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Business Ethics 2016 - QUIZ & ANSWERS (2) - Ethics and Social Responsibility of Business

Business Ethics 2016

BUSINESS ETHICS 2016

Case study guides and test bank and answer keys (2016)

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

 

The Legal Environment of Business and Online Commerce, 8e (Cheeseman)

Chapter 2   Ethics and Social Responsibility of Business

 

1) ________ is a set of moral principles or values that governs the conduct of an individual or a group.

  1. A) Rationality
  2. B) Evolution
  3. C) Ethics
  4. D) Reason

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

2) Which of the following cases is an example of agreement of ethics and laws?

  1. A) a company outsourcing its work to a foreign country to take advantage of cheap labor
  2. B) a person being penalized for bribing a judge to rule a case in the person's favor
  3. C) a company not spending more to keep its emission rates below the legal standard
  4. D) a person hiring an illegal alien worker whose family is destitute

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

3) All laws are framed to meet the highest ethical standards.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

4) An ethically wrong state or condition can still be legal.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

 

 

5) The False Claims Act permits private parties to sue the government on behalf of a corporation.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

6) Under the False Claims Act, a whistleblower can be awarded up to 25 percent of the amount recovered on behalf of the federal government, even if the informer has been a co-conspirator in perpetrating the fraud.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

7) Give an account of the relationship between ethics and law.

Answer:  Ethics and the law are intertwined. Although much of the law is based on ethical standards, not all ethical standards have been enacted as law. The law establishes a minimum degree of conduct expected by persons and businesses in society. Ethics demands more. Sometimes the rule of law and the rule of ethics demand the same response by a person confronted with a problem. In some situations, the law may permit an act that is ethically wrong. In some others, the law demands certain conduct, but a person's ethical standards are contrary.

Diff: 1

Skill:  Legal Concepts

LO:  2.1 Describe how law and ethics intertwine.

AACSB:  Analytical thinking

Classification:  Concept

 

8) ________ is an ethical theory according to which a person adheres to rules or commands that are from an outside source, such as a book or a central figure.

  1. A) Ethical fundamentalism
  2. B) Utilitarianism
  3. C) Ethical relativism theory
  4. D) Rawls's social justice theory

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

9) The ________ Act is a federal statute that permits private parties to sue companies for fraud on behalf of the government.

  1. A) Business Norms
  2. B) Sarbanes-Oxley
  3. C) Glass-Steagall
  4. D) False Claims

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

10) Jules Renton, a financial accountant at Valkyrie Aviation, deals with Valkyrie's accounts with the government. Valkyrie has a contract with the government to deliver a bomber plane called Spearhead. When reviewing the Spearhead account, Renton noticed that Valkyrie has been falsely charging the government for Spearhead's production. If Renton chooses to be a whistleblower and expose the scam to the government, which Congress-enacted statute must he invoke?

  1. A) Business Norms Act
  2. B) Sarbanes-Oxley Act
  3. C) Glass-Steagall Act
  4. D) False Claims Act

Answer:  B

Diff: 2

Skill:  Factual Application

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Application of knowledge

Classification:  Application

 

11) A government or political party that strictly derives its ethics and laws from a specific religious book is an example of ________.

  1. A) utilitarianism
  2. B) ethical fundamentalism
  3. C) ethical relativism
  4. D) Kantian ethics

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

12) Which of the following statements best describes the moral theory of utilitarianism?

  1. A) People must choose the action or follow the rule that provides the greatest good to society.
  2. B) People must perform actions that are in accordance with a specific moral rule or principle from a religious text.
  3. C) People must choose to follow the actions of a virtuous person.
  4. D) People must perform actions that are based on moral duties imparted by one's community.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

13) Which of the following is an apparent disadvantage of utilitarianism?

  1. A) It does not allow people to have subjective notions of right and wrong.
  2. B) It is based on moral duties derived from universal rules.
  3. C) It overemphasizes one book or theory.
  4. D) It treats morality as if it were an impersonal mathematical calculation.

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

14) Which of the following theories of ethics is also referred to as duty ethics?

  1. A) Rawl's social justice theory
  2. B) utilitarianism
  3. C) Kantian ethics
  4. D) ethical fundamentalism

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

15) Which of the following moral theories would closely follow the categorical imperative "Do unto others as you would have them do unto you"?

  1. A) Kantian ethics
  2. B) ethical fundamentalism
  3. C) utilitarianism
  4. D) Rawls's social justice theory

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

16) ________ is a moral theory according to which people owe moral duties that are based on universal rules.

  1. A) Rawls's social justice theory
  2. B) Kantian ethics
  3. C) Utilitarianism
  4. D) Ethical fundamentalism

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

17) Reversibility is a principle of Kantian ethics according to which ________.

  1. A) a person must be allowed to reverse his moral judgment to better suit his needs
  2. B) a person must treat all moral circumstances as one
  3. C) a person must be allowed to selectively choose moral judgments based on the circumstances
  4. D) a person must abide by the rule he or she uses to judge the morality of someone else's conduct

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

18) Consistency is one of the two important principles of ________ upon which its universal laws are based.

  1. A) utilitarianism
  2. B) Kantian ethics
  3. C) Rawls's social justice theory
  4. D) moral relativism

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

19) Which of the following is a perceived disadvantage of Kantian ethics?

