Deck 3: Conducting Business Ethically and Responsibly

Question 1

Behavior that conforms to individual beliefs and social norms about what is right and good is referred to as
social reaction behaviour.
ethical behaviour.
generally accepted behaviour.
collusional behaviour.
motivational behaviour.

Answer 1

ethical behaviour.

Question 2

What is the difference between "ethics" and "business ethics"?
The former refers to beliefs about what is right and wrong, while the latter doesn't deal with right and wrong, only with economic issues.
The former refers to a restricted range of acceptable behaviours, while the latter refers to a much broader range of acceptable behaviours.
There are no differences between the two.
The former refers to beliefs about what is right or wrong, while the latter refers to behaviours by managers or employees.
None of these statements are accurate.

Answer 2

The former refers to beliefs about what is right or wrong, while the latter refers to behaviours by managers or employees.

Question 3

________ refers to ethical or unethical behaviors by a manager or employee of an organization.
Social ethics
Social responsibility
Business ethics
Collusion
Cartelling

Answer 3

Business ethics

Question 4

A manager who discriminates against any ethnic minority in hiring exhibits behaviour that is
ethical but illegal.
ethical and illegal.
unethical but legal.
unethical and illegal.
there is no consensus on how this behaviour should be classified.

Question 5

What is the difference between illegal behaviour and unethical behaviour?
What is illegal varies from country to country, but what is unethical does not.
Illegal behaviour is that which breaks a country's laws, but unethical behaviour may not break any laws.
It is not possible to say what the difference is between illegal and unethical behavior.
Illegal behaviour covers a broader range of issues than unethical behavior.
There is no real difference between illegal and unethical behavior.

Question 6

Ethics are
standards or moral values regarding what is right and wrong.
avoiding doing things that, if everyone did it, we would have a real mess.
believing what's right for one person is wrong for another.
the command to love one another.
standards by how we treat one another.

Question 7

Joe paid his subordinate John less than John deserved because Joe knew that John needed the job badly. Joe's behavior is
illegal but not unethical.
unethical but not illegal.
both illegal and unethical.
neither illegal nor unethical.
It is not possible to say without determining how John feels about his pay.

Question 8

Which of the following statements is correct with regard to the conflict of interest idea in business?
Conflicts of interest exist only in peoples' minds.
A conflict of interest occurs when an activity benefits an individual at the expense of the employer.
A conflict of interest occurs when employees of equal rank have a disagreement.
A conflict of interest occurs when a boss and a subordinate have a disagreement.
All of the statements are correct.

Question 9

If a politician sits on a board that grants money to companies and that executive owns a company that is applying for a grant from the board, he or she is most likely facing a(n)
ethical dilemma.
utility norm.
illegal situation.
conflict of interest.
justice norm.

Question 10

The practice of jeitinho is an element of business activity in which country?
Canada
Japan
Indonesia
Brazil
The Czech Republic

Question 11

The Personal Information Protection and Electronic Documents Act (PIPEDA)
is designed to protect electronic documents from computer hackers.
requires organizations to obtain consent before they collect, use, or disclose information about individuals.
has been declared unconstitutional.
prohibits organizations from using personal information about their employees.
applies almost exclusively to universities.

Question 12

Air Canada sued WestJet, claiming that WestJet had accessed an Air Canada website which contained confidential information. What was the outcome of the lawsuit?
The court ruled that there was nothing unethical about a person from WestJet accessing the website if they could figure out how to do it.
WestJet admitted it had behaved in an unethical fashion, paid Air Canada $5 million dollars, and gave $10 million to children's charities.
Air Canada was able to show that it had lost a lot of business because of the incident, and WestJet had to reimburse Air Canada for the lost business.
The court declined to rule on the case.
The court ruled that this was merely a competitive squabble between two companies and that no fine would be imposed.

Question 13

John is a salesperson who feels that he is not paid nearly enough money for the work that he does. He therefore "pads" his expense account in order to receive increased financial benefits. John's behaviour would be seen as ethical according to which criterion?
Rights
Justice
Utility
Caring
None of these

Question 14

Breaking the law in a totalitarian regime in order to carry out humanitarian efforts would probably be seen by most people as
ethical but illegal.
ethical and illegal.
unethical but legal.
unethical and illegal.
the is no consensus on how this behaviour should be classified.

