Deck 4: Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Question 1

The reduced sales of Martha Stewart branded goods at K-Mart after she was accused of insider trading is an example of the strength of the profit maximization theory.

Answer 1

True

Question 2

Asking whether a decision will produce the right results is an example of deontological theory.

Answer 2

False

Question 3

"What would happen if everyone acted in this way?" is a question that Kant would ask.

Answer 3

True

Question 4

Rawls's justice theory focuses on outcomes.

Question 5

Theories that focus only on actions or decisions are called deontological ethical theories.

Question 6

A retailer's decision not to close earlier than its regular closing time even though a storm warning makes it unlikely that there will be any more customers that day is an example of rule utilitarianism.

Question 7

The Sarbanes-Oxley Act of 2002 requires public companies to have board audit committees comprising only independent directors.

Question 8

"The ends justify the means:" This statement reflects the utilitarian ethical theory.

Question 9

A teleological theory may find unacceptable that any competent employee loses his job, even if the layoff's effect is to reduce prices to consumers and increase profits.

Question 10

The purpose of the _____ is to increase penalties for corporate wrongdoers, establish rules designed to deter and prevent future wrongdoing, and encourage and enable corporate executives to be ethical and socially responsible.

A) Sarbanes-Oxley Act
B) Davis-Bacon Act
C) Goldwater-Nichols Act
D) Certiorari Act

Question 11

The _____ of corporate social responsibility holds that rather than merely striving to maximize profits for its shareholders, a corporation should balance the interests of shareholders against the interests of other corporate stakeholders, such as employees, suppliers, customers, and the community.

A) deontological theory
B) Kantian theory
C) stakeholder theory
D) utilitarian theory

Question 12

Which of the following ethical theories focuses on a decisions or action alone, irrespective of the result it produces?

A) Deontological theory
B) Teleological theory
C) Profit maximization theory
D) Utilitarian theory

Question 13

The stakeholder theory of corporate social responsibility:

A) strives to maximize profits for its shareholders.
B) tries to balance the interests of shareholders and stakeholders.
C) advocates the use of legal remedies to check corporate misbehavior.
D) advocates the freedom of corporations to run as they wish.

Question 14

Rights theory concerns itself with the costs and benefits of requiring respect for another's rights.

Question 15

Under the stakeholder theory of corporate social responsibility, employees' interests are considered.

Question 16

A justice theorist would choose the alternative that allocates society's benefits and burden most fairly.

Question 17

Profit maximization compels a decision maker to consider stakeholders other than the corporation and its shareholders.

Question 18

Utilitarianism is based on the laissez faire theory of capitalism.

Question 19

Profit maximization is a deontological theory.

Question 20

'Begging the question' is also known as the slippery slope fallacy.

Question 21

_____ theory emphasizes that one should use the categorical imperative and judge an action by applying it universally.

A) Utilitarian
B) Teleological
C) Justice
D) Kantian

Question 22

Which of the following is a prescribed guideline for ethical decision making?

A) What gives me maximum profit?
B) Will stakeholders offer support?
C) How can I increase the number of shareholders?
D) How do the alternatives impact my business firm?

Question 23

Kurt is trying to decide whether or not he should drive to work everyday and has a number of questions. Will it save valuable time? Will he be adding to environment pollution? Will it add to the problems of heavy traffic on the roads? Would carpooling be a better idea? Which of the following ethical theories does Kurt adhere to?

A) Utilitarian ethics
B) Deontological ethics
C) Kant's categorical imperative
D) Rights theory

Question 24

Which of the following ethical theories requires decision makers to maximize utility for the society as a whole?

A) Profit maximization theory
B) Deontological theory
C) Rights theory
D) Utilitarian theory

Question 25

______ requires a decision maker to ensure the maximum good for the maximum number.

A) Profit maximization
B) Rights theory
C) Stakeholder theory
D) Utilitarianism

Question 26

_____ protects the rights of those who are less privileged in society.

A) Rights theory
B) Justice theory
C) Rule utilitarianism theory
D) Profit maximization theory

Question 27

_____ categorizes using or manipulating others as an unethical action.

A) Utilitarianism
B) Teleological ethics
C) Consequentialism
D) Kantianism

Question 28

_____ ethical theories focus on the consequences of a decision.

A) Deontological
B) Teleological
C) Kantian
D) Right

Question 29

Which of the following ethical theories illustrates that acting in one's selfish interests can ultimately result in ethical behavior and benefits to society?

