Deck 2: Ethics and Social Responsibility of Business

Question 1

Law and ethics ________.

A) are the same thing
B) have nothing to do with each other
C) while different, are intertwined
D) can both be ignored by business professionals

Answer 1

while different, are intertwined

Question 2

Businesses ________.

A) are subject to the laws of the countries in which they operate, but do not owe a social responsibility not to harm society
B) are subject to the laws of the countries in which they operate and owe a social responsibility not to harm society
C) organized in the United States are subject only to its laws, and can ignore the laws of other countries in which they operate
D) organized in the United States can ignore the law as long as they act ethically in the conduct of their affairs and try not to harm society

Answer 2

are subject to the laws of the countries in which they operate and owe a social responsibility not to harm society

Question 3

Compare and contrast "business law"
and "business ethics."

Answer 3

While most laws are based on ethical standards, not all ethical standards have been enacted as law. While the law establishes a minimum degree of conduct expected by persons and businesses in society, ethics demands more. Ethics and the law are intertwined. Sometimes the rule of law and the rule of ethics demand the same response by a person confronted with a problem. However, sometimes the law demands certain conduct, but a person's ethical standards are to the contrary. Moreover, in some situations, the law may permit an act that is ethically wrong.

Question 4

Portman, who runs a computer hardware store, had signed a contract with Stewie Inc. to deliver 125 computer monitors. He was to deliver them by the 5th of August, but by the 3rd of August, Portman could not arrange for the monitors, as his regular supplier was not available. He then decided to go to another supplier, who had a higher selling price for monitors, rather than cancelling the contract with Stewie Inc., as he believed it was his duty to do so. Which of the following moral theories matches Portman's behavior?

A) Kantian ethics
B) utilitarianism
C) Rawls's social justice theory
D) ethical fundamentalism

Question 5

Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is an increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. Closing the plant would result in the employees losing their jobs and the local suppliers losing a major buyer. It will also have an adverse effect on the community of Kantron as the plant is one of the main sources of employment for the locals. Steve considers all these factors before deciding the fate of the plant. After considering all the factors, if Steve finds that the loss to the employees and the community is far greater than that incurred by the shareholders and decides to keep the plant open, which of the following moral theories matches Steve Templeton's approach to the situation?

A) Kantian ethics
B) Rawls's social justice theory
C) ethical fundamentalism
D) utilitarianism

Question 6

Which of the following is a major theory of ethics?

A) conformal field theory
B) general theory of relativity
C) ethical relativism
D) perturbation theory

Question 7

One criticism of ethical fundamentalism is that ________.

A) it is far too permissive
B) it does not permit people to determine right and wrong for themselves
C) it treats morality as a mathematical calculation
D) it provides no universal ethical rules to guide a person's conduct

Question 8

Utilitarianism ________.

A) dictates that people choose the action or follow the rule that provides the greatest good to society
B) dictates that people choose the action or follow the rule that provides the greatest good for the greatest number of people
C) dictates that people choose the action or follow the rule that provides the individual actor with the greatest level of pleasure
D) dictates that people must choose the action or follow the rule that provides the maximum profit

Question 9

Billionaire Jonathon Apple convinced the Goudaville Town Council that they should condemn the Old McDonald Dairy so he can build an electronics plant on the land, arguing that the benefits to the community in the form of new jobs and extra tax revenues to be generated by the plant will far outweigh the detriment to the McDonald family from shuttering their business. Jonathon's argument is an example of ________.

A) ethical fundamentalism
B) Kantian ethics
C) ethical relativism
D) utilitarianism

Question 10

In Kantian ethics, the mandate, "Do unto others as you would have them do unto you" is referred to as ________.

A) the proletariat manifesto
B) the categorical imperative
C) the golden ratio
D) the manifest destiny

Question 11

Under the social contract theory of morality, it is presumed that each person in a society has entered into a social contract with all others in the society to ________.

A) maximize profit
B) obey the mandates of religious institutions
C) do that which provides the greatest good to society
D) obey moral rules that are necessary for people to live in peace and harmony

Question 12

The "veil of ignorance" is a term most associated with ________.

A) Rawls's social justice theory
B) Kantian ethics
C) ethical relativism
D) utilitarianism

Question 13

The proposition that the least advantaged in a society must receive special assistance to realize their potential is most closely associated with ________.

A) Kantian ethics
B) ethical relativism
C) Rawls's theory of social justice
D) ethical fundamentalism

Question 14

Fred routinely cheats on his taxes. Fred has decided that based on his personal feelings cheating on his taxes is the right thing to do, and that no one else can criticize him for this stance. What moral theory does Fred apparently follow?

A) Kantian ethics
B) ethical relativism
C) Rawls's theory of social justice
D) ethical fundamentalism

Question 15

The moral theory that dictates that people should choose the action or follow the rule that provides the greatest good to society is referred to as ________.

