Deck 3: Business Ethics, Social Forces, and the Law

Question 1

An accumulation of complaints from employees, customers, or investors can lead to imposition of restrictive new regulations and laws.

Answer 1

True

Question 2

Utilitarians believe that ethics is measured by actions that do the most good for the most people.

Answer 2

True

Question 3

Ethics is a philosophical concept that deals with values related to the nature of human conduct.

Answer 3

True

Question 4

In addition to issues of social responsibility, business values and ethics play an important role in the success or failure of a business.

Question 5

Ethical violations can cause lasting detriment to a company's ability to do business through impacts on the company's reputation.

Question 6

Kant's theory understood that sometimes you have to use someone to achieve a one-sided benefit.

Question 7

Moral standards based on positive law may allow businesses to conduct themselves unfairly so long as their actions are not illegal.

Question 8

Civil disobedience is the remedy natural law proponents use to change positive law.

Question 9

Moral relativists believe that ethical decisions will differ based on circumstances.

Question 10

Entitlement theory says that everyone has rights but it is up to the government to protect those rights.

Question 11

Trust is a fundamental basis of the capitalist system that is central to the expectations of investors, customers, and other firm stakeholders.

Question 12

Freedom from economic domination is a personal right protected under United States law.

Question 13

There is often a conflict between the goal of making money for shareholders and the goal of solving social problems through business.

Question 14

The field of business ethics recognizes that social values typically must yield to the profitability motive.

Question 15

Ethical egoism believes that feeling guilty about poor ethical decisions will lead to better future decisions.

Question 16

Unwillingness of businesses to voluntarily improve the ethics of their practices has little practical effect on the regulatory environment.

Question 17

The theory of justice is based on the concept that if there were no laws or rules reasonable people would develop fair rules and standards.

Question 18

There is no evidence that commitment to ethical values is linked with financial performance of business organizations.

Question 19

Moral relativists solve ethical dilemmas according to time and place.

Question 20

In applying the stakeholder model of business ethics, only the interests of important constituencies affected by an action need to be satisfied.

Question 21

Differences among businesses preclude the development of any universal categories of ethical behavior.

Question 22

To Immanuel Kant, an action is ethical if it is fair and done for the right reasons.

Question 23

Ethical egoists such as Ayn Rand hold that:

A)​​people always act in their own self-interest.
B)​people do the most good for the most people.
C)​​ethical dilemmas are resolved according to time and place.
D)​​solving ethical dilemmas requires ethical training

Question 24

Mortgages, security interests, and surety relationships are legal mechanisms created primarily to promote stability and flexibility in trade.

Question 25

The Front-Page-of-the-Newspaper Test helps managers view ethical decisions in terms of public disclosure of the proposed conduct.

Question 26

Maintaining confidentiality is an ethical issue for both employees and company management.

Question 27

Laws that prohibit defamation, invasions of privacy, and reputation exist primarily:

A)​for protection of the person.
B)​for protection of public health, safety, and morals.
C)​​for protection of property.
D)​​for protection of the state.

Question 28

Rights theory includes all of the following except:

A)​​is also known an entitlement theory.
B)​states that everyone has a set of rights.
C)​​believes that it is the government's responsibility to protect our rights.
D)​​using others in a way that gives you a one-sided benefit.

Question 29

Despite the importance of ethical behavior for business success, few Fortune 500 companies have codes of ethics to resolve ethical dilemmas.

Question 30

Civil disobedience is the remedy natural law proponents use to change positive laws.

Question 31

Over half of all Fortune 500 firms train their employees to recognize and deal with particular types of behavior that breach their ethical codes.

Question 32

The importance of trust as a fundamental principle in capitalism is illustrated by expectations that:

A)​​investors will be able to earn a return on their investments.
B)​employees may be discharged at any time for any reason without notice.
C)​​litigation is inevitable because parties to agreements usually break promises.
D)​​insider trading proves that the economic system underlying business is flawed.

Question 33

According to the book Building and Growing a Business Through Good Times and Bad, companies with 100 years of consistent dividends:

A)​​use positive laws as a guide for ethical decisions.
B)​have a goal of  profitability no matter what the cost.
C)​​have a strong commitment to values.
D)​​value social responsibility above all other factors.

Question 34

The Utilitarian Theory:

A)​​holds that we all act in our own self-interest.
B)​is based on doing the most good for the most people.
C)​​resolves ethical dilemmas according to time and place.
D)​​believes that solving ethical dilemmas requires training

Question 35

Immanuel Kant's categorical imperative theory:

A)​​requires that we avoid one-sided benefits as a result of ethical decisions.
B)​makes it easier to settle international business ethical decisions.
C)​​believes you have to be fair and ethical whether you want to be or not.
D)​​always elevates the ends over the means.

