ch 4 test 2 with answers

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Chapter 4 Test Spring 2012

Ch 4 #2 Key 1. (p. 92) ________ refers to standards of moral behavior. A. Legality B. Responsibility C. Integrity D. Ethics

2. (p. 90) Laws represent the standards of ________ behavior. A. ethical B. legal C. moral D. socially responsible Laws are written to protect ourselves from fraud, theft, and violence. Ethics go beyond the law. Many immoral and unethical acts are well within the law.

3. (p. 90) Ethical behavior covers a ________ range of conduct than legal behavior. A. wider B. more limited C. smaller D. less demanding Ethical behavior requires more than following the law, but following the law is an important first step. A society gets into trouble when people consider only what is illegal and not also what is unethical.

4. (p. 92) Many individuals today believe that ethical behavior is determined by what is best for them at the time. This is an example of: A. Situational ethics. B. Moral absolutes. C. The Golden Rule. D. New age realism. 5. (p. 92) Considering the potential impact on others prior to making a decision is consistent with ________ behavior. A. legal B. anti-social C. ethical D. self-motivated 6. (p. 90) Purposefully understating your firm's income to avoid paying higher taxes is an example of: A. An accepted business practice. B. Tax accountants doing their job. C. Illegal behavior. D. A firm's responsibility to its owners. The first standard in business ethics is the legality of the activity. Tax evasion is illegal. 7. (p. 92) Cigarette producers refused to voluntarily place health warnings on their packages. In response, the federal government passed laws requiring health warnings on all cigarette packages. With respect to ethical

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Chapter 4 Test Spring 2012

behavior, this sequence of events is: A. The intended approach. B. The desired approach. C. Not the desired approach. D. Not really a concern. Ethical behavior by businesses is a reflection of a concern for the welfare of society as a whole. Many different sources give the following statements of basic moral values: integrity, respect for human life, self-control, honesty, courage, and self-sacrifice are right; cheating, cowardice, and cruelty are wrong.

8. (p. 94) Which of the following questions will help individuals and organizations when deciding if their decisions are ethical? A. Can I do this without getting caught? B. Is it balanced? C. Has it been done before? D. Is there a desirable alternative?

9. (p. 94) The first step when facing an ethical dilemma is to ask: A. "Is it legal?" B. "Is it balanced?" C. "How will it make me feel about myself?" D. "Is it ethical?"

10. (p. 94) Which of the following questions can help us avoid a decision that would injure our self-esteem? A. Is it legal? B. Is it balanced? C. How will it make me feel about myself? D. How can I avoid taking the blame?

11. (p. 93) Ethical dilemmas in business: A. force us to make poor choices. B. always end up bringing out the best in us. C. often force us to choose between equally unsatisfactory alternatives. D. define us as being moral absolutists or moral situationalists.

12. (p. 93) Business relationships often present ethical dilemmas that are: A. not easily resolved. B. easily resolved by following the relevant laws. C. best resolved by creating a win-lose situation. D. irrelevant and therefore require no action. The textbook describes an ethical dilemma as a problem without a satisfactory solution. Sometimes you must choose between equally unsatisfactory alternatives. Even for companies and individuals with a strong code of ethics, there are still no easy solutions to ethical problems.

13. (p. 94) Ethical behavior at work is learned by:

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Chapter 4 Test Spring 2012

A. Attending corporate responsibility seminars. B. Tracking the failures of those who are caught in business scandals. C. Reading about why others were fired from the job. D. Observing the actions of others.

14. (p. 96) Which of the following is a reason why a business should be managed ethically? A. It is the right thing to do. B. Strict global regulations require it. C. It is the law in the U.S. D. Employees demand it.

15. (p. 96) Relationships between businesses and among nations, A. should be based on international law, exclusively. B. should be based on fairness, honesty, openness, and moral integrity. C. should be scrutinized carefully to make some determination as to whether both sides have the same type of leader behavior when it comes to assigning work. D. will be adversarial because seldom does either side believe in win-win situations.

16. (p. 96) When managers disregard ethical concerns, the likely result is: A. a reduction in employee turnover. B. an improvement in overall manager morale. C. a reduction in lawsuits. D. a general mistrust between workers and management. Corporate standards demonstrated by top management impact the values of the rest of the organization. People learn their standards and values from observing others. Any trust and cooperation between workers and managers must be based on fairness, honesty, openness, and moral integrity.

17. (p. 96) Creating competition between employees within the corporation: A. can encourage employees to deceive customers. B. should focus on improving corporate profit. C. must be ignored when corporate ethics are developed. D. can bring out the best in employees. The text refers to the Sears experience in automotive repairs. The emphasis on meeting sales quotas created an environment that led employees to deceive their customers.

