Deck 2: Business Ethics and the Social Responsibility of Business

Question 1

Situational ethics judges a person's ethics, and it does so from the perspective of the actor.

Answer 1

True

Question 2

The two major forms of utilitarianism are situational and a priori.

Answer 2

False

Question 3

According to Adam Smith, the capitalistic system is composed of economic motivation, private productive property, free enterprise, free markets, competition, and limited government.

Answer 3

True

Question 4

The study of business ethics has several central authorities.

Question 5

To a libertarian, it is not unjust for some people to accumulate fortunes while others live in poverty.

Question 6

Deontologists are sometimes criticized for rigidity and excessive formalism.

Question 7

Most philosophers now agree that people can discover fundamental ethical rules by applying careful a priori
reasoning.

Question 8

A leading proponent of the utilitarian approach to ethics was the eighteenth-century philosopher Immanuel Kant.

Question 9

According to Milton Friedman, the social obligation of a corporation is to return as much money as possible to its shareholders.

Question 10

Jeremy Bentham was not a proponent of utilitarianism.

Question 11

Ethics can be broadly defined as the study of what is good or right for human beings.

Question 12

Intuitionism holds that rational persons possess inherent powers to assess the correctness of actions.

Question 13

Harvard philosopher John Rawls stressed liberty as the most important obligation owed by a society to its members.

Question 14

One criticism of utilitarianism is that it ignores justice in some important instances.

Question 15

Although corporations are not persons but artificial entities created by the state, it is clear that they can and should be held morally accountable.

Question 16

Because there are no universal, clear-cut standards to apply to ethical analysis, it is impossible to make meaningful ethical judgments.

Question 17

Factors leading to the need for the ethical and social responsibility of business are the demands of maintaining a competitive, fair marketplace and the size and power of individual corporations.

Question 18

In employment relationships, ethical issues arise regarding safety and compensation of workers, privacy, and the legitimacy of whistle-blowing.

Question 19

An ethical relativist looks to a central authority, such as the Bible, to guide her in ethical decision making.

Question 20

Not everything that is legal is also morally correct.

Question 21

Business ethics is a subset of ethics; there is no special set of ethical principles that applies only to the business world.

Question 22

Under a Kantian approach to ethics, a person should not lie to colleagues unless that person supports the right of all colleagues to lie to one another.

Question 23

The ethical theory that underlies cost-benefit analysis is:

A) libertarianism.
B) utilitarianism.
C) deontology.
D) ethical relativism.

Question 24

What is unjust to a social egalitarian will also be unjust to a libertarian.

Question 25

Under a strict utilitarian approach, it is ethical to force an individual to participate in a painful medical experiment if the purpose of the experiment is to develop a cure that will benefit large numbers of people.

Question 26

From a Kantian perspective, for an action to be moral, it must be possible for it to be made into a universal law and it must respect the autonomy and rationality of all human beings.

Question 27

Ethical relativism holds that when any two individuals or cultures differ regarding the morality of a particular issue or action, they are both correct because morality is relative.

Question 28

Although discussions have occurred, thus far legislators have not passed any statutes which seek to prevent corporate misconduct and increase corporate responsibility.

Question 29

Deontological theories assess good and evil in terms of the consequences of actions rather than by the motives that lead to them.

Question 30

Bill would like to propose to the board of directors of Midway Corporation that it distribute five percent of its pre-tax yearly income to feed the poor. To Milton Friedman and others, Bill's proposal might be considered unethical,
because it violates the purpose for which the corporation was established.

Question 31

Which of the following does not describe the libertarian social ethics theory?

A) Libertarians stress market outcomes as the basis for distributing society's rewards.
B) Libertarians encourage social control over all people in order to design an equitable society.
C) Libertarians believe it is an injustice for society to take wealth earned by some citizens and distribute it to those who did not directly earn it.
D) The fact that some people end up with fortunes while others are poor proves only that some can play in the market effectively while others cannot.

Question 32

How many stages are there in Kohlberg's theory of moral development?

