Deck 2: Integrity, Ethics, and Social Entrepreneurship

Question 1

Which of the following is NOT one of the four types of responsibilities for small businesses, as identified by business ethics and morality scholar Archie Carroll?

A) Economic
B) Discretionary
C) Legal
D) Fiscal

Answer 1

D

Question 2

Bernard praises his employees as often as he catches someone doing something right. He often hosts family get-togethers for his few employees. Bernard knows

A) a little money spent on his employees will be returned many times over in profits.
B) happy employees make for satisfied customers.
C) this will lead to his employees being more engaged and productive.
D) it's a waste of time and money, but he enjoys the camaraderie.

Answer 2

C

Question 3

An ethical business not only treats customers and employees honestly but also acts as a good citizen in its community. These broader obligations of citizenship are called

A) community commitment.
B) philanthropy.
C) environmentalism.
D) social responsibilities.

Answer 3

D

Question 4

_____ is the term for when an employee steals money from a firm.

A) Cheating
B) Fraud
C) Embezzlement
D) Promotion

Question 5

A small computer retailer makes every effort to satisfy customer needs both before and after the sale. However, this retailer regards social problems as being beyond the scope of his business. This firm's management has recognized

A) some degree of social responsibility in its commitment to customers.
B) the existence of social responsibilities but having failed to do anything about them.
C) ethical obligations to customers but not social responsibilities.
D) social responsibility as the domain of big business.

Question 6

Which of the following would be considered a stakeholder in a business?

A) Employees
B) The community
C) Customers
D) All of these are correct.

Question 7

Entrepreneurs should think carefully about their community commitments, because building a business on a foundation of "doing good" may add to a small company's

A) bottom line.
B) financial burden.
C) payroll.
D) local profile.

Question 8

Which of the following is the most frequently observed form of workplace misconduct?

A) Abusive behavior
B) Lying to employees
C) Falsifying time reports or hours worked
D) Violations of Internet use policies

Question 9

Clark, the owner of DEF LLC, bragged about hiding company income from the IRS but was surprised when he learned his sales manager was accepting kickbacks from customers. Clark should have remembered

A) kickbacks are common in his industry.
B) lapses in integrity are passed down from superiors to subordinates.
C) his sales manager could alert the IRS and Clark could be prosecuted for tax evasion.
D) bragging nearly always leads to trouble.

Question 10

Regina sometimes shorts the customer when weighing out bulk merchandise, believing the practice leads to higher profits; therefore, it is acceptable. We could infer that Regina

A) lacks integrity.
B) is not an entrepreneur.
C) cheats on her taxes.
D) is skimming.

Question 11

Some experts estimate that one-third of all new businesses fail because of

A) employee theft.
B) inaccurate financial reporting.
C) poor marketing.
D) poor community commitments.

Question 12

When a company delivers an excellent product with first-rate service, _____ and _____ are likely to follow.

A) profits; a good reputation
B) customer satisfaction; profits
C) healthy sales; profits
D) customer satisfaction; healthy sales

Question 13

Of all the possible stakeholders, which of the following are the three primary ones?

A) The government, the community, and customers
B) Owners, customers, and employees
C) Investors, creditors, and employees
D) Suppliers, customers, and the community

Question 14

Milton Friedman argued that businesses

A) should avoid social responsibility whenever it is possible to do so.
B) should be required to use their resources to meet their social responsibilities.
C) can only earn profits if they do so in a socially responsible manner.
D) are justified in being socially responsible only if doing so enhances the firm's value.

Question 15

Because a firm has considerable discretion when revealing performance results, financial reports can sometimes be _____ without technically being illegal.

A) inaccurate
B) misleading
C) unreliable
D) bellicose

Question 16

Candace sells the muffins in her bakery at a higher price than the big-box grocery, but she has a steady stream of customers willing to pay what she asks. Candace also supports local charities. What would likely happen if she lowered her prices and stopped her charitable contributions?

A) Income taxes would decrease.
B) Customers would go elsewhere.
C) Business would increase.
D) None of these are correct.

Question 17

Although unethical practices receive extensive attention in the news, most entrepreneurs and other business leaders are people of principle, whose _____ regulates their quest for profits.

