Deck 2: Ethics ant the law

Question 1

Kantian theory considers universalizability and reversibility.

Answer 1

True

Question 2

Utilitarianism seeks to equalize the benefit to everyone.

Answer 2

False

Question 3

Boycotting is a way in which customers show displeasure with unethical corporate activity.

Answer 3

True

Question 4

Rawlsian moral theory seeks to maximize the condition of the worst off person in society.

Question 5

Delaware has a constituency statute.

Question 6

Employees are not stakeholders of a corporation.

Question 7

Rawlsian moral theory seeks to develop principles behind a "veil of information."

Question 8

As opposed to other forms of business,it is well accepted that the primary ethical and legal duty of corporations is to maximize shareholder value.

Question 9

Immanuel Kant argued that spending money in ways that are not consistent with shareholder wishes is tantamount to imposing a tax and unilaterally deciding where the money will be spent.

Question 10

The Deontological theory focuses on the consequences of an action rather than on the motivation of the individual.

Question 11

Ethics and law are unrelated.

Question 12

The chief executive officer plays the most significant role in instilling a sense of ethics throughout the organization.

Question 13

The two main schools of ethical thought are teleological and deontological.

Question 14

If an action does not maximize shareholder value,and the firm has no ethical reason to act,the action should not be taken.

Question 15

From 1990 until today,the gap between what average workers make and what CEO's of companies make in the Standard and Poor's Index has narrowed.

Question 16

Utilitarianism is a major deontological system that operates under the proposition that the ideal is to focus on motivation rather than on consequences.

Question 17

Compliance with the law is the baseline for effective and responsible managerial action.

Question 18

Legislatures in only a minority of the states have enacted statutes authorizing corporate boards to take into account all stakeholders and constituencies even when a change in control or breakup of the corporation has become inevitable.

Question 19

Under the Teleological theory,the ethical good of an action is judged by the effect of the action on others.

Question 20

Nobel Prize winner in economics Milton Friedman asserts that the only guiding criterion for the corporation should be profitability within the confines of the law.

Question 21

In which of the following are a majority of Fortune 500 companies incorporated?

A) New York
B) California
C) Delaware
D) Connecticut

Question 22

Which of the following is the group given the ultimate legal authority to change management?

A) Shareholders
B) Human resource managers
C) The mayor in the applicable jurisdiction
D) The city council in the applicable jurisdiction

Question 23

Which of the following is true regarding the growth of socially responsible mutual funds?

A) Such funds have remained flat with little change in America, but they have grown significantly in Europe.
B) Such funds have remained flat with little change in Europe, but they have grown significantly in America.
C) Both America and Europe have seen a decline in interest in socially responsible funds.
D) Both America and Europe have seen growth in socially responsible funds.

Question 24

Which of the following is a psychological disorder referenced in the text resulting in a lack of empathy and the inability to recognize boundaries?

A) Prevalent personality disorder
B) Narcissistic personality disorder
C) Corporate phenomena disorder
D) Trial disorder

Question 25

What was the result in the case of Bammert v.Don's Super Valu,Inc.,the case in the text involving the alleged retaliatory firing by the defendant of the wife of a police officer after the officer arrested the wife of the owner of Don's Super Valu?

A) That the firing was prohibited because of the at-will employment principle.
B) That the firing was legal because of the at-will employment principle.
C) That the firing was prohibited because of a public policy exception to the at-will principle.
D) That the firing was legal because of the employment contract involved.

Question 26

Which of the following international organizations adopted a convention criminalizing bribes to government officials and recommending a prohibition on the tax deductibility of bribes?

A) The Foreign Corrupt Practices Consortium
B) The Organization of Economic Cooperation and Development
C) The International Business Legal and Ethical Revision Association
D) Transparency International

Question 27

Which of the following is recognized as the primary obligation of directors of a corporation?

A) That the obligation of the directors is to manage the corporation for the best interest of the corporation.
B) That the obligation of the directors is to manage the corporation for the best interest of the officers.
C) That the obligation of the directors is to manage the corporation for the best interest of the employees.
D) That the obligation of the directors is to manage the corporation for the best interest of the community.

Question 28

Nobel prize winner Milton Friedman asserts that "social responsibility" is a fundamentally ____________ doctrine.

A) positive
B) risky
C) good
D) subversive

Question 29

Which of the following allows rights-based moral theories to be compared to other theories such as a utilitarian framework?
A. Deontology
B. Teleological theory
C. Comparative justice
D. Rawlsian moral theory

Question 30

Which of the following are the three main theories under the comparative justice framework?

A) Retributive, Kantian, and Rawlsian
B) Compensatory, comparative, and retributive
C) Distributive, compensatory, and retributive
D) Utilitarianism, teleological, and compensatory

Question 31

Which of the following illustrates that corporate conduct violating society's expectations can result in new forms of regulation without regard for feasibility or cost?

A) The White-Rush Dow Jones Conciliatory Act of 2011
B) The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
C) The Corporate and Securities Reform and Retribution Consumer Protection Act of 2011
D) The Securities and Oversight Act of 2009.