Question 15

Marlene is a shoe buyer for a large department store. Six months ago, she accepted a free trip to Barbados from one of the companies that she buys shoes from. Now, the company is strongly hinting that it wants Marlene to increase the size of her next order, and Marlene feels some obligation to do so because of the free trip she received. Marlene is involved in
illegal behaviour.
a conflict of interest.
collusion.
insider trading.
price gouging.

Question 16

"Cooking the books" to make a company's financial situation look better than it really is illustrates a behaviour that most people would see as
ethical but illegal.
ethical and illegal.
unethical but legal.
unethical and illegal.
the is no consensus on how this behaviour should be classified.

Question 17

Mary is a purchasing agent who has been offered a gift by a supplier if she will order products from the supplier for her company. Mary is facing a
price gouging situation.
conflict of interest situation.
social responsibility situation.
utility norm.
None of these

Question 18

Which of the following behaviors is illegal?
Company executives encourage employees to invest in company stock while withholding information about financial problems.
An employee accepts a gift from a supplier in return for a large order.
A manager refuses to hire or promote a qualified visible minority in spite of company policy.
A manager underpays an employee, knowing that the employee can't afford to quit.
All of these actions are illegal.

Question 19

With regard to the distinction between unethical and illegal behaviour, it is correct to say that
something that is illegal is also unethical.
a given act can be ethical, yet illegal.
the distinction between unethical and illegal behaviour has no practical significance.
it is impossible for something to be unethical and legal at the same time.
all of these are correct.

Question 20

Ethical and unethical behaviour is determined partly by the ________ and partly by ________.
society; culture
society; values
individual; culture
person; religion
culture; society

Question 21

While on a business trip, a manager takes some friends to dinner for a social evening and then charges the dinner to his company's expense account. The _______ norm would ask "Is it consistent with people's responsibilities to each other"?
utility
rights
justice
caring
reciprocity

Question 22

The three general factors that have been identified as important in causing individuals to behave in unethical ways are
pressure, opportunity, and rationalization.
the chance for financial gain, opportunity, and poor control systems.
the potential for monetary, status, and power gains for the individual.
pressure from peers, subordinates, and superiors.
the potential for financial gain, emotional gain, and prestige.

Question 23

Georgia wants to make sure that her employees behave in a highly ethical fashion. What should she avoid doing?
Emphasizing the importance of ethics to all employees.
Helping employees to follow the company's ethical standards.
Modeling behavior that employees should adopt.
Relying on managers to report ethics violations.
Ensuring that a strict code of ethics is in place.

Question 24

All of the following are functions of codes of ethics except
they increase public confidence in a firm or its industry.
they ensure that unethical behaviour will not occur in the firm.
they may help stem the tide of government regulation.
they improve internal operations by providing consistent ethical standards.
they help management respond to problems that arise as a result of unethical behaviour.

Question 25

The first step in the simplified three-step model for applying ethical judgments to situations that may arise during the course of business activities is to
determine the norms that relate to the situation.
determine the most appropriate moral values.
determine the implications of breaching the activity or policy.
gather the relevant factual information.
make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

Question 26

While on a business trip, a manager takes some friends to dinner for a social evening and then charges the dinner to his company's expense account. The ethical ________norm would ask "Does this optimize the satisfaction of all constituencies?"
utility
rights
justice
caring
reciprocity

Question 27

Which of the following is correct with regard to managerial ethics?
A manager who discriminates against any ethnic minority in hiring is exhibiting illegal, but not unethical, behavior.
If a manager pays an employee less than he deserves because the manager knows the employee can't afford to quit, the manager is clearly behaving unethically.
Ethics are not usually an issue when a firm deals with customers.
It is difficult to deal with ethical issues because there is much global variation in business practices.
All of the statements are correct.

Question 28

When evaluating a decision based on the ethical norm of utility, a manager will focus on which of the following questions?
Does the decision optimize the satisfaction of all constituencies?
Is the decision consistent with what we regard as fair?
Does the decision respect the rights of the individuals involved?
Is the decision consistent with people's responsibilities to each other?
How much will the decision cost if it is wrong?

Question 29

When DaimlerChrysler introduced the PT Cruiser, demand was so strong that some dealers would sell one only if the customer was willing to pay several thousand dollars over the sticker price. This is an example of
effective business practice.
price gouging.
collusion.
profit maximization.
price lining.

