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Chapter 10 - Moral Choices Facing Employees
1. According to the traditional law of agency, which statement is true?
a.
law of agency is not legal concept but a moral standard of loyalty that employees today seldom follow.
b.
employees are under a legal obligation to act loyally and in good faith and to carry out lawful instructions.
c.
an employee's work contract is irrelevant to his or her moral obligations for legal reasons.
d.
no moral value is more important than loyalty, whether to a person or an organization.
2. According to the Supreme Court
a.
even if you are not an insider, you can be guilty of insider trading if you misappropriate sensitive information.
b.
anyone buying/selling stock based on nonpublic information is guilty of inside trading.
c.
insider trading violates the interstate commerce clause of the Constitution.
d.
it should be left up to the company, not the government, to decide whether or not to prohibit insider trading.
3. Conflicts of interest
a.
have become less frequent today.
b.
always involve personal financial gain.
c.
are morally worrisome only when the employee acts to the detriment of the company.
d.
occur when employees' have special or private interests that are substantial enough to interfere with their job
duties.
4. A "trade secret"
a.
is legally equivalent to a patent or copyright.
b.
need not be treated confidentially by the company in order to be protected.
c.
can be almost any information not generally known if it is valuable to its possessor and treated confidentially.
d.
is a narrow, precise concept that the law defines in great detail.
5. The Foreign Corrupt Practices Act (FCPA)
a.
doesn't apply to countries where bribery is common.
b.
makes no distinction between bribery and extortion.
c.
provides stiff fines but not prison sentences for corporate officials engaging in bribery overseas.
d.
outlaws "grease payments".
6. In determining the morality of giving and receiving gifts in a business situation, which of the following factors is
MOST relevant?
a.
the purpose of the gift and whether the gift might influence the recipient's judgment.
b.
the size of the business giving the gift.
c.
amount of cash given as a gift.
d.
whether the company receiving the gift is privately held or publicly held.
7. A whistle-blower
a.
doesn't have to be a past or present member of the organization.
b.
doesn't have to report activity that is illegal, immoral, or harmful.
c.
is any employer who spreads gossip for personal gain.
d.
far from being disloyal, may be acting in the best interest of the organization.
8. The Sarbanes-Oxley Act marked an important advance for several reasons one of which is that it
a.
makes it easier to fire whistle blowers.
b.
reduces the law's protection of employees who disclose securities fraud.
c.
makes it illegal for executives to retaliate against employees who report possible violations of federal law.
d.
provides penalties for blowing the whistle illegitimately or maliciously.
9. According to Professor Norman Bowie, which of the following factors is primarily relevant to the motivation of
whistle-blowers?
a.
the whistle blower's feelings of duty to obey the law.
b.
belief that internal channels have been exhausted.
c.
their whistle blowing has some chance of success.
d.
public interest morally outweighs loyalty to the organization.
10. In discussing the case of the truck stop cashier who is asked to write up phony receipts, the text argues that in at least
one scenario
a.
there is nothing wrong with writing up the receipts.
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Chapter 10 - Moral Choices Facing Employees
b.
she should resign immediately.
c.
her prudential concerns may take precedence over moral ones on a temporary basis.
d.
she should never whistle-blow and report the misconduct.
11. In the 1997 case of U.S. v. Hagan, the Supreme Court found that Hagan
a.
had been discriminated against because of whistle blowing.
b.
was innocent of insider trading.
c.
violated the FCPA despite never having gone overseas.
d.
had misappropriated confidential information.
12. The Donald Wohlgemuth case shows that
a.
trade secrets can be patented.
b.
trade secrets often become an integral part of an employee's total job skills and capabilities.
c.
employees need to divest themselves of any skill acquired while handling trade secrets.
d.
"noncompete" or "nondisclosure" contracts are always legally valid.
13. Some writers deny that employees have any obligation of loyalty to the company, because
a.
companies are not the kind of things that are properly objects of loyalty.
b.
you cannot trust anyone.
c.
it’s every man for himself.
d.
companies just aren’t the same any more.
14. When an employee’s interests are likely to interfere with the employee’s ability to exercise proper judgment on behalf
of the organization, what exists?
a.
a golden opportunity
b.
a conflict of interest
c.
a balance of power
d.
a disaster
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Chapter 10 - Moral Choices Facing Employees
15. Insider trading is
a.
the buying or selling of stocks (or other financial securities) by business “insiders” on the basis of information
that has not yet been made public and is likely to affect the price of the stock.
b.
the name of a baseball card shop.
c.
knowing when to make the best buy.
d.
giving great advice on a deal.
16. Inside traders ordinarily defend their actions by claiming that they don’t injure
a.
the boss.
b.
their family.
c.
the President.
d.
anyone.
17. Which is the best argument for legally protecting trade secrets?
a.
Trade secrets are the intellectual property of the employee who developed them.
b.
Employees who disclose trade secrets violate the confidentiality owed to their employers
c.
The theft of trade secrets evens out the competition. Employees who disclose trade secrets violate the
confidentiality owed to their employers
d.
Employees who disclose trade secrets know how to communicate.
18. U.S. companies have a history of paying off foreign officials for business favors. Such acts were declared illegal by
a.
the U.S. Customs department.
b.
the Vice President.
c.
the Foreign Corrupt Practices Act (FCPA) of 1977.
d.
the United Nations.
19. To resolve difficult moral dilemmas, the better we understand the exact ramifications of the alternatives—the more
likely we are
a.
to make a sound moral decision.
b.
to drive the boss go crazy.
c.
to be a success.
d.
to go to jail.
