Business Ethics Managing Corporate Citizenship And Sustainability In The Age Of Globalization 3rd Edition by Andrew Crane -Test Bank

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Business Ethics Managing Corporate Citizenship And Sustainability In The Age Of Globalization 3rd Edition by Andrew Crane -Test Bank

CHAPTER 6

 

Type: fill-in-blank

Title: Chapter 06 – Question 01

01) Please complete the following definition (two missing words): ‘___________ describes the process by which shareholders seek to ensure that “their” corporation is run according to their intentions. It includes processes of goal definition, supervision, control, and sanctioning.’

Feedback: ‘Corporate governance describes the process by which shareholders seek to ensure that “their” corporation is run according to their intentions. It includes processes of goal definition, supervision, control, and sanctioning.’

Page reference: 238

  1. Corporate governance

 

Type: multiple choice question

Title: Chapter 06 – Question 02

02) According to Shankman (1999), two features make agency relations special. One of these is the inherent conflict of interest between shareholders and managers. What is the other?

  1. Short-term focus of the ownership goals.

Feedback: The short-term focus of ownership goals is a feature only of the Anglo-American model; others have a more long-term focus (see Fig 6.2, p242).  The second of the features making agency relations special is that the principal has only limited knowledge and insight into the qualifications, actions, and goals of the agent – which economists refer to as informational asymmetry.

Page reference: 239-240

  1. Limited communication between owners and managers.

Feedback:  Communication is not automatically limited. The second of the features making agency relations special is that the principal has only limited knowledge and insight into the qualifications, actions, and goals of the agent – which economists refer to as informational asymmetry.

Page reference: 239-240

  1. Large differences in defined rights and obligations.

Feedback: Shareholders do have narrow, well-defined rights, whilst managers have far-reaching but ill-defined duties. However, this is a general feature of the relationship between owners and managers (see p238).  The second of the features making agency relations special is that the principal has only limited knowledge and insight into the qualifications, actions, and goals of the agent – which economists refer to as informational asymmetry.

Page reference: 239-240

*d. Informational asymmetry between principal and agent.

Feedback: The principal has only limited knowledge and insight into the qualifications, actions, and goals of the agent, which economists refer to as informational asymmetry.

Page reference: 239-240

 

Type: matching question

Title: Chapter 06 – Question 03

03) Correctly complete the comparison of corporate governance regimes globally, with respect to ownership identity.

Feedback: Crane and Matten identify issues around corporate governance regimes globally, and six geographical areas which have differences on these issues. In addition to ownership identity, the other issues are ownership structure, changes in ownership, goals of ownership, who controls the board, and the key stakeholders.

Page reference: 242

  1. Anglo-American model = Individuals, pensions and mutual funds
  2. Rhenish capitalism = Banks, corporations, state
  3. India = Families, foreign investors, banks
  4. China = State, families, corporations

 

Type: multiple choice question

Title: Chapter 06 – Question 04

04) There are numerous ethical issues around executive pay. Which of these do Crane and Matten identify as a reason that executive pay touches an ethical chord with the public in many countries?

*a. The pay differentials between those at the top and those at the bottom appear to be highly inequitable.

Feedback: See Chapter 7 for a discussion of fair pay for employees.

Page reference: 247-248

  1. It is difficult to design appropriate performance-related pay.

Feedback: Crane and Matten list this as an ethical problem with executive pay in firm-shareholder relations, but they do not argue that the issue touches an ethical chord in many countries.

Page reference: 247-248

  1. Shifts in remuneration show the influence of globalization on executive pay.

Feedback:   Crane and Matten list this as an ethical problem with executive pay in firm-shareholder relations, but they do not argue that the issue touches an ethical chord in many countries.

Page reference: 247-248

  1. The influence of the board is limited, often failing to reflect shareholder (or other stakeholder) interests.

Feedback:   Crane and Matten list this as an ethical problem with executive pay in firm-shareholder relations, but they do not argue that the issue touches an ethical chord in many countries.

Page reference: 247-248

 

Type: multiple choice question

Title: Chapter 06 – Question 05

05) Ballwieser and Clemm (1999) identify five main problematic aspects of the financial intermediary’s job. Which of the following is not one of them?

