Ethics Test Banks

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Crane and Matten define the subject of business ethics as, "The
...issues of right and wrong are addressed
study of business situations, activities, and decisions where..."
The law can be said to be a definition of the minimum acceptable
In a sense, business ethics can be said to begin where the law
standards of behaviour, with many morally contestable issues not
ends
covered by the law. What does this imply for business ethics?
Business has greater power and influence in society than ever
before, business has the potential to provide a major contribution
to our societies, business malpractices have the potential to inflict
Why is business ethics important? Select all that apply
enormous harm on individuals, communities and the environment,
business continues to violate ethics across countries and sectors
(all of the above)
Ethics rationalizes morality to produce ethical blank that can be
theory
applied to any situation
sells sex toys made with environmentally friendly materials, uses
fair trade materials in its toys and aides, provides philanthropic
A sex shop might call itself ethical because it... support for related causes, promotes a label to certify that sex
industry workers have not been exploited in the making of labeled
products (all of the above)
Large corporation = formal, public-relations, and/or sys-
Match the different types of organization with their different ap- tems-based. Small business = informal, trust-based. Civil society
proaches to managing ethics organizations = informal, values-based. Public sector organization
= formal, bureaucratic
According to Crane and Matten, globalization as defined in terms
of the deterritorialization of economic activities is particularly rele-
accountability
vant for business ethics, and this is evident in three areas: culture,
law, and blank
Key issues in business ethics in Asia are corporate governance
and accountability. In North America they are misconduct and
There are clear regional differences in business ethics. Read the
immortality in single decision situations. In Europe, key issues in
following statements and decide which of the following is correct
business ethics are social issues in organizing the framework of
business
sustainability refers to the long-term maintenance of systems ac-
What is Crane and Matten's definition of sustainability
cording to the environmental economic and social considerations
One attempt to address social elements is the UN's Millennium
Development Goals (MDGs), which is a set of 8 goals to be Reduce domestic violence
achieved by 2015. Which of the following is not an MDG?
In his influential 1970 article, Milton Friedman protested against
Corporate responsibilities limit a corporation's freedom to choose
the notion of corporate responsibility for corporations. Which of
how to pursue its main task of increasing profits
the following is not one of the 3 main premises of his argument?
Crane and Matten contend that a corporation can be morally
responsible for its actions, because it has agency independent of
culture
its members. The main arguments in support of this point center
on a corporation's internal decision structure and corporate blank
It is now generally accepted that business responsibility does socially responsible firms may find it easier to attract employees
extend beyond simply making a profit. Which of the following do who may be more committed, corporations seen as responsible
Crane and Matten list as business reasons for CSR? Select all may attract more and/or more loyal customers, by engaging in
that apply voluntary CSR, corporations may avoid government legislation
Carroll developed a four-part model of CSR to address the nature
of business's social responsibilities. According to Carroll's model
Ethical responsibilities
which of the follow responsibilities does society expect businesses
to meet?
Reaction = the corporation denies any responsibility and does
what is demanded of it by relevant groups. Defence = the cor-
Carroll has delineated four strategies of social responsiveness, poration admits responsibility, but fights it, doing the very least
match the strategy name with its description that seems to be required. Accommodation = the corporation
accepts responsibility and does what is demanded of it by relevant
groups. Pro-action = the corporation seeks to go beyond industry
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norms and anticipates future expectations by doing more than is
expected
Crane and Matten's definition of a stakeholder makes it clear that
is it impossible to identify a definitive group of relevant stakehold-
ers for any given corporation in any given situation. Nevertheless,
a typical representation is possible, and three different models
government
are presented. Which of the following stakeholders are included
in the stakeholder view of the firm and in the network model of
stakeholder theory, but not in the traditional model of managerial
capitalism?
