Chapter 2. Business Ethics and the Social Responsibility of Business
1. Ethics can be broadly defined as the study of what is good or right for human beings.
a. True
b. False
2. The study of business ethics has several central authorities.
a. True
b. False
3. Because there are no universal, clear-cut standards to apply to ethical analysis, it is impossible to make meaningful
ethical judgments.
a. True
b. False
4. Not everything that is legal is also morally correct.
a. True
b. False
5. An ethical relativist looks to a central authority, such as the Bible, to guide her in ethical decision making.
a. True
b. False
6. The two major forms of utilitarianism are situational and a priori.
a. True
b. False
7. Situational ethics judges a person’s ethics, and it does so from the perspective of the actor.
a. True
b. False
8. Jeremy Bentham was not a proponent of utilitarianism.
a. True
b. False
9. One criticism of utilitarianism is that it ignores justice in some important instances.
a. True
b. False
10. A leading proponent of the utilitarian approach to ethics was the eighteenth-century philosopher Immanuel Kant.
a. True
b. False
11. Deontologists are sometimes criticized for rigidity and excessive formalism.
a. True
b. False
12. Intuitionism holds that rational persons possess inherent powers to assess the correctness of actions.
a. True
b. False
13. In employment relationships, ethical issues arise regarding safety and compensation of workers, privacy, and the
legitimacy of whistle–blowing.
a. True
b. False
14. Harvard philosopher John Rawls stressed liberty as the most important obligation owed by a society to its members.
a. True
b. False
15. To a libertarian, it is not unjust for some people to accumulate fortunes while others live in poverty.
a. True
b. False
16. Although corporations are not persons but artificial entities created by the state, it is clear that they can and should
be held morally accountable.
a. True
b. False
17. Factors leading to the need for the ethical and social responsibility of business are the demands of maintaining a
competitive, fair marketplace and the size and power of individual corporations.
a. True
b. False
18. According to Milton Friedman, the social obligation of a corporation is to return as much money as possible to its
shareholders.
a. True
b. False
19. According to Adam Smith, the capitalistic system is composed of economic motivation, private productive property,
free enterprise, free markets, competition, and limited government.
a. True
b. False
20. Most philosophers now agree that people can discover fundamental ethical rules by applying careful a priori
reasoning.
a. True
b. False
21. The theory of distributive justice analyzes society through a “veil of ignorance.”
a. True
b. False
22. What is unjust to a social egalitarian will also be unjust to a libertarian.
a. True
b. False
23. From a Kantian perspective, for an action to be moral, it must be possible for it to be made into a universal law and it
must respect the autonomy and rationality of all human beings.
a. True
b. False
24. Under a Kantian approach to ethics, a person should not lie to colleagues unless that person supports the right of all
colleagues to lie to one another.
a. True
b. False
25. Under a strict utilitarian approach, it is ethical to force an individual to participate in a painful medical experiment if
the purpose of the experiment is to develop a cure that will benefit large numbers of people.
a. True
b. False
26. Kant’s approach, like that of ethical fundamentalists, asserts that universal laws stem from the direct
pronouncements of God.
a. True
b. False
27. Bill would like to propose to the board of directors of Midway Corporation that it distribute five percent of its pre-tax
yearly income to feed the poor. To Milton Friedman and others, Bill’s proposal might be considered unethical,
because it violates the purpose for which the corporation was established.
a. True
b. False
28. According to one argument in favor of corporate social responsibility, the more responsibly companies act, the less
the government must regulate them.
a. True
b. False
29. Although discussions have occurred, thus far legislators have not passed any statutes which seek to prevent
corporate misconduct and increase corporate responsibility.
a. True
b. False
30. Situational ethics is essentially the same as ethical relativism.
a. True
b. False
31. Deontological theories assess good and evil in terms of the consequences of actions rather than by the motives that
lead to them.
a. True
b. False
32. Utilitarian notions underlie cost-benefit analysis.
a. True
b. False
33. Business ethics is a subset of ethics; there is no special set of ethical principles that applies only to the business
world.
a. True
b. False
34. Ethical relativism holds that when any two individuals or cultures differ regarding the morality of a particular issue or
action, they are both correct because morality is relative.
a. True
b. False
35. The definition of the doctrine of ethical relativism includes:
a. that when any two individuals differ regarding the morality of an issue or action, they are both correct because
morality is relative.
b. the proposition that a good or moral act is one that results in “the greatest good for the greatest number.”
c. the notion that cost-benefit analysis is relative to making ethical decisions.
d. that, without any further evaluation, the ultimate judgment of the correctness of an action relates to
pronouncements of a central authority.
36. Which of the following does not describe the libertarian social ethics theory?
a. Libertarians stress market outcomes as the basis for distributing society’s rewards.
b. Libertarians encourage social control over all people in order to design an equitable society.
c. Libertarians believe it is an injustice for society to take wealth earned by some citizens and distribute it to
those who did not directly earn it.
d. The fact that some people end up with fortunes while others are poor proves only that some can play in the
market effectively while others cannot.
37. In Adam Smith’s The Wealth of Nations, how many “institutions” are in the capitalistic system?
a. 3
b. 4
c. 5
d. 6
38. The ethical theory that underlies cost-benefit analysis is:
a. libertarianism.
b. utilitarianism.
c. deontology.
d. ethical relativism.
39. How many stages are there in Kohlberg’s theory of moral development?
a. 2
b. 3
c. 4
d. 5