Deck 7: Ethics, Social Responsibility, and the Business Manager

Question 1

The ________ school of ethical thought evaluates actions as ethically good or bad depending on what they contribute to improving intelligence, wisdom, and self-restraint.

A)deontological
B)humanist
C)consequential
D)utilitarian

Answer 1

B

Question 2

The humanist school of ethical thought would evaluate the ethics of an action based on ________.

A)whether the action would contribute to improving intelligence, wisdom, and self-restraint
B)whether the action would cause an increase in net utility and happiness
C)whether the action would be true to the golden rule
D)whether the benefits of the action would outweigh the risks

Answer 2

A

Question 3

Ralph believes it is ethically permissible to bribe a foreign government official to gain a contract. He reasons that not only will the contract bring him a great deal of profit, but it will also create jobs, and nobody will be directly harmed in the process. Ralph's beliefs are in accord with which of the following theories of ethical thought?

A)act utilitarianism
B)rule utilitarianism
C)deontology
D)humanism

Answer 3

A

Question 4

Consequential theories look at ________.

A)whether the desired results were achieved
B)whether the desired people were involved
C)whether the appropriate methods were used
D)whether legitimate goals were selected

Question 5

Immanuel Kant's "categorical imperative" asserts that ________.

A)a person should engage in acts based on legal rather than ethical principles
B)a person should engage only in acts that could become universal standards
C)a person should act only after determining the marginal or net utility of that action
D)a person should act only after determining the ethical category of that action

Question 6

A theory of social responsibility is concerned with ________.

A)whether a firm's production processes were outsourced
B)whether a firm's executive managers were appointed or elected
C)whether a firm's code of conduct was drafted with the participation of the chief executive officer
D)whether a firm's conduct has an unintended impact on the community

Question 7

Chelsea believes that it is ethical for companies to outsource all work to under-developed countries so that the outsourcing companies can pay lesser wages. By doing so, the outsourcing company can reduce manufacturing expenses and, instead, pay its managers higher salaries. Which of the following theories of ethical thought is associated with her beliefs?

A)pacifism
B)rule utilitarianism
C)humanism
D)singularitarianism

Question 8

Which of the following best defines the term "business ethics"?

A)understanding that, in business, justice is more important than freedom
B)understanding that, in business, freedom is more important than justice
C)the study of what makes up good and bad business conduct
D)the study of the legal environment of business

Question 9

________ argue that an act is ethically right if the performance of similar acts by all similar agents would produce the best results in society or has done so in the past.

A)Humanists
B)Act utilitarians
C)Rule utilitarians
D)Deontologists

Question 10

For advocates of ________, rules and principles determine whether actions are ethically good or bad.

A)consequential theories
B)utilitarianism
C)humanist theories
D)deontology

Question 11

The ________ of business is defined as a concern by business about both its profit-seeking and its non-profit-seeking activities and their intended and unintended impacts on groups and individuals other than management or the owners of a corporation.

A)corporate duty
B)social responsibility
C)industrial code of ethics
D)professional responsibility

Question 12

Which of the following theories of ethical thought is illustrated by the phrase "do unto others as you would have them do unto you"?

A)utilitarianism
B)consequentialism
C)deontology
D)humanist theory

Question 13

Which of the following statements is true of the deontological theory of ethics?

A)It evaluates actions as ethically good or bad depending on what they contribute to improving inherent human capacities.
B)It claims that actions can be judged ethically good or bad on the basis of absolute moral principles arrived at by human reason.
C)It asserts that humans would arrive by reason alone at standards of conduct that ultimately derive from a divine being.
D)It uses the principle of utility (adding up the costs and benefits of an act to arrive at net happiness)to focus on an individual action at one point in time.

Question 14

Neoclassical economic theory would argue that the sole purpose of a firm is to ________.

A)maximize profits and expand or create new business
B)increase customer loyalty
C)maximize its consumer base
D)maximize societal welfare by paying higher taxes to the government

Question 15

Adherents of the ________ school of thought judge all conduct of individuals or businesses on whether that conduct brings net happiness or pleasure to a society.

A)utilitarian
B)deontological
C)humanist
D)stoic

Question 16

The ________ theory of ethics is best exemplified by the utilitarian school of thought.

A)humanist
B)deontological
C)consequential
D)relativist

Question 17

Which of the following is a characteristic of rule utilitarianism?