Instrumental stakeholder theory is a theory that attempts to ex-
False
plain how firms take into account stakeholder interests
Globalization facilitates relocation and potentially makes com-
panies able to engage governments in a "race to the bottom",
decisions over employment, lay-offs and relocation are taken by
Since the late 1980's we have witnesses a growing tendency to- firms, and governments cannot directly control employment levels
wards the "privatization" of many political functions and processes (though they are made responsible for unemployment), the priva-
formerly assigned to governments. Which of the following are tization of major public services and publicity owned companies
examples of how people's lives are increasingly controlled and has led to private actors dominating major industries such as
shaped by corporations as well as governments? (Select all that media, telecommunications, and transport, market and industrial
apply) liberalization and deregulation has increased the power of private
actors: the more strongly the market dominates economic life,
the weaker governmental intervention and influence is (all of the
above)
In order to enhance corporate accountability, corporate social
activity, and performance should be made more visible to those
transparency
with a stake in the corporation. The term usually applied to this is
blank
Given the emerging role for corporations in the administration
of civil, social and political rights, Crane and Matten argue that corporate citizenship describes the corporate function for govern-
the extended view of corporate citizenship suggests the following ing citizenship rights for individuals
definition
Which of the following is not one of the factors that Crane and
Matten identify as the most important in deciding whether a situ- the decision is likely to be open to legal challenges
ation should be assigned a moral status?
Stage 1 =recognize a moral issue Stage 2 = make a moral judg-
Rest's 4 stage model of ethical decision making ment Stage 3 = Establish moral intent Stage 4 = Engage in moral
behaviour
Personal values = significant influence, some empirical evident
citing positive relationship. Personal integrity = significant influ-
ence likely, but with lack of inclusion in models and empirical tests.
Individual factors with their likely influence on ethical decision
Moral imagination = A new issue for inclusion with considerable
making
explanatory potential. Locus of Control = limited effect on deci-
sion-making, but can be important in predicting the apportioning
of blame/approbation
Hofstede suggests that differences in cultural knowledge and
beliefs across countries can be explained in terms of 5 dimen-
sions. Read the following description carefully and indicate which
Masculinity/Feminity
of Hofstede's 5 dimensions it describes "the extent to which an
emphasis is placed on valuing money and things versus valuing
people and relationships"
Instrumental purpose and exchange = individuals are concerned
with their own immediate interests and define right according
to whether there is fairness in exchange or deals they make.
Match the following explanations of cognitive moral development Interpersonal accord, conformity, and mutual expectations = in-
with one of the stages identified by Kohlberg dividuals live up to what is expected of them by their immediate
peers and those close to them. Social accord and system main-
tenance = individuals consideration of the expectations of others
broadens to social agreement for generally. Social contract and
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individual rights = individuals assess right and wrong according to
the upholding of basic rights, values and contracts of society
Werhane sees moral imagination as the creativity with which an
individual is able to reflect about an ethical dilemma, why is this It allows the individual to develop alternative solutions
significant?
Rewards = Strong evidence of relationship between rewards/pun-
ishments and ethical behaviour, although other stages in ethical
decision-making have been less investigated. Authority = Good
general support for influence from immediate superiors and top
management on ethical decision-making of subordinates. Bu-
Match the following context related situational influences with the
reaucracy = Significant influence on ethical decision-making well
descriptions of their influence on ethical decision-making
documented, but actually exposed to only limited empirical re-
search. Specific consequences for ethical decision-making there-
fore remain contested. Organizational culture = Strong overall
influence, though implications of relationship between culture and
ethical decision-making remain contested.
Bird and Waters describe the phenomenon of moral muteness, in
which managers reframe moral actions and motives in non-moral
Credibility = the fear of losing organization credibility with stake-
terms. Managers do this because they are worried about per-
holders, particularly shareholders
ceived threats. Which of the following do managers not feel is
under threat through the use of moral terms?
Anand and colleagues identify 6 different strategies of rational-
izing unethical behaviour. What strategy am I using if I make the
Metaphor of the ledger
following argument "Its okay for me to use the Internet for personal
reasons at work after all, I do work overtime a lot"
The bureaucratic dimension of organizations has been argued
to have negative effects on ethical decision-making. Read the
denial of responsibility
following carefully and indicate which is not one of these negative
effects
Crane and Matten define business ethics management as follows
"Business ethics management is the blank attempt to formally
Direct
or informally manage ethical issues or problems through specific
policies, practices, and programmes"
Risk analysis and management is one of the key components of
business ethics management. According to Sison this is because
possible monetary impact
the language of risk assessment has encourage firms out spell
out the risks that firms run by ignoring ethics in terms of...