Question 32

In 2010,the average CEO of a company in the Standard and Poor's 500 Index took home more than _____ times as much as the average worker.

A) 50
B) 100
C) 300
D) 500

Question 33

Which of the following statements regarding the teleological theory is false?

A) Teleological theory is concerned with consequences.
B) Teleological theory judges the ethical good of an action by the effect of the action on others.
C) Teleological theory focuses more on the motivation and principle behind an action.
D) Both that teleological theory is concerned with consequences and that teleological theory judges the ethical good of an action by the effect of the action on others.

Question 34

Which of the following is a term for a state statute authorizing boards of corporations to take into account all stakeholders and constituencies even when a change in control or breakup of the corporation has become inevitable?

A) Corporate control
B) Break-up
C) Constituency
D) Protection

Question 35

Which of the following is the leading association of CEOs in the United States?

A) The Ethical Association of CEOs
B) The CEO Association of America
C) The Business Roundtable
D) The World Concern Association of CEOs

Question 36

Which of the following is true regarding shareholder primacy?

A) It is never legally mandated.
B) It is always legally mandated.
C) It is legally mandated only in very narrow circumstances.
D) There is no such thing.

Question 37

Which of the following is a term for the maximization of shareholder value?

A) Shareholder importance
B) Shareholder primacy
C) Value of shares maximization
D) Corporate allocation

Question 38

Which of the following is true regarding the relationship between law and ethics?

A) The law attempts to prohibit all "bad" behavior.
B) An action that is unethical is also considered illegal in the U.S.
C) Both that the law attempts to prohibit all "bad" behavior and that an action that is unethical is also considered illegal in the U.S.
D) An action that is unethical may nonetheless be legal.

Question 39

Under the "Ethical Business Leader's Decision Tree" discussed in the text,which of the following is the first question managers should ask themselves when determining whether a proposed action is ethical?

A) Whether it will result in a loss of profits
B) Whether stockholders would approve
C) Whether the CEO would approve
D) Whether it is legal

Question 40

Which of the following is a stakeholder of a corporation?

A) Customers only
B) Employees and customers, but not managers
C) Managers and employees, but not customers
D) Customers, employees and managers

Question 41

Fact Pattern 2-2
Jack decides to donate leftover food from his restaurant to a homeless shelter. Brock, an employee
Refer to fact pattern 2-1.who was angry with Jack over not getting a raise,claimed that Jack decided to donate the food only
For publicity and that Jack did not really care about homeless people. Peggy, another employee
Disagreed, contending that regardless of his motivation, Jack was acting ethically because of the
Consequences involved and the number of people helped.
D) Deontological theory

Question 42

Fact Pattern 2-3
Wally and Janice are both managers in a small corporation set up to manufacture sporting goods. They both receive bonuses for any ideas that benefit the company, although Janice's bonus is computed at a lower rate than Wally's because she has been at the company a shorter amount of time. Janice has a great marketing idea that would result in her receiving a bonus of $1,000. She has it all worked out on her computer. Unknown to her, one evening after business hours, Wally obtains the information from her computer and submits it himself the next day. He is immediately awarded a bonus of $2,000 for the information. Fortunately for Janice, Sally, a custodian, saw Wally in Janice's office and heard him calling his wife while he was there to brag about his misdoings. Sally informed Blaire, the CEO, of Wally's actions.
Refer to fact pattern 2-3. Which of the following types of justice is involved if Blaire requires that Wally give Janice the entire $2,000 bonus he received?

A) Compensatory
B) Retributive
C) Fair
D) Justifiable

Question 43

Fact Pattern 2-2
Jack decides to donate leftover food from his restaurant to a homeless shelter. Brock, an employee
Refer to fact pattern 2-2.Upon which of the following would Peggy most likely rely to support her contention?

A) Rawlsian moral theory
B) Teleological theory
C) Artificial person application
D) Deontological theory

Question 44

Monica tells all her employees that she expects them to treat others as they would like to be treated. Which of following is a descriptive term for Monica's requirement?

A) The Required Rule
B) The Accepted Rule
C) The Golden Rule
D) The Advanced Rule

Question 45

Which of the following is part of Kant's categorical imperative?

A) The form of an action rather than the intended result determines the ethical worth.
B) No one person's interest is given more weight than another.
C) Distribution favors the person getting the worst share.
D) Both that no one person's interest is given more weight than another and that distribution favors the person getting the worst share.

Question 46

Which of the following is true regarding the Organization of Economic Cooperation and Development (OECD)?

A) It is comprised of nations form North America, Europe, and Asia-Pacific.
B) It is a subsidiary of the European Union.
C) It is comprised of nations who entered into the North American Free Trade Agreement.
D) It is comprised of states inside the U.S.

