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1. Ethics is concerned with the fairness or justness of an action.
1. Business ethics applies only to the owners, operators, and employees
of corporations.
1. An action may be legal but not ethical.
1. Simply obeying the law does not fulfill all ethical obligations.
1. Acting in good faith gives a business firm a better chance of defending
its actions in court.
1. A business firm can sometimes predict whether a given action is legal.
1. The most common reason that ethical problems occur in business is an
overemphasis on long-run profit maximization.
1. Managers must apply different standards to themselves than they apply
to their employees.
1. An ethics program can clarify what a company considers to be
unacceptable conduct.
1. Corporate ethical policies must be clearly communicated to be effective.
1. Stock buybacks are illegal and serve no legitimate purposes.
1. Ethical standards based on religious teachings tend to be absolute.
1. Under the principle of rights theory, one person’s principles are as
“right” as another’s.
1. According to utilitarianism, it does not matter how many people suffer a
negative effect from an act.
1. If an action is ethical from an outcome-based perspective, then it
cannot be ethical from a duty-based perspective.
1. Corporations can be good citizens by promoting goals that society
deems worthwhile.
1. To be ethical is to “do the right thing” but it does not otherwise “pay.”
1. A business organization and its actions cannot be based on trust.
1. The role played by women may present some difficult ethical problems
for firms doing business internationally.
1. Some U.S. bribery laws are directed toward accountants.
1. In studying the legal environment of business, Professor Dooley’s
students also review ethics in a business context. Ethics includes the
study of what constitutes
a. fair or just behavior.
b. financially rewarding behavior.
c. legal behavior.
d. religious behavior.
1. Lia works for Media Marketing Company. Her job includes putting “spin”
on the firm’s successes and failures. In this context, ethics consist of
a. “bad” versus “good” publicity.
b. questions of rightness and wrongness.
c. the firm’s quarterly revenue.
d. whatever is legal.
1. Bess runs Creditors Asset Recovery. She recruits clients by
misrepresenting the facts and pretending to be licensed in various
occupations in Michigan. Bess’s conduct most likely warrants
a. an ethical admonishment but no other sanctions.
b. an injunction plus other sanctions.
c. no sanctions but no praise.
d. praise for her aggression in recovering the assets of “deadbeat”
debtors.
1. DeLouse Plastics Corporation pays its executives an excessive amount
relative to other employees and to what executives at competitive
companies are paid. This is most likely to be challenged as
a. illegal and unethical.
b. illegal only.
c. neither illegal nor unethical.
d. unethical only.
1. Sharon, the human resources director for Tempo Corporation, attempts
to comply with the law in dealing with applicants and employees. One
of the challenges Sharon faces is that the legality of an action is
a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.
1. Eden, the chief executive officer of Flo-Thru Piping Corporation, wants
to ensure that Flo-Thru’s activities are legal and ethical. The best
course for Eden and Flo-Thru is to act in
a. good faith.
b. ignorance of the law.
c. regard for the firm’s shareholders only.
d. their own self interest.
1. Straitway Company encourages its managers to behave ethically,
reasoning that the employees will take their cues from management.
One of the most important ways to create and maintain an ethical
behavior workplace is for management to
a. demonstrate a commitment to ethical decision making.
b. discreetly engage in unethical or illegal acts.
c. look the other way when an employee engages in an unethical
act.
d. direct employees to “do as we say, not as we do.”
1. Whirlwind Financial Corporation sends its executives to a resort in
Mexico—at taxpayers’ expense—to consider using the firm’s cash to buy
back its stock and thereby prop up the value. Many of its competitors
are doing the same thing. One of the best ways to learn about the
ethical responsibilities inherent in operating a business is to look at
a. the mistakes made by other companies.
b. the benefits of pursuing profit despite the appearance of
impropriety.
c. the prevalence of a practice among other corporations.
d. who is footing the bill for a particular action.
