CHAPTER 1: AN OVERVIEW OF ETHICS
1. An organization’s mission statement highlights its key ethical issues and identifies the overarching values and
principles that are important to the organization and its decision making.
a. True
b. False
2. Line operations personnel can be appointed as corporate ethics officers.
a. True
b. False
3. In a nonprofit organization, the board of directors reports to the local community that it serves.
a. True
b. False
4. Consistency means that shareholders, customers, suppliers, and the community know what they can expect of an
organization—that it will behave in the future much as it has in the past.
a. True
b. False
5. The greater reliance of information systems in all aspects of life has decreased the risk that information technology
will be used unethically.
a. True
b. False
a. True
b. False
7. Employees may suppress their tendency to act in a manner that seems ethical to them and instead act in a manner
that will protect them against anticipated punishment.
a. True
b. False
Chapter 1: An Overview of Ethics
8. The term morality refers to social conventions about right and wrong that are so widely shared that they become the
basis for an established consensus.
a. True
b. False
9. Laws can proclaim an act as legal, although many people may consider the act immoral.
a. True
b. False
10. Fairness and generosity are examples of virtues.
a. True
b. False
11. Lawrence Kohlberg found that the most crucial factor that stimulates a person’s moral development is monetary
reward for good behavior.
a. True
b. False
12. Multinational and global organizations must not present a consistent face to their shareholders, customers, and
suppliers but instead must operate with a different value system in each country they do business in.
a. True
b. False
13. Legal acts conform to what an individual believes to be the right thing to do.
a. True
b. False
14. Ethics has risen to the top of the business agenda because risks associated with inappropriate behavior have
increased, both in their likelihood and in their potential negative impact.
a. True
b. False
Chapter 1: An Overview of Ethics
15. Setting corporate social responsibility (CSR) goals encourages an organization to achieve higher moral and ethical
standards.
a. True
b. False
16. The fairness approach to ethical decision making states that one should choose the action or policy that has the best
overall consequences for all people who are directly or indirectly affected.
a. True
b. False
17. The board of directors of an organization is normally responsible for day-to–day management and operations of
the organization.
a. True
b. False
18. An individual’s manager has very little impact on his or her ethical behavior.
a. True
b. False
19. In the business world, important decisions are too often left to the technical experts; general business managers must
assume greater responsibility for these decisions.
a. True
b. False
20. The goal of the Sarbanes-Oxley Act was to renew investor’s trust in corporate executives and their firm’s financial
reports following numerous financial scandals in the early 2000s.
a. True
b. False
21. Individual views on what is moral are so strongly held that there is nearly universal agreement in spite of differences
in age, cultural group, ethnic background, religion, life experience, education, and gender.
a. True
b. False
Chapter 1: An Overview of Ethics
22. Most people have developed a decision-making process they use almost automatically, without thinking about the
steps they go through.
a. True
b. False
23. The countries with the highest software piracy rate in the world include Luxembourg, Japan, and New Zealand.
a. True
b. False
24. Stakeholders who stand to lose or gain from a situation should be kept out of the decision making process as they
will simply introduce their personal biases.
a. True
b. False
25. The term ethics describes standards or codes of behavior expected of an individual by a group to which the
individual belongs.
a. True
b. False
26. If the desired results are not achieved upon implementation of a solution, one should return to the “identify
alternatives” step of the decision making process and rework the decision.
a. True
b. False
27. Greater globalization has decreased the likelihood of unethical behavior.
a. True
b. False
28. The general public needs to develop a better understanding of the critical importance of ethics as they apply to IT;
currently, too much emphasis has been placed on technical issues.
a. True
b. False
Chapter 1: An Overview of Ethics
29. Supply chain sustainability takes into account such issues as fair labor practices, energy and resource conservation,
human rights, and community responsibility.
a. True
b. False
30. The virtues ethics approach to decision making focuses on how one should behave and think about relationships if he
or she is concerned with his or her daily life in the community.
a. True
b. False
31. is the concept that an organization should act ethically by taking accountability for the impact of its actions on
the environment, the community, and the welfare of its employees.
a. Corporate social responsibility b. Corporate governance
c. Corporate social entrepreneurship d. Corporate sustainability
32. Which of the following steps in the decision-making process gathers and analyzes facts and also identifies
stakeholders affected by the decision?
