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Name:
Class:
Date:
Ch 02 Business Ethics and Social Responsibility
1. Ethics is the study of how people should act.
a.
True
b.
False
2. Life Principles are set by your parents and do not change over time.
a.
True
b.
False
3. There is strong evidence that ethical behavior pays off financially for businesses.
a.
True
b.
False
4. Unethical behavior is a bar to financial success.
a.
True
b.
False
5. John Akers, former chairman of IBM, argues that ethics are not important to economic competitiveness.
a.
True
b.
False
6. Society is hurt when business managers behave ethically.
a.
True
b.
False
7. Researchers who study happiness find that people expect material goods to make them happier than they actually do.
a.
True
b.
False
8. Generally, ethical managers have happier, more satisfying lives.
a.
True
b.
False
9. The behavior of top executives regarding ethical issues has little effect on the behavior of the employees of the
organization.
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Ch 02 Business Ethics and Social Responsibility
a.
True
b.
False
10. A company that engages in unethical behavior may suffer severe consequences.
a.
True
b.
False
11. Wever, Inc. is considering relocating a facility to Mexico. The interests of the various stakeholders affected by this
decision may conflict.
a.
True
b.
False
12. Utilitarian ethics holds that decisions should be made on the basis of practicality, and whatever action is most
convenient should be favored.
a.
True
b.
False
13. Lying is always considered unethical, even if it seems to be justified by the ends.
a.
True
b.
False
14. Deontologists would agree that the increasing medical concern over obesity in the United States justifies federal
regulation of high fat, high sugar, low nutrition food advertising during children’s television programs.
a.
True
b.
False
15. Immanuel Kant was a German philosopher who was a proponent of utilitarian ethics.
a.
True
b.
False
16. In analyzing a situation to determine how to act ethically, a business manager should:
a.
gather background information by either talking firsthand with the people involved or by talking to those who
gained information informally through the company “grapevine.”
b.
narrowly focus on a single issue.
c.
determine whether an alternative violates important values.
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Ch 02 Business Ethics and Social Responsibility
d.
All of the answers are correct.
17. Zeno, Inc. is considering relocating its manufacturing facility from Illinois to Mexico City. The stakeholders in this
decision might include:
a.
Zeno's shareholders.
b.
customers.
c.
the Illinois community in which Zeno operates.
d.
All of these.
18. Ethics is the study of:
a.
sovereign immunity.
b.
how people should act.
c.
respondeat superior.
d.
victimization.
19. Does ethical behavior maximize profitability?
a.
Yes, there is concrete evidence that ethical behavior maximizes profitability.
b.
No, there is concrete evidence that unethical companies outperform ethical companies.
c.
Although there is no guarantee that ethical behavior pays in the short or long run, there is evidence that the
ethical company is more likely to win financially.
d.
There is strong evidence that ethical behavior pays financially in the long run, but not in the short run.
20. Why should ethics be a concern to business?
a.
Society as a whole benefits from ethical behavior.
b.
People feel better when they behave ethically.
c.
Unethical behavior can be very costly.
d.
All of these.
21. Warren Buffet is quoted as saying, “The five most dangerous words in business may be:
a.
‘'Everyone else is doing it.’'’'
b.
‘'It’s none of your business.’'’'
c.
‘'We have always done this.’'’'
d.
‘'Nobody will ever find out.’'’'
22. Research has shown that the least important motivation for managers in behaving ethically is:
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Ch 02 Business Ethics and Social Responsibility
a.
they want to feel good about themselves.
b.
they want to feel good about the decisions they make.
c.
they value their reputation.
d.
profitability.
23. Why do many major corporations actively encourage ethical behavior?
a.
Unethical behavior always damages a business.
b.
Unethical behavior can quickly destroy a business.
c.
Unethical acts are always illegal.
d.
All of these are reasons that corporations actively encourage ethical behavior.
24. Unethical behavior in an organization can create:
a.
a cynical workforce.
b.
a resentful workforce.
c.
an unproductive workforce.
d.
All of these.
25. The observation that "The one and only social responsibility of business is to increase its profits" can be attributed to:
a.
Justice Potter Stewart.
b.
John Akers.
c.
Milton Friedman.
d.
Jeffrey Sachs.
26. E-presto, Inc. has established an EthicsLine. EthicsLine is a toll-free phone number that employees can call any time
of the day, any day of the week to discuss ethics and report suspected unethical or improper conduct. Why would E-presto
establish the EthicsLine?
a.
Ethical behavior improves productivity.
b.
Ethical behavior increases job stability.
c.
Unethical behavior can destroy a business.
d.
All of these are reasons that would justify establishing an EthicsLine.
27. Charlie Sheen’s drug use and violent behavior:
a.
were bad enough to warrant CBS’s firing him from a hit TV show.
b.
have no impact on his job as an actor.
c.
enhance his reputation as a “tough guy” and should be tolerated.
d.
are false accusations.
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Ch 02 Business Ethics and Social Responsibility
28. Ethical companies:
a.
tend to earn higher returns than companies that engage in wrong-doing.
b.
tend to have more creative employees than companies that engage in wrong-doing.
c.
are guaranteed to be more profitable in the long run than companies that engage in wrong-doing.
d.
All of these.
e.
Both (a) and (b).
29. Chelvam is the director of quality control. Chelvam rejected some parts as non-conforming to the specifications.
Chelvam's supervisor directs him to accept the parts. Which value might give Chelvam the strength to oppose his
supervisor?
a.