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Chapter 10 - Moral Choices Facing Employees
20. Whistle-blowing involves exposing activities that are
a.
sports related.
b.
harmful, immoral, or contrary to the public interest.
c.
too close to call.
d.
boring and need some excitement.
21. Whistle-blowers are only human beings, not saints, and they sometimes have their own
a.
salary.
b.
self-serving agenda.
c.
bandwagon.
d.
office.
22. Which act provides sweeping new legal protection for employees who report possible securities fraud, making it
unlawful for companies to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against”
them?
a.
Sarbanes-Oxley Act of 2002
b.
Foreign Corruption Act
c.
Economic Espionage Act
d.
U.S. vs. O’Hagan
23. Conflicts of interest may exist when employees have financial investments
a.
in suppliers, customers, or distributors with whom their organizations do business.
b.
in sports teams.
c.
and question the wisdom of the deal.
d.
that lead to office romance.
24. The use of one’s official position for what always raises moral concerns and questions?
a.
power trips
b.
egos
c.
stepping stones to success
d.
personal gain
25. Conflicts of interests are what kind of problem?
a.
social
b.
evil
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Chapter 10 - Moral Choices Facing Employees
c.
moral
d.
legal
26. An employee can have a conflict of interest even if he or she doesn't act to the detriment of the organization.
a.
True
b.
False
27. Insider trading is the buying or selling of stocks by business "insiders" on the basis of information that has not yet
been made public and is likely to affect the price of the stock.
a.
True
b.
False
29. A kickback is a kind of bribe.
a.
True
b.
False
30. By definition, whistle-blowing can only be done by a past or present member of the organization.
a.
True
b.
False
31. Prudential reasons are reasons that refer to the interests of others and the demands of morality.
a.
True
b.
False
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Chapter 10 - Moral Choices Facing Employees
32. All gifts are bribes.
a.
True
b.
False
33. According to Norman Bowie, whistle blowing can never be justified because it involves violating one's duties to the
organization.
a.
True
b.
False
34. A bribe is remuneration for the performance of an act that's inconsistent with the work contract or the nature of the
work one has been hired to perform.
a.
True
b.
False
35. The Supreme Court has rejected the idea that inside trading involves "misappropriating" confidential information.
a.
True
b.
False
36. A conflict of interest arises when an employee has private interests that are substantial enough to interfere with his or
her job duties.
a.
True
b.
False
37. The Foreign Corrupt Practices Act (FCPA) outlaws grease payments.
a.
True
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Chapter 10 - Moral Choices Facing Employees
b.
False
38. The authors make the case that the FCPA illegitimately imposes parochial American standards on foreign countries.
a.
True
b.
False
39. Employees have no obligations to people with whom they have no business relations.
a.
True
b.
False
40. As a general rule, if the contents of the work agreement that exists between the employee and the employer are legal
and if the employee freely consents to them, then the employee is under an obligation to fulfill the terms of the agreement.
a.
True
b.
False
41. Companies have a right to prevent employees in technical fields from quitting and working for another company.
a.
True
b.
False
42. The SEC's insider-trading rule reduces equality of opportunity in the marketplace.
a.
True
b.
False
43. The Foreign Corrupt Practices Act of 1977 forbids companies to pay kickbacks in the United States, but permits them
to pay kickbacks to companies outside the United States.
a.
True
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Chapter 10 - Moral Choices Facing Employees
b.
False
44. Employees have certain general duties to their employers, and because of the specific business, professional, or
organizational responsibilities they have assumed, they may have other more precise role-based obligations.
a.
True
b.
False
45. When faced with a moral decision, employees should follow the two-step procedure of identifying the relevant
obligations, ideals, and effects, and then deciding where the emphasis should lie among these considerations.
a.
True
b.
False
46. According to Norman Bowie's definition, whistle blowing is conceptually restricted to reporting on activities that are
harmful to third parties, violations of human rights, or contrary to the public purpose and legitimate goals of the
organization.
a.
True
b.
False
47. According to Norman Bowie, a discussion of whistle blowing in the 1990s parallels the discussion of civil
disobedience in the 1960s.
a.
True
b.
False
48. Prudential reasons are those moral reasons that are separate from self-interest.
a.
True
b.
False
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Chapter 10 - Moral Choices Facing Employees
49. According to Jennifer Moore the real reason insider trading should be prohibited is that it undermines the fiduciary
relationship that is at the heart of business management.
a.
True
b.
False
50. The Sarbanes-Oxley Act weakened legal protections for whistle blowers.
a.
True
b.
False
51. What is a conflict of interest, and when does it arise?
52. What is insider trading?
53. What arguments are given in favor of insider trading? What arguments against it?
55. What are the main features of the 1977 Foreign Corrupt Practices Act (FCPA)?
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Chapter 10 - Moral Choices Facing Employees
56. What, if anything, is wrong with foreign forms of bribery?
57. List and briefly explain the seven factors to take into consideration in determining the morality of giving and receiving
gifts in a business situation.
58. What is whistle-blowing, and what motivates whistle-blowers?
59. According to Norman Bowie, whistle-blowing is morally justified only if five criteria are met. What are these five
criteria?
60. What is a key lesson to be learned from the example of the cashier at a truck stop who is asked by her manager to
provide the truckers with phony chits so they can get a larger reimbursement from their companies?
61. What are the potential motivations of being a whistle-blower?
62. Are whistle-blowers a friend or foe to an organization?
63. If all the other businesses in a foreign country are providing a “grease payment” for border patrol. Is it all right and
ethical to do that? State and defend your point.
64. Provide examples of abuses that can occur when a person is in a position of power.
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Chapter 10 - Moral Choices Facing Employees
