Deck 2: Ethics-And-Law

Question 1

Teleological theory focuses on the motivation and principle behind an action rather than its consequences.

Answer 1

False

Question 2

Rawlsian moral theory seeks to develop principles behind a "veil of ignorance."

Answer 2

True

Question 3

Utilitarianism seeks to equalize the benefit to everyone.

Answer 3

False

Question 4

A company's CEO does not play a significant role in instilling a sense of ethics throughout the organization.

Question 5

All business leaders and academics agree that the primary ethical and legal duty of corporations is to maximize shareholder value.

Question 6

The subprime mortgage crisis,accounting scandals,and payment of bribes in international business of the past 40 years all indicate that government regulation is a good substitute for knowledgeable self-restraint.

Question 7

Maximization of shareholder value is considered shareholder primacy and is mandated by law.

Question 8

The Tylenol example shows that no matter how many economic resources a company puts behind restoring its reputation,public image is not generally regained.

Question 9

Ethics and law are unrelated.

Question 10

Nobel Prize winner in economics Milton Friedman asserts that the only guiding criterion for the corporation should be profitability within the confines of the law.

Question 11

Customers can vote with their feet by boycotting unethical practices,such as clothing made in sweatshops.

Question 12

The deontological theory focuses on the consequences of an action rather than on the motivation of the individual.

Question 13

Utilitarianism is a major deontological system that operates under the proposition that the ideal is to focus on motivation rather than on consequences.

Question 14

Kantian theory examines the concepts of universalizability and reversibility.

Question 15

Rawlsian moral theory seeks to maximize the condition of the worst off person in society.

Question 16

All fifty states have constituency statutes.

Question 17

Compliance with the law is just the baseline for effective and responsible managerial action.

Question 18

If a company employee chooses to follow orders (and breaks the law),the fact that a supervisor ordered those actions is a complete defense at a criminal trial.

Question 19

In 2015,the average worker's salary was $36,875,or 35 times less than the average total compensation of CEOs of a company on the Standard and Poor's Index.

Question 20

The two main schools of ethical thought are teleological and deontological.

Question 21

In 2015,the average total compensation for a CEO of a company in the Standard and Poor's 500 Index was more than _____ times as much as the average worker.

A) 50
B) 150
C) 335
D) 500

Question 22

In the decision tree used by ethical business leaders,which of the following is the first question managers should ask when determining whether a proposed action is ethical?

A) Will it result in a loss of profits?
B) Will stockholders approve?
C) Will the CEO approve?
D) Is it legal?

Question 23

__________ justice focuses on how the burden and benefits of a particular system are distributed.

A) Compensatory
B) Retributive
C) Distributive
D) Rawlsian

Question 24

Milton Friedman argued that a company with an action plan for social responsibility is essentially acting in a fundamentally subversive way.

Question 25

A __________ statute is a state statute authorizing boards of corporations to take into account all stakeholders and constituencies even when a change in control or breakup of the corporation has become inevitable.

A) corporate control
B) break-up
C) constituency
D) protection

Question 26

Overly generous compensation packages for CEOs can lead to greedy and unethical behavior and reinforces:

A) empathic tendencies.
B) narcissistic tendencies.
C) a shrinking of social distance between CEO and workers.
D) exemplary conduct.

Question 27

In 1997,the U.S.passed legislation to curb the payment of bribes to government officials by U.S.companies.This legislation is the:

A) Foreign Corrupt Practices Act.
B) Dodd-Frank Wall Street Reform and Consumer Protection Act.
C) Sarbanes-Oxley Act.
D) Bribery Act.

Question 28

The __________ Act illustrates that corporate conduct violating society's expectations can result in new forms of regulation without regard for feasibility or cost.

A) White-Rush Dow Jones Conciliatory
B) Dodd-Frank Wall Street Reform and Consumer Protection
C) Corporate and Securities Reform and Retribution Consumer Protection
D) Securities and Oversight

Question 29

Which of the following statements about socially responsible funds is NOT true?

