Deck 42: Ethics and Social Responsibility of Business

Question 1

Businesses organized in the United States are subject to the laws of other countries in which they operate.

Answer 1

True

Question 2

Ethical relativism allows an individual to evaluate the ethics of his actions based on his own feelings about what is ethical.

Answer 2

True

Question 3

Under the maximizing profits theory of the social responsibility of business,it is improper for a business to undertake charitable acts for the benefit of society if doing so reduces profits.

Answer 3

True

Question 4

Utilitarianism requires taking the course of action that provides the greatest good to society.

Question 5

Ethical fundamentalism permits a person to determine right and wrong for himself.

Question 6

The concept of reversibility under Kantian Ethics allows that the rules be reversed in that the actor must utilize the rule he or she uses to judge the morality of someone else's conduct.

Question 7

Under the traditional view of social responsibility,businesses owe a duty to take actions that maximize profits for shareholders.

Question 8

If something is legal,it is also ethical.

Question 9

Those who abide by Kantian ethics behave by doing unto others as they would have done unto themselves.

Question 10

The most favorable aspect of applying utilitarianism is that it is easy to estimate the good that results from different actions.

Question 11

Under ethical fundamentalism,persons look to an outside source to decide whether a course of action is appropriate.

Question 12

Under the maximizing profits theory of the social responsibility of business,a business should never voluntarily reduce its prices.

Question 13

John Stuart Mill is the best-known proponent of duty ethics.

Question 14

John Locke and Jean-Jacques Rousseau both proposed a social contract theory of morality under which each person is presumed to have entered into a social contract with all others in society to obey moral rules that are necessary for people to live in peace and harmony.

Question 15

Under Rawl's social justice theory the principles of justice are supposed to be chosen by persons who do not know their position in society,something that is unrealistic.

Question 16

One advantage of utilitarianism is that there is no need for measuring the good of an action for society.

Question 17

Under the social contract theory of societal justice,members of society are obligated to obey the moral rules of society regardless of whether others obey those rules.

Question 18

All ethical standards have been enacted as law.

Question 19

Under Rawls's social justice theory,the least advantaged in society must receive special assistance to allow them to realize their potential.

Question 20

Kantian Ethics is based on universal rules that require that all similar cases be treated alike with no exceptions.

Question 21

Under the stakeholder interest theory of the social responsibility of business,a business has obligations to shareholders,employees,and other stakeholders.

Question 22

Under the corporate citizenship theory of the social responsibility of business,a business has multiple obligations,but these obligations are only to those who have some direct interest or connection with the business.

Question 23

Which of the following is correct with regard to the relationship between law and ethics?

A) The rule of law and the golden rule of ethics demand the same response.
B) The law may not permit something that would be ethically wrong.
C) Lawful conduct is always ethical conduct.
D) Although much of law is based on ethical standards,not all ethical standards have been enacted as law.

Question 24

Which of the following is not a part of the beliefs of Kantian Ethics?

A) All cases should be treated alike.
B) The applicability of "do unto others as you would have them do unto you."
C) Choosing a course of action based on what does the greatest good for society.
D) Abiding by the rules applied to others in making decisions.

Question 25

A criticism of the stakeholder interest theory of the social responsibility of business is that it is often impossible to determine how the interests of the different stakeholders should be balanced.

Question 26

What does the "veil of ignorance" require under Rawls's distributive justice theory?

A) Ethical obligations are decided by less intelligent members of society so that they can be understood by all.
B) Ethical obligations in society should not be made public,because if they were,individuals would strive to merely do the minimum.
C) Ethical obligations should be determined by persons who do not know their place in society.
D) Persons who have suffered an injustice should not be able to learn the identity of the person causing the injustice,at least when it is practical to keep this information from the person who was harmed.

Question 27

Someone who believes that moral decisions should be made such that the greatest amount of good in total results from the actions believes in which moral theory?