Question 47

You are the owner of a small Internet company.You are planning a public offering in 12 months.You ask your accountant to prepare an optimistic business model that shows a greater profitability potential than a conservative estimate would produce.When the accountant questions your profitability assumptions,you remind him that he has been given 10,000 shares of the company stock at a low price.A public offering would dramatically increase the value of those shares.Discuss the ethical issues faced by the owner and the accountant.How should they be resolved?

Question 48

Which of the following is not an example of St.Thomas Aquinas' requirements for a law to be just?

A) The law must be within the power of individuals to fulfill it.
B) The law must be consonant with a reasoned determination of the universal good.
C) The law must be formed to promote a private benefit to the majority.
D) The law must be widely promulgated.

Question 49

According to the Delaware Supreme Court,when does the role of a director shift from being a "protector of the corporate bastion" to being an "auctioneer" charged with obtaining the highest realizable short-term value for the shareholders?

A) Only when the breakup of the corporation or a change of control has become inevitable
B) Whenever a yearly loss is reflected
C) At the point that a yearly loss has been reflected for three straight years
D) When the CEO and the board of directors are in disagreement, and there has also been a yearly loss reflected for three straight years

Question 50

Set forth the ways described in the text in which ethics and law are related.

Question 51

Your company has asked you to write a code of ethics.What should you include and why?

Question 52

Fact Pattern 2-1
Susan is an accountant who works in a company owned by Richard. Richard is concerned about the amount of taxes he will owe for the year and asks Susan to falsify his income tax return. Susan refuses. Richard fires her. Susan asks you for advice telling you that Richard is unethical and that she is certain that the law prohibits all unethical conduct.
Refer to fact pattern 2-1. Which of the following is a theory on which Susan may be able to prevail?

A) Public policy
B) Reflective policy
C) Implied protection
D) No justification

Question 53

Rawls believed that social policies developed behind the veil of ignorance would create a system that most benefits the

A) Majority
B) Minority
C) Least well off
D) Most well off

Question 54

According to the Kantian theory of universalizability,the ethical worth of an act is determined by whether one

A) would want such a rule applied to minority members of society
B) would want everyone to perform in this manner
C) could get away with such an action
D) could live with the results of such an action

Question 55

Art,the sole shareholder of ABC Company,got a ticket for reckless driving because he was speeding through a school zone at 85 miles per hour. Sue,the wife of the officer who gave Art the ticket,was an employee of ABC Company. Art asked her if she could get the ticket "fixed" for him. Sue indeed talked to her husband,but he was unwilling to tear up the ticket. Art was incensed and fired Sue on the spot saying that she could not be counted upon to do anything the right way. Discuss the pros and cons of whether Sue should prevail in an action against ABC Company alleging a violation of public policy.

Question 56

Fact Pattern 2-1
Susan is an accountant who works in a company owned by Richard. Richard is concerned about the amount of taxes he will owe for the year and asks Susan to falsify his income tax return. Susan refuses. Richard fires her. Susan asks you for advice telling you that Richard is unethical and that she is certain that the law prohibits all unethical conduct.
Refer to fact pattern 2-1. Which of the following is the theory on which Richard will most likely rely?

A) The employer-freedom principle
B) The employment-at-will principle
C) The free-country theory
D) The free-market theory

Question 57

According to St.Thomas Aquinas,the only true laws were those that followed ____________.

A) reasoned law
B) customary law
C) eternal law
D) localized law

Question 58

Which of the following plays the most significant role in instilling a sense of ethics throughout an organization?

A) The CEO
B) The human resources manager
C) Each employee's immediate supervisor
D) The employees themselves

Question 59

Discuss and explain the ethical business leader's decision tree referenced in the text.

Question 60

Fact Pattern 2-3
Wally and Janice are both managers in a small corporation set up to manufacture sporting goods. They both receive bonuses for any ideas that benefit the company, although Janice's bonus is computed at a lower rate than Wally's because she has been at the company a shorter amount of time. Janice has a great marketing idea that would result in her receiving a bonus of $1,000. She has it all worked out on her computer. Unknown to her, one evening after business hours, Wally obtains the information from her computer and submits it himself the next day. He is immediately awarded a bonus of $2,000 for the information. Fortunately for Janice, Sally, a custodian, saw Wally in Janice's office and heard him calling his wife while he was there to brag about his misdoings. Sally informed Blaire, the CEO, of Wally's actions.
Refer to fact pattern 2-3. Which of the following types of justice is involved if Blaire requires that Wally give Janice $1,000?

A) Compensatory
B) Retributive
C) Fair
D) Justifiable

Question 61

Discuss why Enron failed and who should be held responsible for the failure.

Question 62

You are the CEO of a multi-billion dollar company.Your company employs over 75,000 people.The company is being sued for $100 million dollars as the result of racial discrimination against your customers.Your investigation reveals that some of your managers are actively violating the law.Discuss the steps you would take to ensure your company's compliance with ethical norms and legal requirements.

Question 63

List the two main schools of ethical thought and their main focus.

Question 64

Your company has grown from a national to a multi-national entity.How have your ethical responsibilities changed? To whom do you owe these responsibilities?