  1. Conflict of interest.

Feedback: This is one of the five aspects that Ballwieser and Clemm identify. Providing services like management consulting puts an end to the necessary neutrality of the auditor.

Page reference: 253-256

*b. Ratings are frequently unreliable.

Feedback:  This is not one of the five aspects that Ballwieser and Clemm identify.

Page reference: 253-256

  1. The size of the financial intermediary firms threaten standards.

Feedback:  This is one of the five aspects that Ballwieser and Clemm identify. The more a firm grows, the harder it may become to maintain a constant standard of diligence.

Page reference: 253-256

  1. Long-term relationships with clients can threaten independence.

Feedback:  This is one of the five aspects that Ballwieser and Clemm identify. Long-term confidential relationships with clients can lead to long-term personal relationships that can in turn threaten the independence of the financial intermediary.

Page reference: 253-256

 

Type: multiple response question

Title: Chapter 06 – Question 06

06) Read the following statements carefully and indicate which of them Crane and Matten identify as being among the most serious issues (from an ethical perspective) in the globalization of financial markets. Please select all that apply.

Feedback: Crane and Matten identify five most important issues as: governance and control; national security and protectionism; international speculation; unfair competition with developing countries; and (creation of) space for illegal transactions.

Page reference: 258-260

*a. Deterritorialized financial markets impose the problem that no national government is entitled to govern these markets.

  1. Globalized financial markets price many developing country citizens out of their own financial markets, by allowing foreign investors to purchase shares at inflated prices.
  2. The volume of trade in the financial sector unleashed by financial market liberalization threatens to overwhelm other kinds of economic activity.

*d. As globalized financial markets are not fully controlled by national governments, they can easily be used for transactions that would be illegal in most countries.

 

Type: fill-in-blank

Title: Chapter 06 – Question 07

07) Socially responsible investment is the use of ethical, social, and environmental criteria in the selection and _________ of investment portfolios, generally consisting of company shares.

Feedback: “Socially responsible investment is the use of ethical, social, and environmental criteria in the selection and management of investment portfolios, generally consisting of company shares.” SRI investors typically look for a profitable investment that complies with certain ethical standards, and the criteria for choosing an investment can be either negative or positive.

Page reference: 267

  1. Management

 

Type: multiple choice question

Title: Chapter 06 – Question 08

08) Mackenzie (1998) identifies two types of SRI funds. Market-led funds choose the firms to invest in following the indication of the market. Deliberative funds, meanwhile, base their portfolio decisions on:

  1. Their ability to engage in dialogue with companies.

Feedback: Ethical investment generally seeks engagement with companies, rather than confrontation. An ability to engage in dialogue with companies is therefore not an automatic basis for a deliberative fund’s portfolio decisions.

Page reference: 268-270

*b. Their own ethical criteria.

Feedback: This is the basis for deliberative funds’ portfolio decisions. It leads to these funds regularly assessing companies and practices.

Page reference: 268-270

  1. Data from research agencies.

Feedback: Market-led funds use data from various research agencies, such as EIRIS. Although deliberative funds may also use data from research agencies, portfolio decisions are based on the funds’ own ethical criteria and thus regularly assess companies and practices. The use of such data is therefore not an automatic basis for a deliberative fund’s portfolio decisions.

Page reference: 268-270

  1. A range of negative criteria.

Feedback: SRI investments can be chosen using either positive or negative criteria (see Fig 6.4, p268); neither of these two kinds of criteria is automatically a basis for a deliberative fund’s portfolio decisions.

Page reference: 268-270

 

Type: multiple response question

Title: Chapter 06 – Question 09

09) The Dow Jones Sustainability Index takes a best-in-class approach, meaning the DJSI includes the following kinds of shares: Please select all that apply.

Feedback: The question specifically asks about the best-in-class approach. Best-in-class means a company must be a sustainability leader relative to its rivals in the same sector. It is not inconceivable that shares of companies with improved performance, sustainable products or a good ethical record can be found in SRI funds, but none of these means that a company is necessarily better than its peers.

Page reference: 272-276

*a. Those companies identified as the sustainability leaders in each industry.

  1. Those judged to have improved their sustainability performance most over a period of time.
  2. Companies whose products promote sustainability, and/or that are themselves sustainable.
  3. Companies that have an excellent ethical record.

