Deck 2: Business Ethics

Question 1

Like legal analyses, analyses of ethics have a central authority and follow clear-cut, universal standards.

Answer 1

False

Question 2

Kant's categorical imperative is a variation of the Golden Rule.

Answer 2

True

Question 3

Jeremy Bentham was a proponent of utilitarianism.

Answer 3

True

Question 4

The essential characteristic of ethical fundamentalism is a reliance upon a central repository of wisdom.

Question 5

As a result of regulations by the Securities and Exchange Commission and the stock exchanges, the boards of directors of the great majority of publicly held corporations consist primarily of outside directors, and these corporations have audit committees of outside directors.

Question 6

To a libertarian, it is not unjust for some people to accumulate fortunes while others live in poverty.

Question 7

Act utilitarianism supports rules that, on balance, produce the greatest good.

Question 8

A person who believes in the situational ethics theory would agree that precise guidelines for business behavior must be developed and adhered to by business professionals.

Question 9

An ethical relativist looks to a central authority, such as the Bible, to guide her in ethical decision making.

Question 10

Although corporations are not persons but artificial entities created by the state, it is clear that they can and should be held morally accountable.

Question 11

It is possible for legal acts to be immoral.

Question 12

Kant's philosophy rejects the idea that the end justifies the means..

Question 13

Ethics can be defined broadly as the study of what is good or right for human beings.

Question 14

Intuitionism holds that rational persons possess inherent powers to assess the correctness of actions.

Question 15

Situational ethics, unlike ethical relativism, judges a person's ethics, but first looks at the decision or act from the perspective of the actor.

Question 16

Business ethics, the study and determination of what is right and good in business settings, has a special set of ethical principles that applies only to the world of business.

Question 17

A leading proponent of the utilitarian approach to ethics was the eighteenth century philosopher Immanuel Kant.

Question 18

Harvard philosopher John Rawls stressed liberty as the most important obligation owed by a society to its members.

Question 19

According to Milton Friedman, the social obligation of a corporation is to return as much money as possible to its shareholders.

Question 20

Deontologists are criticized for rigidity and excessive formalism.

Question 21

Arguments exist which oppose business involvement in socially responsible activities.These arguments involve profitability, unfairness to employees and shareholders, accountability, and lack of expertise managing socially useful activities.

Question 22

From a Kantian perspective, for an action to be moral, it must be possible for it to be made into a universal law and it must be respectful of the autonomy and rationality of all human beings.

Question 23

Which of the following best describes the Libertarian social ethics theory?

A)Libertarians stress market outcomes as the basis for distributing society's rewards.
B)Libertarians encourage social control over all people in order to design an equitable society.
C)Libertarians believe it is just for society to take wealth earned by some citizens and distribute it to those who did not directly earn it but are in need.
D)The fact that some people end up with fortunes while others are poor proves only that social interference is necessary to justly redistribute wealth in certain circumstances.

Question 24

If a Middle Eastern culture and the American culture differ as to the morality of a particular action, under ethical relativism:

A)both cultures are correct.
B)the action should be assessed to determine whether the action produces more net pleasure compared with net pain.
C)a cost-benefit analysis should be conducted to determine the relative economic efficiency of the action.
D)the action should be viewed through a "veil of ignorance" to determine whether it is ethical.

Question 25

Kant's approach, like that of ethical fundamentalists, asserts that universal laws stem from the direct pronouncements of God.

Question 26

The "Television Test" is a test that is generally rejected by adherents of intuitionism.

Question 27

Harvard philosopher, Robert Nozick, stressed liberty, not justice, as the most important obligation that society owes its members.

Question 28

To a libertarian, it is unjust for a society to take wealth earned by one citizen and to distribute it to others who did not earn it.

Question 29

True cost-benefit analysis as a social theory:

A)only measures monetary gains and losses in making business decisions.
B)compares direct and indirect costs and benefits of program alternatives for meeting a specific goal.
C)is another theory that judges persons' actions by what those persons believe is right for themselves.
D)emphasizes justice and a central moral authority.

Question 30

Deontological theories assess good and evil in terms of the consequences of actions.

Question 31

Utilitarian notions underlie cost-benefit analysis.

Question 32

The ethical theory that underlies cost-benefit analysis is:

A)libertarianism.
B)deontology.
C)utilitarianism.
D)ethical relativism.

Question 33

Philosophers have found that the most effective way to develop dependable and universal methods for making ethical judgments is to fashion a priori guidelines.

Question 34

Psychologist Lawrence Kohlberg observed that people progress through sequential stages of moral development according to the two major variables of age and reasoning.