A)Actions can be judged good or bad based on rules and principles that are applied universally.
B)An act is ethically right if the performance of similar acts by all similar agents would produce the best results in society or has done so in the past.
C)An act is right or wrong on the basis of whether that individual act alone brings net happiness to society.
D)Actions are evaluated as good or bad depending on whether they contribute to improving inherent human capacities such as intelligence, wisdom, and self-restraint.

Question 18

Nina is a volunteer at an animal shelter who takes home animals that are scheduled to be put down. Even though her act results in her apartment often getting overcrowded and smelly, Nina does this because she considers it ethically wrong to willfully take the life of another living creature. Which of the following theories of ethical thought best explains Nina's behavior?

A)act utilitarianism
B)consequential theory
C)deontology
D)rule utilitarianism

Question 19

Which of the following is a characteristic of rule utilitarians?

A)They take the position that whatever applicable rule has been established by political representatives must be followed and should serve as a standard in the evaluation of similar acts.
B)They focus on the question of verifying whether an act is ethically good or bad.
C)They determine if an action is right or wrong on the basis of whether that individual act alone brings net happiness to society, as opposed to whether other alternatives would bring more or less net happiness.
D)They evaluate actions as ethically good or bad depending on whether they contribute to improving inherent human capacities.

Question 20

Which of the following is a similarity between act utilitarianism and rule utilitarianism?

A)Both schools of thought focus on the consequences rather than the intent of actions.
B)Both schools of thought focus on the question of verifying whether an act is ethically good or bad.
C)Both schools of thought focus on the methods used to achieve a desired outcome.
D)Both schools of thought focus on the absolute morality of actions.

Question 21

Which of the following is a belief held by advocates of the humanist school of ethical thought?

A)Actions can be judged ethically good or bad on the basis of absolute moral principles arrived at by human reason regardless of the consequences of an action.
B)One should focus on a general rule that exemplifies net happiness for the whole society.
C)Individuals would arrive by reason alone at standards of conduct that ultimately derive from a divine being.
D)Whatever applicable rule has been established by political representatives must be followed and should serve as a standard in the evaluation of similar acts.

Question 22

The Model Rules of Professional Responsibility were established by the ________.

A)National Association of Broadcasters
B)American Bar Association
C)American Institute of Certified Public Accountants
D)National Association of Securities Dealers

Question 23

Sam believes that corporations should focus on business and that the government should pay the associated social cost with the money generated as tax. Which of the following theories of social responsibilities is best associated with Sam's beliefs?

A)the profit-oriented school of responsibility
B)the managerial school of responsibility
C)the institutional school of responsibility
D)the regulation school of responsibility

Question 24

Classical economists, who advocate the profit-oriented school of responsibility, would argue that ________.

A)business entities have a responsibility to act in a manner that benefits all of society
B)the social costs of doing business are a collective responsibility of the government
C)a business is a legal entity in our society that must be held responsible for its activities
D)members of boards of directors should be certified as "professionals" before they are allowed to assume managerial responsibility

Question 25

Membership in the American Institute of Certified Public Accountants (AICPA) is suspended without a hearing if a judgment of conviction is filed with the secretary of the institute as related to ________.

A)the willful failure to file an income tax return
B)a petty crime as defined under any state law
C)a misdemeanor as defined under any state law
D)an inability to file an income tax return

Question 26

The deontological and humanist theories of ethical thought are similar in that both theories ________.

A)take the view that human beings have valuable inherent traits
B)apply principles of rule utilitarianism to determine ethical choices
C)apply the categorical imperative to ethical decision making
D)focus on consequences instead of actions or intentions

Question 27

A proponent of the ________ school of social responsibility would argue that efforts at pollution control and bringing equality of payment to the workforce are tasks of the government and not of the private sector, which is incapable of making such choices and is not elected in a democratic society to do so.

A)managerial
B)regulation
C)profit-oriented
D)institutional

Question 28

Which of the following codes of ethics generally provide a "hybrid model" including "dos and don'ts" that address subjects such as honest and fair dealings with customers and nondeceptive advertising?

A)professional codes of ethics
B)individual codes of ethics
C)corporate codes of ethics
D)industry codes of ethics

Question 29

The profit-oriented school of social responsibility argues that businesses ________.

A)should be judged on both their profit and non-profit activities
B)should be judged solely on the basis of economic efficiency and growth
C)should be judged solely on the unintended impact of their profit-making activities
D)should be judged on how they do business with their consumers

Question 30

A member of the board of directors of a large corporation who holds the belief that businesses should be judged solely on criteria of economic efficiency and how well they contribute to growth in productivity is a proponent of the ________ school of social responsibility.

