Chapter 3 1. Wal-Marts low wage policy has forced Safeway to do which of the following?

A) reduce benefits for their workers Rationale: Wal-Marts low-wage policy has forced rivals, such as Safeway, to reduce benefits for their workers in order to stay competitive. 2. Employees are part of the __________ environment of organizations. A) internal Governments are part of the __________ environment of organizations. A) task Demographic forces are part of the __________ environment of organizations. A) general United Airlines is 55% employee owned through a mechanism called A) employee stock ownership. Rationale: If a person works for a company that is more than half owned by its employees, he or she is one of the joint owners he or she is part of an Employee Stock Ownership Plan (ESOP). The group responsible for setting the organization's overall strategic goals and for approving decisions and salaries of top management is known as the A) Board of Directors. Which of the following is an example of an internal stakeholder of an organization? A) Individual workers People who can claim an organization as their legal property are called A) owners. Which of the following is an example of an external stakeholder of an organization? A) customers who go to Starbucks for a latte Rationale: The external task environment consists of 11 groups that present the organization with daily tasks to handle customers.

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10. Which of the following is an example of a group in an organization's task environment? A) mass media Rationale:Task environment consists of 11 groups that present the organization with daily tasks to handle including the mass media. 11. A(n) __________ is a person or organization that helps another organization sell its goods and services to customers. A) distributor 12. A(n) __________ is a person or organization that provides raw materials, services, equipment, labor, or energy to other organizations. A) supplier 13. Two drug companies agree to work together to pool their research and development funds to develop a new drug for arthritis. In doing so, these two organizations can best be described as A) strategic allies. 14. The Environmental Protection Agency (EPA) administers environmental standards in the U.S. The EPA represents __________, part of an organizations' __________. A) government regulators; task environment Rationale: Government regulators such as the EPA are regulatory agencies that establish ground rules under which organizations may operate. These regulators are part of the task environment, the groups that present the organization with daily tasks to handle. 15. ChemTech International is being picketed by a group of people who live by its biggest plant. The group is concerned about ChemTechs disposal of waste products into nearby waterways. In this instance, ChemTech is most likely dealing with __________ part of its __________ environment. A) local communities; task

Rationale: Local communities, such as the people who live by the ChemTech plant, are part of the task environment, the groups that present the organization with daily tasks to handle. 16. A human rights organization is urging consumers to boycott products made by Outbound Clothing because Outbound exploits labor in less developed countries where its manufacturing facilities are located. Outbound is dealing with __________, part of its __________ environment. A) special-interest groups; task Rationale: Special-interest groups are groups whose members try to influence specific issues(exploitation of labor), some of which clearly affect Outbound Clothing. 17. Which of the following statements about the mass media is true? A) No manager can afford to ignore the power of the mass media. 18. The general environment of an organization is also known as its A) macroenvironment. 19. Unemployment rates are examples of _____________ forces in an organization's general environment. A) economic 20. In the insurance industry, claims files previously maintained as paper documents are now stored on computers. This is an example of __________ forces in an organization's _________ environment. A) technological; general Rationale: Technological forces are new developments in methods for transforming resources into goods or services. They are part of the organizations general environment. 21. Which of the following is considered a demographic characteristic? A) gender 22. Which of these is a situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal? A) ethical dilemma 23. Whistleblowers are most likely presented with which of the following? A) an ethical dilemma Rationale: An ethical dilemma is a situation in which you have to decide whether to pursue a course of actions that may benefit you or your organization but that is unethical or even illegal. A whistleblower is an employee who reports organizational misconduct to the public. A whistleblower may be presented with an ethical dilemma in that reporting a hazardous but profitable condition in the organization, for example, may cause him or her to lose his or her job. 24. Standards of right and wrong that influence behavior are known as A) ethics. 25. The pattern of values within an organization is known as its A) value system. 26. __________ are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a persons behavior. A) Values 27. A manager, attempting to decide what decision will result in the individual's best long-term interests, is engaged in the __________ approach to deciding an ethical dilemma. B) individual 28. Pat, a manager at State University, is deciding how to set up a procedure for registering on-line that gives students fair access to courses. Pat is engaged in the ________ approach. A) justice Rationale: The justice approach is guided by respect for impartial standards of fairness and equity. 29. Issues of equity and fairness are usually tied to which of the following approaches to deciding ethical dilemmas? A) justice

