Deck 7: Ethics, Social Responsibility, and the Business Manager

Question 1

A theory of social responsibility is concerned with whether a firm's .

A) production processes were outsourced
B) executive managers were appointed or elected
C) code of conduct was drafted with the participation of the chief executive officer
D) conduct has an unintended impact on the community

Answer 1

D

Question 2

Theories of ethical thought include all but which of the following?

A) consequential
B) deontological
C) humanist
D) incremental

Answer 2

D

Question 3

Business ethics is a subset of the study of ethics and is defined as the study of what makes up bad, not good, business conduct.

Answer 3

False

Question 4

Which of the following best defines the term "business ethics"?

A) understanding that, in business, justice is more important than freedom
B) understanding that, in business, freedom is more important than justice
C) the study of what makes up good and bad business conduct
D) the study of the legal environment of business

Question 5

The of business is defined as a concern by business about both its profit-seeking and its non-profit-seeking activities and their intended and unintended impacts on groups and individuals other than management or the owners of a corporation.

A) corporate duty
B) social responsibility
C) industrial code of ethics
D) professional responsibility

Question 6

argue that an act is ethically right if the performance of similar acts by all similar agents would produce the best results in society or has done so in the past.

A) Humanists
B) Act utilitarians
C) Rule utilitarians
D) Deontologists

Question 7

Deontology is derived from the Greek word deon, meaning .

A) duty
B) science
C) reason
D) happiness

Question 8

The theory of ethics is best exemplified by the utilitarian school of thought.

A) humanist
B) deontological
C) consequential
D) relativist

Question 9

The social responsibility of business is defined as concern by business about both its profit- seeking and its non-profit-seeking activities and their intended and unintended impacts on groups and individuals other than management or the owners of a corporation.

Question 10

Since the late 1960s, an outcry has arisen for business to be more socially responsible. This expression of public concern has resulted in part from all but which of the following factors?

A) the complexity and interdependence of a postindustrial society
B) political influence that has translated public outcry for socially responsible conduct into government regulation
C) a consensus among citizens that the sole responsibility of business is to generate a profit
D) philosophical differences about what the obligation of business should be

Question 11

Which of the following is a characteristic of rule utilitarianism?

A) Actions can be judged good or bad based on rules and principles that are applied universally.
B) An act is ethically right if the performance of similar acts by all similar agents would produce the best results in society or has done so in the past.
C) An act is right or wrong on the basis of whether that individual act alone brings net happiness to society.
D) Actions are evaluated as good or bad depending on whether they contribute to improving inherent human capacities such as intelligence, wisdom, and self-restraint.

Question 12

Since the late 1960s, an outcry has arisen for business to be more socially responsible. This expression of public concern has resulted in part from the complexity and interdependence of a postindustrial society.

Question 13

Consequential theories look at whether .

A) the desired results were achieved
B) the desired people were involved
C) the appropriate methods were used
D) legitimate goals were selected

Question 14

Ethics is the study of good and bad behavior.

Question 15

Explain the factors, beginning in the late 1960s, that led to a public outcry for business to be more socially responsible.

Question 16

Adherents to the school of thought judge all conduct of individuals or businesses on whether that conduct brings net happiness or pleasure to a society.

A) utilitarian
B) deontological
C) humanist
D) stoic

Question 17

In general, proponents of the utilitarian school of thought judge all conduct of individuals or businesses on whether that conduct brings net to a society.

A) productivity
B) profit
C) happiness
D) spirituality

Question 18

The utilitarian school of thought is divided into which of the following subcategories?

A) act utilitarianism and rule deontology
B) act deontology and rule utilitarianism
C) act utilitarianism and rule utilitarianism
D) act deontology and rule deontology

Question 19

Define the terms "ethics," "business ethics," and "social responsibility."

Question 20

Which of the following is a characteristic of rule utilitarians?

A) They take the position that whatever applicable rule has been established by political representatives must be followed and should serve as a standard in the evaluation of similar acts.
B) They focus on the question of verifying whether an act is ethically good or bad.
C) They determine if an action is right or wrong on the basis of whether that individual act alone brings net happiness to society, as opposed to whether other alternatives would bring more or less net happiness.
D) They evaluate actions as ethically good or bad depending on whether they contribute to improving inherent human capacities.

Question 21

If payment of bribes has been determined by the society to bring net happiness, and a rule allowing bribes exists, then rule utilitarians would allow the bribe.

Question 22

For advocates of , rules and principles determine whether actions are ethically good or bad.

A) consequential theories
B) utilitarianism
C) humanist theories
D) deontology

Question 23

Which of the following is a similarity between act utilitarianism and rule utilitarianism?

