Deck 2: Understanding Business Ethics and Social Responsibility

Question 1

Some actions may be illegal,yet considered ethical.

Answer 1

False
Explanation:Unethical actions include those that are illegal. Illegal activities are always considered unethical but some legal activities are also considered unethical.

Question 2

A company that does not act responsibly toward its customers may lose their trust and ultimately their business.

Answer 2

True
Explanation:There are also many ways in which business is answerable to government control and regulation.

Question 3

Most companies have concluded that ethics training programs are not worthwhile.

Answer 3

False
Explanation:Most analysts agree that companies must take the chief responsibility for educating employees on ethical behavior.

Question 4

In the United States,there are increased expectations for a greater social role for business.

Question 5

The standards of behavior that guide managers in their work are called employee ethics.

Question 6

A manager who discriminates against African Americans in hiring exhibits both unethical and illegal behavior.

Question 7

Most companies have policies that forbid buyers from accepting gifts from suppliers.

Question 8

Ethics are beliefs about what is right and wrong.

Question 9

The proactive approach to social responsibility argues that profits should not be spent on social programs.

Question 10

Some ethical and unethical behaviors fall into gray areas,while others are widely agreed upon.

Question 11

What constitutes ethical behavior is determined entirely by the individual.

Question 12

The best stance toward social responsibility a company can take is a proactive one.

Question 13

An individual's personal code of ethics is shaped by his or her life experiences.

Question 14

There is general consensus within the United States that social responsibility must take precedence over profits.

Question 15

Business ethics refers to ethical or unethical behaviors by employees in the context of their personal lives.

Question 16

Ethical standards relating to business practices are fairly consistent around the world.

Question 17

A business's social responsibility to investors includes following proper accounting procedures.

Question 18

A conflict of interest occurs when an activity may benefit the individual to the detriment of his or her employer.

Question 19

Ethical values do not vary from person to person.

Question 20

Accepting and offering bribes is a normal part of doing business in some parts of the world.

Question 21

What is the term given to the groups,individuals,and organizations that are directly affected by the practices of an organization?

A) primary agents of interest
B) social auditors
C) senior managers
D) organizational stakeholders
E) local communities

Question 22

How often should an organization change its objectives?

A) constantly
B) infrequently
C) every year
D) every decade
E) never

Question 23

Small businesses must answer many of the same social responsibility questions as big businesses.

Question 24

What is likely the single MOST effective step that a company can take to set ethical standards?

A) Offer large cash awards for whistle-blowing.
B) Suggest that employees take ethics training.
C) Post ethical rules on bulletin boards.
D) State that the workplace values diversity.
E) Demonstrate support from top management.

Question 25

Though an individual feels that his behavior is ethical,that behavior may still be considered unethical if social norms consider it to be so.

Question 26

What does the Sarbanes-Oxley Act of 2002 require a chief financial officer to do?

A) prevent insider trading
B) engage in strategic management
C) guarantee the accuracy of financial reporting
D) hire a forensic accountant
E) oversee the implementation of ethical standards

Question 27

Which of the following should be the first step in assessing ethical behavior in a certain situation?

A) Seek the advice of managers.
B) Make a judgment based on the outcome of the activity.
C) Consider appropriate moral values.
D) Collect facts related to the situation.
E) Gather a range of opinions on the effectiveness of the policy.

Question 28

Which of the following statements is MOST likely to be included in a company's code of ethics?

A) We reward high achievers.
B) We strive for domination in the market.
C) We achieve our objective by raising capital.
D) We believe in our company brand.
E) We reward all valuable contributions.

Question 29

The Consumer Bill of Rights is backed by numerous federal and state laws.

Question 30

The most essential ingredient in encouraging ethical behavior in an organization is letting employees dictate ethical norms.

Question 31

How do top managers BEST demonstrate a commitment to ethical business practices?

A) by adopting written codes of ethics
B) by reading employees' e-mails
C) by decentralized decision-making practices
D) by cooperating with other companies
E) by monitoring employees' Web searches

Question 32

A whistle-blower is an outsider who reports publicly on the wrongdoings of companies.

Question 33

The ethical norm of utility evaluates whether an act respects the rights of all parties.

