Defining Business Ethics Questions

Chapter 2: Defining Business Ethics True / False Questions 1. (p. 22) Business ethics involve the application of standards of moral behavior to business situations. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 2. (p. 22) You can approach business ethics from two distinct perspectives: what is happening or what should be happening. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 3. (p. 22) You can approach business ethics from two distinct perspectives: a descriptive summation of the customs, attitudes, and rules that are observed within a business or a normative evaluation of the degree to which the observed customs, attitudes, and rules can be said to be ethical. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 4. (p. 22) Business ethics should be applied as a set of moral standards or ethical concepts separate from general ethics. FALSE Business ethics should not be applied as a separate set of moral standards or ethical concepts from general ethics. Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 5. (p. 22) Shareholders are anyone with a share or interest in a business enterprise. FALSE Stakeholders are anyone with a share or interest in a business enterprise. Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 6. (p. 22) Stakeholders are anyone with a share or interest in a company. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 7. (p. 22) Stakeholders include stockholders, employees, and the federal government. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 8. (p. 22) Unethical corporate behavior could negatively impact a community due to an economic decline. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 9. (p. 22-23) Unethical corporate behavior could negatively impact suppliers because of false and misleading financial information. FALSE Unethical corporate behavior could negatively impact stockholders or shareholders because of false and misleading financial information on which to base investment decisions. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.2 10. (p. 22) An organization's unethical behavior can affect creditors by leading to a failure to repay debt according to an agreed schedule. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 11. (p. 22) A negative impact from unethical corporate behavior for creditors could be the loss of employment. FALSE A negative impact from unethical corporate behavior for creditors could be principal and interest payments and repayment of debt according to the agreed schedule. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.2 12. (p. 23) The standard of corporate governance is the extent to which the officers of a corporation are fulfilling the duties and responsibilities of their offices to the relevant stakeholders. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 13. (p. 23) The standard of corporate governance appears to be at the highest level in business history. FALSE The standard of corporate governance appears to be at the lowest level in business history. Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 14. (p. 24) An oxymoron is the combination of two contradictory terms, such as "deafening silence" or "jumbo shrimp." TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 15. (p. 25) Government efficiency could be considered an oxymoron. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 16. (p. 25) "Government efficiency" and "Central Intelligence Agency" can be considered an oxymoron. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 17. (p. 25) A code of ethics is a company's written standards of ethical behavior that are designed to guide managers and employees in making the decisions and choices they face every day. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 18. (p. 25) A code of ethics is a company's unwritten standards of ethical behavior that are designed to guide managers and employees in making the decisions and choices they face every day. FALSE A code of ethics is a company's written standards of ethical behavior. Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.3 19. (p. 24) The positive outcome of unethical behavior in the business world has been increased attention to the need for third-party guarantees of ethical conduct and active commitments from the rest of the business world. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 20. (p. 24) The Ethics Resource Center defines a code of ethics as a central guide to support day-to-day decision making at work. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 21. (p. 25) The code of ethics serves as a message to the organization's stakeholders and should represent a clear corporate commitment to the highest standards of ethical behavior. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 22. (p. 25) Written standards of ethical behavior designed to guide a company's managers and employees make daily decisions refer to a Corporate Social Responsibility Statement. FALSE The company's written standards of ethical behavior is a code of ethics. Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 23. (p. 26) Typically, a company's code of ethics is a public document. FALSE The code of ethics typically is an internal document. Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.3 24. (p. 26) The code of ethics should represent a clear guide to managers and employees in making the decisions and choices they face every day. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 25. (p. 26) A code of ethics usually cannot be easily sidestepped or ignored. FALSE As seen in many of the case studies and discussion exercises in the textbook, a code of ethics can be easily sidestepped or ignored by any organization. Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.3 26. (p. 26) The issue of corporate social responsibility has advanced from an abstract debate to a core performance assessment issue with clearly established legal liabilities. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.4 27. (p. 26) Over the last four decades, corporate ethics has remained in the organizational mainstream. FALSE Corporate ethics has moved from the domain of legal and human resource departments into the organizational mainstream. Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.4 28. (p. 26) Codes of ethics are still typically cosmetic public relations documents, and very few organizations are attempting to share them with all their stakeholders. FALSE Codes of ethics have matured from cosmetic public relations documents into performance measurement documents that an increasing number of organizations are now committing to share with all their stakeholders. Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.4 29. (p. 26) The 2002 Sarbanes-Oxley Act introduced greater accountability for chief executive officers and boards of directors by requiring them to sign off on the financial performance records of the organizations they represent. TRUE Bloom's: Remembering Difficulty: Easy 30. (p. 26) Because of the Sarbanes-Oxley Act, today, when employees are asked to do something that conflicts with their own personal values, seldom is the guidance from companies a series of clichés. FALSE Today when employees observe unethical behavior or are asked to do something that conflicts with their own personal values, the extent of the guidance available to them still is often nothing more than a series of clichés. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.4 31. (p. 28) "Do what's legal" is an ethical cliché. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.4 32. (p. 28) "Do what I d" is an ethical cliché. FALSE "Do what you think is best," "use your best judgment," or "do the right thing" would be clichés. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.4 33. (p. 28) In resolving a truth versus loyalty dilemma, you must decide whether the decision will have short-term or long-term consequences. FALSE In resolving a truth versus loyalty dilemma, you must decide if you tell the truth or remain loyal to the person or organization that is asking you not to reveal that truth. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.5 34. (p. 28) In resolving a justice versus mercy dilemma, you must answer whether you perceive the issue as a question of dispensing justice or mercy. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 35. (p. 28) An ethical dilemma is a situation in which there is a "right" versus "right" answer. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 36. (p. 29) Once you have reached a decision as to the type of conflict you are facing, the three resolution principles are: ends-based, rules-based, and the Golden Rule. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 37. (p. 29) If you utilize the rules-based resolution principle, you would consider which decision would provide the greatest good for the greatest number of people. FALSE If you utilize the rules-based resolution principle, you would ask what would happen if everyone made the same decision as you? Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.5 38. (p. 29) If you utilize the Golden Rule resolution principle, you would utilize the principle: do unto others as you would have them do unto you. TRUE Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.5 39. (p. 30) Andrew Young's statement, "Nothing is illegal if a hundred businessmen decide to do it" is one of the commonly held rationalizations that can lead to misconduct. TRUE Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.6 40. (p. 30) A belief that the activity is safe because it will never be found out or publicized is one of the commonly held rationalizations that can lead to misconduct. TRUE Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.6 41. (p. 30) The Golden Rule resolution principle considers what would happen if everyone made the same decision as you. FALSE The Golden Rule resolution principle considers do unto others as you would have them do unto you. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.6 Multiple Choice Questions 42. (p. 22) _______ is the application of ethical standards to business behavior. A. Corporate social responsibility B. Philanthropy C. Business ethics D. Corporate culture Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 43. (p. 22) Business ethics can be approached using the _______ and _______ perspectives. A. classical, modern B. descriptive, normative C. philosophical, realist D. actual, hypothetical Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 44. (p. 22) A _______ perspective is a summation of the customs, attitudes, and rules that are observed within a business. A. descriptive B. normative C. prescriptive D. philosophical Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 45. (p. 22) _______ is someone with a share or interest in a business enterprise. A. Shareholders B. Board of directors C. Stakeholders D. Employees Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 46. (p. 22) All of the following are stakeholders except _____. A. customers B. federal government C. competitors D. community Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.2 47. (p. 22) Unethical corporate behavior could negatively impact customers due to _______. A. poor service quality B. loss of employment C. loss of stock value D. loss of principle and interest payments Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.2 48. (p. 23) Unethical corporate behavior could negatively impact employees due to_______. A. loss of stock value B. loss