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Chapter 8 Strategic Planning and Corporate Culture 1. Which company is the focus of “When Ethics Drive a Change is Strategy”? a. Bank of America b. Merrill Lynch c. Citigroup d. Chase Manhattan Answer: c. Citigroup 2. Who was the new CEO that implemented the new corporate culture in “When Ethics Drive a Change is Strategy”? a. Charles Prince b. Sanford Weill c. Willard Butcher d. Robert Willlumstad Answer: a. Charles Prince 3. Which of the following was not a previous ethical issue Citigroup had to address before the new CEO took over in “When Ethics Drive a Change in Strategy”? a. lack of separation between financial analyst functions and investment bank functions b. aggressive bond trading strategies c. purposely misleading customers d. lack of control over rogue traders Answer: d. lack of control over rogue traders 4. What type of institution did the new CEO at Citigroup consider the company to be in “When Ethics Drive a Change in Strategy”? a. quadpublic institution b. quasipublic institution c. multipublic institution d. privatepublic institution Answer: b. quasipublic institution 5. What is a quasipublic institution in “When Ethics Drive a Change in Strategy? a. an organization that is owned by both public and private investors b. an organization that focuses on different demographic groups c. an organization that focuses on all the firm’s stakeholders instead of just the investors d. an organization that has both private companies and the government as customers Answer: c. an organization that focuses on all the firm’s stakeholders instead of just the investors 6. The process in which future courses of action are developed to achieve the firm’s short and long-term goals is called: a. Strategic Goals b. Strategic Objectives c. Strategic Planning d. Strategic Implementation Answer: c. Strategic Planning 7. Strategic Planning is: a. the formal process developed by the CEO b. the process in which future courses of action are developed to achieve the firm’s goals c. the process in which a firm’s strategic plan is compared with its competitors d. the process in which a firm’s plan becomes strategic in nature Answer: b. the process in which future courses of action are developed to achieve the firm’s goals 8. Which of the following questions is not asked when deciding on how to resolve an ethical issue? a. Why is this bothering me? b. Is it my responsibility c. What will the estimated cost be? d. What do others think? Answer: c. What will the estimated cost be? 9. Am I being true to myself? is also called the: a. truthfulness test b. honesty test c. mirror test d. reflective test Answer: c. mirror test 10. In Sweden, what percentage of corporations referred to their code of ethics during the strategic planning process? a. 35 percent b. 55 percent c. 75 percent d. 85 percent Answer: b. 55 percent 11. In Sweden, what percentage of public sector organizations referred to their code of ethics during the strategic planning process? a. 43 percent b. 63 percent c. 73 percent d. 85 percent Answer: b. 63 percent 12. In the Ethical Decision Tree model (Figure 8-1), what is the first step in the model? a. Would it be ethical or not to take the action? b. Does it maximize shareholder value? c. Do our ethical standards support this action? d. Is the proposed action legal? Answer: d. Is the proposed action legal? 13. In the Ethical Decision Tree model (Figure 8-1), what is the third step in the model? a. Would it be ethical or not to take the action? b. Does it maximize shareholder value? c. Do our ethical standards support this action? d. Is the proposed action legal? Answer: a. Would it be ethical or not to take the action? 14. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which of the following is not a question asked in the model? a. What is duty? b. What is truth? c. What is right? d. What is integrity? Answer: b. What is truth? 15. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which of the following is not a type of model issue? a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: b. moral standards 16. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with the question “What is duty?” a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: a. moral problems 17. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with the question “What is integrity?” a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: c. moral courage 18. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with the question “What is right?” a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: d. moral reasoning 19. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with effort? a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: c. moral courage 20. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with trust? a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: a. moral problems 21. In Hosmer’s Model of Trust, Commitment, and Effort (Figure 8-2), which model issue corresponds with commitment in the model? a. moral problems b. moral standards c. moral courage d. moral reasoning Answer: d. moral reasoning 22. “Power tends to corrupt, and… a. power corrupts absolutely.” b. absolute power corrupts absolutely.” c. corruptive power is absolute.” d. power absolutely corrupts.” Answer: b. absolute power corrupts absolutely.” 23. Who said “Power tends to corrupt, and absolute power corrupts absolutely”? a. Aristotle b. Socrates c. William Shakespeare d. Lord Acton Answer: d. Lord Acton 24. Who said “With great power comes great responsibility”? a. Spider-man b. Uncle Ben Parker c. Peter Parker d. Batman Answer: b. Uncle Ben Parker 25. What was the Stanford Prison Experiment? a. State prisoners were given different mind altering drugs by Stanford professors b. Stanford California established a prison that did not have any fences blocking escapes c. Stanford survey participants pretended to be guards and prisoners so that the effect of power could be observed d. Prisoners were allowed to take classes at Stanford if they could negotiate with the university Answer: c. Stanford survey participants pretended to be guards and prisoners so that the effect of power could be observed 26. According to the textbook, the ability to change the viewpoint of another person is called: a. Persuasion b. Influence c. Convince d. Negotiation Answer: b. Influence 27. Niccolo Machiavelli wrote: a. The Leader b. The Prince c. The King d. The Negotiator Answer: b. The Prince 28. Using whatever means possible to create and maintain power is called: a. Controlism b. Mainipulatism c. Machiavellianism d. Influencalism Answer: c. Machiavellianism 29. Mach-IV is: a. the independent variable used to study power b. a measurement survey of an individual’s Machiavellianism c. an analogy used to explain how quickly someone can seize power d. a machine that can be used to evaluate an individual’s ability to influence others Answer: b. a measurement survey of an individual’s Machiavellianism 30. Which of the following is not a factor that would affect whether an employee will commit fraud or not? a. financial condition of the organization b. internal accounting controls c. the competitive pressure of the industry d. the state of the economy Answer: c. the competitive pressure of the industry 31. Which book first presented the moral responsibilities of a manager? a. The Morals of the Executive b. The Ethics of the Executive c. The Values of the Executive d. The Functions of the Executive Answer: d. The Functions of the Executive 32. What was the title of the book written by Chester Barnard? a. The Morals of the Executive b. The Ethics of the Executive c. The Values of the Executive d. The Functions of the Executive Answer: d. The Functions of the Executive 33. Chester Barnard stated that what should executives inspire in the common purpose of the organization? a. values b. ethics c. faith d. morals Answer: c. faith 34. What is the process called that evaluates the ethical values within the firm? a. values analysis b. morals analysis c. ethical analysis d. integrity analysis Answer: c. ethical analysis 35. In Roberson and Crittenden’s Mapping of Ethical Philosophies (Figure 8-3), which ethical philosophy corresponds with an Eastern culture and a Socialist Economic Ideology? a. Egoism b. Formalism c. Moral Relativism d. Utilitarianism Answer: d. Utilitarianism 36. In Roberson and Crittenden’s Mapping of Ethical Philosophies (Figure 8-3), which ethical philosophy corresponds with a Western culture and a Capitalist Economic Ideology? a. Egoism b. Formalism c. Moral Relativism d. Utilitarianism Answer: a. Egoism 37. In Roberson and Crittenden’s Mapping of Ethical Philosophies (Figure 8-3), which ethical philosophy corresponds the closest with a Western culture and a Socialist Economic Ideology? a. Egoism b. Formalism c. Moral Relativism d. Utilitarianism Answer: c. Moral Relativism 38. In Roberson and Crittenden’s Mapping of Ethical Philosophies (Figure 8-3), which ethical philosophy is considered in-between a Capitalist and a Socialist Economic Ideology? a. Egoism b. Formalism c. Moral Relativism d. Utilitarianism Answer: b. Formalism 39. In the Typology of Ethical Crises Categories (Table 8-2), copyright infringement would be considered: a. Internal-Normal b. External-Normal c. Internal-Abnormal d. External-Abnormal Answer: c. Internal-Abnormal 40. In the Typology of Ethical Crises Categories (Table 8-2), industrial espionage would be considered: a. Internal-Normal b. External-Normal