Deck 29: Ethics and business practice

Question 1

The idea that the end does not justify the means is an example of which theory of ethics?

A) Deontological ethics.
B) Utilitarianism.
C) Consequentialism.
D) Moral relativism.

Answer 1

A

Question 2

Which of the following is the best example of Bentham's utilitarian theory of ethics?

A) A company restructure increases profits by casualising the majority of the workforce.
B) A company reduces their workforce in order to increase commission payments to the board of directors.
C) A company restructure results in lower profits but ensures that all employees are retained.
D) A company promoted an employee who exceeded their annual sales target.

Answer 2

C

Question 3

Which of the following is NOT one of the propositions that make up the 'rule of law'?

A) The rights and freedoms of citizens are enforceable in the courts.
B) No person should be subject to a law without their knowledge and consent.
C) No person should be punished except for a breach of the law.
D) All persons are equal before the law.

Answer 3

B

Question 4

Why might a business choose to behave in an ethical manner?

A) To avoid legislative intervention by government to protect consumers or the market.
B) To avoid a community backlash and adverse consequences in the market.
C) To avoid adverse and damaging publicity.
D) All of the above.

Question 5

The distinction between the letter and the spirit of the law is largely a moral or ethical question.

Question 6

Law sets the rules and ethics sets the values and standards on which the rules are based.

Question 7

Morals are concerned with:

A) Acting in the best interests of society.
B) The distinction between right and wrong.
C) Acting in your own best interests.
D) Being good members of society.

Question 8

Why is insider trading unethical?

A) Because the buyer of shares who is acting on inside information has effectively stolen the increase in share price from the seller.
B) Because it is unconscionable for the person with inside information to keep that information to themselves.
C) Because the person who sells their shares to a buyer acting on inside information has not done so willingly.
D) Because it is illegal.

Question 9

Which of the following would be an example of a conflict of interest in a business context?

A) The director of a company votes in favour of a contract for services to be provided by his family company.
B) A real estate agent regularly refers clients to a firm of solicitors of which his wife is the principal solicitor.
C) The purchasing officer for a business accepts a commission to place orders exclusively with a particular company.
D) All of the above.

Question 10

Which of the following is NOT one of the fundamentals of the definition of the law?

A) Law is a set of rules that regulates people's interactions with one another.
B) Law imposes penalties that are enforceable through sanction.
C) Law sets standards of conduct.
D) Law is a set of rules determined by the ruler of a country.

Question 11

In a business context, acting ethically is generally considered to involve:

A) Acting in a morally correct and honourable way.
B) Acting strictly in accordance with the law.
C) Acting in the best interests of shareholders.
D) All of the above.

Question 12

Ethical considerations relate to:

A) The distinction between right and wrong.
B) Acting in a morally correct and honourable manner.
C) The treatment of moral questions.
D) All of the above.

Question 13

Which of the following would be an example of insider trading?

A) A person uses confidential information that is not publicly available and profits by purchasing shares based on that information.
B) A person asks their friend to purchase shares for them.
C) A person purchases shares on the stock market without knowing whether those shares will appreciate in the future.
D) A person uses publicly available information to purchase shares on the stock market.

Question 14

Which of the following is the best explanation of the meaning of the term: 'justice'?

A) That which is considered right or fair in society.
B) Anyone can take action in their own hands for a wrong done.
C) The law handed down by Justices of the Peace.
D) All of the above.

Question 15

Which ethical theory evaluates behaviour according to the consequences of that behaviour?

A) Moral relativism.
B) Virtue ethics.
C) Deontological ethics.
D) Utilitarianism.

Question 16

Which of the following is an example of legislation designed to ensure ethical behavior by business?

A) Residential and Retail Tenancies Legislation.
B) The Australian Consumer Law.
C) The Consumer Credit Code.
D) All of the above.

Question 17

Which of the following would be the best foundation for an ethical decision?

