Business Changing World 8th Edition by O. C. Ferrell Test Bank

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Business Changing World 8th Edition by O. C. Ferrell Test Bank

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WITH ANSWERS
Business Changing World 8th Edition by O. C. Ferrell Test Bank

Chapter 02

Business Ethics and Social Responsibility

 

True / False Questions

  1. Business ethics refers to principles and standards that define acceptable conduct in business organizations.
    True    False

 

  1. Ethics and social responsibility mean the same thing.
    True    False

 

  1. Nearly all business decisions may be judged as right or wrong, ethical or unethical.
    True    False

 

  1. The most basic ethical concerns have been formalized through laws and regulations that encourage conformity to societys values and norms.
    True    False

 

  1. All a business has to do to maintain ethical conduct is to follow the law.
    True    False

 

  1. Only corporations have to worry about ethics scandals and social responsibility issues.
    True    False

 

 

 

 

Multiple Choice Questions

  1. The principles and standards that determine acceptable conduct in business are referred to as:
    A. norms
    B. strategies
    C. ethics
    D. laws
    E. rules

 

  1. Social ______ relates to a businesss impact on society.
    A. responsibility
    B. strategy
    C. ethics
    D. law
    E. rule

 

  1. The __ Act criminalized securities fraud and stiffened penalties for corporate fraud.
    A. EEOC
    B. Ethical Standards
    C. Internet Standards
    D. Sarbanes-Oxley
    E. SCF

 

  1. What is considered ethical may differ depending on the __ in which a business operates.
    A. country
    B. culture
    C. trade bloc
    D. hemisphere
    E. industry

 

 

 

  1. Which of the following statements about business ethics is false?
    A. It concerns the impact of a businesss activities on society.
    B. It refers to principles and standards that define acceptable behavior in business organizations.
    C. It relates to an individuals values and moral standards and the resulting business decisions he or she makes.
    D. What is ethical is determined by the public, government regulators, interest groups, competitors, and each individuals personal moral values.
    E. Studying it can help you recognize ethical issues and understand how others make unethical decisions.

 

  1. Studying business ethics will not necessarily
    A. help you recognize ethical issues.
    B. help you understand the importance of ethical decisions.
    C. inform you concerning the impact of the work group on ethical decisions.
    D. describe the ethical decision-making process.
    E. tell you what you ought to do.

 

  1. Ethical violations destroy
    A. nothing.
    B. jobs.
    C. trust.
    D. profits.
    E. morale.

 

  1. The Sarbanes-Oxley Act was passed to
    A. punish those who committed accounting fraud in the late 1990s.
    B. improve corporate profits.
    C. help laid-off employees get their jobs back.
    D. help investors recoup their losses.
    E. help restore confidence in Corporate America.

 

 

 

  1. Which of the following have not been cited as incidents of unethical business activity recently?
    A. Unfair competitive practices in the computer industry
    B. Deceptive advertising of medicines and toys
    C. Accounting fraud
    D. Deceptive advertising of food products
    E. Corporate charitable giving is high

 

  1. Which of the following statements is false?
    A. Ethical issues are limited to for-profit organizations.
    B. Business ethics goes beyond legal issues.
    C. Ethical conduct builds trust among individuals and in business relationships.
    D. Ethical conflicts may evolve into legal disputes.
    E. Regardless of what an individual feels about a particular action, if society judges it to be unethical, that judgment affects the organizations ability to achieve its objectives.

 

 

Essay Questions

  1. What is business ethics?

 

 

 

 

  1. Choose an issue that has been prominently featured in the news and discuss the ethical implications of this issue. Make sure to define any key terms that you use in your response.

 

 

 

 

 

 

 

True / False Questions

  1. An ethical issue is an identifiable problem, situation, or opportunity that requires a person or organization to choose from among several actions that may be evaluated as ethical or unethical.
    True    False

 

  1. The best way to judge the ethics of a decision is to look at it from a managers or employees point of view.
    True    False

 

  1. The size of the transaction, the history of personal relationships within the particular company, and many other factors may determine whether a customer gift will be judged as ethical.
    True    False

 

  1. Conflicts of interest are payments, gifts, or special favors intended to influence the outcome of a decision.
    True    False

 

  1. Ethics is related to the culture in which a business operates.
    True    False

 

