Deck 3: Ethics and Business Decision Making

Question 1

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

Answer 1

False

Question 2

Business ethics focuses on ethical behavior in the business world.

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

Ethics is not concerned with the philosophical basis for morality.

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

Ethical standards based on religious teachings tend to be absolute.

Question 12

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

Question 13

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

Question 14

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

Question 15

How a business owner or manager behaves may indicate to employees and others that unethical behavior will be tolerated.

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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

Question 22

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

Question 23

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

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

Question 24

Corporate ethical policies should be well written to be effective.

Question 25

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

Question 26

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

Question 27

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 28

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

Question 29

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

Question 30

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

Question 31

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 32

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

Question 33

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

Question 34

Fact Pattern 3-1
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 3-1.According to the description quoted by the court in Case 3.1,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 35

If an action is legal,it is ethical.

Question 36

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

Question 37

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

Question 38

In studying the legal environment of business,Professor Dooley's students also review ethics in a business context.Ethics includes the study of what constitutes

A)fair or just behavior.
B)financially rewarding behavior.
C)legal behavior.
D)religious behavior.

Question 39

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

Question 40

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

Question 41

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 42

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 43

Fact Pattern 3-1
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 3-1.Under the decision of the court in Case 3.1,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 44

Teresa,in making marketing decisions for Uno Stuff,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 45

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 46

General Auto,Inc. ,needs to cut costs by downsizing.In determin?ing which employees to discharge,General Auto 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 47

Eagle Production 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 48

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 49

Lacey,a vice-president of Medico 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 50

Dion,an accountant for Engineering Associates,Inc. ,attempts to apply the duty-based 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 51

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 52

Quality Paper Corporation (QPC)makes and sells its products nationwide.To be considered socially responsible when making a business decision,QPC 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 53

A common ethical dilemma faced by the management of Wheel Deals 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 54

In making decisions for Sales Unlimited Inc. ,Tajik uses a cost-benefit analysis.This is a part of

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

Question 55

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 56

Manufactured Metals,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 57

Any decision by Reggie and the other managers of Standard Solutions Corporation may significantly affect the firm's

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 58

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 59

Callie,a lawyer on the staff of Droll International Ltd. ,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 60

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 61

Fealty Financial Corporation asks its employees to judge their actions and get on the ethical business decision-making "bandwagon." Guidelines for evaluating individual actions include all of the following except

A)an individual's conscience.
B)business rules and procedures.
C)loopholes in the law or company policies.
D)promises to others.

Question 62

Otto,the chief executive officer of Prismatic Diamond Corporation (PDC),wants to en?sure that PDC's activities are legal and ethical.The best course for Otto and PDC is to act in

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

Question 63

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 64

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 65

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 66

Olaf,an executive with Product Distribution,Inc. ,has to decide whether to market a product that might have undesirable side effects for a small per?centage of users.What is the balance that must be struck in de?cid?ing whether to sell the product? How does the standard of ethics that is applied affect this balance?

Question 67

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 68

Some consumers misuse the products of Hardware Gear,Inc. ,and are injured,although the products come with detailed instructions and warnings against misuse.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 69

Recreation & Sports Equipment Corporation sells a product that is capable of seriously injuring consumers who misuse it in a foreseeable way.Does the firm owe an ethical duty to take this product off the market? What con?flicts might arise if the firm stops selling this product?

Question 70

Sven,the human resources director for Temp Labor Unlimited,Inc. ,at?tempts to comply with the law in dealing with applicants,employ?ees,and clients.One of the challenges Sven faces is that the legality of an action is

A)always clear.
B)never clear.
C)not always clear.
D)usually clear.

Question 71

Capital Acquisitions Corporation buys,reorganizes,and sells other companies.If Capital 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 72

Equity 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.