Crane and Matten identify 4 main types of ethical codes. Read the
following carefully and choose which of the following is not one of accreditation codes of ethics (eg. Use of fair-trade mark)
these 4 main types
Donaldson proposes principles for organizations working interna-
Respect for local traditions, the belief that context matters when
tionally and needing to address cultural differences when devel-
deciding what is right and wrong, respect for core human values
oping their ethical codes. What are these principals? (Select all
which determine an absolute threshold
that apply)
One-way support = relationships based on philanthropy, sponsor-
ship or other forms of resource contribution from one party to the
other. Joint venture or alliance = Relationship based on formal
partnership involving significant mutual commitment to achieve
specific goals. Project dialogue = Relationship based on dis-
Stakeholder relationships can take a wide variety of forms. Match
cussion between partners regarding specific project or proposal,
the kind of stakeholder relationship with the correct description
such as stakeholder dialogue accompanying major regeneration
or construction projects. Strategy dialogue = Relationship based
on discussion between partners over longer-term issues and the
development of overall strategy for organizations, industries or
regulatory regimes.
'ethical' = focus on internal management systems, or individ-
ual-level aspects of the business. 'environmental' = focus on ex-
clusively on the organization's impact on the natural environment.
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'social' = have a broader remit, covering a range of issues in
addition to (or sometimes separate from) the environment, such
Match the following statements with respect to company reporting
as employee conditions or community relations. 'sustainability' =
on ethical performance 'Approaches prefaced...tend to..."
are concerned with the triple bottom line of social, economic, and
environmental considerations.
Which of the following is not one of the issues that Zadek et al
protecting the integrity of confidential data
have proposed as the key principals of good social accounting
Which of the following is a scheme to tackle the specific aspect of
AA 1000S
reporting assurance in social accounting?
Compliance orientation = Main emphasis is on preventing, de-
tecting, and punishing violations of the law. Values orientation
= Approach is based on defining organizational values and en-
Travino et al identified 4 main ways of approaching the formal couraging employee commitment to certain ethical aspirations.
organization of business ethics management, match the label with External orientation = The focus is on satisfying stakeholders
the description such as customers, the community and shareholders. Protection
orientation = Primary orientation is (or is perceived to be) towards
shielding top management from blame for ethical problems or
legal violations.
Crane and Matten identify two very different models of informal
ethics management. Is the following statement true or false? In the
culture change approach, the leader's role is one of participation
and empowerment in order to foster moral imagination and auton-
False
omy on the part of employees. On the other hand, in the cultural
learning approach, the leader's role is to articulate and personify
the values and standards to which the organization aspires, and
to then inspire and motivate employees to follow their lead
Blank describes the process by which shareholders seek to en-
sure that their corporation is run according to their intentions. It
Corporate governance
includes processes of goal definition, supervision, control, and
sanctioning.
According to Shankman two features make agency relations spe-
cial. One of these is the inherent conflict of interest between Informational asymmetry between principal and agent
shareholders and managers, which is the other?
Anglo-American model = Individuals, pensions and mutual funds.
Correctly complete the comparison of corporate governance
Rhenish capitalism = Banks, corporations, state. India = Families,
regimes globally, with respect to ownership identity
foreign investors, banks. China = State, families, corporations
There are numerous ethical issues around executive pay. Which
The pay differentials between those at the top and those at the
of these do Crane and Matten identify as a reason that executive
bottom appear to be highly inequitable
pay touches an ethical chord with the public in many countries
Ballwieser and Clemm identify 5 main problematic aspects of the
financial intermediary's job, which of the following is not one of Ratings are frequently unreliable
them?
Deterritorialized financial markets impose the problem that no
Read the following statements carefully and indicate which of
national government is entitled to govern these markets, as glob-
them Crane and Matten identify as being among the most serious
alized financial markets are not fully controlled by national gov-
issues (from an ethical perspective) in the globalization of financial
ernments, they can easily be used for transactions that would be
markets (Select all that apply)
illegal in most countries.
