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Strategic Management Practice Test: Ethical Business Strategies, Social Responsibility, and Environmental Sustainability

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Strategic Management Practice Test: Ethical Business Strategies, Social Responsibility, and Environmental Sustainability

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25 Questions

1. The contention that ethical standards should be governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not are the basic principles of

the school of ethical universalism.integrated social contracts theory. the Global Code of Ethical and Social Morality developed by the United Nations. the School of Morally Correct Thinking and Behavior based in Rome, Italy.the school of ethical relativism.

2. Which of the following is not something a company should usually consider in crafting a strategy of social responsibility?

Actions to ensure the company has an ethical strategy and operates honorably and ethically.Actions to protect or enhance the environment Actions to benefit shareholders (such as raising the dividend or boost the stock price)Actions to create a workforce diversity programMaking charitable contributions and donating money and the time of company personnel to community service endeavors.

3. Integrated social contracts theory maintains that

few nations or cultures have common moral agreement on what is ethically right and wrong.there is no such thing as “moral free space”—all ethical standards are determined by societal norms, and individuals have an implied social contract to live up to these standards.adherence to universal ethical norms always take precedence over local ethical norms.there should be no absolute limits put on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. each country/culture/society has commonly held views about what constitutes ethically appropriate actions/behaviors; these common standards of what is ethical and what is not combine to form a “social contract” that all individuals in that country/culture

4. Moral managers

are skeptical about ethics and ethical standards but feel obligated to observe the company code of ethics.see themselves as stewards of ethical behavior and believe it is important to exercise ethical leadership; they are ethically principled and pursue success within the letter and spirit of what is considered ethical and legal.are ethically-principled as long as they see such behavior being in their own self-interest.try to stay within ethical bounds for fear of being caught doing something unethical and having their careers ruined.view what is legal as also ethical.

5. Which one of the following is not part of the moral case for why a company should actively promote the betterment of society?

In return for society granting a business a “license to operate” and not be unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a responsible citizen and do its fair share to promote the general welfare. “It’s the right thing to do.”Acting in a socially responsible manner is in the overall best interest of shareholders. Most business leaders can be expected to acknowledge that socially responsible actions and environmental sustainability are important and that businesses have a duty to be good corporate citizens.Every business has a moral duty to take corporate citizenship into consideration and to do what’s best for shareholders within the confines of discharging its duties to operate honorably, provide good working conditions to employees, be a good environment

6. The moral case for why a company should actively promote the betterment of society and act in a manner benefitting all its stakeholders

is based on the principle of treating people fairly and with respect.rests on the principle that a business is duty bound to fulfill its social contract to serve the interests of all stakeholders in a business enterprise.is based on the conviction that improving the well-being of society ranks higher in priority and is certainly more noble than making a profit and serving the interests of shareholders.boils down to “it’s the right thing to do.”is based on the principle that business activities lack real legitimacy and have few socially redeeming qualities unless and until a company exerts a significant and sincere effort to give something back to the community.

7. The school of ethical relativism holds that

what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country.concepts of right and wrong as they apply to business behavior are always varying shades of gray, never absolute (i.e. black or white). concepts of right and wrong are always a function of each individual’s own set of values, beliefs, and ethical convictions.when there are cross-country or cross-cultural differences in what is deemed fair or unfair, what constitutes proper regard for human rights, and what is considered ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere.concepts of right and wrong are always governed by business norms in each country, culture, or society.

8. An intentionally amoral manager is one who

views the observance of high ethical standards (doing more than what is required by law) as too Sunday-schoolish for the tough competitive world of business, even though observing some higher ethical considerations may be appropriate in life outside of business.believes business and ethics are not to be mixed because different rules apply in business as compared to other realms of life.deliberately and maliciously violates ethical principles on a regular basis.is ethically-principled most of the time but who knowingly and willingly stoops to unethical behavior if there’s low risk of discovery and the action or decision has a sizable positive effect on company profitability.strongly believes that whatever is legal is also ethical.

9. A company’s strategy needs to be ethical because

(1) a strategy that is unethical in whole or in part is morally wrong and reflects badly on the character of the company personnel involved and (2) an ethical strategy is good business and in the best interest of shareholders.of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used. everyone is an ethics watchdog and somebody is sure to blow the whistle on the company’s unethical behavior. unethical strategies are inconsistent with or else weaken the corporate culture. of the dangers that top management will get embarrassed if the company’s unethical behavior is publicly exposed.

