Deck 2: The Evolution of Business Ethics

Question 1

How did the earliest English colonies in America differ from the earliest Spanish ones, such as the Columbus voyage?

A) They were sanctioned by the royal government.
B) They were group business projects created by charters.
C) They outlawed the taking of slaves.
D) They were interested in gold and silver as primary commodities.

Answer 1

B

Question 2

The text states, "Capitalism has an inherent contradiction." What does that mean?

A) Capitalism ultimately lowers the amount of wealth in an economy.
B) Competition is supposed to help the average worker succeed, but it only helps owners and managers.
C) Competition is designed to be ethical but actually forces unethical behavior.
D) Competition naturally leads to monopoly, which ends competition.

Answer 2

D

Question 3

Which of the following was a core demand of colonial leaders seeking independence from England as expressed in the Declaration of Independence?

A) an end to the practice of impressment
B) government based on the consent of the governed
C) lower taxation
D) the right to expand westward

Answer 3

B

Question 4

What morally admirable accomplishment does the text credit to the U.S. during its development between the 1700s and 1900?

A) granting full equality of opportunity
B) eliminating unfair competition
C) creating ideal work conditions
D) increasing life expectancy

Question 5

Which of the following would Adam Smith have opposed, should he have witnessed it occurring?

A) working laborers relatively normal hours even though it damages productivity and makes a business less competitive
B) the payment of laborers producing rivets at a flat salary rate instead of a per-piece incentive rate
C) providing healthy food rations to workers even though it increases costs for the business
D) developing a manufacturing assembly line that divided human labor into tiny, repetitive tasks

Question 6

What was the purpose of the Sherman Antitrust Act of 1890?

A) Force businesses to treat workers more ethically. B. Increase competition in the economy.
C) Reduce foreign competition against American workers.
D) Reduce the boom-and-bust cycle in the economy.

Question 7

Which of the following statements about the development of the human race is accurate?

A) Kinship-based groups ended and larger human societies appeared around 3,000 BC.
B) Remains of Neanderthals demonstrated that humans had little contact with other thinking species.
C) Humans migrated out of Africa around 200,000 years ago.
D) Some social cooperation became essential to survival roughly around 3,000 BC.

Question 8

How did the Plymouth Company endeavor to create a colony in New England differ from previous English colonies like Jamestown?

A) It had a strong religious component and goal.
B) It lacked backing by a royal charter.
C) It involved no debts to the crown.
D) It was not a business venture.

Question 9

Roughly how many slaves were there in the United States on the eve of the Civil War?

A) 4,000,000
B) 2,000,000
C) 10,000,000
D) 800,000

Question 10

What part of the Bill of Rights' Fifth Amendment is particularly salient to healthy commerce?

A) freedom to petition the government
B) property rights
C) freedom from excess taxation
D) freedom of speech

Question 11

How does Michael Shermer characterize the current state of humanity in terms of ethics?

A) the most moral period in our collective history
B) in a slight state of decline over the last 50 years
C) under serious threat from technology during the 21st century
D) in a steep decline due to fraying communal values

Question 12

Jamestown was the first chartered colony established by the Virginia Company of London. If you were young and found yourself working there, either searching for precious metals or toiling in the fields, what is the most likely reason you ended up there?

A) brought from England as an indentured servant
B) brought from Africa as a slave
C) captured among the indigenous people and used as a slave
D) traveled from England as a free volunteer to work in exchange for land

Question 13

Which of the following statements about the development of the U.S. economy is accurate?

A) Westward expansion thinned out the population and caused a temporary economic stagnation.
B) Westward expansion broke down the integrated businesses and brought more competition.
C) Economic growth resulted in the fall of chartered organizations and increased the power of banks.
D) The Industrial Revolution brought about an economic boom in the United States.

Question 14

What did Adam Smith's capitalism have that was lacking in the old mercantilist way of organizing the economy?

A) freedom to pursue high demand or low supply
B) import quotas
C) sanctioning monopolies
D) regulation of tradesmen

Question 15

What was the primary grievance that amplified anti-English sentiment in the American colonies and ultimately sparked the first violent rebellions?

