CH04TB.doc

CHAPTER 4: MASTER TEST BANKETHICAL AND SOCIAL RESPONSIBILITY IN MARKETING Test Item Table by Major Section of the Chapter and Bloom’s Level of Learning Bloom’s Level of Learning (LL) Level 1 Level 2 Level 3 Major Section Knowledge Comprehension Application of the Chapter (Knows Basic (Understands (Applies Terms & Facts) Concepts & Principles) Principles) Chapter Opener: 2, 3, 4 1, 5, 6 Anheuser-Busch 186 (pp. 88-89) Nature and 7, 8, 9, 10 11, 12, 13, 18, 19, 20 14, 15, 16, 17 Significance of 187, 188 189 Marketing Ethics (pp. 90-91) Understanding Ethical 25, 26, 27, 30, 35, 21, 22, 23, 24, 28, 29, 31, 32, 33, 34, 41, Marketing Behavior 38, 39, 40, 43, 44, 36, 37, 53, 54, 62, 65, 42, 55, 56, 57, 58, (pp. 91-98) 45, 46, 47, 48, 49, 66, 67, 71, 72, 73, 74, 59, 60, 68, 69, 81, 50, 51, 52, 61, 63, 76, 77, 80, 86, 87, 88, 89, 90, 93, 94, 99, 64, 70, 75, 78, 79, 95, 98, 102, 103, 104, 100, 101, 112, 113, 82, 83, 84, 85, 91, 108, 109, 110, 111, 115, 117 92, 96, 97, 105, 116 196 106, 107, 114 190, 192, 193, 194 191, 195 Understanding Social 118, 119, 127, 128, 120, 121, 124, 125, 126, 122, 123, 130, 134, Responsibility in 131, 132, 136, 137, 129, 133, 145, 155, 156, 135, 138, 139, 146, Marketing 140, 141, 142, 143, 164, 155, 156, 164, 165, 147, 148, 149, 157, (pp. 98-103) 144, 150, 151, 152, 168, 169, 170, 173, 175, 158, 159, 160, 161, 153, 154, 163, 166, 176, 177, 178, 179, 180 162, 174 167, 171, 172, 181, 197, 200, 201, 203, 204 198, 199, 202 182 Video Case 4: Toyota 183, 184, 185 (pp. 105-107) NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions. CHAPTER 4: MASTER TEST BANK ETHICAL AND SOCIAL RESPONSIBILITY IN MARKETING Test Item Table by Learning Objective and Bloom’s Level of Learning Bloom’s Level of Learning (LL) Learning Objective Level 1 Level 2 Level 3 (LO) Knowledge Comprehension Application (Knows Basic (Understands Concepts (Applies Principles) Terms & Facts) & Principles) LO1 Explain the 7, 8, 9, 10 11, 12, 13, 18, 19, 20 1, 14, 15, 16, 17 differences 187, 188 189 between legal and ethical behavior in marketing. (pp. 90-91) LO2 Identify factors 25, 26, 27, 30, 35, 21, 22, 23, 24, 28, 29, 31, 32, 33, 34, 41, that influence 38, 39, 40, 43, 44, 36, 37, 53, 54, 62, 65, 42, 55, 56, 57, 58, ethical and 45, 46, 47, 48, 49, 66, 67, 71, 72, 73, 74, 59, 60, 68, 69, 81, unethical 50, 51, 52, 61, 63, 76, 77, 80, 86, 87, 88, 89, 90, 93, 94, 99, marketing 64, 70, 75, 78, 79, 95, 98, 102, 103, 104, 100, 101, 112, 113, decisions. 82, 83, 84, 85, 91, 108, 109, 110, 111, 115, 117 (pp. 91-98) 92, 96, 97, 105, 116 196 106, 107, 114 190, 192, 193, 194 191, 195 LO3 Describe the 118, 119, 127, 128, 2, 3, 4, 120, 121, 124, 5, 6, 122, 123, 130, different 131, 132, 136, 137, 125, 125, 126, 129, 133, 134, 135, 138, 139, concepts of 140, 141, 142, 143, 145, 155, 156, 164, 165, 146, 147, 148, 149, social 144, 150, 151, 152, 168, 169, 170, 173, 183, 157, 158, 159, 160, responsibility. 153, 154, 163, 166, 184, 185 161, 162, 174 (pp. 98-102) 167, 171, 172 186, 197, 200, 201, 203 198, 199, 202 LO4 Recognize 181, 182 175, 176, 177, 178, 179, unethical and 180 socially 204 irresponsible consumer behavior. (pp. 102-103) NOTE: Bold numbers indicate short essay questions. Underlined numbers indicate visually enhanced questions. CHAPTER 4: MASTER TEST BANK ETHICAL AND SOCIAL RESPONSIBILITY IN MARKETING MULTIPLE CHOICE QUESTIONS 4-1 CHAPTER OPENER: ANHEUSER-BUSCH APPLICATION The Family Talk about Drinking guidebook developed by Anheuser-Busch to help parents address the topic of underage drinking is an example of a. consumerism. b. preemptive marketing. c. ethical behavior in marketing. d. the social marketing concept. e. cause marketing. Answer: c Page(s): 88-89 LO: 1 AACSB: Ethics QD: Hard Rationale: The Anheuser-Busch guidebook, Family Talk about Drinking, was developed to help parents address the topic of underage drinking. It is an example of ethics in marketing since ethics are the moral principles and values that govern the actions and decisions of an individual or group that serve as guidelines on how to act rightly when faced with moral dilemmas such as underage drinking. 4-2 CHAPTER OPENER: ANHEUSER-BUSCH COMPREHENSION Anheuser-Busch acts on what it views as an ethical obligation to its customers and the general public with its a. development of a low-carb beer. b. annual sponsorship of the Super Bowl. c. exclusive use of ingredients from American manufacturers and suppliers. d. alcohol awareness and education programs. e. commitment to maintaining the lowest prices possible without sacrificing taste. Answer: d Page(s): 88-89 LO: 3 AACSB: Ethics QD: Medium Rationale: Anheuser-Busch has worked to convince people not to abuse its products. It acts on what it views as an ethical obligation to its customers and the general public with its alcohol awareness and education programs. 4-3 CHAPTER OPENER: ANHEUSER-BUSCH COMPREHENSION Anheuser-Busch established its Corporate Social Responsibility (CSR) Department to a. promote the positive aspects of moderate beer consumption. b. promote responsible drinking and deter underage drinking and alcohol abuse. c. encourage recycling of both aluminum cans and glass bottles by ultimate consumers and suppliers. d. educate employees about the importance of serving as role models by drinking responsibly themselves. e. promote Anheuser-Busch as more socially responsible than its competitors. 3 ” The primary reason for its desire to satisfy these needs is consistent with the idea of social responsibility because a. and curb underage drinking before it starts. shareholders. c. b. profit responsibility c. 4-6 CHAPTER OPENER: ANHEUSER-BUSCH APPLICATION Anheuser-Busch is trying to meet the needs of a very diverse group: its customers who drink beer. cause marketing Answer: b Page(s): 88-89 LO: 3 AACSB: Ethics QD: Hard Rationale: Anheuser-Busch’s efforts to preserve the environment reflect its broader social responsibility. environmentalists. moral idealism d. advertising and partnerships that promote responsible drinking. if Anheuser-Busch is not profitable. prevent alcohol abuse. e. Answer: b Page(s): 88-89 LO: 3 AACSB: Ethics QD: Medium Rationale: Corporate Social Responsibility (CSR) Department was established within Anheuser- Busch to develop and implement programs. and underage children who might think “drinking is cool. 4-4 CHAPTER OPENER: ANHEUSER-BUSCH COMPREHENSION By preserving the natural environment. the more highly thought of by potential consumers. too many people will lose their jobs. cause marketing e. ABRC. all of these people or groups are its stakeholders. Anheuser-Busch is appealing to environmentalists through its alcohol abuse awareness initiatives. social responsibility Answer: e Page(s): 88-89 LO: 3 AACSB: Ethics QD: Medium Rationale: Social responsibility is the view that organizations are part of a larger society and are accountable to that society for their actions. it is attempting to persuade underage children from thinking that drinking beer makes them cool. 4-5 CHAPTER OPENER: ANHEUSER-BUSCH APPLICATION Anheuser-Busch’s commitment preserving the natural environment caused Fortune magazine to rank it among the top companies for __________. utilitarianism d. Answer: a Page(s): 88-89 LO: 3 AACSB: Ethics QD: Hard -4- . a. social responsibility c. stockholder responsibility b. alcohol can be good for you if consumed in moderation. the higher company’s sales would be. the more taxes they will be able to pay. contrary to popular belief. d. utilitarianism b. the larger Anheuser-Busch’s profits. which was recognized by Fortune magazine. Anheuser-Busch is exhibiting which of the following? a. green marketing e. c. community. or family. a specific set of behaviors a given society considers ethical. by its alcohol awareness and education initiatives. Answer: c Page(s): 90 LO: 1 AACSB: Ethics QD: Easy Rationale: Key term definition—ethics. social norms of a nation. b. or family. Rationale: Stakeholders is defined in Chapter 1. Answer: b Page(s): 90 LO: 1 AACSB: Ethics QD: Easy Rationale: Key term definition—laws. Social responsibility is a key term in Chapter 4—the idea that organizations are part of a larger society and are accountable to that society for their actions. beliefs. community. b. By preserving the natural environment. the agreed upon codes of behavior for a given nation. 4-7 ETHICS KNOWLEDGE Ethics refers to the a. society’s values and standards that are enforceable in the courts. appeals to people who drink beer and those who try to educate children from thinking drinking beer would make them cool. religion. e. Anheuser-Busch is appealing to the environmentalists. social norms. 4-10 LAWS KNOWLEDGE Society’s values and standards that are enforceable in the courts are referred to as -5- . moral principles and values that govern the actions and decisions of an individual or group. religious tenets of a country or ethnic region that shape its culture. ethics. and values. b. 4-9 LAWS KNOWLEDGE Laws refer to a. d. society’s values and standards that are enforceable in the courts. And ABRC. religious group. c. 4-8 ETHICS KNOWLEDGE The moral principles and values that govern the actions and decisions of an individual or group are referred to as a. a code of ethics that defines what may be done in specific business circumstances. e. c. d. Answer: d Page(s): 90 LO: 1 AACSB: Ethics QD: Easy Rationale: Key term definition—ethics. societal philosophy. written documentation of a prescribed set of attitudes. e. d. The term stakeholder refers to any group or organization that has a stake in the performance of the company. cultural values. universal laws of man that go beyond individual or a group’s beliefs of nations or religions. c. b. 4-13 ETHICAL/LEGAL FRAMEWORK IN MARKETING COMPREHENSION China is the world’s largest tobacco-producing country and has 300 million smokers. the Consumer Bill of Rights Answer: d Page(s): 90 LO: 1 AACSB: Ethics QD: Easy Rationale: Key term definition—laws. unethical but legal. cultural norms. situational ethics.000 Chinese die annually from smoking-related illnesses. 4-12 ETHICAL/LEGAL FRAMEWORK IN MARKETING COMPREHENSION More than 70 percent of the physicians in the Maricopa County (Arizona) Medical Society agreed to establish a maximum fee schedule for health services to curb rising medical costs. c. Laws reflect the beliefs of the majority of society while ethics reflect the beliefs of the minority of society. these terms can be used interchangeably. U. e. Supreme Court ruled that this agreement violated the Sherman Act and represented price fixing. a behavior that is outlawed by the Sherman Act. c. d.S. Supreme Court ruled they were acting illegally because they were engaged in price fixing. All physicians were required to adhere to this schedule as a condition for membership in the society. laws. There is no significant difference between laws and ethics. ethical and legal. ethical but illegal. Ethics deal with religious and moral beliefs while laws deal with social. China restricts tobacco imports. Ethics deal with personal and moral principles whereas laws are society’s values that are enforceable in the courts. See Figure 4-1 in the textbook.S. industry practices. The U. d. trade -6- . altruistic but naïve. unethical and illegal. Answer: e Page(s): 90-91 LO: 1 AACSB: Ethics QD: Medium Rationale: Ethics deal with personal and moral principles while laws are society’s values that are enforceable in the courts. 4-11 ETHICAL/LEGAL FRAMEWORK IN MARKETING COMPREHENSION Which of the following statements accurately distinguishes between laws and ethics? a.S. however. Ethics deal with internal (personal) issues while laws deal with external (social) issues. Answer: a Page(s): 90-91 LO: 1 AACSB: Ethics QD: Medium Rationale: The physicians were acting ethically by trying to keep their fees down. b. This figure is expected to rise to more than 2 million by 2025. e. b. a. Approximately 700. and environmental behaviors. d. economic. This example illustrates that the physician’s actions were a. the U. e. 4-14 ETHICAL/LEGAL FRAMEWORK IN MARKETING APPLICATION An owner of a small publishing company allowed a friend who was starting a machine embroidery business to load the publishing company’s copy of Microsoft Word on her friend’s computer. sanctioned by the Business Software Alliance since only one copy is to be transferred. negotiators advocate free trade. c. in his tenure with Enron. d. Answer: d Page(s): 90-91 LO: 1 AACSB: Ethics QD: Medium Rationale: Smoking has been found to cause cancer and death for many people. the illegal request was also unethical. d. ethically but illegally. c. unethically and illegally. it is also illegal. in a socially responsible manner. They are acting legally because there is no law preventing U. Answer: d Page(s): 90-91 LO: 1 AACSB: Ethics QD: Hard Rationale: Ethics are the moral principles and values that govern the actions and decisions of an individual or group.S. tobacco companies to market their products in China. e.S. b. See Figure 4-1 in the textbook. This activity is a. trade negotiators know this. When software is purchased. unethically but legally. illegal and unethical. tobacco companies from marketing their products in China. unethically but legally. unethically and illegally. caveat emptor. c. Because the U.S. Fastow. they are acting unethically. See Figure 4-1 in the textbook. in ways that cannot be determined by the information provided. thus allowing U. e. acted a. b.S. thus acting illegally. trade negotiators are acting a. He asked an employee to do something illegal and because of his position as her boss. Laws are society’s values and standards that are enforceable in the courts. Answer: c Page(s): 90-91 LO: 1 AACSB: Ethics QD: Hard Rationale: Fastow pleaded guilty to two counts of wire and securities fraud. e. The Business Software Alliance has repeatedly run ads denouncing software piracy. 4-15 ETHICAL/LEGAL FRAMEWORK IN MARKETING APPLICATION Enron’s Chief Financial Officer Andrew Fastow was indicted and then pleaded guilty on a charges of securities fraud in the Enron case and was accused of enriching himself and his family at the company’s expense. ethically but illegally. both legal and ethical. 4-16 ETHICAL/LEGAL FRAMEWORK IN MARKETING APPLICATION -7- . the user agrees not to share the software with others. Not only is this behavior unethical. d. See Figure 4-1 in the textbook. illegal but ethical. ethically and legally. ethically and legally. The U. b. d. There is nothing consumers can do to stop unethical business activities. b. Which of the following statements describes a conclusion that should be drawn from this information? a. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas. Ethics are the moral principles and values that govern the actions and decisions of an individual or group. Many media today use pay-to-vote polls. This survey did not ask if the person who was acting on ethical grounds would first see if the boycott was based on facts. its business practice would fall into which of the following categories? a. Answer: d Page(s): 90-91 LO: 1 AACSB: Ethics QD: Hard Rationale: The use of pay-to-vote polls is legal. any bias is implied and need not be directly stated under the caveat emptor doctrine. outstanding. However. as a means of generating viewer or listener interest. Realistically speaking. unethical but legal e. you should act according to your instincts. typical of businesspeople around the world. The Research Industry Coalition (RIC) has asked all media to inform viewers or listeners that the validity of such polls is questionable and the results are NOT statistically representative of the population but are just a frequency distribution of those who happen to call. See Figure 4-1 in the textbook.S. their use may be misleading. b. a public-opinion research firm. ethical and legal. unethical. c. d. If a television station chooses not to make viewers aware of the shortcomings of a pay-to-vote poll. if viewers believe the polls are scientifically valid or statistically representative of the population. See Figure 4-1 in the textbook. There are many examples of companies that have been boycotted on the basis of unfounded rumors. all businesses must occasionally behave unethically. found that 67 percent of North Americans are willing to boycott products on ethical grounds. unethical and illegal. If you are an ethical person. c. 4-18 CURRENT PERCEPTIONS OF ETHICAL BEHAVIOR COMPREHENSION Public opinion surveys show that 58 percent of U. this practice has become universal. -8- . in which respondents use a 900-telephone number to vote “yes” or “no” on a current issue. causing short. adults rate the ethical standards of business executives as a. Boycotting a product without knowing the facts can be viewed as unethical. e. above average.and long-term harm to its stakeholders until the truth became widely known. similar to other professions. 