10. The unconcerned or non-issue approach to dealing with or managing ethical conduct

is favored at companies whose managers are moral and have ethically upstanding reputations.is appropriate for companies who have a deeply-planted ethical culture.is prevalent at companies whose executives ascribe to the view that notions of right and wrong in business matters are defined entirely by the prevailing laws and government regulations.is perfectly suited for ethically-principled companies where company personnel are highly accustomed to behaving in an ethical fashion (because at such companies, ethical behavior is mostly a non-issue).is favored at companies whose managers fear scandal and are desirous of containing any adverse fallout from claims of unethical actions by company personnel.

11. The compliance approach to dealing with or managing ethical conduct

is favored at companies whose managers (1) lean toward being somewhat amoral but recognize the value of having ethically upstanding reputations or (2) are moral and see strong compliance methods as the best way to impose and enforce high ethical standards.is favored at companies whose managers fear scandal and want to put on a public face of being ethical; they like having some compliance methods in place so they can give the appearance of trying to be ethical (although they are deliberately lax in pushingis favored at companies whose managers are immoral but who see having cosmetic compliance methods in place as a safeguard against scandal. is perfectly suited for companies that have had a code of ethics for 10 years or more and that want to spend little top management time exhorting company personnel to be ethical in their actions and behaviors.is perfectly suited for ethically-unprincipled companies where company personnel must be spurred into complying with the company’s ethical standards.

12. The categories of managerial morality include:

managers with lots of integrity, managers with some integrity, and managers with no integrity. honorable managers, dishonorable managers, and totally corrupt managers.moral managers, immoral managers, and amoral managers.mostly ethical managers, somewhat ethical managers, and totally unethical managers.ethically-principled managers, ethically-unprincipled managers, and if-it-is-legal-then-it-is-ethical managers ( the latter type of manager believes that ethics don’t really apply to business—their view is that anything that is legal is also ethical).

13. Which of the following is not a stance a company can take in dealing with or managing ethical conduct at any given point in time?

The unconcerned or non-issue approach The socially responsible approachThe compliance approachThe damage control approachThe ethical culture approach

14. Which of the following is not accurate as concerns the damage control approach to dealing with or managing ethical conduct?

Company executives that practice the damage control approach are prone to look the other way when shady or borderline behavior occurs—adopting a kind of “See no evil, hear no evil, speak no evil” stance.The damage control approach is well-suited for companies with no history of ethical problems. Executives at companies that practice the damage control approach are prone to making token gestures to police compliance with codes of ethics; they also rely heavily “spin” to help extricate the company from claims that the company’s strategy has unethicThe damage control approach is favored at companies whose managers are intentionally amoral, but are wary of scandal and adverse public relations fallout that could cost them their jobs or tarnish their careers.Companies that practice the damage control approach often have a code of ethics that exists mainly as nice words on paper, but company personnel do not operate within a strong ethical context—there’s a notable gap between talking ethics and walking ethics

15. By some accounts, the population of managers is said to be

about one-third highly ethical, one-third mostly ethical, and one-third mostly unethical.distributed among moral, immoral, and amoral managers in a bell-shaped curve, with immoral managers and moral managers occupying the two tails of the curve, and amoral managers, especially the intentionally amoral managers, occupying the broad middle ground.composed of mostly ethically moral managers but perhaps a third of all managers slip into an immoral or unethical mode in certain circumstances.about 20% highly ethical, 60% mostly ethical, and 20% mostly unethical.about 15% highly ethical, 50% mostly ethical, and 35% ethically corrupt.

16. Which one of the following is not one of the major drivers of unethical managerial behavior?

Overzealous pursuit of personal gain, wealth, and other self interestsA company culture that puts the profitability and good business performance ahead of ethical behavior The pervasiveness of immoral and amoral businesspeopleHeavy pressures on company managers to meet or beat earnings targetsIntense competitive pressures

17. The contentions that (1) many of the same standards of what’s ethical and what’s unethical resonate with peoples of most societies regardless of local traditions and cultural norms and (2) to the extent there is common moral agreement about right and wrong actions, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances are defining beliefs of

the Global Code of Ethical and Social Morality developed in 1925 at a worldwide convention of distinguished religious clerics.the school of ethical relativism.integrated social contracts theory. the School of Morally Correct Thinking and Behavior in Paris, France.the school of ethical universalism.