a. Develop problem statement b. Evaluate result
c. Identify alternatives d. Implement decision
33. A set of beliefs about right and wrong behavior within a society is called .
a. ethics b. moral code
c. law d. vices and virtues
34. Which of the following statements best describes a reason why organizations pursue corporate social responsibility
(CSR) goals and promote a work environment in which employees are encouraged to act ethically when making
business decisions?
a. To enjoy higher employee turnover rates b. To define a variable approach for dealing with stakeholders
c. To gain the goodwill of the community d. To increase unfavorable publicity
35. A(n) is a habit of unacceptable behavior.
a. moral b. virtue
c. ethic d. vice
Chapter 1: An Overview of Ethics
36. A complication of the approach to decision making is that measuring and comparing the values of certain
benefits and costs is often difficult, if not impossible.
a. fairness b. virtue ethics
c. common good d. utilitarian
37. describes standards or codes of behavior expected of an individual by a group (nation, organization,
profession) to which an individual belongs.
a. Ethics b. Virtues
c. Laws d. Morals
38. Every society forms a set of rules that establishes the boundaries of generally accepted behavior. These rules are
often expressed in statements about how people should behave, and they fit together to form the by which a
society lives.
a. laws b. ethics
c. virtues and vices d. moral code
39. had one of the lowest software piracy rates in 2011.
a. Moldova b. Bangladesh
c. Libya d. New Zealand
40. Companies that develop and maintain strong employee relations:
a. build indifference to the organization‘s goals.
b. erode employee involvement.
c. enjoy lower turnover rates.
d. face low employee morale.
41. In the case of United States v. New York Central & Hudson River Railroad Co., the U.S. Supreme Court
established that:
a. executives in an organization with an effective ethics program can receive lesser sentences for unethical
actions.
b. an employer can be held responsible for the acts of its employees even if the employees act in a manner
contrary to their employer’s directions.
c. organizations can escape criminal liability if they make strong efforts to prevent and detect misconduct in the
workplace.
d. officers of companies cannot be given light sentences if their ethics program fail to deter criminal activity
within their firms.
Chapter 1: An Overview of Ethics
42. A rapid increase in the appointment of corporate ethics officers typically follows:
a. the acquisition of one company by another.
b. the revelation of a major business scandal.
c. the appointment of a new CEO.
d. a substantial decrease in the stock price of a firm.
43. Based on a 2009 National Business Ethics Survey, the percentage of employees who said they reported misconduct
in the workplace when they saw it .
a. increased from 2007 to 2009 b. decreased from 2007 to 2009
c. stayed essentially the same d. increased by more than 10 percentage points from 2007 to 2009
44. The that socially responsible activities create can make it easier for corporations to conduct their business.
a. profits b. alliances
c. incentives d. goodwill
45. The step in the decision-making process during which the decision makers consider laws, guidelines, policies, and
principles that might apply to the decision is the step.
a. develop problem statement b. implement decision
c. identify alternatives d. evaluate and choose alternative
46. Which of the following is the most critical step in the decision-making process?
a. Evaluation of the results
b. Identification of alternative solutions
c. Development of a problem statement
d. Implementation of a decision
47. A discrepancy between employee’s own values and an organization’s actions:
a. encourages employee commitment. b. increases employee involvement.
c. fosters poor performance. d. creates high morale.
48. The chairman of , an Indian-based outsourcing firm, admitted he had overstated the company’s assets by
more than $1 billion in India’s largest ever corporate scandal.
a. Tata Consultancy Services b. Wipro Consultancy Services
c. Genpact d. Satyam Computer Services
Chapter 1: An Overview of Ethics
49. Someone who stands to gain or lose, depending on how a situation is resolved is called a .
a. negotiator b. figurehead
c. stakeholder d. philanthropist
50. In a(n) , an organization reviews how well it is meeting its ethical and social responsibility goals, and
communicates its new goals for the upcoming year.
a. ethics review b. performance appraisal
c. social audit d. morals assessment
51. A well-implemented ethics and compliance program and a strong ethical culture can lead to:
a. more fear of retaliation by management. b. less comfort for employees reporting misconduct.
c. more negative views on the organization. d. less pressure on employees to misbehave.