A) economic depression
B) rough treatment by British soldiers
C) unfair taxation
D) government failure to protect colonists against indigenous attacks

Question 16

How did Adam Smith define self-interest?

A) the application of ethical standards to the gathering of wealth
B) concern only for the self
C) concern for self in relation to others
D) the pursuit of wealth and happiness

Question 17

Which of the following went hand-in-hand with the development of agriculture in all agrarian civilizations?

A) written law codes
B) democratic government structures
C) the use of slaves
D) the appearance of lawyers

Question 18

Why was slavery allowed by the Constitution?

A) The Constitution sought to end slavery through omission.
B) The Constitution did not deal with what the creators considered "economic matters."
C) Slavery was universally considered acceptable at the time.
D) It was allowed in order to obtain ratification from southern states.

Question 19

As described by the text, in which of the following ways can Charles Darwin's theory of natural selection be applied to businesses in the present day United States?

A) Government regulation and advance of ethical norms have largely eliminated the "natural selection" of one business over another.
B) Employees who are not evolved to be ethically flexible cannot advance in the competitive culture of modern business.
C) Businesses that fail to be ruthless in their pursuit of profits fail to survive in a harsh marketplace.
D) Businesses that do not adapt to current ethical norms are punished and do not survive.

Question 20

In which of the following situations would Adam Smith argue that government intervention in the marketplace is justified?

A) Many food items begin to arrive from abroad, and their cheap price is putting many local farmers out of work.
B) A general economic downturn has occurred, leaving many out of work.
C) A clothing manufacturer invents a new machine that makes it much more competitive than its rivals.
D) Two growing cities have no road to connect them and no private party is seeking to build one.

Question 21

Which of the following characterizes a broad trend of the Reagan administration in dealing with the U.S. economy?

A) increasing government payments to businesses
B) strengthening unions
C) deregulating the economy
D) raising taxes

Question 22

How did the union movement under Cesar Chavez broadly differ from union action under the International Brotherhood of Teamsters?

A) It was formed to help elevate conditions for laborers.
B) It emphasized nonviolence.
C) It focused more on factory workers than agricultural workers.
D) It used corrupt tactics, such as extortion of business owners.

Question 23

Which of the following statements about the interaction of Friedman's philosophy and ISO 26000 is accurate?

A) Friedman would support most of the ISO 26000 recommendations even if they didn't help raise profits.
B) There are no inherent conflicts between what Friedman argued and what ISO 26000 is trying to accomplish.
C) Friedman would oppose the creation of the ISO 26000 recommendations.
D) Friedman would oppose adoption of many ISO 26000 recommendations.

Question 24

How does the text define a labor union?

A) an association of businesses that advances its collective interest by coordinating actions in a particular industry
B) an association of employees that seeks to reduce the power of management through collective action
C) an association of employees that advances its members interests through collective bargaining with an employer
D) the collection of employees across a specific industry or trade, organized into a single organization

Question 25

How does the state of unions in 2016 differ from that at the end of WWII?

A) Overall membership is far lower, and the movement is politically weaker.
B) Factory worker unions have grown in power as public sector unions have declined.
C) Unions have won far more legal concessions from business owners than they did in 1945.
D) Unions now use private property arguments to win most of their concessions.

Question 26

The new protective and regulatory agencies and acts passed in the 1960s and early 1970s sought to force businesses to make greater efforts to seek the well-being of ______.

A) stakeholders
B) shareholders
C) business owners
D) governmental bodies

Question 27

Which of the following statements about Cesar Chavez and the unions he helped is accurate?

A) He sought a nationwide boycott of a major company.
B) He modeled his leadership style on the founding fathers of the U.S.
C) He kept up his efforts for the rest of his life but never achieved any of his major goals.
D) He organized the very first strike of grape workers in 1965.

Question 28

According to the text, which of the following company actions would be legal, satisfy Friedman's advice, and also be unethical?

A) moving earned income into a tax-free foreign territory such as the Cayman Islands
B) polluting a local river with runoff because it knows the EPA will not detect the emissions
C) engaging in monopolistic practices by colluding with other dominant companies in an industry to fix prices
D) firing employees that indicate they might act as whistleblowers about improper acts

Question 29

Which of the following best represents the core goal of ISO 26000?

