Business Essentials, 12e (Ebert/Griffin)
Chapter 2 Understanding Business Ethics and Social Responsibility
1) What are individual beliefs about what is right and wrong or good and bad referred to as?
A) Motivators
B) Rules
C) Cultures
D) Ethics
E) Laws
2) Which of the following should be the first step in assessing ethical behavior in a certain
situation?
A) Seek the advice of managers.
B) Make a judgment based on the outcome of the activity.
C) Consider appropriate moral values.
D) Collect facts related to the situation.
E) Gather a range of opinions on the effectiveness of the policy.
3) What is likely the single MOST effective step that a company can take to set ethical
standards?
A) Offer large cash awards for whistle-blowing.
B) Suggest that employees take ethics training.
C) Post ethical rules on bulletin boards.
D) State that the workplace values diversity.
E) Demonstrate support from top management.
4) How do top managers BEST demonstrate a commitment to ethical business practices?
A) By adopting and enforcing written codes of ethics
B) By reading employees’ e-mails
C) By decentralized decision-making practices
D) By cooperating with other companies
E) By monitoring employees’ web searches
5) What category of ethics relates to matters such as hiring, firing, working conditions, privacy
and respect?
A) Behavior toward economic agents
B) Behavior toward employees
C) Behavior toward the organization
D) Elimination of conflicts of interest
E) Social responsibility
6) When an activity benefits an individual but not the employer, what ethical dilemma has been
created?
A) Lack of social responsibility
B) Violation of the code of conduct
C) Conflict of morals
D) Interaction with primary agents of interest
E) Conflict of interest
7) Which of the following ethical norms that ensure an action is consistent with what’s fair?
A) Caring
B) Morals
C) Justice
D) Social responsibility
E) Economic agents
8) Which ethical norm considers whether a particular act optimizes the benefits to those who are
affected by it?
A) Utility
B) Rights
C) Justice
D) Caring
E) Respect
9) When evaluating a decision based on the ethical norm of rights, a manager is MOST likely to
consider which of the following questions?
A) Is the decision consistent with what we regard as fair?
B) Does the decision respect the individuals involved?
C) Is the decision consistent with people’s responsibilities to each other?
D) Does the decision optimize the benefits for those who are affected by it?
E) Does the decision comply with current legislation?
10) Which of the following is the BEST description of organizational stakeholders?
A) Competitors
B) Government regulators
C) The officers and key employees of an organization
D) Individuals and businesses who own stock in a company
E) Individuals and groups that are directly affected by the practices of a company
11) Standards that help to shape behaviors towards employees, the organization, and other
economic agents are
A) social responsibilities.
B) managerial ethics.
C) whistle-blowing techniques.
D) values.
E) morals.
12) When a firm significantly increases the price of a good or service because of an increase in
demand, what unethical practice are they potentially engaging in?
A) Consumerism
B) Collusion
C) Unfair pricing
D) Collaboration
E) Price gouging
13) Ethics are beliefs about what is right and wrong.
14) Business ethics refer to ethical or unethical behaviors by employees in the context of their
personal lives.
15) The standards of behavior that guide managers in their work are called written codes.
16) Some ethical and unethical behaviors fall into gray areas, while others are widely agreed
upon.
17) A conflict of interest occurs when an activity may benefit the individual to the detriment of
his or her employer.
18) Ethical values do not vary from person to person.
19) What constitutes ethical behavior is determined entirely by the individual.
20) An individual’s personal code of ethics is shaped by his or her life experiences.
21) Some actions may be illegal, yet considered ethical.
22) Though an individual feels that his behavior is ethical, that behavior may still be considered
unethical if social norms consider it to be so.
23) The ethical norm of utility evaluates whether an act respects the rights of all parties.
24) The most essential element in encouraging ethical behavior in an organization is letting
employees dictate ethical norms.
25) Managerial ethics can be classified into three areas; behavior toward employees, behavior
toward the organization, and behavior toward other economic agents.
26) What is the purpose of a written code of ethics?
27) What would constitute a conflict of interest in a business setting?
28) Describe the three-step model for applying ethical judgments.
29) What role has e-mail played in business ethics and company practices?
30) Why are employers concerned about the use of e-mail and potential legal liability, and what
steps are being taken to prevent issues?
