Collins, Business Ethics 3e
SAGE Publishing, 2021
Test Bank
CHAPTER 5: CODES OF ETHICS AND CODES OF CONDUCT
Multiple Choice
1. A code of conduct differs from a code of ethics because a code of conduct ______.
a. is explicitly written
b. deals with specific situations
c. is broader in nature
d. includes a values statement
2. Which of the following is true of a typical code of ethics?
a. It is often long and complicated.
b. It is unreasonable to expect the average person to abide by its principles.
c. It is typically designed by a lawyer.
d. It is brief enough to fit on a business card.
3. Which of the following does a code of conduct likely contain that a code of ethics
would not?
a. the description of a specific law and what it means for an employee
b. a principle that states all employees should obey the law whenever possible
c. multiple statements of values
d. broad principles that suggest ideal behavior on the whole or how an ideal person
would be
Collins, Business Ethics 3e
SAGE Publishing, 2021
4. As suggested by the text, when should a business owner or company management
first begin drafting a code of ethics?
a. when the business is first conceptualized
b. when filing for a business license
c. when the first employee is hired
d. when the business reaches around 10 employees
5. Which of the following statements about formal development of an ethics program is
accurate?
a. A company should have an ethics office even when it is very new and small.
b. The company should have lawyers decide when to expand ethics programs to larger
levels.
c. The ethics code is embodied by entry-level employees in small organizations.
d. A specific individual should manage organizational ethics when a company reaches
50 employees.
6. How has the adoption of codes of ethics by businesses changed over time?
a. Survival of the fittest has led fewer businesses to abide by their own codes of ethics.
b. Since the 1960s, vastly more businesses have adopted them to be more in line with
public and industry expectations.
c. The rate of adoption by businesses has remained roughly the same since the 1960s.
d. The superficial adoption of codes of ethics has increased, while moral expectations of
business has decreased.
7. You are a manager at a company. Shudra, a new employee, approaches you
because they believe another supervisor’s request is unethical and directly violates the
company code of ethics. Believing that the company code has weak internal support,
Collins, Business Ethics 3e
SAGE Publishing, 2021
Shudra asks if you are aware of any resources that might help clarify the questionable
request. What moral support lever might you suggest?
a. File a formal complaint with human resources.
b. Request an investigation by the ethics officer.
c. Review the industry or professional code of ethics.
d. Contact an attorney anonymously for guidance.
8. You are a member of upper management who is leading an orientation for new hires.
During your first meeting you intend to focus on business ethics. In what way should
you start your meeting with the new employees?
a. Explain how the company will not tolerate failures in moral behavior.
b. Address some ethical issues specifically related to your company and industry.
c. Pass out a code of conduct and let employees have some time to read it.
d. Tell the employees not to worry about public perceptions of your industry.
9. What effect should a code of ethics have on dialogue within an organization?
a. help legitimize dialogue about what constitutes ethical behavior
b. restrict dialogue to support for ethical decision-making
c. make employees afraid to voice concerns about their own ethical questions
d. help bring legal language into conversations about ethical behavior
10. For an employee with strong moral convictions, a code of ethics would ______.
a. be a means of relating to unethical employees
b. help employee worker more quickly
c. apply to both work and nonwork life
d. seem redundant
Collins, Business Ethics 3e
SAGE Publishing, 2021
11. What effect did the Sarbanes-Oxley Act have on codes of ethics and conduct in
publicly traded companies?
a. It forced companies to have or refine a code of conduct.
b. It forced companies to have or refine a code of ethics.
c. It forced transparency about whether or not companies had a code of ethics or
conduct.
d. It forced transparency into the nature of a company’s ethics training system.
12. A firm wants to be publicly listed on the NASDAQ. What is required for this from an
ethics standpoint?
a. Create a code of ethics for upper management.
b. Host an annual ethics training employees and management.
c. Disclose the incidences and outcomes of ethics abuse lawsuits online.
d. Have a publicly available code of conduct for all employees.
13. According to the 1991 Federal Sentencing Guidelines, what happens to a company
that has implemented an effective code of ethics compared to one that does not?
a. The company will not be held liable in fraud lawsuits against it.
b. The judge may reduce the fine imposed against the company.
c. Prison sentences for managers of the company are limited to 1 year.
d. There are no formal rewards, but the company has an improved reputation.
Collins, Business Ethics 3e
SAGE Publishing, 2021
14. Many industry associations and professional organizations have developed their
own codes in an effort to:
a. deflect government regulation.
b. address industry or profession-specific issues.
c. establish trust with their clients.
d. reduce costs associated with malpractice.