A) emphasizing and applying human rights to business's current understanding of ethical practice
B) advocating for socially responsible business practices by studying and rating major corporations on an ethical scale
C) creating a common conceptualization of "social responsibility" and offering best practices for how to make it part of management
D) developing a common curriculum for ethics that can be taught to students regardless of culture

Question 30

Which of the following would likely be a common argument held by both Milton Friedman and Adam Smith?

A) The government should not involve itself in contract law or enforcement.
B) The government should not try to regulate the way businesses choose employees.
C) The government should spend its money to create a strong national defense
D) Some public goods, such as roads, should be financed by the government.

Question 31

How does Archie Carroll (and the text) define ethical responsibilities?

A) activities and practices that society expects and that are codified by law
B) activities and practices that society expects even though they are not codified by law
C) activities and practices that may not match societal norms but that do the most to improve society
D) legal and profitable actions that also represent "best practices" with respect to society's moral code

Question 32

Which of the following represents Professor Archie Carroll's four components of social responsibility?

A) financial, ethical, public, and family
B) philanthropic, moral, ethical, environmental
C) economic, legal, ethical, philanthropic
D) philanthropic, labor support, environmental, and legal

Question 33

How did late 1960s business climate and operation in the United States differ from that of the late 1950s?

A) Businesses generally had more freedom to compete in the marketplace in ways they saw fit.
B) Fewer businesses were behaving ethically.
C) Unions had become more powerful, with larger memberships.
D) More common business practices were regulated by the government.

Question 34

The chief criticism of Milton Friedman's philosophy suggests that businesses following his advice would often ______.

A) pay more in taxes than is due
B) weaken their relationship with shareholders
C) fail to compete effectively in the marketplace
D) deliberately act unethically in the pursuit of profits

Question 35

Which of the following would describe a socially responsible business, according to Professor Archie Carroll's conceptualization?

A) The business obeys the law in all instances except when doing so might be less than ethically sound or when it might truly damage profits.
B) The business puts the quality of its employee's lives and its contribution to the community above all other concerns.
C) The business obeys the law, acts ethically, and tries to take care of its shareholders, but it may not be especially profitable.
D) The business is profitable, it obeys the law, and acts ethically in the name of good corporate citizenship.

Question 36

As described in the text, Valeant Pharmaceuticals made a legal move to buy a wide range of heart medications and raise prices on all of them. How did this primarily damage the company?

A) It damaged its reputation and resulted in a fall in share price.
B) Government prosecution for monopolistic practices followed.
C) It emboldened competitors to make similar moves.
D) It drove its customer base into poorer health.

Question 37

What 1970s trend among major American businesses damaged the integrity of capitalism and required passage of a major regulatory act in 1977?

A) unfair tactics to reduce the power of unions
B) widespread economic degradation
C) secret collusion to create monopolistic conditions
D) corrupt collusion with foreign nations

Question 38

Which of the following would Milton Freedman consider to be the best way for businesses to benefit the community?

A) Donate generously to local community-building projects.
B) Act ethically in dealing with employees, environmental waste, and core mission.
C) Be as financially successful as possible while obeying laws.
D) Develop an internal culture that celebrates the employee, not the shareholder.

Question 39

As dealt with by the Foreign Corrupt Practices Act, how does a "facilitating payment" differ from a "bribe"?

A) A bribe involves a monetary payment; a facilitating payment does not
B) A facilitating payment does not try to compel someone to act against their own job description; a bribe does.
C) Facilitating payments are targeted at government entities and employees; bribes are not.
D) A facilitating payment incurs lower legal penalties than a bribe.

Question 40

Which of the following best characterizes the success of union efforts in the United States in the 19th century?

A) broad success in forcing humane working conditions across a wide range of industries
B) major success on the working-hours issue but little else
C) some isolated, small victories but overall very little progress
D) near-total failure even to form a single functioning union

Question 41

Which of the following novel strategies did Whole Foods implement to improve ethical income standards?

A) reducing the CEO-to-employee salary ratio to 2 to 1
B) making every employee's salary the same
C) making publicly available the salary information of every employee
D) providing stock options to every employee

Question 42

How does the living wage concept differ from the minimum wage concept?