c. Internal-Abnormal d. External-Abnormal Answer: b. External-Normal 41. In the Typology of Ethical Crises Categories (Table 8-2), product recall would be considered: a. Internal-Normal b. External-Normal c. Internal-Abnormal d. External-Abnormal Answer: a. Internal-Normal 42. In the Typology of Ethical Crises Categories (Table 8-2), reputation issues would be considered: a. Internal-Normal b. External-Normal c. Internal-Abnormal d. External-Abnormal Answer: d. External-Abnormal 43. Whether the crisis issue is internal or external is called the: a. Vortex of Crisis b. Center of Gravity c. Focus of Crisis d. Issue Determination Answer: b. Center of Gravity 44. Which of the following is not a trait of a moral person? a. Integrity b. Honesty c. Truthfulness d. Trustworthiness Answer: c. Truthfulness 45. Which of the following is not a behavior of a moral person? a. Do the Right Thing b. Being Open c. Presenting Your Values To Others d. Personal Morality Answer: c. Presenting Your Values To Others 46. Which of the following is not a decision making issue of a moral person? a. Hold on to values b. Be objective/fair c. Ask others for input d. Concern for Society Answer: c. Ask others for input 47. Which of the following is not a role of a moral manager? a. Role modeling through visible action b. Rewards and discipline c. Report all problems to the ethics officer d. Communicating about ethics and values Answer: c. Report all problems to the ethics officer 48. A Strong Moral Manager and a Weak Moral Person results in what kind of leader? a. Hypocritical b. Ethical c. Unethical d. Inconsistent Answer: a. Hypocritical 49. A Weak Moral Manager and a Weak Moral Person results in what kind of leader? a. Hypocritical b. Ethical c. Unethical d. Inconsistent Answer: c. Unethical 50. A Strong Moral Manager and a Strong Moral Person results in what kind of leader? a. Hypocritical b. Ethical c. Unethical d. Inconsistent Answer: b. Ethical 51. A Weak Moral Manager and a Strong Moral Person results in what kind of leader? a. Hypocritical b. Ethical c. Unethical d. Inconsistent Answer: d. Inconsistent 52. The shared values and beliefs of employees within any given organization are called: a. Corporate climate b. Corporate values c. Corporate culture d. Corporate beliefs Answer: c. Corporate culture 53. Factors such as what is seen and heard within a firm are called: a. symbols b. artifacts c. legacies d. identifiers Answer: b. artifacts 54. Which of the following is not one of Schein’s three levels of culture? a. symbols b. artifacts c. shared values d. basic assumptions Answer: a. symbols 55. What groups within the firm learn about what is acceptable and not acceptable is called: a. norms b. shared values c. cognitive learning d. corporate learning Answer: b. shared values 56. The agreed starting point for decision making within the firm is called: a. strategic planning b. strategic decision making c. basic assumptions d. initial cognition Answer: c. basic assumptions 57. The observation of the leader’s behavior as a role model is an example of: a. Primary Embedding Mechanisms b. Secondary Embedding Mechanisms c. Primary Articulation and Reinforcement Mechanisms d. Secondary Articulation and Reinforcement Mechanisms Answer: a. Primary Embedding Mechanisms 58. The system and procedures of the organization is an example of: a. Primary Embedding Mechanisms b. Secondary Embedding Mechanisms c. Primary Articulation and Reinforcement Mechanisms d. Secondary Articulation and Reinforcement Mechanisms Answer: d. Secondary Articulation and Reinforcement Mechanisms 59. Charles Prince was the CEO who increased the ethical focus at Citigroup. a. True b. False Answer: a. True 60. Developing a financial forecast would be an example of strategic planning. a. True b. False Answer: a. True 61. “Is the proposed action legal” is the first decision in the Ethical Decision Tree. a. True b. False Answer: a. True 62. “What is the truth?” is one of the questions asked in Hosmer’s Model of Trust, Commitment and Effort. a. True b. False Answer: b. False 63. “What is integrity” corresponds with moral courage in Hosmer’s Model of Trust, Commitment and Effort. a. True b. False Answer: a. True 64. According to the textbook, the ability to change the viewpoint of another person based on your actions is called persuasion. a. True b. False Answer: b. False 65. Chester Barnard was the author of the book “The Values of the Executive” a. True b. False Answer: b. False 66. Moral Relativism corresponds with an Eastern culture and a Capitalist ideology. a. True b. False Answer: b. False 67. Formalism corresponds with an Eastern culture and a Socialist ideology. a. True b. False Answer: b. False 68. Records tampering would be an example of an