Question 1

Many business decisions involve moral outcomes because
A) a high percentage of employees are dishonest and commit fraudulent activities
B) inevitably situations arise in business that don't always have an easy answer or solution
C) so many firms these days operate multinationally, which causes conflicts between cultures
D) the tone at the top is often permeated by cheating, dishonesty, and greed

Accepted Answer

Many business decisions involve moral outcomes because situations invariably arise in business that don't always have an easy answer or solution.

Question 2

Which of the following most appropriately describes the benefits of an ecologically sustainable world?
A) It will help businesses increase their profitability and bottom line for shareholders.
B) It represents an ultimate moral end, as it is good in and of itself.
C) It will allow the use of fossil fuels for a longer period of time.
D) It will solve any future global energy crisis.

Accepted Answer

An ecologically sustainable world represents an ultimate moral end, as it is good in and of itself.

Question 3

Duress can sometimes be a problem in ethical decision making because
A) the person making the decision may feel pressured or coerced into deciding a particular way
B) a decision made under duress can usually be reversed in a court of law, making it ineffective
C) most people don't like to make decisions, and others have to help them do so in an assertive manner
D) an individual may not realize that he or she is under duress

Accepted Answer

Duress can sometimes be a problem in ethical decision making because the person making the decision may feel pressured or coerced into deciding a particular way.

Question 4

Which of the following is recognized by contract law as a condition where an actor is under duress?
A) The threat of harm is neither illegal nor immoral.
B) The actor has placed himself or herself in the position voluntarily.
C) The actor has been threatened with significant harm.
D) The threat of harm is extremely low.

Accepted Answer

A condition where an actor would be considered under duress in contract law would be when the actor has been threatened with significant harm.

Question 5

Which of the following is not a sign of duress under contract law?
A) There is a significant threat of harm to the actor.
B) The threat is illegal and immoral.
C) The threat of harm is imminent and has a high probability of being carried out.
D) The actor has placed himself or herself into the situation voluntarily.

Accepted Answer

Under conditions of duress, the actor would have not voluntarily placed him- or herself in the situation.

Question 6

Which of the following examples describes a situation in which a decision most likely will be made under duress?
A) A supervisor asks an employee to work on a report that is due next week.
B) A friend asks to borrow money and will return the money at the end of the month.
C) A company executive pressures an accountant to adjust accounts to improve the appearance of profitability.
D) A board of directors asks the chief financial officer to step down due to misconduct.

Accepted Answer

A company executive pressuring an accountant to adjust the books to make the company look more profitable would be an example of a decision the accountant may make under duress.

Question 7

Which of the following statements about duress in organizational situations is true?
A) People who hold positions of power and authority in companies often abuse it without awareness.
B) There is often a power differential between the two parties.
C) People who find themselves under duress rarely take the "escape routes" offered to them.
D) The threats made are unlikely to be enforced.

Accepted Answer

In organizational situations, duress is often a function of the power differential between a person requesting/demanding a certain action and the one being asked.

Question 8

Which of the following most accurately describes the concept of agency?
A) Agency is defined by the delineation between internal and external stakeholders of a company.
B) Agency refers to the ethics of price fixing and price gouging.
C) Agency deals with executives and employees acting as proxies for the owners of the business.
D) Agency is associated with the stockholders of a firm being answerable to the owners.

Accepted Answer

Agency refers to executives, managers, and employees acting as agents of the organization that hired them.

Question 9

Which of the following most accurately describes a fiduciary?
A) A fiduciary is hired by the stockholders to audit the accounts of the firm.
B) A fiduciary is contracted by law to be legally responsible for the firm.
C) A fiduciary is an agent who has custody over things of value to the principle and a responsibility to act in the best interests of the principle he or she represents.
D) A fiduciary is an agent hired by the firm's stockholders and is responsible for ensuring that the firm effectively controls its costs.

Accepted Answer

A fiduciary is an agent who has custody over things of value to the principle and a responsibility to act in the best interests of the principle he or she represents.

