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1. (p. 90) The Enron scandal illustrates the difference between unethical behavior and illegal behavior.
2. (p. 90) Ethical behavior requires more than following the law.
3. (p. 90) Legal behavior and ethical behavior are basically the same.
4. (p. 90) Many immoral and unethical acts fall well within our laws.
5. (p. 90) Ethical behavior refers to the standards that are accepted by society as right or wrong.
6. (p. 90) Ethical behavior requires individuals to decide for themselves what is right and wrong in each situation
they face.
7. (p. 90) Given the level of diversity within the United States, agreement on common standards of ethical
behavior is unachievable.
8. (p. 90) An accurate statement regarding this chapter is “Business law establishes ethical behavior.”
9. (p. 90) Legal behavior includes more aspects of our relationships with others than does ethical behavior.
10. (p. 90) Legal behavior is a first step toward ethical behavior.
11. (p. 90) Laws that protect us from fraud, theft and violence determine ethical behavior.
12. (p. 90) Moral behavior refers to behavior that is accepted by society as right versus wrong.
13. (p. 90) Ethical behavior focuses on treating others fairly.
14. (p. 90) Making accounting records more transparent may help restore trust in the free-market system and
leaders in general.
15. (p. 90) Punishing business leaders who have broken the law may help restore trust in the free-market system
and leaders in general.
16. (p. 90) Making businesspeople more accountable for company actions may help restore trust in the free-market
system and leaders in general.
17. (p. 90) People involved in business may be tempted to do something unethical in order to increase sales and
profits. However, if they are caught, our legal system will deal harshly with them.
18. (p. 92) Ethical behavior involves the clear and easy choice of right and wrong actions towards others.
19. (p. 92) Over two-thirds of the American population report never giving any time to the community.
20. (p. 92) Both managers and workers cite low managerial ethics as a major cause of American Business’s
competitive woes.
21. (p. 92) Ethical behavior begins with large corporations.
22. (p. 92) Making ethical choices is always easy.
23. (p. 92–93) An ethical manager strives for a win-win relationship with others.
24. (p. 92) The question “Is it legal?” establishes ethical behavior.
25. (p. 92) It can be very difficult to maintain a balance between ethics and goals such as pleasing stakeholders.
26. (p. 93) Trying to make decisions that will benefit all parties involved is consistent with the question “How will
it make me feel about myself?”
27. (p. 92) While telling an abusive joke about an ethnic group may not be unlawful, it is unethical.
28. (p. 92–94) An ethical manager’s decisions are based on the following questions: “Is it legal?” and “Is it
profitable?”
29. (p. 94) Behavior that is in conflict with your values and sense of right and wrong can damage your self
esteem.
30. (p. 92–94) Barney extends his lunch break beyond the allotted time. Wilma uses the office telephone for an
unauthorized personal phone call. Fred misrepresents his product to a potential customer. All of these are
examples of unethical behavior.
31. (p. 94) When facing an ethical dilemma, it is often helpful to discuss the situation with your supervisor
because ethical decisions will always withstand scrutiny.
32. (p. 92) Business behavior determines the ethics of society. We can improve society’s moral and ethical
behavior by first making a commitment to improving business’s moral and ethical behavior.
33. (p. 92) Utilizing the phrase “the ends justify the means” as a corporate value system can negatively impact
company morale and competitiveness.
34. (p. 92–93) In reality, ethical behavior depends on the situation. For example, in negotiating a contract with your
employees, the way they win higher wages is by your losing the fight to hold down labor costs. Often, it is a
win-lose relationship.
35. (p. 94) Trust between workers and managers must be based on a foundation of fairness, honesty, openness, and
moral integrity.
36. (p. 94) A growing number of people feel that an employee’s ethics are a personal matter, and have nothing to
do with management.
37. (p. 94) The majority of CEOs believe that employee misconduct results from a failure in organizational
leadership in establishing ethical standards.
38. (p. 94) Management can create an environment in which unethical behavior can develop.
39. (p. 94) Corporate values, like personal values, are learned by observing what others do.
40. (p. 94) Effective corporate values start with employees and develop throughout the organization to include top
management.
41. (p. 94) A business should be managed ethically to maintain a good reputation.
42. (p. 94) A business should be managed ethically to keep existing customers and attract new customers.
43. (p. 94) A business should be managed ethically to reduce employee turnover.
44. (p. 94) A business should be managed ethically to do the right thing for all stakeholders.
45. (p. 94) Corporate standards and values can lead to unethical behavior.
46. (p. 95) Designing an employee incentive program based on increasing sales can lead to unethical behavior.
47. (p. 94) “Do what I say, not what I do” can be an effective code of conduct to instill corporate values.