  1. Workplace bullying is an increasing problem.
    True    False

 

 

 

Multiple Choice Questions

  1. The most common ethical issue identified by employees is ____.
    A. bullying
    B. bribery
    C. conflict of interest
    D. cheating
    E. lying

 

  1. Managers use the ______ of their position to influence employees actions.
    A. authority
    B. power
    C. scope
    D. responsibility
    E. acceptance

 

  1. __ involves taking someone elses work and presenting it as your own.
    A. Copyright
    B. Photosynthesis
    C. Forecasting
    D. Acceptance
    E. Plagiarism

 

  1. That businesspeople are expected not to harm customers, clients, and competitors knowingly through deception, misrepresentation, coercion, or discrimination is part of
    A. fairness and honesty.
    B. communications.
    C. conflict of interest.
    D. business relationships.
    E. consumerism.

 

 

 

  1. If the video game marketer Playstation were investigated for allegedly raising prices excessively during the Christmas buying season and thereby manipulating the supply of games available at that time, this was an ethical issue concerned primarily with
    A. conflict of interest.
    B. communications.
    C. fairness and honesty.
    D. cost control.
    E. game rules.

 

  1. Making claims about dietary supplements or the health benefits of certain unproven ingredients is an issue related to:
    A. conflict of interest.
    B. communications.
    C. product design.
    D. business relationships.
    E. financing.

 

  1. The warning on cigarette packages about the health implications of smoking is an example of which of the following ethical issues?
    A. Conflict of interest
    B. Fairness and honesty
    C. Communications
    D. Relationships within a business
    E. Environmental issues

 

  1. The following behavior is an example of ethical consideration within business relationships:
    A. keeping company secrets.
    B. avoiding obligations.
    C. shirking responsibilities.
    D. setting a poor example for others.
    E. offering a bribe.

 

 

 

  1. If a manager pressures a subordinate to engage in activities that he or she may otherwise view as unethical, such as accounting fraud or stealing a competitors secrets, there exists an ethical issue related to
    A. plagiarism.
    B. business relationships.
    C. communications.
    D. fairness and honesty.
    E. conflicts of interest.

 

  1. If an employee learned of a significant cost-saving idea from a coworker and then informed management of the idea without revealing its true source, then the employee would be involved in
    A. keeping a secret.
    B. career advancement.
    C. plagiarism.
    D. socialism.
    E. egalitarianism.

 

 

Essay Questions

  1. What are some of the general ethical issues in business?

 

 

 

 

  1. How do you recognize an ethical issue in business?

 

 

 

 

 

 

 

True / False Questions

  1. It is almost always easy to recognize specific ethical issues.
    True    False

 

  1. Establishing and enforcing ethical standards and policies within business can help reduce unethical behavior by prescribing which activities are acceptable and which are not and by removing the opportunity to act unethically.
    True    False

 

  1. Without a code of ethics or formal policy on ethics, employees are likely to base their decisions on how their peers and superiors behave.
    True    False

 

  1. Codes of ethics foster ethical behavior because they expand the opportunity to behave unethically.
    True    False

 

  1. Ethical decisions in an organization are influenced by three key factors.
    True    False

 

  1. Codes of ethics are formalized rules and standards that describe what the company expects of its employees.
    True    False

 

 

 

 

Multiple Choice Questions

  1. Many employees utilize different _____ at work than they do at home.
    A. ethical standards
    B. codes of ethics
    C. conflicts of interest
    D. communication skills
    E. body language

 

  1. A large number of ____ cases result in dismissal of the employee, even though the government has tried to take steps to protect workers and to encourage reporting of misconduct.
    A. executive
    B. white collar crime
    C. whistleblower
    D. petty theft
    E. federal

 

  1. __________________ is the extent to which businesses meet the legal, ethical, economic and voluntary responsibilities placed on them by their stakeholders.
    A. A code of conduct
    B. A code of ethics
    C. Egalitarianism
    D. Corporate citizenship
    E. Whistleblowing

 

  1. A set of formalized rules and standards that describe what a company expects of its employees is called a(n)
    A. code of ethics.
    B. opportunity.
    C. moral philosophy.
    D. guideline.
    E. law.