Question 30

Peter, the president of a small company, wants his employees to be aware that they should act ethically. Which of the following has proven most effective in improving ethical behaviour in a business firm?
Reward managers who have secured an advantage for the firm, even if their behaviour might be seen by some people as unethical
Demonstrate top management commitment to high ethical standards
Do not publicly bring attention to unethical behaviour, instead deal with it privately
Fire all unethical employees
Do nothing to reinforce the undesirable behaviour and it will not be repeated

Question 31

Jennifer is about to start her first job. Which of the following is least likely to be an influence on her ethics and behaviour?
Her past experiences
The code of ethics in that firm
Her family and friends
Her peers at school
Religious teaching she may have received

Question 32

To show the company's desire for employee ethical behaviour, many business firms have established
an ethical review board.
an office of ethical affairs.
a whistleblower reward system.
random ethical audits.
codes of conduct.

Question 33

Marilyn has decided to use the three-step model to decide whether a particular business decision is ethical or unethical. What is the third step in the process?
Reflect on her own ethical standards as background for the decision
Gather the relevant factual information
Consult with her boss about the situation
Make an ethical judgment about the rightness or wrongness of the situation
Determine the most appropriate moral values

Question 34

The second step in the simplified three-step model for applying ethical judgments to situations that may arise during the course of business activities is to
determine the implications of violating company policy.
determine the norms that relate to the situation.
determine the most appropriate moral values.
gather the relevant factual information.
make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

Question 35

While on a business trip, a manager takes some friends to dinner for a social evening and then charges the dinner to his company's expense account. The _______ norm would ask "Is this fair"?
utility
rights
justice
caring
reciprocity

Question 36

When evaluating a decision based on the ethical norm of caring, a manager will focus on which of the following questions?
Does the decision optimize the satisfaction of all constituencies?
Is the decision consistent with what we regard as fair?
Does the decision respect the rights of the individuals involved?
Is the decision consistent with people's responsibilities to each other?
How much will the decision cost if it is wrong?

Question 37

When evaluating a decision based on the ethical norm of rights, a manager will focus on which of the following questions?
Does the decision optimize the satisfaction of all constituencies?
Is the decision consistent with what we regard as fair?
Does the decision respect the rights of the individuals involved?
Is the decision consistent with people's responsibilities to each other?
How much will the decision cost if it is wrong?

Question 38

After a hurricane hit Halifax a few years ago, local retailers increased the price of milk and gas by 50% in one day, even though all other stores in the province did not increase prices. These retailers were engaging in
conflict-of-interest pricing.
sharp business practices.
crisis-based pricing.
price gouging.
It is not possible to tell from the information that is given.

Question 39

When evaluating a decision based on the ethical norm of justice, a manager will focus on which of the following questions?
Does the decision optimize the satisfaction of all constituencies?
Is the decision consistent with what we regard as fair?
Does the decision respect the rights of the individuals involved?
Is the decision consistent with people's responsibilities to each other?
How much will the decision cost if it is wrong?

Question 40

Sam is applying the three-step model to help him decide whether a particular business decision is ethical or unethical. What should he do first?
Reflect on his own ethical standards as background for the decision
Gather the relevant factual information
Consult with his boss about the situation
Make an ethical judgment about the rightness or wrongness of the situation
Determine the most appropriate moral values

Question 41

Which three countries are the worst greenhouse gas emitters per capita?
China, India, and Russia
the United States, Canada, and Australia
China, Russia, and the Australia
China, the United States, and Canada
Japan, China, and Russia

Question 42

________is the view that a company's only social responsibility is to make as much money as possible for its shareholders.
Free market capitalism
Managerial capitalism
Globalization
Mixed economy capitalism
None of these terms are correct.

Question 43

The view that business should balance its commitments to the stakeholders in its environment is known as
managerial capitalism.
social auditing.
social responsibility.
business ethics.
stakeholder theory.

Question 44

A chocolate company with a primary emphasis on ethical sourcing and procurement would MOST likely avoid which of the following?
Neglecting the welfare of the farmers who grow cacao beans
Reducing the size of their marketing department
Developing new fat-free products
Hosting a holiday party for all employees
Reducing the funds allocated to the company health care program for employees

Question 45

Organizational stakeholders can best be defined as
competitors.
individuals and businesses that own stock in a company.
government regulators who oversee an industry.
the officers and key employees of an organization.
individuals and groups that are directly affected by the practices of an organization.

Question 46

With regard to the "cap and trade" system for trading carbon credits, it is correct to say that
very little fraud has been uncovered in the system.
the system has proven to be very effective.
studies show that countries in Asia are not interested in the system.
companies in developing countries buy credits which they sell to companies in industrialized countries.
carbon credits essentially give companies the right to pollute the environment.

