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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. 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 interestsThe pervasiveness of immoral and amoral businesspeopleIntense competitive pressuresHeavy pressures on company managers to meet or beat earnings targetsA company culture that puts the profitability and good business performance ahead of ethical behavior

2. The school of ethical relativism holds that

concepts of right and wrong as they apply to business behavior are always varying shades of gray, never absolute (i.e. black or white). 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 a function of each individual’s own set of values, beliefs, and ethical convictions.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 are always governed by business norms in each country, culture, or society.

3. 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.works well in companies desirous of pursuing light ethics compliance.is favored at companies whose managers are amoral yet highly concerned about maintaining the appearance of being ethically upstanding.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.

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

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

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 reduces the risk of reputation-damaging incidents.Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).Acting in a socially responsible manner is in the overall best interest of shareholders.Every business has a moral duty to be a good corporate citizen.

6. A company’s social responsibility strategy is typically comprised of all but which one of the following elements?

Actions to enhance workforce diversity and make the company a great place to workActions to keep prices low enough that the company’s profits will not be viewed by the general public as obscenely high or exorbitantActions to protect or enhance the environmentMaking charitable contributions and donating money and the time of company personnel to community service endeavorsConscious efforts to ensure that all elements of the company’s strategy are ethical and actions to protect or enhance the environment (beyond what is legally required)

7. The best available evidence indicates that the average manager in the whole population of managers is

ethically amoral most of the time but may slip into a moral or immoral mode based on a variety of impinging factors and circumstances.ethically corrupt.ethically immoral and unprincipled, especially when the chances of being discovered are slim; however, in public, the average manager is prone to give every appearance of being ethically principled and to profess support for ethically correct behavior.ethically moral and is fairly steadfast in taking ethically correct positions. mostly ethical.

8. 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 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 appropriate for companies who have a deeply-planted ethical culture.is favored at companies whose managers fear scandal and are desirous of containing any adverse fallout from claims of unethical actions by company personnel.

9. The school of ethical universalism holds that

concepts of right and wrong are absolute and leave no room for deviation from country to country or circumstance to circumstance.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.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 governed by the Global Code of Ethical and Social Morality.

10. According to the school of ethical universalism,

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.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. concepts of right and wrong are universal within countries/societies but not across countries or cultures.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.

11. 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.To the extent that a company’s socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.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.

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

ethical universalism recognizes the obvious—basic moral standards vary significantly according to local cultural beliefs, local religious beliefs, and social mores. 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.it leaves no room for thinking that concepts of right and wrong can be varying shades of gray—they are always absolute and unambiguous.

13. The business case for an ethical strategy

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.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.

14. 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

that the locus of moral control is shifted to individual employees and away from top management.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. 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. inability to deter inherently immoral company personnel from breaking the rules.writing compliance procedures that look strong but really are pretty weak in terms of pushing people to observe the espoused ethical standards.

15. Moral managers

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

16. Which of the following statements regarding a company’s social responsibility and sustainability strategy is false?

Unless a company’s social responsibility initiatives become part of the way it operates its business every day, the initiatives are unlikely to be fully effective.While the strategies and actions of all socially responsible companies have a sameness in the sense of drawing on the same categories of socially responsible behavior, each company’s version of being socially responsible is unique.A company is not demonstrating an adequate degree of social responsibility or endeavoring to be a model corporate citizen unless it spends 5% (or more) of pretax profits on social responsibility initiatives. Social responsibility strategies that have the effect of both providing valuable social benefits and fulfilling customer needs in a superior fashion can lead to competitive advantage.A few companies have integrated social responsibility and/or environmental sustainability objectives into their missions and overall performance targets; they view social performance and environmental metrics as an essential component of judging the compa

17. The three categories of managers that stand out with regard to the beliefs and commitments they have to ethical and moral principles in business affairs are:

moral managers, amoral managers, and immoral managers.ethical managers, socially responsible managers, and crooked managers.ethically-principled managers, ethically-unprincipled managers, and ethically-neutral managers.ethically responsible managers, ethically irresponsible managers, and ethically unconcerned managers.mostly ethical managers, somewhat unethical managers, and ethically corrupt managers.

18. The strength of the beliefs underlying the moral case for an ethical strategy

involves managers with high ethical principles and standards who are advocates of a corporate code of ethics and strong ethics compliance and are genuinely committed to certain corporate values and business practices.begins with managers who themselves have strong character (for example, who are honest, have integrity, and truly care about they conduct a company’s business).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.all of the above.starts with managers who walk the talk in displaying the company’s stated values.

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

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 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 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.

20. Integrated social contracts theory maintains that

few nations or cultures have common moral agreement on what is ethically right and wrong.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. 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.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

21. 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 compliance approachThe ethical culture approach The unconcerned or non-issue approach The damage control approach

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

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.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. 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“It’s the right thing to do.”

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

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.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 put the public interest ahead of shareholder interests.

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

Universal 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 Integrated social contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.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 whCommonly 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 e

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

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

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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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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.

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Without work one finishes nothing. - Ralph Waldo Emerson
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