Deck 4: Business Ethics and Social Responsibility

Question 1

A company that consistently makes _____ magazine's list of the "100 Best Corporate Citizens" is typically regarded as an "ethical" company.

A)Business Ethics
B)Business Week
C)U.S.News and World Report
D)Fortune

Answer 1

A

Question 2

_____ percent of Americans surveyed think that breach of investor and employee trust represents an ongoing and long-standing pattern of deceptive behavior by U.S.corporate officials.

A)Five
B)Nineteen
C)Forty nine
D)Seventy two

Answer 2

D

Question 3

Which of the following statements about business ethics is false?

A)Business ethics refer to actions taken by individuals to do the right thing.
B)Business ethics concern the actions taken by a company to show concern for its stakeholders.
C)Business ethics go beyond obeying applicable laws and regulations.
D)Studying business ethics can help you learn to recognize and respond to ethical challenges.

Answer 3

B

Question 4

Believe it or not, it's in the best interest of Patricia Nimoy's small accounting firm to operate _____.

A)according to internal practices
B)ethically
C)independently of professional oversight
D)in conjunction with outside companies

Question 5

Name three ways that companies can benefit from being ethical.

Question 6

Companies tainted by questionable ethics suffer from higher employee turnover than trustworthy firms.

Question 7

Betty Vinson, an employee of the long-distance provider WorldCom, was put in jail for supporting her employer's fraudulent activities.

Question 8

Which of the following is the best definition of business ethics?

A)The practice of obeying applicable business laws and regulations.
B)The practice of competing fairly and declining to put your own interests above those of your company or its stakeholders.
C)The practice of responding to morally problematic business situations.
D)The practice of making business decisions that are most beneficial to stakeholders.

Question 9

The Wells Fargo scandal taught the company this lesson: "You get what
you measure, even if it is not what you wanted."

Question 10

Ethics refers to _____.

A)the practice of obeying applicable business laws and regulations
B)the ability to recognize a morally problematic situation
C)the ability to know right from wrong and to know when you're practicing one instead of the other
D)a series of situations in which an individual must choose between personal interest and the interest of others

Question 11

Bernie Madoff convinced wealthy investors to give him large sums of money and promised them an 8% to 12% return a year.But he never really invested their money.Instead, he kept it for himself.What was his punishment?

A)He pleaded guilty and went to jail for ten years.
B)He never went to trial because he returned the investor's money.
C)He was not punished in part because he was the former chairman of the NASDAQ stock exchange.
D)He received a 150-year jail sentence.

Question 12

WorldCom CEO Bernie Ebbers is in prison for siphoning off billions of dollars to support an extravagant lifestyle and bankrupting the company in the process.

Question 13

Volkswagen was caught cheating the public by using previously used parts in the manufacture of their cars.

Question 14

Betty Vinson believed that her superiors at WorldCom would take full responsibility for the accounting fraud in which she participated.

Question 15

In planning a statement of core values and a code of ethics for his start?up company, Gordon McDonald realized that ethical organizational activities include all of the following _____.

A)treating the public fairly
B)holding every employee accountable for his or her actions
C)drawing up a list of product safety standards
D)making fairness a top priority

Question 16

In the early 1990s, many workers at Sears automotive service centers became suspicious about policies governing interactions with _____.

A)customers
B)suppliers
C)stakeholders
D)competitors

Question 17

Bernie Madoff Investment Securities is one of several companies that consistently make Business Ethics magazine's list of the "100 Best Corporate Citizens."

Question 18

The only way employees at Wells Fargo were able to keep their jobs was to meet a quota set by the company.To meet this quota they were required to set up a certain number of new banking and credit card accounts.Which of the following statements is false:

A)5,300 employees set up fake accounts so they would meet their quotas
B)collectively, employees set up more than 1.4 million fake accounts generating $2.4 million in fees
C)the 5,300 employees involved in the scam got a warning but kept their jobs
D)bank had to pay more than $500 million in fines and other costs

Question 19

Believe it or not, it's in the best interests of a company to operate unethically.