A) Reason.
B) Self interest.
C) Appearance.
D) All of the above.

Question 18

Ethical relativism provides that laws are relative to other laws.

Question 19

A person's understanding of the law will be determined by their:

A) Religious and ethical views.
B) Moral views and standards.
C) Political views.
D) All of the above.

Question 20

What are some of the adverse effects of a lapse or not complying with ethical considerations by business?

Question 21

Why is tax evasion considered to be unethical?

A) The taxpayer is trying to avoid paying their share towards community services.
B) Tax money is often used for purposes with which the taxpayer does not agree.
C) It is illegal.
D) Everyone pays tax in some form.

Question 22

Ethical investment involves investing in companies in order to make them behave ethically.

Question 23

What kind of unethical business practice was identified in the case of Australia v Competition and Consumer Commission v Keshow [2005] FCA 558?

A) Making improper payments to a foreign government in order to bypass UN sanctions for commercial advantage.
B) Taking unconscionable advantage of the lack of education and commercial experience of customers.
C) Using bogus offshore transactions and a foreign accounting firm to avoid paying tax on income earned in Australia.
D) Using the doctrine of separate legal entity of a company to avoid liability for compensation claims.

Question 24

What are some of the benefits to business in acting ethically?

Question 25

Why was the plaintiff successful in the case of McCabe v British American Tobacco (2002) VSC 73?

A) Because the defendant destroyed documents with the intention of denying the plaintiff a fair trial.
B) Because she contracted lung cancer from smoking.
C) The plaintiff was not successful.
D) Because British American Tobacco knew cigarettes were dangerous and took no steps to reduce the danger.

Question 26

What kind of unethical business practice was identified in the conduct of James Hardie Industries?

A) Making improper payments to a foreign government in order to bypass UN sanctions for commercial advantage.
B) Taking unconscionable advantage of the lack of education and commercial experience of customers.
C) Using the doctrine of separate legal entity of a company to avoid liability for compensation claims.
D) Using bogus offshore transactions and a foreign accounting firm to avoid paying tax on income earned in Australia.

Question 27

In relation to the concept of organisational integrity, which of the following statements is NOT correct?

A) It is based on self-regulation in accordance with a formal set of guiding principles.
B) It is concerned with the ethical behaviour of a corporate entity.
C) It is designed to ensure that responsibility for wrongful acts will be borne by the individuals responsible.
D) It depends on the existence of an ethical corporate culture.

Question 28

An organisational integrity program should comprise:

A) A code of conduct.
B) Systems for reporting breaches and auditing compliance.
C) Training to ensure compliance with the corporation's legal obligations.
D) All of the above.

Question 29

Deontological ethics means that the end justifies the means.

Question 30

The difference between the letter and the spirit of the law is a moral or ethical question.

Question 31

All modern companies are required by law to have a code of ethical conduct.

Question 32

What was the ethical issue raised by the McCabe case?

A) Smokers make an informed decision to smoke so are responsible for their own decision.
B) The plaintiff died before the defendant could appeal.
C) The destruction of the documents was legal at the time but made a fair trial impossible.
D) A trial needs to be fair to both parties.

Question 33

Describe the ethical considerations and duties of businesses in today's society?

Question 34

Business ethics is about how we conduct our business affairs.

Question 35

Ethical considerations involve going beyond self-interest in reaching a decision.

Question 36

Morals are concerned with the distinction between right and wrong.

Question 37

Lawyers are officers of the court and are therefore expected to act within the spirit of the law.

Question 38

List some examples of legal rules with ethical considerations.

Question 39

An ethical investor invests in companies:

A) Whose directors have studied ethics.
B) Who operate ethically.
C) Whose shareholders behave ethically.
D) Who are regulated by ethical laws.

Question 40

Corporations, as legal entities, can have no ethical responsibilities.

Question 41

A business can invest in both a socially responsible as well as socially irresponsible manner. Describe and provide examples of both types of investing.