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 28

The moral theory of ethical fundamentalism can best be characterized by:

A) the consultation of an outside source,such as a book or person,for ethical guidance
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings
D) determining which course of action produces the greatest amount of good for the greatest number of people
E) a set of universal rules based on reasoning that must be applied in all situations and is characterized by reversibility

Question 29

Which of the following statements is true regarding the relationship of law and ethics?

A) The legal requirements will almost always be the same as the ethical requirements because the law is based on the ethical standards.
B) In some cases ethics will require a higher standard of conduct than the law,but never vice versa.
C) In some cases the law will require a higher standard of conduct than ethics,but never vice versa.
D) Depending on the circumstances,the law can require a higher,lower,or the same standard of conduct as ethics demands.

Question 30

Which of the following is a frequently raised criticism of "utilitarianism?"

A) Under utilitarianism,moral and ethical rules are too rigid and fixed over time.
B) Under utilitarianism,actions taken must harm the smallest number of people,thereby failing to consider the effect on the majority.
C) Decisions made using utilitarianism require the measurement of qualities that are not subject to precise measurements.
D) Decisions made using a utilitarian analysis are not allowed to take into account an individual's station or place in society.

Question 31

Which course of action would utilitarianism require to be taken?

A) the one that provides at least some good to the greatest number of people
B) the one that provides the greatest overall good to society,even if the benefit of that alternative flows to only one person
C) the one that harms the smallest number of individuals
D) the one that places the greatest number of people in a better position than they were in previously

Question 32

Under the moral minimum theory of the social responsibility of business,it is acceptable for a business to injure others so long as the business has caused minimal injury.

Question 33

A business who spills oil that impacts land on which homes and businesses are built,but who compensates those whom it injures has met its moral minimum duty of the social responsibility of business.

Question 34

Which of the following best characterizes "utilitarianism?"

A) the consultation of an outside source,such as a book or person,for guidance
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings
D) determining which course of action produces the greatest amount of good for society
E) a set of universal rules based on reasoning that must be applied in all situations and are characterized by reversibility

Question 35

Social audits have recently become mandatory for publicly traded corporations.

Question 36

Rawls's social justice theory includes which of the following?

A) the consultation of an outside source,such as a book or person,for guidance
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings
D) determining which course of action produces the greatest amount of good for the greatest number of people
E) a set of universal rules based on reasoning that must be applied in all situations and are characterized by reversibility

Question 37

Someone who makes moral decisions based on the guidance of an outside source,such as another person,is applying which moral theory?

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory.

Question 38

The corporate citizenship theory of social responsibility argues that businesses have the responsibility to do good for society.

Question 39

Kantian ethics can best be characterized by:

A) the consultation of an outside source,such as a book or person,for guidance
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings
D) determining which course of action produces the greatest amount of good for the greatest number of people
E) a set of universal rules based on reasoning that must be applied in all situations and is characterized by reversibility

Question 40

The golden rule,"Do unto others as you would have them do unto you," is most directly reflected in which moral theory?

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 41

The theory of business social responsibility that holds that a business has a duty to generally do good for society is:

A) the moral minimum theory
B) the maximizing profits theory
C) the stakeholder interest theory
D) the corporate citizenship theory

Question 42

A business that is concerned solely with the financial implications of alternate courses of action is applying which theory of the social responsibility of business?

A) moral minimum
B) maximizing profits
C) stakeholder interest
D) corporate citizenship

Question 43

Someone who believes that the principles of justice and moral duties are based on universal rules,and that the actor must abide by the same rules being applied to others,believes in which moral theory?

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 44

A business that undertakes activities that benefit persons who are in no way connected with the business is applying which theory of the social responsibility of business?