Question 20

Generally speaking, in terms of ethics, the next generation entering business will find a world that's _____ than the one encountered by the previous generation.

A)better informed
B)more challenging
C)more cut and dried
D)better regulated

Question 21

All of the following are true about Betty Vinson's decisions at WorldCom

A)her actions were illegal.
B)she was embarrassed to tell other people what she'd done.
C)she felt badly about what she'd done.
D)her decision to come forth was prompted by national media attention.

Question 22

In 1991, when it was discovered that cases of bottled water had been poisoned with benzene, Perrier executives:

A)recalled only the lots of water that were tainted.
B)ordered a nationwide recall of all the company's bottled water.
C)immediately demonstrated the safety of their water by drinking it themselves.
D)took action to show that tainted water had been found only in isolated instances.

Question 23

Investigators determined that the 1982 tampering with Tylenol bottles occurred in the factory in which the capsules were manufactured.

Question 24

When Betty Vinson made her first accounting adjustment to boost WorldCom's income, she didn't believe she was doing anything unethical because she was merely following orders from her boss.

Question 25

An ethical dilemma is a morally problematic situation.

Question 26

Which statement about ethical decision making is false?

A)learning how to act ethically will make you more marketable.
B)most people believe they are ethical all of the time.
C)acting ethically is generally easier in your personal life than in your business life.
D)ethical decisions are generally more straightforward than ethical dilemmas.

Question 27

Scenario-Based
Bonita and Samuel are concerned about some workplace activities on the part of four coworkers.One employee, for example, makes frequent personal long?distance phone calls, and all four take home office supplies that they don't replace.Because management hasn't stopped them (and even seems to be turning a blind eye), other employees are beginning to think that such activities are quite acceptable.
The activities of the four employees are unethical because they're illegal.

Question 28

Ethical challenges arise in business because organizations have multiple stakeholders and because stakeholders make conflicting demands.

Question 29

Johnson & Johnson received tremendous praise for its treatment of the
Tylenol catastrophe.Later, though, it found itself being charged for an
accounting scandal.

Question 30

Over a recent three-year period, the once admired company Johnson & Johnson experienced 24 product recalls of defective products.When company executives learned that yet another product, Motrin, was defective and needed to be recalled, they:

A)immediately notified the public and instructed retailers to remove the defective Motrin from the shelves.
B)instructed retailers to continue selling the Motrin but told them to post a notice warning customers that taking the Motrin could be harmful.
C)hired contractors to go into stores that sold the product and secretly buy every pack of Motrin on the shelves.
D)ignored the advice of their quality control people and continued to sell the Motrin without warning customers.

Question 31

In 1982, Tylenol capsules laced with ____ caused several deaths.

A)cyanide
C)chlorine
D)Kool Aid

Question 32

Executives at Big Book Inc.had uncovered an internal problem involving embezzlement in the royalty department.In having to decide whether to go to the police or handle the problem themselves, they were faced with the possibility of a(n) _____.

A)ethical misdemeanor
B)conflict of interest
C)ethical lapse
D)ethical dilemma

Question 33

"How can I change my behavior so that I can move up a notch by ethical standards?" If you find that question hard to answer, perhaps you could rephrase it as _____

A)"How would I like to be treated in a given situation "
B)"What is my set of core values "
C)"How can I cultivate an ethical personality "
D)"What advice can I get from my personal mission statement "

Question 34

After the 1982 tampering incident, Johnson & Johnson reintroduced Tylenol in tamper-resistant bottles and restored the Tylenol brand to its previous market position.

Question 35

According to Johnson & Johnson then CEO James Burke, his only regret in the wake of the Tylenol tampering tragedy was the fact that the:

A)tamperer was never caught.
B)cost of tamper-resistant bottles cost hundreds of jobs at J&J.
C)tamperer received only a 10-year sentence.
D)nationwide recall destroyed a valuable brand.

