Deck 5: Business, Societal, and Ethical Contexts of Law

Question 1

Under the maximizing profits theory,a company strives to do no harm,as long as the company continues to be profitable.

Answer 1

False

Question 2

A particular act can be deemed unethical yet still be legal.

Answer 2

True

Question 3

Under the moral minimum theory,as long as the business remains profitable,the company strives to act as ethically as possible.

Answer 3

True

Question 4

Treasury Secretary Geitner had knowledge of the AIG bonuses but failed to stop them because they were obligations between a private company and its employees.

Question 5

refers to having a conscious system in use for deciding moral dilemmas.

Question 6

theory is a moral philosophy that certain rights and moral values are timeless and universal and discoverable through human reason.

Question 7

The idea that society is best served when companies aggressively seek a competitive advantage and that ethical violations will eventually harm companies reflects the narrow view,or theory,of corporate social responsibility.

Question 8

The notion of is a central theme in Immanuel Kant's work.

Question 9

Generally accepted standards of right and wrong in a given society are called .

Question 10

Altering people's values is one of the objectives of an organizational ethics program.

Question 11

A company's code of conduct and code of ethics may be combined into a single document.

Question 12

Ethical misconduct not only includes illegal and unethical practices but also includes questionable practices of managers and organizations.

Question 13

Business ethics is a commitment to following the opinions of stakeholders in pursuing a course of action in business operations.

Question 14

The terms morals and ethics are synonymous.

Question 15

Religious teachings and ethics are separate and distinct and rarely if ever overlap.

Question 16

Ethical problems faced by managers almost always come down to a clear choice,with one option clearly the most ethical choice.

Question 17

People and companies that are directly and indirectly affected by another company's decisions are called .

Question 18

The -based standard requires that the majority good be placed ahead of the individual good when faced with a moral dilemma.

Question 19

Prioritizing moral values for an organization and ensuring that behaviors are aligned with those values is known as .

Question 20

A company's environmental policy and employee expectations regarding protection of the environment would be found in the company's code of .

Question 21

Social responsibility is at its highest when the moderate view,or government's hand theory,of corporate social responsibility is utilized.

Question 22

Lin-Mara's company has a code of ethics and a separate code of conduct.If she wants to be sure that she complies with the company dress code,she would reference the code of ethics.

Question 23

A/B testing is an unethical practice.

Question 24

The fundamental underlying concept of corporate social responsibility is that conscience resides in individuals but not in a corporation itself.

Question 25

In January 2012,about one-third of Facebook's users were the subject of social experiments,without their knowledge.The other two-thirds chose to opt out of the testing.

Question 26

Facebook users must agree to a Data Use Policy,which states that Facebook may use the information from users for research and testing.

Question 27

The final result of the AIG Bonusgate scandal was that no new laws or taxes were enacted,nor were there any additional official actions taken by Congress or the president.

Question 28

A comprehensive values management program may be used in managing a corporation's diversity program.

Question 29

Immanuel Kant is credited with developing the utilitarian stream of moral reasoning.

Question 30

Codes of ethics are insufficient and do not serve their proper purpose if they are intended only to ensure that company policies are legal.

Question 31

Grimshaw v.Ford Motor Company is often cited as a failing of the management's hand approach to corporate social responsibility.

Question 32

No formal complaint was filed against Facebook for its psychological testing of users because the issue was an ethical dilemma,not a legal one.

Question 33

The ethical decision-making approach of John Rawls,under which everyone negotiates from behind a veil of ignorance,is often referred to as a contract-based approach.

Question 34

In Ypsilanti Township v.General Motors Corporation,Ypsilanti was successful in its lawsuit against GMC based on GMC's unethical acceptance of tax abatements and misrepresentations about maintaining jobs.

Question 35

Facebook submitted its experiment for pre-approval to the Institutional Review Board,an independent ethics committee that requires scientific experiments to abide by consent and safety standards.

Question 36

Toby's company has a code of ethics and a separate code of conduct.If he would like to find out about the company's expectations or requirements regarding community service,he would reference the code of ethics.

Question 37

Honoring ethical values and respecting communities and the environment while recognizing the interests of shareholders are elements of corporate citizenship.

Question 38

AIG caused a major political firestorm when,after receiving taxpayer bailout money,it distributed
$165 million in performance bonuses to executive employees.

Question 39

Advocates of the invisible hand theory do not trust corporate leaders with stewardship over noneconomic values.

Question 40

Leah has just handed in a major required report to her professor,and after careful scrutiny,the professor finds numerous instances of plagiarism.If the school policy and the professor's personal perspective follow a principles-based approach,Leah should be charged and suffer whatever penalty is prescribed by school policy.