A) integrity
B) self-sacrifice
C) synchronous behavior
D) loyalty

Question 18

Ethical issues

A) seldom involve legal issues.
B) involve questions of right and wrong.
C) are always clearly defined.
D) often resolve themselves.

Question 19

Which of the following is an example of an employee acting unethically toward his or her employer?

A) Taking a vacation
B) Taking unjustified sick leave
C) Working overtime
D) Taking a 15-minute break

Question 20

Providing support to the community is an example of a(n) _____ responsibility for a small business.

A) discretionary
B) economic
C) ethical
D) legal

Question 21

Many entrepreneurs feel a duty to give back to the community in return for the local support they enjoy-and they usually benefit from increased _____ as a result.

A) publicity
B) respect
C) goodwill
D) management expertise

Question 22

When Evelyn hired a new sales manager, she issued a press release emphasizing the new hire's educational background and industry experience because

A) she wanted to introduce the sales manager to the community.
B) this was her first new hire and she wanted everyone to know her business was expanding.
C) she had stolen the sales manager from a competitor and wanted to gloat publicly.
D) she wanted to highlight and bolster the credibility of the sales manager.

Question 23

All of the following make up employee payroll tax EXCEPT

A) unemployment.
B) sales tax.
C) Medicare.
D) Social Security.

Question 24

The saying "When in Rome, do as the Romans do" reflects a philosophy of ethical

A) insensitivity
B) elitism
C) imperialism
D) relativism

Question 25

If Floyd elects to monitor the Internet use of his employees at work, he should

A) install tracking software on each company computer.
B) first develop a carefully worded and legally sound policy, and then ensure all employees are aware of it.
C) consult an attorney before terminating an employee for surfing the Internet at work.
D) use URL blocks to stop employees from surfing the Internet.

Question 26

Entrepreneurs often come up short on their tax commitments because of a single-minded focus on their product or service and/or

A) casual accounting systems.
B) low-cost accounting software.
C) an incompetent in-house accountant.
D) cash-basis accounting systems.

Question 27

A U.S. manager is upset with the company's overseas representative for paying a small "access fee" to a local customs official to ensure the expedited release of a customer order. The manager's belief such payments are wrong reflects a sense of

A) cultural insensitivity.
B) ethical elitism.
C) ethical imperialism.
D) cultural integrity.

Question 28

A digital ID tag that collects data on consumers' buying habits related to a particular Internet address is known as a

A) cookie.
B) bot.
C) spider.
D) contact signature.

Question 29

Giving the impression a business is something it is not is

A) ingenious and resourceful.
B) illegal.
C) acceptable so long as no one is hurt by the transactions.
D) a way to manipulate customers.

Question 30

Which of the following would NOT be an example of "cyberslacking" at work?

A) Shopping online
B) Surfing the Internet
C) Making personal phone calls
D) Checking personal e-mail

Question 31

An eBay retailer selling counterfeit Gucci and Louis Vuitton handbags is in violation of laws related to

A) Internet fraud.
B) intellectual property.
C) bait-and-switch marketing.
D) ethical imperialism.

Question 32

PRO factors include

A) products, resources, and outputs.
B) products, representatives, and the organization.
C) people, resources, and outputs.
D) performance, relationships, and options.

Question 33

Research suggests that entrepreneurs who head small, growth-oriented companies may be _____ than CEOs of large corporations.

A) more likely to take advantage of customers
B) more likely to display lapses in integrity
C) less socially sensitive
D) less narrowly focused on profits

Question 34

Damon landed his first contract as an entrepreneur and submitted to the local newspaper a news release that gave the impression this was just one of a series of contracts and that business was booming. Damon has

A) told a legitimacy lie.
B) inflated his income.
C) evaded taxes.
D) violated the law.

Question 35

Skimming is an unethical business practice involving

A) fraudulent reporting of income for income tax purposes.
B) employees taking cash from the cash register.
C) sales associates offering gifts and inducements to purchasers.
D) managers of competing firms agreeing to charge high prices.

Question 36

A poll by an online media company found that more than 80 percent of Web users worry about

A) how well their personal information is being protected.
B) whether the content of a website is truthful.
C) phishing scams.
D) hacking.

Question 37

A band who fails to record the cash they collected for admission to their shows could be charged with

A) cash diversion.
B) tax evasion.
C) skimming.
D) payroll tax avoidance.

