Question 1

If a company gains information on a company through misrepresentation,this is a breach of .&#10;A)property&#10;B)honesty&#10;C)trust&#10;D)privacy

Accepted Answer

Gaining information through misrepresentation involves deceit, which breaches honesty.

Question 2

Conflicts of interest are an ethical problem for a business because they .&#10;A)violate an individual's right to privacy&#10;B)create profits that would be owed to other companies instead&#10;C)create incentive for company representatives to act against others' best interest&#10;D)prevent the company from succeeding as well as it might otherwise

Accepted Answer

Conflicts of interest create a situation where representatives of the company may be motivated to act in their own personal interest or the interest of another party instead of acting in the best interest of the company and its stakeholders. This can lead to unethical behavior and can ultimately harm the reputation and success of the company.

Question 3

The Wexler case found that Greenberg had the right to his own formulas because .&#10;A)it would be unfair for his old company to use those formulas&#10;B)his new company did not own the rights to the formulas&#10;C)no one owned the rights to the formulas that Greenberg had created&#10;D)not allowing him to do so would unfairly restrict his ability to compete with the new company

Accepted Answer

The Wexler case found that Greenberg had the right to his own formulas because not allowing him to use them would unfairly restrict his ability to compete with the new company. This decision was made in the spirit of promoting competition in the marketplace.

Question 4

Arthur Andersen's double role with Enron represented a conflict of interest because .&#10;A)Arthur Andersen made too much of a profit from one client&#10;B)Enron executives did not reveal everything to Arthur Andersen that they should have&#10;C)Arthur Andersen had incentive not to make criticisms that would hurt its consultingrole&#10;D)Arthur Andersen did not know Enron well enough to be both consulting and auditing the company

Accepted Answer

Arthur Andersen's dual role as both a consultant and an auditor for Enron created a conflict of interest because it had an incentive not to criticize the company too harshly in its auditing role, as that would jeopardize its lucrative consulting contract with Enron. This conflict of interest ultimately contributed to the accounting fraud that led to Enron's downfall.

Question 5

The Economic Espionage Act of 1996 .&#10;A)was primarily aimed at protecting against domestic spying&#10;B)was primarily aimed at protecting foreign companies in the U.S.&#10;C)has been effective in protecting against domestic spying&#10;D)was the first law in the U.S.to protect trade secrets

Accepted Answer

The answer of The Economic Espionage Act of 1996 .&#10;A)was...

Question 6

The question of intellectual property ownership becomes most complicated when .&#10;A)the intellectual property involves new technology&#10;B)an inventor works for a company that manufactures the invention&#10;C)the intellectual property is not related to work performed for the employer&#10;D)the inventor owns the right to many different patents

Accepted Answer

When an inventor works for a company that manufactures the invention, the question of intellectual property ownership becomes complicated due to potential conflicts between the inventor's rights and the company's claims to innovations created by its employees.

Question 7

One source of the idea that trade secrets are a form of property is the view that .&#10;A)trade should always be free and unrestricted&#10;B)each person owns the product of his/her labor&#10;C)property should be had in common by all people&#10;D)companies should be able to make a profit however they can

Accepted Answer

The view that each person owns the product of his/her labor supports the idea that trade secrets are a form of property. Just like a person owns the physical product he/she creates, a company or individual should be able to own and protect their intellectual property, such as trade secrets. This perspective emphasizes individual ownership and control over one's own creations.

Question 8

Courts have difficulty determining .&#10;A)what constitutes a trade secret&#10;B)whether trade secrets should be protected&#10;C)why companies want to protect trade secrets&#10;D)the extent to which trade secrets have been pursued

Accepted Answer

Courts often struggle with defining what information qualifies as a trade secret because it can vary based on the industry and context.

Question 9

Trade-secret protection agreements that are based on confidentiality assume that .&#10;A)the trade secret was not developed by the employee&#10;B)the employee will not work for other companies&#10;C)the employer is involved in a high-tech industry&#10;D)the employee will eventually work for a competitor

Accepted Answer

Trade-secret protection agreements based on confidentiality typically assume that the trade secret was not developed by the employee but by the company, and thus the company seeks to protect its intellectual property from being disclosed or used outside the company.

Question 10

Why are legal restrictions placed on noncompetition agreements?&#10;A)Most employees stay with the same company for a long time.&#10;B)Most employees are not in a position to use trade secrets with another company&#10;C)They are difficult to enforce.&#10;D)They can result in difficulty for an employee to subsequently find suitable work.

Accepted Answer

Legal restrictions are placed on noncompetition agreements because they can result in difficulty for an employee to subsequently find suitable work. Noncompetition agreements typically restrict an employee from working for a competitor for a certain period of time after leaving their current role, which can make it difficult for them to pursue other job opportunities. This can result in a negative impact on the employee's career growth and ability to earn a living, which is why legal restrictions are often put in place to protect employees from unfair limitations on their employment options.

Deck 5: Business Information and Conflict of Interest