4-17 ETHICAL/LEGAL FRAMEWORK IN MARKETING APPLICATION A recent poll by Environics International. in today’s media age. b. d. and therefore. Answer: e Page(s): 90-91 LO: 1 AACSB: Ethics QD: Hard Rationale: The boycott is unethical because it inflicts damage on others needlessly. in order to stay in business. All businesses will act unethically unless forced by consumers to act morally. ethical but illegal. c. societal culture and norms c. 4-20 CURRENT PERCEPTIONS OF ETHICAL BEHAVIOR COMPREHENSION All of the following are reasons for the state of perceived ethical business conduct EXCEPT: a. evil Answer: b Page(s): 91-92 LO: 2 AACSB: Ethics QD: Medium Rationale: Figure 4-2 in the textbook shows a framework with three influences that can have an effect on one’s personal moral philosophy and ethical marketing behavior. an increase in the public’s expectations of ethical business behavior. universal core values e. insurance company professionals b. e. legal professionals c. the news media Answer: c Page(s): 91 LO: 1 AACSB: Ethics QD: Medium Rationale: Advertising practitioners are considered to be among the least ethical occupations in the United States. Alternative “e” has not been shown to be the case. members of the U. Answer: e Page(s): 91 LO: 1 AACSB: Ethics QD: Medium Rationale: The current low perception of ethical business behavior can be explained by a number of reasons. business culture and industry practices. businesses are behaving more ethically during these difficult economic times. in fact the reverse may be true. Answer: e Page(s): 91 LO: 1 AACSB: Ethics QD: Medium Rationale: Public opinion surveys show that 58 percent of U. 4-21 ETHICAL MARKETING BEHAVIOR COMPREHENSION Factors influencing personal moral philosophy and ethical behavior include __________. religious beliefs and practices b. __________ are considered to be among the LEAST ethical occupations in the United States. a growing tendency for business decisions to be judged publicly by groups with different values and interests.S.S. d. and corporate culture and expectations. national and regional legislation d. b. 4-19 CURRENT PERCEPTIONS OF ETHICAL BEHAVIOR COMPREHENSION According to public opinion surveys. a. These include societal -9- . the universal concept of good vs. Congress e. fair or poor. advertising practitioners d. a. ethical business conduct may have declined. the increased pressure on business people to make decisions in a society with diverse value systems. e. adults rate the ethical standards of business executives as fair or poor. c. a nation’s moral philosophy e. business culture and industry practices Answer: e Page(s): 91-92 LO: 2 AACSB: Ethics QD: Medium Rationale: Figure 4-2 in the textbook shows a framework with three influences that can have an effect on one’s personal moral philosophy and ethical marketing behavior.10 - . organizational structures b. a. and corporate culture and expectations. religious beliefs and practices b. 4-22 ETHICAL MARKETING BEHAVIOR COMPREHENSION Which of the following is considered one of the major factors that influences ethical behavior? a. societal culture and norms c. evil Answer: b Page(s): 91-92 LO: 2 AACSB: Ethics QD: Medium Rationale: Figure 4-2 in the textbook shows a framework with three influences that can have an effect on one’s personal moral philosophy and ethical marketing behavior. and __________. the universal concept of good vs. business culture and industry practices. organizational structures b. and corporate culture and expectations. These include societal culture and norms. These include societal culture and norms. Supreme Court e. national and local legislation d. . legislation c. the U. business culture and industry practices. business culture and industry practices. business culture and industry practices. 4-23 ETHICAL MARKETING BEHAVIOR COMPREHENSION Which of the following is considered one of the major factors that influences ethical behavior? a. national and regional legislation d. a nation’s moral philosophy Answer: b Page(s): 91-92 LO: 2 AACSB: Ethics QD: Medium Rationale: Figure 4-2 in the textbook shows a framework with three influences that can have an effect on one’s personal moral philosophy and ethical marketing behavior. These include societal culture and norms. corporate culture and expectations c. and corporate culture and expectations. culture and norms. business culture and industry practices. federal regulatory agencies d. and corporate culture and expectations. 4-24 ETHICAL MARKETING BEHAVIOR COMPREHENSION Factors influencing personal moral philosophy and ethical behavior include societal culture and norms.S. universal core values e. b. e. ethnic. ideas.S. a. and attitudes that are learned and shared among members of a group is referred to as __________. the U. race. the set of values. morals c. dictates what is morally right and just. that reflects the values of an entire nation. the combination of beliefs and behaviors accepted as correct regardless of a person’s age. expresses the diverse backgrounds of a nation’s subcultures. culture . federal. 4-28 CULTURE COMPREHENSION Which of the following is a socializing force that dictates what is morally right and just? a. culture e.11 - . Supreme Court d. sex. ethics d. the set of values. and local legislation c. art. state. theater. and attitudes that are learned and shared among members of a group. state. etc. is determined by the largest generational group at a given point in time. and local—in societies around the world.4-25 CULTURE KNOWLEDGE Culture refers to a. diversity Answer: d Page(s): 91 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—culture. d. or religious group based on commonly shared ethical principles and protected by laws. It also serves as a socializing force that a. Answer: e Page(s): 91 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—culture. the music. ideals b. attitudes. and attitudes that are learned and shared among members of a group. 4-27 CULTURE KNOWLEDGE Culture refers to the set of values. or religion. c. Answer: a Page(s): 91 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—culture. e. ideas. and norms of behavior that is learned and shared among the members of an organization. ideas. d. 4-26 CULTURE KNOWLEDGE In marketing. becomes the basis of all legislation—federal. the learned behaviors of a specific racial. c. the set of values. ideas. b. reflects the will of the largest or most powerful minority. federal regulatory agencies like the FTC b. c. organizational core values Answer: d Page(s): 91 LO: 2 AACSB: Ethics QD: Medium Rationale: Culture refers to the set of values. Answer: c Page(s): 92 LO: 2 AACSB: Ethics QD: Hard . ideas. c. wages. ensures that the prices to consumers are minimized as a result of increased competition. 4-31 SOCIETAL CULTURE AND NORMS APPLICATION The unauthorized use of intellectual property can severely affect the owners of that property. which can create ethical dilemmas. public goods. music. and attitudes that are learned and shared among members of a group and serves as a socializing force that dictates what is morally right and just. are cyclical so it is important to change with the times. and patents are intellectual property. are fluid and very easy to change. intellectual property. 4-30 SOCIETAL CULTURE AND NORMS KNOWLEDGE Copyrights. d. are concrete. subject to ISO 14000 requirements. d. e. rights granted to individuals or organizations by the WTO for a period of five years. b. This practice also a. and attitudes that are learned and shared among members of a group. and patents are a. The important thing to remember is that moral standards a. accelerates innovation in that industry. limited to books. or distribution of intellectual property is illegal in the United States and most countries. reproduction. c. Unauthorized use. and software. are relative to particular societies. ideas. or tax revenue. b. must be universal in order for cross-cultural marketing to be effective. e. trademarks. as new and improved offerings enter the marketplace. d. trademarks. 4-29 CULTURE COMPREHENSION Culture refers to the set of values.12 - . has a positive impact on an entire nation’s cultural value system. Culture also serves as a socializing force that dictates what is morally right and just. These standards often reflect the laws and regulations that affect social and economic behavior. royalties. levels the playing ground for developing nations by eliminating years of research time. e. has a negative impact on the economy through the loss of jobs. something is either right or wrong Answer: a Page(s): 91-92 LO: 2 AACSB: Ethics QD: Medium Rationale: Moral standards are relative to particular societies. e. Answer: b Page(s): 92 LO: 2 AACSB: Ethics QD: Easy Rationale: Copyrights. b. copying enjoys a long tradition and does not carry a stigma.0 billion in the software industry. corporate culture d. What ethical factor is illustrated by this example? a. Rationale: Differences in societal culture and norms affect the view of ethical behavior.5 billion in the music industry. business culture b. industry practices b. and other international brands is pervasive in China because laws protecting intellectual property are unclear and sporadically enforced. 4-34 SOCIETAL CULTURE AND NORMS APPLICATION Making counterfeit copies of Gucci purses. result in lost jobs. Even when sanctions are applied. Americans are not nearly as protective of their right to privacy. This means that moral standards.13 - . reproduction. unauthorized use.. Opt- in means customers must ask to be involved in data collection and marketing while opt-out companies automatically include customers in data collection unless the customer specifically asks not to be included. or distribution of intellectual property is illegal. European websites have opt-in policies while U. wages. typically . corporate expectations e. societal culture and norms d. changes it international law e.S. where it is legal. industry practices c. $20. One important issue is opt-in versus opt-out.S. are relative to particular societies. like the right to privacy. organizational culture and expectations Answer: c Page(s): 91-92 LO: 2 AACSB: Ethics QD: Hard Rationale: Culture refers to the set of values. ideas. 4-33 SOCIETAL CULTURE AND NORMS APPLICATION As the use of the Internet grows around the world. a. copying a masterpiece was historically considered an art form in its own right. or patent. For example. Culture also serves as a socializing force that dictates what is morally right and just. The difference between the two countries shows that __________ affect(s) the view of ethica1 behavior held in each country.5 billion in the movie industry. there must be as easy an exchange of ideas and information as possible between countries. and attitudes that are learned and shared among members of a group. social legislation c. and in China.S. trademark. where infringing on intellectual property is illegal. sanctions are minimal. 4-32 SOCIETAL CULTURE AND NORMS APPLICATION Consider the copying of another’s copyright. Lost sales.. In the U. and $51. Tommy Hilfiger sportswear. Yet in China. Annual lost sales from the theft of intellectual property amounts to $12. royalties. These are viewed as intellectual property. societal culture and norms Answer: e Page(s): 91-92 LO: 2 AACSB: Ethics QD: Hard Rationale: Differences in societal culture and norms affect the view of ethical behavior held in both the U. websites have opt-out policies. in turn. and tax revenue. In general. Europeans believe it is unethical to invade someone’s privacy. copying enjoys a long tradition in China and does not carry a stigma. e. consisting of confiscation. a warning. and the codes of conduct in business dealings. not nonprofit organizations. business cultures. the boundaries between competitive and unethical behavior. moral idealism d. Moreover. b. fair trade practices. b. antecedent states c. utilitarianism Answer: d Page(s): 91-92 LO: 2 AACSB: Ethics QD: Hard Rationale: In China. Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the competitive behavior among sellers. purchase behavior among buyers. An international company doing business there must be vigilant in understanding China’s societal culture and norms. the buyer getting the product for the best price at the expense of the seller. 4-36 BUSINESS CULTURE COMPREHENSION Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the a. societal culture and norms e. Answer: c Page(s): 92 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—business cultures. and product responsibility to the ultimate consumer.14 - . A business introducing a product into China needs to know that its __________ may lead to trademark infringements. 4-37 ETHICS OF EXCHANGE COMPREHENSION Ethical exchanges between sellers and buyers should result in a. and the codes of conduct in business dealings are referred to as a. the effective rules of the game. d. c. perception of ethical behavior as viewed by employers of business firms. the boundaries between competitive and unethical behavior. d. service. a. the seller making a profit at the expense of the buyer. Answer: a Page(s): 92 LO: 2 AACSB: Ethics QD: Medium Rationale: Business cultures comprise the effective rules of the game. counterfeiting is viewed as a profitable way of doing business. b. accountability of buyers and sellers to federal and state regulators. religious precepts b. corporate values. price. societal norms. e. a public apology. c. societal mores. . competitive behavior among sellers. and perhaps a fine. 4-35 BUSINESS CULTURE KNOWLEDGE In marketing. ” c.” which was pervasive in the American business culture prior to the 1960s. c. a. both parties to the exchange being better off after a transaction. The marketing concept of “be first or be last.” which was a charge placed upon many firms during the period after WWII when products failed to meet their marketing claims. ad nauseum b. e. Answer: a Page(s): 93 LO: 2 AACSB: Ethics QD: Easy .” Answer: b Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—caveat emptor. d.” which created many illegal as well as legal but unethical business practices during the 1980s. “Let’s make a deal. Answer: c Page(s): 92 LO: 2 AACSB: Ethics QD: Medium Rationale: The exchange process is central to the marketing concept. 4-38 CAVEAT EMPTOR KNOWLEDGE The Latin phrase caveat emptor is a legal concept that means a.” d. d. caveat emptor Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—caveat emptor. mea culpa c.” b. b.15 - . the buyer forming a strategic alliance with the seller. The legal concept of “let the buyer beware. cest la vie e.” implying that the first company to the marketplace wins. 4-39 CAVEAT EMPTOR KNOWLEDGE The legal concept of “let the buyer beware. c. 4-40 CAVEAT EMPTOR KNOWLEDGE Caveat emptor refers to a.” an attitude that was held by most marketers prior to the 1990s. “Cash on delivery.” which was pervasive in the American business culture prior to the 1960s. “Don’t take any wooden nickels. The legal concept of “such is life. especially during a period of recession. the seller offering buyers its products and services at cost. Ethical exchanges between sellers and buyers should result in both parties being better off after a transaction. quid pro quo d. e. “Such is life. is referred to as __________. The Latin phrase meaning “empty promises. The Latin term meaning that “all is fair in love and war.” e. “Let the buyer beware. Rationale: Key term definition—caveat emptor. It behooves investors to do research on the company. cest la vie e. de facto marketing d. Fair Practices Act c. modus operandi b. and to be heard. including the rights to safety. Customer Consent Decree Answer: d Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—Consumer Bill of Rights. the principle of __________ is in effect. a. caveat emptor Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: Caveat emptor means “let the buyer beware. de facto marketing d. Neither the government nor any other organization guarantees the suitability of or the positive returns on buyers’ investments. is referred to as the a.16 - . to choose. Neither the government nor any other organization guarantees the suitability of or the positive returns on their investments. a. 4-42 CAVEAT EMPTOR APPLICATION The Securities and Exchange Commission (SEC) works hard to prevent unscrupulous companies from “cooking” their books to paint investors and regulators a better financial picture than they really have. Consumer Bill of Rights e. Yet. it is up to investors to research the companies in which they want to invest because __________ is the norm when investing in the stock market. anguis in herba Answer: b Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: Caveat emptor means let the buyer beware. 4-44 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE . Lanham Act b. 4-43 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE A law that codified the ethics of exchange between buyers and sellers.” It is up to investors to do the research on a company. Caveat Emptor Decree d. modus operandi b. caveat emptor c. to be informed. cest la vie e. in the end. 4-41 CAVEAT EMPTOR APPLICATION Investors should understand that when purchasing stock. It is up to investors to do the research on a company. so they will make a wise purchase. E Pluribus Unum c. including the rights to safety. including the right to be paid. and to be heard. Answer: c Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—Consumer Bill of Rights. guaranteed consumers the rights that are enumerated in the First Amendment to the U.S. It was outlined by __________ in __________. a. 4-45 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE The Consumer Bill of Rights codified the ethics of exchange between buyers and sellers. 1996. to privacy b. codified the ethics of exchange between manufacturers. and (4) to be heard. President John Kennedy. 1962. codified the ethics of exchange between buyers and sellers. to safety Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: In 1962. repair. to be informed. Answer: a Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: The Consumer Bill of Rights was the law that codified the ethics of exchange between buyers and sellers including the rights to safety. distributors. These were the right: (1) to safety. 1983. and suppliers. or reimbursement for products that fail to perform as promised by the manufacturer. President Ronald Reagan. Constitution. d. to choose. These were the right: (1) __________. e. Clinton. 4-46 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE In 1962. fair pay. President John Kennedy outlined it in 1962. Bush. (2) to be informed. to choose. including the rights to safe working conditions. and collaborative decision making. d. President Barack Obama. and suppliers. a. 2009. to be treated with respect d. (3) to choose. b. President John F. distributors. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. c.17 - . (2) to be informed. to be compensated for product defects c. e. President George W. and to be heard. codified the ethics of exchange between manufacturers. be treated without prejudice e. 2003. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. b. and (4) to be heard. guaranteed consumers the right to be compensated through replacement. The Consumer Bill of Rights refers to a law that a. (3) to choose. c. 4-47 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE . President William H. to be informed. President John F. 4-48 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE In 1962. President John F. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. These were the right: (1) to safety. (2) to be informed. and (4) to be heard. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. President John F. President John F.18 - . to have legal representation in a court of law b. (2) to be informed. to demand “rain checks” if advertised goods are out of stock e. to be heard Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: In 1962. to be treated with respect d. a. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. and (4) to be heard. These were the right: (1) to safety. (3) to choose. to exchange or return products within a reasonable period of time c. These were the right: (1) to safety. In 1962. a. to exchange or return products and services within a reasonable period of time c. to choose d. These were the right: (1) to safety. to receive fair prices for both products and services d. (2) to be informed. 4-49 CONSUMER BILL OF RIGHTS (1962) KNOWLEDGE In 1962. to privacy b. These were the right: (1) to safety. (2) to be informed. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. President John F. to be compensated for product defects Answer: c Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: In 1962. and (4) to be heard. (3) to choose. (3) to choose. to be compensated for product defects e. President John F. to receive fair prices for both products and services Answer: b Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: In 1962. to be informed c. These were the right: (1) to safety. and (4) to be heard. (2) to be informed. a. (2) __________. (3) to choose. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. and (4) to be heard. President John F. (3) to choose. (3) __________. to have legal representation in a court of law b. 4-50 ETHICS OF EXCHANGE KNOWLEDGE . to be treated without prejudice e. and (4) __________. However. $500 billion e. The Consumer Product Safety Commission monitors over 15. c. tying arrangements. Answer: a Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: Relating to the right to choose. b. two-thirds e. 4-53 ETHICS OF EXCHANGE COMPREHENSION . d.000 consumer products. personal claims and property damage from consumer product safety incidents cost companies more than $700 billion annually. one-half d. slotting allowances. economic espionage. Over 92 percent of websites collect personal information. Companies need to be vigilant in product quality testing not simply from an ethical perspective but from a financial one as well. and financial data. $300 billion d. many supermarket chains demand “slotting allowances” from manufacturers in the form of cash or free goods to stock new products. one-third c. industrial bribes. $900 million c. Yet. kickbacks. yet only about __________ make their customers aware of how that information is being used.19 - . one-quarter b. shopping habits. a. a. $700 billion Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: The right to safety manifests itself in industry and federal safety standards for most products sold in the U. 4-51 ETHICS OF EXCHANGE KNOWLEDGE The FTC is concerned about the amount of personal information that is collected through websites because the consumer is not made aware of how this information is being used.S. only two-thirds of websites inform consumers of what is done with this information once obtained. e. $100 million b. telephone numbers. Personal claims and property damage from consumer product safety incidents cost companies more than __________ annually. 4-52 ETHICS OF EXCHANGE KNOWLEDGE A current practice whereby retailers may demand cash or free goods in exchange for shelf space to stock new products is referred to as a. three-quarters Answer: d Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: An FTC survey of websites indicated that 92% collect personal information such as consumer e-mail addresses. a play chair. the U. safety. d. However. a youth chair. the American Marketing Association has the right to discipline marketers based on customer complaints. developed a high chair that could be used as an infant feeding seat. e. Answer: c Page(s): 93 LO: 2 AACSB: Ethics QD: Medium Rationale: The right to be heard means that consumers should have access to public policy makers regarding complaints about products and services. consumers should have access to public policy makers regarding complaints about products and services. consumers should have access to public policy makers regarding new product ideas. The Children's Online Privacy Protection Act (1998) is a law designed to protect consumers’ right to a. 4-55 ETHICS OF EXCHANGE APPLICATION Mattel’s Cabbage Patch Snacktime Kids doll was designed to eat plastic toys that were drawn into the doll’s motorized mouth. b. e. Answer: b Page(s): 93 LO: 2 AACSB: Ethics QD: Medium Rationale: The consumer right to be informed has spawned much federal legislation such as the Children’s Online Privacy Protection Act (1998) and self-regulation initiatives restricting the disclosure of personal information.20 - . be informed. safety. d. the doll was found to “eat” the child’s hair and was subsequently recalled and discontinued. . e. d. c. c. the world’s largest children’s products company. Answer: d Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: Consumers’ right to safety ensures safe products. be treated courteously. choose. choose. a booster chair. be treated courteously. b. companies should have access to public policy makers regarding complaints about fraudulent consumer practices. c. 4-54 ETHICS OF EXCHANGE COMPREHENSION The right to be heard means that a. happiness. b. despite extensive testing. 4-56 ETHICS OF EXCHANGE APPLICATION Recently. Since the doll was unsafe. be informed. Department of Commerce has the right to hear consumer complaints.S. be heard. a project team for Cosco. it was removed from production and the marketplace. Mattel discontinued the item because of consumers’ right to a. be treated courteously.21 - . be heard. be informed. Dell was most likely concerned with consumers’ right to a. certain toys that were manufactured in China were found to have unsafe levels of lead in the paint and were recalled. d. 4-58 ETHICS OF EXCHANGE APPLICATION Recently. be informed. be informed. b. happiness. choose. learned that the lithium-ion batteries in its notebook computers posed a fire hazard to consumers. Its design could be made and sold for $49. 4-59 ETHICS OF EXCHANGE APPLICATION When shopping on the Internet. so Cosco violated the right to safety. d. The marketing manager. c. b. b. The company recalled 2. choose. be treated courteously. e. several children were injured and some died as a result of using the chair. Cosco was charged with being unconcerned about consumers’ right to a. Consumer Product Safety Commission fined Cosco $1. and they resolved this by recalling the toys.7 million batteries and gave consumers a replacement before any personal injuries resulted. Before Cosco pulled the unsafe chair from the market. decided to have the prototypes checked out by Cosco employees who had small children. and when reclined. Answer: d Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: The chair was unsafe. safety.S. so Dell recalled them. This was the only product testing performed on the product. safety. e.3 million for its misconduct vis-à-vis the chair. in consultation with other middle managers. an infant bed. c. safety. happiness. e. Answer: a Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: These toys would be harmful to children so the companies who sold them violated consumers’ right to safety. choose. Answer: c Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: The batteries posed a safety hazard. c. This action protected consumers’ right to a. 4-57 ETHICS OF EXCHANGE APPLICATION Dell Inc. The U. d. most consumers assume the personal information they give out is confidential. be heard. Subscribers to America Online (AOL) were upset when AOL proposed giving . b.com filed for bankruptcy in June 2000. be heard. happiness. Today. Answer: b Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: The consumers’ right to be informed was lost when Toysmart threatened to use their private information in a way not consistent with how it had been gathered. d. they should know how their private information would be used.250 d. their right to be informed about what AOL was planning on doing with their personal information is denied.750 e. be heard. $750 c. choose. safety. be informed. 4-61 DO NOT CALL REGISTRY KNOWLEDGE The FTC established the Do Not Call Registry in 2003 for consumers who do not want to receive unsolicited telemarketing calls. be informed. $1. $500 b. it listed its customer database as one of its assets even though it had assured its customers it would never disclose their information to any third party.22 - . be treated courteously. e. a. c. a telemarketer can be fined up to $16. 4-60 ETHICS OF EXCHANGE APPLICATION When Toysmart. member information to partners without telling them. c. e. happiness. In other words. d. 4-62 ETHICS OF COMPETITION COMPREHENSION . These customers believed that according to the Consumer Bill of Rights. $16. $8. Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Hard Rationale: By giving out information about consumers without the knowledge of the consumers. safety. People who had purchased products from Toysmart and were a part of its database were upset when they learned their private information was being treated as property that was for sale.000 Answer: e Page(s): 93 LO: 2 AACSB: Ethics QD: Easy Rationale: The FTC established to Do Not Call Registry in 2003 for consumers who do not want to receive unsolicited telemarketing calls. This is related most directly to consumers’ right to a.000 for each call made to a telephone number posted on the registry. Toysmart’s former customers had a right to a. Today. a telemarketer can be fined up to __________ for each call made to a telephone number posted on the registry. b. Answer: a Page(s): 93 LO: 2 AACSB: Ethics QD: Medium Rationale: Business culture also affects ethical behavior in competition. economic espionage and bribery.8 New Oxford American Dictionary. 4-63 ECONOMIC ESPIONAGE KNOWLEDGE Economic espionage refers to a. typically illegally or dishonestly. See Mac OS X 10. 4-65 ECONOMIC ESPIONAGE COMPREHENSION All of the following are examples of economic espionage EXCEPT: a. 4-64 ECONOMIC ESPIONAGE KNOWLEDGE The clandestine collection of trade secrets or proprietary information about a company’s competitors is referred to as __________. Business culture affects ethical behavior in competition. b. bribery and extortion. wiretapping b. price fixing and copyright infringement. d. economic espionage b. b. c. the clandestine collection of trade secrets from foreign countries.23 - . Two kinds of unethical behavior are most common: a. d. Two kinds of unethical behavior are most common: (1) economic espionage and (2) bribery. persuading someone to act in one’s favor. industrial espionage c. Answer: e Page(s): 93-94 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—economic espionage. c. the destruction of a competitor’s products or services through physical damage of property or damage to their reputation. a. misrepresentation c. marketplace espionage d.6. by a gift of money or other inducement. patent infringement Answer: a Page(s): 93-94 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—economic espionage. industrial surveillance e. the clandestine collection of trade secrets or proprietary information about a company’s competitors. e. bribery . Alternative “b” is the definition of a bribe and alternative “c” is the definition of a kickback. e. economic espionage and antitrust infractions. price fixing and economic espionage. an illicit payment made to someone who has facilitated a transaction or appointment. a. aerospace. known only to Smolensky and the supplier. IL. beverage industry (alcoholic and nonalcoholic) Answer: c Page(s): 93-94 LO: 2 AACSB: Ethics QD: Medium Rationale: Economic espionage is most prevalent in high-technology industries. This is an example of a. e. . wiretapping.” Smolensky discovered later that a prospective rival had called to ask the supplier for certain ingredients by their secret codes. marrying someone who works for a competitor in an executive position Answer: d Page(s): 93-94 LO: 2 AACSB: Ethics QD: Medium Rationale: Key term definition—economic espionage. fraud. The company sells kefir. hiring people who ever worked in an executive capacity at a competitor’s firm. c. searching through a competitor’s trash e. entertainment c. especially if they didn’t have a noncompete clause c. 4-67 ECONOMIC ESPIONAGE COMPREHENSION Economic espionage is most likely to occur in which type of industries? a. got a call from his supplier. who had developed his own secret recipe. where technical know-how and trade secrets separate industry leaders from followers. two firms hiring the same musician to write their company jingle b. misrepresentation. saying. based in Skokie. corporate shadowing. making their effectiveness as a promotional tool negligible d. a cultured milk product popular in Smolensky’s native Russia. “dumpster diving” or searching a competitor’s trash. theft. 4-66 ECONOMIC ESPIONAGE COMPREHENSION Economic espionage includes such activities as _________. The rival had picked them out of Lifeway’s refuse. 4-68 ECONOMIC ESPIONAGE APPLICATION Michael Smolensky is CEO of Lifeway Foods. fashion design and textiles b. economic espionage. offering to accept all competitors’ coupons. such as electronics. and pharmaceuticals. high-tech electronics and aerospace d. and violations of written and implicit employment agreements with noncompete clauses. intellectual property (print) e. clandestine trade secrets. Smolensky. Recently.24 - . Giving and receiving bribes and kickbacks are another form of unethical competitive business behavior. b. someone is trying to steal your secrets. “Michael. Inc.. industrial equipment. specialty chemicals. d. employment contract violations Answer: c Page(s): 93-94 LO: 2 AACSB: Ethics QD: Medium Rationale: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company's competitors and includes illegal trespassing. the search of a competitor’s trash. Bloom was notified immediately through a web-based news monitoring service. wiretapping. In this case. the use of kickbacks d. When a West Coast provider of catastrophic pet coverage “preannounced” the addition of a wellness component (Pet Assure’s specialty) in an interview with a tiny community newsweekly six months prior to launching it. Answer: b Page(s): 93-94 LO: 2 AACSB: Ethics QD: Hard Rationale: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors. Espionage activities include illegal trespassing. Whether Pet Assure’s response is ethical or unethical is debatable. e. but also enabled him to get his offering to the market first. recently took advantage of a rival’s naïveté. Jay Bloom relied on __________ to keep him abreast of his competitors’ activities. economic espionage c. Pet Assure found out about its competitor’s activities by reading a news story in a local paper. corporate piracy e. a national pet health-care provider network based in Dover. misrepresentation. N.J. not economic espionage. This not only gave him time to add catastrophic benefits to one of his own wellness products. d. and violations of written and implicit employment agreements with noncompete clauses. competitive surveillance. industrial sleuthing. the search of a competitor’s trash. primary market research Answer: a Page(s): 93-94 LO: 2 AACSB: Ethics QD: Hard Rationale: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors.25 - . fraud. a. theft. legal environmental scanning b. Coke-Pepsi Photo . not primary data collection.. This is a legal form of secondary. which includes the search of a competitor’s trash. 4-69 ECONOMIC ESPIONAGE APPLICATION Jay Bloom’s Pet Assure. What should the Pepsi employee do? a. c. thought they might go to work for Coke one day and didn’t want to spoil their employment chances. 15 b. 67 e. didn’t want to disappoint their children. Answer: b Page(s): 94 LO: 2 AACSB: Ethics QD: Medium . Suppose you are a senior executive at Pepsi-Cola and a Coca-Cola employee offers to sell you the marketing plan and sample for a new Coke product at a modest price. Buy the marketing plan if assured there would be no legal or ethical repercussions. Most said that they a. were afraid the media would find out. 36 c. 4-71 MAKING RESPONSIBLE DECISIONS COMPREHENSION Consider the Coke-Pepsi photo above. Answer: c Page(s): 94 LO: 2 AACSB: Ethics QD: Medium Rationale: The Pepsi employee should immediately report the incident to Coca-Cola who will take the appropriate steps such as contacting the FBI to investigate the situation. d. Immediately contact Coca-Cola to advise them of the plot to sell the marketing plan. 89 Answer: d Page(s): 94 LO: 2 AACSB: Ethics QD: Easy Rationale: When this question was posed in an online survey of marketing and advertising executives. b. would prefer competing ethically so they could sleep at night. 4-72 MAKING RESPONSIBLE DECISIONS COMPREHENSION Consider the Coke-Pepsi photo above. Immediately report the offer to the Better Business Bureau. __________ percent of marketing and advertising executives said they would buy the plan and product sample if there were no repercussions.26 - . Ignore the offer to buy the marketing plan and hope the ethical dilemma would go away. 52 d. An employee of Coca-Cola attempted to share its marketing plan with an employee of Pepsi for a modest price. e. Advise the Coca-Cola employee that it would be ethical to buy the plan if it was offered for free. c. When asked this question in an online survey. Thirty three percent of Pepsi’s marketing and advertising executives say they would decline an offer to buy one of Coke’s marketing plans and samples. e. knew they would get fired. b. d. 67 percent said they would buy the plan and product sample if there were no repercussions. a.4-70 MAKING RESPONSIBLE DECISIONS KNOWLEDGE Consider the Coke-Pepsi photo above. industries are high-tech in nature. b. The employee was arrested for bribery and sentenced to five years house arrest. What was the consequence to the Coca-Cola employee who tried to sell classified information to Pepsi? a.27 - . but had to undergo personal psychiatric counseling and attend a seminar on ethical behavior. e. industries experience little competition. b. c.000 in restitution. The employee was given the choice of quitting or being demoted to a minimum wage job. They would prefer competing ethically so they could sleep at night. Answer: d Page(s): 94 LO: 2 AACSB: Ethics QD: Medium Rationale: The consequence to the Coca-Cola employee who tried to sell Pepsi information was an eight-year prison sentence and a $40. c. e. 4-73 MAKING RESPONSIBLE DECISIONS COMPREHENSION Consider the Coke-Pepsi photo above. They didn’t want to disappoint their children. industries experience intense competition. They knew they would get fired. c. b. d.000 fine. 4-75 BRIBERY KNOWLEDGE Bribery is most likely to occur when a. e. They thought they might go to work for Coke one day and didn’t want to spoil their employment chances. . the country has reached a high level of economic development. They were afraid the media would find out. d. The employee was fired and no other legal action was taken since the practice is unfortunately too commonplace. d. Answer: a Page(s): 94 LO: 2 AACSB: Ethics QD: Medium Rationale: Most of the 33 percent of respondents in the online survey say they would decline the offer because they would prefer competing ethically so they could sleep at night. industries operate in an oligarchic competitive environment. 