 

 

 

  1. What is the act of an employee exposing an employers wrongdoing to outsiders?
    A. Fraud
    B. Whistleblowing
    C. Plagiarism
    D. Mayhem
    E. A criminal lawsuit

 

  1. Codes of ethics foster ethical behavior by all of the following except
    A. expanding the opportunity to behave ethically by providing rewards for following the rules.
    B. limiting the opportunity to behave unethically by providing punishments for violations of the rules and standards.
    C. limiting the opportunity to behave unethically by providing rewards for violations of the rules and standards.
    D. expanding the opportunity to behave ethically by providing punishments for following the rules.
    E. encouraging employees to bend the rules.

 

  1. Unethical behavior in business can be reduced if management does all of the following except
    A. establish clear policies on unethical behavior.
    B. limit opportunities for unethical behavior.
    C. establish formal rules and procedures.
    D. punish unethical behavior firmly.
    E. depend totally on employees personal ethics.

 

  1. According to the text, ethical decisions in an organization are influenced by (1) individual moral standards, (2) the influence of managers and co-workers, and (3)
    A. religious values.
    B. informal ethical policies or rules.
    C. opportunity codes and compliance requirements.
    D. family influence.
    E. the founders values.

 

 

 

  1. Which of the following should help reduce the incidence of unethical behavior in an organization?
    A. Understanding that individual moral standards, the influence of managers and coworkers, and opportunity influence ethical behavior
    B. Maximizing ethical conflict in work groups
    C. Expanding opportunity by providing punishments for violations of the rules
    D. Overlooking violations of codes of ethics
    E. All of the above

 

  1. A code of ethics represents ____________ rules and standards of what a company expects of its employees.
    A. team
    B. impoverished
    C. authority-obedience
    D. formalized
    E. situational

 

 

Essay Questions

  1. How can an organization improve ethical behavior?

 

 

 

 

  1. Why is it increasingly common for organizations to have a code of ethics and compliance programs?

 

 

 

 

 

 

 

True / False Questions

  1. There are four dimensions of social responsibility: economic, legal, ethical, and voluntary.
    True    False

 

  1. The concept of social responsibility is universally accepted.
    True    False

 

  1. One of the dimensions of social responsibility is metaphysical.
    True    False

 

  1. Increasingly, companies are introducing eco-friendly and socially responsible products to their lines in order to satisfy consumer demand and improve their images.
    True    False

 

  1. Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their owners.
    True    False

 

  1. Voluntary responsibilities are optional activities that promote human welfare or goodwill.
    True    False

 

 

 

 

Multiple Choice Questions

  1. Obeying the law is a business __________.
    A. right
    B. choice
    C. economic responsibility
    D. legal responsibility
    E. ethical responsibility

 

  1. Approximately ____ percent of Fortune 500 companies engage in recycling efforts.
    A. 75
    B. 83
    C. 38
    D. 57
    E. 20

 

  1. Which is NOT a dimension of social responsibility?
    A. Legal
    B. Philosophic
    C. Economic
    D. Voluntary
    E. Ethical

 

  1. _____ is the activities that individuals, groups, and organizations undertake to protect their rights as consumers.
    A. Consumerism
    B. Civil rights
    C. Protectionism
    D. Conspicuous consumption
    E. Shopping

 

 

 

  1. John F. Kennedys consumer bill of rights outlined four rights: the right to be informed, the right to choose, the right to be heard and:
    A. The right to government regulations
    B. The right to good service
    C. The right to easy credit
    D. The right to shop wherever you want
    E. The right to safety

 

  1. Being profitable relates to which social responsibility dimension?
    A. Economic
    B. Voluntary
    C. Ethical
    D. Legal
    E. Corporate citizenship

 

  1. Which of the following is not one of the dimensions of social responsibility?
    A. Voluntary
    B. Economic
    C. Legal
    D. Ethical
    E. Altruistic

 

  1. Philanthropic contributions made by a business to a charitable organization represent which dimension of social responsibility?
    A. Corporate citizenship
    B. Economic
    C. Legal
    D. Ethical
    E. Voluntary

 

 

 

  1. Consumers vote against firms they view as socially irresponsible by not
    A. boycotting the companys products.
    B. expressing dissatisfaction by protesting.
    C. writing their representatives in Congress.
    D. buying the companys products.
    E. filing complaints with the company.

