Problem 1: I plan on depositing 5,000 at the end of ever year with an expected return on the account being 9.8%, how long will it take me to reach $1 million in my account?
Now what if I only deposited 4,000, what is my expected return on the account to have $1 million in my account.
Problem 2: Mattel needed to act quickly when they learned of potential lead hazards in some of its toys. As a firm, they used ethical principles and approaches to:
A. isolate itself from the Chinese firm and its subcontractor to make sure it did not get blamed for the problem.
B. minimize the damage by focusing on the few product lines affected.
C. maintain its strong relationship with its customers by recalling products that posed dangers to children and their customers.
D. use the occasion as an opportunity to shed unprofitable lines of products at the same time they disposed of the defective products.
E. All of the above.
Problem 3: Using profit as the sole guide for corporate action can lead to:
A. increased short run and long run profitability.
B. short-term profits but long-term loss of customers.
C. long-term profitability but short-term losses.
D. increased corporate social responsibility.
E. all of the above
Problem 4: Deceptive advertising and promotion of inferior products are examples of _______ ethical issues.
A. business
B. marketing
C. social
D. finance
E. economic
Problem 5: Unlike other business functions like accounting or finance, people in marketing are often singled out as the root cause of ethical concerns because:
A. they are trained in the art of effective persuasive communication.
B. consumers recognize marketers are not as quantitatively skilled as accounting and finance people.
C. they interact directly with consumers.
D. problems like those that occurred at Enron, Tyco, and WorldCom were caused by marketers.
E. marketers, by definition, are less ethical.
Problem 6: Products that may damage the environment, use of sweatshop labor, and marketing of dangerous products are examples of:
A. internal, controllable marketing issues.
B. managerial issues but not marketing issues.
C. situational ethical issues.
D. marketing social issues.
E. no big deal and should not be considered a problem in most marketing environments.
Problem 7: Because marketing and sales professionals are so much in the public's eye, it should not be surprising to find them:
A. make accountants look good.
B. define the company's internal ethical standards.
C. generate corporate social responsibility.
D. offset visibility through advertising.
E. sometimes rank poorly in ratings of trusted professions.
Problem 8: In a recent Gallup survey, which of the following came in last in ratings of trusted professions?
A. car salespeople.
B. lawyers.
C. senators.
D. real estate agents.
E. medical doctors.
Problem 9: Janice was shocked to learn that the real estate company she just went to work for did not have a _________, the basic starting point for creating a strong ethical climate.
A. ethical retreat seminar
B. set of values
C. contract
D. social commitment
E. business ethics bonus
Problem 10: The Johnson & Johnson Credo prioritized their responsibilities to:
A. users of their products first, then employees, communities and finally the stockholders.
B. stockholders first, then management, the employees and then finally, their suppliers and vendors.
C. domestic markets first, then other countries in the developed world and finally, countries in the developing world.
D. users of their products first, then researchers who develop their products, regulators and then the financial markets.
E. doctors first, then nurses, insurance companies and other payers, financial markets, then the consumer users of their products.
Problem 11: The Johnson & Johnson Credo:
A. is a response to the Tylenol incident.
B. was proved to be a historical artifact but ineffective when the company needed to act in the Tylenol crisis, which was a clear lesson to other companies to update similar documents.
C. became the model and standard for all pharmaceutical companies.
D. is remarkable, far-ranging, durable and long document in the detailed description of potential problems for the company.
E. is a one-page document created by Robert Wood Johnson which has guided the firm ever since.
Problem 12: When J&J removed all Tylenol from the shelves after some containers were tampered with, poisoning and killing seven people, the company was:
A. sacrificing short-term profits for long-term credibility.
B. responding to consumer outcry.
C. being directed to do so by the Food and Drug Administration.
D. accepting the fact that consumers would never use Tylenol again.
E. designing promotional discounts to sell the returned Tylenol in less developed countries.
Problem 13: Jacqueline was pleased to read a paraphrasing of the "Golden Rule," "Do unto our customers as you would have them do unto you." as part of her new employer's mission statement. Next, Jacqueline expects to find in the firm's employee handbook:
A. a summary of recent Supreme Court business ethics cases.
B. implicit understandings to guide her in decision-making.
C. explicit rules governing the firm's transactions.
D. statements of employee concerns.
E. all of the above
Problem 14: To have an ethical business climate requires all employees to be dedicated to that goal because:
A. employees have to be taught ethical standards.
B. managers rarely enforce values unless employees ask them to do so.
C. customers are only vaguely interested in a firm's ethical standards.
D. employees do not have sufficient visionary scope to understand the ramifications of unethical behavior.
E. the roots of ethical conflict often are competing values of individuals.
Problem 15: Almost every organization includes values and ethics as part of their mission statement and includes a set of explicit rules in the company's employee handbook. Once the rules are in place there must be:
A. a system of controls that rewards appropriate behavior and punishes inappropriate behavior.
B. a Web site where employees can vent their frustration over lapses in ethical behavior.
C. weekly reminder seminars to enforce guidelines.
D. commitment from customers to accept these rules.
E. all of the above
Problem 16: Ronald is concerned about selling his company's software, knowing his firm does not intend to continue the line of software and will not be issuing upgrades in the future. Before talking to his supervisor, Ronald will likely:
A. discuss the issue with a trusted family member.
B. read his company's employee handbook, looking for explicit rules.
C. ask other salespeople how they feel about selling the software.
D. consult industry ethical standards guidelines.
E. any or all of the above
Problem 17: Senior management of an automobile manufacturing company found the transmission in their trucks sometimes appears to be in park when it is not. When the engine is left running, this could cause the truck to shift into reverse without the driver knowing it. The company weighed the cost of recalling thousands of trucks against the potential cost of lawsuits. This is an example of:
A. people are innately corrupt.
B. everyone does it.
C. choosing between conflicting outcomes.
D. if you do not take advantage, someone else will.
E. people rarely understand the consequences of unethical actions.
Problem 18: Which of the following types of unethical behavior are likely to be observed in marketing environments?
A. High pressure sales techniques.
B. Deceptive sales tactics
C. Misrepresentation of company data.
D. Misleading advertising.
E. All of the above
Problem 19: New real estate disclosure regulations require sellers and their agents to tell prospective buyers about any existing problems. Previously, they were only expected to answer buyer's questions. The new regulation addressed the marketing ethical problem of:
A. high pressure sales techniques.
B. deceptive pricing tactics
C. misrepresentation of company data.
D. misleading advertising.
E. withholding information.
Problem 20: Edward is seriously considering developing his entry-level marketing position into a fullfledged career. His mentor suggested he learn and demonstrate the Ethical Values in the AMA Code of Ethics. Which of the following is not one of those Ethical Values?
A. Honesty when dealing with customers and stakeholders.
B. Fairness in balancing the needs of both buyers and sellers.
C. Respect for the human dignity of all stakeholders
D. Dedication to increasing the return on investment for shareholders as the main duty of the corporation.
E. Citizenship to fulfill economic, legal, philanthropic and social responsibilities strategically.
Problem 21: Elizabeth has developed a promotional campaign for a client that promises a hefty return for her owned cash-strapped business. While the campaign does not violate any laws, it might be considered manipulative and misleading, especially when targeted toward senior citizens. If Elizabeth were to consult the AMA Code of Ethics she'd discover:
A. there is a high value placed on creative approaches for clients which can outweigh other concerns if the client or firm are in financial danger.
B. that different concerns affect the client and her business.
C. the General Norms and Ethical Values are somewhat ambiguous, and she should rely on her own personal ethics and her firms Code of Ethics.
D. her campaign might be difficult to support despite its creativity and ability to meet the needs of both her client and her own firm.
E. there are few practical guidelines in situations like these.
Problem 22: The AMA Code of Ethics is silent with regard to:
A. regulators.
B. customers.
C. economically vulnerable segments such as children and the elderly.
D. consultants
E. None of the above. The AMA Code of Ethics mentions each of these.
Problem 23: In making decisions managers are often faced with the dilemma between doing what is beneficial for them and possibly the firm in the short run, and doing what is right and beneficial for the firm and society in the long run. To address this conflict, a firm's:
A. quarterly profit statement needs to be ethically evaluated.
B. long-term goals must be stated in general terms so as to not interfere with individual's short-term goals.
C. think about society ahead of the needs of the company.
D. long-term goals must be aligned with the short-term goals of each individual within the firm.
E. all of the above
Problem 24: After a rash of embarrassing and potentially illegal activities, Jane is re-assessing the ethical standards and practices in her organization. Jane will assess:
A. whether the organization has a strong ethical climate.
B. what explicit rules for governing the firm's transactions exist.
C. the current a code of ethics.
D. what system for rewarding and punishing behavior is in place.
E. all of the above
Problem 25: One of Big Ben Clock Company's customers has complained to the home office about high-pressure sales tactics used by their leading sales representative. The company's code of ethics explicitly directs sales personnel not to engage in such practices. The manager of Big Ben will likely:
A. assess whether the organization has a strong ethical climate.
B. determine what explicit rules for governing the firm's transactions exist.
C. review ambiguity in the current a code of ethics.
D. determine what punishment is appropriate.
E. all of the above
Problem 26: One of All Army Credit Union's customers complained to the home office about huge fees assessed to his account that were not mentioned when he opened the account. The manager of Al Army Credit Union will likely:
A. assess whether the organization has a strong ethical climate.
B. determine what explicit rules for governing the firm's transactions exist.
C. review ambiguity in the current a code of ethics.
D. determine what reward is appropriate for the staff member who generated the fees.
E. all of the above
Problem 27: Firms with strong ethical climates tend to:
A. make greater utilization of business development consultants.
B. offer more goods and services than firms without strong ethical climates.
C. be more socially responsible.
D. invest more in sales training software.
E. all of the above
Problem 28: Many executives and corporate board of directors perceive being socially responsible as not part of their mission or responsibility. These business leaders consider being socially responsible to be:
A. the basic requirement of any business.
B. the equivalent of the AMA standard of "Do no harm."
C. the sum of customer and operational effectiveness.
D. basic business ethics.
E. beyond the norms of corporate ethical behavior.
Problem 29: One of the criticisms of corporate social responsibility is the difficulty of demonstrating:
A. revenue savings to the company.
B. tangible benefits to the company
C. virtual perceptions among the company's consumers.
D. the benefits to government from compliance with social responsibility regulations.
E. the social need for corporate social responsibility.
Problem 30: Internet auction sites are especially prone to scamming as discussed in the Power of the Internet 3.1: Unethical Internet Behavior. _______________ are vulnerable to scams, and a great deal of money is lost.
A. Buyers only
B. Sellers only
C. The auction sites
D. All of the above
E. None of the above.
Problem 31: Being socially responsible is generally considered ____________________.
A. a good thing to do only when a company is profitable.
B. inappropriate for most firms in today's market.
C. beyond the norms of corporate ethical behavior.
D. more appropriate for regulators, ethical philosophers and clergy with a special interest in social and corporate behavior.
E. corporate foundations who can effectively concentrate a firm's philanthropy.
Problem 32: For his class in ethics, Isaac examined the practices of a number of nationally focused and international firms to determine how ethics and corporate social responsibility were being practiced. He found:
A. firms could be both ethical and socially responsible.
B. firms could be ethical, but they were not involved with the larger community.
C. firms could be neither ethical nor socially responsible and still be part of the business community.
D. firms could have questionable ethical practices yet donate a lot to the community which could embarrass the recipients of the donations.
E. all of the above.
Problem 33: Ironically, while the leaders of Enron Corporation were manipulating the company's finances for their personal benefit, the company was a major donor to Houston area charities. Enron had ethically-challenged business practices but was also:
A. practicing marketing ethics.
B. manipulating the company's bottom line through charitable donations.
C. creating a local ethical business climate.
D. contributing to corporate social responsibility.
E. all of the above
Problem 34: In Adding Value 3.1, Coca-Cola's HIV/AIDS program:
A. provides free soft drinks to AIDS victims.
B. uses Coca-Cola's marketing muscle to promote Coke's new AIDS vaccine.
C. leverages Coca-Cola's corporate assets for corporate social responsibility efforts.
D. shows how an ethical climate can lead to better business practices.
E. all of the above
Problem 35: The Ethical Decision-Making Framework includes all of the following steps EXCEPT:
A. identify issues.
B. promote the firm's corporate social responsibility efforts.
C. gather information and identify stakeholders.
D. brainstorm and evaluate alternatives.
E. choose a course of action.
Problem 36: Garrett has just purchased a beer distributorship. He wants to increase the visibility of his firm in local markets but knows there are a number of regulations and socially accepted practices associated with promoting alcoholic beverages. According to the framework for ethical decision making, the first thing Garrett will do is:
A. identify issues.
B. promote the firm's corporate social responsibility efforts.
C. gather information and identify stakeholders.
D. brainstorm and evaluate alternatives.
E. choose a course of action.