A) Rights theory
B) Profit maximization theory
C) Kantian theory
D) Justice theory

Question 30

Which of the following ethical theories is a deontological theory?

A) Utilitarian theory
B) Teleological theory
C) Rights theory
D) Profit maximization theory

Question 31

Which of the following ethical theories emphasizes that certain human rights are fundamental and must be respected by other humans?

A) Rights theory
B) Utilitarian theory
C) Teleological theory
D) Profit maximization theory

Question 32

Which of the following factors can impose direct penalties for corporate misbehavior?

A) Market forces
B) Corporate management
C) Labor unions
D) Investors

Question 33

Which of the following ethical theories judges our actions as good or bad depending on their consequences and is expressed as "the ends justify the means"?

A) Rights theory
B) Utilitarianism
C) Kantianism
D) Deontological theory

Question 34

Which of the following ethical theories has been criticized for promoting moral fanaticism and reducing innovation, entrepreneurship, and production?

A) Rights theory
B) Teleological theory
C) Utilitarian theory
D) Profit maximization theory

Question 35

Which of the following ethical theories is closely related to the profit maximization theory?

A) Utilitarianism
B) Kantianism
C) Deontological theory
D) Rights theory

Question 36

The _____ requires a public company to disclose whether it has adopted a code of ethics for senior financial officers, and to disclose any change in the code or waiver of the code's application.

A) Davis-Bacon Act
B) Goldwater-Nichols Act
C) Sarbanes-Oxley Act
D) Certiorari Act

Question 37

Profit maximization results in ethical conduct because:

A) it emphasizes the right to redistribute wealth in order to help the poor and disadvantaged.
B) it requires society's members to act within the constraints of the law.
C) it protects fundamental rights, unless some greater right takes precedence.
D) it focuses on the decision or action itself, irrespective of what results it produces.

Question 38

Which ethical theory justifies the protection of a neo-Nazi's right to hateful speech, even though the cost of such speech includes damage to relations between ethnic groups, which may far outweigh any benefits the society receives from the speech?

A) Rights theory
B) Teleological theory
C) Profit maximization theory
D) Utilitarian theory

Question 39

_____ is a teleological ethical theory because it focuses on results by maximizing total social welfare.

A) Rights theory
B) Kantian theory
C) Deontological theory
D) Profit maximization theory

Question 40

Which of the following is a characteristic of profit maximization?

A) It is concerned with the equal distribution of wealth in society.
B) It protects everyone's fundamental rights.
C) It is closely related to utilitarianism because it focuses on results.
D) It ensures complete responsible and ethical behavior by corporations.

Question 41

A _____ argument states that we should or should not do something merely because one or more other people or firms do or do not do it.

A) bandwagon fallacy
B) circular reasoning
C) false cause
D) gambler's fallacy

Question 42

Debra asks Alex, her stock broker, if she can trust his advice to purchase the stocks for Acme Co. Alex replies, "Of course you can." Debra asks, "Why should I trust you?" Alex says, with a smile, "Because I am a trustworthy person." Alex is engaging in:

A) circular reasoning.
B) bandwagon fallacy.
C) argumentum ad baculum.
D) false analogy.

Question 43

Speedster is an automobile manufacturing company that has a factory in Seattle, Washington. It has placed Keith McShane, the operations head of the factory, in charge of investigating the firm's decision whether to move the factory to Qingdao, China. Keith is against the idea of the factory relocating to Qingdao because his fellow Americans will loose their jobs to the Chinese. Therefore, he is desperately searching for information that favors Seattle over Qingdao. Which of the following prescribed guidelines for ethical decision making will Keith need to focus on to make an unbiased, ethical decision?

A) Will the shareholders offer support?
B) What facts impact my decision?
C) How can I increase the number of shareholders?
D) Which decision will allow me to retain my job?

Question 44

Bob DeSlob, CEO of Westlake, Inc., had supported the development and distribution of the Super Widget, a product that is expensive to make. The Super Widget failed to meet its expected sales. Bob, now, decides to invest more resources to produce and aggressively market the Super Widget, rationalizing that if he did not invest more in the product, what he has invested would be lost. Bob is engaging in:

A) sunk cost fallacy.
B) argumentum ad baculum.
C) argumentum ad hominem.
D) reductio ad absurdum.

