Deck 5: Ethics and Business Decision Making

Question 1

Ethical standards based on religious teachings tend to be absolute.

Answer 1

True

Question 2

Managers must apply different standards to themselves than they apply to their employees.

Answer 2

False

Question 3

Setting realistic workplace goals can reduce the probability that employ?ees will act unethically.

Answer 3

True

Question 4

If an action is ethical from an outcome-based perspective, it is always ethical from a duty-based perspective.

Question 5

In ethical terms, a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on individuals.

Question 6

To act ethically is to think narrowly about what is best in the short run for one's employer.

Question 7

According to utilitarianism, an action that affects a minority adversely is morally wrong.

Question 8

Business ethics focuses on ethical behavior in the business world.

Question 9

Ethics is not concerned with the philosophical basis for morality.

Question 10

Ethics is the branch of philosophy that focuses on what constitutes right and wrong behavior.

Question 11

Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take.

Question 12

Duty-based ethical standards imply that people have basic rights.

Question 13

Businesspersons who would choose to act unethically may be deterred from doing so because of public opinion.

Question 14

Business ethics is consistent only with short-run profit maximization.

Question 15

Duty-based ethics may be based on religious precepts or philosophical reasoning.

Question 16

According to utilitarianism, it does not matter how many people benefit from an act.

Question 17

Under the principle of rights theory, one person's set of values is as "right" as another's.

Question 18

A business firm's profits may suffer if the firm acts unethically.

Question 19

Ethics focuses on the way in which moral principles apply in daily life.

Question 20

Ethics is not concerned with the fairness or justness of an action.

Question 21

The legality of a particular action is always clear.

Question 22

Bribery of foreign government officials is both an ethical and a legal issue.

Question 23

Acting in good faith gives a business firm a better chance of defending its actions in court.

Question 24

Corporate ethical policies must be clearly communicated to be effective.

Question 25

An ethics program can clarify what a company considers to be unacceptable conduct.

Question 26

A business firm can sometimes predict whether a given action is legal.

Question 27

Corporations can behave as good citizens by promoting goals that society deems worthwhile.

Question 28

Corporations can be perceived as owing ethical duties to groups other than their shareholders.

Question 29

Corporate ethical policies and programs must be integrated throughout the firm to be effective.

Question 30

The roles that women play in some foreign countries may present some difficult ethical problems for firms doing business internationally.

Question 31

One guideline to evaluating the ethics of a particular action is to "let your conscience be your guide."

Question 32

To be ethical is to "do the right thing" but it does not otherwise "pay."

Question 33

A business organization and its actions cannot be based on trust.

Question 34

Ignorance of a law excuses a business from liability for its vio?lation.

Question 35

Simply obeying the law does not fulfill all ethical obligations.

Question 36

An action may be unethical but legal.

Question 37

Establishing which duties take priority over others determines a firm's views on corporate social responsibility.

Question 38

Ethical codes of conduct can set the ethi?cal tone of a firm.

Question 39

The minimal acceptable standard for ethical behavior is compliance with the law.

Question 40

In the interest of preserving personal freedom, the law codifies all ethical requirements.

Question 41

Fact Pattern 5-B1
Leo runs an asset recovery business. In one case, he recruits clients by misrepresenting the facts and pretending to be licensed to practice law in Mississippi. He files gratuitous, malicious pleadings, lies to the court, and otherwise abuses the judicial process. Later, he involves himself in other cases in which he uses similar tactics.
Refer to Fact Pattern 5-B1. Under the decision of the court in Case 5.1, Baum v. Blue Moon Ventures LLC, Leo's conduct most likely warrants

A) an admonishment but no other sanctions.
B) an injunction against certain court filings plus other sanctions.
C) no sanctions but no praise.
D) praise for its aggression in recovering the assets of "deadbeat" debtors.

Question 42

Superior Corporation engages in ethical behavior solely for the purpose of get?ting good publicity and thereby increasing profits. Superior is

A) acting unethically in its pursuit of publicity.
B) acting unethically in its pursuit of profits.
C) acting unethically in its setting of priorities.
D) not acting unethically.

Question 43

Dion, an accountant for Engineering Associates, Inc., attempts to apply the duty approach to ethical reasoning in conflicts that occur on the job. This ap?proach is based on the idea that a person must

A) achieve the greatest good for the most people.
B) avoid unethical behavior regardless of the consequences.
C) conform to society's ethical standards.
D) place his or her employer's interest first.

Question 44

Fact Pattern 5-B1
Leo runs an asset recovery business. In one case, he recruits clients by misrepresenting the facts and pretending to be licensed to practice law in Mississippi. He files gratuitous, malicious pleadings, lies to the court, and otherwise abuses the judicial process. Later, he involves himself in other cases in which he uses similar tactics.
Refer to Fact Pattern 5-B1. According to the description quoted by the court in Case 5.1, Baum v. Blue Moon Ventures LLC, Leo's conduct is

A) "an example of guerilla warfare through litigation."
B) "praiseworthy for its ingenuity in recovering hidden assets."
C) "understandable in the pursuit of profit but not laudable."
D) "unjustifiable but not seriously reprehensible."