Question 41

What action did Facebook's COO,Sheryl Sandburg,take in response to the complaint?

A) She issued a statement explaining the experiment and the concept of A/B testing.
B) She issued a half-hearted apology stating that the study was part of ongoing research companies do to test products and apologized for the lack of communication.
C) She issued an apology, urging Facebook and other companies to stop the unethical research on consumers.
D) She took no action.

Question 42

Fly High Aviation provides maintenance for executive jets based on private contracts with corporations that maintain airplanes for company use.Which of the following is least likely to be a Fly High stakeholder?

A) The mechanics who work for Fly High.
B) The corporations that contract with Fly High for their services.
C) The citizens who live near the airports that planes maintained by Fly High fly into.
D) Individuals who own Fly High stock.

Question 43

The utilitarian approach to moral philosophy was founded by
A) Cicero.

A) Jeremy Bentham.
B) Immanuel Kant.
D) Kenneth Lay.

Question 44

Big Bucks Bank has published a detailed company ethics code based on an extensive values management process.The code specifies that all dealings with customers are to be fully documented and all dealings with the public not only are to be legal but should be based on what is best for the consumer.Everyone who deals with a customer is responsible for what he or she advises and must document conversations.Promotions and rewards will be based not only on productivity but also on fairness and how customers are treated.At the weekly mortgage department meeting,Brayson,the supervisor,informs his department that loan production is way down and that they need to do whatever is necessary to step up the number of loans made.As a result,several questionable loans are granted that make money for Big Bucks but result in families ultimately being subject to foreclosure.Assuming the questionable loans have been unethically made,which trait of an ethical company has been breached?

A) Senior management has not articulated a clear vision of integrity.
B) Policies and practices of the mortgage department are not aligned with ethical standards of the organization.
C) Responsibility is collective rather than individual.
D) Nothing has been breached as this is common among even the most ethical of companies.

Question 45

The formal complaint against Facebook alleged that Facebook deceived its users because

A) the Data Use Policy permitted Facebook to charge a fee to users for the experiment.
B) not all users had to agree to the Data Use Policy.
C) the Data Use Policy did not state that data would be used for research purposes or that users' personal information would be shared with researchers.
D) the Data Use Policy did not state that Facebook collected user data for analysis.

Question 46

Mighty Motors is a major automobile manufacturer with assembly plants in small towns throughout the United States.Mighty Motors is suffering losses in the current economy and has decided to stop manufacturing the Mighty Brute,an SUV with horrible gas mileage that simply isn't selling.The company will also be closing the only plant that is exclusively dedicated to manufacturing the Brute.This particular assembly plant is the primary employer in the town where it is located.Who,among the following,would be considered a secondary stakeholder in this decision?

A) Ed, who has been working at the factory for ten years.
B) See Through Glass, which manufactures the windshields and side windows exclusively used in the Brute.
C) Mike, a town resident who teaches elementary school and drives a Hyundai Sonata.
D) Tony, who runs a pizza shop that many of the plant employees go to for lunch and sometimes dinner.

Question 47

Shania is on the board of directors of a public company.The board is deciding on a new health care plan that would cost its workers more than its current plan,but would save the company millions.After asking herself how she would feel if this decision was announced to the public on the local and national news,Shania decides to vote against changing the health plan.The approach Shania used in making her decision is referred to as the .
A) maximizing profits test

A) universalization test
B) invisible hand test
D) broadcast news test

Question 48

"What if everyone took these same actions" is a question sometimes called the
A) functionality approach.

A) universalization approach.
B) utilitarian approach.
D) morality approach.

Question 49

In Grimshaw v.Ford Motor Company,if Ford had made the repairs to the cars,diminishing profit but enhancing customer safety,which theory of corporate social responsibility would Ford have been exhibiting?

A) The narrow view, or invisible hand theory.
B) The moderate view, or government's hand theory.
C) The hybrid view, or citizen's hand theory.
D) The broad view, or good corporate citizenship.

Question 50

After numerous threats from the federal government to enact laws and taxes to recoup bonus money paid to executive employees at AIG,of the reported $165 million paid out,how much was returned by those receiving bonuses?
A) approximately $100 million

A) approximately $50 million
B) approximately $75 million
D) approximately $120 million

Question 51

AIG received a government bailout to save the company because

A) had the company gone bankrupt, too many employees would have become unemployed without sufficient unemployment insurance to aid them.
B) had the company gone bankrupt, the effect on New York City, where it was situated, would have been a catastrophe, so the bailout was actually in part to keep New York City solvent.
C) had the company gone bankrupt, money already owed to the U.S. government prior to the collapse would never have been recovered, so the bailout was necessary to keep AIG in operation until it was solvent enough to repay the government.
D) had the company gone bankrupt, the U.S. financial infrastructure would have been severely or even irreparably damaged.