A) Few large mutual fund companies or 401(k)retirement plans offer socially responsible options for investment.
B) Investment in socially responsible funds has grown in the United States.
C) Investment in socially responsible funds has grown in Europe.
D) The Coalition for Environmentally Responsible Economics promotes investor guidelines focused on environmental awareness in the context of corporate activities.

Question 30

Nobel prize winner Milton Friedman asserts that "social responsibility" is a fundamentally __________ doctrine.

A) positive
B) risky
C) good
D) subversive

Question 31

Which of the following is true regarding shareholder primacy?

A) It is never legally mandated.
B) It is always legally mandated.
C) It is legally mandated only in very narrow circumstances.
D) There is no such thing.

Question 32

According to economist Michael C.Jensen,long-term market value of an organization cannot be maximized if:

A) outperforming competition has both a long-term and short-term focus.
B) companies chose social responsibility over shareholders.
C) management focuses on long-term value creation over short-term profits.
D) management ignores or mistreats any important constituency.

Question 33

Immanuel Kant argued that spending money in ways that are not consistent with shareholder wishes is tantamount to imposing a tax and unilaterally deciding where the money will be spent.

Question 34

Which of the following allows rights-based moral theories to be compared to other theories such as a utilitarian framework?

A) Deontology
B) Teleological theory
C) Comparative justice
D) Rawlsian moral theory

Question 35

According to St.Thomas Aquinas,an unjust law

A) could not properly be considered law at all.
B) is defective and morally objectionable.
C) must be obeyed even if it is morally objectionable.
D) must be overturned by a supermajority of the legislature.

Question 36

Which of the following is the group given the ultimate legal authority to change management?

A) Shareholders
B) Human resource managers
C) The mayor in the applicable jurisdiction
D) The city council in the applicable jurisdiction

Question 37

Court rulings and legislation have clearly affirmed that the obligation of a company's directors is to manage the corporation for the best interest of the:

A) corporation.
B) officers.
C) employees.
D) community.

Question 38

Which of the following is a term for the maximization of shareholder value?

A) Shareholder importance
B) Shareholder primacy
C) Value of shares maximization
D) Corporate allocation

Question 39

Yoshi believes firmly in the positive view.Which of the following statements best sums up Yoshi's legal philosophy?

A) The law attempts to prohibit all "bad" behavior.
B) An action that is unethical is also considered illegal in the U.S.
C) Valid laws prohibit all "morally objectionable" behavior.
D) Any law is real and enforceable if it has been created in accordance with recognized procedures.

Question 40

The three main theories under the comparative justice framework are:

A) retributive,Kantian,and Rawlsian.
B) compensatory,comparative,and retributive.
C) distributive,compensatory,and retributive.
D) utilitarian,teleological,and compensatory.

Question 41

According to the Delaware Supreme Court,when does the role of a director shift from being a "protector of the corporate bastion" to being an "auctioneer" charged with obtaining the highest realizable short-term value for the shareholders?

A) Only when the breakup of the corporation or a change of control has become inevitable
B) Whenever a yearly loss is reflected
C) At the point that a yearly loss has been reflected for three straight years
D) When the CEO and the board of directors are in disagreement,and there has also been a yearly loss reflected for three straight years

Question 42

You are the owner of a small Internet company.You are planning a public offering in 12 months.You ask your accountant to prepare an optimistic business model that shows a greater profitability potential than a conservative estimate would produce.When the accountant questions your profitability assumptions,you remind the accountant of the 10,000 shares of the company stock the accountant was able to purchase at a low price.A public offering would dramatically increase the value of those shares.Discuss the ethical issues faced by the owner and the accountant.How should they be resolved?

Question 43

Managers who create ethical solutions while maximizing shareholder value are said to find:

A) the universalizability principle.
B) distributive justice.
C) the sweet spot.
D) shareholder primacy.

Question 44

Your company has grown from a national to a multinational entity.How have your ethical responsibilities changed? To whom do you owe these responsibilities?

Question 45

Which of the following statements regarding the teleological theory is NOT true?