Question 38

If a student copies a favorite CD and gives it away to a friend to use, the student is engaged in the theft of _____ property.

A) collective
B) intangible
C) intellectual
D) real

Question 39

A firm understating income is guilty of

A) bait and switch.
B) skimming.
C) scaling.
D) relativism.

Question 40

An effective way for an entrepreneur to establish legitimacy is to

A) hire experienced employees from competitors.
B) insist on professional behavior from all employees.
C) communicate the company's mission clearly and frequently.
D) outperform the competition by underbidding and overpromising.

Question 41

Michaela is using the Ethics Resource Center's decision-making process to resolve an ethical dilemma. She has identified all the solutions to her problem. What is Michaela's next step?

A) Choose a solution as quickly as possible, as time is of the essence.
B) Evaluate each of the identified alternatives.
C) Choose an "obvious" solution that has been used in the past.
D) Discard any "off-the-wall" solutions.

Question 42

In a small organization, a(n) _____ has much greater influence on employees than _____ does.

A) code of ethics; a leader's behavior
B) leader's behavior; his or her stated philosophy
C) ethics training program; the leader's stated philosophy
D) code of ethics; the amount of legislation affecting the organization

Question 43

In their highly influential book The Power of Ethical Management, Kenneth Blanchard and Norman Vincent Peale suggest that an ethics policy be based on all of the following fundamental principles EXCEPT

A) patience.
B) pride.
C) profit.
D) perspective.

Question 44

What is the best place to start your search for a solution to a challenging ethical problem?

A) Identify as many solutions as possible to the problem.
B) Look at the surface of the problem.
C) Identify the root of the problem.
D) None of these are correct.

Question 45

Marathon Sporting Goods recently received an award for its outstanding customer service and its dedication to using eco-friendly practices. Marathon's dedication to its customers and the environment is an example of

A) a sustainable small business.
B) ethical relativism.
C) social entrepreneurship.
D) ethical imperialism.

Question 46

Which of the following types of business would be the most adversely affected by new environmental protection laws?

A) Medical waste disposal operations
B) Drugstores
C) Movie theaters
D) Liquor stores

Question 47

A survey of MBA students employed by small and medium-size companies revealed that codes of ethics shape and improve conduct in their organizations by

A) defining behavioral expectations.
B) providing a formal channel for communicating with superiors without fear of reprisal.
C) serving as a guide for handling peer pressure.
D) All of these are correct.

Question 48

The purpose of Better Business Bureaus is to

A) provide an outlet for customer complaints about a business.
B) promote ethical conduct on the part of all businesses in a region.
C) report relevant information to law enforcement agencies.
D) impose penalties on companies that engage in unethical business practices.

Question 49

Which of the following is NOT one of the long-term benefits of adopting ethical and responsible business practices, as suggested by the advocacy group Business for Social Responsibility?

A) Improved supply chain management
B) Improved productivity and quality
C) Improved access to capital
D) Better recruitment and reduced employee turnover

Question 50

An example of a small business that actually benefits from the growing interest in environmentalism would be a(n)

A) fast lube and oil change center.
B) producer of ethanol from farm waste.
C) self-service car wash.
D) asbestos removal service.

Question 51

A code of ethics becomes increasingly appropriate and necessary as a small business

A) expands its credit sales and acquires more customers who buy on credit.
B) begins to market products in other countries.
C) grows with a consequent lessening of personal interactions between the owner and employees.
D) increases borrowing to the extent that one third of its assets are financed by borrowing.

Question 52

Perhaps the most widely recommended principle for ethical behavior is to do what

A) is best for yourself.
B) will yield the most profits.
C) you would want others to do for you.
D) will reduce product prices.

Question 53

The business practices that a firm's leaders and employees view as right or wrong reflect their

A) ethical imperialism.
B) underlying values.
C) belief system.
D) code of ethics.

Question 54

When evaluating alternatives, the entrepreneur will select one that builds goodwill, is beneficial to all parties, is fair, and is

A) exploitable.
B) publishable.
C) truthful.
D) repeatable.

Question 55

Perhaps the greatest benefit of integrity in business is the _____ it generates.