A)profit-oriented
B)managerial
C)institutional
D)professional obligation

Question 31

Lucas is the general manager of an organization that manufactures school uniforms. Numerous competing firms have outsourced their production to sweatshops in developing countries where workers are paid less than minimum wages. However, Lucas refuses to do this, and his firm consequentially starts to lose market share. In this instance, which of the following schools of ethical thought is guiding Lucas's actions?

A)deontological
B)humanist
C)utilitarian
D)consequential

Question 32

Which of the following statements is true of the managerial school of social responsibility?

A)It argues that a firm must have the trust of all groups, both internal and external.
B)It argues that the social costs of doing business are a collective responsibility of the government.
C)It asserts that a business is a legal entity in our society that must be held responsible for its activities.
D)It sees all business units as accountable to elected public officials.

Question 33

Proponents of the profit-oriented theory of social responsibility would argue that ________.

A)the social cost of doing business should be borne by the government
B)businesses should contribute money to charities
C)the profits in business should be reduced in order to cause lesser harm to the environment
D)firms have a responsibility to act in a manner that benefits all of society

Question 34

The ________ required publicly traded companies to set up confidential internal systems by April 2003 so that employees and others could have a method of reporting possible illegal or unethical auditing and accounting practices.

A)Homeland Security Act
B)Whistleblower Protection Act
C)Glass-Steagall Act
D)Sarbanes-Oxley Act

Question 35

A proponent of the managerial theory of social responsibility would argue that ________.

A)managers should maximize profits and leave social responsibility to the government
B)businesses should act carefully so as not to injure the fabric of society
C)firms should seek to maintain the trust of internal and external constituents and interest groups, not just stockholders
D)business managers and members of the board of directors should seek professional certification

Question 36

Which of the following best describes the term externalities?

A)the money that firms set aside to give away to society
B)the taxes that firms pay
C)the unintended consequences of profit-seeking activities
D)the unexpected external causes that hinder successful business transactions

Question 37

The production and marketing emphases of organizations have evolved into what is called a(n) ________.

A)corporate culture
B)industry code
C)organizational hierarchy
D)corporate code

Question 38

Which of the following assertions does a managerial theorist agree with?

A)Modern managers seldom need to balance conflicting claims on their time and their company's resources.
B)Firms cannot survive by ignoring the claims of important interest groups.
C)Firms do not have to deal with external constituents other than their customers and suppliers.
D)Government regulation is the key to ethical management.

Question 39

Which of the following is a characteristic of people who are referred to as professionals?

A)They have licensing-examination requirements.
B)They are entitled to a minimum wage that is higher than the average.
C)They belong to a formal association or group that functions only through online communication.
D)They have a set of written ethical standards that is continually enforced by the group.

Question 40

Section 806 of the Sarbanes-Oxley Act ________.

A)protects federal whistleblowers who report agency misconduct
B)limits the securities activities of commercial banks and affiliations between commercial banks and securities firms
C)imposes liability on persons and companies who defraud governmental programs
D)prohibits any publicly traded company from discriminating against an employee who provides information to the government regarding violation of the securities laws

Question 41

The professional obligation school of social responsibility holds that ________.

A)business directors and managers should be licensed by meeting university requirements and passing a state or a national test
B)government should set up standards of socially responsible conduct for each industry
C)businesses should be judged solely on the criteria of economic efficiency and how well they contribute to growth in productivity and technology
D)business entities are distinct organizations in our society and that their sole purpose is to increase profits for shareholders

Question 42

In general, corporate codes of ethics apply to upper- and middle-level managers.

Question 43

Proponents of the ________ school of social responsibility argue for government representatives on boards of directors.

A)institutional
B)professional obligation
C)regulation
D)managerial

Question 44

Humanists believe that one should focus on a general rule that exemplifies net happiness for the whole society.

Question 45

Dorn Petrochemicals is found responsible for a large oil spill that resulted in widespread environmental damage. A national debate followed, and a prominent social scientist argued that the oil company should be prosecuted to the full extent of the law and that all sanctions that apply to individuals and other business entities should also apply to Dorn. This social scientist is most likely a proponent of the ________ theory of social responsibility.

A)institutional
B)managerial
C)regulation
D)professional obligation

Question 46

Failure to provide a taxpayer with a copy of his or her return may subject a tax preparer to criminal penalties.

Question 47

The primary argument of the regulation school of social responsibility is that ________.