Question 35

Bill would like to propose to the board of directors of Bizmarc, Inc., that the corporation distribute one percent of its pre-tax yearly income to feed the poor.To Milton Friedman and others, Bill's proposal might be considered unethical, because it violates the purpose for which the corporation was established.

Question 36

What is unjust to a social egalitarian will also be unjust to a libertarian.

Question 37

Ethical relativism holds that when any two individuals or cultures differ regarding the morality of a particular issue or action, they are both correct because morality is relative.

Question 38

Under a Kantian approach to ethics, a person should not lie to colleagues unless that person supports the right of all colleagues to lie to one another.

Question 39

How many stages are there in Kohlberg's Theory of Moral Development?

A)2
B)3
C)4
D)5

Question 40

Ethical issues in business settings include corporate governance, whistle-blowing, shareholder voting, and management's duties to shareholders.

Question 41

Nineteen-year-old Martin was raised in a good, Christian home and attended parochial school through eighth grade.Martin is a good student and citizen who conforms to the expectations of his church, family, and peers.He does so because he loves his family and church, is loyal to them, and trusts them.Under Kohlberg's schematic analysis, Martin is most likely at what stage of moral development?

A)Pre-conventional.
B)Conventional.
C)Post-conventional.
D)Adult.

Question 42

Which arguments oppose business involvement in socially responsible activities?

A)Lack of corporate focus on profitability.
B)Unfairness to company employees and shareholders.
C)Lack of accountability.
D)All of the above.
E)(a) and (c), but not (b)

Question 43

Which of the following presents ethical dimensions for a business?

A)Possible pollution of the physical environment.
B)Conflicts among differing cultures and value systems in international transactions.
C)Compensation and working conditions of employees.
D)All of the above.

Question 44

The ethical theory of intuitionism proposes that:

A)the power of an individual to assess the rightness or wrongness of decisions is as basic to human beings as the instinct for survival.
B)market outcomes should be the basis for distributing goods.
C)the "veil of ignorance" should be developed to consider the needs and rights of all society's members.
D)society should stress equality of opportunity, not results.

Question 45

A factor demanding the ethical and social responsibility of business is:

A)the "invisible hand" of competition.
B)the sheer size and power of individual corporations.
C)the fact that self-regulation has been effective in achieving social goals.
D)great amounts of wealth and economic power are controlled by a small number of shareholders who own and exercise tight control over a large number of corporations

Question 46

The stakeholder model for the societal role of the business corporation:

A)is a derivative of the social contract theory.
B)holds that a corporation has the fiduciary duties of utmost loyalty and good faith to employees, customers, and suppliers, as well as shareholders.
C)views a corporation as public property.
D)All of the above.
E)Only (a) and (b).

Question 47

Social egalitarians believe:

A)the ends justifies the means.
B)society should provide each person with equal amounts of goods and services regardless of the contribution each makes to increase society's wealth.
C)society should divide wealth based on each person's contribution.
D)that if persons wish to act morally, they should emulate those in the society who always seem to do the right thing.

Question 48

How does Immanuel Kant's approach to ethical decision-making differ from that of an ethical fundamentalist?

A)Kant's approach is premised on man's rationality and not on principles handed down from above.
B)Kant's approach stresses liberty and not justice.
C)Kant's approach judges society in moral terms by how it distributes goods and services.
D)Kant's approach assesses each separate act according to whether it maximizes pleasure over pain.

Question 49

The type of moral equality espoused by John Rawls is:

A)freedom to do what one wishes.
B)social and material equality.
C)freedom from government regulation.
D)equality of opportunity.

Question 50

An ethical decision-making approach that relies on a central authority or set of rules, such as the Koran or the Bible, is:

A)ethical fundamentalism.
B)ethical relativism.
C)rule utilitarianism.
D)act utilitarianism.

Question 51

Adam Smith, in The Wealth of Nations, said the capitalistic system was composed of six institutions, which include all but which of the following?

A)Economic motivation.
B)Free enterprise.
C)Labor.
D)Limited government.

Question 52

To a __________ , whether telling a lie in a given instance would produce greater pleasure than telling the truth is less important than deciding if a general practice of lying would maximize society's pleasure.

A)deontologist
B)rule utilitarian
C)ethical fundamentalist
D)ethical relativist

Question 53

The definition of business ethics includes which of the following points?

A)It is a branch of applied ethics.
B)It is fully codified in federal statutes.
C)It has a central authority and universal standards.
D)It seeks to determine what is good and right in business settings.
E)Choices (a) and (d) only.