Question 52

One method described in the text for deciding whether A/B testing is ethical is to focus on

A) whether there is a risk of harm when a test is done.
B) whether there is legal and binding consent.
C) the size of the testing sample of users.
D) whether the test is secretive in nature.

Question 53

The moderate view of assessing corporate citizenship holds that

A) corporate officers and boards of directors should provide the exclusive view of corporate responsibility.
B) corporate employees below the senior executive level should provide the exclusive view of corporate responsibility.
C) community groups where the corporation is located should provide the exclusive view of corporate responsibility.
D) the government should provide the exclusive view of corporate responsibility.

Question 54

Facebook conducted a psychological test on its users to study
A) changing its color background.

A) sales and marketing data.
B) emotional contagion.
D) user's health data.

Question 55

Sasha is broke but needs a gown to go to a formal dance sponsored by her company.She goes to a local dress shop and purchases an expensive gown she cannot afford.She wears the gown to the event,tucking in and hiding the price tag rather than removing it.She dances all night and the next day goes back to the shop and returns the dress.The store's policy is that it will accept returns for 30 days as long as the price tag is still attached.

A) Sasha has not acted unethically because she complied with the store's policy.
B) Sasha has not acted unethically because she got the idea from an article in a magazine that said that celebrities do things like this all the time.
C) Sasha has not acted ethically because this is not an accepted act in the general society.
D) Sasha has not acted ethically if she returns the dress without cleaning it but has acted ethically if it is cleaned and sanitized before returning it.

Question 56

KAM Corp.has separate codes of ethics and conduct.Each of the following would likely be included in its code of ethics except

A) expectations of privacy and dignity to be afforded others.
B) expectations of an individual's community service.
C) avoidance of conflicts of interest.
D) requirements of procedural due process and impartiality.

Question 57

Which of the following was not an argument made by recipients of AIG bonuses who were defending their right to receive and retain the bonus money?

A) The bonuses were negotiated into their contracts prior to the AIG collapse.
B) The bonuses were based on meeting individual goals that the employees did meet.
C) The bonuses were needed to retain AIG's top talent, who were necessary as the company rebuilt.
D) The bonuses came from money AIG had on hand at the time of the collapse and did not come from the taxpayer-supplied funds.

Question 58

The categorical imperative test consists of

A) individuals making ethical decisions with an eye toward potential consequences if everyone in society acted similarly.
B) individuals making ethical decisions with an eye toward potential consequences if only some in society acted similarly but not all.
C) individuals making ethical decisions with an eye toward potential consequences if no one else in society acted similarly.
D) individuals making ethical decisions with an eye toward potential consequences if most in society benefit even if some in society are harmed.

Question 59

Nobel Prize-winning economist Milton Friedman believed that

A) managers who pursue social initiatives with corporate funds are morally correct and are pursuing a path that is required regarding their fiduciary duties owed to stakeholders.
B) Adam Smith's belief - that the common good is best served when economic institutions don't pursue a common good but instead pursue an economic advantage - is wrong and misguided.
C) the only responsibility a business has is to maximize shareholder wealth.
D) a deliberate amorality in corporate decision making is discouraged.

Question 60

Modern Corporation operates a steel mill.It has never contributed anything to the local community,and it knowingly pollutes both the air and the river that runs by its mill.The corporation's reasoning is that the cost of installing pollution control devices would diminish its profits,and it doesn't support the community because it provides jobs and doesn't think it owes anything else to the citizens in its area.Donating to the community would also diminish profits.Which theory of corporate social responsibility is Modern Corporation exhibiting?

A) the narrow view, or invisible hand theory
B) the moderate view, or government's hand theory
C) the hybrid view, or citizen's hand theory
D) the broad view, or management's hand theory

Question 61

Faber College,founded in 1904,is an integral part of its surrounding community.Which of the following is a primary stakeholder in Faber College?

A) The students.
B) The authors of the textbooks sold to the bookstore for student purchase.
C) The local bar that students frequent when they are not studying.
D) The community newspaper that runs a weekly column discussing the events at Faber.

Question 62

When a company is developing a code of ethics,what are the four key points that must be followed to create a usable and effective document?

Question 63

Which of the following A/B tests would most likely be unethical?

A) If Facebook uses different shades of green in its interface to measure users' responses.
B) If users are incited to act out against immigrants.
C) If users are incited to purchase additional amounts of product.
D) If Facebook redirects visitors to a page programmed to display variations of a sales pitch.