A)since managers are responsible to the government, a corporation cannot be trusted due to corrupt government officials
B)since managers are responsible only to a board of directors that represents shareholders, the corporation cannot be trusted to act in a socially responsible manner
C)since managers are responsible to the government, they can seldom be trusted to ensure public interest
D)since managers are responsible only to a board of directors that represents shareholders, a corporation can be trusted to act in a way that ensures consumer sovereignty

Question 48

A country with a socialist government has passed a new law that requires all companies to set aside a certain budget for social initiatives. These organizations are also required to provide an annual report to the government detailing all expenditure and policy information. These initiatives are in line with the ________ school of social responsibility.

A)profit-oriented
B)professional obligation
C)managerial
D)regulation

Question 49

Deontology considers the consequences of individual actions.

Question 50

Both act and rule utilitarians focus on verifying whether an act is ethically good or bad.

Question 51

If payment of bribes has been determined by the society to bring net happiness, and a rule allowing bribes exists, then rule utilitarians would allow the bribe.

Question 52

The purpose of "adherence to sociocultural values" under the United Nations code of conduct is to ________.

A)ensure that if the host country discriminates on the basis of race, sex, or religion, the corporation does the same
B)prevent transnational companies from imposing value systems that are detrimental to those of the host country
C)promote the presence of U.S. companies in foreign countries
D)prevent governments from regulating multinational organizations

Question 53

The AICPA Division for CPA Firms requires member firms to ensure that all professionals participate in continuing education programs.

Question 54

The deontological theory is best exemplified by the utilitarian school of thought.

Question 55

Advocates of the ________ school of social responsibility for business argue that business entities have a responsibility to act in a manner that benefits all of society.

A)regulation
B)professional obligation
C)managerial
D)institutional

Question 56

Businesspeople who adhere to a consequential theory of ethics look at the actions of a business or any other societal unit only in terms of whether the results can be rationalized.

Question 57

Max, a student of political science, believes that there should be government representatives on the board of directors of every major corporation. He also believes that the government should set up codes of socially responsible behavior for every industry. Which of the following theories of social responsibility does Max advocate?

A)the profit-oriented school of responsibility
B)the managerial school of responsibility
C)the institutional school of responsibility
D)the regulation school of responsibility

Question 58

An advocate of the institutional theory would argue in favor of businesses ________.

A)focusing solely on profit-making ventures
B)gaining the trust of constituent groups
C)emphasizing continuing professional education
D)acting in a manner that benefits all of society

Question 59

Neoclassical economic theory would argue that the sole purpose of business is to make a profit for its investing shareholders.

Question 60

Zoe believes that businesses should act in a manner that benefits all of society, just as courts, universities, and governments do. Which of the following theories of social responsibility is associated with Zoe's beliefs?

A)the profit-oriented school of responsibility
B)the managerial school of responsibility
C)the institutional school of responsibility
D)the regulation school of responsibility

Question 61

What are the objectives of the United Nations code of conduct for transnational companies?

Question 62

A regulation school of social responsibility sees all business units as accountable to elected public officials.

Question 63

How are professionals defined? Describe the American Bar Association's Model Rules of Professional Responsibility.

Question 64

According to the United Nations code of conduct for transnational corporations, companies are free to give gifts or payments to ensure the business transaction occurs.

Question 65

According to the institutional theory of social responsibility, if society is to be protected from the unintended effects of profit-making business activities, it is necessary for government to be involved.

Question 66

Explain the factors, since the late 1960s, that led to a public outcry for business to be more socially responsible.

Question 67

According to the profit-seeking school of social responsibility, a firm must have clear ethical standards and a sense of social responsibility for its unintended acts in order to maximize profits and to survive in both the short and long runs.

Question 68

Advocates of the profit-seeking school of social responsibility argue that business entities have a responsibility to act in a manner that benefits all of society.

Question 69

The profit-seeking school of social responsibility argues that the social costs of doing business are a responsibility of individual businesses.

Question 70

Advocates of the institutional theory of social responsibility argue that a firm must have the trust of all groups, both internal and external.

Question 71

Describe the arguments put forth by advocates of the managerial school of social responsibility.

Question 72

According to the United Nations code of conduct for transnational corporations, if the host country discriminates on the basis of race, sex, or religion, it is ethical for the corporation to do the same.

Question 73

How did the Sarbanes-Oxley Act give impetus to "internal housecleaning" in firms?

Question 74

Compare and contrast the institutional and regulation schools of social responsibility.

Question 75

In what way do the act utilitarianism and rule utilitarianism theories of ethical thought differ from one another?

Question 76

Advocates of a professional obligation theory argue that business managers have a responsibility to the public beyond merely making profits.

Question 77

Professionals are defined, in part, as persons who are subject to codes of conduct that are enforced.