Question 34

What must every corporation do in maintaining and reporting its financial status?

A) purchase stocks on margin
B) use creative accounting practices
C) support increased stock prices
D) aim to maximize predicted profit margins
E) conform to generally accepted accounting principles

Question 35

Advertising for which of the following products is MOST likely to have ethical ramifications?

A) swimwear
B) sporting equipment
C) decaffeinated beverages
D) books
E) alcohol

Question 36

If a firm hides responsibility for wrongdoing,what type of stance are they taking toward social responsibility?

A) responsible
B) obstructionist
C) accommodative
D) proactive
E) moderate

Question 37

Which of the following occurs when someone uses confidential information to gain from the purchase or sale of stocks?

A) identity theft
B) a margin purchase
C) insider trading
D) collusion
E) a guarantee

Question 38

What are beliefs about what is right and wrong or good and bad called?

A) motivators
B) rules
C) cultures
D) ethics
E) laws

Question 39

What term refers to the way in which a business tries to balance its commitments to groups and individuals in its social environment?

A) business ethics
B) socialization
C) stakeholder consciousness
D) social responsibility
E) corporatization

Question 40

Which statement about codes of ethics is FALSE?

A) Fewer and fewer companies are adopting codes of ethics.
B) Codes of ethics are determined by company managers.
C) Some ethical responses can be learned through experience.
D) Social responsibility involves providing quality products and pricing products fairly.
E) Core principles and values should remain a constant characteristic of a company.

Question 41

Which one of the following organizations has as its primary function the regulation of advertising and pricing practices?

A) Food and Drug Administration (FDA)
B) Federal Trade Commission (FTC)
C) Federal Communication Commission (FCC)
D) Securities and Exchange Commission (SEC)
E) Small Business Administration (SBA)

Question 42

Jordan is a recent college graduate with a degree in computer programming.He has just begun his first full-time job and is excited to apply the skills that he worked so hard to acquire.Though he excelled as a student,Jordan is anxious about how successful he will be as an employee.When an opportunity unexpectedly presents itself to take credit for a brilliant software program that someone else wrote,Jordan does not resist and claims the program as his own.Which of the following would LEAST likely also happen along with Jordan's decision?

A) Other recently hired employees who learn of Jordan's dishonesty are hesitant to report him because they think he is the boss's favorite new employee.
B) After thinking deeply about his behavior, Jordan becomes better equipped to act ethically in the future.
C) Without recognizing his behavior as unethical, Jordan steals office supplies and reports more hours on his time sheet than he has actually worked.
D) The company's ethics committee agrees that employees should not be expected to tell the truth if honesty is not part of their personal ethics.
E) An employee who reports Jordan's dishonesty consequently suffers from psychological and emotional stress.

Question 43

What is the term for an employee who detects and tries to put an end to a company's unethical,illegal,and/or socially irresponsible actions by publicizing them?

A) fast-track manager
B) whistle-blower
C) corporate lookout
D) government inspector
E) blue sky thinker

Question 44

SeaBreeze Sailing Company manufactures sailboats for personal pleasure use.Which of the following would suggest that SeaBreeze Sailing Company is NOT committed to corporate social responsibility?

A) Sailboats are available for customer rental only when weather conditions are safe.
B) The boats are constructed from scarce or nonrenewable natural resources.
C) Employees are provided with excellent vacation packages.
D) The company engages in practices that benefit local investors.
E) Advertisements for sailboat rentals contain correct pricing information.

Question 45

Why has climate change become a major issue for both business and government?

A) The body of scientific evidence is inconclusive.
B) The solutions to the problems are unanimous.
C) The weather patterns are becoming increasingly uniform.
D) The change in climate patterns affects the entire planet.
E) The effects are confined to national boundaries.

Question 46

What is the term used to describe a situation when increased demand leads to overly steep and often unwarranted price increases?

A) price fixing
B) price matching
C) price stabilization
D) price gouging
E) price comparison

Question 47

What act was passed in 2002 as a response to a number of highly publicized accounting scandals?

A) Sarbanes-Oxley Act
B) McCain-Feingold Act
C) Securities and Exchange Act
D) Accounting Standards Act
E) Dodd-Frank Act

Question 48

Which of the following is the BEST description of organizational stakeholders?