of employment C. poor service quality D. loss of principle and interest payments Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.2 49. (p. 23) Unethical corporate behavior could negatively impact the federal government due to _____. A. false and misleading financial information used to make investment decisions B. loss of employment C. economic uptick D. the loss of tax code Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.2 50. (p. 23) _______ is the system that directs and controls business corporations. A. Local governance B. State governance C. Federal governance D. Corporate governance Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 51. (p. 23) A(n) _______ is the combination of two contradictory terms. A. oxymoron B. synonym C. antonym D. metaphor Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 52. (p. 23-24) All of the following are oxymorons except: A. government efficiency B. authentic reproduction C. Central Intelligence Agency D. lifetime warranty Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.3 53. (p. 24) A(n) _______ is the written standards of ethical behavior designed to guide a company's managers and employees as they make daily decisions. A. code of ethics B. code of morality C. code of conduct D. employee handbook Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.3 54. (p. 26) The ______ introduced greater accountability for chief executive officers and boards of directors by requiring them to signing off on the financial performance records of the organizations they represent. A. Global Sullivan Principals B. Federal Corrupt Practices Act C. 2002 Sarbanes-Oxley Act D. False Claims Act Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.3 55. (p. 26) The issue of ______ has advanced from an abstract debate to a core performance assessment issue with clearly established legal liabilities. A. corporate ethics B. corporate social responsibility C. corporate donations D. corporate community involvement Bloom's: Understanding Difficulty: Easy Learning Outcome: 2.4 56. (p. 26) _______ have matured from cosmetic public relations documents into performance-measurement documents which an increasing number of organizations are now committing to share with all their stakeholders. A. Code of ethics B. 2002 Sarbanes-Oxley Act C. Federal Corrupt Practices Act D. Global Sullivan Principles Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.4 57. (p. 28) According to the text, which of the following is not an ethical cliché? A. Do what's legal B. Consult the company code of ethics C. Do what I do D. Do what you think is best Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.5 58. (p. 28) A situation in which there is no obvious "right" or "wrong" decision, but rather a "right" or "right" answer, refers to which of the following: A. ethical dilemma B. moral manifestation C. absolute ethics D. unethical dilemma Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 59. (p. 27) During the 1960s, a major ethical dilemma was _______. A. deceptive advertising B. cyber crime C. human rights issues D. honesty Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.5 60. (p. 27) _______ was/were a major ethical dilemma in the 1980s. A. Drug use escalation B. A changing work ethic C. Bribes and illegal contracting practices D. International corruption Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.5 61. (p. 27) _______ was/were a business ethics development in the 1990s. A. Class action lawsuits B. The Federal Corrupt Practices Act C. The establishment of the Defense Industry Initiative D. The growth of anticorruption efforts Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.5 62. (p. 28) In which type of conflict would you face the following question: Do you tell the truth or remain loyal to the person or organization asking you not to reveal the truth? A. Short-term versus long-term B. Justice versus mercy C. Truth versus loyalty D. Individual versus community Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 63. (p. 29) Which of the following is not a resolution principle? A. Rules-based B. The Golden Rule C. Rationalization-endured D. Ends-based Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 64. (p. 29) The _______ resolution considers what would happen if everyone made the same decision as you. A. rules-based B. ends-based C. Golden Rule D. similarity-based Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 Fill in the Blank Questions 65. (p. 22) ________________________ is the application of ethical standards to business behavior. Business ethics Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 66. (p. 22) A _____________________ perspective is a summation of the customs, attitudes, and rules that are observed within a business. descriptive Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.1 67. (p. 22) A ____________________ is someone with a share or interest in a business enterprise. Stakeholder Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.2 68. (p. 23) Corporate ____________________ is the system that directs and controls business corporations. governance Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 69. (p. 23) An ____________________ is the combination of two contradictory terms. oxymoron Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 70. (p. 24) A _______________________ is the written standards of ethical behavior designed to guide a company's managers and employees as they make daily decisions. code of ethics Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.3 71. (p. 26) The _______________________________ introduced greater accountability for chief executive officers and boards of directors by requiring them to signing off on the financial performance records of the organizations they represent. 