Human Resource Management, 15e (Martocchio)
Chapter 2 Business Ethics, Corporate Social Responsibility, and Sustainability
1) Which term refers to the discipline that deals with what is good and bad or right and wrong?
A) morals and traditions
B) social responsibility
C) cultural norms
D) ethics
2) Ethics, corporate social responsibility, and corporate sustainability are everyone’s business,
including HR professionals.
3) Citizenship is the discipline dealing with what is good and bad, or right and wrong, or with
moral duty and obligation.
4) What is the difference between ethics and corporate social responsibility as each concept
applies to corporations?
5) Which of the following firms has NOT been exposed for ethical abuses and corrupt conduct?
A) Enron
B) Lehman Brothers
C) WorldCom
D) General Electric (GE)
6) In a recent survey, what percent of investors said they would move their account if they
discovered the company was involved in unethical behavior?
A) 17%
B) 37%
C) 67%
D) 97%
7) The CEO of GE begins and ends each annual meeting by ________.
A) introducing the firm’s senior officials
B) reviewing the firm’s financial details
C) restating the firm’s integrity principles
D) asking stockholders for their opinions
8) What do most of the 500 largest corporations in the United States have?
A) social responsibility audits
B) environmental audits
C) code of ethics
D) podcasts
9) With regards to ethics, most of the 500 largest corporations in the United States now have a
code of ethics. Which of the following would LEAST likely be included in the codes?
A) ethics offices
B) social accounting
C) conduct standards
D) performance appraisals
10) The minimum standards of ethical behavior in a firm are based on ________, while higher
standards are established by ________.
A) corporate policies; human resources
B) coworkers; mission statements
C) organizational culture; laws
D) laws; corporate leadership
11) Surveys indicate that 25 percent of investors would move their account if they discovered the
company was involved in unethical behavior.
12) Most of the 500 largest corporations in the United States now have a code of ethics.
13) Unethical practices are limited to Wall Street because of the money and pressure involved.
14) Compliance with the law sets the minimum standard for ethical behavior in business.
15) A major source of ethical guidance is the behavior and advice of people that psychologists
call ________.
A) internal monitors
B) third-party respondents
C) disinterested parties
D) significant others
16) According to your textbook, sources of ethical guidance should ________.
A) lead to your beliefs or a conviction about what is right or wrong
B) have little effect on a person’s pursuit of what is expedient
C) be nothing more than the subject matter of philosophical discussions
D) remain abstractions that don’t pertain to day-to-day living in today’s world
17) Laws ________ ethical behavior.
A) mandate
B) offer guidance to
C) have nothing to do with
D) none of the above
18) Which of the following would LEAST likely be a source of ethical guidance?
A) holy books
B) laws
C) friends
D) tests
19) As a professional, what should be your primary source of ethical guidance in the workplace?
A) corporate HR policies
B) corporate code of ethics
C) corporate mission statement
D) corporate procedures
20) Sources of ethical guidance exclude laws because laws are mandated by the government and
not personal beliefs and values.
21) According to the model of ethics, advice from friends, holy books, and laws serve as sources
of ethical guidance.
22) According to psychologists, the behavior and advice of “significant others” is a source of
ethical guidance.
23) Laws offer guidance to ethical behavior, prohibiting acts that can be especially harmful to
others.
24) In the legal use of the term, a whistleblower is someone who ________.
A) serves as a part–time referee in sporting events
B) has an ethical obligation to shield his or her employer from lawsuits
C) participates in an activity that is protected by federal law
D) serves as a majordomo at political dinners
25) When comparing the effectiveness of whistleblowers and external auditors in uncovering
corporate wrongdoings, ________ in public companies.
A) whistleblower tips discovered 54.1 percent of uncovered fraud schemes
B) external auditors discovered 54.1 percent of uncovered fraud schemes
C) whistleblower tips discovered 4.1 percent of uncovered fraud schemes
D) whistleblower tips are no more effective than external auditors at discovering fraud schemes
26) Whistleblower protection has been around since ________.
A) the passage of the Sarbanes-Oxley Act of 2002
B) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
C) the Federal False Claims Act of 1863
D) the Whistleblowers Anonymity Act of 2005
27) Companies are concerned about the whistleblower part of the Dodd-Frank Act for all of the
following reasons EXCEPT that informants might ________.
A) skip internal channels and go straight to government authorities
B) use the whistleblower provision to settle other grievances with their companies
C) overload internal compliance channels and thus hinder internal compliance efforts
D) all of the above
28) All of the following EXCEPT ________ are major components of the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
A) protecting investors
B) promoting too-big-to–fail bailouts
C) maintaining an advance warning system
D) enforcing regulations that are already on the books
29) The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in
________.
A) 1863
B) 1933
C) 2001
D) 2010
30) Which of the following laws was NOT enacted for the purpose of legislating business ethics?
A) Federal Sentencing Guidelines for Organizations Act
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Taft–Hartley Act
31) What law prohibits the release of source selection and proposal information?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
32) Which law prohibits a former employee who served in certain positions on a contract in
excess of $10 million from receiving compensation as an employee or consultant from that
contractor for one year?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
33) What law was passed in response to reports of military contracts for $500 toilet seats?