A) Teleological theory is concerned with consequences.
B) Teleological theory judges the ethical good of an action by the effect of the action on others.
C) Teleological theory focuses more on the motivation and principle behind an action.
D) Teleological theory is concerned with consequences and judges the ethical good of an action by the effect of the action on others.

Question 46

The Organization of Economic Cooperation and Development (OECD)comprises:

A) nations from North America,Europe,and Asia-Pacific.
B) a subsidiary of the European Union.
C) nations who entered into the North American Free Trade Agreement.
D) states inside the United States.

Question 47

The text describes ways in which ethics and law are related.Explain those relationships in terms of what a judge needs to follow and what society's consensus demands.

Question 48

The main issue in CASE 2.1 Meinhard v.Salmon (1928)was whether:

A) the parties equitably adhered to the proper morals of the marketplace.
B) Salmon purposely sought to defraud Meinhard.
C) a relationship of trust with fiduciary-like obligations was created under the parties' joint venture.
D) a buyer's unsavory reputation must be disclosed to a seller.

Question 49

Companies perceived to act unethically often suffer financial setbacks.What type of company is especially sensitive to public perception based on where its income comes from?

A) Oil refineries
B) Investment banks
C) Consumer products companies
D) Commodities processors

Question 50

Which one of the following is NOT a manner in which a company can promote ethical behavior?

A) ​Lobby legislators for more ethical guidelines
B) ​Craft an ethical mission statement
C) Provide ethics training
D) Adopt a Code of Ethics

Question 51

A CEO's role of instilling high standards among employees is best exemplified by which of the following statements?

A) "You can't judge a book by its cover."
B) "Do as I say,not as I do."
C) "Early to bed,early to rise,makes a man healthy,wealthy,and wise."
D) "Character is doing the right thing when nobody's looking."

Question 52

According to Kant's theory of universalizability,the ethical worth of an act is determined by whether a person:

A) would want such a rule applied to minority members of society.
B) would want everyone to perform in this manner.
C) could get away with such an action.
D) could live with the results of such an action.

Question 53

Discuss and explain the ethical business leader's decision tree referenced in the text.

Question 54

Which of the following is NOT an example of St.Thomas Aquinas' requirements for a law to be just?

A) The law must be within the power of individuals to fulfill it.
B) The law must be consonant with a reasoned determination of the universal good.
C) The law must be formed to promote a private benefit to the majority.
D) The law must be widely promulgated.

Question 55

As manager,Merce tells all employees the expectation is for them to treat others as they would like to be treated.Which of following is a descriptive term for Merce's requirement?

A) The Required Rule
B) The Accepted Rule
C) The Golden Rule
D) The Advanced Rule

Question 56

Your company has asked you to write a code of ethics.What should you include and why?

Question 57

According to St.Thomas Aquinas,only laws that followed __________ were true and just.

A) reasoned law
B) customary law
C) eternal law
D) localized law

Question 58

According to __________,social policies developed behind the veil of ignorance would create a system benefiting the __________.

A) Rawls; majority
B) Rawls; minority
C) Rawls; least well off
D) Kant; most well off

Question 59

The CEO of ABC Company was reviewing the company's annual report and realized that two of the company's largest customers were no longer purchasing from ABC.Artie got on the phone to the CEOs of those two companies and offered to fix invoices so that they paid less but could claim higher prices as their expenses and pocket the difference.One of the CEOs agreed and began the transactions.The other CEO notified the Interstate Commerce Commission about this collusion.Discuss how the legal and ethical aspects of this scenario differ.

Question 60

Kant's categorical imperative states that:

A) the form of an action rather than the intended result determines the ethical worth.
B) no one person's interest is given more weight than another.
C) distribution favors the person getting the worst share.
D) morally objectionable actions can never be in the best interests of society.

Question 61

You are the CEO of a multibillion-dollar company.Your company employs more than 75,000 people.The company is being sued for $100 million as the result of racial discrimination against your customers.Your investigation reveals that some of your managers are actively violating the law.Discuss the steps you would take to ensure your company's compliance with ethical norms and legal requirements.

Question 62

Discuss why Enron failed and who should be held responsible for the failure.

Question 63

List the two main schools of ethical thought and their main focus.