 

Type: true-false

Title: Chapter 06 – Question 10

10) Cooperatives are owned and run by their managers. True or false?

  1. True

Feedback: Cooperatives are businesses that are not owned by investors or managers, but rather by their workers or customers, who also exert democratic control over the company.

Page reference: 277

*b. False

Feedback: Cooperatives are businesses that are not owned by investors or managers, but rather by their workers or customers, who also exert democratic control over the company.

Page reference: 277

 

 

CHAPTER 7

 

 

Type: matching question

Title: Chapter 07 – Question 01

01) There is often a gap between HRM policies and the reality they can sometimes represent. ‘Translate’ the following terms:

Feedback: From an ethical perspective, employees should not be treated purely as a means to an end, and it is this restriction that makes all the difference in terms of business ethics.

Page reference: 291

  1. Flexibility = Management can do what it wants
  2. Empowerment = Making someone else take the risk and responsibility
  3. Recognizing the contribution of the individual = Undermining the trade union and collective bargaining
  4. Teamworking = Reducing the individual’s discretion

 

Type: matching question

Title: Chapter 07 – Question 02

02) Match the following employee rights with the examples of the issues involved.

Feedback: These are only some of the most important rights and the main ethical problems commonly associated with them in the day-to-day reality of business.

Page reference: 293

  1. Right to privacy = Work-life balance
  2. Right to due process = Disciplinary proceedings
  3. Right to healthy and safe working conditions = Occupational health and safety
  4. Right to work = Fair treatment in the interview

 

Type: multiple choice question

Title: Chapter 07 – Question 03

03) Which of the following do Crane and Matten not provide as an example of an issue associated with an employee’s duty to respect their employer’s property?

  1. Working time

Feedback: This is one of the issues involved in an employee’s duty to respect the employer’s property.

Page reference: 293

  1. Unauthorized use of company resources for private purposes

Feedback:  This is one of the issues involved in an employee’s duty to respect the employer’s property.

Page reference: 293

*c. Whistleblowing

Feedback:  This is not one of the issues involved in an employee’s duty to respect the employer’s property. Rather, it is an issue involved in the employee’s right to freedom of conscience and speech.

Page reference: 293

  1. Embezzlement

Feedback:  This is one of the issues involved in an employee’s duty to respect the employer’s property.

Page reference: 293

 

Type: fill-in-blank

Title: Chapter 07 – Question 04

04) Institutional discrimination means that the very ________ of the organization is prejudiced against certain groups.

Feedback: ‘Institutional discrimination means that the very culture of the organization is prejudiced against certain groups.’ No matter how good the legislation, many forms of discrimination are deeply embedded in business. A good example is gender discrimination.

Page reference: 296

  1. Culture

 

Type: multiple choice question

Title: Chapter 07 – Question 05

05) Imagine a retailer introduces a programme aimed at making sure employees smile and appear happy in front of customers. This is an example of which of the four kinds of threat to privacy that Simms (1994) suggests we might want to protect? Choose the best fit.

  1. Physical privacy

Feedback: This is about the ‘right to one’s own space’. Programmes to ensure smiling employees do not threaten this kind of privacy.

Page reference: 304

  1. Social privacy

Feedback: This is about the freedom to interact with other people, and in whichever way we choose. An example would be penalizing employees for behaving in a manner deemed ‘unacceptable’ or ‘immoral’ during their social lives. Programmes to ensure smiling employees do not threaten this kind of privacy.

Page reference: 304

  1. Informational privacy

Feedback: This is about how, when and to what extent private data about us are released to others. Programmes to ensure smiling employees do not threaten this kind of privacy.

Page reference: 304

*d. Psychological privacy

Feedback: Psychological privacy is about controlling emotional and cognitive inputs and outputs, and not being compelled to share private thoughts and feelings.

Page reference: 304

 

Type: true-false

Title: Chapter 07 – Question 06

06) According to Kaler (1999), the two main areas to which an employee’s right to participation extends are operational participation and a right to association. True or false?

  1. True

Feedback: The two main areas that Kaler identifies are: financial participation, and operational participation.

