Deck 2: Integrity, Ethics And, Social Entrepreneurship

Question 1

An example of an employee acting unethically towards his or her employer is:

A)Taking a vacation
B)Taking unjustified sick leave
C)Working overtime
D)Taking a 15-minute break

Answer 1

B

Question 2

Clark, the owner of DEF PTY (Ltd), bragged about hiding company income from SARS but was surprised when he learned his sales manager was accepting kickbacks from customers.Clark should have remembered:

A)kickbacks are common in his industry.
B)lapses in integrity can easily be passed down from superiors to subordinates.
C)his sales manager could alert the SARS and Clark could be prosecuted for tax evasion.
D)bragging nearly always leads to trouble.

Answer 2

B

Question 3

Ethical issues:

A)seldom involve legal issues.
B)are questions of right and wrong.
C)are always clearly defined.
D)often resolve themselves.

Answer 3

B

Question 4

A small computer retailer makes every effort to satisfy customer needs both before and after the sale.However, this retailer regards social problems as being beyond the scope of his business.This organisation's management has recognised:

A)some degree of social responsibility in its commitment to customers.
B)the existence of social responsibilities but having failed to do anything about them.
C)ethical obligations to customers but not social responsibilities.
D)social responsibility as the domain of big business.

Question 5

Carla sells the muffins in her bakery at a higher price than the big-box grocery but she has a steady stream of customers willing to pay what she asks.Carla also supports local charities.What would likely happen if she lowered her prices and stopped her charitable contributions?

A)Nothing
B)Customers would go elsewhere.
C)Business would increase.
D)Income taxes would decrease.

Question 6

Entrepreneurs should think carefully about their community commitments because "doing good" may add to a small company's:

A)bottom line.
B)financial burden.
C)payroll.
D)local profile.

Question 7

When a company delivers an excellent product with excellent service, ______________ are likely to follow.

A)profits and a good reputation
B)customer satisfaction and profits
C)healthy sales and profits
D)customer satisfaction and healthy sales

Question 8

Abe sometimes shorts the customer when weighing out bulk merchandise, believing the practice leads to higher profits so it is acceptable.We could infer that

A)Abe lacks integrity.
B)Abe is not an entrepreneur.
C)Abe cheats on his taxes.
D)Abe is skimming.

Question 9

Because a business has considerable discretion in reporting performance results, financial reports can sometimes be _____ without technically being illegal.

A)inaccurate
B)misleading
C)unreliable
D)bellicose

Question 10

The owner of LMN Company has been asked to sponsor a junior soccer team by donating money to buy team shirts.In return, the team will print the company name on the shirts.To which stakeholder group does this team belong?

A)Owners
B)Customers
C)Employees
D)Community

Question 11

Annabelle often shops for clothing and household goods online while at work.Which of the following best describes this situation?

A)Abusive behaviour.
B)Lying to employees.
C)Improper use of company resources.
D)Inappropriate Internet use at work.

Question 12

Bernard praises his employees as often as he catches someone doing something right.He often hosts family get-togethers for his few employees.Bernard knows:

A)a little money spent on his people will be returned many times over in profits.
B)happy employees make for satisfied customers.
C)this will lead to his employees being more engaged and productive.
D)it's a waste of time and money but he enjoys the camaraderie.

Question 13

An ethical business not only treats customers and employees honestly, but also acts as a good citizen in the community.These broader obligations of citizenship are called:

A)community commitment.
B)philanthropy.
C)environmentalism.
D)social responsibilities.

Question 14

After issues related to customers and competitors, the second most common category of ethical issues that challenge small businesses is concerned with:

A)the treatment of employees.
B)international relations.
C)public relations.
D)harmful production processes.

Question 15

An organisation's employees would be considered __________________ in the business.

A)investors
B)stakeholders
C)customers
D)shareholders

Question 16

Milton Friedman argues that businesses:

A)should avoid social responsibility whenever it is possible to do so.
B)should be required to use their resources meet their social responsibilities.
C)can only earn profits if they do so in a socially responsible manner.
D)are justified in being socially responsible only if doing so increases the business's value.

Question 17

While unethical practices do exist, it is good that the great majority of small businesses strive to achieve the highest standards of ____ in their quest for profits.