18. The ethical culture approach to dealing with or managing ethical conduct

is perfectly suited for companies that have had a code of ethics for 10 years or more and that want to spend little top management time exhorting company personnel to be ethical in the actions and behavior.is favored at companies whose managers are amoral yet highly concerned about maintaining the appearance of being ethically upstanding.works well in companies desirous of pursuing light ethics compliance.is favored at companies where top managers are very concerned about gaining employee buy-in to the company’s ethical standards, business principles, and corporate values and see the company’s code of ethics and/or its statement of corporate values as integral to the company’s identity and ways of operating. is favored at companies whose managers want to maintain the appearance of an ethical culture to help shield the company from scandal, adverse publicity, and possible unethical conduct on the part of company personnel.

19. One of the big difficulties and challenges that a company encounters in using the “damage control” approach to managing ethics-related issues and ethics conduct is

a proliferation of ethical rules and guidelines to avoid public scandal. credibility problems with stakeholders and susceptibility to ethical scandal.how to discreetly signal employees that the company’s code of ethics will be lightly enforced if at all.that the locus of moral control is shifted to individual employees.writing a code of ethics that looks strong but is really pretty weak in terms of ethical principles.

20. The business case for an ethical strategy

begins with ethical guidelines that help send the message that management takes the observance of ethical norms seriously and that behavior falling outside ethical boundaries will have negative consequences.starts with managers who understand there is big difference between adopting values statements and codes of ethics that serve merely as window dressing and those that truly paint the white lines for a company’s actual strategy and business conduct.emphasizes that pursuing unethical strategies not only damages a company’s reputation but can also have costly consequences that are wide ranging.starts with numerous ethical rules and guidelines and an environment where employees rely on these rules for moral guidance.focuses primarily on costs that are difficult to quantify (for example, customer defections and adverse effects on employee productivity) but can often be the most devastating.

21. Moral managers

are ethically principled.view what is legal as the ethical minimum and have a habit of operating at well above what the law requires. see themselves as stewards of ethical behavior and believe it is important to exercise ethical leadership.pursue success within the letter and spirit of what is considered ethical and legal.All of the above.

22. Striving to be socially responsible entails touching such bases as

All of these.whether to make charitable contributions and donate money and the time of company personnel to community service endeavors.what actions to take to enhance workforce diversity and make the company a great place to work.what, if any, actions to take to protect or enhance the environment (beyond what is legally required).exerting conscious efforts to ensure that all elements of the company’s strategy are ethical and actions to make the company a great place to work.

23. Which of the following is not something a company should consider in crafting an environmental sustainability strategy?

Actions to maintain ecological support systems for future generationsActions to protect the environment that will guard against the ultimate endangerment of the planetActions to provide for the longevity of natural resourcesMaking contributions to the Global Environmental Council which are distributed based on a competitive basisAll of these

24. Which one of the following is false as concerns the merits of why acting in a socially responsible manner is “good business”?

The higher the public profile of a company or brand, the greater the scrutiny of its activities and the higher the potential for it to become a target for pressure group action.Acting in a socially responsible manner nearly always results in higher profits and a higher stock price for shareholders.Companies with deservedly good reputations for contributing time and money to the betterment of society are better able to attract and retain employees compared to companies with tarnished reputations.Some employees feel better about working for a company committed to improving society—a condition that can contribute to lower turnover and better worker productivity.To the extent that a company’s socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.

25. An immoral manager is one who

believes that ethical standards violate the principle of moral free space and therefore are illegitimate.is ethically unprincipled but nonetheless usually observes ethical standards for fear of getting caught and fired.is ethically-principled most of the time but who might stoop to unethical behavior if there’s low risk of discovery and the action or decision has a sizable positive effect on company profitability.has no regard for so-called ethical standards in business and pays no attention to ethical principles in making business decisions—an immoral manager is driven by greed and self-gain and won’t hesitate to violate ethical principles if it is in his/her best interest to do so.strongly believes that it is ethical to do whatever is legal.

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25 Questions

❤ If you liked Fatskills, consider supporting us by checking out The Life Manuals You Never Got.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | What Should We Know? Privacy | Terms |

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All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | What Should We Know?
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Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com