Applying the Concept Answers

Applying the Concept 2-1: The Internal Environment

Identify the internal environmental factor underlying each statement.

A. management and culture
B. mission
C. resources
D. systems process
E. structure

1. “We plant seeds, grow vegetables, cut them up, place them in a bag, and sell them to Stop and Shop supermarkets as locally grown.”
D. Systems process. Inputs are being converted into outputs.

2. “We are buying a new software package to improve our customers’ privacy and security.”
C. Resources. Software is a physical resource.

3. “Yes. We sell donuts, but we make more money on real estate by renting our facilities to franchisees.”
B. Mission. Real estate is the actual purpose of the business.

4. “We are splitting computer sales into desk PCs and mobile laptops and tablets.”
E. Structure. Splitting a department changes the existing structure.

5. “The CEO has been fired for unethical behavior, and the CFO is moving up to replace him.”
A. Management and culture. There is a change in Management.


Applying the Concept 2-2: Strong and Weak Cultures

Identify whether each statement reflects an organization with a strong or weak culture.

A. strong culture
B. weak culture

6. “Oh no, do I really have to listen to the story about how the company founder Ted walked three miles in a snowstorm to deliver the package on time again?”
A. Strong culture. It appears that there is conformity with everyone dressing similarly. If some people wear jackets and ties and others don’t, it’s optional and a weak part of expected behavior.

7. “Everyone in the department acts differently, so I guess I can just be me rather than trying to act in a manner acceptable to others.”
A. Strong culture. Stories are a part of a strong culture.

8. “It’s hard to know if I need to follow the ethics code because managers act unethically every now and then.”
B. Weak culture. When expected behavior is not clear, there is a weak culture.

9. “I started to tell this ‘dumb blond’ joke, and the other employees all gave me a dirty look, so I stopped.”
B. Weak culture. Unclear values are an indication of a weak culture.

10. “When I walked around the department during my job interview, I realized I’d have to come to work in formal attire because all the women were wearing dresses or suits.”
A. Strong culture. The group is giving a “dirty look” to convey that ethical jokes are not acceptable behavior. Employees enforcing behavior comes from a strong culture.


Applying the Concept 2-3: The External Environment

Identify which external environmental factor is referred to in each statement.

A. customers
B. competition
C. suppliers
D. labor force
E. shareholders
F. society
G. technology
H. the economy
I. governments

11. “Are you going to close that sale to Costco?”
I. Governments. The government can stop mergers and acquisitions when it believes society will be harmed by the business transaction.

12. “If we don’t get a 4% raise, the Teamsters union will go on strike at our company.”
G. Technology. A new material is a technology change.

13. “Animal activist groups pressured the Ringling Brothers circus to the point that it will stop having elephant acts in 2018.”
B. Competition. AT&T lost its monopoly, as it has competition now.

14. “KFC bought some bad chickens in China, and sales declined.”
H. The economy. The government can influence the economy through monetary policy of changing the amount of money in the economy.

15. Our company was going to be sold to Sprint, but the government said that would be in violation of antitrust laws.”
E. Shareholders. They own the company and appoint top managers.

16. “Tesla is working on software for its cars to be self-driven.”
G. Technology. New software is a technology change.

17. “LinkedIn and other social media websites took some of the traffic flow away from Facebook.”
B. Competition. The social media websites compete with each other for viewers.

18. “Since the recession ended, we have had an increase in sales, but revenues are still not above pre-recession levels.”
H. The economy. Sales tend to go with the state of the economy; down in a recession and up during growth periods.

19. “The owners of the company will get to vote on its being acquired or staying independent.”
E. Shareholders. They own the company and may get a vote on issues like acquisitions and mergers.


Applying the Concept 2-4: Level of Moral Development

Identify each statement by its level of moral development.

A. preconventional level
B. conventional level
C. postconventional level

20. I can’t lie to customers because it is against my religion; it is a sin to lie.
C. Postconventional. The person is not lying because of religious honest.

21. Carl says to Lolo, “You’re not selling as much as the rest of us. You really should lie to customers like we do. If the boss asks why you aren’t selling as much as the rest of us, you better not tell him we lie, or you will be sorry.”
B. Conventional. Carl is using peer pressure to get Lolo to be unethical.

22. Latavia says to John, “There is no big deal in telling lies to customers. We are helping them buy a good product.”
A. Preconventional. Latavia is trying to convince John that lying is OK.


Applying the Concept 2-5: Ethical Approach

Identify each statement by its approach to making ethical decisions.

A. Golden Rule
B. four-way test
C. stakeholder’s approach
D. discernment and advice
E. code of ethics

23. I’m a member of Rotary International, and I use its approach when I make decisions.
B. Four-Way test. The Rotary approach is the four-step method.

24. When I make decision, I follow the guidelines the company gave all of us to use to make sure I’m doing the right thing.
E. Code of ethics.  Companies have codes of ethics for all employees to follow.

25. I try to make sure that everyone affected by my decisions gets a fair deal.
C. Stakeholder’s approach.  The person is trying to create a win-win situation for all stakeholders involved.

26. I try to treat people the way I want them to treat me.
A. Golden rule. This statement is essentially saying Do unto others as you would want them to do unto you.

27. Latoya, what do you think of my decision for handling this customer’s complaint?
D. Discernment and Advice.  The person is considering if the decision is ethical or not and getting advice to determine if it is or not.