A) competitors
B) government regulators
C) the officers and key employees of an organization
D) individuals and businesses that own stock in a company
E) individuals and groups that are directly affected by the practices of a company

Question 49

Jana and Kate are the owners of an upscale jewelry boutique that offers unique and much-desired accessories in an affluent neighborhood.Jana and Kate are concerned,however,that the company's commitment to social responsibility has begun to diminish in various respects.How would this MOST likely be evident?

A) Other local businesses may be forced to close their doors.
B) The health of employees and their children is starting to suffer.
C) Local investors and stakeholders seek to invest their money elsewhere.
D) The boutique's customer base may decrease sharply due to moderate increases in price.
E) Employees may begin making fewer charitable personal donations.

Question 50

Which of the following would NOT be included among the primary agents of interest with regard to a company's ethical behavior?

A) stockholders
B) unions
C) bloggers
D) customers
E) competitors

Question 51

Which of the following is a way to tell how an organization is doing in meeting its social responsibility goals?

A) governmental mandate
B) executive summary
C) social audit
D) government initiative
E) financial report

Question 52

What is it called when two or more firms agree to collaborate on wrongful acts?

A) monopolizing
B) consumerism
C) collusion
D) brokering
E) business as usual

Question 53

Dara's Dress Shop was honored last year for its strong commitment to corporate social responsibility.Which of the following would MOST likely decrease the shop's chances of being recognized again this year?

A) The shop has laid off two employees during the past six months.
B) Fewer clearance sales have been offered to the public this year.
C) An experienced ethics professional has been added to the Board of Directors.
D) Many of the dresses are made from fabrics spun by unprotected child laborers.
E) The shop has reduced its line of designer merchandise.

Question 54

Which of the following is NOT an element of green marketing?

A) profitability
B) sustainability
C) production processes
D) product modification
E) packaging reduction

Question 55

Chang is the CEO of a local furniture business.He is very committed to treating his customers with honesty and fairness.At the end of a long day,Chang knowingly accepts a $20 bill that a customer accidentally hands him instead of a $1 bill.Which of the following is MOST likely to be true of Chang?

A) He has a highly developed set of personal ethics.
B) His entire business is based on unethical principles.
C) He has acted in a manner that runs counter to his business ethics.
D) His personal ethics and business ethics are consistent.
E) He learned his business ethics from his employees.

Question 56

What is the term for an activity that may benefit the individual to the detriment of his or her employer?

A) agency dispute
B) leadership challenge
C) conflict of interest
D) proactive stance
E) ethical standard

Question 57

The CEO of Perry's Pizzeria,a rapidly growing restaurant chain,is committed to a high level of corporate social responsibility along with continued business success.Which action by the CEO would most enhance the company's reputation for social responsibility?

A) using more nutritious but more expensive, ingredients
B) cutting employees' wages and benefits to boost the company's stock price
C) using marketing or advertising methods that would allow the company to discreetly reduce pizza size without also reducing the price
D) packaging products in material that costs less, even if customers object to the change
E) taking steps that would cause competitors to close their doors

Question 58

Which ethical norm considers whether a particular act optimizes the benefits to those who are affected by it?

A) utility
B) rights
C) justice
D) caring
E) respect

Question 59

Which of the following has NOT been identified as a basic consumer right?

A) a right to safe products
B) a right to low prices
C) a right to be heard
D) a right to choose what they buy
E) a right to be informed about a product

Question 60

Jordan is a recent college graduate with a degree in computer programming.He has just begun his first full-time job and is excited to apply the skills that he worked so hard to acquire.Though he excelled as a student,Jordan is anxious about how successful he will be as an employee.When an opportunity unexpectedly presents itself to take credit for a brilliant software program that someone else wrote,Jordan does not resist and claims the program as his own.Which of the following statements must be true about Jordan's decision?

A) It was made with careful thought.
B) It does not reveal anything about his beliefs or character.
C) It raises questions about his personal ethics.
D) It will strengthen his professional skills.
E) It will not benefit him professionally.

Question 61

Moia is a successful entrepreneur who owns several popular pastry shops.She often imports macadamia nuts from countries with poor economic conditions,which has furthered her desire to help improve the lives of the people living there.How can Moia BEST exhibit corporate social responsibility to the citizens of these nations?