Question 10

You are the executive director a food bank in your local area. As a charitable organization, you are not required to pay taxes. As such, you have all of the following fiduciary duties EXCEPT
A) to act in good faith and in a manner that you reasonably believe is in the best interest of the organization
B) to avoid untoward risk or potential harm to the interests of the principal
C) to ensure the organization conforms to the purposes that allow the organization its tax-exempt status from the IRS
D) to act in ways that demonstrate loyalty to the organization over individual interests

Accepted Answer

For executives and board members of exempt organizations, there are three fiduciary duties: the duty of loyalty, which requires the fiduciary to act in good faith and in a manner that they reasonably believe is in the best interest of the organization, the duty of care, which requires the fiduciary to avoid untoward risk, and the duty of obedience, which requires the fiduciary to ensure the organization conforms to the purposes that allow the organization its tax-exempt status from the IRS.

Question 11

When an employee accepts a job with a new company, the employee
A) owes no fiduciary responsibility to the firm's owners
B) only owes a fiduciary responsibility to the firm's owners if he or she is employed at the executive level
C) should attempt to avoid actions that may cause unnecessary risk to the firm
D) should be made to sign a contract making him or her liable for errors made while working for the business

Accepted Answer

When an employee accepts a new job with a new company, the employee should make reasonable efforts to avoid taking actions that may cause unnecessary risk to the firm.

Question 12

Recently promoted, Liam now works among the executive ranks in his company. While he is confident in his skills, Liam is apprehensive about ethical temptations because they are based on his
A) lack of understanding of how the business functions on a day-to-day basis
B) conflicting roles as agent of the business and his personal ethical values
C) being able to raise the stock price sufficiently to cash in share options
D) avoiding ethical issues associated with financial statement disclosures

Accepted Answer

A common issue for executives is the potential conflict between their roles as agents of the business and their personal ethical values.

Question 13

In the context of business ethics, moral courage refers to which of the following?
A) the ability to circumvent the ethical issue at hand
B) the ability to choose an option that is legal, even if it is unethical
C) the ability and willingness to choose ethically, even when faced with negative consequences
D) the courage to pursue actions, using the rationale that being caught is unlikely

Accepted Answer

In the context of business ethics, moral courage refers to the ability and willingness to choose ethically, even when faced with negative consequences.

Question 14

A scenario whereby a local firm could legally choose to dump waste products into a local stream to save money
A) would be an example of a quadrant I situation, as the action is good for the business but morally improper
B) would be an example of a quadrant II situation, as the action is both good for the business and ethically correct
C) would be an example of a quadrant III situation, because the action would be both bad for the business and ethically improper
D) would be an example of a quadrant IV situation, as the action is bad for the business but ethically correct

Accepted Answer

A local firm choosing to legally dump waste products into a local stream to save money would be an example of a quadrant I situation, as this action is good for the firm (saves money) but may be morally questionable and improper.

Question 15

A firm is contemplating moving into town, building a factory and offices, and hiring many of the town's population who had previously been unemployed long term. This type of situation is an example of a
A) quadrant I situation because the decision will benefit both the firm and the town
B) quadrant II situation, because the action would be both good for the firm and ethically correct
C) quadrant III situation, because the action would benefit the firm, but not necessarily the firm's stakeholders
D) quadrant IV situation, because the action would be the right thing to do, but may not necessarily help the firm

Accepted Answer

This would be an example of a quadrant II situation, because the decision/action would be both good for the business and ethically correct.

Question 16

Which of the following examples would be placed in quadrant III of the business tradeoff framework-bad for business and ethically problematic?
A) Check cashing companies offer high-cost loans to low-income customers.
B) Upon discovering one of its garment factories used low-paid child labor, Walmart moved production and paid higher wages to adult laborers.
C) Volkswagen reduced its workforce without layoffs.
D) Oil Chem dumped millions of gallons of liquid landfill into sewers in Flint, Michigan.

