Entrepreneurship and Effective Small Business Management, 11e (Scarborough)
Chapter 2 Ethics and Social Responsibility: Doing the Right Thing
1) ________ are the various groups and individuals who affect and are affected by a business.
A) Consequentialists
B) Workers
C) Stakeholders
D) Objectivists
Topic: Introduction
AACSB: Ethical Reasoning
2) ________ involves the moral values and behavioral standards that businesspeople draw on as
they make decisions and solve problems.
A) Business ethics
B) Social responsibility
C) Moral responsibility
D) Law
Topic: Introduction
AACSB: Ethical Reasoning
3) The concept of social responsibility has evolved from that of a nebulous “do-gooder” to one
of:
A) “law follower.”
B) “social steward.”
C) “moral steward.”
D) “law abider.”
Topic: Social Responsibility
AACSB: Ethical Reasoning
4) Doing what is “right” as opposed to what is “wrong” is:
A) the law.
B) ethical behavior.
C) legal behavior.
D) business behavior.
Topic: Introduction
AACSB: Ethical Reasoning
1
5) A company’s suppliers are:
A) stockholders.
B) bondholders.
C) stakeholders.
D) None of the above
Topic: Introduction
AACSB: Ethical Reasoning
6) Which one of the following is a company’s stakeholder?
A) Employees
B) Unions
C) Investors
D) All of the above
Topic: Introduction
AACSB: Ethical Reasoning
7) What is a violation of Title VII of the Civil Rights Act of 1964?
A) Sex discrimination
B) Sexual harassment
C) AIDS discrimination
D) None of the above
Topic: Business’s Responsibility to Employees
AACSB: Ethical Reasoning
8) The moral values and behavioral standards business people employ daily when making
decisions and solving problems are known as:
A) social responsibility.
B) business ethics.
C) the corporate culture.
D) the company policies and procedures.
Topic: Introduction
AACSB: Ethical Reasoning
2
9) The various groups who affect and are affected by the decisions and actions of a small
business are called:
A) suppliers.
B) stakeholders.
C) minorities.
D) intermediaries.
Topic: Introduction
AACSB: Ethical Reasoning
10) Over the past few decades, business leaders have, in general, become more proactive in
terms of implementing the organizational characteristics of:
A) moral management.
B) amoral management.
C) immoral management.
D) ethical norms.
Topic: The Benefits of Moral Management
AACSB: Ethical Reasoning
11) ________ dilemmas lurk in even the most mundane decisions that entrepreneurs make every
day.
A) Legal
B) Ethical
C) Spiritual
D) Global
Topic: An Ethical Perspective
AACSB: Ethical Reasoning
12) Once a manager recognizes the ethical dimensions involved in a dilemma or decision, his/her
next step in establishing a workable ethical framework to guide him/her would be to:
A) identify key stakeholders and assess how the decision will affect them.
B) generate alternative choices.
C) distinguish between ethical and unethical responses to the situation.
D) determine who is most responsible for making and implementing the decision.
Topic: Establishing an Ethical Framework
AACSB: Ethical Reasoning
3
13) The ultimate decision on whether to abide by ethical principles in any given situation rests
with:
A) the manager.
B) the business owner.
C) the individual.
D) stakeholders.
Topic: An Ethical Perspective
AACSB: Ethical Reasoning
14) Those who can most influence individual behavior within a small company and set the moral
and ethical tone of a company are its:
A) customers.
B) managers or owners.
C) employees.
D) human resource managers.
Topic: An Ethical Perspective
AACSB: Ethical Reasoning
15) The practice of moral management by the small business generally results in:
A) a stronger competitive position.
B) a weaker competitive position.
C) increased governmental scrutiny of the company’s business practices.
D) lower operating costs and increased employee satisfaction.
Topic: The Benefits of Moral Management
AACSB: Ethical Reasoning
16) “Everybody does it.” is an example of:
A) moral blindness.
B) justice.
C) consequences and outcomes.
D) public justification.
Topic: Why Ethical Lapses Occur
AACSB: Ethical Reasoning
4
17) To cope successfully with the many ethical decisions they face, entrepreneurs must develop a
________ ethical framework to guide themselves and the organization.
A) loose
B) workable
C) tight
D) flexible
Topic: Establishing an Ethical Framework
AACSB: Ethical Reasoning
18) Ricardo disapproves of an advertising campaign featuring scantily clad models in suggestive
poses with his company’s product. Ricardo is practicing ________ ethical management.
A) immoral
B) amoral
C) moral
D) socially irresponsible
Topic: The Benefits of Moral Management
AACSB: Reflective Thinking
19) Ethical lapses happen for a number of reasons. Joan made an unethical decision. When
confronted with it by her boss, she couldn’t understand why he was upset because “Everyone
does it.” This is an example of an ethical lapse due to:
A) a “bad apple.”
B) a “bad barrel.”
C) opportunity pressures.
D) competitive pressures.
Topic: Why Ethical Lapses Occur
AACSB: Ethical Reasoning
20) Ethical lapses caused by a chance to “get ahead” by taking some unethical action come about
because of:
A) a “bad apple.”
B) a “bad barrel.”
C) opportunity pressures.
D) competitive pressures.
Topic: Opportunity Pressures
AACSB: Ethical Reasoning
5
21) There are a number of “tests” of ethical behavior in business. The one that prioritizes
choosing the option that results in the greatest good for the greatest number of people is known
as:
A) the utilitarian principle.
B) the professional ethic.
C) the Golden Rule.
D) Kant’s categorical imperative.
Topic: Establishing and Maintaining Ethical Standards
AACSB: Ethical Reasoning
22) If your ethical conduct is based on treating other people the way you expect them to treat
you, you are using:
A) the family test.
B) the professional ethic.
C) the Golden Rule.
