Bus130 ch4 TF

Using profit as the sole guideline for corporate action is the primary purpose of a business.
FALSE

Although firms cannot stay in business long without earning a profit, using profit as the sole guideline can lead to short-term decisions that cause the firm to lose customers in the long run.

Short-term profitable decisions can cause firms to lose customers in the long run.
TRUE

Although firms cannot stay in business long without earning a profit, using profit as the sole guideline can lead to short-term decisions that cause the firm to lose customers in the long run.

Marketing has been singled out as the root cause of a host of ethical problems in business.
TRUE

Marketing ethical lapses have led to problems such as unethical advertising and the promotion of
shoddy products.

Marketers are frequently singled out for criticism related to ethics, in part because they interact directly with people.
TRUE

Because marketers are in the public eye, it is not surprising that their actions are more visible and
therefore subject to more scrutiny and more criticism.

Advertising executives are rated as having higher ethical standards than lawyers.
FALSE

Lawyers have a very slightly higher rating than advertising executives in terms of perceived ethical standards. Neither group gets a high rating.

The process of creating a strong ethical business climate begins with employee acceptance.
FALSE

The process of creating a strong ethical business climate begins with a shared set of ethical values and a shared understanding of the implications of these values for the firm.

Each individual’s ethical standards are a product of culture and upbringing.
TRUE

Our different cultural and individual backgrounds lead to different sets of ethical standards.

Merck & Co.–having learned from the Johnson & Johnson Tylenol incident–was quick to respond when the first reports of problems with Vioxx arose.
FALSE

Merck had seen evidence that Vioxx was associated with higher incidence of cardiovascular problems at least four years before the drug was withdrawn.

A survey of marketing officers reported that the most frequently observed type of unethical behavior was false or misleading advertising.
FALSE

Although false/misleading ads were one category of often-observed unethical behavior, the most commonly reported behaviors were high pressure, misleading, or deceptive sales tactics.

The first “Ethical Norm” in the AMA’s code of ethics is “Marketers must do no harm.”
TRUE

The ethical norms in the AMA Code of Ethics are: (1) Do no harm; (2) Foster trust in the marketing system; and (3) Embrace ethical values.

Firms with strong ethical climates tend to be more socially responsible.
TRUE

Corporate social responsibility refers to voluntary actions taken by a company to address ethical, social, and environmental impacts of its business operations and concerns of its stakeholders. Highly ethical firms are more likely to be socially responsible; however, the two do not always go together.

Ethical issues are likely to arise at each stage of the strategic marketing planning process.
TRUE

Firms must consider ethical issues at the planning, implementation, and control stages of the strategic marketing planning process.

There is often no one right answer to ethical dilemmas.
TRUE

Many ethical decision making scenarios have no clear-cut answer, as the interests of different sets of stakeholders may be in conflict.

If a U.S. clothing brand buys from overseas suppliers who manufacture clothing using child labor, this is the supplier’s problem, and the U.S. company has no reason to be concerned.
FALSE

Even though the children are not actually employed by the U.S. firm, its reputation–and perhaps even its sales–may suffer from public disclosure of the labor practices of its suppliers.

A roofing company agreed to complete a job in one week and collected a 50% deposit, but never showed up to do the job. The same roofing company then donated $6,000 to a local children’s hospital. The roofing company could be considered socially responsible.
TRUE

It is possible to be socially responsible yet unethical, which describes this particular company. Its failure to meet its agreements demonstrates ethical issues; however, its community support shows social responsibility.

When a cereal manufacturer announces that due to recent reports about the health benefits of whole grains, it will begin using whole grains in all of its breakfast cereals, the company has integrated ethics into the implementation phase of its marketing strategy.
TRUE

During the Implementation stage firms can identify potential markets and how to successfully deliver the 4 Ps in an ethical way.

BlendMate, a firm that manufactures high-end blenders, donates $10 per blender sold to a local food bank. This is a form of corporate social responsibility.
TRUE

When companies voluntarily embrace CSR, they not only appeal to their shareholders, but to their primary stakeholders–including their own employees, consumers, the marketplace, and society at large. In this case, the company would be supporting a charity that helps society at large.

Ethos Water donates two percent of its profits to children in need of clean water. This action demonstrates that Ethos Water is a firm with a strong ethical climate.
FALSE

This is an example of corporate social responsibility, as it is a voluntary action designed to help the community at large. While ethical firms are more likely to be socially responsible, the two do not always go hand in hand.

Corporate social responsibility refers to the coordinated actions of the federal and many state governments to address the ethical, social and environmental impacts of business operations.
FALSE

Corporate social responsibility refers to voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders.

The idea the corporate social responsibility is unnecessary because the goal of any corporation is simply to make a profit has been thoroughly discredited and is no longer supported by economists or
business people.
FALSE

While some feel that the recent economic crisis argues in favor of social responsibility being a core responsibility of firms, not everyone agrees.