1. Tilly, the chief financial officer for USA Products Corporation, attempts
to apply Christian precepts in making ethical decisions and in doing
business. In applying duty-based ethical standards that are derived from
a religious source, Tilly would consider the motive behind an act to be
a. irrelevant.
b. the least important consideration.
c. the most important consideration.
d. the only consideration.
1. In business deals, Felipe, the chief executive officer of Glazed Donuts,
Inc., follows duty-based ethical standards. These are most likely derived
from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.
1. Global Distribution Corporation suggests that its employees apply the
“categorical imperative” to ethical issues that arise at work. This re-
quires that the employees
a. categorize the issues according to legality, morality, and
profitability.
b. consider only the benefits that would accrue to them personally.
c. look only at the result, regardless of the means to attain it.
d. weigh the consequences that would follow if everyone acted the
same.
1. Dion, an accountant for Entertainment Sports, Inc., attempts to apply a
duty-based approach to ethical reasoning in conflicts that occur on the
job. This approach is based on the idea that a person must
a. achieve the greatest good for the most people.
b. avoid unethical behavior regardless of the consequences.
c. conform to society’s ethical standards.
d. place his or her employer’s interest first.
1. Ryan, the owner of SuperMart Stores, Inc., adheres to the “principle of
rights” theory. Under this theory, a key factor in determining whether a
business decision is ethical is how that decision affects
a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the “right” thing to do.
d. the right to make a profit.
1. Solid Tool Company’s decision makers view a particular risk in the use
of Solid’s product as open and obvious. Continuing to market the
product without telling consumers of the risk could be justified from a
perspective of
a. duty-based ethics.
b. Kantian ethics.
c. rights-based ethics.
d. utilitarian ethics.
1. Fess, research manager for Greenergy Products, Inc., applies utilitarian
ethics to determine that an action is morally correct when it produces
the greatest good for
a. Fess.
b. Greenergy.
c. the fewest people.
d. the most people.
1. In deciding questions of corporate social responsibility, Valley Disposal
& Recycling, Inc., is concerned with
a. how the corporation can best fulfill any ethical duty to society.
b. the effect on corporate profits of ignoring any ethical duty to
society.
c. whether the corporation owes any ethical duty to society.
d. all of the choices.
1. Applied Business Corporation makes and markets its products
nationwide. Under the stakeholder approach, to be considered socially
responsible when making a business decision, Applied must take into
account the needs of
a. its consumers, the community, and society only.
b. its employees and owners only.
c. its employees, owners, consumers, the community, and society.
d. no one.
1. Sunny Energy Corporation engages in ethical behavior solely for the
purpose of getting good publicity and thereby increasing profits. Sunny
is
a. acting unethically in its pursuit of publicity.
b. acting unethically in its pursuit of profits.
c. acting unethically in its setting of priorities.
d. not acting unethically.
1. BarBQ Sushi Taco Company considers the impact of its corporate
decisions on various groups and often acts in the interest of a group
that has a greater stake in a decision than BarBQ’s shareholders. This
is most likely to attract potential employees who are
a. investors focused on short-term profits.
b. irresponsible slackers.
c. politically-motivated complainers.
d. recent college graduates.
1. Rio Business Corporation pays potential clients, including private foreign
companies and the representatives of foreign labor organizations to
facilitate business. If Rio knows that the payments will be passed on to
a foreign government, this practice is
a. illegal if the payments violate the Foreign Corrupt Practices Act.
b. legal because a third party acts as a “go-between.”
c. legal because private parties are involved on both sides of the
deal.
d. legal because the payments are intended to facilitate business.
1. Recreation & Sports Equipment Corporation sells a product that is
capable of seriously injuring consumers who misuse it in a foreseeable
way. Does the firm owe an ethical duty to take this product off the
market? What conflicts might arise if the firm stops selling this product?
1. Quixotic Corporation decides to respond to what it sees as a moral
obligation to correct for past gender discrimination by adjusting pay
differences among its male and female employees. Does this raise an
ethical conflict among those employees? Between the employer and the
employees? Between the corporation and its shareholders? If so, how
should it be resolved?