Question 36

Recognizing that an ethical dilemma exists is usually far more difficult than resolving the dilemma once its existence is recognized.

Question 37

The final question of the Blanchard-Peale "Three Part Test", has to do with conscience.

Question 38

Positive law:

A)​​is enacted by government authority.
B)​ensures that businesses will follow a high level of ethical standards.
C)​​is also known as natural law.
D)​​is moral-based law.

Question 39

The U.S.Patriot Act and airport security regulations were enacted for the protection of:

A)​​the person.
B)​public, health, safety and morals.
C)​​the state.
D)​​personal rights.

Question 40

Voluntary improvements in value choices and business ethics are:

A)​​less effective than those brought about by government regulation.
B)​less costly and intrusive than those brought about by government regulation.
C)​​virtually nonexistent in corporate America.
D)​​more common in third-world countries than in the United States.

Question 41

Laws that prohibit theft, operation of a factory in areas zoned residential, and copyright infringement exist primarily:

A)​​for protection of the person.
B)​for protection of public health, safety, and morals.
C)​for protection of property.
D)​​for protection of the state.

Question 42

The ethical category of integrity and truthfulness is best expressed as maintaining one's values and principles:

A)​​so long as profits can be maintained.
B)​so long as the costs are not great.
C)​​unless deviating will go unnoticed.
D)​​despite the consequences or costs.

Question 43

Laws that prohibit mislabeling of food, speeding, and sale of alcohol to minors exist primarily:

A)​​for protection of the person.
B)​for protection of public health, safety, and morals.
C)​​for protection of property.
D)​​for protection of the state.

Question 44

An ethical duty of confidentiality could be breached in any of the following situations except:

A)​​information obtained through research of the employer is disclosed.
B)​customer lists or leads are disclosed to a competitor.
C)​​proprietary information or technology of a business is disclosed.
D)​​when a confidential informant tells government officials of illegal company activity.

Question 45

All of the following situations reflect a possible conflict of interest except:

A)​​A CEO offers a contract to a friend without checking competing bids.
B)​A CEO hires a relative for a company position although another candidate is more qualified.
C)​​A manager buys a piece of realty that would be suitable for a planned company project.
D)​​A CEO takes a cut in pay to decrease company overhead.

Question 46

The Blanchard and Peale three-part test for resolving ethical dilemmas consists of the following questions:

A)​​Is it legal? Is it ethical? Is it moral?
B)​Is it legal? Is it balanced? How does it make me feel?
C)​​Is it ethical? Is it right? Does it pass the "front page of the newspaper" test?
D)​​Is it right? Is it balanced? Is it fair?

Question 47

In applying the "front-page-of-the-newspaper" test to a contemplated course of conduct one should ask:

A)​​Would I be found criminally liable if this winds up on the front page of the newspaper?
B)​Would I be liable for monetary damages if this winds up on the front page of the newspaper?
C)​Would I be willing to have my spouse, friends, and children read about this if it winds up on the front page of the newspaper?
D)​​Would I be able to explain this to the authorities if it winds up on the front page of the newspaper?

Question 48

"Primum non nocere" is Latin for:

A)​​Above all, do no harm.
B)​Let the buyer beware.
C)​​Hear no evil, see no evil, and speak no evil.
D)​​No news is good news.

Question 49

Thomas works for an internationally-renowned computer company.As a condition of his employment, Thomas signed a confidentiality agreement, in which he agreed not to disclose any trade secrets of the firm.The company has been researching a new computer advancement, and is on the brink of introducing this product to the buying public.Before the official product release, Thomas is considering offering information related to this new advancement to one of his company's competitors for a price.What categories of ethical behavior might be impacted by Thomas' decision to disclose this information to his employer's competitor?

Question 50

John Harrington operates a business that almost always hires skilled workers who are college graduates; currently, however, his business does have a part-time opening for an unskilled worker.Harrington is considering hiring an uneducated welfare recipient instead of a student from the local university.Apply the "Guidelines for Analyzing a Contemplated Action" to this problem.

Question 51

Which of the following is not a question business ethicist Laura Nash has developed to help businesspeople reach the right decision in ethical dilemmas?​

A)​​Have you defined the problem accurately?
B)​How would you define the problem if you stood on the other side of the fence?
C)​​How did the situation occur in the first place?
D)Does your proposed solution to the problem effectively balance the competing objectives of ethical decision-making and corporate profitability?

Question 52

The passage of federal securities disclosure laws occurred largely as the result of:

A)​​voluntary self-regulation by ethics experts in the securities industry.
B)​the stock market crash of 1929.
C)​​changes in the international market for securities and negotiable instruments.
D)​​legislative changes protecting debtors and creditors.