Chapter 02
Defining Business Ethics
True / False Questions
1. Business ethics involves the application of standards of moral behavior to business
situations.
2. Business ethics can be approached from two distinct perspectives: prohibitive and
preventative.
3. Business ethics should be applied as a separate set of moral standards or ethical
concepts from general ethics.
4. Ethical behavior should not be the same inside and outside a business situation.
5. A stakeholder is someone with a share or interest in a business enterprise.
6. Not every stakeholder will be relevant in every business situation.
7. Stakeholders include stockholders, employees, and the federal government.
8. The interests of wholesalers in an organization include accurate deliveries of quality
products on time and at a reasonable cost.
9. The interests of the creditors of an organization focus specifically on the employment of
local residents and the safety of the work environment.
10. Unethical corporate behavior does not have any impact on a company’s stakeholders.
11. Unethical corporate behavior would have no negative impact on a community if it were to
lead to an economic decline.
12. Corporate governance is the system by which businesses are directed and controlled.
13. The standard of corporate governance is the extent to which the officers of an
organization are fulfilling the duties and responsibilities of their offices to the relevant
stakeholders.
14. The standard of corporate governance appears to be at the highest level in recent
business history.
15. An oxymoron is the combination of two facts that mirror and support each other.
16. A positive outcome of the awareness generated by unethical behavior in the business
world has been increased attention to the need for third-party guarantees of ethical conduct and
active commitments from the rest of the business world.
17. A company’s code of ethics comprises written standards of moral behavior that are
designed to guide managers and employees in making the decisions and choices they face every
day.
18. The Ethical Remuneration Community defines a code of ethics as a central guide to
support day-to-day decision making at work.
19. According to the Ethics Resource Center, an organization’s cornerstones include its
missions, values, and principles.
20. The Ethics Resource Center states that a code of ethics should help managers,
employees, and stakeholders understand how an organization’s cornerstones translate into
everyday decisions, behaviors, and actions.
21. According to the Ethics Resource Center, a good code of ethics is structured to liberate
and empower people to make more effective decisions with greater confidence.
22. As a message to its stakeholders, an organization’s code of ethics should represent a clear
corporate commitment to the highest standards of ethical behavior.
23. An organization’s code of ethics has no relevance to its stakeholders.
24. An organization’s code of ethics has no relevance to its employees.
25. An organization’s code of ethics does not pertain to the everyday functioning of its
managers and employees.
26. The issue of corporate social responsibility has advanced from an abstract debate to a
core performance-assessment issue with clearly established legal liabilities.
27. Over the last five decades, corporate ethics has shifted from the organizational
mainstream into the domain of legal and human resource departments.
28. Codes of ethics have matured from performance-measurement documents into cosmetic
public relations documents.
29. The 2002 Sarbanes-Oxley Act introduced greater accountability for chief executive officers
and boards of directors in signing off on the financial performance records of the organizations
they represent.
30. A major ethical dilemma of the 2000s is the employee versus management mentality.
31. International ethics centers that serve the needs of global businesses were formed in the
1960s.
32. An ethical dilemma is a situation in which there is no obvious right or wrong decision, but
rather a right or right answer.
33. Once the type of a particular ethical conflict has been determined, there are two
principles through which it can be resolved: Volcker’s Rule and Campbell’s Rule.
34. Utilizing the ends-based principle to resolve an ethical dilemma necessitates focusing
solely on the decisions that other people in one’s situation would arrive at.
35. Utilizing the rules-based principle to resolve an ethical dilemma necessitates considering
which decision would provide the greatest good for the greatest number of people.
36. When trying to resolve an ethical dilemma, the Golden Rule principle considers only the
legal aspects of the problem.
37. The three principles by which ethical dilemmas are resolved are successful in all
situations.
2-13
38. The ethicalness of an action is determined by the number of people who take the action.
39. The notion that anything which isn’t specifically labeled as wrong must be OK encourages
ethical actions in employees prone to unethical behavior.
40. The belief that an activity is safe because it will never be found out or publicized is one of
the commonly held rationalizations, identified by Saul Gellerman, which can lead to unethical
behavior.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 02-06 Explain how executives and employees seek to justify unethical behavior.
Multiple Choice Questions
41. _____ is the application of standards of moral behavior to business situations.
42. Which of the following statements best describes business ethics?
43. In the context of business ethics, the _____ perspective is a summation of the customs,
attitudes, and rules that are observed within a business.
44. In the context of business ethics, a _____ perspective evaluates the degree to which the
observed customs, attitudes, and rules within a business can be considered ethical.
45. A perspective of business ethics that is a simple documentation of what is happening in a
business situation is termed _____ perspective.
46. A perspective of business ethics that involves recommending what should be happening
in a business situation is termed _____ perspective.
47. Which of the following is true of business ethics?
48. A _____ is defined as someone with a share or interest in a business enterprise.
49. Which of the following is true of stakeholders?
50. GeoTransmit, a large multinational telecommunications company, hid from its investors
the extensive debt and losses it had accumulated. Its fraudulent accounting behavior was
eventually discovered, and the company went bankrupt. Which of the following statements is true
of the future of GeoTransmit and its stakeholders?
51. The system that directs and controls business organizations is termed _____.
52. Which of the following is true of corporate governance?
53. A feature of the standard of corporate governance is that it _____.
54. Which of the following is true of the standard of corporate governance?
55. The term “business ethics” is sometimes considered an oxymoron because:
56. The main function of a code of ethics is to _____.