A) 2
B) 3
C) 4
D) 5

Question 33

According to one argument in favor of corporate social responsibility, the more responsibly companies act, the less the government must regulate them.

Question 34

The definition of the doctrine of ethical relativism includes:

A) that when any two individuals differ regarding the morality of an issue or action, they are both correct because morality is relative.
B) the proposition that a good or moral act is one that results in "the greatest good for the greatest number."
C) the notion that cost-benefit analysis is relative to making ethical decisions.
D) that, without any further evaluation, the ultimate judgment of the correctness of an action relates to pronouncements of a central authority.

Question 35

Situational ethics is essentially the same as ethical relativism.

Question 36

Utilitarian notions underlie cost-benefit analysis.

Question 37

In 2002, Congress passed what legislation seeking to prevent business scandals by increasing corporate responsibility through imposing additional corporate governance requirements on publicly held corporations?

A) The Securities and Exchange Act
B) The Sarbanes-Oxley Act
C) The Kohlberg Act
D) The Uniform Commercial Code

Question 38

In Adam Smith's The Wealth of Nations, how many "institutions" are in the capitalistic system?

A) 3
B) 4
C) 5
D) 6

Question 39

The theory of distributive justice analyzes society through a "veil of ignorance."

Question 40

Kant's approach, like that of ethical fundamentalists, asserts that universal laws stem from the direct pronouncements of God.

Question 41

How does Immanuel Kant's approach to ethical decision-making differ from that of an ethical fundamentalist?

A) Kant's approach is premised on man's rationality and not on principles handed down from above.
B) Kant's approach stresses liberty and not justice.
C) Kant's approach judges society in moral terms by how it distributes goods and services.
D) Kant's approach assesses each separate act according to whether it maximizes pleasure over pain.

Question 42

An auto designer chooses to devote his efforts to designing an automobile that is the safest vehicle possible. He does so because he wishes to save lives and prevent disabling injuries. He believes he and his employer have a duty to provide the public with the safest possible vehicle. The designer's approach to ethical decision-making is best characterized as:

A) utilitarian.
B) deontological.
C) ethically relative.
D) ethically fundamental.

Question 43

The definition of business ethics includes which of the following points?

A) It is a science completely separate from applied ethics.
B) It is fully codified in federal statutes.
C) It has a central authority and universal standards.
D) It seeks to determine what is good and right in business settings.

Question 44

True cost-benefit analysis as a social theory:

A) only measures monetary gains and losses in making business decisions.
B) compares direct and indirect costs and benefits of program alternatives for meeting a specific goal.
C) is another theory that judges persons' actions by what those persons believe is right for themselves.
D) emphasizes justice and a central moral authority.

Question 45

Analyze whether telling a lie is unethical in terms of each of the following ethical theories.
a. The approach of Immanuel Kant and his "categorical imperative."
b. Utilitarianism.
c. Intuitionism and the "Television Test."
d. Ethical relativism.
e. Ethical fundamentalism.

Question 46

Compare the social ethics theories of distributive justice and libertarianism. How are they alike? How are they different? Explain your answer.

Question 47

Arguments favoring social responsibility of business entities include all but which of the following?

A) Corporations are subject to a higher standard of accountability than are public bodies.
B) Limited liability granted to corporations carries a responsibility to contribute to society's betterment.
C) Corporate involvement in social causes makes good business sense.
D) The more responsibly companies act, the less regulation the government must provide.

Question 48

According to Jack Behrman, a professor of business ethics, free enterprise involves a:

A) combination of properties.
B) capitalistic combination of factors of production.
C) group expression of the use of private property.
D) All of these are true.

Question 49

A common criticism of deontological ethical theories is that they:

A) are excessively pragmatic.
B) are rigid and excessively formal.
C) only consider actions by their motives.
D) fail to consider universal principles.