30. Drug companies are often criticized for selling their drugs at exorbitant prices. When asked, they will often say that the pricing is fair given the amount of research and development that has gone into the drug. Without this high price, they argue that other new drugs that will help millions of people around the world could not be developed. Yet, those who cannot afford the high price and may die without the drug feel unjustly discriminated against. The drug companies are practicing which approach to this ethical dilemma? A) utilitarian Rationale: The utilitarian approach is guided by what will result in the greatest good for the greatest number of people. In the example given the drug companies are providing a new drug in addition to the others they have developed that will help even more people, despite the fact that some cannot afford the drugs. 31. The Sarbanes-Oxley Act of 2002 requires that a companys chief executive officer and chief financial officer must comply with which of the following? A) must certify financial reports Rationale: Administered by the SEC, SarbOx requires a companys chief executive officer and chief financial officer to personally certify the organizations financial reports, prohibits them from taking personal loans or lines of credit, and makes them reimburse the organization for bonuses and stock options when required by restatement of corporate profits. 32. New MBAs sometimes expect the employees they supervise to be obedient for obediences sake. The level of personal moral development for which this statement is an example is the __________ level according to Kohlberg. A) preconventional Rationale: Kohlberg has proposed three levels of personal moral developmentpreconventional, conventional, and postconvential. The preconventional level manager would expect employees to be obedient for obediences sake. 33. Which of the following statements about a code of ethics is most true? A) Most codes of ethics offer guidance on how to treat stakeholders. Rationale: A code of ethics consists of a formal written set of ethical standards guiding an organizations actions. Most codes offer guidance on how to treat customers, suppliers, competitors, and other stakeholders. The purpose is to clearly state top managements expectations for all employees. Most codes prohibit bribes. 34. Thomas, an assembly line worker for SoftTools Company, observes that his graveyard shift (midnight - 8 a.m.) manager removes safety guards from some machines so that the work can be done faster. Thomas sends a letter to top management reporting this. Thomas is a: A) whistleblower Rationale: A whistleblower is an employee who reports organizational misconduct to the public (Thomas), such as health and safety matters (removing the safety guards from some machines). 35. A manager's duty to take actions that will benefit the interests of society as well as of the organization is known as A) social responsibility. 36. __________ is the notion that corporations are expected to go above and beyond following the law and making a profit. A) Corporate social responsibility 37. Milton Friedman would have agreed with which of the following statements about social responsibility? A) A company will not benefit the stockholders when it practices social responsibility. Rationale: Friedman represents the view that The social responsibility of business is to make profits. Unless a company focuses on maximizing profits, it will become distracted and fail to provide goods and services, benefit the stockholders, create jobs, and expand economic growththe real social justification for the firms existence. 38. The economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs is known as B) sustainability. 39. Google made a pledge to investors when it went public to reserve 1% of its profit and equity to make the world a better place. This action is the best example of corporate A) philanthropy. Rationale: Philanthropy is defined as making charitable donations to benefit humankind as Google did with its pledge. 40. Sergio is Manager of Human Resources for XYZ Company. News has just been released that the company has violated financial reporting laws. Based on research on the effects of such publicity, Sergio should expect that A) job applications will decrease.

