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Chapter 5 Ethics and the Environment 1. In the “Is It Just Me” scenario, which company is the focus of the scenario? a. Exxon b. BP c. Shell d. Chevron Answer: a. Exxon 2. In the “Is It Just Me” scenario, what is Exxon’s primary contribution to reduce global warming? a. Investing in alternative fuels b. Investing in more efficient engines c. Investing in more efficient refining processes d. Selling the oil that is used to help operate wind turbines Answer: d. Selling the oil that is used to help operate wind turbines 3. In the “Is It Just Me” scenario, which oil company made the largest investment in alternative fuels? a. Exxon b. BP c. Shell d. Chevron Answer: c. Shell 4. In the “Is It Just Me’ scenario, when Lee Raymond retired as CEO of Exxon, what was the value of his retirement package? a. $20 million b. $50 million c. $200 million d. $400 million Answer: d. $400 million 5. What is the tragedy of the commons? a. common mistakes are made all the time pertaining to environmental issues b. it is difficult to obtain a common commitment on any environmental issue c. free unrestricted access to any resource will ultimately ruin the resource d. common stakeholders do not always agree with the solution to an environmental issue Answer: c. free unrestricted access to any resource will ultimately ruin the resource 6. Which historical philosopher established the basic tenet of the tragedy of the commons? a. Plato b. Aristotle c. Socrates d. Kant Answer: b. Aristotle 7. Which modern author presents the current interpretation of the tragedy of the commons? a. Garrett Hardin b. John Elkington c. Milton Friedman d. Edward Freeman Answer: a. Garrett Hardin 8. What example is given in the textbook to demonstrate the tragedy of the commons? a. building near an ocean b. using more energy than is needed c. cows grazing on land d. continue to plant the same crops without rotating them Answer: c. cows grazing on land 9. The tragedy of the commons refutes whose theory? a. John Stuart Mill b. Adam Smith c. Jeremy Bentham d. Henry Sidgwick Answer: b. Adam Smith 10. If the natural environment is considered a stakeholder, a stakeholder would be defined as: a. any individual that has a vested interest in the firm b. any individual that has a financial interest in the firm c. any entity that has a vested interest in the firm d. any special interest group that has a vested interest in the firm Answer: c. any entity that has a vested interest in the firm 11. Which of the following is a Generic Competitive Environmental Strategy? a. Ecoeffectiveness b. Ecoimprovement c. Ecoefficiency d. Ecoperformance Answer: c. Ecoefficiency 12. Which Competitive Environmental Strategy focuses on low cost competitive advantage and organizational process competitive focus? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: a. Ecoefficiency 13. Which Competitive Environmental Strategy focuses on differentiation competitive advantage and organizational processes competitive focus? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: b. Beyond Compliance Leadership 14. Which Competitive Environmental Strategy focuses on low cost competitive advantage and products and services competitive focus? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: c. Environmental Cost Leadership 15. Which Competitive Environmental Strategy focuses on differentiation competitive advantage and products and services competitive focus? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: d. Ecobranding 16. Which Competitive Environmental Strategy recommends having ISO 14000 certification? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: b. Beyond Compliance Leadership 17. Which Competitive Environmental Strategy recommends focusing on ecodesign? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: a. Ecoefficiency 18. Which Competitive Environmental Strategy corresponds with Timberland putting an environmental “nutrition label” on the boxes of their shoes? a. Ecoefficiency b. Beyond Compliance Leadership c. Environmental Cost Leadership d. Ecobranding Answer: d. Ecobranding 19. Which of the following was not recommended for a firm to implement from a voluntary environmental compliance perspective? a. Publish an annual report b. Implement a system to reduce toxic chemical use c. Implement a system to reduce sustainable products d. Ensure that the same environmental standards are consistent globally Answer: c. Implement a system to reduce sustainable products 20. In 2005, which company had the largest penalty ever levied by the EPA? a. Exxon b. Union Carbide c. DuPont d. General Electric Answer: c. DuPont 21. In 2005, what was the total fined levied on DuPont for hiding the dangers of one of its chemicals? a. $5.5 million b. $10.5 million c. $14.5 million d. $16.5 million Answer: d. $16.5 million 22. Which of the following is not a reason why Johnson & Johnson has adopted a policy on climate friendly energy? a. reduce operating costs b. helps meet legal obligations c. improve the environment