Question 1

Shelly is a state legislator.A bill to legalize gambling has been introduced in her state and she is deciding how to vote on it.Shelly owns 10,000 shares of stock in a company that manufactures slot machines.She wants to remain ethical and is not sure if she should disclose her holdings and disqualify herself from the vote.

Accepted Answer

Shelly should disclose her holdings and disqualify herself from voting because her potential conflict of interest, real or not, would make her actions ethically questionable. It is important for her to avoid even the appearance of impropriety and ensure that her actions as a legislator are in the best interest of her constituents and state, not her personal financial gain.

Question 2

Enron Corporation was a multinational conglomerate with a core business of:

Accepted Answer

Enron's core business was energy trading, specifically buying and selling electricity and natural gas contracts. While they did have involvement in other industries, such as power plants and pipelines, the energy trading was their main source of revenue.

Question 3

In Arthur Andersen LLP v United States,Andersen's appeal of their previous conviction was overturned by the Supreme Court because:

Accepted Answer

The Supreme Court overturned Andersen's conviction due to defective jury instructions given by the trial court. This means that the jury was not given proper guidance on how to interpret the law and make a decision based on the evidence presented. Therefore, the verdict was not considered fair and just.

Question 4

Big Bucks Bank has published a detailed company ethical code based on an extensive values management process.The code specifies that all dealings with customers are to be fully documented and all dealings with the public are to be not only legal but should be based on what is best for the consumer.Everyone who deals with a customer is responsible for what they advise and must document conversations.Promotions and rewards will be based on not only productivity but also on fairness and how the customer is dealt with.At the weekly mortgage department meeting,Bill the supervisor informs his department that the loan production is way down and that they need to do whatever is necessary to step up the amount of loans granted.As a result,a number of questionable loans are granted which make money for Big Bucks but result in families being foreclosed on.Assuming the questionable loans to be unethically given,which trait of an ethical company has been breached?

Accepted Answer

The breach is that the policies and practices of the mortgage department are not aligned with those of the organization, as the ethical code specifies that all dealings with customers are to be fully documented and based on what is best for the consumer. The questionable loans granted, resulting in foreclosures, do not align with this ethical code.

Question 5

The utilitarian approach to moral philosophy was founded by:

Accepted Answer

The utilitarian approach to moral philosophy was founded by Jeremy Bentham. Bentham believed that the moral worth of an action should be determined by its ability to bring about the greatest amount of happiness for the greatest number of people. This approach is often summed up in the phrase "the greatest good for the greatest number."

Question 6

"What if everyone took these same actions" is a question sometimes called the:

Accepted Answer

The question "What if everyone took these same actions" is commonly associated with the universalization approach. This approach encourages individuals to consider the consequences of their actions if they were applied universally to everyone in society. By asking this question, individuals are prompted to consider whether their actions would be beneficial or harmful in a broader societal context.

Question 7

In Grimshaw v.Ford Motor Company,if Ford had made the repairs to the cars,diminishing profit but enhancing customer safety,which theory of corporate social responsibility would Ford have been exhibiting?

Accepted Answer

The broad view of corporate social responsibility, also known as management's hand theory, holds that businesses should actively seek to improve society and address social problems, rather than focusing solely on profit. By making repairs to the cars that would enhance customer safety, even if it diminished profits, Ford would be exhibiting this broad view of corporate social responsibility.

Question 8

AIG received a government bailout to save the company because:

Accepted Answer

AIG was a large insurance company that had significant ties to other financial institutions. If it had gone bankrupt, it could have triggered a domino effect of financial failures and severely damaged the U.S. financial infrastructure. The government bailout was intended to prevent this and stabilize the financial system.

Question 9

The moderate view of assessing corporate citizenship believes that:

Accepted Answer

The moderate view of assessing corporate citizenship believes that the government should provide the exclusive view of corporate responsibility.

Question 10

Fly High Aviation provides maintenance for executive jets based on private contracts with corporations that maintain airplanes for company use.Which of the following is least likely to be a Fly High stakeholder?

