Deck 27: Ethics and Business Practice

Question 1

To be sound,ethical opinions must be based on which of the following?

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

Answer 1

A

Question 2

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

Answer 2

It is often said by proponents of a laissez faire approach,that business is quite able to regulate itself and what is good for business is good for everyone.This argument suffers when a market leader like HIH Insurance fails so spectacularly and catastrophically.The impact of that failure was not limited to shareholders and unsecured creditors;it impacted on employees,policyholders and claimants under policies.It resulted in a restructuring of the insurance industry and was a major cause of an insurance crisis,particularly in public liability insurance.

Question 3

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.

Answer 3

D

Question 4

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 5

With respect to ethical relativism,codes of law are relative to other codes of law.

Question 6

Which of the following scenarios best describes Jeremy Bentham's utilitarian philosophy?

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.

Question 7

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

Question 8

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

Question 9

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

Question 10

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

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

Question 11

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.

Question 12

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 13

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 14

Explain an advantage associated with ethical business practices?

Question 15

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

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

Question 16

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 17

Morals are concerned with the distinction between right and wrong.

Question 18

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 19

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

Question 20

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 21

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 22

List some examples of legal rules with ethical considerations.

Question 23

Because they are legal entities,corporations are exempt from ethical responsibilities.

Question 24

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 25

Deontological ethics means that the end justifies the means.

Question 26

As a general rule,an organisation's integrity program should include:

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 27

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

Question 28

Current law requires all businesses to have a corporate code of conduct for ethical business practices.

Question 29

ACME Inc.manufactures high-in-demand electronic components.As part of its sales contracts with customers,ACME Inc.requires that customers agree not to hold ACME Inc.liable for more than fair market value for defective components and that customers mediate any dispute they may have with ACME Inc.Is ACME Inc.'s contract unconscionable?

A)Yes,ACME Inc.'s contract is unconscionable,if it is marginally unfair to customers and against good conscience.
B)Yes,ACME Inc.'s contract is unconscionable because its terms are one-sided and grossly unfair to customers.
C)No,ACME Inc.'s contract is not unconscionable because it is transparent about the exact terms.
D)No,ACME Inc.'s contract is not unconscionable because customers still have rights under the contract.

Question 30

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.

Question 31

After the McCabe v British American Tobacco case,how did the Parliament of Victoria amend its laws?

A)The Parliament of Victoria banned the sale of tobacco products.
B)The Parliament of Victoria made it a criminal penalty to deliberately and knowingly destroy evidence.
C)The Parliament of Victoria gave attorneys the discretion to either follow the letter of the law or the spirit of the law.
D)The Parliament of Victoria's legal amendments only apply to the destruction of evidence before the commencement of litigation.

Question 32

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 33

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 34

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 35

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 36

Business ethics is about how we conduct our business affairs.

Question 37

What was the ethical issue raised by the McCabe case?

A)Whether smokers make an informed decision to smoke and are therefore responsible for their own decision.
B)Whether Mrs.McCabe produced the requested documents in a timely manner.
C)Whether the destruction of the documents made a fair trial impossible for Mrs.McCabe.
D)Whether Mrs.McCabe withheld key evidence that was being sought by the defendant.

Question 38

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 39

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 40

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

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.

Question 42

As officers of the court,lawyers are expected to act within the spirit of the law.