 

  1. Studies have found a direct link between social responsibility and _________ in business.
    A. profitability
    B. ethics
    C. declining stock prices
    D. happiness of stakeholders
    E. global Warming

 

 

Essay Questions

  1. What are the four dimensions of social responsibility?

 

 

 

 

  1. Discuss what companies have done to address environmental concerns and to become more sustainable.

 

 

 

 

 

 

True / False Questions

  1. Without employees, a business cannot carry out its goals.
    True    False

 

  1. Recycling is a business response to employee issues.
    True    False

 

  1. The right to safety requires that businesses provide a safe place for consumers to shop.
    True    False

 

  1. A major social responsibility for business is providing equal opportunities for all employees.
    True    False

 

  1. Americans use over 100 billion plastic bags annually and only recycle 10-20 percent of them.
    True    False

 

  1. Managers consider social responsibility on an annual basis.
    True    False

 

 

 

Multiple Choice Questions

  1. Water and soil pollution from oil and gas drilling is primarily what type of concern?
    A. Consumer relations
    B. Environmental issues
    C. Community relations
    D. Employee relations
    E. Relations with stockholders

 

  1. Which of the following is not an area of environmental concern in society today?
    A. Animal rights
    B. Land pollution
    C. Waste disposal
    D. The hard-core unemployed
    E. Business practices that harm endangered wildlife

 

  1. Laws regarding safety in the workplace are enforced by ___.
    A. FTC
    B. OSHA
    C. EPA
    D. the consumer bill of rights
    E. codes of ethics

 

  1. One role of the FTCs Bureau of Consumer Protection is to protect consumers from ___________.
    A. ethics
    B. fraud
    C. laws
    D. power
    E. unity of command

 

 

 

  1. Approximately ____ percent of Fortune 500 companies have a written environmental policy.
    A. 3
    B. 23
    C. 43
    D. 63
    E. 83

 

  1. Corporations contribute more than ______ to environmental and social causes each year.
    A. $2 million
    B. $2 billion
    C. $12 billion
    D. $12 million
    E. No money

 

  1. The __________ gives consumers the freedom to review complete information about the products they are buying.
    A. right to be informed
    B. right to be heard
    C. right to purchase
    D. right to choose
    E. right to speak out

 

  1. A major social responsibility for businesses is providing ______ for all employees.
    A. equal wages
    B. equal opportunities
    C. more free time
    D. better healthcare
    E. equal holiday pay

 

 

 

  1. ___________ refers to attaching a positive environmental association on an unsuitable product or service.
    A. Greenwashing
    B. Whitewashing
    C. Environmentalism
    D. Corporate citizenship
    E. Community relations

 

  1. Many businesses, recognizing that employees lack many basic work skills, are becoming more concerned about the quality of ____ in the United States.
    A. job opportunities
    B. education
    C. philanthropy
    D. management
    E. community relations

 

 

Essay Questions

  1. Discuss the sustainability issues managers must confront in dealing with social responsibility issues.

 

 

 

 

  1. Discuss the community relations issues that concern businesses.

 

 

 

 

 

 

Multiple Choice Questions
Solve the Dilemma: Customer Privacy

 

  1. What did Jon Barnard do to help Checkers develop a competitive advantage over the competition?
    A. Handed out coupons
    B. Developed a database that improve efficiency
    C. Nothing
    D. He had no competition
    E. Lowered prices

 

  1. What did Barnard want to do with the information gathered on his customers?
    A. Spy on them
    B. Improve his advertising campaigns
    C. Give the best customers an award for loyalty
    D. Nothing
    E. Change the pizza recipe

 

 

Essay Questions

  1. What are some of the ethical issues in giving customers an award for consumption behavior without notifying them first?

 

 

 

 

 

 

  1. Do you see Barnards plan to offer a prize to the highest-consuming customers as a potential violation of privacy? Explain.