Consideration.
b.
Courage.
c.
Fairness.
d.
Ambition.
30. Paul decided he did not want the new jeans he had purchased from a large discount department store. He had worn
them three times and decided he just did not want them because his friends said they weren’t “cool.” The jeans fit him fine
and there is nothing wrong with them. He takes the jeans back to the store and, as is its policy, the store gave him a full
refund of his money. Which statement best expresses rationalization for this decision?
a.
Paul's conduct was ethical as long as he was within the time frame for returns.
b.
Paul's conduct was unethical unless the store’s policy included “satisfaction guaranteed” and allowed returns
for any reason.
c.
This is not an issue of ethics since people do this all the time.
d.
Paul's conduct was ethical since the store has a legal duty to return his money when he returned the jeans.
31. The Chief Executive Officer of Ticor, Inc. must decide about the disposal of toxic waste materials. Which of the
following considerations should help the CEO reach an ethical business decision?
a.
Toxic waste disposal law.
b.
The harm the disposal could cause to the environment.
c.
The impact on the business if the decision is publicly disclosed through the news media.
d.
All of these.
32. Don runs a construction company. He hires people to work on his projects and tells them they are all "independent
contractors." Legally, they are not independent contractors since Don tells the workers when to come to work, how long to
work, what days to work, what they are to do each day, and so forth. At the end of each week, Don pays his workers in
cash rather than with a check. Also, he does not withhold any state, federal or local withholding tax (since he claims the
workers are independent contractors). Which statement is correct?
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Ch 02 Business Ethics and Social Responsibility
a.
Don has committed both unethical and illegal conduct.
b.
Don has committed unethical conduct, but it is legal.
c.
Don has committed ethical conduct but it is illegal.
d.
Don has committed both ethical and legal conduct.
33. Which of the following is NOT a stakeholder?
a.
a business competitor.
b.
shareholders.
c.
employees.
d.
the environment.
34. Nortron Corporation wants to create an ethical environment in its company. Which of the following has been found to
help foster a sense of ethics within an organization?
a.
The company may develop a formal, written ethics code.
b.
The company may institute a formal ethics training program for the employees.
c.
The top executives may provide good examples by behaving ethically themselves.
d.
All of these alternatives have been used by U.S. companies to create an ethical environment in their
organizations.
35. Lois is running for political office. She trails the incumbent and decides to start running a series of "attack ads." The
attack ads are very effective and one week before the election it appears that she has drawn even with her opponent. Lois
admits that the attack ads were exaggerations and contained some distortions. Which statement is correct?
a.
Lois has engaged in unethical behavior.
b.
Lois has engaged in ethical behavior since she has an obligation to her supporters to run a campaign that will
help her get elected.
c.
It is not possible to determine whether Lois's attack ads were ethical or unethical.
d.
Assuming Lois's attack ads were unethical, her conduct is justified and proper if she gets elected.
36. John discovered his company's accountant was "skimming" money from the business. The accountant agreed to pay
John a one-time payment of $25,000 not to report the skimming to company officials. The accountant promised she would
pay the money back when she could. John accepted the money and never reported what he knew. A year later the
accountant was fired when the embezzlement was discovered. She was also prosecuted for theft. The payment to John was
never discovered. Which statement is correct?
a.
John's act was unethical and illegal.
b.
John's act was unethical but not necessarily illegal.
c.
John's act was ethical since he believed the accountant would return the money; however, it was illegal.
d.
Based on the facts, John's conduct was both ethical and legal given the special circumstances of this case.
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Ch 02 Business Ethics and Social Responsibility
37. Oxtron, Inc. arranged for two employees, Kaiya and Gary, to attend "The Business Ethics 2008 Conference:
Maintaining Credibility" in New York City. Although Gary goes to New York, he does not participate in the conference.
Instead, he takes in the local attractions. Kaiya fully participated in the conference. Using ethical standards, describe what
Kaiya should do about Gary's failure to participate in the conference.
38. Tianhui was recently hired as a sales representative by Oxtron, Inc. Before leaving on his first sales trip, a number of
the other sales representatives take Tianhui aside and tell him that it is customary for the sales representatives to "pad"
(increase) their expense reports each month by 20%. Use utilitarian ethics to decide what Tianhui should do about the
expense report he submits to Oxtron.
39. Many of America’s largest consumer product companies, such as Wal-Mart, Nike, and Land’s End, buy fabric
produced in China by Fountain Set Holdings Ltd. Chinese government investigators recently discovered that Fountain Set
has contaminated a local river by dumping dye waste into it. What responsibility do U.S. companies have to ensure safe
environmental practices by overseas suppliers?
40. Li is the vice president of marketing for Felson, Inc., a manufacturer of children’s clothing Felson is considering
building a factory in a developing country, where there are few restrictions on working conditions, wages, or maximum
work hours. Which viewpoint: utilitarian or deontological would support this move? Why?
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Ch 02 Business Ethics and Social Responsibility
41. Oxtron, Inc. is considering establishing a program that actively encourages ethical behavior. What reasons would
support Oxtron's adoption of an ethics program?
42. Acme Widgets donates $1.00 from each sale of its Super Widget to the World Food Bank. This action illustrates:
A. corporate social responsibility.
B. outsourcing.
C. unethical corporate conduct.
D. none of these answers.