A) Both schools of thought focus on the consequences rather than the intent of actions.
B) Both schools of thought focus on the question of verifying whether an act is ethically good or bad.
C) Both schools of thought focus on the methods used to achieve a desired outcome.
D) Both schools of thought focus on the absolute morality of actions.

Question 24

Theories of ethical thought include consequential theories, deontological theories, and humanist theories.

Question 25

The deontological theory is best exemplified by the utilitarian school of thought.

Question 26

The humanist school of ethical thought would evaluate the ethics of an action based on whether the .

A) action would contribute to improving intelligence, wisdom, and self-restraint
B) action would cause an increase in net utility and happiness
C) action would be true to the golden rule
D) benefits of the action would outweigh the risks

Question 27

Immanuel Kant's "categorical imperative" asserts that a person should _ .

A) engage in acts based on legal rather than ethical principles
B) engage only in acts that could become universal standards
C) act only after determining the marginal or net utility of that action
D) act only after determining the ethical category of that action

Question 28

Nina is a volunteer at an animal shelter who takes home animals that are scheduled to be put down. Even though her act results in her apartment often getting overcrowded and smelly, Nina does this because she considers it ethically wrong to willfully take the life of another living creature. Which of the following theories of ethical thought best explains Nina's behavior?

A) act utilitarianism
B) consequential theory
C) deontology
D) rule utilitarianism

Question 29

Ralph believes it is ethically permissible to bribe a foreign government official to gain a contract. He reasons that not only will the contract bring him a great deal of profit, but it will also create jobs, and nobody will be directly harmed in the process. Ralph's beliefs are in accord with which of the following theories of ethical thought?

A) act utilitarianism
B) rule utilitarianism
C) deontology
D) humanism

Question 30

Chelsea believes that it is ethical for companies to outsource all work to under-developed countries so that the outsourcing companies can pay lesser wages. By doing so, the outsourcing company can reduce manufacturing expenses and, instead, pay its managers higher salaries. Which of the following theories of ethical thought is associated with her beliefs?

A) pacifism
B) rule utilitarianism
C) humanism
D) unitarianism

Question 31

Deontology considers the consequences of individual actions.

Question 32

Lucas is the general manager of an organization that manufactures school uniforms. Numerous competing firms have outsourced their production to sweatshops in developing countries where workers are paid less than minimum wages. However, Lucas refuses to do this, and his firm consequentially starts to lose market share. In this instance, which of the following schools of ethical thought is guiding Lucas's actions?

A) deontological
B) humanist
C) utilitarian
D) consequential

Question 33

Which of the following theories of ethical thought is illustrated by the phrase "Do unto others as you would have them do unto you"?

A) utilitarianism
B) consequentialism
C) deontology
D) humanist theory

Question 34

Which of the following statements is true of the deontological theory of ethics?

A) It evaluates actions as ethically good or bad depending on what they contribute to improving inherent human capacities.
B) It claims that actions can be judged ethically good or bad on the basis of absolute moral principles arrived at by human reason.
C) It asserts that humans would arrive by reason alone at standards of conduct that ultimately derive from a divine being.
D) It uses the principle of utility (adding up the costs and benefits of an act to arrive at net happiness) to focus on an individual action at one point in time.

Question 35

Which school of ethical thought evaluates actions as ethically good or bad depending on what they contribute to improving intelligence, wisdom, and self-restraint?

A) deontological
B) humanist
C) consequential
D) utilitarian

Question 36

Which of the following is a belief held by advocates of the humanist school of ethical thought?

A) Actions can be judged ethically good or bad on the basis of absolute moral principles arrived at by human reason regardless of the consequences of an action.
B) One should focus on a general rule that exemplifies net happiness for the whole society.
C) Individuals would arrive by reason alone at standards of conduct that ultimately derive from a divine being.
D) Whatever applicable rule has been established by political representatives must be followed and should serve as a standard in the evaluation of similar acts.

Question 37

The deontological and humanist theories of ethical thought are similar in that both theories .

A) take the view that human beings have valuable inherent traits
B) apply principles of rule utilitarianism to determine ethical choices
C) apply the categorical imperative to ethical decision making
D) focus on consequences instead of actions or intentions

Question 38

Humanists believe that one should focus on a general rule that exemplifies net happiness for the whole society.

Question 39

Businesspeople who adhere to a consequential theory of ethics look at the actions of a business or any other societal unit only in terms of whether the results can be rationalized.

Question 40

Both act and rule utilitarians focus on verifying whether an act is ethically good or bad.

Question 41

The production and marketing emphases of organizations have evolved into what is called a(n) .

A) corporate culture
B) industry code
C) organizational hierarchy
D) corporate code

Question 42

Membership in the American Institute of Certified Public Accountants (AICPA) is suspended without a hearing if a judgment of conviction is filed with the secretary of the institute as related to .

