Business & Society, 16e (Lawrence)
Chapter 5 Ethics and Ethical Reasoning
1) Ethics are primarily based on religious beliefs.
2) Ethical ideas are present in all societies, all organizations, and all individual persons.
3) If all people relied on ethical relativism, there would be no universal ethical standards on which
people around the globe could agree.
4) Business must develop its own definition of what is right and wrong, apart from ethics.
5) Business cannot expect to be profitable while adhering to ethical principles of conduct.
6) The U.S. Corporate Sentencing Guidelines provide a strong incentive for businesses to promote
their ethics at work.
7) The Sarbanes-Oxley Act requires that firms maintain good financial practices, apart from high
ethical standards, in how they conduct and monitor business operations.
8) An ethical egoist acts for the benefit of others and sacrifices self-interest.
9) Because managers make major decisions, they have limited opportunity to influence the ethical
tone of the firm.
10) Only in the last few years have scholars found a positive relationship between an
organization’s economic performance and attention to spiritual values.
11) Managers in the same company are likely to be at the same stages of moral reasoning at any
given time.
12) For managers who reason at stages 2 and 3, their personal rewards, recognition from others, or
compliance with the company’s rules become their main ethical compass.
13) According to utilitarian reasoning, an action is ethically preferred when its benefits outweigh
its costs.
14) Business managers should use all four methods of ethical reasoning—virtues, utility, rights,
and justice—to better understand ethical issues at work.
15) Moral intensity refers to the perception of how illegal an ethical issue is.
16) A conception of right and wrong is:
A) Impossible to know.
B) The definition of ethics.
C) Determined by power.
D) Based on stakeholder dialogue.
17) People’s ethical beliefs come from:
A) Legislative action and judicial decisions.
B) Reading the company’s profit and loss statements.
C) Their religious background, family, and education.
D) The organization’s code of ethics.
18) People everywhere depend on ethical systems to tell them whether their actions are:
A) Legal or illegal.
B) Right or wrong.
C) Financially attainable or not.
D) Logical and reasonable judgment.
19) Businesses are expected to be ethical in their relationships with:
A) Stockholders.
B) Customers.
C) Competitors.
D) All of these answers are correct.
20) Why should business be ethical, according to Figure 5.1?
A) Most people want to act in ways that are consistent with their own sense of right and wrong.
B) Ethical behavior protects business firms from abuse by unethical employees and competitors.
C) Society’s stakeholders expect it from businesses.
D) All of these answers are correct.
21) Under the U.S. Corporate Sentencing Guidelines, if a firm has developed a strong ethics
program, corporate executives found guilty of criminal activity may have their sentence:
A) Increased.
B) Reduced.
C) Unaffected.
D) Decided by the company.
22) Under the Sarbanes-Oxley Act, corporations are required to:
A) Have executives vouch for the accuracy of a firm’s financial reports.
B) Have their audit committee comprised of only executives employed by the firm.
C) Collect reimbursements from the U.S. government if financial restatements occur.
D) All of these answers are correct.
23) A purchasing agent directing her company’s orders to a firm from which she received a
valuable gift, is an example of:
A) Conflict of interest.
B) Ethical relativism.
C) Moral development.
D) Egotism.
24) Cross-cultural contradictions arise due to:
A) The emergence of a developing country’s economic power.
B) Religious differences practiced by business executives.
C) Differences between home and host countries’ ethical standards.
D) All of these answers are correct.
25) An ethics issue based on cross-cultural contradictions is best illustrated by which example?
A) Legally marketing a pesticide abroad that has been banned in the U.S.
B) Circumventing government regulations to ensure company profits.
C) Hiring child workers in violation of civil law.
D) False and misleading advertising claims.
26) As business becomes increasingly global:
A) It must turn to national laws for guidance.
B) Ethical issues become issues of free trade.
C) A global code of conduct will emerge for businesses.
D) Cross-cultural contradictions will increase.
27) A recent study found that, compared to the 1980s, managers today place what importance on
moral values, such as honesty and forgiveness?
A) Less important.
B) About the same importance.
C) Slightly more important.
D) Triple the importance.
28) According to a 2017 survey, Americans hold a dim view of:
A) Nurses.
B) The Supreme Court.
C) Churches.
D) Business executives.
29) According to an annual Gallup poll, which occupation was consistently ranked the highest for
honesty and ethics?
A) Congressional members.
B) Car salespeople.
C) Nurses.
D) Clergy.