d. enhance their competitive advantage Answer: d. enhance their competitive advantage 23. Which of the following is not an environmental initiative that could be generated by any employee within a firm? a. policies for reuse and recycling b. policies for hazardous substance reduction c. policies for environmental training d. policies for reduction of resources and energy use Answer: c. policies for environmental training 24. The employees of which company in the Netherlands developed their own waste reduction and recycling program? a. Philips b. Nestle c. GE Plastics d. Ford Europe Answer: c. GE Plastics 25. The employees of which company in Finland developed a cleaner diesel fuel? a. Shell b. BP c. Nestlé d. Finoil Answer: c. Nestlé 26. Which author established the modern environmental movement? a. Al Gore b. Rachel Carson c. Jimmy Carter d. Garrett Hardin Answer: b. Rachel Carson 27. Which book established the modern environmental movement? a. The Tragedy of the Commons b. Silent Spring c. Inconvenient Truth d. The Benefits of Triple Bottom Line Reporting Answer: b. Silent Spring 28. Which environmental group has the slogan “When the last tree is cut, the last river poisoned, and the last fish dead, we will discover that we can’t eat money”? a. Sierra Club b. Greenpeace c. Environmental Defense Fund d. Friends of the Earth Answer: b. Greenpeace 29. Which environmental group has the largest membership in the United States? a. Sierra Club b. Greenpeace c. Environmental Defense Fund d. Friends of the Earth Answer: a. Sierra Club 30. What year was the first Earth Day celebration? a. 1970 b. 1977 c. 1980 d. 1982 Answer: a. 1970 31. Which environmental group was formed to address the issue of the pesticide DDT? a. Sierra Club b. Greenpeace c. Environmental Defense Fund d. Friends of the Earth Answer: c. Environmental Defense Fund 32. Which environmental group has economists, engineers, computer analysts and various PhDs on its staff? a. Sierra Club b. Greenpeace c. Environmental Defense Fund d. Friends of the Earth Answer: c. Environmental Defense Fund 33. Which environmental group identifies environmental accounting tricks that firms may play? a. Sierra Club b. Greenpeace c. Environmental Defense Fund d. Friends of the Earth Answer: d. Friends of the Earth 34. Stanwick and Stanwick found that: a. There was a positive relationship between a firm’s environmental disclosures and financial performance. b. There was a negative relationship between a firm’s environmental disclosures and financial performance. c. There was no significant relationship between a firm’s environmental disclosures and financial performance. d. There was not enough data to determine the relationship between a firm’s environmental disclosures and financial performance. Answer: a. There was a positive relationship between a firm’s environmental disclosures and financial performance. 35. Stanwick and Stanwick found that: a. firms with a low level of financial performance had the highest incidences of environmental policies. b. firms with a medium level of financial performance had the highest incidences of environmental policies. c. firms with a high level of financial performance had the highest incidences of environmental policies. d. they could not determine a relationship between level of financial performance and incidences of environmental policies. Answer: b. firms with a medium level of financial performance had the highest incidences of environmental policies. 36. Which of the following government regulations is the oldest? a. National Environmental Policy Act b Clean Air Act c. Clean Water Act d. Clean Ground Act Answer: c. Clean Water Act 37. What was the first government regulation that protected the general public from environmental problems? a. Federal Food Drug, and Cosmetic Act b. Resource Conservation and Recovery Act c. Safe Drinking Water Act d. Resource Recovery Act Answer: a. Federal Food Drug, and Cosmetic Act 38. Which of the following accounting rules relates to environmental liabilities? a. FAS 1 – Accounting for Liabilities b. FAS 5- Accounting for Contingencies c. FAS 7 – Accounting for Reserves d. FAS 8 – Accounting for Environmental Investment Answer: b. FAS 5- Accounting for Contingencies 39. What does NIMBY stand for? a. New Independent Management BuyIn Yield b. Not In My Back Yard b. Not In My Back Yard c. Negative Image Maintenance Bonus Yield d. No Initiative, Management By Young Views Answer: b. Not In My Back Yard 40. The systematic equal allocation of environmental benefits and burdens is called: a. environnemental equity b. environnemental balance c. environnemental justice d. environmental cost/benefit Answer: c. environnemental justice 41. The ability of an organization to protect the use of future resources is called: a. environmental proactiveness b. environmental sustainability c. environmental protection d. environmental responsibility Answer: b. environmental sustainability 42. Based on Grafe-Buckens and Beloe, which of the following is not a major component of sustainability