 

 

 

 

  1. How would you handle the situation if you were Barnard?

 

 

 

 

 

Chapter 02 Business Ethics and Social Responsibility Answer Key
 

True / False Questions

  1. (p. 36)Business ethics refers to principles and standards that define acceptable conduct in business organizations.
    TRUE

Business ethics are principles and standards that define acceptable behavior for individuals within an organization as well as the organization at large.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

  1. (p. 36-37)Ethics and social responsibility mean the same thing.
    FALSE

Business ethics are the principles and standards that determine acceptable conduct in businesses. Social responsibility is a broader concept. It is a businesss obligation to maximize its positive impact and minimize its negative impact on society.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

  1. (p. 39)Nearly all business decisions may be judged as right or wrong, ethical or unethical.
    TRUE

Business decisions, either by law or by society, will be deemed an acceptable practice or not.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business


 

  1. (p. 37)The most basic ethical concerns have been formalized through laws and regulations that encourage conformity to societys values and norms.
    TRUE

The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud as well as stiffen corporate fraud. This was a response to public outcry regarding accounting scandals in the early 2000s and to restore confidence in Corporate America.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

  1. (p. 37, 39)All a business has to do to maintain ethical conduct is to follow the law.
    FALSE

Business ethics goes beyond legal issues by building trust among individuals and in business relationships which validates and promotes confidence among those relationships.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

  1. (p. 39)Only corporations have to worry about ethics scandals and social responsibility issues.
    FALSE

Ethical issues are not limited to for-profit corporations but include government, non-profits such as universities, sports and individuals.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

 

 

Multiple Choice Questions

  1. (p. 36)The principles and standards that determine acceptable conduct in business are referred to as:
    A. norms
    B. strategies
    C. ethics
    D. laws
    E. rules

Business ethics is defined as the principles and standards that determine acceptable conduct in business.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

  1. (p. 37)Social ______ relates to a businesss impact on society.
    A. responsibility
    B. strategy
    C. ethics
    D. law
    E. rule

Social responsibility is a businesss obligation to maximize its positive impact and minimize its negative impact on society.

 

AACSB: Reflective Thinking
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business


 

  1. (p. 37)The __ Act criminalized securities fraud and stiffened penalties for corporate fraud.
    A. EEOC
    B. Ethical Standards
    C. Internet Standards
    D. Sarbanes-Oxley
    E. SCF

Congress passed the Sarbanes-Oxley Act in response to several prominent accounting scandals. The Act criminalized securities fraud and stiffened penalties for corporate fraud.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

  1. (p. 40-41)What is considered ethical may differ depending on the __ in which a business operates.
    A. country
    B. culture
    C. trade bloc
    D. hemisphere
    E. industry

The acceptability of behavior in business varies in part depending on local values, moral principles, and customs.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business


 

  1. (p. 36-37)Which of the following statements about business ethics is false?
    A. It concerns the impact of a businesss activities on society.
    B. It refers to principles and standards that define acceptable behavior in business organizations.
    C. It relates to an individuals values and moral standards and the resulting business decisions he or she makes.
    D. What is ethical is determined by the public, government regulators, interest groups, competitors, and each individuals personal moral values.
    E. Studying it can help you recognize ethical issues and understand how others make unethical decisions.

Social responsibility concerns the impact of a businesss activities on society.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

  1. (p. 39)Studying business ethics will not necessarily
    A. help you recognize ethical issues.
    B. help you understand the importance of ethical decisions.
    C. inform you concerning the impact of the work group on ethical decisions.
    D. describe the ethical decision-making process.
    E. tell you what you ought to do.

Others such as your peers, family, and co-workers will judge your actions and decisions to be ethical or unethical.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business


 

  1. (p. 39)Ethical violations destroy
    A. nothing.
    B. jobs.
    C. trust.
    D. profits.
    E. morale.

Ethical conduct builds trust and credibility therefore when ethical violations are committed, it is very difficult, to restore trust and confidence.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Hard
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

  1. (p. 37)The Sarbanes-Oxley Act was passed to
    A. punish those who committed accounting fraud in the late 1990s.
    B. improve corporate profits.
    C. help laid-off employees get their jobs back.
    D. help investors recoup their losses.
    E. help restore confidence in Corporate America.

The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud as well as stiffen corporate fraud. This was a response to public outcry regarding accounting scandals in the early 2000s and to restore confidence in Corporate America.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility


 

  1. (p. 37)Which of the following have not been cited as incidents of unethical business activity recently?
    A. Unfair competitive practices in the computer industry
    B. Deceptive advertising of medicines and toys
    C. Accounting fraud
    D. Deceptive advertising of food products
    E. Corporate charitable giving is high

National newspapers such as USA Today or Wall Street Journal regularly cover examples of ethical issues across industries. Corporate charitable giving is not an incidence of unethical conduct.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

  1. (p. 39)Which of the following statements is false?
    A. Ethical issues are limited to for-profit organizations.
    B. Business ethics goes beyond legal issues.
    C. Ethical conduct builds trust among individuals and in business relationships.
    D. Ethical conflicts may evolve into legal disputes.
    E. Regardless of what an individual feels about a particular action, if society judges it to be unethical, that judgment affects the organizations ability to achieve its objectives.