18. (p. 96) Following an ethics-based approach to decision making will normally lead to higher: A. profits. B. trust and cooperation. C. prices. D. employee turnover.

19. (p. 96) Following an ethics-based approach to decision making will normally lead to: A. higher profits. B. lower employee turnover.

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Chapter 4 Test Spring 2012

C. lower prices. D. more competition.

20. (p. 96) The Hum-dinger Corporation recently instituted a corporate ethics code. The president of the company realizes that ethical relationships are based on: A. fairness and honesty. B. strict penalties for illegal activities. C. a full-time compliance officer monitoring employee behavior. D. watchdogs and whistleblowers.

21. (p. 96) Which of the following would most likely involve ethical concerns? A. Overstating an expense report. B. Forecasting sales for the next year. C. Developing the marketing plan for the next year. D. Improving working conditions.

22. (p. 94) Jake recently invested in a Hottie Potatee franchised business that serves potatoes with all the trimmings. The business needs lots of employees in order to operate effectively. He told you that if he calls the business once each day and tells the employees that he is on his way there, they will be on their best behavior. As he tells it, "It's okay if I really don't make it there, after all, I'm the owner and the business should be able to run without micromanagement." As a recent student of business ethics, you remind Jake that: A. he should post a code of ethics that stipulates how each employee should work and how each employee should treat the customers. B. he should create a survey for customers to respond to, and then he will always know if his employees are productive. C. employees usually take-on the behavior of their leaders. If integrity is not important to the owner, it may not be important to employees. D. "No good deed goes unpunished." Even though he may think he is doing a good thing, his employees will not appreciate the fact that he is working very hard on his business, off-site. Their expectations are that he should be there, working side by side with them.

23. (p. 96) A(n) ________-based ethics code emphasizes the prevention of unlawful behavior by increasing control and penalizing wrongdoers. A. legal B. corporate responsibility C. compliance D. integrity

24. (p. 97) Which of the following terms describes someone who reports illegal or unethical behavior? A. whistleblower B. horn blower C. watch tower sentinel D. integrity watchdog

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Chapter 4 Test Spring 2012

25. (p. 96) A(n) ________-based ethics code defines corporate values; creates a supportive environment, and, stresses shared accountability among employees. A. social B. corporate responsibility C. compliance D. integrity

26. (p. 96) To improve America's business ethics: A. Congress must pass an ethics bill. B. ethics must be taught in every business school around the globe. C. a company's suppliers must be thoroughly investigated for ethical violations. D. company leaders should adopt and support a corporate code of ethics.

27. (p. 97-98) After developing a code of ethics, it should be communicated to: A. everyone with whom the business has dealings. B. the Attorney General in jurisdictions where the business has operations. C. all levels of management. D. stockholders.

28. (p. 98) Which of the following is a characteristic of an effective ethics officer? A. (S)he has a background in human resource management. B. (S)he is exceptionally organized. C. (S)he has a capacity to serve as a counselor and an investigator. D. (S)he communicates primarily via email.

29. (p. 96; 97) Compliance based ethics codes typically: A. rely on laws and regulations outside the firm for guidance. B. have a strong affinity for shared accountability among employees. C. promote a "do-it-right" climate. D. enable responsible employee conduct. Compliance-based ethics codes prevent unlawful behavior by increasing control and by penalizing wrongdoers.

30. (p. 98) What is the benefit of employing an ethics officer? A. This professional serves as a law-enforcement officer, with the authority to arrest employees who do not abide by the ethics code. B. This individual writes the ethics code and keeps this document current. He has sole authority to change the document as he sees fit. C. This professional has the responsibility to make certain that the ethics code remains a private company document; however, since the position has very little authority, it becomes a token job with high turnover. D. This individual's job is dedicated to objectively investigating ethics breaches. If necessary, employees feel comfortable with communicating confidentially to this professional.