4-74 MAKING RESPONSIBLE DECISIONS COMPREHENSION Why did 33 percent of Pepsi’s marketing and advertising executives say they would decline an offer to buy one of Coke’s marketing plans and samples? a. The other accomplices were sentenced to five years in prison. The employee was permitted to keep her original job (minus any bonuses). Answer: e Page(s): 94 LO: 2 AACSB: Ethics QD: Easy Rationale: Bribery is most evident in industries experiencing intense competition and in countries in earlier stages of economic development. Rationale: Most of the 33 percent of respondents in the online survey say they would decline the offer because they would prefer competing ethically so they could sleep at night. The employee was sentenced to eight years in prison and ordered to pay $40. Economic espionage (alternative “c”) is most prevalent in high-technology industries. 4-79 CORPORATE CULTURE KNOWLEDGE . establishes procedures for ethical international business based on the ISO 7000 Code of Conduct. Consumer Bill of Rights Act and Economic Espionage Act.4-76 GOING ONLINE COMPREHENSION Transparency International is an organization that a. a formalized method for controlling the marketing environment. a set of values. monitors and ranks nations worldwide according to their perceived use of bribery. b. e. b. state. Two significant laws. d. Transparency International Act and Dumpster Diving Act. d.28 - . e. 4-78 CORPORATE CULTURE KNOWLEDGE Corporate culture refers to a. Answer: d Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—corporate culture. c. creates an acceptable international code of ethics. monitors how developed nations deal with developing nations. Economic Espionage Act and Foreign Corrupt Practices Act. and attitudes that is learned and shared among the members of an organization. ideas. the formal statement of ethical principles and rules of conduct adopted by an organization. Fair Trade Practices Act and Bribery Protection Act. makes sure federal. b. the fundamental. Answer: a Page(s): 94-95 LO: 2 AACSB: Ethics QD: Medium Rationale: The prevalence of economic espionage and bribery in international marketing has prompted laws to curb these practices. Answer: c Page(s): 95 LO: 2 AACSB: Ethics QD: Medium Rationale: Transparency International polls employees and political analysts and ranks countries on the basis of their perceived level of bribery to win or retain business. c. the set of accepted standards and practices within a given industry. address these practices in the United States. passionate. d. the Economic Espionage Act (1996) and the Foreign Corrupt Practices Act (1977). Global Rights Protection Act and Foreign Corrupt Practices Act. e. 4-77 ETHICS OF COMPETITION COMPREHENSION Two laws specifically intended to curb economic espionage and bribery in international marketing are a. c. and enduring principles of an organization that guide its conduct over time. and local governments in the United States abide by the Consumer Bill of Rights. d. d. manner of work. ideas. the dress codes. core values c. modus operandi. and sayings of its employees. e. such as treating everyone equally and providing a relaxed atmosphere at work. corporate culture. b. Lava’s advertising. The set of values. mission or vision. a. ideas. This best describes the Internet company’s a. the involvement of shareholders with an organization’s day-to-day marketing decisions. If you were to walk into the office. “We ignore the rules. Answer: e Page(s): 95 LO: 2 AACSB: Ethics QD: Hard Rationale: A corporate culture is a set of values. which also contains dartboards. They work in one large room. 4-82 CODE OF ETHICS KNOWLEDGE . expectations for ethical behavior present in formal codes of ethics. The culture of a company demonstrates itself in the dress. a mission statement b. a code of ethics and conduct e. contracts and agreements between members of the same industry. 4-80 CORPORATE CULTURE COMPREHENSION Corporate culture manifests itself in many different ways: the ethical behavior of top management. and we let no obstacle stand in your company’s way—no matter how bold or impossible your idea may seem. socialization process. and manner of work (team efforts) of employees. and attitudes that is learned and shared among the members of an organization.com is an Internet company that helps other organizations implement marketing strategies that they hope will let them dominate their industry. c. a pool table.29 - . corporate culture Answer: e Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Text term definition—corporate culture. sayings.” The company is composed of eighteen bright young Internet experts. b. Culture is also apparent in the expectations for ethical behavior present in formal codes of ethics and the ethical actions of top management and co-workers. c. and a meditation center. e. ideas. state and local laws regarding ethical business behavior. the socially responsible behaviors of its customers. and attitudes that is learned and shared among the members of an organization is referred to as __________. states. 4-81 CORPORATE CULTURE APPLICATION Lava. business definition. the socialization process d. Answer: c Page(s): 95 LO: 2 AACSB: Ethics QD: Medium Rationale: Corporate culture is a set of values. and attitudes that is learned and shared among the members of an organization. and a. it would be next to impossible to tell the company owners from its lowest ranking employee. A code of ethics is a formal statement of ethical principles and a. b. . Answer: c Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—code of ethics. Answer: b Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—code of ethics. Answer: e Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—code of ethics. Answer: b Page(s): 95 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—code of ethics. b. e. d. 4-85 CODE OF ETHICS KNOWLEDGE A code of ethics refers to a. 4-84 CODE OF ETHICS KNOWLEDGE A formal statement of ethical principles and rules of conduct is referred to as a(n) a.30 - . c. e. code of conduct. b. core value pronouncement. e. cultural values d. legal restrictions. 4-83 CODE OF ETHICS KNOWLEDGE A code of ethics is a formal statement of rules of conduct and a. moral laws. legal restrictions. b. c. c. rules of conduct. core values. an informal guide of ethical principles and moral conduct. code of ethics. the written document stating the beliefs and values of each employee in a firm. core values. moral laws. c. moral code. a formal statement of moral and ethical business attitudes. ethical principles. a formal statement of ethical principles and rules of conduct. d. d. e. a firm’s itemized list of business activities that are and are not consistent with the company’s mission statement. ethical mission. cultural values. 31 - . A second reason rests in the perceived behavior of top management and co-workers. and work manner of employees are part of a corporate culture and not a code of ethics. Most companies do not have a formal code of ethics. and work manner of employees. lack of religious beliefs d. Better Business Bureau records. e. c. customer and supplier relationships. b. conflicts of interest.4-86 CODE OF ETHICS COMPREHENSION All of the following are addressed by an organization’s code of ethics EXCEPT: a. the dress. government regulation b. accurate recordkeeping. and three trade references. fear of disciplinary action e. Answer: a Page(s): 95 LO: 2 AACSB: Ethics QD: Medium Rationale: The dress. d. Answer: c Page(s): 95 LO: 2 AACSB: Ethics QD: Medium Rationale: The lack of specificity is one of the major reasons for the violation of ethics codes. sayings. which includes maintaining professionalism and guaranteeing the quality of its work. family influence c. Most companies overlook infractions if the action is unethical but legal. . insurance coverages. Employees must often judge whether a specific behavior is really unethical. d. There are very few violations in firms with written codes of ethics. lack of specificity Answer: e Page(s): 95 LO: 2 AACSB: Ethics QD: Medium Rationale: The lack of specificity is one of the major reasons for the violation of ethics codes. 4-89 CODE OF ETHICS APPLICATION HomeWorRx Referral Network profiles home service companies for homeowners looking for a contractor or handyman. 4-87 CODE OF ETHICS COMPREHENSION Which of the following statements describes one of the major reasons codes of ethics are violated? a. To ensure that companies they recommend are reliable. contributions to political parties and government officials. b. There is often a discrepancy between the written code of ethics of a firm and the personal and moral beliefs of individual employees. e. HomeWorRx checks the business licenses. 4-88 CODE OF ETHICS COMPREHENSION Which of the following is a major reason for the violation of ethics codes? a. c. sayings. Many codes of ethics lack specificity. The recommended home service company also has to agree to a(n) __________. top management’s behavior e. code of ethics e. industry endorsement d. (2) foster trust in the marketing system. support governmental agencies in their quest to identify and prosecute those who break the laws of ethical marketing e. and (3) __________. champion new legislation that protects ethical business firms and punish those who abuse consumer trust d. to work at Tyson plants. the absence of whistle-blowers d. a.S. rules of conduct include maintaining professionalism and guaranteeing the quality of work. 4-92 AMA STATEMENT OF ETHICS KNOWLEDGE . beef. and pork processors. six executives of Tyson Foods. See Figure 4-3 in the textbook. one of the major reasons why some company employees engage in ethical behavior. a.32 - . 4-91 AMA STATEMENT OF ETHICS KNOWLEDGE The American Marketing Association Statement of Ethics is centered on three general norms: marketers must: (1) do no harm. In this case. the absence of a written core values statement c. Based on this information. were arrested for the illegal smuggling of undocumented foreign workers into the U. contribute to society’s well-being through charitable contributions and cause-related marketing efforts Answer: b Page(s): 95-97 LO: 2 AACSB: Ethics QD: Easy Rationale: American Marketing Association Statement of Ethics—General Norms. statement of values and beliefs c. the absence of a stakeholder code of ethics Answer: d Page(s): 95-96 LO: 2 AACSB: Ethics QD: Hard Rationale: Employees often gauge how serious a company is about ethical behavior by looking at the actions of upper management. initiate fair and honest dialogues in developing markets b. 4-90 CODE OF ETHICS APPLICATION In 2001. statement of cultural values b. a mission statement that is too broad b. communicate. one of the world’s largest poultry. a. one could conclude that Tyson’s violations are the result of __________. and practice the fundamental ethical values that will improve consumer confidence in the integrity of the marketing exchange system c. contract due diligence Answer: d Page(s): 95 LO: 2 AACSB: Ethics QD: Hard Rationale: A code of ethics is a formal statement of ethical principles and rules of conduct. embrace. 33 - . employees. fairness c. The American Marketing Association Statement of Ethics identifies six key aspirational ethical values. diversity b. These include: _________. honesty d. and citizenship. fairness. responsibility Answer: e Page(s): 95-97 LO: 2 AACSB: Ethics QD: Hard Rationale: “We will recognize our special commitments to economically vulnerable segments of the market such as children. respect. openness. the elderly. and co-workers. fairness d. honesty b. 4-94 AMA STATEMENT OF ETHICS APPLICATION Even though his business is very small. respect e. openness Answer: d Page(s): 95-97 LO: 2 AACSB: Ethics QD: Hard Rationale: “We will appropriately acknowledge the contributions of others. responsibility. See Figure 4-3 in the textbook. See Figure 4- 3 in the textbook.” This action exhibits which key AMA ethical value? a. See Figure 4-3 in the textbook. the owner of a LAN center wants to follow the American Marketing Association Statement of Ethics. such as consultants.” American Marketing Association Statement of Ethics—Ethical Values: Responsibility (bullet #4). charity Answer: c Page(s): 95-97 LO: 2 AACSB: Ethics QD: Easy Rationale: American Marketing Association Statement of Ethics—Ethical Values. perseverance e. to our marketing endeavors.” At the end of the meal.00 gift certificate plus a T-shirt that reads.” American Marketing Association Statement of Ethics—Ethical Values: Respect (bullet #4). This action exhibits which key AMA ethical value? a. “Great Minds Think Like Me. and others who may be substantially disadvantaged. the employee (from president to members of the cleaning staff) who had the best idea for improving the center is honored and given a $25. integrity c. respect d. 4-95 BUSINESS ETHICS STUDY COMPREHENSION . Every month there is a “company cookout. 4-93 AMA STATEMENT OF ETHICS APPLICATION A health club wishes to follow the American Marketing Association Statement of Ethics and decides to offer a modified workout class at a very low price for senior citizens who otherwise might not be able to afford their services. openness e. responsibility c. a. honesty b. e. 40% e. 7% b. 25% d. d. c. c. Answer: e Page(s): 96 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—whistle-blowers. 4-97 WHISTLE-BLOWERS KNOWLEDGE Whistle-blowers refer to a. whistle-blower.34 - . ombudsman. c. ombudsman. whistle-blowers. cronies. e. e. employees who blackmail or extort money from their employers. Answer: c Page(s): 96 LO: 2 AACSB: Ethics QD: Medium . employees who are coerced by their employers to participate in illegal or unethical activities. employees who are simultaneously employed by competing firms and who trade company secrets. 62% Answer: d Page(s): 96 LO: 2 AACSB: Ethics QD: Medium Rationale: A study of business executives reported that 40% had been implicitly or explicitly rewarded for engaging in ethically troubling behavior. a. crony. b. corporate snitches. Answer: a Page(s): 96 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—whistle-blowers. 12% c. b. corporate snitch. d. customers who report unethical or illegal actions of the firms that market the offerings they bought. scabs. 4-96 WHISTLE-BLOWERS KNOWLEDGE Employees who report unethical or illegal actions of their employers are referred to as a. d. employees who report unethical or illegal actions of their employers. A recent study of business executives reported that __________ had been implicitly or explicitly rewarded for engaging in ethically troubling behavior. scab. 4-98 WHISTLE-BLOWERS COMPREHENSION An employee who reports illegal accounting procedures is an example of a(n) a. b. 35 - . the falsification of a safety document. e. These two people are . c. A salesperson for a hardware wholesaler tries to sell insurance to his regular customers in order to earn some extra income. After reporting this practice. An employee spends the afternoon studying at work for her test rather than counting inventory as she was supposed to be doing. a biotech company. An employee tells the Consumer Product Safety Commission his company falsified safety reports on a child’s car seat. he or she would have been a whistle-blower. Mattel employees were sorry that 150 of the 10 million Power Wheels cars and trucks the company sold had caught on fire. claiming they did not go along with the scheme because they objected to it as being unethical. Answer: e Page(s): 96 LO: 2 AACSB: Ethics QD: Hard Rationale: Whistle-blowers are employees who report unethical or illegal actions of their employers. a treatment for psoriasis. c. b. 4-101 WHISTLE-BLOWERS APPLICATION Two former sales representatives of Amgen. b. alleged the company strongly encouraged its sales force to search confidential medical records in physician’s offices in an attempt to find names of patients that would benefit from the use of Amgen’s drug Enbrel. d. one of the reps was fired and the other resigned after receiving a poor performance review. A Mattel employee reported to the Consumer Product Safety Commission that Mattel knowingly manufactured an electrical system for Power Wheels that would catch on fire after long use. A former Mattel employee owned one of the Mattel Power Wheel cars that caught on fire and slightly burned its rider. e. If an employee of Mattel had reported to the CPSC that Mattel was knowingly manufacturing an electrical system for Power Wheels that would catch on fire after long use. Soon after. Answer: b Page(s): 96 LO: 2 AACSB: Ethics QD: Hard Rationale: Whistle-blowers are employees who report unethical or illegal actions of their employers—in this case. Mattel research engineers proved that the spate of fires in the company’s Power Wheels cars and trucks was the result of consumers’ tinkering with the engine. An employee is unhappy because his company is downsizing. 