A) perspectivism
B) social contract
C) utilitarianism
D) ethical fundamentalism

Question 16

Rawls's social justice theory is based on the ________ theory of morality proposed by John Locke and Jean-Jacques Rousseau.

A) religious
B) utilitarian
C) social contract
D) duty

Question 17

Describe the major tenets of Rawls's Social Justice Theory and identify two criticisms of this theory.

Question 18

What is the social contract theory of morality?

Question 19

Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. But closing the plant would be a blow to the employees as they will lose their jobs, and the local suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have an adverse effect on the community of Kantron, as the plant is one of the main sources of employment for the locals. Steve Templeton considered all these factors before making a decision on the fate of the plant.

- If Steve Templeton decides not to close the plant in Kantron, what business social responsibility will Steve Templeton be achieving?

A) moral minimum
B) corporate citizenship
C) maximizing profits
D) stakeholder interest

Question 20

Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. But closing the plant would be a blow to the employees as they will lose their jobs, and the local suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have an adverse effect on the community of Kantron, as the plant is one of the main sources of employment for the locals. Steve Templeton considered all these factors before making a decision on the fate of the plant.

-If Steve Templeton decides to close the plant in Kantron, what important business social responsibility will Steve Templeton accomplish?

A) moral minimum
B) corporate citizenship
C) maximizing profits
D) stakeholder interest

Question 21

Sinbad Cola, a soft drink manufacturer, opened a plant in Buron. The waste from the plant was released into the Buron Sea, which was situated a mile away from the plant. Releasing the wastes into the sea resulted in water pollution and groundwater contamination. The water pollution in turn negatively affected Buron's fishing business. Sinbad Cola compensated for this by bringing the contamination levels down with additional filters and paying for the damages to the local fisheries. Which theory of business social responsibility did Sinbad Cola comply with when it compensated for its harmful waste disposal methods?

A) moral minimum
B) stakeholder interest
C) corporate citizenship
D) maximizing profits

Question 22

Conch Corporation, a global oil and gas company, plans to open a subsidized postsecondary vocational school in the town of Cristen, where one of its offices is situated. The plan is put to vote and then approved despite some objection from shareholders. The school is being opened in collaboration with the local government. Its objective is to help the youth of the neighborhood, especially dropouts, learn a vocational skill. What social responsibility theory describes Conch Corporation's move to open the school?

A) moral minimum
B) maximizing profits
C) corporate citizenship
D) stakeholder interest

Question 23

In the past, many business decisions were based solely on a cost-benefit analysis and how they affected the bottom line. However, the realization that such decisions made by businesses have far-reaching effects on society has led to the development of ________.

A) the theories of the social responsibility of business
B) the Securities and Exchange Commission
C) the Uniform Sentencing Guidelines
D) Kantian ethics

Question 24

Under the maximize profits theory of the social responsibility of business, businesses should be primarily concerned with the interests of ________.

A) its workers
B) the members of the communities in which the business operates
C) its shareholders
D) taxpayers

Question 25

The theory of corporate social responsibility that would hold that so long as a business avoids or corrects the social injury it causes, it has met its duty of social responsibility is the ________.

A) mini-max theory
B) moral minimum theory
C) super-max theory
D) maximize profits theory

Question 26

The corporate social responsibility theory that argues that businesses have a responsibility to not just "do well," but also "do good"
Is the ________.

A) corporate citizenship theory
B) moral minimum theory
C) stakeholder interest theory
D) maximize profits theory

Question 27

The legislative and judicial branches of government have established laws that enforce the ________ of social responsibility for corporations.

A) stakeholder interest
B) maximizing profits
C) corporate citizenship
D) moral minimum

Question 28

Describe the maximize profits theory of the social responsibility of business and identify the Nobel Prize-winning economist from the University of Chicago who advocated this theory.

Question 29

Which of the following is a characteristic of a public benefit corporation?

A) It is a not-for-profit corporation.
B) Its mission is purely to maximize profit.
C) One of its purposes is to generate benefits for society.
D) It is owned by the Federal government.

Question 30

Which of the following is NOT another term for a public benefit corporation?

A) benefit corporation
B) B corp.
C) PB&J corp.
D) social purpose corporation

Question 31

Which of these statements is true with regards to public benefit corporations?

A) Most states have enacted legislation that permits public benefit corporations.
B) To date, only one state has enacted legislation allowing for public benefit corporations.
C) Public benefits corporations are only chartered by the Federal government.
D) Most states have not enacted legislation that permits public benefit corporations.

Question 32

Which of these would NOT be considered a typical specific public benefit purpose of a public benefit corporation?

A) reducing the company's carbon footprint
B) engaging in sustainability efforts
C) maximizing shareholder value
D) giving 25 percent of its profits to charity

Question 33

Which of these entities has chosen to conduct its business as a public benefit corporation?

A) Salvation Army
B) United States Postal Service
C) Federal Reserve Bank
D) Ben and Jerry's

Question 34

By law, the directors and officers of a public benefit corporation may act differently than directors and officers of a traditional corporation. Describe this difference.