1. Ethics is the branch of philosophy that focuses on what constitutes right
and wrong behavior.
1. Business ethics focuses on ethical behavior in the business world.
1. An action may be legal and ethical.
1. The legality of an action is always clear.
1. Corporations can be perceived as owing ethical duties to groups other
than their shareholders.
1. The minimal acceptable standard for ethical behavior is compliance with
the law.
1. Business ethics is consistent only with short-run profit maximization.
1. Focusing on a firm’s short-term profits without considering the company’s
long-term needs may be acting unethically.
1. Ethical codes of conduct can set the ethical tone of a firm.
1. Setting realistic workplace goals can reduce the probability that employees
will act unethically.
1. Some companies have set up confidential systems for employees to “raise
red flags” about suspected unethical practices.
1. Restricting the bonuses that are paid to executives is unethical.
1. Ethical reasoning is the process through which an individual rationalizes
whatever action he or she chooses to take.
1. In ethical terms, a cost-benefit analysis is an assessment of the negative
and positive effects of alternative actions on individuals.
1. According to utilitarianism, an action that affects the majority adversely is
morally wrong.
1. It may be unethical for a company with a product that is outlawed in one
country to look elsewhere for a market.
1. A business firm’s profits may suffer if the firm is not a “good corporate
citizen.”
1. Businesspersons who would choose to act unethically may be deterred
from doing so because of public opinion.
1. One guideline to evaluating the ethics of a particular action is to “let your
conscience be your guide.”
1. Bribery of foreign government officials is both an ethical and a legal
issue.
1. John is sales manager for Kleen ‘N Brite Products, Inc. Compared to
John’s personal activities, his business activities most likely involve
a. more complex ethical issues.
b. no ethical issues.
c. simpler ethical issues.
d. the same ethical issues.
1. Mariah works in the public relations department of New Trends Sales
Company. Her job includes portraying New Trends’s activities in their best
light. In this context, ethics consist of
a. a different set of principles from those that apply to other activities.
b. the same moral principles that apply to non-business activities.
c. those principles that produce the most favorable financial outcome.
d. whatever saves New Trends’s “face.”
1. Any decision by the management of Fast-Food Franchise Corporation
may significantly affect its
a. operators only.
b. operators, owners, suppliers, the community, or society as a whole.
c. owners only.
d. suppliers, the community, or society as a whole only.
1. Peak & Vale Accountants provides other firms with accounting services.
Questions of what is ethical involve the extent to which Peak & Vale has
a. a legal duty beyond those duties mandated by ethics.
b. an ethical duty beyond those duties mandated by law.
c. any duty beyond those mandated by both ethics and the law.
d. any duty when it is uncertain whether a legal duty exists.
1. Housemate, Inc., makes and sells a variety of household products. With
a fair amount of certainty, Housemate’s decision makers can predict
whether a given business action would be legal in
a. all situations.
b. many situations.
c. no situations.
d. practically no situations.
1. Kennedy Capital Corporation provides other firms with funds to expand
operations. If Kenney strictly complies with existing laws, the firm will
a. fulfill all business ethics obligations.
b. fulfill no business ethics obligations.
c. fulfill some business ethics obligations.
d. not need to fulfill any business ethics obligations.
1. Flexo Trucking Company transports hazardous waste. Garn is a Flexo
driver, whom the company knows drives longer hours than federal
regulations permit. One night, Garn exceeds the limit and has an accident.
Spilled chemicals contaminate Hill City’s water source, forcing the
residents to move away. Flexo acted unethically because
a. Flexo showed reckless disregard for Hill City’s residents and others.
b. Garn exceeded the federal time limit.
c. harm was caused by an unfortunate accident.
d. Hill City should have better protected its water source.
1. Ergonomic Corporation convenes its employees for its managers to
announce (1) a new company-wide ethical code of conduct, (2) an ad
campaign to publicize the new code, and (3) the discharge of employees
who do not adhere to the code. One of the most effective ways to set a
tone of ethical behavior within a business organization is
a. to create an ethical code of conduct.
b. to discharge employees who do not create the appearance of
impropriety.
c. to post a marketing campaign online touting the firm’s ethical tone.
d. for management to direct employees to “do as we say, not as we
do.”
1. Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-
Christian religious ethical standards. With respect to their application,
these standards are
a. absolute.
b. analytical.
c. discretionary.
d. utilitarian.
1. In making business decisions, Glenda, personnel manager for HVAC
Maintenance, Inc., applies his belief that all persons have fundamental
rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
1. Made4U Goods, Inc., asks its employees, many of whom are members
of the National Machinists Union, to apply the utilitarian theory of ethics.
This theory does not require
a. a choice among alternatives to produce the maximum societal utility.
b. a determination of whom an action will affect.
c. an assessment of the effects of alternatives on those affected.
d. the acquiring of the means of production by workers.
1. Halley, a lawyer on the staff of International Group, applies the utilitarian
theory of ethics in business contexts. Utilitarianism focuses on
a. moral values.
b. religious beliefs.
c. the consequences of an action.
d. the nature of an action.
1. In making decisions for United Merchandising Company, Vance uses a
cost-benefit analysis. This is part of
a. duty-based ethics.
b. Kantian ethics.
c. the principle of rights.
d. utilitarianism.
1. Chuckie, president of DrinkUp Fresh Beverages, Inc., does not apply
utilitarianism to business ethical issues. One problem with utilitarianism is
that it
a. gives business profits priority over production costs.
b. ignores the practical costs of a given set of circumstances.
c. requires complex cost-benefit analyses of simple situations.
d. tends to justify human costs that many find unacceptable.
1. A common ethical dilemma faced by the management of General Holdings
Corporation involves the effect that its decision will have on
a. one group as opposed to another.
b. the firm’s competitors.
c. the government.
d. the U.S. Chamber of Commerce.
1. Fealty Credit Corporation asks its employees to evaluate their actions and
get on the ethical business decision–making “bandwagon.” Guidelines for
judging individual actions include all of the following except
a. an individual’s conscience.
b. business rules and procedures.
c. loopholes in the law or company policies.
d. promises to others.
1. Spencer Hydraulics Corporation’s ethics committee is asked a business
ethics question—should the firm bid low to obtain a contract that it knows
it can fulfill only at a higher price? A practical method to investigate and
solve this question involves all of the following steps except
a. absolution.
b. decision.
c. inquiry.
d. justification.
1. Ethical standards would most likely be considered violated if Retail Mart
Corporation deals with a company in a developing nation that
a. agrees to produce goods at Retail Mart’s desired price.
b. goes unnoticed by “corporate watch” groups.
c. exploits its workers.
d. pays its workers less than the U.S. minimum wage.
1. Bilt-Well Construction Corporation makes a side payment to a government
official in Nigeria to obtain a contract. In the United States, this is
a. illegal and unethical.
b. illegal but not unethical.
c. unethical but not illegal.
d. legal and ethical.
1. To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all
U.S. companies, must
a. conceal financial records that reveal past bribes.
b. keep records that “accurately and fairly” reflect financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
1. Ophelia, an executive with Pharma Drug Distribution, Inc., has to decide
whether to market a product that might have undesirable side effects for
a small percentage of users. How should Ophelia decide whether to sell
the product? How does the standard of ethics that is applied affect this
answer?
1. Matchless Clothing Company buys clothing assembled by Nantra, Ltd., a
foreign firm that employs young children for long hours and low pay.
Nantra’s nation does not enforce its child labor laws. Human International
Politics (HIP), a political activist organization, discovers Matchless’s
connection to Nantra and plans to reveal this information. Before HIP
does so, however, Matchless publicly releases the information itself and
announces that it is severing its relationship with Nantra. Matchless
publicizes its action in its advertising, and the company’s sales and profits
increase, apparently as a direct result. Has Matchless acted unethically
in any way? From an ethical perspective, is Matchless’s conduct in this
situation more important than whatever its motive might be?
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