A) by including labels on her products indicating where the nuts come from
B) by hiring people who have traveled to these nations
C) by opening pastry shops in these countries that would create jobs for the citizens there
D) by purchasing the nuts more regularly
E) by shipping free pastries to these nations

Question 62

Which of the following statements about corporate social responsibility is TRUE?

A) It cannot legitimately be influenced by a company's competing interests.
B) It does not include issues raised by marketing and advertising.
C) It must be concerned only with the well-being of employees and consumers.
D) Environmental matters must be addressed at the expense of profits.
E) It benefits a business by increasing efficiency and sales.

Question 63

When evaluating a decision based on the ethical norm of utility,a manager is MOST likely to consider which of the following questions?

A) Is the decision consistent with what we regard as fair?
B) Does the decision respect the rights of the individuals involved?
C) Is the decision consistent with people's responsibility to each other?
D) Is the decision consistent with best management practice?
E) Does the decision optimize the benefits for those who are affected by it?

Question 64

When evaluating a decision based on the ethical norm of rights,a manager is MOST likely to consider which of the following questions?

A) Is the decision consistent with what we regard as fair?
B) Does the decision respect the individuals involved?
C) Is the decision consistent with people's responsibilities to each other?
D) Does the decision optimize the benefits for those who are affected by it?
E) Does the decision comply with current legislation?

Question 65

Which of the following steps would be LEAST likely to help a business develop and maintain an ethical environment?

A) Ensure that a mission statement is in place.
B) Communicate standards of behavior to all employees.
C) Implement ethics training programs.
D) Offer orientation programs so that new employees understand the business's ethical standards.
E) Trust that management-level employees will act ethically.

Question 66

Wei-Yin runs a small,socially responsible business in which she sells her own watercolor paintings.Wei-Yin has a passion to help aspiring artists in her area achieve their dreams,but so far has assisted only a few of them.Which of the following would MOST likely be a reason for this?

A) Wei-Yin does not have much time or money to devote to this desire.
B) Wei-Yin is consumed with making a large profit in her business.
C) Wei-Yin fears that helping more artists will mean more competition for her company.
D) Wei-Yin does not have a sound ethical code in place.
E) Wei-Yin does not wish to engage in corporate philanthropy.

Question 67

What is the MOST effective step that a company can take to promote ethical behavior?

A) conduct frequent comprehensive audits of all financial information
B) have employees sign a code of conduct upon hiring
C) demonstrate top management support of ethical standards
D) publicize efforts to become more ethical
E) survey employees on their personal ethical codes

Question 68

What is a social audit?

A) an examination of a company's financial records to determine their conformance with GAAP
B) a program to promote consumer activism
C) an analysis by the government of a company's compliance with employment laws
D) an analysis of a firm's success in using funds earmarked for meeting its social responsibility goals
E) a check on consumer rights

Question 69

What is the full meaning of the acronym GAAP?

A) general action accounting points
B) gradually accepted activity positions
C) generally accepted accounting principles
D) greater antagonistic action plans
E) general action audit principles

Question 70

Zach's company has appointed him to boost the business's level of corporate social responsibility.Which of the following would MOST likely be an appropriate step for Zach toward achieving this task?

A) extending employees' hours while paying them the same
B) placing less priority on the satisfaction of investors
C) reducing the company's number of charitable contributions
D) offering employees better health benefits while still increasing the company's profit
E) suspending standards designed to protect the environment

Question 71

The Omega Group's mission statement conveys a primary commitment to compassionately improving the lives of elderly citizens.What is LEAST likely to be true of the company's ethical code?

A) The company values the well-being of others.
B) The company believes that all people have worth.
C) The company prohibits age discrimination when hiring employees.
D) The company expects and requires elderly citizens to contribute to society.
E) The company prioritizes fair treatment of all human beings.

Question 72

Which of the following questions would a company dedicated to increasing its level of corporate social responsibility be LEAST likely to ask?

A) "How can we afford to pay our employees more?"
B) "Should we offer more sales in order to better serve our customers?"
C) "Can we purchase better quality ingredients while still making a profit?"
D) "Which charitable donations will make our investors most happy?"
E) "If our profits go up, can we lay off some of our employees?"