D) Kant’s categorical imperative.
Topic: Establishing and Maintaining Ethical Standards
AACSB: Ethical Reasoning
23) The ethical standards test of ethical behavior in businesses that prioritizes acting in such a
way that the action taken under the circumstances could be a universal law or rule of behavior is
called:
A) the family test.
B) the professional ethic.
C) the Golden Rule.
D) Kant’s categorical imperative.
Topic: Establishing and Maintaining Ethical Standards
AACSB: Ethical Reasoning
6
24) A company “Code of Ethics” refers to:
A) the awareness of a company’s management of the social, environmental, political, and human,
as well as the financial, consequences that its actions produce.
B) the moral values and behavioral standards business people employ daily when making
decisions and solving problems.
C) a formal statement of the standards of behavior and ethical principles a company expects its
employees to abide by.
D) the process of bringing land, labor, and capital together, and of assuming the risks involved in
producing a good or service in the hope of making a profit.
Topic: Develop a Code of Ethics
AACSB: Ethical Reasoning
25) Robin works hard at acting on principle and conviction and striving to do the honorable
thing. Robin is guided by the ethical principle of:
A) honesty.
B) integrity.
C) fidelity.
D) fairness.
Topic: Table 2.5
AACSB: Ethical Reasoning
26) A number of things can be done in order to integrate ethical principles into a company, such
as:
A) limiting diversity in their hiring.
B) establishing a legalistic and rigid set of rules and ensuring obedience to them.
C) creating a one-way communication culture, clearly communicating expectations.
D) the conduct of top managers setting impeccable ethical examples.
Topic: Establishing Ethical Standards
AACSB: Ethical Reasoning
27) The entrepreneur can implement and maintain ethical standards by:
A) performing periodic ethical audits.
B) making examples of clearly visible violators.
C) handing down a strict code of ethics established by upper management.
D) doing all of these.
Topic: Perform Periodic Ethical Audits
AACSB: Ethical Reasoning
7
28) This term denotes the awareness of a company’s management of the social, environmental,
political, human, and financial consequences that its actions produce.
A) Company policies and procedures
B) The corporate culture
C) Social responsibility
D) Business ethics
Topic: Social Responsibility
AACSB: Ethical Reasoning
29) Perhaps the best way to deal with the environmental challenges we face would be to:
A) create redesigned, “clean” manufacturing systems.
B) conduct corporate education programs on the issues for employees.
C) revert society to a simpler, more environmentally friendly economy.
D) enhance efforts at recycling existing waste.
Topic: Businesses’ Responsibility to the Environment
AACSB: Ethical Reasoning
30) If the small business owner wants to demonstrate that the company is serious about its
responsibility toward employees, he/she should:
A) focus on creating the maximum return on investment.
B) listen to employees and involve them in decision making.
C) begin a reengineering effort to improve productivity.
D) decrease the cultural diversity in his/her company.
Topic: Business’s Responsibility to Employees
AACSB: Ethical Reasoning
31) A ________ defines the values underlying the entire company and its ethical responsibilities
to its stakeholders.
A) fidelity
B) promise-keeping
C) company credo
D) code of ethics
Topic: Establishing and Maintaining Ethical Standards
AACSB: Ethical Reasoning
8
32) Cultural diversity in the small business brings several benefits to its owner, including:
A) less government scrutiny of his/her business practices.
B) local and state tax breaks.
C) a smaller but better educated and skilled labor force from which to hire new employees.
D) a rich blend of perspectives, skills, and talents.
Topic: Cultural Diversity in the Workplace
AACSB: Multicultural and Diversity
33) Managing diversity in the workforce means managers need to:
A) hire more minorities and fewer non-minorities.
B) create an environment in which all types of workers can flourish.
C) establish affirmative action programs.
D) strive for more homogeneity in the workforce.
Topic: Cultural Diversity in the Workplace
AACSB: Multicultural and Diversity
34) Managing diversity begins with:
A) concentrating on communication.
B) recognizing your own biases and stereotypes.
C) valuing diversity as a core company value.
D) assessing your company’s diversity needs.
Topic: Cultural Diversity in the Workplace
AACSB: Multicultural and Diversity
35) The small business owner can successfully manage diversity in his/her business by:
A) avoiding invalid assumptions.
B) placing managers of the same gender or ethnic origin over workers.
C) treating all employees the same regardless of their cultural background.
D) setting quotas or goals for how many individuals from different groups should work in the
company.
Topic: Cultural Diversity in the Workplace
AACSB: Multicultural and Diversity
9
36) A ________ is a written statement of the standards of behavior and ethical principles a
company expects from its employees.
A) fidelity
B) promise-keeping
C) code of ethics
D) company credo
Topic: Establishing and Maintaining Ethical Standards
AACSB: Ethical Reasoning
37) A(n) ________ is a company-provided benefit designed to help reduce workplace problems
such as alcoholism, drug addiction, a gambling habit, and other conflicts and to deal with them
when they arise.
A) employee assistance program (EAP)
B) substance abuse policy
C) drug testing program
D) employee education program
Topic: Drug Testing
AACSB: Ethical Reasoning
38) Companies can avoid drug and other related problems by including several key elements in
the company drug program, such as:
A) drug testing all employees periodically regardless of need.
B) having a written substance abuse policy.
C) turning supervisors into “drug police” by having them watch employees for signs of substance
abuse.
D) including all of these in the drug program.
Topic: Drug Testing
AACSB: Ethical Reasoning
39) What is an EAP?
A) It is a drug testing program for small businesses.
B) It is a program to help employees with substance abuse and other types of personal and family
problems.
C) It is an HIV screening process used in the recruiting process.
D) It is a type of diversity management program.
Topic: Drug Testing
AACSB: Ethical Reasoning
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