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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 litmus test of a company’s code of ethics is

the degree to which it is connected to a company’s statement of core values.the extent to which a company’s approach to ethical behavior mirrors the ethical principles for society at large.the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.based on the rules a company’s top management and board of directors make about “what is right” and “what is wrong.”determined by the ethical behaviors expected of company personnel in the course of doing their jobs.

2. Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition

are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants—whether you tip for service at dinner or make payments to government officials to get goods through customs or give kickbacks to cuare generally advocates of the ethical relativism school of thought. are in a distinct minority compared to companies that view the payment of bribes and kickbacks as a legitimate or permissible practice. still have considerable difficulty in preventing the payments of bribes and kickbacks when such payments are entrenched as normal and customary in locations where they do business.are out-of-step with business reality given that the preponderance of company managers are immoral.

3. The strength of integrated social contracts theory is that it

puts no absolute limits on what actions and behaviors fall inside the boundaries of what is ethically or morally right and which actions/behaviors fall outside. recognizes that individuals and businesses have a basic right to “moral free space” and that it is inappropriate to specify ethically permissible and ethically impermissible actions and behaviors.correctly recognizes all soundly-reasoned ethical standards are universal.recognizes the importance of allowing local ethical norms to always take precedence over universal ethical norms.accommodates the best parts of ethical universalism and ethical relativism.

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

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

writing compliance procedures that look strong but really are pretty weak in terms of pushing people to observe the espoused ethical standards.inability to deter inherently immoral company personnel from breaking the rules.that the locus of moral control is shifted to individual employees and away from top management.a proliferation of ethical rules and guidelines and an environment where employees come to rely on the existing rules for moral guidance—a condition that fosters a mentality of what is not forbidden is allowed. being clever in signaling employees that the company’s code of ethics is mere window-dressing and that employees should not expect that top executives will “walk the talk” and actually practice what they preach.

6. Which of the following is not a particularly sound or valid reason why a company’s strategy should be ethical?

An unethical strategy reflects badly on the character of the company personnel involved.A strategy that is unethical in whole or in part is morally wrong.Most all shareholders believe it is honorable for their company to pursue an ethical strategy (even though it usually entails making less profit) and are turned off by company efforts to make greater profits via unethical means.Customers shun companies known for their shady behavior and ethically upstanding company personnel are repulsed by a work environment where unethical behavior is condoned. An ethical strategy is in the self-interest of shareholders, partly because an unethical strategy can damage a company’s reputation and partly because unethical behavior can be very costly in terms of fines and penalties, legal and investigative costs, cu

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

8. 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 Morally Correct Thinking and Behavior in Paris, France.the school of ethical relativism.the school of ethical universalism.integrated social contracts theory.

9. Based on data from the Global Corruption Report sponsored by Transparency International,

business managers are more corrupt on average than government officials.bribery occurs most often in the automotive industry, the drug and pharmaceutical industry, and in the apparel industry.the ethically “cleanest” industries are public works contracts and construction, the arms and defense industry, and the oil and gas industry. corruption among public officials and in business transactions is widespread across the world. corruption in emerging country markets is relatively low compared to the rest of the world.

10. An immoral manager is one who

believes that ethical standards violate the principle of moral free space and therefore are illegitimate.strongly believes that it is ethical to do whatever is legal.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.

11. The stance a company takes in dealing with or managing ethical conduct at any given point in time can take such basic forms as

the empowered employee approach, the cultural values approach, and the authoritarian approach.the unconcerned or non-issue approach, the damage control approach, the compliance approach, and the ethical culture approach. the noncompliance approach, the compliance approach, the public interest approach, and the cultural norm approach. the amoral approach, the immoral approach, and the ethically-principled approach.the ethically incorrect approach, the ethically correct approach, and the socially responsible approach.

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

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.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. Acting in a socially responsible manner is in the overall best interest of shareholders. “It’s the right thing to do.”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

13. Moral managers

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.are ethically principled.pursue success within the letter and spirit of what is considered ethical and legal.All of the above.

14. 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.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.boils down to “it’s the right thing to do.”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.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.

15. The damage control approach to dealing with or managing ethical conduct

is favored at companies whose managers are intentionally amoral, but who are wary of scandal and adverse public relations fallout that could cost them their jobs or tarnish their careers.is well-suited for companies with no history of ethical problems.is prevalent at companies whose executives are moral and want to put on a public face of being ethically-principled. is appropriate for companies whose managers are highly concerned about having ethically upstanding reputations.is perfectly suited for ethically-principled companies where company personnel are highly accustomed to behaving in an ethical fashion (because at such companies any ethical lapses are easily subject to damage control).

16. The school of ethical relativism holds that

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 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 governed by business norms in each country, culture, or society. what constitutes ethical or unethical conduct varies according to the religious convictions of each society or each culture within a country.

17. Moral managers

are skeptical about ethics and ethical standards but feel obligated to observe the company code of ethics.view what is legal as also ethical. 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.try to stay within ethical bounds for fear of being caught doing something unethical and having their careers ruined.are ethically-principled as long as they see such behavior being in their own self-interest.

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

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.is favored at companies whose managers are amoral yet highly concerned about maintaining the appearance of being ethically upstanding.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.

19. The strength of the beliefs underlying ethical universalism is that

it leaves no room for thinking that concepts of right and wrong can be varying shades of gray—they are always absolute and unambiguous.ethical standards are objectively-determined by religious and moral experts.ethical universalism recognizes the obvious—basic moral standards vary significantly according to local cultural beliefs, local religious beliefs, and social mores. it draws upon the collective views of multiple societies and cultures to put some clear boundaries on what constitutes ethical business behavior and what constitutes unethical business behavior no matter what country market or culture a company is operating in.what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical is (or should be) grounded in religious doctrine and applied strictly to all business situations.

20. 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 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.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.

21. The categories of managerial morality include:

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).mostly ethical managers, somewhat ethical managers, and totally unethical managers.moral managers, immoral managers, and amoral managers.managers with lots of integrity, managers with some integrity, and managers with no integrity. honorable managers, dishonorable managers, and totally corrupt managers.

22. The business case for why companies should act in a socially responsible manner includes such reasons as

it can lead to increased buyer patronage.All of these.it is in the best interest of shareholders.it generates internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).it reduces the risk of reputation-damaging incidents.

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

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

24. Which one of the following is not a part of the business case for why companies should act in a socially responsible manner?

Acting in a socially responsible manner is in the overall best interest of shareholders.Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.To the extent that a company’s socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).Every business has a moral duty to be a good corporate citizen.

25. Which of the following statements is false as concerns the various approaches company managers can take in dealing with or managing ethical conduct?

The main objective of the compliance approach is to protect against adverse publicity and any damaging consequences brought on by headlines in the media, outside investigation, threats of litigation, punitive government action, or angry or vocal shareholders.Companies using the unconcerned or non-issue approach ascribe to the view that ethics has no place in the conduct of business and that companies should not be morally accountable for their actions.Companies that adopt a compliance mode usually do such things as making the company’s code of ethics a visible and regular part of communications with employees, having ethics training programs, appointing a chief ethics officer or ethics ombudsperson, inOne of the weaknesses of the compliance approach is that moral control resides in the company’s code of ethics and in the ethics compliance system rather than in an individual’s own moral responsibility for ethical behavior and in strong peer pressures foCompanies using the damage control approach usually make some concession to window-dressing ethics, going so far as to adopt a code of ethics (so their executives can point to it as evidence of their ethical commitment should any ethical lapses on the com

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25 Questions

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25 Questions

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

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Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com