Rationale: Ethics can affect the quality of people who apply to work in an organization. One online survey of 1,020 people indicated that 83% rated a companys record of business ethics as very important when deciding whether to accept a job offer. 41. Which of the following is one of the layers of the diversity wheel? A) external dimensions 42. Which of the following would be considered a primary dimension of diversity? A) gender 43. __________ is defined as the stable physical and mental characteristics responsible for a persons identity. A) Personality 44. Which of the following dimensions is an example of a secondary dimension on the diversity wheel? A) geographic location 45. Which of the following dimensions is an example of an organizational dimension on the diversity wheel? A) seniority 46. The concept of the glass ceiling would most likely be experienced by which of the following people? A) an African American woman who is a senior vice president at a large multinational bank Rationale: The glass ceiling is a metaphor for an invisible barrier preventing women and minorities from being promoted to top executive jobs. Thus the African American woman VP is most likely to experience the concept of the glass ceiling. 47. The Americans with Disabilities Act requires employers to A) reasonably accommodate an individual's disability. Rationale: The Americans with Disabilities Act prohibits discrimination against the disabled and requires organizations to reasonably accommodate an individuals disabilities. 48. The belief that ones' own culture is better than another culture is called A) ethnocentrism. 49. Joe believes that he was not promoted to professor at State University because of the universitys desire to promote minorities and women to achieve greater diversity at higher ranks. More than likely Joe believes he is suffering from A) reverse discrimination. Rationale: Some employees like Joe are afraid that attempts to achieve greater diversity in their organization will result in reverse discriminationthat more black or Asian employees will be promoted over the heads of supposedly more qualified whites. 50. What is the difference between a stakeholder and a stockholder? A stakeholder is a broad term that encompasses both internal and external interests in the organization. For example, employees, owners, and the board of directors represent the internal stakeholders of an organization. On the other hand, stockholders are those who have a financial interest (who have invested in) in the organization. . 51. Identify at least five of the external stakeholders of organizations that lie in the task environment. Explain why each of these is important to the organization. The task environment consists of: Competitors, customers, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media. These are all important to the organization because they are the source of some input the organization needs. For example, customers bring in money when they buy a product; suppliers bring in needed materials; employee unions bring in workers. 52. Identify at least four forces in the general environment of organizations. How do these differ from those forces in the task environment? The forces are: Economic, technological, sociocultural, demographic, political-legal, and international. They differ from forces in the task environment because an organization may be able to influence or control elements in its task environment, but not in its general environment. 53. Identify and define the approaches to deciding ethical dilemmas. The four approaches are: Utilitarian, individual, moral-rights, and justice. The utilitarian approach seeks to maximize the greatest good for the greatest number of people. The individual approach is guided by what will be in the individual's best long-term interests. The moral-rights approach is focused on respecting the fundamental rights of human beings. The justice approach is guided by impartial standards of fairness and equity.

54. Why is the support of top managers significantly important in promoting a strong ethical climate? Top managers set the tone and direction of the firm. Individuals follow the examples set by those in the leadership positions of an organization. In order to have a strong ethical climate, top managers must model the way. 55. Summarize the debate for and against social responsibility. What is your opinion, and why? The position against organizations engaging in socially responsible actions mainly rests on the argument that the responsibility of corporations is to maximize profits for stockholders. Anything that takes away from this is irresponsible. The argument in favor of corporate social responsibility states the following. *Businesses have an ethical obligation to contribute to society's welfare. *Businesses create problems, and should help solve those problems. *Businesses have resources to solve problems that other entities do not have. *Socially responsible behavior can create a favorable public image which in turn makes the business more profitable. Does ethical behavior and social responsibility pay off financially for an organization? Summarize the research given in the text. Answer: Ethical and socially responsible corporate behaviors have the following effects (or lack of effects) that have been demonstrated in research studies: *One survey found that 74% of people polled said their perception of a firms honesty directly affected their decision about whether to buy its stock. *Illegal corporate behavior diminishes a company's sales growth for several years. *88% of customers claim they are more likely to buy from socially responsible companies. *Ethical corporate behavior attracts more qualified job applicants. *One survey found that 71% of employees who saw honesty applied rarely or never in their organization had seen misconduct in the past year. *Unethical behavior in the form of employee fraud costs U.S. organizations around $652 billion a year. *Studies suggest that profitability is enhanced by a reputation for honesty and corporate citizenship. 56. What are the differences between the internal and external dimensions of diversity? Internal: those elements that exert a sustained and dramatic influence on our lives. These include ethnicity, gender, race, sexual orientation and physical abilities. External includes elements of choice that people adopt and/or discard over the course of their lives. Elements include: marital status, educational background, etc. 57. What are the major barriers to diversity? The major barriers are: *Ethnocentrism, which is the belief that one's own nation, culture, language, abilities or behavior is superior to another's *Fear of reverse discrimination *Resistance to diversity program priorities *Unsupportive social atmosphere *Lack of support for family demands *Lack of support for career-building steps