Question 54

Which of the following is a common criticism of ethical relativism?

A)It promotes open-mindedness and tolerance.
B)It assumes that a person's actions are always correct for that person, but if that is true, then all behavior is, by definition, moral.
C)It is rigid and excessively formal.
D)It is too judgmental.

Question 55

Under which ethical system would it be ethical to compel a few citizens to undergo painful or fatal medical tests in order to develop cures for the rest of the world?

A)Utilitarianism.
B)Ethical fundamentalism.
C)Distributive justice.
D)Libertarianism.

Question 56

In a classic study published in 1932, Adolf Berle and Gardner Means concluded that great amounts of economic power had been:

A)widely dispersed among a large number of corporations.This trend has continued steadily.
B)widely dispersed among a large number of corporations.This trend has declined steadily.
C)concentrated in a relatively few corporations and shareholders had become far removed from active participation in management.These trends have declined steadily.
D)concentrated in a relatively few corporations and shareholders had become far removed from active participation in management.These trends have continued steadily.

Question 57

An auto designer chooses to devote his efforts to design an automobile that is the safest vehicle possible.He does so because he wishes to save lives and prevent disabling injuries.He believes he and his employer have a duty to provide the public with the safest possible vehicle.The designer's approach to ethical decision-making is best characterized as:

A)utilitarian.
B)deontological.
C)ethically relative.
D)ethically fundamental.

Question 58

In what way or ways are situational ethics and ethical relativism similar?

A)They both look to a central authority or set of rules to guide ethical decision-making.
B)They both assess each separate act according to whether it maximizes pleasure over pain.
C)They both judge actions from the perspective of the actor.
D)All of the above.

Question 59

A major criticism of utilitarianism as an ethical theory is:

A)it is rigid.
B)in some important instances it ignores justice.
C)it results in the judgment that a person's actions are always moral for that person and therefore exempt from punishment.
D)it is excessively formal.

Question 60

Which of the following is a common criticism of deontological ethical theories?

A)They are excessively pragmatic.
B)They are rigid and excessively formal.
C)They only consider actions by their motives.
D)They fail to consider universal principles.

Question 61

Is telling a lie unethical? Analyze whether telling a lie is unethical in terms of each of the following ethical theories.
a.The deontological approach.
b.Utilitarianism.
c.Intuitionism and the "Television Test."
d.Ethical relativism.
e.Ethical fundamentalism.

Question 62

Discuss each of the following ethical theories with regard to whether you accept or reject them for your own actions and decisions.
a.Intuitionism and the "Television Test."
b.Rule Utilitarianism.
c.Ethical Relativism.
d.Ethical Fundamentalism.
e.The deontological approach.f.Milton Friedman's ideas on corporate governance.

Question 63

Through his observation of human behavior, psychologist Lawrence Kohlberg developed a model of moral development.Describe the stages of moral development that were studied and developed by Kohlberg and the relevance of this model for ethical business behavior.

Question 64

Discuss the arguments for and against businesses' involvement in socially responsible activities.

Question 65

Neal is young, likable, optimistic and generous son of a prominent public official.He has a master's degree in business and is the business partner of Ken and Bill in an oil drilling and exploration business.Neal also serves as a director on the board of the Bonanza Savings and Loan Association.While serving on the Bonanza Board, Neal votes to approve major loans to Ken and Bill without disclosing to the other directors that he is a business partner of Ken and Bill.Neal also personally arranges for a $900,000 line of credit from Bonanza for an oil drilling venture in which he is a partner with Ken.The drilling venture is unsuccessful and Ken and Bill both default on their loans to Bonanza, which then causes the S & L to become insolvent.Federal banking officials seize Bonanza and liquidate its assets to pay creditors and depositors.Because Bonanza is federally insured, tax money is also used to pay off depositors whose deposits are insured under federal programs.Bonanza shareholders lose their investment money.Was Neal's conduct as a director of Bonanza ethical? Analyze his conduct in light of the following ethical theories:
a.Intuitionism and the "Television Test."
b.Milton Friedman's ideas on corporate governance.
c.Deontological theories.
d.Rule utilitarianism.
e.Ethical relativism.

Question 66

Compare the social ethics theories of distributive justice, libertarianism, and Marxism.How are they alike? How are they different? Explain your answer.

Question 67

Discuss which of the social theories listed below you most agree with and why.Discuss your reasons for disagreeing with the others.
a.Distributive justice
b.Social egalitarianism
c.Libertarianism