Page reference: 310-311

*b. False

Feedback: The two main areas that Kaler identifies are: financial participation, and operational participation.

Page reference: 310-311

 

Type: multiple choice question

Title: Chapter 07 – Question 07

07) ‘Presenteeism’ is a common cultural force in many organizations – but what is it?

  1. Social pressure to give gifts to colleagues upon return from a business trip.

Feedback: This is not an explanation of presenteeism.

Page reference: 315

*b. The phenomenon of being at work when you should be at home recovering or enjoying time off.

Feedback:  This is an explanation of presenteeism. The implicit assumption is that only those putting in long hours will be rewarded with career progression and other company rewards.

Page reference: 315

  1. The assumption that an employee can only work effectively in the workplace.

Feedback:  This is not an explanation of presenteeism, though may be an expression in practice of the phenomenon.

Page reference: 315

  1. The reality that employees are expected to stay at work until after the boss has left.

Feedback:  This is not an explanation of presenteeism, though may be an expression in practice of the phenomenon.

Page reference: 315

 

Type: multiple choice question

Title: Chapter 07 – Question 08

08) With regard to differences between national cultures and moral values, what do Crane and Matten suggest should be the starting point for providing direction between the two poles of absolutism and relativism on questions of employment conditions?

  1. The moral standards of the employer.

Feedback: This is essentially an absolutist position.

Page reference: 322

  1. Moral standards of the host country.

Feedback: This is essentially a relativist position.

Page reference: 322

  1. The economic development of the host country.

Feedback: This is essentially a relativist position, perhaps informed by a consequentialist perspective.

Page reference: 322

*d. Human rights should be a basic compass.

Feedback: This is the position that Crane and Matten suggest (citing Frankental, 2002). The UN’s Universal Declaration of Human Rights is the most widely accepted set of principles in this regard.

Page reference: 322

 

Type: multiple choice question

Title: Chapter 07 – Question 09

07) Ruggie (2008) has developed a framework for understanding business and government responsibilities in the area of human rights. It is a framework of …

*a. Protect, respect and remedy.

Feedback: The framework offers an important starting point for delineating corporate and governmental responsibilities in this area. States have a duty to protect against human rights abuses by non-state actors, such as corporations. Corporations have a responsibility to respect human rights by obeying the law and following international principles. Firms and governments need to put in place systems to provide remedy for human rights abuses.

Page reference: 328

  1. Protect, serve and employ.

Feedback:  The framework offers an important starting point for delineating corporate and governmental responsibilities in this area. States have a duty to protect against human rights abuses by non-state actors, such as corporations. Corporations have a responsibility to respect human rights by obeying the law and following international principles. Firms and governments need to put in place systems to provide remedy for human rights abuses.

Page reference: 328

  1. Respect, remedy and redeploy.

Feedback:  The framework offers an important starting point for delineating corporate and governmental responsibilities in this area. States have a duty to protect against human rights abuses by non-state actors, such as corporations. Corporations have a responsibility to respect human rights by obeying the law and following international principles. Firms and governments need to put in place systems to provide remedy for human rights abuses.

Page reference: 328

  1. Awareness, benevolence and compassion.

Feedback:  The framework offers an important starting point for delineating corporate and governmental responsibilities in this area. States have a duty to protect against human rights abuses by non-state actors, such as corporations. Corporations have a responsibility to respect human rights by obeying the law and following international principles. Firms and governments need to put in place systems to provide remedy for human rights abuses.

Page reference: 328

 

Type: multiple response question

Title: Chapter 07 – Question 10

10) ‘Green jobs’ is one of the main ways in which the problems and tensions inherent in the concept of sustainable development has been addressed. Which of the following do Crane and Matten identify as aspects of green jobs? Please select all that apply.

Feedback: The concept of green jobs is one of greater environmental sustainability in the organization’s goods and services and/or structure and organization. There are a great many approaches to achieving the goal of a greener workplace, such as increasing recycling and introducing home-based teleworking.

Page reference: 331

  1. Jobs in the agricultural industry.

*b. Jobs become more environmentally sustainable through reorganization of labour and the workplace.

  1. Jobs become human-centred, reducing the need for complicated and energy-intensive machinery.

*d. Jobs in industries producing environmentally friendly goods and services.