a. a system to ensure the sustainable management of the earth’s natural resources b. the development of social and institutional structures that would support sustainable management c. changes in the legal framework to support sustainability d. changes in the economic framework to support sustainability Answer: c. changes in the legal framework to support sustainability 43. In the Major Challenges to Sustainability Table, what would be an example of depletion for developed economies? a. deforestation b. soil loss c. insufficient reuse and recycling d. overuse of water for irrigation Answer: c. insufficient reuse and recycling 44. In the Major Challenges to Sustainability Table, what would be an example of poverty of a survival economy? a. urban and minority unemployment b. lack of skilled workers c. population growth d. income equality Answer: c. population growth 45. In the Major Challenges to Sustainability Table, what would be an example of pollution for emerging economies? a. dung and wood burning b use of toxic materials c. lack of sewage treatment d greenhouse gases Answer: c. lack of sewage treatment 46. The triple bottom line call also is described as: a. Population, Pollution, Profit b. People, Planet, Profit c. Prevention Protection Population d. Pollution Population Planet Answer: b. People, Planet, Profit 47. 3BL stands for : a. 3 below level b. triple bottom line c. 3 times the business legislation d. business leverage cubed Answer: b. triple bottom line 48. The three factors that relate to the triple bottom line are: a. social, ethical, environmental b. ethical environmental, financial c. social environmental financial d. stakeholder environmental financial Answer: c. social environmental financial 49. Equator Principles address: a. social and environmental issues when financial institutions consider project financing b. the principles used to help countries along the equator with global warming c. the principles used by developed countries to help survival economies d. the principles used by governments to develop global warming solutions Answer: a. social and environmental issues when financial institutions consider project financing 50. Which of the following is not a member of the Equator Principles Financial Institutions? a. Barclays b Crédit Suisse c. Bank of America d. Citigroup Answer: c. Bank of America 51. The Greenhouse Gas Effect is: a. As Greenhouse Gases increase, more heat is trapped in Earth’s atmosphere b. As Greenhouse Gases increase, it replaces oxygen in the air c. Is completely man made since there are no natural Greenhouse Gases d. Not proven yet to impact the climate Answer: a. As Greenhouse Gases increase, more heat is trapped in Earth’s atmosphere 52. Which of the following is not a Greenhouse Gas? a. Méthane b. Nitrous Oxide c. Hydroflurocarbons d. Carbon Monoxide Answer: d. Carbon Monoxide 53. What is the Kyoto Treaty? a. a treaty for countries to use alternative fuels b. a treaty focusing on environmental sustainability c. a treaty to reduce the level of Greenhouse Gases d. a treaty for countries to use more nuclear power Answer: c. a treaty to reduce the level of Greenhouse Gases 54. From a GDP perspective which country would receive the largest negative impact if the levels of Carbon Dioxide were to double from 2002 to 2050? a. United States b. European Union c. Former Soviet d. China Answer: d. China 55. From a cost (in billions of dollars) perspective which country would receive the largest negative impact if the levels of Carbon Dioxide were to double from 2002 to 2050? a. United States b. European Union c. Former Soviet d. China Answer: b. European Union 56. In the Strategic Options for Climate Change Table, what would be considered an internal company innovation? a. product development b. new product/market combinations c. process improvement d. internal transfer of emission reductions Answer: c. process improvement 57. In the Strategic Options for Climate Change Table, what would be considered a horizontal beyond the supply chain compensation? a. internal transfer of emission reductions b. acquisition of emission credits c. product development d. process development Answer: b. acquisition of emission credits 58. In the “Is It Just Me” scenario, Exxon showed their strong commitment to environmental sustainability. a. True b. False Answer: b. False 59. In the “Is It Just Me” scenario, Shell showed their strong commitment to environmental sustainability. a. True b. False Answer: a. True 60. In the “Is It Just Me” scenario, BP showed their strong commitment to environmental sustainability. a. True b. False Answer: a. True 61. The concept of the Tragedy of the Commons can be traced back to Aristotle. a. True b. False. Answer: a. True 62. The Tragedy of the Commons supports Adam Smith’s invisible hand theory. a. True b. False Answer: b. False 63. Ecoeffectiveness is a Generic Competitive Environmental Strategy. a. True b. False Answer: b. False 64. Organizational Processes is one of the categories to develop Generic Competitive Environmental