30) Scholars found that spirituality affects employee and organizational performance in what way?
A) Negatively.
B) Positively.
C) Has no affect.
D) Only affects not-for-profit organizations
31) As an additional employee benefit to promote spirituality, companies have begun to provide
employees with the services of:
A) Philosophers.
B) Chaplains.
C) Financial advisors.
D) Ombudspersons.
32) Which statement characterizes the moral reasoning typically found in a child?
A) “When in Rome, do as the Romans do.”
B) “I’ll let you play with my toy if I play with yours.”
C) “Seek the greatest good for the greatest number.”
D) “Respect the rights of others.”
33) Mature adults typically base their ethical reasoning on broad principles and relationships such
as:
A) Human rights and constitutional guarantees of human dignity.
B) Universal principles of justice.
C) Customs and traditions show by their peers.
D) Both of these answers are correct: Human rights and constitutional guarantees of human
dignity; and universal principles of justice.
34) All of the following values are present in most ethical decisions except:
A) Be fair and just.
B) Be kind.
C) Act responsibly.
D) Be honest.
35) Business managers need a set of ethical guidelines to help them:
A) Understand the changing customs throughout the world.
B) Justify the resolution which best helps themselves.
C) Identify and analyze the nature of ethical problem.
D) None of these answers is correct.
36) Aristotle argued:
A) Self-control is the most virtuous of values.
B) Faith is a road to charity and modesty.
C) Moral virtue is a mean between two virtues.
D) High-mindedness delivers human integrity.
37) When the benefits of an action outweigh its costs, the action is considered ethically preferred
according to:
A) Utilitarian reasoning.
B) Virtue ethics.
C) Theological reasoning.
D) Plato and Aristotle.
38) The main drawback to utilitarian reasoning is that:
A) The majority may override the rights of those in the minority.
B) Managers using this reasoning process often fail to consider the means taken to reach the end.
C) It is difficulty to accurately measure both costs and benefits.
D) Cost-benefit calculations can only be provided by accountants.
39) At the core of rights reasoning is the belief that:
A) The company’s right to a profit must be protected.
B) Respecting others is the essence of human rights.
C) The right to join a union is no longer universally accepted.
D) Economic and political powers determine who is right.
40) Which of the following is not true about justice reasoning?
A) The reasoner is interested in the net value of benefits.
B) The reasoner considers who pays the costs and who receives the benefits.
C) The reasoner seeks a fair distribution to all affected.
D) The reasoner relies upon some accepted rule or standard.
41) A just or fair ethical decision occurs when:
A) The rights of all affected are considered.
B) The greatest good for those with power is achieved.
C) Benefits and burdens are distributed in fair proportions.
D) Benefits exceed costs.
42) The reason(s) behind the uncertainty of an ethical or unethical decision is (are) that different
people and groups:
A) May honestly and genuinely use different sources of information.
B) May rank various rights in different ways.
C) May not share the same meaning of justice.
D) All of these answers are correct.
43) One factor in determining the moral intensity of an ethical issue is how quickly the
consequences take effect, a factor that is known as:
A) Temporal immediacy.
B) Social consensus.
C) Proximity.
D) Probability.
44) A high magnitude of consequences that increases the moral intensity of an ethical issue is best
exemplified by which of the following?
A) A manager used company funds to pay for personal expenses.
B) Sexual harassment has become less socially acceptable since the “#MeToo” movement.
C) An employee stole paper clips from the supply closet.
D) A food product contaminated with salmonella was distributed to stores.
45) In the case LafargeHolcim and ISIS in Syria, a utilitarian benefit of keeping the plant open
was:
A) Worker lives were in danger.
B) Operations were under threat.
C) Employees received paychecks.
D) The local community lost jobs.
46) Briefly discuss the meaning of ethics.
47) Discuss why businesses should be ethical.
48) Explain the purpose of the Sarbanes-Oxley Act. What issues does the act address? Is this act
still a potent government tool?
49) There are four reasons stated in the textbook as to why ethical problems occur in business.
Identify the nature of each ethical problem and the typical approach taken in response to the
problem.
50) How does a person’s spirituality influence his/her ethical behavior? How have organizations
responded to increased attention to spirituality and religion at work attempting to accommodate
their employees?
51) Define and discuss the six stages of moral development. What is the ethics referent at each
stage? What is the basis of ethics reasoning at each stage?
52) What are the four methods of ethical reasoning? Discuss the limitations of each of the four
methods.