A) Federal Sentencing Guidelines for Organizations
B) Sarbanes–Oxley Act
C) Federal Contract Protection Act
D) Procurement Integrity Act
34) What federal law offers easier punishments for wayward corporations that have ethics
programs in place?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
35) What federal law outlined an effective ethics training program and explained the seven
minimum requirements for an effective program to prevent and detect violations?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
36) Which of the following was NOT included in the FSGO?
A) guidelines for ethics standards
B) job security for whistleblowers
C) guidelines for providing ethics training
D) system for anonymously reporting misconduct
37) According to the FSGO, ________ were supposed to be responsible for the prevention of
white collar crimes in an organization.
A) attorneys
B) top executives
C) common stockholders
D) organizational stakeholders
38) Which law most likely prompted organizations to create codes of ethics and install ethics
hotlines?
A) Corporate and Auditing Accountability, Responsibility, and Transparency Act
B) Federal Sentencing Guidelines for Organizations Act
C) Procurement Integrity Act
D) McCarran-Ferguson Act
39) Which law criminalizes many corporate acts that were previously relegated to various
regulatory structures?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
40) Which law was passed to redress accounting and financial reporting abuses in light of
corporate scandals?
A) Federal Sentencing Guidelines for Organizations
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Federal Contract Protection Act
41) Which law contains broad employee whistleblower protections against firms and managers
that retaliate or harass employees who report suspected corporate wrongdoing?
A) Sarbanes–Oxley Act
B) Procurement Integrity Act
C) Federal Sentencing Guidelines for Organizations
D) Federal Contract Protection Act
42) Erica, an accountant, notices suspicious accounting practices at the firm where she is
employed. She wants to report the unethical behavior to authorities but is worried that she might
be harassed or demoted as a result. Which law was passed to protect Erica in this situation?
A) Federal Contract Protection Act
B) Procurement Integrity Act
C) Taft–Hartley Act
D) Sarbanes–Oxley Act
43) John provides information to the SEC about conduct by his employer that he believes
constitutes securities fraud. Which law most likely protects John from being demoted for his
actions?
A) Federal Contract Protection Act
B) Procurement Integrity Act
C) Sarbanes–Oxley Act
D) Taft–Hartley Act
44) Which 2003 Supreme Court case upheld Sarbanes-Oxley’s whistleblower-protection rule?
A) Dothard v. Rawlingson
B) Bechtel v. Competitive Technologies Inc.
C) O’Connor v. Consolidated Coin Caterers Corp.
D) Grutter v. Bollinger
45) The Supreme Court ruling in Bechtel v. Competitive Technologies Inc. upheld which federal
law?
A) McCarran-Ferguson Act
B) Sarbanes–Oxley Act
C) Davis–Bacon Act
D) Taft–Hartley Act
46) According to the Sarbanes-Oxley Act, any SEC reporting bank that does NOT have a code of
ethics must ________.
A) submit a report to Congress
B) provide an explanation
C) pay a significant fine
D) develop an ethics code
47) Which of the following is NOT required by the Sarbanes–Oxley Act?
A) Publicly traded firms must disclose whether they have a code of ethics for top executives.
B) Publicly traded firms must not discharge employees who report ethical abuses.
C) Bank-holding companies and SEC reporting banks must have codes of ethics.
D) Corporations must not provide financial loans to executives or directors.
48) The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in
2010.
49) The Procurement Integrity Act of 1988 was passed after reports of military contracts for
$500 toilet seats and $5,000 hammers.
50) According to the Procurement Integrity Act, if a firm that has an ethics program in place is
found guilty of misconduct, the firm will receive a reduced punishment.
51) Although laws cannot mandate ethics, they may be able to identify the baseline separating
what is good and what is bad.
52) The Corporate and Auditing Accountability, Responsibility and Transparency Act is also
known as the Sarbanes-Oxley Act.
53) The Federal Sentencing Guidelines for Organizations Act contains broad employee
whistleblower protections that subject corporations to penalties for retaliating against employees
who report suspected corporate wrongdoing.
54) The Sarbanes-Oxley Act was passed in response to reports of out-of–control military
spending.
55) In the 2003 case Bechtel v. Competitive Technologies Inc., the Supreme Court overturned
Sarbanes–Oxley‘s whistleblower-protection rule.
56) The Corporate and Auditing Accountability, Responsibility and Transparency Act requires
SEC reporting banks and bank-holding companies to have a code of ethics.
57) Identify and discuss the federal government’s four attempts to legislate business ethics since
the late 1980s.
58) The primary purpose of an ethics audit is to ________.
A) ensure that EEO policies are being implemented
B) supplement a company’s code of ethics
C) evaluate a company’s ethical culture
D) interview ethics training candidates
59) Harvey Electronics has used a number of methods to create an ethical culture that both
employees and customers appreciate. What is the most effective way for the firm to sustain its
ethical culture?
A) asking job candidates ethical questions
B) implementing an ethics audit regularly
C) publishing the firm’s code of ethics periodically
D) ensuring that new employees receive ethics training
60) Organizations with strong ethical cultures take steps to ensure that their standards are
________.
A) widely accessible
B) followed by leaders and employees
C) promoted
D) all of the above