Question 36

In contrast to the "right-versus-right" problem posed by an ethical dilemma, the problem posed by a(n) _____ entails a "right-versus-wrong" decision.

A)ethical lapse
B)conflict of interest
C)moral puzzle
D)ethical decision

Question 37

When asked what he looks for in a new hire, investment guru Warren Buffet placed integrity over intelligence.

Question 38

To what fraudulent activities did Volkswagen executives plead guilty in the fall of 2015? What was the effect of these activities on the company?

Question 39

The use of private information about a company for personal financial benefit is
called insider training.

Question 40

An example of a company known for responding appropriately to an ethical dilemma is _____.

A)WorldCom
B)Johnson & Johnson
C)Sears Roebuck & Company
D)Tyco

Question 41

Being a whistle-blower helps you advance your career.

Question 42

One of the four common rationalizations for justifying misconduct is reasoning that "The company will excuse my action and protect me."

Question 43

The prospect of feeling bad if they did the same things should be enough to warn Bonita and Samuel that the activities of these employees are unethical.

Question 44

If they find themselves pondering the same activities, Bonita and Samuel should ask themselves: "Is it unfair to some parties?"

Question 45

If you're on the receiving end, it's ethical behavior to refuse any item that's overly generous or given for the purpose of influencing a business decision.

Question 46

What steps would you take to solve an ethical dilemma?

Question 47

It's possible that the activities of these employees, though not illegal, may be considered unethical by those in authority over the manager.

Question 48

The 2002 Sarbanes-Oxley Act protects whistle-blowers under federal law.

Question 49

All of the following should usually be considered inappropriate behavior :

A)accepting a pair of sports tickets from a supplier.
B)donating company funds to a local community center.
C)inviting a business acquaintance to dinner.
D)warning a friend that he or she is about to be fired.

Question 50

An ethical lapse may occur when you must choose between taking actions that promote your personal interests over the interests of others.

Question 51

If you were the manager in this situation, you might consider asking all the parties involved, "Would you want your activities written up in the newspaper?"

Question 52

Betty Vinson blew the whistle on fraudulent activities at Enron.

Question 53

Cynthia Cooper's intervention at WorldCom resulted in investor and employee losses being less than they would have been had she not blown the whistle on her bosses.

Question 54

What does an ethical decision entail?

Question 55

When a business executive accepts a pair of sports tickets from a supplier, he is succumbing to conflict of interest.

Question 56

As an employee, your primary responsibility is to your employer.

Question 57

Thinking that "My behavior isn't really illegal or immoral" is one of the four common rationalizations for justifying misconduct.

Question 58

Explain the concept of an ethical lapse.

Question 59

Which of the following items is directly related to the problem of dealing with ethical issues?

A)Bribes
B)Conflicts of loyalty
C)Whistle-blowing
D)Hiring practices

Question 60

A whistle-blower is an individual who exposes illegal or unethical behavior in an organization.

Question 61

J.C.Penney's _____ states that employees cannot accept any cash gifts or any noncash gifts except those which have a value below $50.

A)"Statement of Business Ethics"
B)"Mission Statement"
C)"Code of Business Ethics"
D)"Statement of Ethical Conduct"

Question 62

Five months after the fraud at WorldCom was exposed, new CEO Michael Cappellas delivered a pep talk on the company's future while the senior management team led the audience in a rousing rendition of what song?

A)"You Are My Sunshine"
B)"Oh Happy Day"
C)"America the Beautiful"
D)"If You're Happy and You Know It, Clap Your Hands"

Question 63

According to J.C.Penney's "Statement of Business Ethics," all of the following are acceptable :

A)attendance at paid-for business functions.
B)sports events and golf outings if practical for employees to reciprocate.
C)cash gifts below $50 in value.
D)trips of several days.

Question 64

According to one study, all of the following are common rationalizations for justifying misconduct _____.

A)"My behavior isn't really illegal or immoral."
B)"My action is in everyone's best interest."
C)"My action provides financial security for my family."
D)"No one will find out what I've done."

