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Exam 4: Demanding Ethical and Socially Responsible Behavior

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Question 71

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About 10 years ago,there were several bank mergers.Shortly after Big Bucks Bank bid on The Bank of Plenty,a story hit the local newspapers about the investigation into the purchase of several thousand shares of stock of the Bank of Plenty by three of its top executives,just prior to the announcement that Big Bucks Bank planned to buy Bank of Plenty.Upon close examination by the SEC (Securities and Exchange Commission)it was determined that the stock purchases were an illegal maneuver on the part of these executives.This is an example of insider trading.The executives were "banking" on the stock price rising sharply when the purchase announcement was made public.

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Question 72

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The social audit is:

A) a company report that always include a net social contribution.
B) a government mandated report required of all firms who have a business license.
C) a company report that measures the firm's social contributions inside and outside of the firm.
D) a recent development that creates a ratio to compare a firm's corporate philanthropy to its profits.

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Question 73

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As a result of pressure from business lobbyists,Congress failed to pass legislation protecting whistleblowers.

Which of the following is an unresolved ethical issue that surrounds global trade?

Several years ago,the garment and soft goods industry agreed to adopt higher ethical standards with respect to contract manufacturers that produce their goods.The leadership agreed that this was a good approach in order to avoid the U.S.government from intervening and creating new laws to force the industry to only work with foreign manufacturers who operated with high ethical standards.This was sensible strategy on the part of the garment and soft goods industry.

Both managers and workers cite low managerial ethics as a major cause of American businesses' competitive woes.

A payoff for socially conscious behavior is:

A U.S.government official has indicated that for a generous contribution to his reelection fund,he would ignore your firm's apparent violation of several anti-pollution laws.Which of the following "ethics check questions" would you consider first?

At a recent town hall meeting,citizens expressed concern regarding the impact of a proposed new gambling casino.The owner of the proposed casino responded,"I don't know what all of this fuss is about.I'm just a businessman trying to earn a profit,provide new jobs,and pay taxes." His response reflects an overall commitment to corporate social responsibility.

Given the level of diversity within the United States,agreement on common standards of ethical behavior is unachievable.

Business is under pressure from society to be more socially responsible.However,even the strongest advocates for corporate responsibility can't seem to agree:

The majority of CEOs blame unethical employee conduct on:

All U.S.companies practice the same ethical standards when dealing with suppliers and contract manufacturers abroad.

Recently,Bob was trying to choose between three mutual fund investments for his retirement account.As a socially conscious investor,he will prefer to invest in funds that hold the stocks of oil and coal companies,as opposed to wind-turbine and renewable energy companies.

Legal behavior is a first step toward ethical behavior.

The Connecting through Social Media box titled "Facebook or Fakebook" depicts the social media sites' widespread popularity.It asks members to consider:

Abby is a stockbroker for a large financial services company.A client who works at Sixth Generation Software,Ltd. ,just called to purchase several thousand shares of his company's stock.He reveals to her that the company is about to announce the appointment of a new CEO.Abby asks her client if this information is public knowledge.The reason she asks is to make certain that her client,her company,and she remain in compliance with Regulation FD,the Fair Disclosure rule.

A business should be managed ethically to keep existing customers and attract new customers.

Legal behavior and ethical behavior are basically the same.

Employees,just like children,can observe behavior and adopt standards of right and wrong.