Question 45

Manufactured Goods, Inc., asks its employees, many of whom are mem?bers of the National Machinists Union, to apply the utilitarian theory of ethics. This theory does not require

A) a choice among alternatives that will produce maximum so?cietal utility.
B) a determination of whom an action will affect.
C) an assessment of the effects of alternatives on those affected.
D) the acquiring of the means of production by workers.

Question 46

Del, vice-president of sales for EZ Products, Inc., adheres to relig?ious ethical standards. Their application involves an element of

A) absolutism.
B) after-the-fact rationalization.
C) personal discretion.
D) utilitarianism.

Question 47

Tina, the chief financial officer for USA Products Corporation, at?tempts to apply Christian precepts in making ethical decisions and in do?ing busi?ness. In applying duty-based ethical standards that are derived from a re?ligious source, Tina would most likely consider the motive behind an act to be

A) irrelevant.
B) the least important consideration.
C) the most important consideration.
D) the only consideration.

Question 48

Kit follows certain religious principles. With respect to the behavior of Kit and other adherents of her religion, its principles are most likely

A) absolute.
B) changeable.
C) flexible.
D) vague.

Question 49

Global Distribution Corporation suggests that its employees ap?ply the "categorical imperative" to ethical issues that arise at work. This re?quires that the employees

A) categorize the issues according to legality, morality, and profitability.
B) consider only the benefits that would accrue to them personally.
C) look only at the result, regardless of the means to attain it.
D) weigh the consequences that would follow if everyone acted the same.

Question 50

Mina works in the public relations department of National Sales Company. Her job includes portraying National's activities in their best light. In this context, ethics consist of

A) a different set of principles from those that apply to other activities.
B) the same moral principles that apply to non-business activities.
C) those principles that produce the most favorable financial outcome.
D) whatever saves National's "face."

Question 51

In studying business law, Professor Smith's students also study ethics in a business context. Ethics is the study of what constitutes

A) financially rewarding behavior.
B) legal behavior.
C) religious behavior.
D) right or wrong behavior.

Question 52

Rob, the owner of Super Stores, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a busi?ness decision is ethical is how that decision affects

A) the right determination under a cost-benefit analysis.
B) the rights of others.
C) the "right" thing to do.
D) the right to make a profit.

Question 53

Lia works for Media Marketing Company. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics consist of

A) "bad" versus "good" publicity.
B) questions of rightness and wrongness.
C) the firm's quarterly revenue.
D) whatever is legal.

Question 54

Dona, an accountant for Engineering Services, Inc., attempts to apply the duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person

A) has a duty to engage in ethical behavior no matter the consequences.
B) has a duty to conform one's behavior to society's ethical standards.
C) has a duty to one's employer that is superior to any other duty.
D) may engage in unethical behavior if it achieves a greater good.

Question 55

Tom, in making marketing decisions for United Products, Inc., takes a utili?tarian perspective. A characteristic statement of this philosophy is

A) "an action is morally correct when, among the people it affects, it produces the greatest amount of good for the greatest number."
B) "for every action, there is an equal and opposite reaction."
C) "life in a state of nature is nasty, brutish, and short."
D) "the pursuit by individuals of their self-interest will result in a cor?re?sponding increase in societal welfare."

Question 56

Bob, research manager for Corn Products, Inc., ap?plies utilitarian ethics to determine that an action is morally cor?rect when it produces

A) the greatest good for Bob.
B) the greatest good for the most people.
C) the least good for the fewest people.
D) the least good for the most people.

Question 57

In deciding questions of corporate social responsibility, Mega Deals, Inc., is concerned with

A) how the corporation can best fulfill its duty to society.
B) the effect on corporate profits of ignoring any duty to society.
C) whether the corporation owes a duty to society.
D) all of the choices.

Question 58

In making business decisions, Brian, personnel manager for Conservative Investments, Inc., applies his belief that all persons have fundamental rights. This is

A) a religious rule.
B) the categorical imperative.
C) the principle of rights.
D) utilitarianism.

Question 59

John is sales manager for Kleen 'N Brite Products, Inc. Compared to John's personal activities, his business activities involve

A) more complex ethical standards.
B) simpler ethical standards.
C) the same ethical standards.
D) no ethical standards.

Question 60

Energy Research Corporation asks its employees to consider ethical be?hav?ior from a "categorical imperative" perspective. This approach

A) categorizes certain actions as imperative.
B) considers the consequences to follow if everyone acted the same.
C) focuses on categories of rights and privileges.
D) imposes sanctions on those who behave unethically.

Question 61

Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate's decision makers can predict whether a given business action would be legal in

A) all situations.
B) many situations.
C) no situations.
D) practically no situations.

