Deck 3: Ethics in Business

Question 1

Congress enacted the Sarbanes-Oxley Act to help reduce unethical management decisions.

Answer 1

True

Question 2

Ethics is a branch of philosophy that focuses on morality.

Answer 2

True

Question 3

Company codes of conduct set forth company policies and expectations for different issues.

Answer 3

True

Question 4

Once a law is passed to codify an ethical requirement,the ethical aspect of the action is no longer important.

Question 5

One view of the role of business in society is the perceived duty of a company only to generate revenue for its owners.

Question 6

It can be difficult to predict with certainty how a court will apply a given law to a particular action.

Question 7

Conduct that is legal is ethically unquestionable.

Question 8

When making ethical decisions,a business should evaluate the financial implications.

Question 9

The effectiveness of an industry code of ethics is partly determined by the commitment of the industry or company leadership to enforce it.

Question 10

The study of ethics goes no further than the requirements of the law to evaluate what is right for society.

Question 11

Outcome-based ethics deals with traditional standards of behavior.

Question 12

One of the most important ways to maintain an ethical workplace is for management to set standards and expectations for ethical behavior.

Question 13

Congress does not pass laws based on ethics.

Question 14

Duty-based ethics is based in the idea that every business has certain duties to others.

Question 15

Ethical decision makers should test and reflect on the outcome of their decisions.

Question 16

When profit maximization is the goal,a company does not benefit from ethical behavior.

Question 17

The term moral minimum is best defined as the highest degree of ethical behavior expected of a firm.

Question 18

Because it may be unclear how a court will interpret and apply a law,companies can ensure decisions are viewed as ethical by documenting their own interpretation of the law.

Question 19

Under the categorical imperative,an unethical decision that would have only a small impact is acceptable as long as no one else in society acts the same way.

Question 20

Corporate "citizenship" involves making decisions beyond just maximizing profits and dividends.

Question 21

Because social media is so widespread,it is legal and ethical for a company to have social media policies limiting employees from criticizing the company.

Question 22

Under the "stakeholder view," no group ever has a greater stake in company decisions than the shareholders do.

Question 23

Once a company has investigated any foreign suppliers,it is unnecessary to continue to monitor those suppliers.

Question 24

An overemphasis on long-run profit maximization is a common reason for ethical problems that occur in business.

Question 25

As part of the IDDR approach as described in the text,it is important to list many possible actions and analyze them using several different ethical theories.

Question 26

With respect to what society will tolerate,a company's compliance with the law,and no more,is

A) the highest ethical level.
B) the lowest ethical level.
C) the only ethical level.
D) irrelevant.

Question 27

Corporate social responsibility links the responsibility of citizenship with the strategy and key principles of a business.

Question 28

Decision makers need to consider what they can and will do before they consider what they should do.

Question 29

Business ethics looks at whether business decisions

A) are right or wrong.
B) derive from well-known business principles.
C) follow legal doctrine.
D) align with corporate policy.

Question 30

Global businesses need to be conscious of the impact of different religious principles on ethics.

Question 31

Ethics has to do with how a businessperson making business decisions applies

A) legal doctrine.
B) moral principles.
C) corporate policy.
D) financial priorities.

Question 32

Making ethical decisions is most often best done by analyzing objective standards (such as profit or number of people fired)instead of subjective impacts on stakeholders.

Question 33

Rationalization is the process of making a logical decision based in evidence and an analysis of the ethical dimensions of the decision.

Question 34

Outcome-based ethics determines what is ethical by looking at the potential benefits and harms of a given action.

Question 35

Corporate social responsibility may increase a business's reputation or goodwill.

Question 36

Under the principle of rights theory,the key factor in a decision is how the result may harm the rights of the company to make money.

Question 37

The Fraud Reduction and Data Analytics Act to prevent,detect,and respond to fraud in federal programs institutionalizes

A) fraud.
B) ethical rights and duties.
C) federal programs.
D) corporate policy.

Question 38

The first step in making an ethical decision is to understand the problem.

Question 39

Judging a job applicant based on what an online search reveals about the applicant's activities outside the workplace universally is viewed as ethical.

Question 40

Artificial Intelligence Inc.sells to Beta Bots Corporation a promising idea for a technological innovation that is still being developed and that looks very promising.This is

A) ethical and legal.
B) unethical but legal.
C) illegal and unethical.
D) unethical and illegal.

