.
IX. EMPLOYMENT PRACTICES. Everyone who works for a living should have the opportunity to land a job for which he or she is qualified and to be rewarded on the basis of ability and performance. Although this is an important issue for society, over the years this opportunity has been denied to members of various minority groups.
1. A minority is a racial, religious, political, national, or other group regarded as different from the larger group of which it is a part and that is often singled out for unfavorable treatment.
2. The federal government responded to the outcry of minority groups during the 1960s and 1970s by passing a number of laws forbidding discrimination in the workplace.
a) Now, almost 50 years after passage of the Civil Rights Act of 1964, abuses still exist.
b) There is a disparity among income levels for whites, blacks, and Hispanics. (See Figure 2.3.)
c) Lower incomes and higher unemployment rates also affect Native Americans, handicapped persons, and women.
3. Responsible managers have instituted several programs to counteract the results of discrimination.
A. Affirmative Action Programs. An affirmative action program is a plan designed to increase the number of minority employees at all levels within an organization.
1. Employers with federal contracts of more than $50,000 per year must have written affirmative action plans. The objective of such programs is to ensure that minorities are represented within the organization in approximately the same proportion as in the surrounding community.
2. Affirmative action programs have been plagued by two problems.
a) The first problem involves quotas. In the beginning, many firms pledged to recruit and hire a certain number of minority members by a specific date. To achieve this goal, they were forced to consider only minority applicants for job openings.
b) The second problem is that not all businesspeople are in favor of affirmative action programs, although most such programs have been reasonably successful.
3. Congress created (and later strengthened) the Equal Employment Opportunity Commission (EEOC), a government agency with the power to investigate complaints of employment discrimination and sue firms that practice it.
4. The threat of legal action has persuaded some corporations to amend their hiring and promotional practices, but the discrepancy between men’s and women’s salaries still exists. (See Figure 2.4.)
B. Training Programs for the Hard-Core Unemployed. Some firms have assumed the task of helping the hard-core unemployed: workers with little education or vocational training and a long history of unemployment.
1. Such workers require training; this training can be expensive and time consuming.
2. To share the costs, business and government have joined together in a number of cooperative programs. The National Alliance of Business (NAB) is a joint business-government program to train the hard-core unemployed. The National Alliance’s 5,000 members include companies of all sizes and industries as well as educators and community leaders.
X. CONCERN FOR THE ENVIRONMENT. Pollution is the contamination of water, air, or land through the actions of people in an industrialized society.
1. For several decades, environmentalists have been warning us about the dangers of industrial pollution.
2. Unfortunately, business and government leaders either ignored the problem or weren’t concerned about it until pollution became a threat to life and health in America.
3. Today, Americans expect business and government leaders to take swift action to clean up our environment—and to keep it clean.
A. Effects of Environmental Legislation. As in other areas of concern to our society, legislation and regulations play a crucial role in pollution control. The Environmental Protection Agency (EPA) is the federal agency charged with enforcing laws designed to protect the environment. (See Table 2.5.)
Some business owners and managers take the position that environmental standards are too strict. Consequently, it has often been necessary for the EPA to take legal action to force firms to install antipollution equipment and clean up waste storage areas. Experience has shown that the combination of environmental legislation, voluntary compliance, and EPA action can succeed in cleaning up the environment and keeping it clean.
| At Issue The United States has been at the forefront in negotiating opportunities and expanding rights for minorities. Recently, much attention has been given to the rights of religious minorities. Employers must permit employees to engage in religious expression, “unless the religious expression would impose an undue hardship on the employer.” They are also required to provide a workplace in which religious harassment of employees is not allowed. Undue hardship can be claimed if the accommodation interferes with legitimate business interests. According to the EEOC: “An employer can show undue hardship if accommodating an employee’s religious practices requires more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees’ job rights or benefits, impairs workplace safety, causes coworkers to carry the accommodated employee’s share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation.” Workplace proselytizing presents a special challenge to employers: failure to respond to employees’ complaints about proselytizing could lead to charges of religious harassment, but requiring a religious employee to cease proselytizing may result in liability for failure to reasonably accommodate the employee’s beliefs. How should employers deal with proselytizing?
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