Socially responsible investment is the use of ethical, social, and
environmental criteria in the selection and blank of investment management
portfolios, generally consisting of company shares
Mackenzie identifies two types of SRI funds; Market-led funds
choose the firms to invest in following the indication of the market. their own ethical criteria
Deliberative funds base their portfolio decisions on:
The Dow Jones Sustainability Index takes a best-in-class ap-
those companies identified as the sustainability leaders in each
proach, meaning the DJSI includes the following kinds of shares
industry
(Select all that apply)
Cooperatives are owned and run by their managers False
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Flexibility = management can do what it wants. Empowerment =
making someone else take the risk and responsibility. Recognizing
Translate the following terms the contribution of the individual = undermining the trade union
and collective bargaining. Teamworking = reducing the individual's
discretion
Right to privacy = work-life balance. Right to due process = disci-
Match the following employee rights with the examples of the plinary proceedings. Right to healthy and safe working conditions
issues involved = occupational health and safety. Right to work = fair treatment in
the interview
Which of the following do Crane and Matten not provide as an
example of an issue associated with an employee's duty to respect Whistleblowing
their employer's property?
Institutional discrimination means that the very " " of the organi-
Culture
zation is the prejudiced against certain groups.
Imagine a retailer introduces a programme aimed at making sure
employees smile and appear happy in front of customers. This
is an example of which of the four kinds of threat to privacy that Psychological privacy
Simms (1994) suggests we might want to protect? Choose the
best fit.
According to Kaler (1999), the two main areas to which an em-
ployee's right to participation extends are operational participation False
and a right to association. True or False?
'Presenteeism' is a common cultural force in many organizations The phenomenon of being at work when you should be at home
- but what is it? recovering or enjoying time off
With regard to difference between national cultures and moral
values, what do Crane and Matten suggest should be the starting
Human rights should be a basic compass
point for providing direction between the two poles of absolutism
and relativism on questions of employment conditions?
Ruggie (2008) has developed a framework for understanding
business and government responsibilities in the area of human Protect, respect and remedy
rights. It is a framework of...
'Green jobs' is one of the main ways in which the problems and
Jobs become more environmentally sustainable through reorga-
tensions inherent in the concept of sustainable development has
nization of labour and the workplace, Jobs in industries producing
been addressed. Which of the following do Crane and Matten
environmentally friendly goods and services.
identify as aspects of green jobs? Please select all that apply.
Inalienable entitlements to fair treatment when entering into ex-
Which of the following statements are to be found in Crane and
changes with sellers, They rest upon the assumption that con-
Matten's definition of consumer rights? Please select all that
sumer dignity should be respected, They rest upon the assumption
apply.
that sellers have a duty to treat consumers as ends in themselves
The notion of caveat emptor has been eroded over time. One
example of this is the UN's guidelines on consumer protection.
to promote the availability of effective consumer redress
Carefully read the following statements and indicate which of them
is not one of the objectives of those guidelines.
Intrusiveness = right to privacy. Predatory pricing = right to fair
Match the following common ethical problem around marketing
prices. Buyer-seller relationships = right to engage in markets.
with the main consumer rights involved
Consumer exclusion = right to basic freedoms and amenities
Blank occurs when a marketing communication either creates, or
takes advantage of, a false belief that substantially interferes with Deception
the ability of people to make rational consumer choices.
What responsibility are sellers often said to have, in relation to
A duty of care
customers perceived to be vulnerable in some way?
What do Crane and Matten identify as a focus for debate in the Erosion of local cultures and rise of cultural homogenization,
case of companies expanding into new, international markets? Increasing predominance of consumerist ideologies, Deliberate
Select all that apply. removal of domestic rivals.

What is at the 'bottom of the pyramid' concept?

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focus on offering innovative products and services to the world's
poorest people.
What are the dimensions of Smith's (1995) consumer sovereignty
Consumer capability, Choice, Information
test? Select all that apply.
In responding to ethical consumers, companies have two basic
Which of the following statements about ethical consumption options: they are either adopt an ethical niche orientation to the
would Crane and Matten agree with? Select all that apply. ethical market, Consumers can to some extent act as a social
control on business.