Internal-Normal crisis issue. a. True b. False Answer: b. False 69. A strike would be an example of an External-Normal crisis issue. a, True Answer: b. False 70. Truthfulness is a trait of a moral person a. True b. False Answer: b. False 71. Rewards and Discipline is a characteristic of a moral manager a. True b. False Answer: a. True 72. A weak moral person and a strong moral manager is called an Inconsistent leader. a. True b. False Answer: b. False 73. A strong moral person and a weak moral manager is called a Hypocritical leader. a. True b. False Answer: b. False 74. The shared values and beliefs of employees within any given organization is called a corporate culture. a. True b. False Answer: a. True 75. Basic assumptions is par of Schein’s Three Levels of Culture. a. True b. False Answer: a. True 76. How is strategic planning relevant when corporate ethics are discussed? Answer: Strategic planning is a critical step in both the formulation and implementation of the strategic ethical focus of the firm. It is through the strategic planning process that a firm establishes its short-term and long-term goals. As a result, it is imperative that ethical standards are integrated in the strategic planning process. Therefore, managers should not consider ethics as a stand alone decision. Ethics should be naturally integrated into the decision making process so that it is considered just one more variable to consider for ANY strategic decision made by the firm. If ethics is not incorporated in the strategic planning process the firm will be vulnerable for ethical lapses and the consequences of those lapses in the future. 77. From a firm perspective, how would you rank in order of desirability of the different types of leaders presented in the moral person and moral manager matrix? Answer: Of course, the highest ranking order is the easiest since it would automatically be the ethical leader. One of the foundation points of this textbook is to stress to the students that they have the control over how they manage others. By assuming an ethical leadership role as is highlighted with the ethical leader, these managers guide both themselves and others by the ethical standards established within them. The next most desirable leader would be the inconsistent leader. This type of leader could be considered a transition ethical leader. An inconsistent leader has the tools to become an ethical leader since he or she has the strong ethical values of a moral person. As a result, the only problem with the inconsistent leader is that he or she has not been able to transfer these traits to others via their management role. Therefore, it is desirable and feasible for an inconsistent leader to move and become an ethical leader. The third most desirable leader would be the hypocritical leader. Although the hypocritical leader has strong ethical management skills, he or she does not have strong individual ethical skills needed to become a moral person. This type of leader is dangerous to a firm because a hypocritical leader is not trustworthy. As a result, creditability and believing the manager is telling the truth is met with skepticism. Therefore, as was the case of Martha Stewart, a hypocritical leader must build back trust in their relationship with the subordinates before he/she could move to become an ethical leader. The fourth and last most desirable leader would be the unethical leader. An unethical leader neither has the traits of a moral person nor the ethical management skills of a manager. As a result, it would be highly unlikely that an unethical leader would ever become an ethical leader. 78. Why is culture so important in the study of business ethics? Answer: Corporate culture could be considered the glue that holds the organization together. As a result, corporate culture is critical for the implementation of any strategy within the firm. Therefore, if the corporate culture supports strong ethical standards, it would be much easier for management to execute changes in their strategy. Furthermore, those values and beliefs of the firm’s culture, what is considered acceptable and unacceptable behavior is quickly filtered throughout the organization. Thirdly, an ethically favorable culture creates a more positive work environment for the firm which means that employees are proud to work for the firm and are excited about working for the company. Finally a strong ethical corporate culture can save the company money by reducing the legal and financial costs of having illegal activities occurring within the firm. Test Bank For Understanding Business Ethics Peter Allen Stanwick, Sarah D. Stanwick 9780131735422, 9788131755365, 9781506303239, 9781452256559

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