Ethical issues are not limited to for-profit corporations but include government, non-profits such as universities, sports and individuals.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: The Role of Ethics in Business

 

 

Essay Questions

  1. (p. 24)What is business ethics?

Business ethics refers to principles and standards that define acceptable behavior in business organizations. Within the context of an organization, ethics relates to an individuals or work groups decisions that society evaluates as right or wrong.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

  1. (p. 363-39)Choose an issue that has been prominently featured in the news and discuss the ethical implications of this issue. Make sure to define any key terms that you use in your response.

Students answers will vary, but they should aim to use and define key terms such as business ethics and social responsibility. They may also want to define and discuss the term ethical issue. Pay careful attention that students truly understand what business ethics is and that they are using the terms properly.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Hard
Learning Objective: 02-01 Define business ethics and social responsibility; and examine their importance.
Topic: Business Ethics and Social Responsibility

 

 

True / False Questions

  1. (p. 39)An ethical issue is an identifiable problem, situation, or opportunity that requires a person or organization to choose from among several actions that may be evaluated as ethical or unethical.
    TRUE

In business, this choice usually involves weighing monetary gain against what a person considers appropriate conduct.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 40)The best way to judge the ethics of a decision is to look at it from a managers or employees point of view.
    FALSE

The best way to judge the ethics of a decision is to look at it from a customers or competitors point of view.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 40)The size of the transaction, the history of personal relationships within the particular company, and many other factors may determine whether a customer gift will be judged as ethical.
    TRUE

This explains why a person needs several years experience in identifying what constitutes an ethical and unethical decision due to its complex nature.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 43)Conflicts of interest are payments, gifts, or special favors intended to influence the outcome of a decision.
    FALSE

Conflicts of interest exist when a person must choose between advancing his or her own personal interests or those of others. Bribes are payments, gifts, or special favors intended to influence the outcome of a decision.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 40)Ethics is related to the culture in which a business operates.
    TRUE

Different cultures adhere to different ethical standards such as in the U.S. it could be viewed as a bribe to bring a gift to a business meeting but in Japan it is considered impolite to not bring a gift to a business meeting.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 42-43)Workplace bullying is an increasing problem.
    TRUE

The Workplace Bullying Institutes latest survey found that 37% of U.S. workers have been bullied, that is 54 million Americans.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

 

Multiple Choice Questions

  1. (p. 43)The most common ethical issue identified by employees is ____.
    A. bullying
    B. bribery
    C. conflict of interest
    D. cheating
    E. lying

Observed instances of conflict of interest among fellow employees is the form of ethical misconduct most frequently reported by employees.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 48)Managers use the ______ of their position to influence employees actions.
    A. authority
    B. power
    C. scope
    D. responsibility
    E. acceptance

Because of the inherent authority of their position, managers have the opportunity to influence employees actions.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 48)__ involves taking someone elses work and presenting it as your own.
    A. Copyright
    B. Photosynthesis
    C. Forecasting
    D. Acceptance
    E. Plagiarism

In business, the ethical issue of plagiarism arises when an employee copies reports or takes the work or ideas of others and presents it as his or her own.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 44)That businesspeople are expected not to harm customers, clients, and competitors knowingly through deception, misrepresentation, coercion, or discrimination is part of
    A. fairness and honesty.
    B. communications.
    C. conflict of interest.
    D. business relationships.
    E. consumerism.

Fairness and honesty are at the heart of ethics and relate to values of decision makers such as not pilfering office supplies or engaging in collusive behavior.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 44)If the video game marketer Playstation were investigated for allegedly raising prices excessively during the Christmas buying season and thereby manipulating the supply of games available at that time, this was an ethical issue concerned primarily with
    A. conflict of interest.
    B. communications.
    C. fairness and honesty.
    D. cost control.
    E. game rules.

