Topic 4-Solution

CCN2004 Managing Organisations (Study Guide)
Topic 4: Social Responsibility and Ethics

Suggested Answers in MOODLE (Posted Separately)
1. Who has a claim on a company’s resources?
a. Stakeholder
b. Whistle blower
c. Social entrepreneur
d. Milton Friedman
Answer: a. stakeholder
2. Matching Activity: (refer to Exhibit 6-1 Arguments For and Against Social
Responsibility):
Argument For * * Violation of profit maximization

Social
Responsibility
Argument * * Public expectations

Against Social
Responsibility
3. JW Marriott Hotel urges hotel guests to save the earth by reusing towels instead
of replacing towels with clean ones every day.
Answer: This is an example of Activist (or dark green) approach – firms look
for ways to respect and preserve the environment and be actively socially
responsible. The activist approach reflects the highest degree of
environmental sensitivity and illustrates social responsibility.
4. Do the following items match together?
* + +
Stage 1. Stage 5. Valuing ….. Stage 4.
Sticking rules to regardless of the Maintaining
1
avoid physical majority’s opinion conventional

punishment order …… agreed
Principled Level Preconventional Level Conventional Level
5. Issue Intensity: Fill in the Blanks 

Six characteristics determine issue intensity or how important an ethical issue is to an
individual.
Consensus of Wrong__: How much agreement is there that the action is wrong?
Probability of Harm__: How likely is it that this action will cause harm?
Immediacy of Consequences__: Will harm be felt immediately?
Proximity to victim(s) __: How close are the potential victims?
Concentration of Effect__: How concentrated is the effect of the action on the

victim(s)?
Greatness of Harm__: How many people will be harmed?
6. The more agreement that the action is wrong, the greater the
issue intensity or importance, the more likely employees behave
ethically. Which of the following is applicable?
a. Consensus of wrong
b. Probability of harm
c. Proximity to victim
d. Concentration of effect
Answer: a. Consensus of wrong
2
7. One of McDXXX’s suppliers used rotten food.

Suppose you are an employee of this supplier and
believed that this behaviour is incorrect so you exposed
this kind of unethical activity to the public. When you
reported this ethical concern, your role is called
______________.
Answer: whistle-blower: individuals who raise ethical concerns or issues to others.
8. Dow corning sent a small team of employees to rural India to help women
examine stitchery and figure out prices for garments to be sold in local markets.
Answer: Employee volunteering! Employee volunteering is a popular way for
businesses to be involved in promoting social change.
9. The breast cancer ‘pink’ campaign and the global AIDS Red campaign (started by
Bono) are ways that companies support social causes.
Answer: Corporate philanthropy! Corporate philanthropy can be an effective way
for companies to address societal problems. Molson-Coors’ eleven-member
executive team spent a full day at their annual team-building retreat building a house
in Las Vegas with Habitat for Humanity. PricewaterhouseCoopers employees
renovated an abandoned school in Newark, New Jersey. Every Wachovia employee is
given six paid days off from work each year to volunteer in his or her community.
Concept Check:
1. Social obligation is when a firm engages in social actions because of its
obligation to meet certain economic and legal responsibilities. The organization
does what it’s obligated to do and nothing more. (True / False?) Answer: True!
2. This idea reflects the classical view of social responsibility, which says that
management’s only social responsibility is to maximize profits. (True / False?)
Answer: True!
3. Name the six stages of moral development.
3
4. Explain what stage of moral development the shop assistant in the case is
probably at. Answer: there are many possible answers! The following is just
an example for reference. You could have your own way of answering the
question, too. The key is to show the concept name, follow the definition in
applying any theory, relate your answer to the case, and show strong argument
with detail justification. For instance:
Stage 1: Sticking to rules to avoid physical punishment
Answer: the sales assistant would say nothing and follow boss’s
instructions to sell overpriced product (sticking to rules) because he is afraid of
being scolded by his supervisor (i.e. punishment)
Elaboration of answer: There are six stages in the Stage of Moral
Development Model. Stage 1 belongs to the lowest Level (Preconventional
Level) of the Model at which a person’s choice between right or wrong is based
on personal consequences from outside sources, such as physical punishment,
reward, or exchange of favours. At this level, there are two stages altogether
and Stage 1 is at the lowest stage.
In this case, the shop assistant is afraid of getting a big scolding (a form of
punishment) so he/she chooses to follow to his supervisor’s instruction to sell
overpriced product (sticking to rule). According to dictionary.com (2016), the
definition of consequence is the outcome of an event especially as relative to an
individual. In this case the result of not following his supervisor’s instruction
to sell overpriced electronic product is of negative consequence (being scolded)
to the sales assistant.
In a normal business setting, it is seldom the case that a sales assistant
will receive physical punishment for not sticking to rule; hence, any
consequence that is negative such as scolding by supervisor can, therefore, be
4
used as an example in this case.
Reference:
http://www.dictionary.net/, assessed on 2nd August, 2016.
Good job!

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CCN2004 Managing Organisations (Study Guide)

Topic 4: Social Responsibility and Ethics

Argument For * * Violation of profit maximization

Argument * * Public expectations

4. Do the following items match together?

avoid physical majority’s opinion conventional

Principled Level Preconventional Level Conventional Level

5. Issue Intensity: Fill in the Blanks 

Immediacy of Consequences__: Will harm be felt immediately?

Proximity to victim(s) __: How close are the potential victims?

Concentration of Effect__: How concentrated is the effect of the action on the

Greatness of Harm__: How many people will be harmed?

7. One of McDXXX’s suppliers used rotten food.

Answer: whistle-blower: individuals who raise ethical concerns or issues to others.

used as an example in this case.

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