Question 41

Ethics is important because laws may not always be easy to interpret or apply.This is because

A) laws are very organized and structured and so are complicated to read.
B) laws represent the will of the people and that will is often changing.
C) laws are created by the political process and are the result of compromise.
D) laws often have definition provisions to explain the meaning of terms.

Question 42

Product Sales Inc.adheres strictly to the goal of maximizing profits.Even so,Product Sales will benefit from ethical behavior

A) if customer service is good.
B) if its owners are happy with the revenue.
C) under no circumstances.
D) if it efficiently allocates its scarce resources.

Question 43

Questions of what is ethical involve the extent to which a company has

A) a legal duty beyond those duties mandated by ethics.
B) an ethical duty beyond those duties mandated by law.
C) any duty beyond those mandated by both ethics and the law.
D) any duty when it is uncertain whether a legal duty exists.

Question 44

Viaduct Corporation used untested and risky construction techniques to build a bridge under budget.The techniques were legal but the bridge collapsed,killing several people.Viaduct's actions were

A) unethical and may result in legislation to ensure it does not happen again.
B) ethical because they were legal and so Viaduct owes no one.
C) dangerous and so inherently illegal.
D) legal under Sarbanes-Oxley and so Viaduct will face no penalties.

Question 45

When making decisions that are ethical under either profit maximization or corporate citizenship theories,a business should include all of the following steps except

A) recognize that there is an ethical issue in the decision.
B) apply ethical theories to reasonable alternatives.
C) publicize the options you rejected with your reasons.
D) reflect on the outcome of the decision once it is made.

Question 46

Owen and other managers employed by Pastry Bakeries are most likely to find that unethical behavior in the workplace can be deterred by

A) taking immediate action in response to unethical conduct.
B) imposing sanctions disproportionate to misconduct.
C) distributing rewards without regard to ethics.
D) ignoring small breaches of company rules.

Question 47

The utilitarian theory of ethics does not require

A) a choice among alternatives to produce the maximum societal utility.
B) a determination of whom an action will affect.
C) an assessment of the effects of alternatives on those affected.
D) the acquiring of the means of production by workers.

Question 48

"Be honest and treat people fairly." With respect to business ethics,implementing this motto is

A) not important.
B) only important in democratic societies.
C) very important.
D) only important with large customers.

Question 49

The triple bottom line looks at all of the following except

A) how decisions impact profits and revenue.
B) how decisions impact sustainability and the planet.
C) how decisions impact employees and consumers.
D) how decisions impact the relationship between the U.S.and other nations.

Question 50

Lucy is a business manager for Manufacturing Company.Ethical issues that Lucy is not likely to encounter include determining

A) protocols for company meetings.
B) questions of workplace diversity.
C) compliance with environmental regulations.
D) application of safety standards.

Question 51

Cynthia is the chief financial officer of Digital Corporation.In that capacity,when she is unsure whether a certain business action is legal,she should act

A) in her own best interest.
B) honestly and responsibly.
C) in the short-run interest of Digital.
D) to maximize profit.

Question 52

Under the principle of rights theory,a key factor in determining whether a business decision is ethical is how that decision

A) compares to religious principles.
B) affects the rights of others.
C) causes consequences that would follow if everyone acted the same way.
D) supports the right to make a profit.

Question 53

Duty-based ethical standards are most likely to derive from

A) a corporate ethics code.
B) a cost-benefit analysis.
C) philosophical reasoning.
D) the law.

Question 54

An ethical code of conduct is not

A) law.
B) a set of rules that the company can enforce.
C) an outline of the company's policies.
D) a guide for decision makers facing ethical questions.

Question 55

Flo,the manager of Grounds Maintenance Inc. ,must decide whether to use an herbicide that could be unhealthy to employees using it and to the public once it is on the ground.Flo might lose the client if she refuses to use the herbicide.If Flo analyzes the importance of good health and avoidance of disease to people in making her decision,she is likely using

A) religious principles.
B) the categorical imperative.
C) the principle of rights theory.
D) utilitarianism.

Question 56

Seafood Café Company makes products that can cause severe health problems to those with shellfish allergies.Seafood analyzes the cost of warning people of the risk (which they believe is obvious)and the risk of harm to people if no warning is included in advertising and on menus.This analysis most likely is part of

A) a duty-based ethics approach.
B) corporate social responsibility.
C) religious ethical principles.
D) outcome-based ethics.