A) trust
B) profit
C) reputation
D) sales

Question 56

A baker looking for new retail space has returned from a seminar on environmentalism and wishes to act responsibly in this area. Which action will best accomplish this purpose?

A) Looking into leasing a LEED-certified space
B) Reducing product prices
C) Eliminating undesirable processing odors
D) Increasing service to customers

Question 57

In a small organization, the ethical influence of a leader is

A) relatively minor.
B) overpowered by profit concerns of stockholders.
C) less important than the views of others within the firm.
D) more pronounced than it is in a large corporation.

Question 58

Which of the following statements about the Foreign Corrupt Practices Act is true?

A) It makes it illegal for foreign businesses to use bribery in their dealings in the United States.
B) It makes it illegal for U.S. businesses to use bribery in their dealings anywhere in the world.
C) It makes it legal for U.S. businesses to use bribery in their dealings anywhere in the world.
D) It makes it legal for U.S. businesses to use bribery in their dealings only in countries where bribery is legal.

Question 59

The advocacy group Business for Social Responsibility contends that which of the following is a long-term benefit of ethical and responsible business practices?

A) Improved financial performance
B) Ironclad customer loyalty
C) Increased customer turnover
D) Fewer regulatory citations

Question 60

An example of a business adversely affected by environmental protection laws would be a

A) glass manufacturer.
B) military contractor.
C) fast-food restaurant.
D) fast lube and oil change center.

Question 61

Refusing to pay a bribe even though it is a common practice in the country one is doing business in is an example of

A) cultural relativism.
B) social entrepreneurship.
C) integrity.
D) sustainability.

Question 62

William wants everyone to think his business is growing faster than it actually is so he built an impressive website with an exaggerated company history. His efforts to mislead are known as _____.

Question 63

Entrepreneurs should think carefully about their community commitments, because building a business on a foundation of "doing good" may add to a small company's _____.

Question 64

Widespread use of the Internet has focused attention on the issue of protecting _____.

Question 65

Richard believes the United States is the greatest nation on earth and that all other countries should subscribe to our system of democracy and human rights. Therefore, he expects his overseas sales representatives to follow American business practices. This is an example of _____.

Question 66

Carlos understands that cultures develop different standards and practices that govern how business is conducted. He is careful to observe local customs when he interacts with foreign companies. Carlos is practicing _____.

Question 67

Ralph has vending machines on his business property for the convenience of his employees. He reports on his income tax form only half the cash collected by these machines. The rest is hidden in Ralph's personal account. This practice is an example of _____.

Question 68

Milton Friedman believed the only _____ of a business is to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.

Question 69

Millicent, founder of a small company that markets baked goods made from organic ingredients, emphasis honesty in all transactions. In this respect, Millicent acts with _____.

Question 70

Among the many _____ of any small business are owners, customers, employees, the community, and the government.

Question 71

U.S. government assistance is available to lead the entrepreneur in compliance with environmental law through the

A) Small Business Administration.
B) Department of Energy.
C) Department of Commerce.
D) Department of the Interior.

Question 72

Malcolm creates a positive work environment and rewards his employees generously for their contributions. Malcolm is exercising integrity by _____ his employees.

Question 73

Entrepreneurs would do well to remember that customers who have questions about the _____ (products, representatives, and the organization) are less likely to make purchases.

Question 74

Tyrone gives 1 percent of the profits of his company to local organizations like the Little League and the Boys and Girls Club. In this way, Tyrone is fulfilling his _____.

Question 75

Owners, customers, and employees are considered to be the _____ of a business.

Question 76

Sometimes Vincent doesn't have enough cash on hand to send in the monthly taxes withheld from his employees' paychecks. This could be the result of a single-minded focus on production or because of a casual _____.

Question 77

Franco treats his customers with respect. He is always truthful, even if it means losing a sale. He uses high-quality materials and careful craftsmanship. If he can't meet a customer's deadline, he says so. His customers appreciate his integrity, which has helped to build _____ between them and Franco.

Question 78

Salespeople often must walk a fine line between _____ and _____.

Question 79

A recent Ethics Resource Center survey indicated that employees witness various forms of misconduct in their workplaces, with the most frequently observed offenses involving _____ and _____.

Question 80

Rhoda, the bookkeeper for a small company, has been diverting company funds into her personal bank account. Rhoda is engaging in _____.