Question 47

Which of the following is correct with regard to pollution?
Noise pollution is now a greater concern than air or water pollution.
Developing countries like China have a good record on air pollution because as their industrialization proceeds, they can install effective pollution control devices on new installations.
There is a worldwide consensus among all people that our climate is warming and that warming is caused by human activity in the form of air pollution.
Global warming will hurt some people and benefit others.
All of these are correct.

Question 48

Ian is the president of a medium-sized manufacturing company. He wants to ensure that his company behaves in a socially responsible way. Which of the following is the greatest challenge facing Ian?
Determining how to respond to the interests of one part of society which conflicts with the needs of another part of society
Determining the contents of the code of ethics and what takes priority
Determining when to conduct a social audit
Knowing what social responsibility is
Determining when to conduct ethical training for employees

Question 49

John wants his employees to be aware that they should act ethically. He should
fire anyone who behaves unethically.
not draw public attention to any employee's unethical behaviour, but instead deal with it privately.
publicly reward ethical behaviour and ignore unethical behaviour.
publicly discipline employees who behave unethically, but don't fire them.
adopt a written code of ethics.

Question 50

Approximately ____ of Canadian firms have codes of ethics, while approximately _______ of U.S. firms have them.
one-third; two-thirds
two-thirds; nine-tenths
one-fifth; one-fourth
one-half; one-half
one-half; three-quarters

Question 51

Which of the following is correct regarding global warming?
The idea is a hoax.
Global warming is occurring, but the rate is so slow that it will be hundreds of years before any significant problems arise.
There is agreement that global warming is caused by increased air pollution that is a result of human activity.
There is agreement that global warming is happening, but there is a debate about whether the warming is natural or caused by human activity.
Global warming will have a negative effect on everyone.

Question 52

All of the following groups are organizational stakeholders except
employees.
investors.
customers.
competitors.
All of these groups are organizational stakeholders.

Question 53

What are carbon credits?
Credits given to countries that produce more oil than they consume
Credits given to countries that install the most pollution equipment per capita
Credits which are purchased by countries that give them the right to pollute the atmosphere
Credits which must be purchased by countries after they have been found guilty of polluting the atmosphere
Credits that are given to countries for producing the carbon that is needed to make oil

Question 54

Social Return on Investment (SROI) helps companies to
improve their financial return on investment.
increase employee satisfaction.
understand, manage, and communicate the social value of their activities for stakeholders.
respond to required government regulations on social responsibility
improve the level of ethics within the company.

Question 55

Damage to the environment by strip mining is associated with which of the following types of pollution?
Noise
Land
Water
Oil
Air

Question 56

Under the Canadian and Ontario Environmental Protection Act, liability for a business firm can run as high as ________ per day.
$10 000
$500 000
$25 000
$2 000 000
$5 000 000

Question 57

________ are waste industrial gases that trap heat in the atmosphere.
Greenhouse emissions
Byproducts
Energy supplies
Acid rain
Exajoules

Question 58

Why did the fair trade movement develop?
Because large industrialized countries were using unfair trading practices with developing countries
Because pollution was increasing too rapidly in developing countries as a result of excessive investment in mining operations
Because workers involved in producing commodities like coffee were not receiving fair payment for their products
Because free trade agreements were hurting smaller producers
Because there was a surplus of cotton as a result of highly efficient U.S. production

Question 59

Ensyn Corp. converts sawdust into liquid fuel by blasting wood waste with a sand-like substance that is heated. This use of plant waste to produce energy is known as
recycling.
biomass.
green power.
toxic waste conversion.
exajoules.

Question 60

Which of the following is the greatest challenge in meeting a firm's social responsibility?
Determining when to conduct ethical training
Determining the contents of the code of ethics
Determining when to conduct a social audit
Knowing what social responsibility is
Determining how to respond to the interests of one part of society (e.g., investors) which conflict with the needs of another part of society (e.g., customers)

Question 61

Bristol Corp. plans to introduce an inexpensive line of shoes to the Canadian market. It has found a manufacturer in Asia that can produce the shoes at a cost that will be cheaper than other brands of the same quality. Which of the following is a potential ethical implication that the company should consider before beginning production?
The country's existing labor laws and the factory working conditions
The average exchange rate of the country's currency over a ten-year period
The challenges of doing business in a country with a nonconvertible currency
The energy demands of the manufacturer's facility
The basic international business strategy it will use