Question 57

The National Restaurant Association announces a new industry code of ethics.The effectiveness of this code will be determined by

A) the commitment of management to enforcing the code.
B) the similarity of the code to the employees' personal values.
C) the success of the campaign publicizing the code.
D) the relationship between the code and the law.

Question 58

Compliance with the law is not always sufficient to determine "right" behavior because

A) the law does not codify all ethical requirements.
B) company codes are also sources of law.
C) business decisions can have negative impacts.
D) ethical problems occur in business.

Question 59

If a company strictly complies with existing laws,the firm will

A) fulfill all business ethics obligations.
B) fulfill no business ethics obligations.
C) fulfill some business ethics obligations.
D) not need to fulfill any business ethics obligations.

Question 60

When adopting duty-based ethics,corporations often demonstrate the duties they owe

A) through required government disclosure forms.
B) in their mission statements and strategic plans.
C) by adopting a corporate religion.
D) in the biographies of corporate leaders.

Question 61

Cody makes a business decision based on financial outcomes first,and then attempts to argue that it is ethical as well when it may not be.Cody is

A) rationalizing his decision.
B) questioning his decision.
C) using the utilitarian approach.
D) using the stakeholder approach.

Question 62

To avoid unethical practices by a foreign supplier,an effective business practice is to

A) pay foreign employees at U.S.pay rates.
B) have suppliers sign contracts affirming that they will behave ethically.
C) routinely monitor the foreign workplaces.
D) obtain a legislative decree that the supplier is ethical.

Question 63

Frances,an executive with GMO Seed & Feed,Inc. ,has to decide whether to market a product that could offer substantial benefits but might also have potentially serious side effects for a small percentage of users.Using the different ethical philosophies discussed,analyze the decision.

Question 64

ChemCo Inc.expends funds and takes steps to ensure that all employees are treated fairly and that the environmental impact of the corporation is minimal.This is the concept of

A) the moral minimum.
B) corporate social responsibility.
C) the categorical imperative.
D) the triple bottom line.

Question 65

Recreation & Sports Equipment Corporation sells a profit-generating product that is capable of seriously injuring consumers who misuse it in a foreseeable way.They are contemplating adding a warning to the product but that warning will increase the cost of the product and they are worried that it may scare some potential customers who might not buy the product.Thinking about the two main theories of the role of business in society,discuss whether Recreation & Sports Equipment Corporation behaves ethically by continuing to sell the product without warning.

Question 66

According to the theory of corporate social responsibility,any decision by the management of Precision Processing Corporation should consider how a proposed action may affect only the

A) firm's officers and shareholders.
B) firm's officers,shareholders,and suppliers,as well as the community,or society as a whole.
C) firm's shareholders.
D) firm's suppliers,the community,or society as a whole as well as the news media and local government.

Question 67

Holdings Corporation,a top-performing company,may be more likely to behave unethically if

A) its customers focus solely on the firm's profitability.
B) employees feel they are expected to continually perform at a high level to keep their jobs.
C) the company mandates a four-part analysis for each corporate decision being made.
D) the firm begins to focus on being good corporate citizens.

Question 68

A cost-benefit analysis is part of

A) a duty-based ethics approach.
B) corporate social responsibility.
C) the principle of rights theory.
D) utilitarianism.

Question 69

Hale,research manager for Investor Fund,Inc. ,adheres to utilitarian ethics in making business and ethical decisions that involve the actions of the firm.According to this standard,an action is morally correct when it produces the greatest good for

A) Hale.
B) Investor Fund.
C) the fewest people.
D) the most people.

Question 70

In making a business decision,Jin Soo brainstorms possible solutions to his problem and then considers what he should do.If Jin Soo is using the IDDR approach to decision making,he is in the

A) the discussion step.
B) the decision step.
C) the inquiry step.
D) the review step.

Question 71

Caryn is faced with making a business decision.As she thinks about the problem,she feels that there is no easy answer.She continues to think about what is making her uncomfortable about the situation before brainstorming possible solutions.If Caryn is using the IDDR approach to decision making,she is engaged in

A) the discussion step.
B) the decision step.
C) the inquiry step.
D) the review step.

Question 72

When deciding to engage in corporate social responsibility,a key factor when selecting activities is

A) how the social activity relates to the business activities of the corporation.
B) how much free publicity the corporation will get from the social activity.
C) whether the corporation is required to do the social activity by law.
D) whether the activity will result in short-term profit increases.