4-100 WHISTLE-BLOWERS APPLICATION Which of the following statements best describes the activities of a whistle-blower? a. these two people sued Amgen. d. An employee loses his/her retirement fund due to a downturn in the stock market. The Consumer Product Safety Commission investigated the fires and ordered a recall to repair all of the 10 million units that had been sold. 4-99 WHISTLE-BLOWERS APPLICATION Which of the following statements best describes a whistle-blower? a. Rationale: Whistle-blowers are employees who report unethical or illegal actions of their employers. social responsibility and personal ethics. Moral philosophy is learned through the process of socialization with family. societal culture and norms. scabs. Moral philosophy is influenced by the societal culture he/she is in. moral idealism and utilitarianism. . ethical choices are based on a. ombudsmen. b. existentialism and pragmatism. b. chance and opportunity. Moral philosophy is influenced by the corporate culture he/she is in. contrarians. c. b. pragmatism and idealism. c. the personal moral philosophy of the decision maker. cronies. a. d. Moral philosophy is learned through the process of socialization with friends. 4-103 PERSONAL MORAL PHILOSOPHY COMPREHENSION All of the following statements about a person’s moral philosophy are true EXCEPT: a. Two moral philosophies are moral idealism and utilitarianism. It is also influenced by the societal. 4-104 PERSONAL MORAL PHILOSOPHY COMPREHENSION Two prominent personal moral philosophies that have direct bearing on marketing practice are a. Moral philosophy cannot be learned through formal education. Answer: c Page(s): 96-97 LO: 2 AACSB: Ethics QD: Medium Rationale: Two prominent personal moral philosophies—moral idealism and utilitarianism— have direct bearing on marketing practice. laws enacted by Congress and regulations by federal and state governments. Answer: a Page(s): 96-97 LO: 2 AACSB: Ethics QD: Medium Rationale: Ultimately. moral behaviorism and secular ethics. d. Answer: a Page(s): 96-97 LO: 2 AACSB: Ethics QD: Medium Rationale: Moral philosophy is learned through the process of socialization with friends and family and by formal education. business. Answer: c Page(s): 96 LO: 2 AACSB: Ethics QD: Hard Rationale: Whistle-blowers are employees who report unethical or illegal actions of their employers.36 - . ethical choices are based on the personal moral philosophy of the decision maker. c. e. e. c. whistle-blowers. d. e. d. b. 4-102 PERSONAL MORAL PHILOSOPHY COMPREHENSION Ultimately. e. business culture and industry practices. and corporate culture in which a person finds himself/herself. a.4-105 MORAL IDEALISM KNOWLEDGE A personal moral philosophy that considers individual rights or duties as universal. considers individual rights or duties as universal. e. is referred to as __________. regardless of the outcome. hedonism e. state. a democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal. religion Answer: b Page(s): 97-98 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—moral idealism. regardless of the outcome. all human beings are basically good. believes that goodwill always triumph over evil.37 - .” Answer: d Page(s): 97-98 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—moral idealism. and local levels. moral idealism c.” which is “One should treat others as one would like others to treat oneself. social responsibility b. Constitution’s Bill of Rights. b. social responsibility . a personal moral philosophy that considers individual rights or duties as universal. d. a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior. c. regardless of the outcome.” c. Answer: e Page(s): 97-98 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—moral idealism. a formal statement of ethical principles and rules of conduct.S. 4-106 MORAL IDEALISM KNOWLEDGE Moral idealism refers to a personal moral philosophy that a. e. follows the “Golden Rule. 4-107 MORAL IDEALISM KNOWLEDGE Moral idealism refers to a. believes in “the greatest good for the greatest number. d. utilitarianism d. a. 4-108 MORAL IDEALISM COMPREHENSION A moral philosophy that exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups is referred to as __________. a societal moral philosophy based on the Golden Rule of the Judeo-Christian ethic embodied in the U. b. socialism. This is an example of a. 3M developed a new product that didn’t contain this chemical and which cost less to produce. b. 4-110 MORAL IDEALISM COMPREHENSION The 3M company stopped production of a chemical it had made for over 40 years when tests showed the chemical could be harmful in large doses. Answer: d Page(s): 97-98 LO: 2 AACSB: Ethics QD: Medium Rationale: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal (in this case consumer safety). Answer: c Page(s): 97-98 LO: 2 AACSB: Ethics QD: Medium Rationale: 3M’s popular Scotchgard fabric protector had no known harmful health or environmental effect. made the need for the product obsolete. b. New advances in fabric manufacturing. even though the products in which it was used had no known harmful health or environmental effect. The product accidentally violated patent rights of a competitor. . This philosophy exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups. e. existentialism. utilitarianism d. the Golden Rule Answer: b Page(s): 97-98 LO: 2 AACSB: Ethics QD: Medium Rationale: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal. hedonism e. New governmental legislation banned the production of one of the product’s component chemicals. moral idealism. d. moral idealism c. such as dirt repellant fibers. c. resulting in a significantly higher profit margin. However. This is an example of moral idealism. resulting in a $200 million loss in annual sales of the product. Believing that the substance could be possibly harmful in large doses. so the product was voluntarily halted. 3M voluntarily stopped its production. individualism. c. d. utilitarianism. Traces of the potentially harmful chemical were found in humans. e. regardless of the outcome. the company discovered that a chemical used in the product appeared in miniscule amounts in the tissues of humans and animals. regardless of the outcome.38 - . b. 4-109 MORAL IDEALISM COMPREHENSION Why did 3M stop production of Scotchgard fabric protector? a. utilitarianism c. This action is an example of ________. instead of taking the less expensive route of remaining quiet about the problem. However. But. a. green marketing d. 3M Scotchgard Photo 4-111 MORAL IDEALISM COMPREHENSION Consider the 3M Scotchgard photo above. 3M voluntarily stopped its production. the Irvine. stringent laws e. utilitarianism c. Western Digital chose to offer replacement disk drives for all the disk drives that had the faulty chip. a.000 of its hard drives because of a faulty internal chip. moral idealism b. Believing that the substance could be possibly harmful in large doses.39 - . resulting in a $200 million loss in annual sales of the product. This is an example of moral idealism. The personal moral philosophy 3M used when it voluntarily stopped the production of its popular 3M Scotchgard was because of a minute chemical used in its manufacture was found in the tissues of both animals and humans was an example of ___________. The chip will not affect the disk drive motor until after six to twelve months of use. moral idealism . recalled about 400. This delay in the problem’s appearance means that many consumers would not think to blame the disk drive manufacturer. 4-112 MORAL IDEALISM APPLICATION Western Digital. cause marketing Answer: a Page(s): 97-98 LO: 2 AACSB: Ethics QD: Medium Rationale: 3M’s popular Scotchgard fabric protector had no known harmful health or environmental effect. California-based maker of disk drives. the company discovered that a chemical used in the product appeared in miniscule amounts in the tissues of humans and animals. hedonism b. 4-115 UTILITARIANISM COMPREHENSION According to the personal moral philosophy of __________. socialism Answer: a Page(s): 98 LO: 2 AACSB: Ethics QD: Easy Rationale: Key term definition—utilitarianism. 4-114 UTILITARIANISM KNOWLEDGE A personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior is referred to as __________. If not. b. a. a. . 4-113 MORAL IDEALISM APPLICATION The owners of Ben & Jerry’s Homemade. If the benefits exceed the costs. moral idealism. socialism Answer: b Page(s): 98 LO: 2 AACSB: Ethics QD: Medium Rationale: Utilitarianism assesses the costs and benefits of the consequences of a behavior. existentialism d.40 - . existentialism d. then the behavior is unethical. the behavior is ethical. a product that works as promised). if the benefits exceed the costs. socialism Answer: c Page(s): 97-98 LO: 2 AACSB: Ethics QD: Hard Rationale: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal (in this case. hedonism c. d. existentialism e. hedonism b. adhere to the belief that the company should not harm the environment in any way but actually improve it. then the behavior is ethical. e. altruism. Answer: d Page(s): 97-98 LO: 2 AACSB: Ethics QD: Hard Rationale: The philosophy of moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal. moral idealism e. Inc. moral idealism e. socialism. regardless of the outcome. regardless of the outcome. d. utilitarianism c. c. utilitarianism b. utilitarianism. a. existentialism. This is an example of _________. This philosophy underlies the economic tenets of capitalism and is embraced by many business executives and students. Cosco rushed the chair into production to beat its competition before it was properly safety-tested. Cosco’s actions exemplify which of the following philosophies? a. and when reclined. Answer: e Page(s): 98 LO: 2 AACSB: Ethics QD: Medium Rationale: Utilitarianism is a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior. communism d. moral idealism. Answer: b Page(s): 98 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—social responsibility. utilitarianism Answer: e Page(s): 98 LO: 2 AACSB: Ethics QD: Hard Rationale: Utilitarianism is a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior. utilitarianism. . c. however. d.4-116 UTILITARIANISM COMPREHENSION The personal moral philosophy of utilitarianism underlies the economic tenets of a. a project team for Cosco. existentialism. socialism e. Cosco saw the low-priced. b. 4-118 SOCIAL RESPONSIBILITY KNOWLEDGE The idea that organizations are part of a larger society and are accountable to that society for their actions is referred to as a. developed a high chair that could be used as an infant feeding seat. profit responsibility. Most consumers. a play chair. an infant bed. socialism. than costs to recall and redesign them. Its design could be made and sold for $49. the world’s largest children’s products company. existentialism b. moral idealism. communism. e. Cosco denied culpability. a booster chair. a youth chair. d. The firm said that only a few consumers had had any trouble with the chair—and probably didn’t assemble them correctly. were very satisfied with the chair and had no problems with it. moral idealism c. multiple-use chair as offering more benefits to consumers as a group. 4-117 UTILITARIANISM APPLICATION Recently. capitalism.41 - . c. b. stakeholder responsibility. When some children were injured as a result of this chair. e. social responsibility. Answer: b Page(s): 98 LO: 3 AACSB: Ethics QD: Medium Rationale: The three concepts of social responsibility are profit responsibility. utilitarianism. c. 4-120 SOCIAL RESPONSIBILITY COMPREHENSION Profit responsibility. e. The duty of an organization is most easily understood at the societal responsibility level. and distributors. a democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal. state. it is an innate outgrowth of a person’s moral and ethical belief system. Constitution’s Bill of Rights. a societal moral philosophy based on the Golden Rule of the Judeo-Christian ethic found in the U. Social responsibility cannot be taught. d. and local levels. stakeholder responsibility. The three concepts of social responsibility are economic responsibility. (2) stakeholder responsibility. b. and societal responsibility. c. suppliers. Social responsibility means that organizations are part . b. moral idealism. societal responsibility.4-119 SOCIAL RESPONSIBILITY KNOWLEDGE Social responsibility refers to a. Alternative “c” is the definition of stakeholder responsibility. and (3) societal responsibility. b. Organizations are part of a larger society and are accountable to that society for their actions. Answer: d Page(s): 98 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—social responsibility. the view that organizations are part of a larger society and are accountable to that society for their actions. and external social responsibility. and stakeholder responsibility are three concepts of a.42 - . c. regardless of the outcome. The simplest form of social responsibility is profit responsibility: maximize profits for the company owners or stockholders.S. employees. d. social responsibility. Answer: c Page(s): 98 LO: 3 AACSB: Ethics QD: Medium Rationale: Figure 4-4 in the textbook shows three concepts of social responsibility: (1) profit responsibility. 4-121 SOCIAL RESPONSIBILITY COMPREHENSION Which of the following statements about social responsibility is most accurate? a. e. internal social responsibility. green marketing. e. a personal moral philosophy that considers individual rights or duties as universal. d. a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior. cause marketing. Societal responsibility focuses on the obligations an organization has to its customers. Exxon acted. value consciousness. social responsibility. Answer: a Page(s): 98 LO: 3 AACSB: Ethics QD: Hard Rationale: Social responsibility means that marketing firms. c. 4-123 SOCIAL RESPONSIBILITY APPLICATION The residents of Alaska and people throughout the world were outraged when the Exxon Valdez crashed into a shoal and dumped millions of gallons of crude oil into the pristine waters of Prince William Sound. Exxon did not demonstrate a. b.43 - . In short. moral idealism. cause marketing. of a larger society and are accountable to that society for their actions. profit responsibility. 4-122 SOCIAL RESPONSIBILITY APPLICATION In 2007. Answer: e Page(s): 98 LO: 3 AACSB: Ethics QD: Hard Rationale: Social responsibility is the view that organizations are part of a larger society and are accountable to that society for their actions. People were upset with Exxon’s response to the disaster. This is an example of a. Gap Inc. d. with only the organization’s interests in mind. at least initially. the Gap created a large team whose purpose is to travel worldwide to ensure compliance with its Code of Vendor Conduct. See Figure 4-4 in the textbook. The company was slow to admit its mistake and even slower to implement cleanup activities. In response to these events. exist as part of a larger society and are accountable to that society for their actions. b. . social responsibility. Several closings occurred because of the use of child labor. cause marketing. profit responsibility. Exxon was criticized for acting in a manner that would benefit the organization but not society. e. green marketing. as well as other organizations. utilitarianism. c. ended its relationship with 23 foreign production facilities due to code violations. d. e. . and the general public.44 - . Stakeholder responsibility includes suppliers and distributors. See Figure 4-4 in the textbook. According to Figure 4-4 above. Stakeholder responsibility includes suppliers and distributors. societal b. customer e. Societal responsibility includes public interest groups. each of which relates to particular constituencies. ecological environment. seller Answer: a Page(s): 98-99 LO: 3 AACSB: Ethics QD: Medium Rationale: There are three concepts of social responsibility. Figure 4-4 4-124 SOCIAL RESPONSIBILITY COMPREHENSION There are three concepts of social responsibility. employees. and the general public. seller Answer: b Page(s): 98-99 LO: 3 AACSB: Ethics QD: Medium Rationale: There are three concepts of social responsibility. each of which relates to particular constituencies. stakeholder c. “B” represents __________ responsibility. and consumers. societal b. ecological environment. a. profit d. a. “A” represents __________ responsibility. 4-125 SOCIAL RESPONSIBILITY COMPREHENSION There are three concepts of social responsibility. Societal responsibility includes public interest groups. each relating to particular constituencies. customer e. profit d. There is often conflict in satisfying all constituencies at the same time. each relating to particular constituencies. stakeholder c. employees. Profit responsibility includes owners and stockholders. According to Figure 4-4 above. See Figure 4-4 in the textbook. “C” represents __________ responsibility. e.45 - . Profit responsibility includes owners and stockholders. 4-126 SOCIAL RESPONSIBILITY COMPREHENSION There are three concepts of social responsibility. stakeholder c. and consumers. the view that an organization has an obligation to those who can affect the achievement of its objectives. stakeholder responsibility Answer: d Page(s): 98-99 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—profit responsibility. seller Answer: c Page(s): 98-99 LO: 3 AACSB: Ethics QD: Medium Rationale: There are three concepts of social responsibility. According to Figure 4-4 above. profit responsibility e. . 