A)integrity
B)relativism
C)synchronous behaviour
D)congruity

Question 18

Of all the possible stakeholders, the three primary ones are

A)the government, the community and the customers.
B)the customers, the employees and the owners.
C)the creditors, the investor and the employees.
D)the suppliers, the customer and society at large.

Question 19

The term for when an employee steals money from a business is:

A)cheating.
B)fraud.
C)embezzlement.
D)promotion.

Question 20

Providing inaccurate or misleading financial information to stakeholders can:

A)damage critical relationships.
B)reduce profits.
C)increase profits.
D)enhance critical relationships.

Question 21

Entrepreneurs must reconcile their social obligations with _____.

A)their family commitments.
B)their personal schedule.
C)the need to earn profits.
D)their religious beliefs.

Question 22

Skimming is an unethical business practice involving:

A)failure to report all income on tax returns.
B)employees taking cash from the cash register.
C)sales associates offering gifts and inducements to purchasers.
D)managers of competing businesses agreeing to charge high prices.

Question 23

A South African manager is upset with the company's overseas representative for paying a small "access fee" to a local customs official to ensure the expedited release of a customer order.The manager's belief such payments are wrong reflects a sense of _____.

A)cultural insensitivity
B)ethical elitism
C)ethical imperialism
D)cultural integrity

Question 24

Damon landed his first contract as an entrepreneur then submitted to the local newspaper a news release that gave the impression this was just one of a series of contracts and that business was booming.Damon has:

A)told a legitimacy lie.
B)inflated his income.
C)evaded taxes.
D)violated the law.

Question 25

A digital ID tag that is electronically sent to the customer's computer when other requested materials are downloaded from a website is known as:

A)a cookie.
B)a saucer.
C)an inverted collector.
D)a contact signature.

Question 26

Many types of socially responsible actions can be consistent with an organisation's long-term profit resulting in some degree of _____ being earned by such behaviour.

A)money
B)respect
C)goodwill
D)management expertise

Question 27

Giving the impression a business is something it is not:

A)is ingenious and resourceful.
B)is illegal.
C)is acceptable so long as no one is hurt by the transactions.
D)is a way to manipulate customers.

Question 28

The saying "When in Rome, do as the Romans do" reflects a philosophy of _____.

A)ethical insensitivity
B)ethical elitism
C)ethical imperialism
D)ethical relativism

Question 29

When Evelyn hired a new sales manager, she issued a press release emphasising the new hire's education and industry experience because:

A)she wanted to introduce the sales manager to the community.
B)this was her first new hire and she wanted everyone to know her business was expanding.
C)she had stolen the sales manager from a competitor and wanted to gloat publicly.
D)she wanted to bolster the sales manager's credibility.

Question 30

Entrepreneurs often come up short on their tax commitments because of a single-minded focus on their product or service and/or _____.

A)casual accounting systems
B)low-cost accounting software
C)incompetent in-house accountant
D)cash-basis accounting systems

Question 31

The type of tax most likely to be a problem for entrepreneurs is:

A)government's income tax.
B)employee payroll taxes.
C)government withholding tax.
D)sales tax.

Question 32

A band who fails to record the cash they collected for admission to their shows could be charged with what illegal practice?

A)cash diversion
B)tax evasion
C)skimming
D)payroll tax avoidance

Question 33

PRO factors include:

A)products, resources and outputs.
B)products, representatives and organisations
C)people, resources and outputs.
D)performance, relationships and options.

Question 34

An eBay retailer selling counterfeit Gucci and Louis Vuitton handbags is in violation of laws related to:

A)Internet fraud.
B)intellectual property.
C)bait-and-switch marketing.
D)ethical imperialism.

Question 35

An effective way for an entrepreneur to establish legitimacy is:

A)to hire experienced employees from competitors.
B)to insist on professional behaviour from all customer-contact employees.
C)to communicate the company's mission clearly and frequently.
D)to out-perform the competition by underbidding and over-promising.

Question 36

Of all the concerns regarding Internet use, the greatest is:

A)how users' personal information is being protected.
B)whether the content of a website is truthful.
C)how soon a website customer will receive an order.
D)hacking.

