Business Ethics and Social Responsibility QA

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TRUE

Business ethics are the principles and standards that determine acceptable behavior for individuals within an organization as well as the organization at large.

FALSE

Business ethics relates to an individual’s or a work group’s decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire business’s activities on society.

FALSE

Whether made in science, politics, sports, or business, any organizational decision can be judged as right or wrong, ethical or unethical.

TRUE

The most basic ethical and social responsibility concerns have been codified by laws and regulations that encourage businesses to conform to society’s standards, values, and attitudes. The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud and stiffen penalties for corporate fraud.

FALSE

Business ethics goes beyond legal issues by building trust among individuals and in business relationships which validates and promotes confidence among those relationships.

FALSE

Ethical issues are not limited to for-profit organizations. Ethical issues include all areas of organizational activities, including government.

TRUE

An ethical issue is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. In business, this choice usually involves weighing monetary gain against what a person considers appropriate conduct.

TRUE

One of the principal causes of unethical behavior in organizations is overly aggressive financial or business objectives. Many of these issues relate to decisions and concerns that managers have to deal with daily.

FALSE

Different cultures may abide by different ethical standards. For example, in the United States, bringing a gift to a business meeting could be viewed as a bribe, but in Japan, it is considered impolite to not bring a gift to a business meeting.

FALSE

Use of social media, video, and shopping sites, while at work, results in lost productivity and profits for employers.

TRUE

Bullying may create what some consider a hostile environment, a term generally associated with sexual harassment. Although sexual harassment has legal recourse, bullying has little legal recourse at this time.

FALSE

Conflicts of interest exist when a person must choose between advancing his or her own personal interests or those of others. Bribes are payments, gifts, or special favors intended to influence the outcome of a decision.

TRUE

Fairness and honesty are at the heart of business ethics and relate to the general values of decision makers. Beyond obeying the law, businesspersons are expected not to harm customers, employees, clients, or competitors knowingly through deception, misrepresentation, coercion, or discrimination.

TRUE

Ethical decisions in an organization are influenced by individual moral standards, the influence of managers and co-workers, and the opportunity to engage in misconduct.

TRUE

It is difficult for employees to determine what conduct is acceptable within a company if the firm does not have established ethics policies and standards. And without such policies and standards, employees may base decisions on how their peers and superiors behave.

TRUE

Codes of ethics do not take into consideration every situation but they should provide a clear means of appropriate behavior and steps to take in addressing ethical issues and/or concerns.

TRUE

Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior because they prescribe which activities are acceptable and which are not, and they limit the opportunity for misconduct by providing punishments for violations of the rules and standards.

FALSE

There are four dimensions of social responsibility: economic, legal, ethical, and voluntary (including philanthropic).

TRUE

Voluntary responsibilities are not required but contribute to the community and quality of life.

FALSE

Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by various stakeholders.

TRUE

To respond to developments, most companies are introducing eco-friendly products and marketing efforts. For example, Walmart is becoming very proactive in protecting the environment.

FALSE

Although the concept of social responsibility is receiving more and more attention, it is still not universally accepted.

TRUE

A major legal and social responsibility for business is providing equal opportunities for all employees regardless of their sex, age, race, religion, or nationality.

TRUE

The right to safety was one of the consumer rights outlined by John F Kennedy in 1962.

TRUE

Sustainability involves the interaction among nature and individuals, organizations, and business strategies and includes the assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles, so that they maintain the health of the natural environment.

Business ethics is defined as the principles and standards that determine acceptable conduct in business organizations.

Many consumers and social advocates believe that businesses should not only make a profit but also consider the social implications of their activities.

Social responsibility refers to a business’s obligation to maximize its positive impact and minimize its negative impact on society.

Congress passed the Sarbanes-Oxley Act in response to several prominent accounting scandals. The law criminalized securities fraud and stiffened penalties for corporate fraud.

Business ethics relates to an individual’s or a work group’s decisions that society evaluates as right or wrong, whereas social responsibility is a broader concept that concerns the impact of the entire business’s activities on society.

Studying business ethics will not necessarily motivate individuals to perform acts of social responsibility.

The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud as well as stiffen penalties for corporate fraud. This was a response to public outcry regarding accounting scandals in the early 2000s and to restore confidence in corporate America.

Ethical conduct builds trust and credibility. Establishing trust and confidence is much more difficult in organizations that have reputations for acting unethically.

Ethical issues are not limited to for-profit corporations but also affect government, non-profits such as universities, sports, and individuals.

According to the National Ethics Business Survey, misuse of company time is the number one area of misconduct observed in the workplace.

A conflict of interest occurs when an employee must choose whether to advance his or her own interests or those of the firm.

Fairness and honesty are at the heart of business ethics and relate to values of decision makers. Businesspersons obeying the law are expected not to harm customers, employees, clients, or competitors knowingly through deception, misrepresentation, coercion, or discrimination.