Accepted Answer

The citizens living near the airports are not stakeholders in Fly High Aviation as they have no direct business relationship or impact on the company's operations. The other options (mechanics, contracting corporations, and stockholders) are more closely linked to the company and its success.

Question 11

Arthur Andersen was:

Accepted Answer

Arthur Andersen was Enron's auditing firm, responsible for reviewing and certifying Enron's financial statements. However, their audit was marred by conflicts of interest and questionable practices, contributing to Enron's eventual downfall.

Question 12

The categorical imperative test consists of:

Accepted Answer

A) The categorical imperative test consists of individuals making ethical decisions with an eye toward potential consequences if everyone in society acted similarly.
G) The categorical imperative test consists of individuals making ethical decisions with an eye toward potential consequences if everyone in society acted similarly.
H) The categorical imperative test consists of individuals making ethical decisions with an eye toward potential consequences if everyone in society acted similarly.
I) The categorical imperative test consists of individuals making ethical decisions with an eye toward potential consequences if everyone in society acted similarly.

Question 13

KAM Corp has separate Codes of Ethics and Conduct.Each of the following would likely be included in their Code of Ethics except:

Accepted Answer

The answer of KAM Corp has separate Codes of Ethics...

Question 14

When Enron's top executives were subpoenaed to testify before Congress,each exercised their constitutional right against self incrimination except:

Accepted Answer

The answer of When Enron's top executives were subpoenaed to...

Question 15

Mighty Motors is a major automobile manufacturer with assembly plants in small towns throughout the United States.Mighty Motors is suffering losses in the current economy and has decided to stop manufacturing the Mighty Brute,an SUV with horrible gas mileage that simply isn't selling.They will also be closing the only plant that is exclusively dedicated to manufacturing the Brute.This particular assembly plant is the primary employer in the town that it is located in.Who,among the following would be considered a secondary stakeholder in this decision?

Accepted Answer

Tony, who runs a pizza shop, is a secondary stakeholder because his business indirectly depends on the plant employees who are his customers.

Question 16

After numerous threats from the federal government to enact laws and taxes to recoup bonus money paid to executive employees at AIG,of the reported $165 million paid out,how much was returned by those receiving bonuses?

Accepted Answer

Nearly $50 million was returned by AIG executives.

Question 17

Modern Corporation operates a steel mill.They have never contributed anything to the local community and they knowingly pollute both the air and river that runs by their mill.Their reasoning is that the cost to install pollution control devices would diminish their profits and they don't support the community because they provide jobs and don't think they owe anything else to the citizens in their area.Donating to the community would also diminish profits.Which theory of corporate social responsibility are they exhibiting?

Accepted Answer

The narrow view or invisible hand theory believes that a corporation's only responsibility is to maximize profits for its shareholders and that any sort of social responsibility or community engagement would diminish those profits. This aligns with Modern Corporation's stance on not contributing to the community or implementing pollution control devices.

Question 18

Sara is broke but needs a gown to go to a formal dance sponsored by her company.She goes to a local dress shop and purchases an expensive gown she cannot afford.She wears the gown to the event tucking in and hiding the price tag rather than removing it.She dances all night and the next day goes back to the shop and returns the dress.The store's policy is that they will accept returns for thirty days as long as the price tag is still attached.

Accepted Answer

Sara has acted unethically because knowingly purchasing an expensive gown she cannot afford with the intention of returning it after one use is not an accepted act in the general society. The fact that she complied with the store's policy does not make her actions ethical. The fact that she got the idea from a magazine or whether she cleaned and sanitized the dress before returning it are not relevant to the ethical issue at hand.

Question 19

Nobel Prize winning economist Milton Friedman believed that:

Accepted Answer

Milton Friedman believed that a business's only responsibility is to maximize shareholder wealth. He argued that any social initiatives pursued by a business should be done so voluntarily by the shareholders themselves and not at the expense of the company's profits. This philosophy is known as shareholder primacy.

Question 20

Which of the following was not an argument made by recipients of AIG bonuses defending their right to receive and retain the bonus money?

Accepted Answer

All of the arguments were made by recipients of AIG bonuses defending their right to receive and retain the bonus money.

Quiz 5: Business,Societal,and Ethical Contexts of Law