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Chapter 4 Test Spring 2012

31. (p. 96) While speaking with his sales force, the director of sales explains, "Anyone caught violating a sales law will be fired." After studying business ethics, you recognize this remark as a reference to the firm's __________ ethics. A. technology-based B. personal responsibility-based C. compliance-based D. integrity-based 32. (p. 96) In an effort to promote the importance of a valuable education, the faculty and staff at the local community college are trained to ask each student about their career preferences, rather than suggest courses that may not benefit the student's future goals. Although it would be tempting to suggest courses just to increase the College's enrollment, employees know that it is more important to serve each student well, even if it means suggesting courses and/or degrees offered at other institutions. This approach is consistent with: A. an integrity-based ethics code. B. a compliance-based ethics code. C. a response to a government mandate. D. a personal responsibility commitment. 33. (p. 97) A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a: A. whistleblower. B. horn blower. C. cheerleader. D. moral policeman. 34. (p. 96) Zach spent several months developing a good relationship with a business client. The client is now buying a significant amount of product from Zach's company, resulting in high commissions for Zach, personally. After checking the sales records for the past six months, Ben (a sales colleague of Zach's) started visiting the same client in the hopes of capturing some of the client's business too. Although he considers it "legal and fair game", sales reps in his firm have begun to avoid him because they consider it a violation of: A. company-based ethics. B. compliance-based ethics. C. integrity-based ethics. D. whistleblowing-based ethics. 35. (p. 96) John was recently hired by Backstreet Books, an eclectic bookstore in a large college town. At the beginning of the first day on the job, his store manager handed him a small booklet consisting of company rules. He was asked to read it and sign and submit the last page, before starting work. Among other things, the rules explicitly discussed reprimands for grievous behavior and dismissal if the firm could prove that the employee was stealing product from the store. This booklet represented the ___________ of the store. A. company-based ethics B. compliance-based ethics C. integrity-based ethics D. whistleblowing-based ethics 36. (p. 98) Corporate social responsibility describes the firm's: A. exclusive responsibility to its stockholders. B. ability to plan for the unexpected. C. commitment to a management training program. D. concern for the welfare of society.

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Chapter 4 Test Spring 2012

37. (p. 99) All else held equal, socially responsible firms: A. are viewed more favorably by consumers. B. enjoy significantly higher profits. C. often experience customer loyalty problems. D. fail to earn sufficient profits for their owners. 38. (p. 99) We describe charitable donations by corporations to nonprofit organizations as __________. A. corporate philanthropy B. corporate responsibility C. corporate strategy D. structural commitment 39. (p. 100) The position a firm takes on issues that affect the corporation as well as society is known as its: A. political philanthropy. B. corporate policy. C. target posturing. D. structural positioning. 40. (p. 99) In recent years, progressive firms have embarked upon ____________, where they will commit company resources and expertise toward helping-out in emergency type situations. A. corporate philanthropy B. corporate social activism C. social civility D. corporate social initiatives 41. (p. 100) Corporate ________ covers issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution. A. responsibility B. philanthropy C. diversity D. structure and strategy 42. (p. 101) One strategy guaranteed to displease your customers is to: A. provide a quality product at only a fair price. B. focus on cost and quality control systems within your organization. C. practice deception regarding product safety issues. D. shift the production of goods to foreign facilities and layoff U.S. workers. 43. (p. 101) Investors, today are realizing financial benefit by: A. investing in companies who only operate in stable environments. B. investing in firms that have abundant resources for social initiatives. C. investing in companies who are committed to a better environment. D. investing in companies who are leaving a sizeable carbon footprint. 44. (p. 101) Insider trading involves: A. an Internet activity that establishes a barter exchange system between businesses. B. investors using private company information to further their own fortunes. C. the exchange of assets between companies in the same industry. D. a payment or reward for socially conscious behavior.

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Chapter 4 Test Spring 2012

45. (p. 104) The difference between an organization's positive social contributions and its negative social impacts is called their: A. social scorecard. B. responsibility impact report. C. net social contribution. D. community commitment level. 46. (p. 104) The purpose of a(n) ________ is to evaluate an organization's progress towards implementing programs that are socially responsible and responsive. A. accountability review B. social audit C. federal disclosure statement D. annual report 47. (p. 103) Going green means: A. increased global warming. B. increasing one's bottom line, before any other social considerations. C. increasing one's carbon footprint D. increasing one's initiatives toward a concern for the environment. 48. (p. 99) When a firm undertakes corporate social initiatives it is: A. Making donations that are directly related to a firm's corporate competency. B. Making long-term commitments to one cause. C. Hiring minority workers. D. Making safe products. Corporate social initiatives are actions where a company offers its distinctive competencies and deploys resources to help in emergency situations. Some companies maintain emergency response teams that are ready for deployment when global crises call for quick action.

49. (p. 99) Top management at Big Bend Motorcycle Company is convinced that the company has a social responsibility to its community. Management believes that the firm can have the greatest impact in this area through cash contributions to nonprofit organizations. This is an example of: A. graduated payments. B. corporate philanthropy. C. structure and strategy. D. short run profit maximization. Corporate philanthropy includes charitable donations to nonprofit groups of all kinds.

50. (p. 100) When Bagel Works employs in-store recycling, composting, and uses nontoxic cleaners, Bagel Works is participating in: A. corporate philanthropy. B. corporate social initiatives. C. corporate responsibility. D. corporate policy.