Buncholz (1998) identifies the changing ethics governing our so-
cieties as a factor in the move towards more sustainable con- The consumerism ethic promotes instant gratification and con-
sumption. Which of the following statements is accurate according sumption.
to her model? Select all that apply.
Crane and Matten suggest that businesses can best be under-
Notable decisions about how the firm deals with any single other
stood as part of an industrial network rather than part of a simple
firm can have a significant effect on other members of the business
exchange between two parties. What does this suggest about
network, including suppliers and competitors.
corporate interactions?
According to resource dependence theory, power derives from
the degree of dependence that each actor has on the other's
resources. This dependence is a function of the quality of an False
organization's resources and how useful they are to the other
party.
Crane and Matten define a conflict of interest as follows: 'A conflict
of interest occurs when a person's or organization's obligation to
Obstruct
act in the interests of another is interfered with by a competing
interest that may blank the fulfilment of that obligation.'
You are the purchasing manager at ACME Ink Supplies, Inc. The
sales rep from a new supplier gives you a large box of premium
quality Belgian chocolates after your first test purchase, with a How might your existing supplier perceive the gift, What do you
note thanking you for the business. You like chocolates, but are think is the intention of the sales rep, What impact would the gift
not sure you should take the gift. What would Crane and Matten have on you.
suggest you might consider in making up your mind? Select all
that apply.
There is a clear ethical issue in the case where a single large com-
With which of the following statements on ethical issues in relation
petitor dominates the market, as it can disadvantage consumers
to competitors would Crane and Matten agree?
and competitors.
As western firms have become more familiar with traditions, such
as the Chinese practice of guanxi, so they have increasingly
It is a matter of respect for local traditions
tolerated gift-giving practices in such countries. What is the reason
for this, according to Donaldson (1996)?
Crane and Matten argue that the pressure exerted by powerful
corporate customers to comply with ethical sourcing guidelines
True
and criteria constitutes a kind of regulatory intervention in the
supply chain. True or False?
A code of conduct is all very well, but to be successful in prac-
A workable code of conduct, Enforcement policies which establish
tice, Emmelhainz and Adams (1999) argue that ethical sourcing
the penalties for violation, A system of monitoring supplier com-
through the supply chain requires the following: Select all that
pliance with the code.
apply.
Fair trade is concerned with more than just the fairness of ex-
change relationships in a narrow economic sense. It is just as
much concerned with blank an organization's suppliers and the Sustaining
communities and environments where these suppliers are locat-
ed.
Communities or organizations bound by interdependence of all
What are industrial ecosystems?
kinds of resources and wastes
Non-profit distributing organizations, Involved in the promotion
What is civil society? Select all that apply. of social interests causes and/or goals, Examples include social
enterprises non-governmental organizations and religious groups
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Sectional group aims = self-interest, Promotional group aims =
social goals, Sectional groups exert pressure through = threat of
Crane and Matten identify different types of CSOs: match them
withdrawal, Promotional groups exert pressure through = mass
media publicity
The boundaries defining which CSO can reasonably be defined
Carefully read the following statements about recognizing CSO
as stakeholders are permeable and evolving rather than concrete
stakes in business and indicate which of them Crane and Matten
and fixed, Firms are more likely to recognize and respond to CSOs
would agree with. Select all that apply.
that are known, trusted and not too critical
Boycotts are probably the most widely used form of non-violent
Promotional boycotts aim to shift business from on company to
direct action. Friedman (1999) suggests a number of purposes
the sector's best performer as a means of encouraging weaker
that CSOs may have for boycotts: which of the following is not one
companies to change their policies.
of Friedman's suggestions?
The charter is to serve as a code of conduct for NGOs on the
What is the Accountability Charter, which was launched in 2006?
international stage.
Which of the following statements on global issues and causes Global issues raise the prospect of coordinated global attention
would Crane and Matten agree with? from international CSOs and multinational corporation.
The four kinds of constructive engagement between civil society
and business, according to Crane and Matten, are charitable Social enterprises
giving, business-CSO collaboration, blank and 'civil regulation'.