One aspect of fairness related to competition and sometimes a company can gain control over markets, such as manipulating the supply of products, by using questionable practices that harm competition.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Hard
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 46-47)Making claims about dietary supplements or the health benefits of certain unproven ingredients is an issue related to:
    A. conflict of interest.
    B. communications.
    C. product design.
    D. business relationships.
    E. financing.

Truthfulness about product quality and effectiveness is important to consumers. Many supplements make claims that they will help the consumer lose weight, gain muscle, or improve their overall health that have not been proven, or may even be false.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Hard
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 46-47)The warning on cigarette packages about the health implications of smoking is an example of which of the following ethical issues?
    A. Conflict of interest
    B. Fairness and honesty
    C. Communications
    D. Relationships within a business
    E. Environmental issues

An important aspect of communications regarding an ethical issue is product labeling such as the Surgeon Generals warning on cigarette packages.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Hard
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 48)The following behavior is an example of ethical consideration within business relationships:
    A. keeping company secrets.
    B. avoiding obligations.
    C. shirking responsibilities.
    D. setting a poor example for others.
    E. offering a bribe.

Ethical behavior within a business involves keeping company secrets, meeting obligations and responsibilities, and avoiding undue pressure that may force others to act unethically.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

  1. (p. 48)If a manager pressures a subordinate to engage in activities that he or she may otherwise view as unethical, such as accounting fraud or stealing a competitors secrets, there exists an ethical issue related to
    A. plagiarism.
    B. business relationships.
    C. communications.
    D. fairness and honesty.
    E. conflicts of interest.

Ethical issues related to business relationships include the responsibility of managers to help an organization achieve its goals without compromising employee rights.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 31)If an employee learned of a significant cost-saving idea from a coworker and then informed management of the idea without revealing its true source, then the employee would be involved in
    A. keeping a secret.
    B. career advancement.
    C. plagiarism.
    D. socialism.
    E. egalitarianism.

Plagiarism is taking someone elses work or idea and presenting it as your own without mentioning its source.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

 

Essay Questions

  1. (p. 39-48)What are some of the general ethical issues in business?

General ethical issues include conflicts of interest that exist when people must choose whether to advance their own interest or those of others. Fairness and honesty relate to the general values of decision makers. Communication is another area in which ethical concerns may arise. Businesspeoples behavior toward customers, suppliers, and others in their workplaces may also generate ethical concerns.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business


 

  1. (p. 26-31)How do you recognize an ethical issue in business?

An ethical issue is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. In business, such a choice often involves weighing monetary profit against what a person considers appropriate conduct. The best way to judge the ethics of a decision is to look at a situation from a customers or competitors viewpoint.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
Topic: The Role of Ethics in Business

 

True / False Questions

  1. (p. 48)It is almost always easy to recognize specific ethical issues.
    FALSE

It is usually difficult to recognize specific ethical issues in practice.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 49)Establishing and enforcing ethical standards and policies within business can help reduce unethical behavior by prescribing which activities are acceptable and which are not and by removing the opportunity to act unethically.
    TRUE

Ethics codes and compliance requirements reduce the opportunity to act unethically and consistently enforcing repercussions for unethical behavior reduces unethical acts by individuals within an organization.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 49)Without a code of ethics or formal policy on ethics, employees are likely to base their decisions on how their peers and superiors behave.
    TRUE

A code of ethics ensures all employees, including senior level executives, are clear on what ethical standards are expected of them.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 50)Codes of ethics foster ethical behavior because they expand the opportunity to behave unethically.
    FALSE

Codes of ethics foster ethical behavior because they reduce the opportunity to behave unethically.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 49)Ethical decisions in an organization are influenced by three key factors.
    TRUE

Ethical decisions in an organization are influenced by three key factors: individual moral standards, the influence of managers and co-workers, and the opportunity to engage in misconduct.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 49)Codes of ethics are formalized rules and standards that describe what the company expects of its employees.
    TRUE

Codes of ethics do not take into consideration every situation but it should provide a clear means of appropriate behavior and steps to take in addressing ethical issues and/or concerns.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

 

 

Multiple Choice Questions

  1. (p. 49)Many employees utilize different _____ at work than they do at home.
    A. ethical standards
    B. codes of ethics
    C. conflicts of interest
    D. communication skills
    E. body language