A) It is designed to provide comfort, not simply exceed the poverty threshold.
B) It does not take into account support of a family, only an individual.
C) It covers part-time workers and full-time workers instead of only full-time workers
D) It is most often introduced in municipal ordinances, not state and federal governments.

Question 43

Which of the following statements about the minimum wage is accurate?

A) Free market advocates support higher minimum wages to keep the labor force healthy.
B) States can establish their own minimum wages, but only if they are higher than the federal minimum wage.
C) The federal minimum wage is generally determined based on what is believed to be a living wage.
D) In 2015, about 12.6 million workers were paid a minimum wage.

Question 44

What employee benefit do employees say they desire the most?

A) bonus packages
B) personal and vacation time
C) stock options
D) health insurance

Question 45

According to your text, what event began the general swing toward greater regulation of business in the United States?

A) 1840 Philadelphia workers strike
B) Fair Packaging and Labeling Act
C) Sherman Antitrust Act
D) Equal Employment Opportunity Commission

Question 46

In which of the following ways would the Interpenetrating Systems Model suggest that the business subsystem could affect the nonprofit subsystem?

A) Businesses pay more in taxes, which the government returns to individuals in the form of income tax breaks.
B) Businesses have a very successful year and make greater voluntary contributions to nonprofits.
C) Businesses improve their ethical behaviors and nonprofits match by improving their own behaviors.
D) Businesses act improperly and inspire more government regulation that apply to nonprofits.

Question 47

In which of the following ways has the federal government acted to regulate the nature of CEO pay?

A) capping CEO pay based on total company revenue
B) forcing disclosure of CEO compensation to employees
C) forcing a max ratio of CEO compensation to nonmanagement employee compensation
D) levying a special tax on CEO compensation

Question 48

How does Congress determine the federal minimum wage level?

A) congressional vote based on proposed raises
B) indexed to inflation
C) indexed to poverty threshold
D) matched to highest state minimum wage levels

Question 49

What did the experience of the 1980s Ben & Jerry's compensation plan demonstrate about the nature of CEO compensation over the last half-century?

A) The Ben & Jerry's plan demonstrated that highly talented CEOs were willing to forgo higher levels of compensation for the chance to lead a highly ethical company.
B) Limiting CEO compensation showed that radically high compensation actually reduced the ethical behavior of upper management.
C) Limiting CEO compensation prevented the company from getting the best talent, showing that ever higher compensation is required for attracting those leaders.
D) The Ben & Jerry's plan demonstrated that offering stock options as compensation was more attractive to CEOs than high base salary.

Question 50

Which of the following statements about CEO compensation is accurate?

A) The ratio of CEO compensation to average nonmanagement employee compensation is about 20 to 1.
B) The average pay of the 200 highest paid CEOs approaches $1 billion.
C) Unlike employee and lower management compensation, CEO compensation is rarely tied to performance.
D) According to the text, CEOs work on average fewer hours and at a less frenetic pace than most nonmanagement employees.

Question 51

The CEO of a defense industry contractor company discovers, through some internal audits, that significant amounts of unsupported and unethical cost inflation have been going on in her company. As a result, she chooses to sign the Defense Industry Initiative. Which of the following will result from her decision?

A) a voluntary commitment to create a written business ethics code
B) a legal requirement to allow inspections by an independent regulatory agency
C) a voluntary commitment to reduce the CEO to employee compensation ratio
D) a legal requirement to establish an internal ethics program

Question 52

Which of the following does B Lab hope for with respect to the B Corporation status it created?

A) the encouragement of more nonprofit organization creation through success of B Corporations
B) a tax-exempt status for B Corporations
C) a new tax class specifically for B Corporations that rewards ethical behavior
D) the conversion of all C Corporations to B Corporations

Question 53

How would the goals and decision making of managers in a B Corporation differ, at least theoretically, from those in a C Corporation?

A) They would be nonprofit in structure instead of for-profit.
B) They would not seek to maximize shareholder wealth and instead focus exclusively on community and environmental contributions.
C) They would be somewhat less focused on maximizing shareholder wealth and more on ethical concerns.
D) They would be exempt from taxation if a certain threshold of ethical action is met.

Question 54

Which of the following characteristics match the highest percentage of those earning minimum wage in the United States?