Question 65

Whistle-blower Cynthia Cooper advised students at Mississippi State University to:

A)keep your nose clean and you won't end up in prison for 25 years like me.
B)strive to be persons of honor and integrity.
C)don't beat yourself up just because you caved in to the pressure.
D)integrity will always make you admired by those around you.

Question 66

Clayton Moore must choose between taking actions that promote personal interests and the interests of others at work? The ethical issue that he's facing is characterized as a matter of _____.

A)insider trading
B)conflict of interest
C)whistle-blowing
D)rationalization

Question 67

Although Cynthia Cooper did the right thing in exposing fraud at WorldCom, many coworkers _____ her.

A)sued
B)shunned
C)threatened
D)reported

Question 68

A survey of 200 whistle-blowers conducted by the National Whistleblower Center revealed that _____ had been fired by their respective employers.

A)three-fourths of them
B)one-half of them
C)all of them
D)none of them

Question 69

A chef put two frogs in a pot of warm soup water.Recognizing danger, the first frog jumped out, but the second frog didn't.In terms of ethics, what's the moral of the story?

A)A friend in need is a friend indeed.
B)If it smells like onions, it probably is onions.
C)Get out before the water gets too hot.
D)Look before you leap.

Question 70

When you say to yourself, "I know I lied to make the deal, but it'll bring in a lot of business and pay a lot of bills," which of the four common rationalizations for misconduct are you using?

A)"The company will condone my actions and protect me."
B)"No one will find out what I've done."
C)"My action is in everyone's best interest."
D)"My behavior isn't really illegal or immoral."

Question 71

The misdeeds of Betty Vinson and her accomplices at WorldCom didn't go undetected.They caught the eye of Cynthia Cooper, who could have looked the other way but chose instead to be a(n) _____.

A)inside traitor
B)public defender
C)whistle-blower
D)mediator

Question 72

In 2002, a federal law known as the _____ Act was created to protect whistle-blowers.

A)Sarbanes-Oxley
B)Whistle-Blower Buffer
C)Oxbow
D)Smoot-Hawley

Question 73

According to one whistle-blower, whistle-blowers are usually treated like_____ by some coworkers.

A)"an umpire at a baseball game"
B)"ants in your pants"
C)"a fly on the wall"
D)"skunks at a picnic"

Question 74

Neal works for a company with a contract to cater events for a community college while his uncle Daniel owns a bakery which also caters locally.The potential ethical issue that he's facing is characterized as a matter of _____.

A)conflict of opinion
B)insider trading
C)conflict of interest
D)rationalization

Question 75

When you ask yourself the question, "If I didn't get caught, did I really do it?" which of the four common rationalizations for misconduct are you using?

A)"No one will find out what I've done."
B)"My action is in everyone's best interest."
C)"My behavior isn't really illegal or immoral."
D)"The company will condone my actions and protect me."

Question 76

Lucretia finds herself caught between loyalty to her employer on the one hand and loyalty to a friend who works in her office on the other.The potential ethical issue that she's facing is characterized as a matter of _____.

A)conflict of loyalty
B)conflict of interest
C)rationalization
D)insider loyalty

Question 77

Master investor Warren Buffet once admitted that "I cannot tell you that _____ is the best policy {but it is a good policy}."

A)loyalty
B)kindness
C)fairness
D)honesty

Question 78

Karen learns from a coworker at her pharmaceutical company that one of the firm's most profitable drugs will be pulled off the market.Before the news becomes public, she sells all of her stock in the company.This action is characterized as _____.

A)the Martha Stewart syndrome
B)insider trading
C)the stakeholder's dilemma
D)conflict of interest

Question 79

Which of the following is a rationalization for misconduct in the workplace?

A)Committing career suicide
B)Telling yourself that you acted in everyone's best interests
C)Refusing to accept a promotion
D)Selling your shares in the company

Question 80

Because the conspiracy of fraud was brought to an end with Cynthia Cooper's intervention, WorldCom investor and employee losses were _____.

A)less
B)greater
C)the same
D)trivial