One aspect of fairness relates to competition. Companies sometimes attempt to gain control over markets by using questionable practices, such as manipulating the supply of products, that harm competition.

Truthfulness about product quality and effectiveness is important to consumers. Many marketers of dietary supplements make unproven or even false claims that their products will help the consumer lose weight, gain muscle, or improve their overall health.

Managers in particular, because of the inherent authority of their position, have the opportunity to influence employees’ actions.

In business, the ethical issue of plagiarism arises when an employee copies reports or takes the work or ideas of others and presents it as his or her own.

An important aspect of communications regarding an ethical issue is product labeling such as the Surgeon General’s warning on cigarette packages.

Ethical behavior within a business involves keeping company secrets, meeting obligations and responsibilities, and avoiding undue pressure that may force others to act unethically.

Ethical issues related to business relationships include the responsibility of managers to help an organization achieve its goals without compromising employee rights.

Plagiarism is taking someone else’s work or idea and presenting it as one’s own without crediting its source.

Ethical decisions in an organization are influenced by three key factors: individual moral standards, the influence of managers and co-workers and the opportunity to engage in misconduct.

Understanding the influences of business ethics leads to establishment of codes of ethics. Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior as they limit the opportunity for misconduct by providing punishments for violations of the rules and standards.

Business managers and employees often experience some tension between their own ethical beliefs and their obligations to the organizations in which they work. Many employees utilize different ethical standards at work than they do at home. This conflict increases when employees feel that their company is encouraging unethical conduct or exerting pressure on them to engage in it.

Codes of ethics are formalized rules and standards that describe what the company expects of its employees.

A code of ethics establishes which types of behavior are acceptable and which are not. It limits the opportunity for misconduct by clearly defining violations and establishing punishment.

Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior because they prescribe which activities are acceptable and which are not, and they limit the opportunity for misconduct by providing punishments for violations of the rules and standards.

A company should never rely on an employees’ personal ethics to guide ethical standards due to the wide array or lack of moral standards that an individual may maintain.

The government seeks to reward firms that report misconduct; however, many whistleblowers still suffer retaliation. Congress has taken steps to close a legislative loophole that resulted in the dismissal of many whistleblowers.

Whistleblowing occurs when there is a lack of anonymous reporting mechanisms in a company and an employee therefore finds it necessary to expose the firm’s wrongdoing to the government or media.

Economic responsibility refers to earning a profit, which is the foundation of the social responsibility pyramid.

Businesses, like all organizations, have a legal responsibility to obey the law.

Ethical responsibilities, the third dimension of social responsibility, require that a firm acts ethically and does what is right, just, and fair.

The four dimensions of social responsibility are legal, economic, voluntary, and ethical.

Being a “good corporate citizen” is an example of voluntary social responsibility dimension.

Voluntary responsibilities include philanthropic donations.

Corporate citizenship is the extent to which businesses meet the legal, ethical, economic and voluntary responsibilities placed on them by their stakeholders.

Studies have found a direct link between social responsibility and profitability in business as well as employee commitment and consumer loyalty.

Consumerism is defined as the activities that individuals, groups, and organizations undertake to protect their rights as consumers.

Many laws regarding safety in the workplace are enforced by the Occupational Safety and Health Administration (OSHA).

A major social responsibility for all business is providing equal opportunities to all employees regardless of sex, age, race, religion, or nationality.

John F. Kennedy’s 1962 consumer bill included the right to be informed, the right to choose, the right to be heard, and the right to safety.

The right to be informed provides consumers access to information about the products they wish to buy and ensures vital information is contained on product packages and labels.

The right to choose ensures that consumers have access to a variety of products and services at competitive prices. The assurance of both satisfactory quality and service at a fair price is also a part of the consumer’s right to choose.

The Federal Trade Commission’s Bureau of Consumer Protection enforces a variety of laws designed to protect consumers against unfair, deceptive, or fraudulent practices.

Sustainability refers to the process of conducting activities in such a way as to provide for the long-term well-being of the natural environment, including all biological entities. Hence, it involves the interaction among nature and individuals, organizations, and business strategies and includes the assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles, so that they maintain the health of the natural environment.

One area of environmental concern is pollution of water and soil from business activities. Sustainability refers to conducting activities in such a way as to provide for the long-term well-being of the natural environment, including all biological entities.

Because environmental responsibility imposes costs on both business and the public, managers must coordinate environmental goals with other social and economic goals.

The most common way that businesses demonstrate their community responsibility is through donations to local and national charitable organizations and causes.

Environmentalists are concerned that some companies are merely greenwashing, or “creating a positive association with environmental issues for an unsuitable product, service, or practice.”

Businesses recognize that today’s students are tomorrow’s employees and customers, and have come to understand the value of a better educated workforce.