52. An approach to ethical decision making that is based on a vision of society as a community whose members work
together to achieve a general set of values and goals is the approach.
a. common good b. fairness
c. virtue ethics d. utilitarian
53. In a for-profit organization, it is the primary objective of the to oversee the organization’s business activities
and management for the benefit of shareholders, employees, customers, suppliers, and the community.
a. negotiator b. board of directors
c. corporate ethics officer d. corporate compliance officer
54. A provides an organization with vision and leadership in the area of business conduct.
a. spiritual leader b. corporate ethics officer
c. disseminator d. disturbance handler
55. Section 404 of the Sarbanes-Oxley Act states that:
a. annual reports must contain a statement signed by the CEO and CFO attesting that the information in all of
the firm’s SEC filings is accurate.
b. public companies must disclose their code of ethics as well as any waiver of the code for certain members of
senior management.
c. a code of ethics must be easily accessible by employees, shareholders, business partners, and the public.
d. the code of ethics must continually be applied to a company’s decision making and emphasized as an
important part of its culture.
Chapter 1: An Overview of Ethics
56. The is responsible for the careful and responsible management of an organization.
57. A person who acts with acts in accordance with a personal code of principles.
58. In an environment where employees are encouraged to do “whatever it takes” to get the job done, employees may
feel pressure to engage in conduct to meet management’s expectations.
59. The approach to decision making suggests that when faced with a complex ethical dilemma, people do either
what they are most comfortable doing or what they think a person they admire would do.
60. The goal of the approach to ethical decision making is to find the single greatest good by balancing the
interests of all affected parties.
61. are one’s personal beliefs about right and wrong.
62. A(n) is a habit that inclines people to do what is acceptable.
63. A(n) is a statement that highlights an organization’s key ethical issues and identifies the overarching values
and principles that are important to the organization and its decision making.
64. In the decision-making process of implementing the decision, a(n) plan must be defined to explain to people
how they will move from the old way of doing things to the new way.
65. An effective helps ensure that employees abide by the law, follow necessary regulations, and behave in an
ethical manner.
66. A(n) is a clear, concise statement of an issue that needs to be addressed.
Chapter 1: An Overview of Ethics
67. The led to significant reforms in the content and preparation of disclosure documents by public companies.
68. The principle that the ethical choice treats everyone the same and shows no favoritism or discrimination is most
closely associated with the approach to dealing with moral issues.
69. The approach to ethical decision making fits easily with the concept of value in economics and the use of
cost-benefit analysis in business.
70. Decisions and policies that use the approach to decision making attempt to implement social systems,
institutions, and environments that everyone depends on and that benefit all people.
71. A code of ethics cannot gain company-wide acceptance unless it is developed with and fully endorsed by the
organization’s leadership.
72. Section 406 of the requires public companies to disclose whether they have a code of ethics and to disclose
any waiver of the code for certain members of senior management.
73. During the problem definition process, one must be extremely careful not make about the situation.
74. is the practice of illegally making copies of software or enabling others to access software to which they are
not entitled.
75. The moral corruption of people in power, which is often facilitated by a tendency for people to look the other way
when their leaders act inappropriately has been given the name .
76. acts conform to what an individual believes to be the right thing to do.
77. frequently include a set of formal, written statements about the purpose of an organization, its values, and the
principles that should guide its employees’ actions.
Chapter 1: An Overview of Ethics
78. Supply chain sustainability is a component of that focuses on developing and maintaining a supply chain that
meets the needs of the present without compromising the ability of future generations to meet their needs.
79. The growth of the Internet and the ability to capture and store vast amounts of personal data have increased the risk
that will be used unethically.
80. A(n) aligns the practices of a workplace with the stated ethics and beliefs of that workplace, holding people
accountable to ethical standards.
81. What is a social audit? Explain.
82. Describe two trends that have increased the likelihood of unethical behavior.
Chapter 1: An Overview of Ethics
83. In the context of an ethical decision–making process, discuss the importance of communication in implementing a
change.
84. Discuss the role of the board of directors in creating an ethical organization.
85. Briefly describe the difference between morals, ethics, and laws.