Question 62

Atlas Corp. offers a money back guarantee on products and provides complaint hot lines for its customers. This is an example of which of the following consumer rights?
Right to be informed
Right to choose
Right to be heard
Right to health and safety
Right to low prices

Question 63

The recent surge of products being called "light" led to an investigation by government agencies. This illustrates concerns about which of the basic consumer rights?
Right to low prices
Right to choose what they buy
Right to safe products
Right to be informed
Right to be heard

Question 64

Which of the following illustrates consumers' rights to safe products?
Clothing must be labelled with information about its proper care.
A new vacuum cleaner must be free of electrical hazards while in use cleaning a consumer's home.
There must be open competition in the marketplace.
Procter & Gamble provides a toll-free telephone number for consumers to use for complaints or questions.
Food products must list their ingredients.

Question 65

The Canadian Competition Bureau investigated possible __________ by Hershey, Nestle, and Cadbury.
unit pricing
demand pricing
price fixing
price gouging
price leadership

Question 66

Consumerism is
the group of laws dealing with retail commercial transactions.
the movement that seeks to protect and expand the rights of consumers in their dealings with businesses.
the right to be informed about all aspects of a product.
the right to choose the product.
the right to safe products.

Question 67

Social activism dedicated to protecting the rights of consumers in their dealings with businesses is called
whistle-blowing.
kiting.
price gouging.
consumerism.
collusion.

Question 68

When a food company lists the ingredients that make up their products, which consumer right is it addressing?
Right to choose
Right to safe products
Right to courteous service
Right to be informed
Right to be heard

Question 69

Which consumer right is violated by a company that restricts and interferes with competition?
Right to be heard
Right to choose what they buy
Right to good prices
Right to safe products
Right to be informed

Question 70

Paramount Pizza wants to be seen as a socially responsibility company. It can support its claim of being a socially responsible company by
using more nutritious ingredients even if they are more expensive.
cutting employees' wages and benefits in order to boost the company's stock price.
reducing pizza size while holding the price constant.
packaging products in material that costs less, even if customers object to the change.
taking actions to force competitors into bankruptcy.

Question 71

Dangerous chemical and/or radioactive byproducts of various manufacturing processes are called
solid waste.
acid rain.
toxic waste.
incineration waste.
biomass.

Question 72

Martha is the owner of a business that regularly imports certain agricultural commodities from countries with poor economic conditions. If she wants to help the citizens of those countries, how can she BEST do that?
By including labels on her products indicating where the commodities come from
By hiring people who have visited these countries and are familiar with the conditions there
By opening an outlet in these countries and creating jobs for the people there
By purchasing more of the commodities
By shipping free products to these nations

Question 73

When two or more firms agree to collaborate on wrongful acts, it is referred to as
consumerism.
collusion.
market segmentation.
oligopoly.
monopoly.

Question 74

Because it was the initial year of production, only 3000 units of a new model car were built. Some auto dealers got together and agreed that they would sell the cars only if the customer was willing to pay several thousand dollars over the sticker price. This is an example of
price gouging.
smart business practice.
price fixing.
collusion.
price lining.

Question 75

A poll of 12 000 people in 11 different countries revealed that ____ percent of those polled were willing to spend extra money to fight climate change.
90
75
65
45
20

Question 76

The conversion of waste materials into useful products is called
recycling.
solid waste recovery.
acid rain.
biomass.
toxic waste disposal.

Question 77

With respect to the issue of counterfeit brands, it is correct to say that
counterfeit brands used to be a big problem, but new legislation in various countries has reduced the problem considerably.
counterfeit brands are a big problem in products like perfume and designer clothing, but less of a problem in pharmaceuticals and expensive wines.
consumers benefit from counterfeit goods because they can get good products for lower prices.
it is generally easy to tell the difference between counterfeit goods and the real thing.
none of the above are correct.

Question 78

In 2011, the Alberta securities regulator brought charges against several executives at Grand Cache Coal Corp. because those executives sold company stock just before the company publicly disclosed negative news about its sales. This was an example of
cheque kiting.
insider trading.
misrepresentation of finances.
improper financial management.
whistle-blowing.

Question 79

All of the following are basic rights of consumers except
safe products.
to be heard.
to be informed.
to choose what they buy.
low prices.

Question 80

Arctic Glacier Inc., a Canadian company, was one of several companies served with subpoenas by the U.S. government as it investigated possible
violation of monopoly rules.
insider trading.
cheque kiting.
unsafe products.
collusion.