Strategies. a. True b. False Answer: a. True 65. In 2005, DuPont received the largest fine ever levied by the EPA. a. True b. False Answer: a. True 66. The Sierra Club is the largest environmental group in the world a. True b. False Answer: b. False 67. Greenpeace has over 4 million members. a. True b. False Answer: a. True 68. The Silent Spring was written to address the issue of pesticides a. True b. False Answer: a. True 69. Greenpeace was formed in response to the issue of using pesticides in the environment. a. True b. False Answer: b. False 70. The Clean Air Act was the first piece of legislation in the United States to protect the general public from environmental problems. a. True b. False Answer: b. False 71. Environmental sustainability is best represented by NIMBY. a. True b. False Answer: b. False 72. Equator principles address environmental issues in the food service industry. a. True b. False Answer: b. False 73. Methane is a Greenhouse Gas. a. True b. False Answer: a. True 74. Why is the natural environment such an important ethical issue? Answer: The natural environmental is an important ethical issue for two major reasons. The first major reason is the impact the environment has on stakeholders. If a firm has a negative impact on the environment it could result in not only the stakeholders not having their needs met, but could result in permanent damage to stakeholders. If toxic material is leaked into the ground or billions of pollution participles are released into the area, it could impact the health of the members of the local community and could even ultimately lead to the death of many members in the local community. The second major ethical issue related to the natural environment is sustainability. If firms do not think of resource allocation from a long term perspective, they will use the resources at a quicker pace than they can be replaced. This could have a negative financial impact of the firm and could negatively impact employees, investors, customers, suppliers, and the local community. 75. How do you determine whether a community has been faced with “environmental injustice”? Answer: There could certainly be some subjective measures into the negative short term and long term impacts a specific facility has in the neighborhood. However, when the costs outweigh the environmental benefits of the facility, it could be concluded that environmental injustice has taken place. NIMBY is an effective concept with the assumption that the neighborhood has the coordinating power to try to block negative environmental investments in the local community, As a result, in another level of environmental justice, those neighborhoods that have the resources to establish a protection campaign and threaten legal action if necessary have higher odds of winning the blockage of a facility which would result in a negative environmental impact. Therefore, the neighborhoods that do not have the resources to mount an effective campaign will have these negative impact environmental facilities placed in their own backyards. 76. Is Al Gore the correct person to spearhead the environmental movement? Answer: The simple answer is yes since he is the most recognized “celebrity” to warn against global warming. After winning an Academy Award and the sharing in the Nobel Peace Prize, people listen to what Al Gore has to say about global warming. However, he certainly had a major misstep when the energy consumption in his house was released to the public. When you become the spokesman of a particular cause, you need to make sure that your message can not be challenged. His message was challenged for a while based on his actions not corresponding with his words. It would have been better for Mr. Gore to have ordered the re-fitting of his house so that it would be more energy efficient. This would have been an effective ending to the Inconvenient Truth movie. 77. Can profitability and environmental sustainability co-exist? Answer: Yes, they can co-exist and they better co-exist. It is the responsibility of the firms to address the long term environmental sustainability and climate change issues. One question that needs to be asked is why do cars continue to use technology that was patented in 1806 by Francois Isaac de Rivaz. As a result, society is using technology that is over 200 years old. You can ask your class if there is any other technology that is used to such extent globally that is two centuries old and results in a negative impact on the environment. Therefore, alternative fuels and alternative engine designs are long overdue. At the time of this writing, a barrel of oil is over $110. As a result, these should be considered environmental opportunities instead of environmental costs. In order for a firm to survive in the long term, it must focus on both profit and environmental sustainability. Test Bank For Understanding Business Ethics Peter Allen Stanwick, Sarah D. Stanwick 9780131735422, 9788131755365, 9781506303239, 9781452256559

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