Many employees utilize different ethical standards at work than they do at home. At work, people are influenced by corporate culture, co-workers, and rules and policies that may all conflict with their own personal moral standards.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 50)A large number of ____ cases result in dismissal of the employee, even though the government has tried to take steps to protect workers and to encourage reporting of misconduct.
    A. executive
    B. white collar crime
    C. whistleblower
    D. petty theft
    E. federal

The government seeks to reward firms that report misconduct, however many whistleblowers are terminated. A legislative loophole has resulted in the dismissal of many whistleblower complaints.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 51)__________________ is the extent to which businesses meet the legal, ethical, economic and voluntary responsibilities placed on them by their stakeholders.
    A. A code of conduct
    B. A code of ethics
    C. Egalitarianism
    D. Corporate citizenship
    E. Whistleblowing

Corporate citizenship is the extent to which businesses meet the legal, ethical, economic and voluntary responsibilities placed on them by their stakeholders

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 49)A set of formalized rules and standards that describe what a company expects of its employees is called a(n)
    A. code of ethics.
    B. opportunity.
    C. moral philosophy.
    D. guideline.
    E. law.

Codes of ethics are formalized rules and standards that describe what the company expects of its employees.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 50)What is the act of an employee exposing an employers wrongdoing to outsiders?
    A. Fraud
    B. Whistleblowing
    C. Plagiarism
    D. Mayhem
    E. A criminal lawsuit

Whistleblowing occurs when a lack of anonymous reporting mechanisms exists in a company and therefore an employee may expose an employers wrongdoing to the government or media.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 50)Codes of ethics foster ethical behavior by all of the following except
    A. expanding the opportunity to behave ethically by providing rewards for following the rules.
    B. limiting the opportunity to behave unethically by providing punishments for violations of the rules and standards.
    C. limiting the opportunity to behave unethically by providing rewards for violations of the rules and standards.
    D. expanding the opportunity to behave ethically by providing punishments for following the rules.
    E. encouraging employees to bend the rules.

Codes of ethics sets clear guidelines for employees regarding what ethical behavior is expected of them. It also creates a formal procedure for infractions committed by employees related to ethical issues.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 49-50)Unethical behavior in business can be reduced if management does all of the following except
    A. establish clear policies on unethical behavior.
    B. limit opportunities for unethical behavior.
    C. establish formal rules and procedures.
    D. punish unethical behavior firmly.
    E. depend totally on employees personal ethics.

A company should never rely on an employees personal ethics to guide ethical standards due to the wide array or lack thereof moral standards that an individual maintains.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 49)According to the text, ethical decisions in an organization are influenced by (1) individual moral standards, (2) the influence of managers and co-workers, and (3)
    A. religious values.
    B. informal ethical policies or rules.
    C. opportunity codes and compliance requirements.
    D. family influence.
    E. the founders values.

Three factors that influence business ethics are individual moral standards, the influence of managers and co-workers and the opportunity to engage in misconduct which is determined by ethics codes and compliance requirements.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business


 

  1. (p. 31-32)Which of the following should help reduce the incidence of unethical behavior in an organization?
    A. Understanding that individual moral standards, the influence of managers and coworkers, and opportunity influence ethical behavior
    B. Maximizing ethical conflict in work groups
    C. Expanding opportunity by providing punishments for violations of the rules
    D. Overlooking violations of codes of ethics
    E. All of the above

Understanding the influences of business ethics leads to establishing codes of ethics and compliance requirements that reduce unethical behavior in an organization.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Hard
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

  1. (p. 49)A code of ethics represents ____________ rules and standards of what a company expects of its employees.
    A. team
    B. impoverished
    C. authority-obedience
    D. formalized
    E. situational

A code of ethics establishes what types of behavior are acceptable and which are not, and limits the opportunity for misconduct by clearly defining violations and establishing punishment.

 

AACSB: Ethics
Blooms: Comprehension
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in Business

 

 

Essay Questions

  1. (p. 49-51)How can an organization improve ethical behavior?

Understanding how people choose their ethical standards and what prompts them to engage in unethical behavior may reverse the current trend toward unethical behavior in business. Establishing and enforcing ethical standards and policies within a business can reduce unethical behavior by describing which activities are acceptable and which are not and removing the opportunity to act unethically. Codes of ethics and training programs can help the business create a corporate culture that encourages ethical behavior.

 

AACSB: Ethics
Blooms: Knowledge
Difficulty: Medium
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
Topic: The Role of Ethics in

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