48. (p. 94) “Quality is job #1” as a corporate mission statement can influence the ethical behavior of employees.
49. (p. 95, figure 4.1) An ethic of justice is based on a sense of responsibility to reduce actual harm or suffering.
50. An ethic of care is based on a sense of responsibility to reduce actual harm or suffering.
51. An ethic of justice is based on principles like justice, fairness, equality, or authority.
52. An ethic of care is based on principles like justice, fairness, equality, or authority.
53. (p. 94–95) As a manager you have a responsibility for the unethical behavior of your employees.
54. (p. 94) Avoiding lawsuits is one reason to manage a firm ethically.
55. (p. 95) When faced with slow sales and low profits, even managers with strong personal values may feel
pressured to compromise those values.
56. (p. 96) Integrity-based ethics codes are based on avoiding legal punishment.
57. (p. 96) Compliance-based ethics codes are based on preventing unlawful behavior.
58. (p. 97) Businesses with a formal code of ethics are less common now than in the past.
59. (p. 96) Compliance-based ethics codes focus on preventing unlawful behavior by increasing control and by
penalizing wrongdoers.
60. (p. 96) In order to be successful, efforts to improve the ethical behavior of businesses must begin with top
management’s support of a corporate code of conduct.
61. (p. 97) Businesses recognize that pressure to violate ethical standards can come from either inside or outside of
the firm.
62. (p. 97) People who report illegal or unethical behavior are known as whistleblowers.
63. (p. 97) As a result of pressure from business lobbyists, Congress has failed to pass legislation protecting
whistleblowers.
64. (p. 97) An ethics officer serves both as a counselor and as an investigator.
65. (p. 97) Individuals with a background in public relations make the most effective ethics officers.
66. (p. 97) Enforcement is perhaps the most important step in an effective code of ethics.
67. (p. 96) A code of ethics designed to avoid criminal misconduct is an example of a compliance-based ethics
code.
68. (p. 96) An integrity-based ethics code moves beyond legal compliance in order to create a “do-the-right-thing”
climate.
69. (p. 97) To be effective, an organization’s code of ethics needs to be communicated to outsiders such as
suppliers, subcontractors, and customers.
70. (p. 97-98; Legal Briefcase box) Whistleblowers must work for the company they report for questionable behavior.
71. (p. 96) Dewy Cheatum encourages his employees to create and use legal loopholes to gain a competitive
advantage. This is both legal and consistent with the compliance-based approach to a code of ethics.
72. (p. 96) The brewers of Budweiser beer encourage their customers to drink responsibly and “know when to say
when.” This reflects a compliance-based approach to ethics.
73. (p. 96) Cigarette producers label their products with warnings of potential health hazards. This is an example
of a compliance-based code of ethics.
74. (p. 96–97) America’s business ethics can be improved by requiring written contracts with their employees,
customers, and owners.
75. (p. 99) Corporate social responsibility refers to the concern businesses have for the welfare of society.
76. (p. 99) Corporate philanthropy refers to the position a firm takes on issues that affect society.
77. (p. 99) A charitable donation by a corporation is an example of corporate philanthropy.
78. (p. 99) Ethical behavior will allow a firm to meet its corporate social responsibility.
79. (p. 100) Minority hiring practices and pollution control are both areas of corporate responsibility.
80. (p. 100) Being responsible to your customers may require your firm to provide more information regarding
your product than the law demands.
81. (p. 99) Corporate philanthropy refers to the position a firm takes on social and political issues.
82. (p. 99) Ethical behavior comes at the expense of corporate financial performance.
83. (p. 100) Businesses can have either a positive or negative impact on society, although the news coverage tends
to focus on the negative.
84. (p. 100) In the discussion of corporate social responsibility, stakeholders and stockholders refer to the same
group.
85. (p. 101) One responsibility of business is to satisfy customers by offering them goods and services of real
value.
86. (p. 102) Studies show that consumers are not concerned about the socially conscious behavior of the firms with
which they do business.
87. (p. 102) Unethical behavior may seem to work for the short term, but it guarantees eventual failure.
88. (p. 102) Investors can profit from choosing to invest their money in companies whose goods and services
benefit the community and the environment.
89. (p. 103) The government’s case against Martha Stewart alleges that she knowingly sold products that were
defective.
90. (p. 102) Insider trading occurs when employees of a company use private company information to profit in the
stock market.
91. (p. 102) Insider trading provides the information needed for the securities markets to operate fairly and
efficiently.
92. (p. 104) Businesses have a social responsibility to create jobs.
93. (p. 105) Promoting social justice is a responsibility of society, but not business.