A) moral minimum
B) maximizing profits
C) stakeholder interest
D) corporate citizenship

Question 45

Peter runs an auto air conditioning repair shop.Because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners,auto air conditioning repairers have become subject to numerous new laws and regulations,some of which are costly and burdensome with which to comply.Although it costs him more,Peter decides to follow all the statutes and regulations so long as everyone else does the same.Peter has reached his decision in accordance with:

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 46

The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is:

A) the moral minimum theory
B) the maximizing profits theory
C) the stakeholder interest theory
D) the corporate citizenship theory
E) the social audit theory

Question 47

The moral theory of ethical relativism can best be characterized by:

A) the consultation of an outside source,such as a book or person,for guidance
B) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society
C) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings
D) determining which course of action produces the greatest amount of good for the greatest number of people
E) a set of universal rules based on reasoning that must be applied in all situations and is characterized by reversibility

Question 48

The four theories of social responsibility of business discussed in the text can best be described as:

A) laws,only one of which applies in each state
B) laws,more than one of which can apply in a particular state
C) mutually exclusive policies on which laws should be based
D) policies on which laws should be based,more than one of which might be proper

Question 49

Which social responsibility theory has been advocated by Nobel Prize-winning economist Milton Friedman?

A) maximizing profits
B) moral minimum
C) stakeholder interest
D) corporate citizenship
E) corporate social audit

Question 50

Someone who makes moral and ethical decisions based on his own beliefs is applying which moral theory?

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 51

Which of the following actions is consistent with the maximizing profits theory of the social responsibility of business?

A) raising wages because it is expected to lower employee turnover and long-term overall compensation expenses
B) raising wages because it is believed that workers are underpaid relative to the industry average and that employee relations will be improved even though overall compensation expenses will increase
C) raising wages to avoid a strike that would cost more than the increased costs of the wage increase
D) A and C only
E) A,B,and C

Question 52

Mary owns her own business and has just attended a cash flow management seminar where it was suggested the businesses should delay paying their suppliers as long as absolutely possible even if doing so violates the stated payment terms.Mary decides to continue paying her suppliers on time in accordance with their payment terms because Mary would like her customers to pay her on time.Mary has reached her decision in accordance with:

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics

Question 53

Which two philosophers proposed a social contract theory of morality?

A) John Locke and Jean-Jacques Rousseau
B) Jeremy Bentham and John Stuart Mill
C) Karl Marx and Joseph Story
D) Milton Friedman and Henry Ford
E) R. J. Reynolds and Arthur Anderson.

Question 54

Which of the following is a criticism of ethical relativism?

A) Moral and ethical rules are too rigid and fixed over time.
B) Some persons would take actions that they believe to be moral,but which most persons in society believe to be immoral.
C) Decisions require the measurement of qualities that are not subject to precise measurements.
D) Decisions are not allowed to take into account a particular person's station or place in society.

Question 55

A procedure which can be used to assess the moral health of a corporation is the:

A) social audit
B) Valdez checkup
C) corrupt practices inventory
D) minimum moral assessment

Question 56

The theory of business social responsibility that holds that the obligation of a business is to earn a profit while not harming others,but if it does cause harm,it must compensate the victims for the harms caused,is:

A) the moral minimum theory
B) the maximizing profits theory
C) the stakeholder interest theory
D) the corporate citizenship theory

Question 57

The theory of business social responsibility that holds that a business owes duties to the various constituencies,such as customers and employees,in addition to the shareholders is:

A) the moral minimum theory
B) the maximizing profits theory
C) the stakeholder interest theory
D) the corporate citizenship theory

Question 58

Which of the theories of the social responsibility of business includes obligations of a business to parties other than shareholders?

A) corporate citizenship only
B) stakeholder interest only
C) stakeholder interest and corporate citizenship
D) moral minimum and stakeholder interest
E) moral minimum,stakeholder interest,and maximizing profits

Question 59

Constituency statutes most directly relate to which theory of the social responsibility of business?

A) moral minimum
B) maximizing profits
C) stakeholder interest
D) corporate citizenship

Question 60

A business that is willing to sacrifice some income in order to avoid harm to others is applying which theory of the social responsibility of business?

