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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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1. Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical

vary enormously from religion to religion and country to country across the world.ultimately depend on a person’s own values and beliefs.ultimately depend on the circumstances—nothing is really black or white when it comes to ethical standards.are present in all societies, organizations, and individuals; some of the most important concepts (for example, being truthful) of what is right and what is wrong resonate with people of most cultures, and are thus universal.are governed mainly by the thinking and writings of religious clerics at the School of Morally Correct Thinking and Behavior in Geneva, Switzerland.

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

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

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

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.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.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.

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

5. Moral managers

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. are skeptical about ethics and ethical standards but feel obligated to observe the company code of ethics.are ethically-principled as long as they see such behavior being in their own self-interest.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.

6. Companies that adopt the principle of ethical relativism in providing ethical guidance to company personnel

quickly find themselves on a slippery slope with no higher order moral compass if they operate in countries where ethical standards vary considerably from country to country.have a one-size-fits-all set of ethical standards.end up allowing each company employee to determine what set of ethical standards to observe.base their standards of what is ethical and what is unethical on the Global Code of Ethical Conduct first developed in 1935 and since subscribed to by the governments of 180 countries.have no fair way to judge the ethical correctness of the conduct of company personnel.

7. 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.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.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.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.

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

everyone is an ethics watchdog and somebody is sure to blow the whistle on the company’s unethical behavior. (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 dangers that top management will get embarrassed if the company’s unethical behavior is publicly exposed.unethical strategies are inconsistent with or else weaken the corporate culture. of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used.

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

Intense competitive pressuresHeavy pressures on company managers to meet or beat earnings targetsThe pervasiveness of immoral and amoral businesspeopleA company culture that puts the profitability and good business performance ahead of ethical behavior Overzealous pursuit of personal gain, wealth, and other self interests

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

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 perfectly suited for ethically-unprincipled companies where company personnel must be spurred into complying with the company’s ethical standards. is favored at companies whose managers are immoral but who see having cosmetic compliance methods in place as a safeguard against scandal. 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 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.

11. Business ethics concerns

developing a special set of ethical standards for businesses to observe in conducting their affairs.what ethical behaviors should be expected of company personnel in the course of doing their jobs.the application of general ethical principles and standards to the actions and decisions of companies and the behavior of company personnel.developing a consensus among companies worldwide as to what ethical principles that businesses should be expected to observe in the course of conducting their operations.picking and choosing among the consensus ethical standards of society to arrive at a set of ethical standards that apply directly to operating a business.

12. An environmental sustainability strategy consists of a company’s deliberate actions to

operate in an honorable manner, provide good working conditions for employees, and to actively work to enhance the quality of life in the local communities where it operates and in society at large.apply universal norms regarding the protection of the environment to its everyday operations and to establish guidelines regarding what actions are ecology sound based on the findings of the scientific community.balance commonly held views about what constitutes environmentally appropriate actions against its ability to make a profit.meet the current needs of customers, suppliers, shareholders, employees and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet.apply ethical principles of right and wrong regarding the protection and enhancement of natural resources and ecological support systems as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world.

13. According to the school of ethical universalism,

concepts of right and wrong are universal within countries/societies but not across countries or cultures.concepts of what is ethical and what is unethical are universal and absolute, leaving no room for deviation from country to country or circumstance to circumstance. to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable.all societies and countries are obligated to apply universally-defined ethical principles of right and wrong as set forth in the Global Code of Ethical Behavior adopted by 150 nations of the world.concepts of what constitutes ethical behavior and unethical behavior are dictated by subjectively-provable moral principles but not by objectively-provable moral principles.

14. Which one of the following statements about the ethical relativism school of thinking is false?

In a multinational company, application of ethical relativism equates to multiple sets of ethical standards.According to the ethical relativism school of thinking, a “one-size-fits-all” template for judging the ethical appropriateness of business actions and the behaviors of company personnel does not exist. The best and fairest way for a multinational company to approach the enforcement of ethical standards companywide is to reject ethical universalism and pursue ethical relativism.There are few absolutes when it comes to business ethics and thus few ethical absolutes for consistently judging a company’s conduct in various countries and markets.A company that adopts the principle of ethical relativism and holds company personnel to local ethical standards necessarily assumes that what prevails as local morality is an adequate guide to ethical behavior—this assumption is ethically dangerous.

15. The notion of social responsibility as it applies to businesses concerns

the responsibility that top management has for ensuring that the company’s actions and decisions are in the best interest of society at large. a company’s duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct. a company’s duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.societal expectations that all company stakeholders will be treated equally and fairly.a company’s duty to put the public interest ahead of shareholder interests.

16. Which one of the following is not a key element of integrated social contracts theory?

Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.Commonly held views about what is morally right and wrong form a “social contract” (contract with society) that is binding on all individuals, groups, organizations, and businesses in terms of establishing right and wrong and in drawing the line between eUniversal ethical norms always take precedence over local ethical norms.Universal ethical principles or norms leave some “moral free space” for the people in a particular country (or local culture or even a company) to make specific interpretations of what other actions may or may not be permissible within the bounds defined Universal ethical principles apply in those situations where most all societies—endowed with rationality and moral knowledge—have common moral agreement on what is wrong and thereby put limits on what actions and behaviors fall inside the boundaries of wh

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

is prevalent at companies whose executives are moral and want to put on a public face of being ethically-principled. is well-suited for companies with no history of ethical problems.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 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).

18. 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.Customers shun companies known for their shady behavior and ethically upstanding company personnel are repulsed by a work environment where unethical behavior is condoned. 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.A strategy that is unethical in whole or in part is morally wrong.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

19. 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 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.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.

20. The school of ethical universalism holds that

concepts of right and wrong are governed by the Global Code of Ethical and Social Morality. all societies and countries apply essentially the very same set of universally-defined ethical principles of right and wrong in judging individual behavior.concepts of right and wrong are universal within countries but not across countries and cultures.some concepts of what is right and what is wrong resonate with peoples of most societies regardless of local traditions and cultural norms—hence common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances.concepts of right and wrong are absolute and leave no room for deviation from country to country or circumstance to circumstance.

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

corruption among public officials and in business transactions is widespread across the world. 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.corruption in emerging country markets is relatively low compared to the rest of the world.the ethically “cleanest” industries are public works contracts and construction, the arms and defense industry, and the oil and gas industry.

22. The business case for an ethical strategy

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.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 numerous ethical rules and guidelines and an environment where employees rely on these rules for moral guidance.emphasizes that pursuing unethical strategies not only damages a company’s reputation but can also have costly consequences that are wide ranging.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.

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

Making charitable contributions and donating money and the time of company personnel to community service endeavors.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 programActions to ensure the company has an ethical strategy and operates honorably and ethically.

24. Which of the following is not a key question that senior executives must ask whenever a new strategic initiative is under review?

Would the potential outcome of the proposed action pose a risk of embarrassment?Is what we are proposing to do fully compliant with our code of ethical conduct?Is it apparent that this proposed action is in harmony with our core values?Is there anything in the proposed action that could be considered ethically objectionable?Are any conflicts or concerns evident between the proposed action and our core values?

25. Which of the following represents a justifiable reason for why a company’s strategy should be ethical?

Pursuing an unethical strategy damages a company’s reputation and can have costly consequences.An ethical strategy is good business and is in the best interest of shareholders.An unethical strategy reflects badly on the character of the company personnel involved.All of these.A strategy that is unethical in whole or in part is morally wrong.

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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 | OSHA Basics Quiz | What Should We Know? Privacy | Terms |

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

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 | OSHA Basics Quiz | What Should We Know?
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Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com