15. Research has shown a positive correlation between organizations with a code of
ethics and ______.
a. greater tolerance for diversity
b. faster employee turnover
c. higher NASDAQ rating
d. lower employee trust
16. Which of the following would set the best tone for a code of ethics?
a. providing a list a prohibited activity
b. including a declarative statement that employees will always be honest
c. listing the ramifications of non-compliance with the code
d. sharing ethical dilemma experiences
17. Which of the following values is among the six most commonly found in professional
codes of ethics?
a. hard work
b. extroversion
c. citizenship
d. loyalty
Collins, Business Ethics 3e
SAGE Publishing, 2021
18. Research has shown that the three value categories that appear in most codes of
ethics are deontological, utilitarian, and ______.
a. ethics of care
b. fair use
c. socialist
d. social good
19. How does the text define “oath”?
a. a private code
b. a pact with oneself for ethical behavior
c. a public promise
d. a commitment to a profession’s public goals and ethics
20. Which of the following statements about the MBA oath developed by Harvard
Business School students is accurate?
a. It requires the taker to reject the pursuit of personal wealth and profits.
b. It gives emphasis to the work of the individual and influence on the individual.
c. It is required of most graduates of MBA programs in the United States.
d. It helps professionalize the management field and enhance public trust.
21. Musa has just passed the bar exam has taken the oath required for attorneys to
practice in the United States. Which of the following is the most likely reason an
attorney is required to take an oath before practicing law in the United States?
Collins, Business Ethics 3e
SAGE Publishing, 2021
a. Being an attorney is a profession that requires moral action in its duties.
b. The modern legal profession relies on interpretation of laws to guide behavior; the
oath is just symbolic.
c. The public has very little trust for attorneys, and such an oath is necessary to mollify
them.
d. The legal profession is inherently corrupt, and oaths are necessary to increase moral
behavior.
22. What does the government of the Netherlands require of all financial institution
employees?
a. Complete 20 hours of ethical training per year.
b. Show each customer and client that they have taken an oath.
c. Adopt a personal oath of moral behavior.
d. Take an oath to perform duties with high integrity.
23. Samuel owns a business in a developing nation that has operated locally for many
years. Recently, his company has grown and is now making international deals. What is
to be expected of that business?
a. It will change to adopt the commons standards of the three Abrahamic faiths.
b. It will mimic the operational standards of much bigger corporations.
c. It will remain true to its informal ways for doing business even in the international
marketplace.
d. It will change to adopt international standards for business.
24. Which of the following is held in common among the Christian, Muslim, and Jewish
religions according to the 1994 interfaith declaration?
a. respecting all religious doctrines while conducting business
b. valuing justice and mutual respect when interacting with one another
Collins, Business Ethics 3e
SAGE Publishing, 2021
c. acknowledging the importance of business as a driver of nations
d. celebrating individual achievement and moral responsibility
25. Which of the following would be an example of “stewardship” as described by the
1994 interfaith declaration?
a. A salesperson providing full disclosure of charges before accepting a new project.
b. A CEO approving purchase of a technology that would help reduce pollution.
c. A director implementing sanctions against a department manager that violated the
company’s code of ethics.
d. A human resource director ensuring that both sides of an employee disagreement are
given equal consideration.
26. What was the core purpose of the Caux Principles for Responsible Business?
a. reducing the influence of free market capitalism in international business
b. seeking international standards in sanctions for unethical behavior
c. conceptualizing how responsible business should act internationally
d. spreading Western business values to the developing world
27. What are the two ethical ideals of the Caux Principles for Responsible Business?
a. human dignity and collectively seeking the common good
b. human dignity and the worldwide implementation of just laws
c. freedom of action and freedom of information
d. collectively seeking the common good and worldwide implementation of just laws
Collins, Business Ethics 3e
SAGE Publishing, 2021
28. What should large companies do to increase employee buy-in for their code of
ethics?
a. solicit employee input
b. require quarterly ethics training
c. delegate creation to a third party
d. communicate changes early and often
29. What problem do many small or medium-sized companies have with respect to
codes of ethics that is less of a problem with larger companies?
a. a code of ethics that emphasizes punishment
b. a vague code of ethics
c. lacking a code of ethics
d. a “lecturing” code of ethics
30. Ali started an accounting firm a year ago. Recently, the company just hired a tenth
employee and needs a code of ethics. How do you recommend this business owner
start the process?
a. Have a lawyer draw up the basic needs of a code of ethics.
b. Write an initial draft then share with employees for review and input.
c. Make a template based on a similar organizations’ code of ethics.
d. Create a code-writing team comprised of all employee levels.
31. What is a particular benefit of using the “Code of Ethics Toolkit” created by the
Ethics & Compliance Initiative?
a. It automatically updates with the most current human resource laws.
b. It aligns the organization’s code with international standards of business.
Collins, Business Ethics 3e
SAGE Publishing, 2021
c. It provides guidance to employees on the legal ramifications of their actions.
d. It aligns department-specific codes with organization-wide ethics code.
32. What is the first step in the text’s suggested 13 steps for creating a code of ethics as
a team-building exercise?
a. Decide on the organization’s ethical priorities.
b. Create a code writing team.
c. Obtain approval from organizational leaders.
d. Define a “code of ethics.”
