63) Business ethics consist of the fundamental ________ values and behavioral standards that
form the foundation for the people of an organization as they make decisions and interact with
stakeholders.
A) religious
B) moral
C) societal
D) legal
64) To create an environment for your people that facilitates ethical behavior, an entrepreneur
should:
A) set the tone and establish and enforce policies.
B) not need to educate.
C) punish whistle blowers.
D) All of the above
65) The greater the reward or the smaller the penalty for unethical acts, the greater is the
probability that such behavior will occur. This refers to:
A) competitive pressures.
B) opportunity pressures.
C) globalization pressures.
D) personal pressures.
66) Mary started her dot.com business in 2005. Recently, she hired Jackie as VP of Sales and
Marketing. As part of company policy, management was to give a blood test for verification of
AIDS or any drug abuse. When the results came back, Mary found out that Jackie had AIDS.
She was fired because the company does not tolerate having employees with AIDS.
A) Mary had the right to fire Jackie because it is her company and she can do whatever she
wants.
B) Mary should have consulted with an attorney to find a reason for firing Jackie.
C) Mary is in violation of discrimination laws.
D) Mary should have requested a blood test from everyone on a quarterly basis.
67) Joan was hired as a sales representative. One of her responsibilities was to make outside
sales calls. Over the years, she got friendly with her customers. One of the customers has been
asking her for a date for a while and finally told her that she will not be getting any orders unless
she goes out with him.
A) This is in violation of sexual harassment and Joan can sue the customer.
B) This is in violation of sexual harassment and Joan can sue her employer.
C) This is not in violation of sexual harassment because the employer was not negligent.
D) This is not in violation of sexual harassment because Joan liked the customer very much.
68) A few examples of small businesses giving back to the community are:
A) literacy programs.
B) food bank programs.
C) clean environment programs.
D) All of the above
69) Polls show that increasingly the public is only holding companies accountable for the
economic impact of their decisions, not the ethical implications.
70) In most situations, the ethical dilemma is clear-cut and obvious.
71) Stakeholders are the individuals and groups affected by a decision.
72) Ethics are the fundamental moral values and behavioral standards that form the foundation
for the people of an organization as they make decisions and interact with stakeholders.
73) Small business owners seldom feel the pressure to violate ethical standards or to take
shortcuts in their careers.
74) Fortunately, for businesses, it only takes a short time to build a reputation and it takes a long
time to destroy it.
75) If a small business owner obeys the law, he/she can be certain that his/her actions are ethical.
76) In terms of ethical behavior, the law merely establishes the minimum standard of behavior.
77) The policies and procedures concerning ethical behavior in an organization serve as specific
guidelines for people as they make daily decisions.
78) Building a reputation for ethical behavior typically takes a long time.
79) The first step in developing an ethical framework is to identify the key stakeholders.
80) Since ethical decisions are based on absolute standards of conduct, it is unimportant to
identify the stakeholders in any specific decision when determining the ethical thing to do.
81) The five-step process for developing an ethical framework is very similar to the process for
problem-solving in business.
82) Although companies set standards for ethical behavior, the ultimate decision on whether to
abide by ethical principles rests with the individual.
83) While corporate culture influences employees’ ethical decisions, managers have little impact
on those decisions.
84) One of the most important groups of stakeholders that a business must satisfy is its
customers.
85) If a manager says things like, “Everyone does it” or “I don’t get paid to be ethical, I get paid
to produce results,” he/she is suffering from moral blindness.
86) The most effective way of diminishing moral blindness is through training.
87) Since ethical standards are constant from one culture to another, ethical decisions pose no
special problems for companies engaged in international business.
88) Companies have the responsibility to provide investors with an attractive return on their
investment.
89) Kant’s categorical imperative advises managers to take only those actions that a disinterested
panel of professional colleagues would view as proper.
90) There is no universal answer for resolving ethical dilemmas.
91) If a company has a written code of ethics and provides clear instructions to employees, two-
way communication is unimportant in maintaining ethical standards.
92) It is important that any ethical code is enforced fairly and consistently.
93) The best insurance against ethical violations is the hiring of people with strong moral
principles.
94) To establish and maintain the highest level of ethical standards, the company’s owner should
hand down the company’s ethical standards and require managers to enforce them.
95) Businesses have social responsibility to several constituencies: the environment, their
employees, their shareholders, the community, and their customers.
96) Clean manufacturing systems stress recycling and reducing of materials.
97) When it comes to carrying out its social responsibility, one of the most important
constituencies to the small business is its employees.
98) The increasing cultural diversity in the United States is hindering the entrepreneurial effort in
the economy.
99) Consumers have the right to honest communication about the products and services they buy
and the companies they buy them from.
100) Managing cultural diversity in the workforce is getting easier as society becomes more
diverse.
101) The only way to achieve diversity in the small business is to let it take care of itself as
society increases in diversity.
102) The starting point for managing diversity is learning your own biases and prejudices.
103) The management of diversity will require ongoing adjustments of your company to your
workers.
104) One “break” small business gets over large companies is a significantly lower rate of
substance abuse due to the “family-like” atmosphere that tends to prevail in small companies.