31) What term refers to the way in which a business tries to balance its commitments to groups
and individuals in its social environment?
A) Business ethics
B) Socialization
C) Stakeholder consciousness
D) Social responsibility
E) Corporatization
32) What is the term given to the groups, individuals, and organizations that are directly affected
by the practices of an organization?
A) Primary agents of interest
B) Social auditors
C) Competitors
D) Organizational stakeholders
E) Local communities
33) When businesses work to honor warranties, charge fair prices and stand behind the quality of
their products, what stakeholder group are they supporting?
A) Customers
B) Employees
C) Investors
D) Suppliers
E) Local communities
34) What stakeholder group is being protected when managers follow proper procedures and
strive to be accurate and candid in assessing future growth?
A) Customers
B) Employees
C) Investors
D) Suppliers
E) Local communities
35) When a multinational organization supports its commitment to stakeholders, which
stakeholders are they most concerned with?
A) The stakeholders in their home country
B) The stakeholders where most sales are made
C) The stakeholders in emerging markets
D) The stakeholders represented by the government
E) The stakeholders in every country where business is done
36) What is the name of the concept that expanded the role of business in protecting and
enhancing the general welfare of society?
A) Ethics
B) Morals
C) Social responsibility
D) Accountability
E) Restraint
37) A business’s social responsibility to investors includes following proper accounting
procedures.
38) In the United States, there are increased expectations for a greater social role for business.
39) What is the difference between ethics and social responsibility?
40) When defining its sense of social responsibility, a firm typically confronts what areas of
concern?
41) Describe the stakeholder model of social responsibility.
42) Explain the steps that an organization must take to foster a company-wide sense of social
responsibility.
43) What must every corporation do in maintaining and reporting its financial status?
A) Purchase stocks on margin
B) Use creative accounting practices
C) Support increased stock prices
D) Aim to maximize predicted profit margins
E) Conform to generally accepted accounting principles
44) Which of the following occurs when someone uses confidential information to gain from the
purchase or sale of stocks?
A) Identity theft
B) A margin purchase
C) Insider trading
D) Collusion
E) A guarantee
45) What does the Sarbanes-Oxley Act of 2002 require a chief financial officer to do?
A) Prevent insider trading
B) Engage in strategic management
C) Guarantee the accuracy of financial reporting
D) Hire a forensic accountant
E) Oversee the implementation of ethical standards
46) When working to protect the environment, what type of pollution is created by carbon
monoxide and other chemicals produced by manufacturing plants?
A) Noise
B) Land
C) Water
D) Air
E) Waste
47) Which of the following includes provisions that control air pollution by members?
A) Sarbanes-Oxley
B) GAAP
C) Code of ethics
D) NAFTA
E) FTC
48) Which of the following is created by the chemical or radioactive by-products of the
manufacturing process?
A) Fracking
B) Toxic waste
C) Alternative sources of energy
D) Carbon dioxide
E) Landfill waste
49) What is the main cause of water pollution?
A) Acid rain
B) Landfill runoff
C) Chemical and waste dumping
D) Vehicle exhaust
E) Decomposition
50) What do new forms of solid-waste disposal, such as repurposing combustible waste, help
prevent?
A) Future contamination of land
B) Toxins
C) Use of phosphates
D) Runoff
E) Zero-landfill claims
51) What is the practice of injecting water and chemicals into underground rock in order to break
the rock apart called?
A) Recycling
B) Toxic waste elimination
C) Fracking
D) Zero-landfill support
E) Repurposing
52) Which of the following regulates advertising and pricing practices to protect consumers?
A) Generally Accepted Accounting Principles
B) North American Free Trade Agreement
C) Food and Drug Administration
D) Federal Trade Commission
E) Children’s Online Privacy Protection Act
53) Social activism dedicated to protecting the rights of consumers is the result of what?
A) Decreased consumer rights
B) Consumerism
C) International agreements
D) The Consumer Bill of Rights
E) Green marketing efforts
54) When a firm modifies a production process to limit the consumption of valuable resources,
and promotes the product produced as environmentally friendly, what business practice are they
engaging in?
A) Collusion
B) Consumerism
C) Green marketing
D) Recycling
E) Near zero status