Question 37

A person understating income or claiming personal expenses as business expenses is guilty of _____.

A)bait and switch
B)skimming
C)scaling
D)relativism

Question 38

If Floyd elects to monitor the personal e-mail accounts of his employees at work, he should:

A)install screening software to avoid hiring another IT employee.
B)first develop a carefully worded and legally sound policy and make sure all employees are aware of it.
C)consult an attorney before terminating an employee for viewing personal e-mail at work.
D)block access to all personal e-mail servers from company computers.

Question 39

Floyd would like to be able to monitor his employees' Internet activity because:

A)his customers cannot view his company website if his employees are surfing the websites.
B)employees have to share Internet access and he wants to be fair to everyone.
C)such activity hinders workplace productivity.
D)his data plan allows only five gigabytes of access every month and overage charges are expensive.

Question 40

If a student copies a favourite CD and gives it away to a friend to use, the student is engaged in the theft of _____ property.

A)collective
B)intangible
C)intellectual
D)real

Question 41

In drawing up a code of ethics, a small business owner should adopt a code

A)provided by the ethics resource centre.
B)that outlines ethical principles and gives examples.
C)that outlines ethical principles but avoids examples.
D)suggested by the Better Business Bureau.

Question 42

Members of a community will react _____ to a business they trust.

A)negatively
B)positively
C)indifferently
D)indecisively

Question 43

The most widely recommended principle for ethical behaviour is to do what:

A)is best for yourself.
B)will yield the most profits.
C)you would want others to do for you.
D)will reduce product prices.

Question 44

A code of ethics becomes increasingly appropriate and necessary as a small business:

A)expands its credit sales and acquires more customers who buy on credit.
B)begins to market products in other countries.
C)grows larger, with a consequent lessening of the owner's personal influence.
D)increases borrowing to the extent that one-third of its assets are financed by borrowing.

Question 45

Naked Sports Gear's dedication to its customers, employees and the environment is an example of:

A)a sustainable small business.
B)ethical relativism.
C)social entrepreneurship.
D)ethical imperialism.

Question 46

Perhaps the greatest benefit of integrity in business is the _____ it generates.

A)trust
B)profit
C)reputation
D)sales

Question 47

To be classified as a social entrepreneurship, a business must have a triple bottom line.

Question 48

Environmentalism poses the greatest threat to small:

A)medical waste disposal businesses.
B)chemists.
C)movie theatres.
D)auto repair shops.

Question 49

In a small business, the most important key to ethical performance is:

A)a code of ethics.
B)the personal integrity of the founder or owner.
C)a training programme based on the code of ethics.
D)the amount of legislation affecting the organisation.

Question 50

The application of South African standards to ethical issues that are clouded by cultural differences abroad is sometimes categorised as _____.

A)overly idealistic.
B)ethical imperialism.
C)South African arrogance.
D)situation ethics.

Question 51

The purpose of small business forums are:

A)to provide an outlet for customer complaints about a business.
B)to promote ethical conduct on the part of all businesses in a region.
C)to report relevant information to law enforcement agencies.
D)to impose penalties on companies that engage in unethical business practices.

Question 52

The price of integrity is high, but the potential payoff is incalculable because it is impossible to compute:

A)the price of a clear conscience.
B)the cost of environmental destruction.
C)the value of ethical imperialism.
D)the profit margin on good deeds.

Question 53

In order to make an ethical decision, the key to problem definition is to:

A)go with the obvious solution.
B)look at the surface of the problem.
C)find the most cost effective solution.
D)identify the root of the problem.

Question 54

In Karl Eller's book, Integrity Is All You've Got, which of the following characterises entrepreneurial businesses with integrity?

A)The entrepreneur with integrity gives the company a competitive edge.
B)The management of these companies understand the bottom line so that is still their singular focus.
C)For the most part, founders with integrity are stressed to balance growing the business and following their principles.
D)A solid financial performance needs to be achieved so that customers will know about the company's integrity.

Question 55

When evaluating alternatives, the entrepreneur will select one that is truthful, beneficial to all parties, fair, and

A)exploitable.
B)publishable
C)profitable
D)repeatable.