Question 62

Import-Export Sales, Inc., like other businesses, has duties pre?scribed by

A) ethics and the law.
B) ethics only.
C) the law only.
D) the market only.

Question 63

Delta Equity Corporation provides other firms with capital to expand op?erations. If Delta strictly complies with existing laws, the firm will

A) fulfill all business ethics obligations.
B) fulfill no business ethics obligations.
C) fulfill some business ethics obligations.
D) not need to fulfill any business ethics obligations.

Question 64

Eve, the chief executive officer of Federated Corporation (FC), wants to en?sure that FC's activities are legal and ethical. The best course of Eve and FC is to act in

A) good faith.
B) ignorance of the law.
C) regard for the firm's shareholders only.
D) their own self interest.

Question 65

In making decisions for United Merchandising Company, Viv uses a cost-benefit analysis. This is part of

A) duty-based ethics.
B) Kantian ethics.
C) the principle of rights.
D) utilitarianism.

Question 66

Any decision by the management of Standard Business Corporation may significantly affect its

A) operators only.
B) operators, owners, suppliers, the community, or society as a whole.
C) owners only.
D) suppliers, the community, or society as a whole only.

Question 67

A common ethical dilemma faced by the management of Variety Business Corporation involves the effect that its decision will have on

A) one group as opposed to another.
B) the firm's competitors.
C) the government.
D) all of the choices.

Question 68

Steve, the human resources director for Total Personnel Corporation, at?tempts to comply with the law in dealing with applicants and employ?ees. One of the challenges Steve faces is that the legality of an action is

A) always clear.
B) never clear.
C) sometimes clear.
D) usually clear.

Question 69

Equity Capital Corporation provides other firms with funds to expand op?erations. Questions of what is ethical involve the extent to which Equity has

A) a legal duty beyond those duties mandated by ethics.
B) an ethical duty beyond those duties mandated by law.
C) any duty beyond those mandated by both ethics and the law.
D) any duty when it is uncertain whether a legal duty exists.

Question 70

Holly, a lawyer on the staff of International Group, applies the utilitar?ian theory of ethics in business contexts. Utilitarianism focuses on

A) moral values.
B) religious beliefs.
C) the consequences of an action.
D) the nature of an action.

Question 71

Steele Tool Company's decision makers view a particular risk in the use of Steele's product as open and obvious. Continuing to market the product without telling consumers of the risk could be justified from a perspective of

A) duty-based ethics.
B) Kantian ethics.
C) rights-based ethics.
D) utilitarian ethics.

Question 72

Harry, a vice-president of International Pharmaceuticals, Inc., does not ap?ply utilitarianism to business ethical issues. One problem with utili?tari?anism is that it

A) gives business profits priority over production costs.
B) ignores the practical costs of a given set of circumstances.
C) requires complex cost-benefit analyses of simple situations.
D) tends to justify human costs that many find unacceptable.

Question 73

Some consumers misuse the products of Hardware Supplies, Inc., and are injured. In terms of responsibility, Hardware may have

A) a legal duty only.
B) an ethical and a legal duty.
C) an ethical duty only.
D) neither an ethical nor a legal duty.

Question 74

In business deals, Elin, the chief executive officer of Frosted Donuts, Inc., follows duty-based ethical standards. These are most likely derived from

A) a corporate ethics code.
B) a cost-benefit analysis.
C) philosophical reasoning.
D) the law.

Question 75

Max lies to Nora, his spouse. This is

A) illegal and unethical.
B) illegal only.
C) neither illegal nor unethical only.
D) unethical only.

Question 76

Quality Business Corporation (QBC) makes and sells its products nationwide. To be considered socially responsible when making a business decision, QBC could take into account the needs of

A) its consumers, the community, and society only.
B) its employees and owners only.
C) its employees, owners, consumers, the community, and society.
D) no one.

Question 77

Eagle Manufacturing Corporation could demonstrate a commitment to ethical behavior by

A) complying with the law only.
B) implementing ethical programs only.
C) making a profit only.
D) complying with the law, establishing ethics codes, and making money.

Question 78

Make-It Construction Corporation makes a side payment to a govern?ment official in Nigeria to obtain a contract. In the United States, this is

A) illegal and unethical.
B) illegal only.
C) neither illegal nor unethical.
D) unethical only.

Question 79

Macro Manufacturing, Inc., needs to cut costs by downsizing. In determin?ing which employees to discharge, Macro will most likely weigh

A) its ethical duty to long-term employees and the legality of discharg?ing older workers only.
B) its ethical duty to long-term employees, its profit margin, and the le?gality of discharging older workers.
C) the legality of discharging older workers only.
D) no duty.

Question 80

Nora's best criticism of utilitari?anism is that it

A) encourages unethical behavior.
B) fosters conformance with society's standards.
C) mandates acting in an employer's best interest.
D) results in human costs many persons find unacceptable.