A) employed in the retail industry
B) employed in the restaurant and leisure industry
C) near retirement age or postretirement
D) possessing an associate's degree

Question 55

What are the four major subsystems of the Interpenetrating Systems Model?

A) government, business, nonprofits, and personal-communal
B) government, environmental, financial, and communal
C) citizen, labor, manager, owner
D) business, public sector, nongovernmental, and citizen

Question 56

Where does overlapping typically occur in all four subsystems of the Interpenetrating Systems Model?

A) profit seeking
B) tax policy
C) regulatory interests
D) environmental practices

Question 57

How did Franklin Roosevelt's establishment of the minimum wage fit with Adam Smith's economic philosophy?

A) It satisfied Smith's argument for a livable wage for every full-time worker.
B) It violated Smith's argument for government nonintervention in the economy.
C) It violated Smith's argument that businesses should obey the law and seek profits and nothing else.
D) It satisfied Smith's argument that governments should seek to regulate businesses to force ethical behavior in all ways possible.

Question 58

Which of the following is a requirement for a corporation to be labeled a B Corporation by B Lab?

A) at least 120 points scored on a 200-point ethics scale
B) written plans to take shareholder interests into account
C) written plans to take stakeholder interests into account
D) no detected problems in the company's history, as determined through a background check

Question 59

Which of the following conditions inspired the establishment of the Federal Sentencing Guidelines for Organizations (FSG) in 1991?

A) disparity between CEO sentencing and upper management sentencing
B) overly harsh sentencing by judges for work-related crimes to satisfy public outrage
C) easy cover-ups by management of work-related crimes
D) wide variation in sentencing decisions for work-related crimes

Question 60

An employee of a major corporation commits a specific act of fraud in the course of his employment and is caught. When the employee is brought before a judge and sentenced, the judge refers to the FSG to levy a specific fine. Once the standardized fine is chosen, what does the judge then consider to possibly adjust the fine?

A) how long the employee has been at the company and whether or not there have been previous offenses
B) whether or not the company has implemented an ethics best-practices program
C) the company's track record with legal challenges during the past 10 years
D) the amount of compensation the company earned from the fraudulent behavior

Question 61

In which of the following ways would Adam Smith have most likely thought about the concept of a living wage?

A) Smith warned managers to only pursue the pursuit of profits within the law, so he would likely have opposed a livable wage.
B) Smith warned managers not to negotiate wages below subsistence levels, so he would likely have supported some version of a living wage.
C) Smith supported regulation by the government of worker's welfare, so he would have supported a livable wage.
D) Smith felt that high bargaining power on the part of workers was damaging to competition, and so he would have opposed a livable wage.

Question 62

In the ERC's survey of 6,400 for-profit employees about organization culture, what percentage said that their organization had either a strong or a strong-leaning ethical culture?

A) 15 percent
B) 66 percent
C) 24 percent
D) 43 percent

Question 63

What is the goal of websites like Glassdoor and Just Capital?

A) providing guidelines for ethical behavior that companies can follow
B) granting tax breaks to companies with good ethical reputations
C) increasing LGBT representation in companies
D) forcing transparency on the ethics of many companies

Question 64

According to the text, how does tax avoidance differ from tax evasion?

A) Tax avoidance makes a company more competitive; tax avoidance damages a company's profitability.
B) Tax avoidance is always ethical; tax evasion is never ethical.
C) Tax avoidance occurs domestically; tax evasion involves foreign entities.
D) Tax avoidance is legal; tax evasion is illegal.

Question 65

The CEO of a company is a very strong adherent of Milton Friedman's philosophy. Which of the following actions is she most likely to pursue or support?

A) raising base employee salaries, regardless of performance, to improve workforce health
B) voluntarily spending money on ethics training in order to be granted B Corporation status
C) lobbying for government deregulation that would allow the company to dispose of its waste more cheaply, even if it hurt the environment
D) illegally moving money into shell companies out of the country to avoid taxation

Question 66

How does the Trump Administration action on the Affordable Health Care Act differ from the Sherman Antitrust Act of 1890?

A) It targets business instead of consumers.
B) It represents deregulation at the state level instead of the federal level.
C) It represents government regulation instead of deregulation.
D) It represents government deregulation instead of regulation.