A) the willful failure to file an income tax return
B) a petty crime as defined under any state law
C) a misdemeanor as defined under any state law
D) an inability to file an income tax return

Question 43

How are professionals defined? Describe the American Bar Association's Model Rules of Professional Responsibility.

Question 44

In general, corporate codes of ethics apply to upper- and middle-level managers.

Question 45

Which of the following is not a characteristic of professions or professionals?

A) mandatory university educational training before licensing, as well as continuing education requirements
B) licensing-examination requirements
C) a formal association or group that meets regularly
D) strict, unexamined adherence to the ideology of one political party

Question 46

Define the consequential theories, deontological theories, and humanist theories of ethical thought.

Question 47

The Model Rules of Professional Responsibility were established by the .

A) National Association of Broadcasters
B) American Bar Association
C) American Institute of Certified Public Accountants
D) National Association of Securities Dealers

Question 48

Section 806 of the Sarbanes-Oxley Act .

A) protects federal whistleblowers who report agency misconduct
B) limits the securities activities of commercial banks and affiliations between commercial banks and securities firms
C) imposes liability on persons and companies who defraud governmental programs
D) prohibits any publicly traded company from discriminating against an employee who provides information to the government regarding violation of the securities laws

Question 49

How did the Sarbanes-Oxley Act result in "internal housecleaning" within firms?

Question 50

Classical economists, who support the profit-oriented school of social responsibility, recognize that there will be unintended effects of profit-seeking activities, called , that affect society and cannot be incorporated into or passed on in the price of an output.

A) unforeseeable circumstances
B) concomitant consequences
C) externalities
D) internalities

Question 51

The AICPA Division for CPA Firms requires member firms to ensure that all professionals participate in continuing education programs.

Question 52

Membership in the American Institute of Certified Public Accountants (AICPA) is suspended without a hearing if a judgment of a conviction is filed with the secretary of the institute.

A) tort
B) civil
C) misdemeanor
D) felony

Question 53

The required publicly traded companies to set up confidential internal systems by April 2003 so that employees and others could have a method of reporting possible illegal or unethical auditing and accounting practices.

A) Homeland Security Act
B) Whistleblower Protection Act
C) Glass-Steagall Act
D) Sarbanes-Oxley Act

Question 54

Which of the following is not a recognized school of social responsibility?

A) professional obligation
B) regulation
C) reputation
D) profit-oriented

Question 55

Which of the following is a characteristic of people who are referred to as professionals?

A) They have immunity from tort (specifically, malpractice) liability.
B) They are entitled to a minimum wage that is higher than the average.
C) They belong to a formal association or group that functions only through online communication.
D) They have a set of written ethical standards that is continually enforced by the group.

Question 56

Membership in the American Institute of Certified Public Accountants (AICPA) is suspended without a hearing if a judgment of conviction is filed with the secretary of the institute related to all but which of the following?

A) willful failure to file an income tax return, which the CPA as an individual is required to file
B) filing a fraudulent return on the part of the CPA for his or her own return or that of a client
C) aiding in the preparation of a fraudulent income tax return of a client
D) negligent failure to file an income tax return, which the CPA as an individual is required to file

Question 57

Failure to provide a taxpayer with a copy of his or her return may subject a tax preparer to criminal penalties.

Question 58

Which of the following is not a recognized school of social responsibility?

A) profit-oriented
B) critical thinking
C) managerial
D) institutional

Question 59

What are the differences between the "act utilitarianism" and "rule utilitarianism" theories of ethical thought?

Question 60

Which of the following codes of ethics generally provide a "hybrid model" including "dos and don'ts" that address subjects such as honest and fair dealings with customers and non- deceptive advertising?

A) professional
B) individual
C) corporate
D) industry

Question 61

A proponent of the _ school of social responsibility would argue that efforts at pollution control and bringing equality of payment to the workforce are tasks of the government and not of the private sector, which is incapable of making such choices and is not elected in a democratic society to do so.

A) managerial
B) regulation
C) profit-oriented
D) institutional

Question 62

According to the institutional school of social responsibility, business entities have a responsibility to act in a manner that benefits .

A) shareholders
B) suppliers
C) employees
D) all of society

Question 63

Dorn Petrochemicals is found responsible for a large oil spill that resulted in widespread environmental damage. A national debate followed, and a prominent social scientist argued that the oil company should be prosecuted to the full extent of the law and that all sanctions that apply to individuals and other business entities should also apply to Dorn. This social scientist is most likely a proponent of the theory of social responsibility.

A) institutional
B) managerial
C) regulation
D) professional obligation

Question 64

The profit-oriented school of social responsibility argues that businesses should be judged .