A) moral minimum
B) maximizing profits
C) stakeholder interest
D) corporate citizenship

Question 61

A famous psychologist has written a highly acclaimed book targeted at victims of domestic abuse.This book gives practical advice on getting out of such abusive relationships and avoiding further injury prior to getting out of the relationship.Pat thinks the book is excellent,but knows that many persons who could benefit from the book are unaware of its existence and unable to afford its $39.95 price.Pat is considering photocopying significant portions of the book and selling the photocopied portions to such persons at the cost of photocopying,which is much less than $39.95.In using a utilitarianism approach to decide whether to undertake this,Pat would:

A) look to an outside source regarding the photocopying and selling
B) look for a universal rule about photocopying and selling such material
C) try to determine the fairest thing to do
D) determine if the total good to the world would be increased if Pat were to undertake the photocopying and selling of the copied book sections

Question 62

Compare and contrast the views held by Milton Friedman regarding the ethical responsibility of a corporate business to that of someone following the stakeholder interest theory of social responsibility.

Question 63

The increasing use of the Internet and computers generally has made it much easier for businesses to gather,process,and distribute information about its customers,as well those who are not customers.In the context of ethical obligations,should business be able to gather and sell this information?

Question 64

The government has proposed demolishing 800 of 2,000 units in a low-income public housing project that has become crime-ridden and in poor repair.These 800 units will be replaced with 300 units,half of which will be for low-income families,and half for moderate-income families,resulting in fewer low-income housing units in total.Evaluate this proposal under utilitarianism.

Question 65

Assume that a drug company has recently developed a new weight-loss drug that is available only by doctor's prescription.This drug has some significant side effects,but is quite effective for helping individuals lose weight.The drug is being heavily advertised directly to the public,resulting in large numbers of individuals contacting their doctors in order to get a prescription for the drug.Because of the side effects,this drug is intended only for persons who are severely overweight.Some of the advertising for this drug emphasizes the happiness and beauty that can result when one is slender,leading many doctors to over prescribe the drug.Discuss the drug company's actions in light of the theories of the social responsibility of business.

Question 66

Beginning in about 1990,many credit card issuers began marketing more aggressively to college students on the basis that they have considerable future earning potential even though their current income is not very high.Prior to 1990,most credit card issuers required cosigners,who would typically be the students' parents.This has led to far more students incurring excessive debt.This has required some students to work longer hours while in college and to have more debt-related problems after getting out of college.Furthermore,employers are increasingly using credit information in the hiring selection process so that some students' debt problems adversely affect their ability to find a job.Evaluate the propriety of these marketing efforts.

Question 67

A company is planning to promote its services heavily via telemarketing.The company has learned that the majority of those to be called are strongly opposed to receiving telemarketing calls.In addition,many of the persons who will be called are elderly who might decide to purchase the product even though they do not really need it or cannot afford it.Discuss the appropriateness of proceeding with this plan under the different theories of the social responsibility of business.

Question 68

Peter runs an auto air conditioning repair shop.Because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners,auto air conditioning repairers have become subject to numerous new laws and regulations,some of which are costly and burdensome to comply with.This results in much higher costs for air conditioning repairs for many owners of older cars.By not following some of these regulations,Peter can repair these older cars at a much lower cost.Peter believes that the good that comes from the reduced repair costs outweighs the resulting incremental damage to the environment,and thus decides to not follow the regulations.Peter has reached his decision in accordance with:

A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls's distributive justice theory

Question 69

OSHA has promulgated regulations requiring employers to provide a certain baseline level of breathing protection to employees.Your company is quite successful,and you can afford to provide a level of breathing protection that exceeds OSHA requirements.Should you?

A) The company has a regulatory and ethical obligation to provide the highest level of protection possible if it can afford it.
B) The company has a regulatory requirement to buy the best equipment available,but not an ethical requirement.
C) The company does not have a regulatory requirement,but does have an ethical obligation.
D) The company has neither a regulatory nor ethical requirement to provide the best equipment available.

Question 70

Big Green Company is considering introducing a new product to replace an existing product.The new product would result in increased revenues,but slightly lower overall profits because the product will cause injury to a few users and Big Green will compensate persons who are injured.The introduction of this product would be the proper decision under:

A) both the moral minimum theory and the profit maximization theory
B) neither the moral minimum theory nor the profit maximization theory
C) the moral minimum theory,but not under the profit maximization theory
D) the profit maximization theory,but not under the moral minimum theory