Question 45

An "argumentum ad populum" used in an argument is a wrong conclusion:

A) that does not follow from the facts or premises set out.
B) based on a false analogy.
C) that relies on the idea that a popular belief is true.
D) based on an attack against the speaker, not his/her reasoning.

Question 46

What two conditions must be met if profit-maximization is to maximize utility?

Question 47

"Your decision will be better for your firm and other stakeholders if you consider your selfish interest." Considering that this statement is true, which of the following prescribed guidelines for ethical decision making should you focus on?

A) Will the shareholders offer support?
B) How can I increase the number of shareholders?
C) How do the alternatives impact me, the decision maker?
D) Who are the stakeholders?

Question 48

Jack flipped a coin five times and each time it came up heads. His friend Atmel saw this and bet Jack that the next flip would come up tails. Atmel figured that it was overdue for a tails and so tails was a more likely outcome in the next flip. Atmel has fallen prey to:

A) sunk cost fallacy.
B) reductio ad absurdum.
C) argumentum ad hominem.
D) gambler's fallacy.

Question 49

A "non-sequitur" used in an argument is a conclusion:

A) that does not follow from the facts or premises set out.
B) based on a false analogy.
C) that relies on the idea that a popular belief is true.
D) based on an attack against the speaker, not his/her reasoning.

Question 50

Bill, a senior manager at Bizlaw, Inc., instructs Kim, a mid-level manager, to make false statements on the performance evaluation of Gloria, one of Kim's employees who has recently filed a discrimination claim against Bill. Bill tells Kim, "Look around you. Every manager makes up stories about employees Bizlaw wants to get rid of." Bill's argument illustrates:

A) bandwagon fallacy.
B) argumentum ad baculum.
C) argumentum ad hominem.
D) circular reasoning.

Question 51

Trisha has been given the responsibility of making an important decision for her firm. Which of the following actions strengthens the argument that Trisha is a justice theorist?

A) Trisha chooses the alternative that promises the highest net welfare to society as a whole.
B) Trisha chooses the alternative that respects the most important human right.
C) Trisha considers whether everyone is getting what they deserve.
D) Trisha determines whether anyone's rights are negatively affected by an alternative.

Question 52

Which of the following critical thinking errors is likely to occur among the subordinates if a leader is unethical?

A) False analogy
B) Bandwagon fallacy
C) False cause
D) Gambler's fallacy

Question 53

The last tactic to adopt in resisting a request to act unethically is to:

A) buy time to think about a solution.
B) find a mentor and peer group.
C) prepare to leave the job.
D) find win-win solutions.

Question 54

Which of the following attacks the speaker for his argument, not his reasoning?

A) Argumentum ad hominem
B) Argumentum from authority
C) Argumentum as populism
D) Argumentum ad vacuum

Question 55

Carol, an Acme Co. employee, regularly takes pens, paper, and other office supplies from the Acme office supply cabinet and brings them home for her husband to use in his home office. Carol defends this action by saying that: "I don't get paid enough, and besides, no one will miss the supplies." This statement is an example of:

A) circular reasoning.
B) false analogy.
C) bandwagon fallacy.
D) a non sequitur.

Question 56

How can a corporation improve its corporate governance and corporate responsibility?

Question 57

Guilty by association is a form of:

A) begging the question.
B) argumentum ad hominem.
C) argumentum ad populum.
D) gambler's fallacy.

Question 58

Bennett is in the process of making an important decision for his firm. Which of the following actions strengthens the argument that Bennett is a utilitarian?

A) Bennett chooses the alternative that promises the highest net welfare to society as a whole.
B) Bennett implements the alternative that allocates society's benefits and burden most fairly.
C) Bennett considers whether everyone is getting what he deserves.
D) Bennett determines whether anyone's rights are negatively affected by an alternative.

Question 59

What three things are seen in the corporate scandals of 2002, such as Enron and WorldCom?

Question 60

Which of the following is also called the slippery slope fallacy?

A) Gambler's fallacy
B) Reductio ad absurdum
C) Sunk cost fallacy
D) Argumentum ad hominem

Question 61

Carol, a senior manager in Bizlaw, Inc., encourages Rob, her junior manager, to bill Bizlaw's clients for his commute time, and identify it as "meet and confer with senior manager." Carol explains that she will then adjust her own billing sheet to match this entry. Carol tells Rob that all other Bizlaw junior and senior managers engage in this practice, and that clients have never questioned such entries. Rob is not sure whether this would be an ethical action. What should Rob do?