The degree of interaction between business and CSOs has inten-
Corporations co-opt their CSO partners, threating the indepen-
sified at the same time as it has increased in scope and incidence.
dence that makes the CSO sector such an important balance to
Which of the following do Crane and Matten identify as one of the
corporate power.
risks?
Role of profit in a social enterprise = Profit earning; limits on profit
distribution. Role of profit in a corporation = profit maximizing.
Complete the matching of some of the key differences between a
Governance of a social enterprise = based on participation and
social enterprise and a corporation
democracy amongst stakeholders. Governance of a corporation =
based on accountability to providers of capital
Whether an how to sustain civil society through their actions, given
CSOs have a role to play in encouraging business to promote sus-
CSOs' vital role in encouraging sustainable development, Decid-
tainability, but the relationship is not free of challenges. What do
ing how to balance the competing interests of different CSOs,
Crane and Matten identify as challenges for business in engaging
Deciding the extent of community and/or CSO participation in
with CSOs on sustainability? Select all that apply.
corporate decision-making
Blank includes rule definitions, laws, mechanisms, processes,
Regulation
sanctions, and incentives.
As a representative of citizens' interests, government restricts
In what ways is government a stakeholder of business? Select all business, As an actor with interests of its own government is
that apply. dependent on business, As an actor with interests of its own
government is in competition with business
Government provides society with = Regulation that protects their
Government is located between the interests of business and interests. Government receives from society = Consent and toler-
society. Complete the following matching which sets out the re- ance. Government provides business with = Profitable and stable
lationship in a little more detail economic framework. Government receives from business = tax-
es, jobs, investments, etc
One of the numerous ways in which business can influence
government is for it to engage in lobbying, which Crane and
Information provision
Matten define as an attempt by business to influence government
decisions making through blank and persuasion.
Which of the following do Crane and Matten not list as being a public-private partnerships (the profit maximization of business
common issue in the context of privatization and deregulation? may conflict with effective public service provision)
Intensity of regulation in a national context = Decreasing inten-
sity (e.g., deregulation, privatization). Intensity of regulation in a
Match the following statements about the effect of globalization on globalized context = Increasing intensity. Addressee of regulation
the context of business-government relations in a national context = Social actors (e.g., domestic companies,
citizens). Addressee of regulation in a globalized context = Nation
states (e.g., EU member states), private transnational actors

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Business has become a key player in the regulatory game, with
a number of new forms of regulation emerging in recent years. Cost-effectiveness (financial savings), Faster achievement of ob-
What are the goals for those trying to introduce new types of jectives (speed), Encouragement of a proactive approach from
rule-making, according to Calster and Deketelaere (2011)? Select industry (integration into the regulatory process)
all that apply.
Government = National imperative regulation (e.g. 35-hour week
in France). Government and business = Country-wide agree-
ments with government (e.g. voluntary environmental agreements
Match the regulatory outcomes at national level with the regula- in place in many countries). Business and CSO = Country-wide
tory actor group involves, in the following multi-factor setting agreements with CSOs (e.g. agreements between businesses and
trades unions). Business, government and CSO = Country-wide
multipartite agreements and projects (e.g. Covenant for Work in
Germany)
Detomasi (2007) talks of 'global public policy networks,' in which
'the strengths of state, market, and civil society actors combine
to create an effective international governance system that over-
Codes of conduct
comes the weaknesses afflicting each individually.' What is the
main instrument that is used in such networks to regulate the
social, ethical, and environmental impacts of business?
1992 = World Business Council on Sustainable Development
lobbies against any concrete measures at global level on climate
change. 1996-1998 = Shell and BP leave the Global Climate
Coalition in the face of European Union commitment to Kyoto
One of the key policy areas of sustainability has been on the issue and stakeholder pressure in the EU. 2005 = The European Union
of global climate change. Correctly complete the timeline. launches its Emissions Trading Scheme. This is a market mecha-
nism designed to achieve greenhouse gas reductions. 2006-2008
= A growing number of firms conclude that measures to tackle
climate change are inevitable and it is therefore prudent to be part
of the process.

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