105) The majority of small companies realize they have as big a drug problem with their
employees as larger companies do.
106) The use of random drug testing by small businesses is on the rise.
107) Effective drug prevention programs use random drug tests of employees and keep their drug
policies unwritten for maximum flexibility.
108) Businesses with less than 50 employees are not subject to ADA and therefore may deal with
HIV-positive and AIDS-infected employees without fear of government action.
109) AIDS is considered to be a “handicap,” and AIDS-infected employees are protected against
discrimination by the Americans with Disabilities Act.
110) The safest course of action for a small business to take with an employee who has AIDS is
to fire him.
111) Coping with AIDS in the workplace is not like managing normal health care issues.
112) Most small business owners know exactly what their legal obligations are to employees
with AIDS.
113) An employer can be held liable for sexual harassment if he/she knew or should have known
of the harassment and failed to take prompt action to stop it.
114) Employers can be held responsible for third-party sexual harassment if managers knew
about it or should have known about it.
115) The best way to handle sexual harassment is to educate the employees and thereby prevent
sexual harassment.
116) When a manager receives a complaint about sexual harassment, his/her first step should be
to keep the complaint casual and urge the complainant to return to the alleged harasser
her/himself and deal with the issue that way first.
117) When a sexual harassment complaint is made, the company should not inform the accused
until the complaint has been thoroughly investigated.
118) A small business’s responsibility to its customers includes the customers’ right to honest
communication and a right to choose among competing products.
119) In terms of social responsibility to the consumer, consumers have a right to be heard by the
company.
120) Companies do not have an ethical obligation to inform consumers regarding their products.
121) Businesses have a responsibility to the communities in which they operate, according to
your authors.
122) What managers and owners say is more important in determining employee ethical
behavior than what they do.
123) Employees are at the heart of increases in productivity and they add the personal touch that
puts the passion in customer service.
124) One of the policies of sexual harassment is to not have sanctions and penalties for engaging
in harassment.
125) The United States Supreme Court changed the nature of an employer’s liability for sexual
harassment, rejecting the previous standard that the employer had to be negligent somehow to be
liable for a supervisor’s improper behavior toward employees.
126) An employer can be held liable for third parties who engage in sexual harassment if the
employer has the ability to stop the improper behavior.
127) Employers should not keep employees’ medical records strictly confidential.
128) Despite the fact that AIDS is becoming more common in the workplace, few businesses are
prepared to deal with it.
129) Decisions based on assumptions are bound to be flawless.
130) One of the best ways to identify your own cultural biases is to get exposure to people who
are like you.
131) Progressive companies are taking their environmental policies a step further, creating
redesigned, “clean” manufacturing systems that focus on avoiding waste and pollution.
132) Social responsibility is the awareness by a company’s managers of the social,
environmental, political, human, and financial consequences their actions produce.
133) One of the best ways to evaluate the effectiveness of an ethics system is to perform periodic
audits.
134) A code of ethics is a written statement of the standards of behavior and ethical principles a
company expects from its employees.
135) Business ethics consist of the fundamental moral values and behavioral standards that form
the foundation for the people of an organization as they make decisions and interact with
stakeholders.
136) Entrepreneurs can do whatever they want and that conflictive action taken by entrepreneurs
against society’s ethical standards does not incur a price.
137) Stockholders are the various groups and individuals who affect and are affected by a
business.
138) Ethical behavior is concerned with doing things “right.”
139) To cope successfully with the myriad ethical decisions they face, entrepreneurs must
develop a workable ethical framework to guide themselves and the organization.
140) When there does not exist a positive organizational culture which stresses ethical behavior
regardless of consequences, employees may respond to feelings of pressure and compromise
personal ethical standards to ensure that a contract is not lost or that a project is completed on
time.
141) Competitive pressures assumes that the greater the reward or the smaller the penalty for
unethical acts, the greater is the probability that such behavior will occur.
142) When customers shop for “value,” they also consider the company’s stance on social
responsibility.
143) Entrepreneurs must create an environment in which all types of workers—men, women,
Hispanic, African American, white, disabled, homosexual, elderly, and others—can flourish and
can give top performances to their companies.
144) The United States Supreme Court changed the nature of an employer’s liability for sexual
harassment, accepting the previous standard that the employer had to be negligent somehow to
be liable for a supervisor’s improper behavior toward employees.
145) Define the key terms: stakeholders and business ethics.
146) Describe the three levels of ethical standards.
147) Your authors suggest a five-step process for developing an ethical framework. Identify and
explain each of the five steps.
148) What are the benefits of moral management?
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149) What causes ethical lapses?
150) How can managers establish and maintain ethical principles into their companies?
151) What are a business’s responsibilities to its employees? Briefly outline and explain each.
152) What can the small business owner do to develop an effective drug prevention program?
153) What is the small business’s responsibility to employees in terms of coping with AIDS in
the workplace and having a legal and humane AIDS policy?
154) What is sexual harassment? What can a small business owner do to minimize the likelihood
of sexual harassment?
155) What are the small business’s responsibilities to its customers?
156) What are the small business owner’s responsibilities to his/her investors and community?