33. How does a code of ethics differ from an organization’s vision statement?
a. It addresses acceptable behavior for specific situations, not general aspirations for
behavior.
b. It describes aspirations for employee behavior, not future organizational aspiration.
c. It deals with organizational culture, not acceptable behavior in specific situations.
d. It articulates an organization’s purpose, not its future aspirations.
34. Raleigh is in the process of developing a code-writing team for an accounting firm of
15 employees. Who in the company should be a part of this team?
a. Raleigh and two or three senior executives
b. Raleigh and the 14 other employees
c. Raleigh and the HR director
d. Raleigh and a group of six or seven of the most-respected employees
Collins, Business Ethics 3e
SAGE Publishing, 2021
35. When gathering a list of ethical behaviors from employees, the prompts should
focus on ______.
a. each employees’ core ethical beliefs and philosophy
b. examples of when each employee behaved unethically
c. unethical behavior the employee has witnessed
d. times when the employee behaved ethically or witnessed ethical behavior
36. What is the purpose of using a round robin format in the work of the code-writing
team?
a. It allows everyone to hear examples and decide on common themes.
b. It allows management to hear of unethical behaviors in their company.
c. It helps employees come clean about their worst impulses.
d. It brings an international and broad cultural perspective to the resulting code of
ethics.
37. When writing a code of ethics, you should distribute other organizations’ codes of
ethics ______.
a. during the development of common themes
b. at the beginning of the writing process
c. after an initial draft of your own code has been created
d. before you form your code-writing committee
38. Bart’s company has developed a draft code for the entire company where he works.
Now, having reached the step of “code alignment,” they should ______.
a. compare their code to the missions and goals of each department
b. put the code up to a vote by management
Collins, Business Ethics 3e
SAGE Publishing, 2021
c. make sure the values of each employee aligns with the code
d. compare the code to that of the larger accounting profession
39. As recommended by the text, when should code revision, the last step in the code
development process, occur?
a. a few weeks to a month after adoption
b. constantly
c. annually
d. with every ethics training workshop
40. Which of the following should be integrated into an organization’s strategic
planning?
a. code of ethics and employee aspirations
b. business plan and vision statement
c. mission statement and code of ethics
d. mission statement, vision statement, and code of ethics
41. What does an organization’s vision statement have that its mission statement does
not?
a. future aspirations for the organization
b. a description of what the organization does
c. a description of the organization’s target/customers
d. a mention of ethics
Collins, Business Ethics 3e
SAGE Publishing, 2021
42. “We will earn our customers’ enthusiasm through continuous improvement driven by
the integrity, teamwork, and innovation of GM people.” This language from General
Motors is part of a ______.
a. mission statement
b. vision statement
c. code of conduct
d. code of ethics
43. In which of the following ways should a company’s code of ethics differ from its
mission statement or vision statement?
a. It should be less subject to fluctuation with environmental changes.
b. It should have more input from management.
c. It should be less aspirational and more in line with present circumstances.
d. It should carry a greater reflection of industry expectations.
44. When all the elements of a strategic plan are integrated, it should produce a(n)
______.
a. culture of efficiency in the organization
b. common “cause” for employees
c. aspirational vision for what the company will become
d. “ideal” version of the company that does not yet exist
45. As described in the text, William George, the former chairman and CEO of
Medtronic, has outlined a connection between ______ and his company’s mission and
values.
a. a strong vision statement
Collins, Business Ethics 3e
SAGE Publishing, 2021
b. employee retention
c. ethical organizational culture
d. profits and shareholder value
46. A code of conduct requires input from which of the following that is not required for a
code of ethics?
a. lawyers
b. employees
c. upper management
d. the president/CEO
47. Which of the following falls under the New York Stock Exchange (NYSE)
recommended code of conduct component “Protection and Proper Use of Assets”?
a. unfair treatment of customers
b. use of corporate information for personal gain
c. employee retaliation
d. theft
48. Which of the following is an important component of the New York Stock
Exchange’s recommended inclusion of “Encouraging the Reporting of Any Illegal or
Unethical Behavior”?
a. protecting nonpublic information
b. preventing retaliation
c. avoiding waste
d. implement strong sanctions against employees
Collins, Business Ethics 3e
SAGE Publishing, 2021
49. Which of the following New York Stock Exchange code of conduct
recommendations specifically deals with customer relations?
a. compliance with laws, rules, and regulations
b. conflict of interest
c. corporate opportunities
d. fair dealing
50. After many years of successful operation, a financial services firm uncovers a
specific fraud in which employees were accepting personal gifts from clients for
preferred treatment. Which of the following is most likely going to need revision as a
result?
a. code of conduct
b. code of ethics
c. vision statement
d. mission statement
51. What point is the text trying to make by illustrating the legal ruling in Florida that
state judges and lawyers cannot be “friends” on Facebook?
a. Codes of conduct should remain somewhat vague to encompass changing situations.
b. New societal or environmental conditions may require changes to a code of conduct.
c. Conflicts of interest should be addressed in codes of conduct.
d. Codes of ethics are often better at handling complex situations than codes of
conduct.