A) on both their profit and non-profit activities
B) solely on the basis of economic efficiency and growth
C) solely on the unintended impact of their profit-making activities
D) on how they do business with their consumers

Question 65

Proponents of the profit-oriented theory of social responsibility would argue that .

A) the social cost of doing business should be borne by the government
B) businesses should contribute money to charities
C) the profits in business should be reduced in order to cause lesser harm to the environment
D) firms have a responsibility to act in a manner that benefits all of society

Question 66

A proponent of the managerial theory of social responsibility would argue that .

A) managers should maximize profits and leave social responsibility to the government
B) businesses should act carefully so as not to injure the fabric of society
C) firms should seek to maintain the trust of internal and external constituents and interest groups, not just stockholders
D) business managers and members of the board of directors should seek professional certification

Question 67

Which of the following best describes the term "externalities"?

A) money that firms set aside to give away to society
B) taxes that firms pay
C) unintended consequences of profit-seeking activities
D) unexpected external causes that hinder successful business transactions

Question 68

The primary argument of the regulation school of social responsibility is that since managers are responsible .

A) to the government, a corporation cannot be trusted due to corrupt government officials
B) only to a board of directors that represents shareholders, the corporation cannot be trusted to act in a socially responsible manner
C) to the government, they can seldom be trusted to ensure public interest
D) only to a board of directors that represents shareholders, a corporation can be trusted to act in a way that ensures consumer sovereignty

Question 69

With which of the following assertions does a managerial theorist agree?

A) Modern managers seldom need to balance conflicting claims on their time and their company's resources.
B) Firms cannot survive by ignoring the claims of important interest groups.
C) Firms do not have to deal with external constituents other than their customers and suppliers.
D) Government regulation is the key to ethical management.

Question 70

Max, a student of political science, believes that there should be government representatives on the board of directors of every major corporation. He also believes that the government should set up codes of socially responsible behavior for every industry. Which of the following schools of social responsibility does Max advocate?

A) profit-oriented
B) managerial
C) institutional
D) regulation

Question 71

Advocates of the school of social responsibility for business argue that business entities have a responsibility to act in a manner that benefits all of society.

A) regulation
B) professional obligation
C) managerial
D) institutional

Question 72

Which of the following statements is true of the managerial school of social responsibility?

A) It argues that a firm must have the trust of all groups, both internal and external.
B) It argues that the social costs of doing business are the collective responsibility of the government.
C) It asserts that a business is a legal entity in our society that must be held responsible for its activities.
D) It sees all business units as accountable to elected public officials.

Question 73

The professional obligation school of social responsibility holds that .

A) business directors and managers should be licensed by meeting university requirements and passing a state or a national test
B) government should set up standards of socially responsible conduct for each industry
C) businesses should be judged solely on the criteria of economic efficiency and how well they contribute to growth in productivity and technology
D) business entities are distinct organizations in our society and that their sole purpose is to increase profits for shareholders

Question 74

A country's governing body has passed a new law that requires all companies to set aside a certain budget for social initiatives. These organizations are also required to provide an annual report to the government detailing all expenditure and policy information. These initiatives are consistent with the school of social responsibility.

A) profit-oriented
B) professional obligation
C) managerial
D) regulation

Question 75

An advocate of the institutional theory would argue in favor of businesses .

A) focusing solely on profit-making ventures
B) gaining the trust of constituent groups
C) emphasizing continuing professional education
D) acting in a manner that benefits all of society

Question 76

A member of the board of directors of a large corporation who holds the belief that businesses should be judged solely on criteria of economic efficiency and how well they contribute to growth in productivity is a proponent of the _ school of social responsibility.

A) profit-oriented
B) managerial
C) institutional
D) professional obligation

Question 77

Classical economists, who advocate the profit-oriented school of responsibility, would argue that .

A) business entities have a responsibility to act in a manner that benefits all of society
B) the social costs of doing business are a collective responsibility of the government
C) a business is a legal entity in our society that must be held responsible for its activities
D) members of boards of directors should be certified as "professionals" before they are allowed to assume managerial responsibility

Question 78

Proponents of the school of social responsibility argue for government representatives on boards of directors.

A) institutional
B) professional obligation
C) regulation
D) managerial

Question 79

Sam believes that corporations should focus on business and that the government should pay the associated social cost with the money generated as tax. Which of the following schools of social responsibility is best associated with Sam's beliefs?

A) profit-oriented
B) managerial
C) institutional
D) regulation

Question 80

Zoe believes that businesses should act in a manner that benefits all of society, just as courts, universities, and governments do. Which of the following schools of social responsibility is associated with Zoe's beliefs?

A) profit-oriented
B) managerial
C) institutional
D) regulation