Accepted Answer

Based on the schematic provided in the book, there can be choices that have business benefits and those which have ethical benefits. Sometimes those connect well, as when an ethical action is also a good business action (e.g., Johnson & Johnson's Tylenol recall). In other cases, there is a trade-off with something being good for business, but ethically bad or something being ethically good, but not beneficial to the bottom line. The most harmful is when an action is both bad for business and bad ethics.

Question 17

Mark Eberhard's decision to found Tesla Motors rather than buying a sports car after his divorce is an example of
A) duress under contract law
B) avoiding harm
C) choice
D) coercion

Accepted Answer

There is no evidence in this question of Eberhard being under any kind of duress or coercion nor that his actions are being taken to avoid harm. Instead, he is exercising a choice.

Question 18

Comparing the Corporate Credo of Johnson & Johnson to what we know of Adam Neumann's mission to become the world's first trillionaire, one could accurately differentiate the two by recognizing that
A) one seeks compliance with the law and the other seeks to obey legal rules
B) one aims for the acquisition of personal wealth, and the other sets out a way to respectfully work with many different coworkers, suppliers, and customers
C) one seeks a greater good and the other seeks ethical virtue
D) one is a story of corporate wealth acquisition, while the other is a story of personal acquisition of wealth

Accepted Answer

Adam Neumann sought personal wealth while Johnson & Johnson's Credo provided a path to working respectfully with colleagues, suppliers, and consumers.

Question 19

The chapter discusses the term moral distribution. What is meant by this term?
A) This term refers to a normal distribution and discusses how the majority of people fall on the edges of the distribution.
B) This term refers to how often people commit unethical behavior for which they are not caught.
C) This term refers to the notion that there are a few very evil and very good people, and most people tend to fall in the middle.
D) This term refers to the increasing incarceration rate in the United States.

Accepted Answer

The term moral distribution refers to the idea that there are a few very good and very evil people, and most others fall more toward the middle of the distribution.

Question 20

Which of the following is the main differentiator of the targets between the pragmatic and philosophical approaches to business ethics?
A) The pragmatic approach is concerned more with happiness and fulfillment.
B) The philosophical approach focuses more on avoiding harm and compliance.
C) The two approaches are identical, except for a few nuances.
D) The pragmatic approach focuses more on compliance, whereas the philosophical approach focuses more on fulfillment.

Accepted Answer

The pragmatic approach focuses more on compliance, whereas the philosophical approach focuses more on fulfillment.

Quiz 1: Introduction: Why Study Business Ethics

Many business decisions involve moral outcomes because

Which of the following most appropriately describes the benefits of an ecologically sustainable world?

Duress can sometimes be a problem in ethical decision making because

Which of the following is recognized by contract law as a condition where an actor is under duress?

Which of the following is not a sign of duress under contract law?

Which of the following examples describes a situation in which a decision most likely will be made under duress?

Which of the following statements about duress in organizational situations is true?

Which of the following most accurately describes the concept of agency?

Which of the following most accurately describes a fiduciary?

You are the executive director a food bank in your local area. As a charitable organization, you are not required to pay taxes. As such, you have all of the following fiduciary duties EXCEPT

When an employee accepts a job with a new company, the employee

Recently promoted, Liam now works among the executive ranks in his company. While he is confident in his skills, Liam is apprehensive about ethical temptations because they are based on his

In the context of business ethics, moral courage refers to which of the following?

A scenario whereby a local firm could legally choose to dump waste products into a local stream to save money

A firm is contemplating moving into town, building a factory and offices, and hiring many of the town's population who had previously been unemployed long term. This type of situation is an example of a

Which of the following examples would be placed in quadrant III of the business tradeoff framework-bad for business and ethically problematic?

Mark Eberhard's decision to found Tesla Motors rather than buying a sports car after his divorce is an example of

Comparing the Corporate Credo of Johnson & Johnson to what we know of Adam Neumann's mission to become the world's first trillionaire, one could accurately differentiate the two by recognizing that

The chapter discusses the term moral distribution. What is meant by this term?

Which of the following is the main differentiator of the targets between the pragmatic and philosophical approaches to business ethics?