Deck 4: Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Question 1

Asking whether a decision will produce the right results is an example of deontological theory.

Answer 1

False
Explanation: Asking whether a decision will produce the right results is an example of a teleological theory.Teleological theories focus on the consequences of a decision while deontological theories focus on decisions or actions.

Question 2

The reduced sales of Martha Stewart branded goods at K-Mart after she was accused of insider trading is an example of the strength of the profit maximization theory.

Answer 2

True
Explanation: Profit maximization theory requires that decision makers consider the rights protected by rights and justice theories.The reduced sales show that ignoring these rights can have a negative impact on a corporation.

Question 3

"The ends justify the means." This statement reflects the utilitarian ethical theory.

Answer 3

True
Explanation: Utilitarian theory tries to achieve the highest level of satisfactions over dissatisfactions and justify the maximum good.

Question 4

Rawls's justice theory focuses on outcomes.

Question 5

"Begging the question" is also known as the slippery slope fallacy.

Question 6

An individual can lead ethically while not attempting to behave in an ethically way.

Question 7

The purpose of the _____ is to increase penalties for corporate wrongdoers,establish rules designed to deter and prevent future wrongdoing,and encourage and enable corporate executives to be ethical and socially responsible.

A) Sarbanes-Oxley Act
B) Davis-Bacon Act
C) Goldwater-Nichols Act
D) Certiorari Act

Question 8

Rights theory concerns itself with the costs and benefits of requiring respect for another's rights.

Question 9

The _____ of corporate social responsibility holds that rather than merely striving to maximize profits for its shareholders,a corporation should balance the interests of shareholders against the interests of employees,suppliers,customers,and the community.

A) deontological theory
B) Kantian theory
C) stakeholder theory
D) utilitarian theory

Question 10

The stakeholder theory of corporate social responsibility:

A) strives to maximize profits for its shareholders.
B) tries to balance the interests of shareholders and stakeholders.
C) advocates the use of legal remedies to check corporate misbehavior.
D) advocates the freedom of corporations to run as they wish.

Question 11

Under the stakeholder theory of corporate social responsibility,employees' interests are considered.

Question 12

Profit maximization compels a decision maker to consider stakeholders other than the corporation and its shareholders.

Question 13

A retailer's decision not to close earlier than its regular closing time even though a storm warning makes it unlikely that there will be any more customers that day is an example of rule utilitarianism.

Question 14

The Sarbanes-Oxley Act of 2002 requires public companies to have board audit committees comprising only independent directors.

Question 15

Theories that focus only on actions or decisions are called deontological ethical theories.

Question 16

Profit maximization is a deontological theory.

Question 17

A teleological theory may find unacceptable that any competent employee loses his job,even if the layoff's effect is to reduce prices to consumers and increase profits.

Question 18

"What would happen if everyone acted in this way?" is a question that Kant would ask.

Question 19

Utilitarianism is based on the laissez faire theory of capitalism.

Question 20

A justice theorist would choose the alternative that allocates society's benefits and burden most fairly.

Question 21

Which of the following is a prescribed guideline for ethical decision making?

A) What gives me maximum profit?
B) Will stakeholders offer support?
C) How can I increase the number of shareholders?
D) How do the alternatives impact my business firm?

Question 22

Which of the following factors can impose direct penalties for corporate misbehavior?

A) Market forces
B) Corporate management
C) Labor unions
D) Investors

Question 23

Which of the following is a characteristic of profit maximization?

A) It is concerned with the equal distribution of wealth in society.
B) It protects everyone's fundamental rights.
C) It is closely related to utilitarianism because it focuses on results.
D) It ensures complete responsible and ethical behavior by corporations.

Question 24

Which of the following ethical theories illustrates that acting in one's selfish interests can ultimately result in ethical behavior and benefits to society?

A) Rights theory
B) Profit maximization theory
C) Kantian theory
D) Justice theory

Question 25

Which of the following ethical theories focuses on a decisions or action alone,irrespective of the result it produces?

A) Deontological theory
B) Teleological theory
C) Profit maximization theory
D) Utilitarian theory

Question 26

_____ protects the rights of those who are less privileged in society.

A) Rights theory
B) Justice theory
C) Rule utilitarianism theory
D) Profit maximization theory

Question 27

Which of the following ethical theories judges our actions as good or bad depending on their consequences and is expressed as "the ends justify the means"?

A) Rights theory
B) Utilitarianism
C) Kantianism
D) Deontological theory

Question 28

Which of the following ethical theories emphasizes that certain human rights are fundamental and must be respected by other humans?