Question 73

Moia is a successful entrepreneur who owns several popular pastry shops.She often imports macadamia nuts from countries with poor economic conditions,which has furthered her desire to help improve the lives of the people living there.Which of the following challenges would Moia likely find to be MOST central in seeking to run both a socially responsible and successful business?

A) how to engage in fair marketing practices that are cost-effective
B) how to pay her overseas workers fair wages, sell her pastries for less there, and still make the necessary profit
C) how to obtain the best quality macadamia nuts at a much lower price than they are worth
D) how to decrease employee benefits without experiencing subsequent complaints
E) how to perform a social audit without taking up too much valuable work time

Question 74

The CEO of Perry's Pizzeria,a rapidly growing restaurant chain,is committed to a high level of corporate social responsibility along with continued business success.Which of the following would likely be a failure in the area of legal compliance for the pizzeria?

A) Ingredients used in Perry's pan pizza are not as healthy as those of other companies' pizza.
B) Female applicants are not hired for delivery jobs, even when they are capable of performing those duties.
C) An employee is fired after she is caught stealing money from the cash register.
D) Persons with certain food allergies are not hired as employees.
E) Perry's signature dessert is advertised as being made from a popular chocolate bar.

Question 75

Carla's Collegiate Exchange,a popular bookseller among university students,has just drafted its mission statement.The company seeks to sell books on a sliding scale based on a student's available income.What does this MOST likely reveal about the company's ethical code?

A) The company believes financially challenged students should not be hindered from succeeding educationally.
B) The company believes that poor individuals should be given a greater chance at success than are wealthy individuals.
C) The company is indifferent to people's financial well-being.
D) The company is not concerned with fostering the success of others.
E) The company is most motivated by a desire for greater profits.

Question 76

A husband and wife have just opened a gymnastics center,with the hope of training future Olympians.They desire to run their center in a socially responsible way.Which of the following should they certainly avoid?

A) purchase of substandard gym equipment
B) advertising methods intended to profit the center
C) initiatives that decrease the satisfaction of investors
D) doubling of enrollment fees for the program
E) provision of attractive salaries for employees

Question 77

Pamela is the manager of a local eyewear store.She wants to ensure that the ethical conduct of her employees is above reproach.Which of the following should Pamela avoid doing?

A) underscoring the importance of ethics to all employees
B) encouraging and equipping employees to follow the company's ethical standards
C) modeling behavior that employees should adopt
D) relying on management alone to report ethics violations
E) ensuring that a strict code of ethics is in place

Question 78

A university has filed a formal complaint against a local hospital for failing to be socially responsible in its treatment of university students completing internships there.Which of the following would most likely be a valid response by a hospital that was NOT guilty of this charge?

A) "The responsibility to take disciplinary action against the supervisor who physically threatened the student interns lies with someone else."
B) "Because sanitary conditions are very important, floors are mopped regularly and are sometimes left wet. We cannot be held responsible if student interns unfamiliar with this practice slip and injure themselves."
C) "All student interns are clearly instructed to wear gloves and protective covering when handling blood samples that may endanger the interns' health."
D) "We expect our student interns to work double shifts after a day of classes so that they will be well prepared for a career in the health professions."
E) "Unforeseen budget cuts have forced us to revoke our contracts with student interns regarding hourly compensation."

Question 79

Tiffany's Taffy Shop is known for its commitment to corporate social responsibility.However,the owner,Mrs.Wu,has learned that an employee has been unknowingly ordering candy wrappers that are harmful to the environment.How could Mrs.Wu BEST recover from this ethical lapse?

A) by firing the employee immediately
B) by seeking ways to remedy any harm that may have been caused
C) by considering ethics training for all employees
D) by ordering candy wrappers that are less expensive
E) by decreasing the amount of taffy sold

Question 80

Which of the following steps would be LEAST likely to help a business develop and maintain an ethical environment?

A) Ensure that a mission statement is in place.
B) Communicate standards of behavior to all employees.
C) Implement ethics training programs.
D) Offer orientation programs so that new employees understand the business's ethical standards.
E) Trust that employees will act ethically.