Question 64

That corporations have a social responsibility and that profitability should be secondary reflects

A) the narrow view, or invisible hand theory.
B) the moderate view, or government's hand theory.
C) the hybrid view, or citizen's hand theory.
D) the broad view, or good corporate citizenship.

Question 65

In Grimshaw v.Ford Motor Company,Ford was found liable because

A) Ford ignored a government recall warning to the detriment of its customers.
B) Ford placed profit over the potential impact to customers, including potential loss of customers' lives.
C) Ford improperly designed the Pinto and did few, if any, safety tests, so the flaw wasn't uncovered until accidents started occurring.
D) Ford acted unethically by hiding the fact that lawsuits were being filed for the Pinto's defect from the government and the general public.

Question 66

Valarie is employed as a sales representative at a major corporation.On occasion she feels that the men at her office stare at her,and they occasionally make suggestive comments that upset her and make her uncomfortable.When she complains to her human resource department,the department informs her that it will send out a memo asking the male employees to start acting more professionally but it doesn't feel that the conduct has broken any laws.When she says the company and the male employees are not acting ethically,that implies that this is a legal but not an ethical matter.Do you agree or disagree,and why?

Question 67

What is the difference between ethics and morals?

Question 68

Ivan is 85 years old and Gianna,his wife,is 83.They are on a fixed retirement budget and have no disposable income and no savings.Gianna's doctor informs her that she requires a particular medicine that costs $84.They don't have money to buy the medicine,there are no relatives or friends to ask,and there are no programs that can provide them with the money for the medicine.Feeling he has no choice,Ivan goes to the local bank and robs it,handing the teller a note demanding $84 in small bills.Discuss Ivan's action from a moral and ethical point of view.

Question 69

Harper seeks to implement a policy of enhanced values management in his office.Which of the following is not a direct outcome of values management in the workplace that Harper can expect?

A) Managing values in Harper's workplace will legitimize managerial actions.
B) Managing values in Harper's workplace will strengthen the cohesiveness and balance of his organization's culture.
C) Managing values in Harper's workplace will enhance profit and profitability.
D) Managing values in Harper's workplace will cultivate greater sensitivity to the impact of the company's values and messages.

Question 70

In your opinion,was Facebook's use of A/B testing ethical or unethical? Explain.

Question 71

Tyke's Bikes is a bicycle sales and repair shop in a small city.It sells new and used bikes with a narrow profit margin and does repairs at minimal costs.Frequently,if a child comes into the shop with a broken part or a flat tire,Tyke's makes the repair for free if the child has no money.Tyke's also provides a free one-hour repair class for those who want to learn how to fix their bikes.At large local organized bike rides,Tyke's provides free services,asking only for voluntary donations.Which theory of corporate social responsibility is Tyke's exhibiting?

A) The narrow view, or invisible hand theory.
B) The moderate view, or government's hand theory.
C) The hybrid view, or citizen's hand theory.
D) The broad view, or good corporate citizenship.

Question 72

Name the five-step process that a manager should use for ethical decision making.

Question 73

You are the CEO of a major corporation that is suffering financially in the current economy.Your board has tasked you with cutting employee-related costs by 5 percent.Recognizing and referencing the pros and cons of alternative approaches you could take and the ethical theories that apply,what would you do?

Question 74

As a result of the AIG bailout,the U.S.government received a(an) stake in the company.

A) 50 percent
B) 60 percent
C) 70 percent
D) 80 percent

Question 75

Why is the case of Grimshaw v.Ford Motor Company looked at as an example of the failing of the invisible hand and government's hand approaches to corporate social responsibility?

Question 76

The triple bottom line in the perspective of corporate social responsibility emphasizes each of the following except

A) creation of profit.
B) creation or destruction of environmental value.
C) creation of social value.
D) creation of private value.

Question 77

Assume that you have money you'd like to invest in stock.Would you prefer to invest in a company that evidences values based on the invisible hand theory,the government's hand theory,or the good corporate citizenship theory of operations? Explain reasons for your choice,and indicate why the rejected choices were not chosen.

Question 78

Which of the following is not a common challenge to business ethics and values management?

A) Ethics cannot be taught.
B) Complying with the law is all that a corporation needs to do to remain ethical.
C) Ethics cannot be managed.
D) Success is measured in profits and losses, not in ethical conduct.

Question 79

Each of the following is a key component in the creation and implementation of a company's values management program except

A) identifying the values that the company should promote.
B) identifying the values that the company's peer competitors promote.
C) developing written policies and procedures to align behaviors with the company's preferred values.
D) training personnel about the policies and procedures implemented.

Question 80

What were the reasons offered to defend the fact that AIG had paid $165 million in bonuses to certain employees?