4-128 PROFIT RESPONSIBILITY KNOWLEDGE The duty of a firm to maximize profits for its owners or stockholders is referred to as _________. each relating to particular constituencies. profit d. the duty of a firm to maximize profits for its owners or stockholders. customer e. societal b. d. each of which relates to particular constituencies. and consumers. employees. b. a. There is often conflict in satisfying all constituencies at the same time. 4-127 PROFIT RESPONSIBILITY KNOWLEDGE Profit responsibility refers to a. Stakeholder responsibility includes suppliers and distributors. Profit responsibility includes owners and stockholders. benefit marketing d. Answer: e Page(s): 98-99 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—profit responsibility. the obligation of a firm to price its products or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit. and the general public. a. There is often conflict in satisfying all constituencies at the same time. Societal responsibility includes public interest groups. ecological environment. value consciousness c. See Figure 4-4 in the textbook. the idea that organizations are part of a larger society and are accountable to that society for their actions. c. the concept that no expansion or additional research and development will occur until a company is making a profit. social responsibility b. 4-131 STAKEHOLDER RESPONSIBILITY KNOWLEDGE Stakeholder responsibility refers to a. social responsibility. suppliers. Answer: a Page(s): 99-100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—stakeholder responsibility. and stockholders. d. b. b. consumers. which is a drug to treat persons afflicted with AIDS. the idea that organizations are part of a larger society and are accountable to that society for their actions. Companies practicing societal responsibility primarily have obligations to the preservation of the ecological environment and to the general public. the concept that no expansion or additional research and development will occur until a company is making a profit. Answer: c Page(s): 98-99 LO: 3 AACSB: Ethics QD: Medium Rationale: Companies practicing profit responsibility serve owners and stockholders. c. cause marketing strategy. and stockholders. and employees. 4-130 PROFIT RESPONSIBILITY APPLICATION Burroughs Wellcome is the developer and maker of AZT. the duty of a firm to maximize profits for its owners or stockholders. owners and stockholders.4-129 PROFIT RESPONSIBILITY COMPREHENSION The groups primarily served by a firm exhibiting profit responsibility include a. d. b. distributors. and the environment. Important considerations here are (1) how companies can recover costs of their research and development if they give away their discoveries and/or (2) how they can compensate their stakeholders if they sell their products at a loss. Answer: e Page(s): 98-99 LO: 3 AACSB: Ethics QD: Hard Rationale: Profit responsibility holds that companies have a simple duty: to maximize profits for their owners or stockholders. Companies practicing stakeholder responsibility primarily serve consumers. public interest groups. the obligation of a firm to price its products or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit. utopian responsibility. and supplier/distributors. e. c.46 - . This is an example of the manufacturer adhering to its a. e. . the general public. profit responsibility. government. the view that an organization has an obligation to those who can affect the achievement of its objectives. e. moral idealism. c. owners. d. employees. the general public. owners.500 annually—more than many AIDS patients can afford. See Figure 4-4 in the textbook. The firm charges each patient $6. A. the supplier of Perrier bottled water. as minimal as it might be. 4-133 STAKEHOLDER RESPONSIBILITY COMPREHENSION The groups primarily served by a firm exhibiting stakeholder responsibility include a. the general public.. e. c. benefit marketing d. Companies practicing societal responsibility primarily have obligations to the preservation of the ecological environment and to the general public. exercised __________ when it recalled 160 million bottles of water in 120 countries after traces of a toxic chemical was found in 13 bottles.” a. stakeholder responsibility Answer: e Page(s): 99-100 LO: 3 AACSB: Ethics QD: Hard Rationale: Stakeholder focuses on the obligations an organization has to those who can affect achievement of its objectives. utilitarianism c. and employees. and stockholders. See Figure 4-4 in the textbook. Even though the chemical was not harmful to humans. public interest groups. b. The recall cost the company $35 million. Source Perrier was protecting its customers. the general public. moral idealism b. and the environment. profit responsibility e. value consciousness c.4-132 STAKEHOLDER RESPONSIBILITY KNOWLEDGE The view that an organization has an obligation to those who can affect the achievement of its objectives is referred to as _________. a. the president of the company believed it was his duty to remove “the least doubt. 4-135 STAKEHOLDER RESPONSIBILITY APPLICATION . owners. d. and stockholders. distributors. stakeholder responsibility e. social responsibility b. owners. government. Companies practicing stakeholder responsibility primarily serve consumers. 4-134 STAKEHOLDER RESPONSIBILITY APPLICATION Source Perrier S. and supplier/distributors. owners and stockholders. employees. to weigh on the image of the quality and purity of our product. suppliers.47 - . consumers. and the profit from $40 million in lost sales. profit responsibility Answer: d Page(s): 99-100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—stakeholder responsibility. Answer: b Page(s): 99-100 LO: 3 AACSB: Ethics QD: Medium Rationale: Companies practicing profit responsibility serve owners and stockholders. cause marketing d. e. and distributors. utilitarianism d. the duty of a firm to maximize profits for its owners or stockholders. After the recall. 4-137 SOCIETAL RESPONSIBILITY KNOWLEDGE The obligation organizations have to (1) the preservation of ecological environment and (2) the general public is referred to as _________. the idea that organizations are part of a larger society and are accountable to that society for their actions. 4-136 SOCIETAL RESPONSIBILITY KNOWLEDGE Societal responsibility refers to a. stakeholder responsibility c. which affected Toyota employees. benefit marketing d. profit responsibility Answer: d Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—societal responsibility. d. moral idealism b. suppliers. b. which can lead to sudden acceleration problems. societal responsibility e. c. Toyota Motor Corporation executives were widely criticized for their failure in practicing __________ when selected Toyota brands had been linked to sticky gas pedals. a. 4-138 SOCIETAL RESPONSIBILITY APPLICATION . social responsibility b. the obligation of a firm to price its products or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit. stakeholder responsibility c. Toyota was criticized for not responding quickly to stakeholder (particularly customer) concerns. a. the view that an organization has an obligation to those who can affect the achievement of its objectives. shareholders.48 - . Toyota sales fell. the obligation that organizations have to (1) the preservation of ecological environment and (2) the general public. profit responsibility Answer: b Page(s): 99-100 LO: 3 AACSB: Ethics QD: Hard Rationale: Stakeholder focuses on the obligations an organization has to those who can affect achievement of its objectives. cause marketing e. The company recalled over 9 million cars worldwide under pressure from the National Highway Traffic Safety Administration and thousands of consumer complaints. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—societal responsibility. Most paint is neither biodegradable nor friendly to the environment because it is made with petroleum solvents. A builder who decided to build a subdivision with 500 homes and paint each with an environmentally friendly, soy-based paint (even though it costs more) would be practicing a. profit responsibility. b. cause marketing. c. stakeholder responsibility. d. mass marketing. e. societal responsibility. Answer: e Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Societal responsibility is the view that organizations have obligations to the general public and to the preservation of the ecological environment. Many more people besides those who live in the subdivision will benefit from the use of environmentally friendly paint. 4-139 SOCIETAL RESPONSIBILITY APPLICATION The maker of Wrigley chewing gum funded a $10 million ad campaign aimed at getting African Americans to use doctors for regular health care maintenance instead of only when they are sick. This is an example of a. profit responsibility. b. cause marketing. c. stakeholder responsibility. d. societal responsibility. e. mass marketing. Answer: d Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Societal responsibility is the view that organizations have obligations to the general public and to the preservation of the ecological environment. Wrigley is taking responsibility for the general public by trying to help people who are not necessarily its stakeholders. 4-140 TRIPLE-BOTTOM LINE KNOWLEDGE The recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth is referred to as a. social responsibility. b. the triple-bottom line. c. the marketing concept. d. sustainability. e. social entrepreneurship. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—triple-bottom line. 4-141 TRIPLE-BOTTOM LINE KNOWLEDGE Triple-bottom line refers to a. the recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth. - 49 - b. the obligations an organization has to those who can affect achievement of its sales, profit, and market share objectives simultaneously. c. the recognition of the need for organizations to be responsible simultaneously to shareholders, employees, and customers. d. the obligations an organization has to practice profit, stakeholder, and societal responsibility simultaneously. e. three different financial statements prepared in three different formats: one for governmental regulators, one for shareholders, and one for internal use. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—triple-bottom line. 4-142 TRIPLE-BOTTOM LINE KNOWLEDGE All of the following are the result of an interest in the triple-bottom line EXCEPT: a. sustainable development. b. cause marketing. c. ISO 9000. d. green marketing. e. social audits. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Green marketing, cause marketing, social audits, and sustainable development reflects the growing interest in the concept of the triple-bottom line, which is the recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth. Alternative “c” (ISO 9000) consists of standards for the registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization (ISO). 4-143 GREEN MARKETING KNOWLEDGE Marketing efforts to produce, promote, and reclaim environmentally sensitive products are referred to as a. green marketing. b. recycle marketing. c. cause marketing. d. environmental marketing. e. recycling. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—green marketing. 4-144 GREEN MARKETING KNOWLEDGE Green marketing refers to a. the purchasing of products from producers whose farming practices are Fair Trade certified. b. the marketing efforts taken by new and smaller companies that lack both the experience and resources of their major competitors. - 50 - c. the marketing efforts to produce, promote, and reclaim environmentally sensitive products. d. the marketing of products that have in no way been altered or reprocessed by artificial means. e. the marketing of those products made exclusively from recycled materials. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—green marketing. 4-145 GREEN MARKETING COMPREHENSION At 3M, the “Pollution Prevention Pays” program has generated over 8,000 ideas that eliminated more than 3 billion pounds of air, water, and solid-waste pollutants from the environment. This is an example of a. proactive marketing. b. green marketing. c. consumerism. d. an ecological code of ethics. e. cause marketing. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Medium Rationale: Green marketing is defined as marketing efforts designed to produce, promote, and reclaim environmentally sensitive products. The 3M program has reduced the amount of pollutants in the environment. 4-146 GREEN MARKETING APPLICATION Which of the following is an example of green marketing? a. McDonald’s adding apple snacks to its Happy Meals targeted at children. b. Lowe’s and Home Depot discontinuing the sale of lumber and other wood products. c. Levi-Strauss marketing prewashed jeans. d. Joe’s Lawn Service offering a special spring cleanup promotion. e. Walmart implementing buying practices that encourage it suppliers to use containers and packing made from corn, not oil-based resins. Answer: e Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Green marketing is defined as marketing efforts designed to produce, promote, and reclaim environmentally sensitive products. 4-147 GREEN MARKETING APPLICATION Chrysler recycles thousands of tons of wooden pallets, cardboard, and paper annually. Chrysler cars are 75 percent recyclable. Chrysler’s recycling programs are examples of a. recycle marketing. b. cause marketing. c. green marketing. d. environmental marketing. e. triple-top line marketing. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Hard - 51 - and reclaim environmentally sensitive products. 4-148 GREEN MARKETING APPLICATION Many fast food restaurants. no longer use STYROFOAM™ containers (which do not degrade as quickly as paper in a landfill) for packaging their products. which can cut fuel costs by half and lower fuel emissions by 90 percent. triple-top line marketing. b. triple-top line marketing. International Sustainable Offerings. e. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Green marketing is defined as marketing efforts designed to produce. and reclaim environmentally sensitive products. and bags. and reclaim environmentally sensitive products. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—ISO 14000. Integrated Standards Organization. b. cause marketing. 4-150 ISO 14000 KNOWLEDGE ISO stands for a. an ecological code of ethics. These fast-food restaurants are practicing a. b. and Wendy’s. c. Integrated Solutions Organization. containers. promote. promote. e. International Service Organizations. d. Rationale: Green marketing is defined as marketing efforts to produce. This is an example of a. green marketing. 4-149 GREEN MARKETING APPLICATION FedEx and UPS are converting their delivery trucks with standard diesel engines to more fuel- efficient and cleaner hybrid-electric vehicles. Rather. e. demarketing. McDonald’s. promote. these firms wrap their burgers in recycled paper wrappers. c. d. d.52 - . c. cause marketing. Answer: d Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Green marketing is defined as marketing efforts designed to produce. consumerism. STYROFOAM™ does not degrade as quickly as paper in a landfill. International Standards Organization. 4-151 ISO 14000 KNOWLEDGE . including Burger King. preemptive compliance. green marketing. Using recycled paper reduces the amount of solid waste sent to landfills. and reclaim environmentally sensitive products. c. long-term growth. b. c. a plan to encourage the purchase of “Made in America” products. b. d. c. an initiative for organizations to support the International Special Olympics Committee and its athletes without endangering its nonprofit status. relationship marketing. d. 4-152 ISO 14000 KNOWLEDGE A global undertaking to further green marketing efforts is the a. marketing philanthropy. b. a global plan to further green marketing. . the name of the agreement that created the North American Free Trade Association (NAFTA). ISO 14000 initiative. marketing allegiance. Kyoto Protocol.53 - . ISO Trans-Global initiative. d. and profit simultaneously if they are to achieve sustainable. the planet. e. promote. ISO 9000 initiative. the recognition of the need for organizations to improve the state of people. cause marketing. ISO 14000 refers to a. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—ISO 14000. 4-153 CAUSE MARKETING KNOWLEDGE When the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. a set of standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization (ISO). Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Text term definition—ISO 14000. when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. transactional marketing. marketing services provided at little or no cost for the purpose of promoting or supporting a worthy cause. 4-154 CAUSE MARKETING KNOWLEDGE Cause marketing refers to a. e. Answer: e Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—cause marketing. b. marketing efforts to produce. e. d. this marketing practice is referred to as a. Green World (GW) initiative. c. protecting the environment.54 - . when marketing actions that took place actually caused more harm than good. e. c. public relations. e. This is an example of a. following industry-specific codes of ethics. c. there is no limit to the amount of charitable deductions a firm can make. cause marketing is generally linked to public causes and concerns while straight charitable contributions are generally given to private institutions. d. b. satisfying customer needs. e. 4-156 CAUSE MARKETING COMPREHENSION Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns. enhancing corporate sales and profits. d. but a firm is limited to the number of cause marketing efforts it can make during a fiscal year. green marketing. b. e. demonstrating ethical behavior. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Hard . b. fulfilling societal objectives. there is essentially no difference between a charitable contribution and cause marketing. and enhancing corporate sales and profits. charitable donations are contributed at the sole discretion of the firm. c. 4-157 CAUSE MARKETING APPLICATION Procter & Gamble raises funds for the Special Olympics when consumers purchase selected company products. cause marketing is the amount is directly affected by consumers’ purchases. Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Medium Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—cause marketing. philanthropic marketing. cause marketing. satisfying customer needs. and a. 4-155 CAUSE MARKETING COMPREHENSION A key difference between cause marketing and a charitable contribution is a. a charitable contribution provides an organization with a lower tax deduction. d. societal promotions. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Medium Rationale: Socially responsible efforts on behalf of the general public are becoming more common. Charitable contributions are outright donations. cause marketing. d. One contributing factor was the sale of a bag designed by Marimekko ® exclusively for the Avon Breast Cancer Crusade. philanthropic marketing. Avon Ad 4-158 CAUSE MARKETING APPLICATION Consider the Avon ad above. c. This is an example of a. c. b. cause marketing. the marketing concept. Avon has already donated millions toward breast cancer research. philanthropic marketing. green marketing. corporate altruism. e. b. . Proceeds from the sales of the Christmas cards purchased through the catalog went to benefit the Starlight Children’s Foundation and the National Center for Missing and Exploited Children. This is an example of a. corporate altruism. The amount of money received by the Special Olympics is directly related to how many P&G products are purchased by customers. sold Christmas cards on page two of its holiday retail catalog. Spiegel designed and printed the cards. 4-159 CAUSE MARKETING APPLICATION Spiegel Inc. Answer: e Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products.55 - . One hundred percent of net profits were donated to the crusade. The amount of money received by the Boys & Girls Clubs is directly related to how many coupons Post consumers redeem. societal marketing. public relations marketing. Post promises to donate $0. e. to identify every child in cocoa- farming villages who had to walk at least three kilometers or more each way to school. Cadbury worked with its lead partner. Canada. public relations marketing. donated $50 to the Make-A-Wish Foundation of Canada for each Toyota purchased during a particular month.56 - . Each entry represented one bicycle part and 100 parts “built” one bike. d.000 in total—is . b. In the spring of 2009. cause marketing. Answer: c Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. How much Spiegel donates to the two nonprofit organizations is based on how many cards it sells. societal marketing. 4-160 CAUSE MARKETING APPLICATION A Toyota dealership in British Columbia. e. goodwill marketing. 4-161 CAUSE MARKETING APPLICATION Post supports the Boys & Girls Clubs. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. This is an example of how a small business can engage in a. Cadbury Canada launched a program that encouraged consumers to enter the bar codes of their candy and chocolate bars online. c. For every coupon found on a box of any of the Post brands redeemed. The biggest-ever shipment of bicycles to Ghana—5. This is an example of a. The amount donated by the car dealership was directly related to how many Toyotas it sold. cause marketing. d. b. societal marketing. c.10 to the organization. d. marketing altruism. philanthropic marketing. the marketing concept. e. World Vision Ghana. Answer: a Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. 4-162 CAUSE MARKETING APPLICATION Cadbury Canada recognized that education is crucial to lifting Ghanaian children out of poverty. philanthropic marketing. increased card usage among cardholders. c. This effort raised $1. and attracted new cardholders.7 million for the renovation. . and a.57 - . philanthropic marketing. In this case. 4-163 MARKETING MATTERS KNOWLEDGE American Express Company pioneered cause marketing when it sponsored the renovation of a. cause marketing. decreased outstanding debt on previously unpaid credit cards. e. Cadbury’s sales of candy and chocolate products were directly tied to the number of bicycles given to Ghanaian children. b. b. helping thousands of kids get to school and get a head start on a brighter future. The is an example of a. Madison Square Garden. The vast majority of consumers say they will switch to a brand that supports a good cause provided the price and quality of the brands are equal. it raised $1.7 million for the renovation. the Statue of Liberty. increased card usage among cardholders. increased usage among cardholders. This effort raised $1.7 million to renovate a national icon. c. e. Carnegie Hall. e. 4-164 MARKETING MATTERS COMPREHENSION When American Express pioneered cause marketing. public relations marketing. Answer: b Page(s): 100 LO: 3 AACSB: Ethics QD: Hard Rationale: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. c. attracted new cardholders. became the only credit card accepted for admission to the sight. 4-165 MARKETING MATTERS COMPREHENSION Which of the following statements concerning cause marketing is MOST accurate? a. d. Liberty Hall. d. the Lincoln Memorial. was able to raise interest rates without facing customer complaints. b. societal marketing. received a tax credit that more than paid for the original campaign. d. transactional marketing. Answer: e Page(s): 100-101 LO: 3 AACSB: Ethics QD: Medium Rationale: American Express Company pioneered cause marketing when it sponsored the renovation of the Statue of Liberty. Answer: d Page(s): 100-101 LO: 3 AACSB: Ethics QD: Easy Rationale: American Express Company pioneered cause marketing when it sponsored the renovation of the Statue of Liberty. and attracted new cardholders. and performance in terms of social responsibility is referred to as a. c. Answer: d Page(s): 101 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—social audit. the ability to understand one’s own emotions and the emotions of people with whom one interacts on a daily basis. their contributions are significantly less. Answer: d Page(s): 101 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—social audit. Also. a company-wide assessment of employees at all levels to determine the compliance to the organization’s code of ethics. an accountability analysis. d. Answer: a Page(s): 100-101 LO: 3 AACSB: Ethics QD: Medium Rationale: Cause marketing benefits companies as well as causes. but they lose their benefit almost immediately after the promotion runs its course. a SWOT analysis. 4-168 SOCIAL AUDIT COMPREHENSION . 4-166 SOCIAL AUDIT KNOWLEDGE A systematic assessment of a firm’s objectives. Women are much more suspicious about the sincerity of cause marketing programs than men. c. The positive effects of cause marketing are significant during the promotion. b. conducting business in a way that protects the natural environment while making economic progress. 4-167 SOCIAL AUDIT KNOWLEDGE A social audit refers to a. d. d. b. a business mission. strategies. e. a systematic assessment of a firm’s compliance to fair hiring practices and commitment to diversity.S. consumers say they have a more favorable opinion of companies that support causes they care about. strategies. c.58 - . a social audit. and performance in terms of social responsibility. therefore. the strategic marketing process. e. Cause marketing rarely creates a point of difference for the firm that engages in this marketing practice. 80 percent of consumers say they will switch to a brand or retailer that supports a good cause if the price and quality of brands or retailers are equal. Research indicates that 85 percent of U. a systematic assessment of a firm’s objectives. e. b. The profits generated by cause marketing are usually paid in “goodwill” rather than actual revenue. Many companies develop. determine the amount of money that can be allocated for societal marketing programs. financial audit c. b. and performance in terms of social responsibility. identification of environmental forces that could interfere with the firm’s plans. (3) determination of organizational objectives and priorities for programs and activities it will . Converting socially responsible ideas into actions involves careful planning and monitoring of programs. 4-170 SOCIAL AUDIT COMPREHENSION A social audit is a systematic assessment of a firm’s objectives. d. and evaluate their social responsibility efforts by means of a(n) a. d. social audit. tactical plan. Answer: a Page(s): 101 LO: 3 AACSB: Ethics QD: Medium Rationale: Many companies develop. action plan. e. slogan. selection of a team leader and assignment of tasks and task deadlines for team members. (4) specification of the type and amount of resources necessary to achieve social responsibility objectives. e. strategies. evaluation of social responsibility programs and activities undertaken and assessment of future involvement. identify social responsibility causes consistent with the company’s mission. b. evaluation of possible benefits both tangible and intangible to the firm’s triple-bottom line. and performance in terms of social responsibility. e. and evaluate their social responsibility efforts by means of a social audit. The five steps of the audit are: (1) recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors. c. determine the types of resources needed to achieve social responsibility objectives. d. b.59 - . and (5) a. spokesperson. c. etc. (2) identification of social responsibility causes or programs consistent with the company’s mission. (3) determination of organizational objectives and priorities for programs and activities it will undertake. Answer: c Page(s): 101 LO: 3 AACSB: Ethics QD: Medium Rationale: A social audit is a systematic assessment of a firm’s objectives. recognize a firm’s social expectations and the rationale for engaging in social responsibility endeavors. creation or selection of a theme. The five steps of the audit are: (1) recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors. research plan. which is a systematic assessment of a firm’s objectives. and performance in terms of social responsibility. implement. 4-169 SOCIAL AUDIT COMPREHENSION The first step in any social audit is to a. for marketing cohesiveness. strategies. strategies. (2) identification of social responsibility causes or programs consistent with the company’s mission. implement. the first of which is the recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors. Answer: c Page(s): 101 LO: 3 AACSB: Ethics QD: Medium Rationale: A social audit consists of five steps. evaluate current social responsibility programs. 4-173 SUSTAINABLE DEVELOPMENT COMPREHENSION Which of the following statements about sustainable development is most accurate? a. e. d. sustainable development. b. and reclaim environmentally sensitive products. Sustainable development involves conducting business in a way that protects the natural environment while making economic progress. only a small number of consumers care whether a company practices sustainable development. e. global economies that are slowly moving from an agrarian-base to an industrial base. . Answer: a Page(s): 102 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—sustainable development. 4-171 SUSTAINABLE DEVELOPMENT KNOWLEDGE Conducting business in a way that protects the natural environment while making economic progress is referred to as a. and (5) evaluation of social responsibility programs and activities undertaken and assessment of future involvement. sustainable development is a luxury that only large international companies can achieve. placing restraints on a company’s growth until all ancillary support services are in place to ensure a new venture’s success. 4-172 SUSTAINABLE DEVELOPMENT KNOWLEDGE Sustainable development refers to a. d. Answer: e Page(s): 102 LO: 3 AACSB: Ethics QD: Easy Rationale: Key term definition—sustainable development. d. Answer: d Page(s): 102 LO: 3 AACSB: Ethics QD: Medium Rationale: Over 90 percent of Americans surveyed are concerned with working conditions under which products are made. conducting business in a way that protects the natural environment while making economic progress. the marketing concept. e. A company that uses overseas child laborers to manufacturer its products to reduce costs does not practice sustainable development. Sustainable development is achieved when a firm’s sales growth rate increases an average of 1-2% per year for a period of at least five years. A company that always makes its furniture from rare tropical woods is practicing sustainable development. stakeholder responsibility. adhering to worldwide standards for environmental quality and green marketing practices. c. (4) specification of the type and amount of resources necessary to achieve social responsibility objectives. b. b. marketing efforts to produce. environmental marketing. c. promote. Unfortunately. At this point in time. green marketing.60 - . undertake. c. The examples cited are examples of unethical consumer practices. ISO 9000 compliance d. unethical practices by consumers. These efforts are part of the company’s goal to engage in __________. consumer behavior is spotty on both counts. act ethically and responsibly e. . violations of the Consumer Bill of Rights. all of which have a cost to marketers in terms of lost sales revenue and prevention expenses. Answer: b Page(s): 102 LO: 4 AACSB: Ethics QD: Medium Rationale: Consumers also have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. acceptable consumer code of ethics. cause marketing e. a. b. Unfortunately. 4-176 CONSUMER ETHICS COMPREHENSION Practices that include filing warranty claims after the claim period. c. d. and making the bottle more flexible for easier recycling. seek products without ISO 14000 Answer: d Page(s): 102 LO: 4 AACSB: Ethics QD: Medium Rationale: Consumers have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. environmental downsizing Answer: a Page(s): 102 LO: 3 AACSB: Ethics QD: Hard Rationale: Arrowhead’s bottle changes are an example of sustainable development. a. sustainable development b.61 - . 4-175 CONSUMER ETHICS COMPREHENSION Consumers have an obligation to __________ in the exchange process and in the use and disposition of products. market development c. e. get as much as they can for their money b. normal and reasonable consumer behavior. and making fraudulent returns of merchandise are examples of a. misredeeming coupons. reveal any and all pertinent personal information d.4-174 SUSTAINABLE DEVELOPMENT APPLICATION Arrowhead® Brand Mountain Spring Water recently changed its bottle by reducing the size of its label by one-third. using 30% less plastic. support cause marketing efforts c. which involves conducting business in a way that protects the natural environment while making economic progress. costs to be passed along to shareholders as a part of doing business. Most unethical consumer behavior is against “big business. Retailers lose about $30 billion yearly from shoplifting. c. believe that public sentiment toward ecological issues has now reached a consensus—in today’s economic downturn. Answer: a Page(s): 102 LO: 4 AACSB: Ethics QD: Medium Rationale: Consumer complaints about online auction fraud outnumber all reports of online crime. believe that protecting the environment in one area actually can create disruptions in another areas. indicating that they are of lesser quality. At some point. The potential cost to marketers of unethical consumer behavior is dramatically reduced by investing in loss prevention training.” then that becomes the norm so. The cost to marketers of unethical consumer behavior is huge in terms of lost sales and prevention expenses.62 - . b. and disposition of products. Consumer complaints about online auction fraud outnumber all reports of online crime. ultimately. e. independently owned businesses. it is simply the cost of doing business. 4-178 CONSUMER ETHICS COMPREHENSION Which of the following statements about consumer ethics is most accurate? a.” 4-179 CONSUMER ETHICS COMPREHENSION Although research shows consumers are sensitive to ecological issues. They may (1) be unwilling to sacrifice convenience and pay higher prices to protect the environment. lack the knowledge to make informed decisions dealing with the purchase. d. be unable to make an ecologically sound purchase because eco-friendly products are significantly less expensive. c. c. Most consumers who shoplift do so because a salesperson has been insulting or rude. Most consumers’ unethical acts are motivated by economic need. Some consumers believe that if they can get away with unethical behavior. d.” Answer: b Page(s): 102-103 LO: 4 AACSB: Ethics QD: Medium Rationale: Research on unethical consumer behavior indicates that these acts are rarely motivated by economic need. use. If “everyone else does it. Few customers behave unethically toward smaller. The cost to marketers of unethical consumer behavior is negligible in terms of lost sales. This behavior appears to be influenced by (1) a belief that a consumer can get away with the act and it is worth doing and (2) the rationalization that the act is justified or driven by forces outside the individual because “everybody does it. to retailers. d. e. it is worth it. every person shoplifts or participates in an unethical exchange. b. b. and (2) a. jobs are more important than environmental issues.4-177 CONSUMER ETHICS COMPREHENSION Which of the following statements about consumer ethics is most accurate? a. there is no such thing as unethical consumer behavior. Retailers lose about $1 million dollars a day from shoplifting. Answer: b Page(s): 102 LO: 4 AACSB: Ethics QD: Medium . believe that ecological issues are still a matter of opinion even within the scientific community itself. they may not be willing to purchase a given product or service solely on the basis of its environmental claims. e. the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product. e. a. . d. b. demarketing Answer: a Page(s): 103 LO: 4 AACSB: Ethics QD: Easy Rationale: Text term definition—greenwashing. Answer: d Page(s): 102-103 LO: 4 AACSB: Ethics QD: Medium Rationale: Consumers also have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. the planet. e. not acceptable unless the participants are nonprofit organizations or charities. acceptable provided the merchant providing the service has not violated the Consumer Bill of Rights. are a. making fraudulent returns of merchandise. not acceptable because consumers also have an obligation to act ethically and responsibly. etc. long-term growth. and reclaim environmentally sensitive products. and profit simultaneously if they are to achieve sustainable. d. the recognition of the need for organizations to improve the state of people. 4-180 CONSUMER ETHICS COMPREHENSION Practices such as filing warranty claims after the claim period. lack of knowledge. which have a cost to marketers in terms of lost sales revenue and prevention expenses. whitewashing c. Answer: c Page(s): 103 LO: 4 AACSB: Ethics QD: Easy Rationale: Text term definition—greenwashing. Rationale: Inconvenience. conducting business in a way that protects the natural environment while making economic progress.63 - . the practice of deliberately concealing the mistakes that polluters make regarding the environmental disasters they perpetrated. or company practice is referred to as ___________. misredeeming coupons. c. occasionally permitted when two different firms are competing for a customer’s business and both are using equally less than ethical practices. promote. service. higher prices. c. greenwashing b. service. b. and confusion influence consumers’ disposition toward environmentally sensitive products. environmental slander d. green gouging e. marketing efforts to produce. 