Question 56

The most important influence on ethics in a small business is:

A)the accountant or bookkeeper who keeps honest financial records.
B)the salesperson who quotes a fair price to customers.
C)the founder or owner whose values are put into practice.
D)the existence of a written code of ethics.

Question 57

The ethical influence of a leader of a small business is:

A)relatively minor.
B)overpowered by profit concerns of shareholders.
C)less important than the views of others within the organisation.
D)more pronounced than that of a leader of a large company.

Question 58

An example of an industry especially vulnerable to efforts to protect the environment is the _____ industry.

A)glass manufacturing
B)military construction
C)restaurants
D)asbestos removal

Question 59

An example of a small business that actually benefits from the growing interest in environmentalism would be

A)a fast-lube and oil change centre.
B)a producer of ethanol from farm waste.
C)a self-service car wash.
D)an asbestos removal service.

Question 60

Gary developed a code of ethics for his growing business because:

A)he wanted to define the ethical expectations for all his employees.
B)he wanted to have a legal defence should any of his people violate the law.
C)he wanted to create an informal channel of communication for discussions about ethical issues.
D)he wanted to give his suppliers a formal document dictating how they should behave.

Question 61

William wants everyone to think his business is growing faster than it actually is so he built an impressive website with an exaggerated company history.His efforts to mislead are known as ____________ ______.

Question 62

Malcolm is careful to share with his employees information about customer orders, financial performance and quality concerns.Malcolm is exercising _________ __________.

Question 63

Richard believes that South Africa is the greatest nation on earth and that all other countries should subscribe to its system of democracy and human rights.Therefore, he expects his overseas sales reps to follow the South African business practices.This is an example of _________ _____________.

Question 64

Entrepreneurs would do well to remember that customers who have questions about the ________ ____________ (products, representatives or the organisation) are less likely to make purchases.

Question 65

Frans treats his customers with respect.He is always truthful, even if it means losing a sale.He uses high quality materials and careful craftsmanship.If he can't meet a customer's deadline, he says so.His customers appreciate his integrity, which has helped to build ________ between them and Frans.

Question 66

Owners, customers and employees are considered to be the _________ ____________ of a business.

Question 67

​Refusing to pay a bribe even though it is a common practice in the country one is doing business in is an example of:

A)​cultural relativism
B)​social entrepreneurship
C)​integrity
D)sustainability

Question 68

Entrepreneurs should think carefully about their community commitments because charitable acts may be a _________ to the organisation.

Question 69

Millicent, founder of a small company that markets baked goods made from organic ingredients, emphasis honesty in all transactions.In this respect, Millicent acts with ____________.

Question 70

Sometimes Vincent doesn't have enough cash on hand to send in the monthly taxes withheld from his employees' salaries.This could be the result of a single-minded focus on production or because of a casual ____________.___________.

Question 71

​Successful entrepreneur Karl Eller noted the crucial role of ________to achievement in business.

Question 72

A baker looking for new retail space has returned from a seminar on environmentalism and wishes to act responsibly in this area.Which action will best accomplish this purpose?

A)Looking into leasing a LEED certified space.
B)Reducing product prices.
C)Eliminating undesirable processing odours.
D)Increasing service to customers.

Question 73

Sales people are often asked to walk a fine line between _________ and ____________.

Question 74

Carl understands that cultures develop different standards and practices that govern how business is conducted.He is careful to observe local customs when he interacts with foreign companies.Carls is practising ___________ ._____________.

Question 75

Tyrone gives 1% of the profits of his company to local organisations such as the junior soccer clubs and reading clubs.In this way, Tyrone is fulfilling his _________ ______________.

Question 76

Among the many __________ of any small business are owners, employees and customers.

Question 77

Suppliers, creditors and the community are examples of ______________of a business.

Question 78

Rhoda, the bookkeeper for a small company, has been diverting company funds into her personal bank account.Rhoda is engaging in ____________.

Question 79

Milton Friedman believed that the only ________ ____________ of a business is to make a profit while operating within the rules of the game.

Question 80

Ralph has vending machines on his business property for the convenience of his employees.He reports on his income tax form only half the cash collected by these machines.The rest is hidden in Ralph's personal account.This practice is an example of ___________.