A) Rights theory
B) Utilitarian theory
C) Teleological theory
D) Profit maximization theory

Question 29

_____ ethical theories focus on the consequences of a decision.

A) Deontological
B) Teleological
C) Kantian
D) Rights

Question 30

The _____ requires a public company to disclose whether it has adopted a code of ethics for senior financial officers,and to disclose any change in the code or waiver of the code's application.

A) Davis-Bacon Act
B) Goldwater-Nichols Act
C) Sarbanes-Oxley Act
D) Certiorari Act

Question 31

______ requires a decision maker to ensure the maximum good for the maximum number.

A) Profit maximization
B) Rights theory
C) Stakeholder theory
D) Utilitarianism

Question 32

Which ethical theory justifies the protection of a neo-Nazi's right to hateful speech,even though the cost of such speech includes damage to relations between ethnic groups,which may far outweigh any benefits the society receives from the speech?

A) Rights theory
B) Teleological theory
C) Profit maximization theory
D) Utilitarian theory

Question 33

Which of the following ethical theories is a deontological theory?

A) Utilitarian theory
B) Teleological theory
C) Rights theory
D) Profit maximization theory

Question 34

Which of the following ethical theories requires decision makers to maximize utility for the society as a whole?

A) Profit maximization theory
B) Deontological theory
C) Rights theory
D) Utilitarian theory

Question 35

Profit maximization results in ethical conduct because:

A) it emphasizes the right to redistribute wealth in order to help the poor and disadvantaged.
B) it requires society's members to act within the constraints of the law.
C) it protects fundamental rights,unless some greater right takes precedence.
D) it focuses on the decision or action itself,irrespective of what results it produces.

Question 36

_____ categorizes using or manipulating others as an unethical action.

A) Utilitarianism
B) Teleological ethics
C) Consequentialism
D) Kantianism

Question 37

Which of the following ethical theories has been criticized for promoting moral fanaticism and reducing innovation,entrepreneurship,and production?

A) Rights theory
B) Teleological theory
C) Utilitarian theory
D) Profit maximization theory

Question 38

_____ theory emphasizes that one should use the categorical imperative and judge an action by applying it universally.

A) Utilitarian
B) Teleological
C) Justice
D) Kantian

Question 39

_____ is a teleological ethical theory because it focuses on results by maximizing total social welfare.

A) Rights theory
B) Kantian theory
C) Deontological theory
D) Profit maximization theory

Question 40

Kurt is trying to decide whether or not he should drive to work every day and has a number of questions.Will it save valuable time? Will he be adding to environment pollution? Will it add to the problems of heavy traffic on the roads? Would carpooling be a better idea? Which of the following ethical theories does Kurt adhere to?

A) Utilitarian ethics
B) Deontological ethics
C) Kant's categorical imperative
D) Rights theory

Question 41

Jack flipped a coin five times and each time it came up heads.His friend Atmel saw this and bet Jack that the next flip would come up tails.Atmel figured that it was overdue for a tails and so tails was a more likely outcome in the next flip.Atmel has fallen prey to:

A) sunk cost fallacy.
B) reductio ad absurdum.
C) argumentum ad hominem.
D) gambler's fallacy.

Question 42

"Your decision will be better for your firm and other stakeholders if you consider your selfish interest." Considering that this statement is true,which of the following prescribed guidelines for ethical decision making should you focus on?

A) Will the shareholders offer support?
B) How can I increase the number of shareholders?
C) How do the alternatives impact me,the decision maker?
D) Who are the stakeholders?

Question 43

Bob DeSlob,CEO of Westlake Inc. ,had supported the development and distribution of the Super Widget,a product that is expensive to make.The Super Widget failed to meet its expected sales.Bob,now,decides to invest more resources to produce and aggressively market the Super Widget,rationalizing that if he did not invest more in the product,what he has invested would be lost.Bob is engaging in:

A) sunk cost fallacy.
B) argumentum ad baculum.
C) argumentum ad hominem.
D) reductio ad absurdum.

Question 44

Guilty by association is a form of:

A) begging the question.
B) argumentum ad hominem.
C) argumentum ad populum.
D) gambler's fallacy.

Question 45

Carol,an Acme Co.employee,regularly takes pens,paper,and other office supplies from the Acme office supply cabinet and brings them home for her husband to use in his home office.Carol defends this action by saying that: "I don't get paid enough,and besides,no one will miss the supplies." This statement is an example of:

A) circular reasoning.
B) false analogy.
C) bandwagon fallacy.
D) a non sequitur.