4-181 GREENWASHING KNOWLEDGE Making an unsubstantiated or misleading claim about the environmental benefits of a product. 4-182 GREENWASHING KNOWLEDGE Greenwashing refers to a. technology. acceptable provided the salesperson doesn’t mind. or company practice. technology. state government. the state government Answer: b Page(s): 107 LO: 3 AACSB: Ethics QD: Medium Rationale: In a recent survey.4-183 VIDEO CASE 4: TOYOTA COMPREHENSION Toyota employs all of the following business practices as part of “The Toyota Way” EXCEPT: a. Toyota Tundra gas-electric hybrid truck c. Toyota Camry hydrogen fuel cell hybrid car Answer: d Page(s): 106 LO: 3 AACSB: Ethics QD: Medium Rationale: Implementation of Toyota’s G21 vision led to the development and deployment of the Toyota Prius gas-electric hybrid car. to always go to the source to find the facts and make correct decisions. The G21 vision arose out of this goal. to build trust and take responsibility. Lexus 450 all-electric car b. consumers were asked the following question: “Who should take the lead in addressing environmental issues?” The results suggest that businesses should.” 4-184 VIDEO CASE 4: TOYOTA COMPREHENSION One of Toyota’s top goals has been to develop advanced vehicle technologies to complement existing ones. Answer: e Page(s): 105 LO: 3 AACSB: Ethics QD: Medium Rationale: Alternative “e” is Toyota’s core principle or value that forms “The Toyota Way. d. the federal government b. and environmental groups. b. to maximize individual and team performance. to continuously improve business operations. which eventually led to the production of which of the following vehicles? a. environmental groups e. consumers were asked the following question: “Who should take the lead in addressing environmental issues?” The results suggest that __________ should. followed by individuals. businesses c. e.64 - . individuals d. Scion iQ micro-subcompact compressed natural gas car d. to contribute to society and the economy by producing high-quality products and services. See Figure 1 in the textbook . Toyota Prius gas-electric hybrid car e. federal government. always striving for innovation and evolution. c. 4-185 VIDEO CASE 4: TOYOTA COMPREHENSION In a recent survey. a. Anheuser-Busch has been an advocate for responsible drinking for nearly three decades through its “Know When to Say When” campaign in 1982. Page(s): 89 LO: 3 AACSB: Ethics QD: Medium 4-187 ETHICAL/LEGAL FRAMEWORK IN MARKETING COMPREHENSION Describe the difference between ethics and laws Answer: Ethics are the moral principles and values that govern the actions and decisions of an individual or group. Page(s): 90 LO: 1 AACSB: Ethics QD: Medium 4-188 ETHICAL/LEGAL FRAMEWORK IN MARKETING COMPREHENSION Explain the four ways to classify marketing decisions according to ethical and legal relationships. and (4) unethical and illegal. through its ABRC subsidiary. Answer: The four ways can be determined by placing ethicality (vertical) and legality (horizontal) as the axes of a two-by-two dimensional grid. Answer: Societal responsibility refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public. the brewer launched its “Responsibility Matters” campaign that implemented effective education and awareness programs to promote responsibility and responsible behaviors. annually recycles over 27 billion aluminum cans. which was established in 1989. Page(s): 90-91 LO: 1 AACSB: Ethics QD: Medium 4-189 ETHICAL/LEGAL FRAMEWORK IN MARKETING APPLICATION . (3) unethical but legal. The four combinations are: (1) ethical and legal. In 2004. While ethics deal with personal moral principles and values. (2) ethical but illegal. In addition. its newly renamed Corporate Social Responsibility Department.65 - . They serve as guidelines on how to act rightly and justly when faced with moral dilemmas. and its Family Talk about Drinking guidebook distributed free to parents and educators. laws are society’s values and standards that are enforceable in the courts. Anheuser-Busch. See Figure 4-1 in the textbook. CHAPTER 4: MASTER TEST BANK ETHICAL AND SOCIAL RESPONSIBILITY IN MARKETING SHORT ESSAY QUESTIONS 4-186 CHAPTER OPENER: ANHEUSER-BUSCH COMPREHENSION Explain how Anheuser-Busch acts with societal responsibility. ethical but illegal.66 - . Culture also serves as a socializing force that dictates what is morally right and just. Corporate culture is a set of values. Provide concrete examples for the four classifications marketing decisions according to ethical and legal relationships. Answer: Answers will vary. Page(s): 90-91 LO: 1 AACSB: Ethics QD: Hard 4-190 UNDERSTANDING ETHICAL MARKETING BEHAVIOR COMPREHENSION Figure 4-2 Identify and briefly describe each of the three factors identified in Figure 4-2 above that influence one’s personal moral philosophy and ethical behavior. and the codes of conduct in business dealings. Business cultures are made up of the effective rules of the game. such as those cited in the textbook. This means that moral standards are relative to particular societies. unethical and illegal. and attitudes that are learned and shared among members of a group. unethical but legal. ideas. Culture is the set of values. but they should include examples of behaviors that are ethical and legal. Page(s): 91-95 LO: 2 AACSB: Ethics QD: Medium 4-191 BUSINESS CULTURE AND INDUSTRY PRACTICES KNOWLEDGE . ideas. the boundaries between competitive and unethical behavior. “B” business culture and industry practices. Answer: The three major factors affecting business ethics are “A” societal culture and norms. and attitudes that is learned and shared among the members of an organization. See Figure 4-1 in the textbook. and “C” corporate culture and expectations. Page(s): 93-94 LO: 2 AACSB: Ethics QD: Medium 4-194 PERSONAL MORAL PHILOSOPHY COMPREHENSION Identify and describe the two types of personal moral philosophy. In answering.67 - .” Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the competitive behavior among sellers. This practice is more common in business-to-business and government marketing than in consumer marketing. Espionage activities include illegal trespassing. and violations of written and implicit employment agreements with noncompete clauses. Kennedy change the concept of American business culture away from caveat emptor in the 1960s? Answer: Before the 1960s. In general. consultant fees. theft. the legal concept of caveat emptor (let the buyer beware) was pervasive in American business culture. The second form of unethical competitive behavior is giving and receiving bribes and kickbacks. the boundaries between competitive and unethical behavior. Explain the difference between societal culture and business culture. [and] the codes of conduct in business dealings. wiretapping. Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors. Page(s): 92 LO: 2 AACSB: Ethics QD: Easy 4-192 CONSUMER BILL OF RIGHTS (1962) COMPREHENSION How did President John F. to be informed. Briefly discuss the two most common kinds of unethical competitive behavior. Bribes and kickbacks are often disguised as gifts. This practice is illegal and unethical and carries serious criminal penalties for the offending individual or business. and to be heard. misrepresentation. Ethical exchanges between buyers and sellers should result in both parties being better off after a transaction. Page(s): 92-93 LO: 2 AACSB: Ethics QD: Medium 4-193 ESPIONAGE AND BRIBERY COMPREHENSION Business culture affects ethical behavior in competition. . The Consumer Bill of Rights includes the rights to safety. bribery is most evident in industries experiencing intense competition and in countries in the earlier stages of economic development. President Kennedy codified a Consumer Bill of Rights that was intended to regulate the ethics of exchange between buyers and sellers. provide concrete examples for both. Business cultures “comprise the effective rules of the game. and favors. the search of a competitor’s trash. to choose. fraud. In 1962. Answer: Societal culture provides a foundation for understanding moral behavior in business activities. Answer: The two kinds of unethical behavior that are most common are: (1) economic espionage and (2) bribery. And pieces of people are increasingly being used as raw materials for products-from placenta- enriched shampoos to experimental DNA-run computers. then the behavior is unethical. and therapies.or herself. ethical choices are based on the personal moral philosophy of the decision maker. Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal. The cost of the blood is a supply and demand issue—just like the price of rocks compared to the price of diamonds. It is also influenced by the societal. They are marketed to museums and personal collectors.000. Answer: This example makes it obvious why ethics is such a difficult topic. Page(s): 98 LO: 2 AACSB: Ethics QD: Easy 4-196 MORAL IDEALISM/UTILITARIANISM APPLICATION Body Bazaar: The Market for Human Tissue in the Biotechnology Age is a book by Lori Andrews and Dorothy Nelkin. which focuses on how much can be learned from research on body parts. According to the book. Moral philosophy is learned through the process of socialization with friends and family and by formal education. then the behavior is considered unethical. then the behavior is ethical. then the behavior is considered ethical. If the benefits exceed the costs. Blood has become one of the most valuable commodities on Earth. Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior. It is not really an ethical issue. “Body parts are bought and sold for medical research. While petroleum sells for $100 a barrel. Students should realize that they must weigh their personal philosophy of moral idealism—the way the remains of a loved one should be treated respectfully—with a more utilitarian philosophy. regardless of the outcome. Two prominent personal moral philosophies have direct bearing on marketing practice: (1) moral idealism and (2) utilitarianism. if not. Page(s): 96-98 LO: 2 AACSB: Ethics QD: Medium 4-195 UTILITARIANISM KNOWLEDGE Define the moral philosophy of utilitarianism and explain its relationship to capitalism. Answer: Ultimately.” Use this quote to explain why ethics is such a difficult concept to understand. diagnostics. and corporate culture in which a person finds him. Answer: Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior. an equivalent quantity of blood products is worth $67. business. Moral idealism and utilitarianism are two types of moral philosophy. It is included to demonstrate that subjects can be made to appear to be an ethical issue when they are not.68 - . If benefits exceed the costs. Page(s): 97-98 LO: 2 AACSB: Ethics QD: Hard . If not. This philosophy underlies the economic tenets of capitalism and is embraced by many business executives and students. It exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups. This philosophy underlies the economic tenets of capitalism and is embraced by many business executives and students. stakeholder responsibility.” Are turkey growers who allow their birds to access the out-of-doors only moments before they are killed acting socially responsible? Answer: To answer this question. to taste better than conventionally-raised turkeys. Even more worrying is the finding that 75 percent of these Internet companies justify this omission on the grounds that they don’t have any environmental or social impacts. Profit responsibility holds that companies have a simple duty to maximize profits for their owners or stockholders. Customers who actually desire a more humanely treated animal are being deceived. stakeholder responsibility. Societal responsibility refers to obligations that organizations have to the preservation of the ecological environment and to the general public. Stakeholder responsibility focuses on the obligations organizations have to those who can affect achievement of their objectives. suppliers. It is not acting socially responsible if it believes in stakeholder responsibility.4-197 SOCIAL RESPONSIBILITY COMPREHENSION Describe the three major concepts of social responsibility. Page(s): 98-100 LO: 3 AACSB: Ethics QD: Hard 4-199 SOCIAL RESPONSIBILITY APPLICATION A recent survey found that 79 percent of Internet and e-commerce companies take absolutely no social responsibility. which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the . and distributors. Page(s): 98-100 LO: 3 AACSB: Ethics QD: Medium 4-198 SOCIAL RESPONSIBILITY APPLICATION An increasing percentage of turkeys are now being marketed as “free range. which are thought to have lived more humane lives—and as a result. and societal responsibility.69 - . The USDA defines a free-range bird as one that has been allowed “access to the out-of-doors. Answer: The three concepts of social responsibility include profit responsibility. then it is taking profit responsibility—this is one of the concepts of social responsibility. employees. students will need to consider the three concepts of social responsibility. A formal practice of giving service to the general public is referred to as cause marketing. See Figure 4-4 in the textbook. If the turkey grower feels that its responsibility is to maximize profits for its owners and stockholders.” Consumers typically pay $1 more per pound for free-range turkeys. and 50 percent said they didn’t have the expertise to address them. There is nothing to indicate that the grower is taking any societal responsibility. while 55 percent said they didn’t have time to think about these issues. Societal responsibility refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public. Answer: Social responsibility encompasses profit responsibility. Would these Internet-based companies benefit from acting more socially responsible? Explain your answer. including customers. and societal responsibility. Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of a specific product. Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns and satisfying customer needs. marketing and social responsibility programs are often integrated. It may . Page(s): 98-102 LO: 3 AACSB: Ethics QD: Hard 4-200 GREEN MARKETING COMPREHENSION Define green marketing and provide an example of it. promote. What is this called and how does it affect cardholders’ behavior? Answer: This practice is called cause marketing. Page(s): 100 LO: 3 AACSB: Ethics QD: Medium 4-202 CAUSE MARKETING APPLICATION MasterCard International links usage of its card with fund raising for institutions that combat cancer. Ecologically responsible initiatives such as green marketing represent one such initiative. Today. strategies. social audits. Students. cause marketing. and muscular dystrophy. Examples from the textbook include 3M’s “Pollution Prevention Pays” program and Xerox’s “Design for the Environment” program. long-term growth. and reclaim environmentally sensitive products. Answer: Green marketing refers to a company’s marketing efforts to produce. the planet. Green marketing—marketing efforts to produce. promotion of one of its products. satisfying customer needs. of course. and enhancing corporate sales and profits. which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of its products. Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns. Page(s): 100 LO: 3 AACSB: Ethics QD: Medium 4-201 CAUSE MARKETING COMPREHENSION What is the difference between standard charitable contributions and cause marketing? Answer: A firm’s standard charitable contributions are outright donations. Growing interest in green marketing. Sustainable development involves conducting business in a way that protects the natural environment while making economic progress. emphasis is placed on what is termed the triple-bottom line—recognition of the need for organizations to improve the state of people. and reclaim environmentally sensitive products. They can also enhance corporate sales and profits. may think of other equally appropriate examples. and sustainable development reflect this recognition. child abuse. and profit simultaneously if they are to achieve sustainable. Frequently. and performance in terms of social responsibility. A social audit is a systematic assessment of a firm’s objectives. promote. MasterCard gives a modest percentage of charges from its credit card charges to the institutions.70 - . heart disease. (3) Determination of organizational objectives and priorities for programs and activities it will undertake.” Page(s): 103 LO: 4 AACSB: Ethics QD: Medium . (4) Specification of the type and amount of resources necessary to achieve social responsibility objectives. Page(s): 101 LO: 3 AACSB: Ethics QD: Medium 4-204 CONSUMER ETHICS AND SOCIAL RESPONSIBILITY COMPREHENSION Research on unethical consumer behavior. and (5) Evaluation of social responsibility programs and activities undertaken and assessment of future involvement. What influences these behaviors? Answer: These behaviors appear to be influenced by (1) a belief that a consumer can get away with the act and it is worth doing and (2) the rationalization that the act is justified or driven by forces outside the individual—“everybody does it. (2) Identification of social responsibility causes or programs consistent with the company’s mission. indicates that these acts are rarely motivated by economic need. Page(s): 100 LO: 3 AACSB: Ethics QD: Hard 4-203 SOCIAL AUDIT COMPREHENSION What are the five steps in a social audit? Answer: A social audit consists of the following steps: (1) Recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors. such as fraudulent automobile insurance claims or unauthorized downloading of music.71 - . have the effect of encouraging the cardholders to charge more on their MasterCards (rather than Visa or American Express)—especially if they believe in the charity receiving the contribution. movies. and software.