Question 67

Which of the following can be deduced from the provisions in the Code of Hammurabi?

A) Unethical business practices existed many thousands of years ago.
B) Civilization in ancient Mesopotamia understood that slavery was unethical.
C) Unethical business practices appeared with the emergence of capitalism.
D) Division of labor reduced the quality of life for workers even in ancient times.

Question 68

How did the Obama administration differ from the Reagan and Bush administrations with respect to business ethics?

A) It sought to increase environmental protection while decreasing consumer protection regulation.
B) It sought to decrease general regulation of business.
C) It sought to increase general regulation of business.
D) It did not make regulation or deregulation of business a priority.

Question 69

Which of the following phrases best describe the four voyages that Christopher Columbus undertook to the Americas?

A) searches for habitable land
B) military missions
C) religious quests
D) business ventures

Question 70

What are Edgar Schein's three distinct levels of organizational culture?

A) gender relations, manager-employee relations, and employee-organization relations
B) artifacts and behaviors, espoused values, and assumptions
C) profit-seeking, goal-seeking, and ethical intentions
D) explicit values, implicit values, and informal values

Question 71

Which of the following was a major legislative act of regulation or deregulation under the Obama administration?

A) creation of the Consumer Product Safety Commission
B) Dodd-Frank Wall Street Reform and Consumer Protection Act
C) dismantling of the Affordable Care Act
D) Air Pollution Control Act

Question 72

According to Adam Smith's writings, in which of the following ways would piece-rate incentives differ from excessive division of labor?

A) They would create a net outflow of workers instead of inflow.
B) They would create less competition for skilled labor, not more.
C) They would lower a worker's income instead of raising it.
D) They would hurt a worker's physical health rather than mental health.

Question 73

What factor was the primary basis for the earliest division of labor in human history?

A) urban/rural divide
B) social status
C) wealth
D) gender

Question 74

In terms of union organization and management, the experience of Cezar Chavez is most representative of which of the following qualities?

A) self-sacrifice for the plight of the laborer
B) self-enrichment through corrupt dealings
C) achievement of political power through violent union action
D) championing a lost cause

Question 75

What positive correlation appeared within the evidence of the ERC survey into organizational culture at for-profit organizations?

A) strong ethical culture and lower levels of misconduct
B) strong ethical culture and higher levels of misconduct
C) weaker ethical culture and lower levels of retaliation for reporting misconduct
D) strong-leaning ethical culture and higher levels of retaliation for reporting misconduct

Question 76

Which of the following statements about the Optimal Ethics Systems Model is accurate?

A) It forgoes the "best practices" model in favor of offering some general guidelines for ethical behavior.
B) Its ultimate goal is to eliminate ethical behaviors that represent a challenge to financial revenue.
C) Its ultimate goal is to reduce ethical risks as close to zero as possible.
D) It focuses primarily on hiring practices and employee diversity as the primary driver of ethical behavior.

Question 77

Which of the following statements about the "living wage" concept is accurate?

A) Living wage calculations are typically limited to food, childcare, and healthcare.
B) About half of states have instituted living wage legislation.
C) It is typically slightly lower, when calculated, than local minimum wage levels.
D) A living wage calculation is specific to geographic region or city.

Question 78

One would most likely use the Interpenetrating Systems Model to try to understand which of the following?

A) why the government is increasing regulation on businesses
B) why a corporation chooses not to create a written ethics code
C) why a CEO makes so much more in salary and benefits than a low-level employee
D) why an organization's culture is considered ethically weak

Question 79

What would having B Corporation status in the city of Philadelphia do for a company?

A) The company would earn a 15 percent reduction in total corporate taxes.
B) It would improve a company's reputation but earn no monetary incentives.
C) It would do nothing.
D) The company would earn a $4000 tax credit.

Question 80

Which of the followings statements about the current state of B Corporations is accurate?

A) Most B Corporations are small or medium-sized businesses.
B) No major governmental entities have yet to grant B Corporations special tax status.
C) The B Corporation concept remains domestic to the United States, but there are hopes that it will become popular internationally.
D) Every company with B Corporation status undergoes a yearly audit to maintain it.