Question 50

Neal is the young, likable, optimistic, and generous son of a prominent public official. He has a master's degree in business and is the business partner of Ken and Bill in an oil drilling and exploration business. Neal also serves as a director on the board of the Bonanza Savings and Loan Association. While serving on the Bonanza Board, Neal votes to approve major loans to Ken and Bill without disclosing to the other directors that he is a business partner of Ken and Bill. Neal also personally arranges for a $900,000 line of credit from Bonanza for an oil drilling venture in which he is a partner with Ken. The drilling venture is unsuccessful and Ken and Bill both default on their loans to Bonanza, which then causes the S & L to become insolvent. Federal banking officials, who then liquidate its assets
to pay its creditors and depositors, seize Bonanza. Because Bonanza is federally insured, a substantial amount of tax money is also used to pay off depositors whose deposits are insured under federal programs. Bonanza shareholders lose their investment money. Was Neal's conduct as a director of Bonanza ethical? Analyze his conduct in light of the following ethical theories.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
a. Intuitionism and the "Television Test."
b. Milton Friedman's ideas on corporate governance.
c. Deontological theories.
d. Rule utilitarianism.
e. Ethical relativism.

Question 51

Nineteen-year-old Martin was raised in a good, Christian home and attended parochial school through eighth grade. Martin is a good student and citizen who conforms to the expectations of his church, family, and peers. He does so because he loves his family and church, is loyal to them, and trusts them. Under Kohlberg's schematic analysis, Martin is most likely at what stage of moral development?

A) Preconventional
B) Conventional
C) Postconventional
D) Universal

Question 52

_{45. To a(n) , whether telling a lie in a given instance would produce greater pleasure than telling the truth is less}
Important than deciding if a general practice of lying would maximize society's pleasure.

A) deontologist
B) rule utilitarian
C) ethical fundamentalist
D) ethical relativist

Question 53

Under which ethical system would it be ethical to compel a few citizens to undergo painful or fatal medical tests in order to develop cures for the rest of the world?

A) Utilitarianism
B) Ethical fundamentalism
C) Distributive justice
D) Libertarianism

Question 54

Which arguments oppose business involvement in socially responsible activities?

A) Lack of corporate focus on profitability.
B) Unfairness to company employees and shareholders.
C) Lack of accountability.
D) All of these are true.

Question 55

A common criticism of ethical relativism is that it:

A) promotes open-mindedness and tolerance.
B) assumes that a person's actions are always correct for that person, but if that is true, then all behavior is, by definition, moral.
C) is rigid and excessively formal.
D) is too judgmental.

Question 56

The type of moral equality espoused by John Rawls is:

A) freedom to do what one wishes.
B) social and material equality.
C) freedom from government regulation.
D) equality of opportunity, not of results.

Question 57

The ethical decision-making approach that views ethical decisions from the actor's perspective and then judges whether the decisions were ethical is:

A) ethical fundamentalism.
B) absolutism.
C) situational ethics.
D) act utilitarianism.

Question 58

Adam Smith, in The Wealth of Nations, said the capitalistic system was composed of institutions which include all but which of the following?

A) Economic motivation
B) Free enterprise
C) Labor
D) Limited government

Question 59

Kohlberg observed that people progress through stages of moral development according to the major variables of:

A) age and education.
B) age, economic status, and peer influence.
C) education and family guidance.
D) religion, education, and the influence of peers and family.

Question 60

In what way or ways are situational ethics and ethical relativism similar?

A) They both look to a central authority or set of rules to guide ethical decision-making.
B) They both assess each separate act according to whether it maximizes pleasure over pain.
C) They both judge actions from the perspective of the person who actually made the judgment.
D) All of these are true.

Question 61

Discuss which of the social ethics theories listed below you most agree with and why. Discuss your reasons for disagreeing with the others.
a. Distributive justice
b. Social egalitarianism
c. Libertarianism

Question 62

Through his observation of human behavior, psychologist Lawrence Kohlberg developed a model of moral development. Describe the stages of moral development that were studied and developed by Kohlberg and the relevance of this model for ethical business behavior.