2002 Sarbanes-Oxley Act Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.3 72. (p. 28) A ______________________________ is a situation in which there is no obvious "right" or "wrong" decision, but rather a "right" or "right" answer. ethical dilemma Bloom's: Remembering Difficulty: Easy Learning Outcome: 2.5 Essay Questions 73. (p. 22) Name and discuss three stakeholders' interests in an organization. Answers will vary, based upon which of the three stakeholder groups the student chooses. See Figure 2.1, Stakeholder Interests, on page 22 for possible answers. Bloom's: Remembering Difficulty: Medium Learning Outcome: 2.2 74. (p. 23) Do you agree that the standard for corporate governance appears to be at the lowest level in business history? Explain. The standard of corporate governance does appear to be at the lowest in business history. There are numerous examples that support this claim. CEO salary increases far exceed those of employees they lead. In addition, products rushed to the market have later been recalled due to safety problems. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.2 75. (p. 24) Define an oxymoron. Give an example of an oxymoron, and explain why it is an oxymoron. An oxymoron is the combination of two contradictory terms, such as "deafening silence" or "jumbo shrimp." Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.3 76. (p. 24-25) What is the purpose of a code of ethics for an organization? A code of ethics serves dual functions. As a message to the organization's stakeholders, the code should represent a clear corporate commitment to the highest standards of ethical behavior. As an internal document, the code should represent a clear guide to managers and employees in making the decisions they face daily. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.4 77. (p. 26) Describe and discuss dramatic changes that have taken place in the business environment over the last four decades. 1) The increased presence of an employee voice has made individual employees feel more comfortable speaking out against actions of their employers that they feel to be irresponsible or unethical. They are also more willing to seek legal resolution for such issues as unsafe working conditions, harassment, discrimination, and invasion of privacy; 2) The issue of corporate social responsibility has advanced from an abstract debate to a core performance-assessment issue with clearly established legal liabilities; 3) Corporate ethics has moved from the domain of legal and human resource departments into the organizational mainstream with the appointment of corporate ethics officers with clear mandates. Codes of ethics have matured from cosmetic public relations documents into performance measurement documents that an increasing number of organizations are now committing to share with all their stakeholders. 4) The 2002 Sarbanes-Oxley Act has introduced greater accountability for chief executive officers and boards of directors in signing off on the financial performance records of the organizations they represent. Bloom's: Understanding Difficulty: Medium Learning Outcome: 2.4 78. (p. 26-29) Define ethical dilemma. Give an example of an ethical dilemma. Discuss the type of conflict you are dealing with. Discuss the resolution principle you would use to resolve the ethical dilemma. Ethical dilemma - a situation in which there is no obvious right or wrong decision, but rather a right or right answer. Examples and explanations of the type of conflict and resolution principle will vary. Bloom's: Applying Difficulty: Difficult Learning Outcome: 2.5 79. (p. 30-31) Discuss one of the four commonly held rationalizations, identified by Saul Gellerman, that can lead to misconduct. 1) A belief that the activity is within reasonable ethical and legal limits—that is, that it is not "really" illegal or immoral. Andrew Young is quoted as having said, "Nothing is illegal if a hundred businessmen decide to do it." 2) A belief that the activity is in the individual's or the corporation's best interests—that the individual would somehow be expected to undertake the activity. In a highly competitive environment, working on short-term targets, it can be easy to find justification for any act as being "in the company's best interest." 3)A belief that the activity is safe because it will never be found out or publicized—the classic crime-and punishment issue of discovery. Every unethical act that goes undiscovered reinforces this belief. 4) A belief that because the activity helps the company, the company will condone it and even protect the person who engages in it. Bloom's: Understanding Difficulty: Difficult Learning Outcome: 2.6 80. (p. 30-31) Discuss two of the four commonly held rationalizations, identified by Saul Gellerman, that can lead to misconduct. 1) A belief that the activity is within reasonable ethical and legal limits—that is, that it is not "really" illegal or immoral. Andrew Young is quoted as having said, "Nothing is illegal if a hundred businessmen decide to do it." 2) A belief that the activity is in the individual's or the corporation's best interests—that the individual would somehow be expected to undertake the activity. In a highly competitive environment, working on short-term targets, it can be easy to find justification for any act as being "in the company's best interest." 3)A belief that the activity is safe because it will never be found out or publicized—the classic crime-and punishment issue of discovery. Every unethical act that goes undiscovered reinforces this belief. 4) A belief that because the activity helps the company, the company will condone it and even protect the person who engages in it. Bloom's: Understanding Difficulty: Difficult Learning Outcome: 2.6