Question 46

An "argumentum ad populum" used in an argument is a wrong conclusion:

A) that does not follow from the facts or premises set out.
B) based on a false analogy.
C) that relies on the idea that a popular belief is true.
D) based on an attack against the speaker,not his/her reasoning.

Question 47

What two conditions must be met if profit-maximization is to maximize utility?

Question 48

How can a corporation improve its corporate governance and corporate responsibility?

Question 49

Which of the following attacks the speaker for his argument,not his reasoning?

A) Argumentum ad hominem
B) Argumentum from authority
C) Argumentum as populism
D) Argumentum ad vacuum

Question 50

Which of the following critical thinking errors is likely to occur among the subordinates if a leader is unethical?

A) False analogy
B) Bandwagon fallacy
C) False cause
D) Gambler's fallacy

Question 51

Bennett is in the process of making an important decision for his firm.Which of the following actions strengthens the argument that Bennett is a utilitarian?

A) Bennett chooses the alternative that promises the highest net welfare to society as a whole.
B) Bennett implements the alternative that allocates society's benefits and burden most fairly.
C) Bennett considers whether everyone is getting what he deserves.
D) Bennett determines whether anyone's rights are negatively affected by an alternative.

Question 52

A _____ argument states that we should or should not do something merely because one or more other people or firms do or do not do it.

A) bandwagon fallacy
B) circular reasoning
C) false cause
D) gambler's fallacy

Question 53

The last tactic to adopt in resisting a request to act unethically is to:

A) buy time to think about a solution.
B) find a mentor and peer group.
C) prepare to leave the job.
D) find win-win solutions.

Question 54

Bill,a senior manager at Bizlaw Inc. ,instructs Kim,a mid-level manager,to make false statements on the performance evaluation of Gloria,one of Kim's employees,who recently filed a discrimination claim against Bill.Bill tells Kim,"Look around you.Every manager makes up stories about employees Bizlaw wants to get rid of." Bill's argument illustrates:

A) bandwagon fallacy.
B) argumentum ad baculum.
C) argumentum ad hominem.
D) circular reasoning.

Question 55

Which of the following is also called the slippery slope fallacy?

A) Gambler's fallacy
B) Reductio ad absurdum
C) Sunk cost fallacy
D) Argumentum ad hominem

Question 56

Debra asks Alex,her stock broker,if she can trust his advice to purchase the stocks for Acme Co.Alex replies,"Of course you can." Debra asks,"Why should I trust you?" Alex says,with a smile,"Because I am a trustworthy person." Alex is engaging in:

A) circular reasoning.
B) bandwagon fallacy.
C) argumentum ad baculum.
D) false analogy.

Question 57

Speedster is an automobile manufacturing company that has a factory in Seattle,Washington.It has placed Keith McShane,the operations head of the factory,in charge of investigating the firm's decision whether to move the factory to Qingdao,China.Keith is against the idea of the factory relocating to Qingdao because his fellow Americans will lose their jobs to the Chinese.Therefore,he is desperately searching for information that favors Seattle over Qingdao.Which of the following prescribed guidelines for ethical decision making will Keith need to focus on to make an unbiased,ethical decision?

A) Will the shareholders offer support?
B) What facts impact my decision?
C) How can I increase the number of shareholders?
D) Which decision will allow me to retain my job?

Question 58

Trisha has been given the responsibility of making an important decision for her firm.Which of the following actions strengthens the argument that Trisha is a justice theorist?

A) Trisha chooses the alternative that promises the highest net welfare to society as a whole.
B) Trisha chooses the alternative that respects the most important human right.
C) Trisha considers whether everyone is getting what he deserves.
D) Trisha determines whether anyone's rights are negatively affected by an alternative.

Question 59

A "non sequitur" used in an argument is a wrong conclusion:

A) that does not follow from the facts or premises set out.
B) based on a false analogy.
C) that relies on the idea that a popular belief is true.
D) based on an attack against the speaker,not his/her reasoning.

Question 60

What three things are seen in the corporate scandals of 2002,such as Enron and WorldCom?

Question 61

Carol,a senior manager in Bizlaw Inc. ,encourages Rob,her junior manager,to bill Bizlaw's clients for his commute time,and identify it as "meet and confer with senior manager." Carol explains that she will then adjust her own billing sheet to match this entry.Carol tells Rob that all other Bizlaw junior and senior managers engage in this practice,and that clients have never questioned such entries.Rob is not sure whether this would be an ethical action.What should Rob do?