  1. A) It treats morality as if it were an impersonal mathematical calculation.
  2. B) It does not allow people to have subjective notions of right and wrong.
  3. C) It is based on universal rules that have no common consensus.
  4. D) It differentiates between the morality one uses to judge others and the morality one uses on oneself.

Answer:  C

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

20) Portman, who runs a computer hardware store, had signed a contract with Stewie Inc. to deliver 125 computer monitors. He was to deliver it by the 5th of August, but by the 3rd of August, Portman could not arrange for the monitors, as his regular supplier was not available. He then decided to go to another supplier who had a higher selling price for monitors rather than cancelling the contract with Stewie Inc., as he believed it was his duty to do so. Which of the following moral theories matches Portman’s behavior?

  1. A) Kantian ethics
  2. B) utilitarianism
  3. C) Rawls's social justice theory
  4. D) ethical fundamentalism

Answer:  A

Diff: 2

Skill:  Factual Application

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Application of knowledge

Classification:  Application

 

 

21) How are ethical rules established in Kantian ethics?

  1. A) by a set of universal rules that are based on consistency and reversibility
  2. B) by following principles that have been derived from holy books
  3. C) by an individual's feelings on what is right and wrong
  4. D) by choosing an alternative that is best for the society as a whole

Answer:  A

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

22) ________ theory is a moral theory that asserts that fairness is the essence of justice.

  1. A) Kantian ethics
  2. B) Ethical fundamentalism
  3. C) Utilitarianism
  4. D) Rawls's social justice

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

23) From which of the following theories of morality is Rawls's social justice theory fundamentally derived?

  1. A) the utilitarianism theory
  2. B) the ethical fundamentalism theory
  3. C) the social contract theory
  4. D) the moral relativism theory

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

24) Which of the following is a perceived disadvantage of Rawls's social justice theory?

  1. A) It allows those in advantageous positions to suppress people in least advantageous positions in a society.
  2. B) It does not consider the fact that people would not want to maximize benefits to the least advantaged persons in a society.
  3. C) It only allows people in advantageous positions in a society to form rules on morality.
  4. D) It postulates that there are no universal ethical rules to guide a person's conduct.

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

25) Which of the following moral theories represents the dictum "I will keep the rules if everyone else does"?

  1. A) perspectivism
  2. B) social contract
  3. C) ethical fundamentalism
  4. D) utilitarianism

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

26) How are ethical rules established in Rawls's social justice theory?

  1. A) by establishing a set of universal rules based on consistency and reversibility
  2. B) by establishing an original position of a veil of ignorance
  3. C) by the ruling class or people in advantageous positions
  4. D) by following what's best for the society as a whole

Answer:  B

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

27) ________ is a moral theory that holds that individuals must decide what is ethical based on their own feelings about what is right and wrong.

  1. A) Ethical relativism
  2. B) Kantian ethics
  3. C) Utilitarianism
  4. D) Rawls's social justice theory

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

28) Which of the following moral theories will help an anthropologist study ancient societies with an impartial and unprejudiced mindset?

  1. A) Rawls's social justice theory
  2. B) utilitarianism
  3. C) Kantian ethics
  4. D) ethical relativism

Answer:  D

Diff: 2

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

29) According to ethical relativism, ________.

  1. A) ethics rely on duties based on universal rules that one is morally bound to follow
  2. B) each person is presumed to have entered into a social contract with all others in society to obey moral rules
  3. C) there are no universal ethical rules to guide a person's conduct
  4. D) people must choose an action or follow a rule that provides the greatest good to society

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

30) Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is an increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. Closing the plant would result in the employees losing their jobs and the local suppliers losing a major buyer. It will also have an adverse effect on the community of Kantron as the plant is one of the main sources of employment for the locals. Steve considers all these factors before deciding the fate of the plant. After considering all the factors, if Steve finds that the loss to the employees and the community is far greater than that incurred by the shareholders and decides to keep the plant open, which of the following moral theories matches Steve Templeton's approach to the situation?

  1. A) Kantian ethics
  2. B) Rawls's social justice theory
  3. C) ethical fundamentalism
  4. D) utilitarianism

Answer:  D

Diff: 3

Skill:  Factual Application

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Application of knowledge

Classification:  Application

 

31) Under ethical fundamentalism, a person looks to an outside source for ethical rules or commands.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

32) The main criticism about ethical fundamentalism is that it does not allow people to decide for themselves what is right and what is wrong.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

33) Utilitarianism postulates doing the greatest good for the greatest number of people.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

34) Kantian ethics is also known as duty ethics.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

35) Kant believed that people owe moral duties that are based on universal rules.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

36) Kantian ethics is based on the premise that people can use reasoning to reach ethical decisions.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

37) The principle of inconsistency of Kantian ethics postulates treating all ethical cases differently.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

38) According to Kantian ethics, one would be obligated to abide by a contract even if that contract turns out to be detrimental to the obligated party.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

39) Kantian ethics distinguishes between the morality one uses to judge others and the morality one uses on oneself.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

40) The social contract theory is derived from Rawls's social justice theory.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

41) According to Rawls's social justice theory, a person who is in his or her "veil of ignorance" is best fit to select the fairest possible ethical principles.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

42) According to Rawls's social justice theory, moral duties are based on an implied social contract.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

43) Ethical relativism holds that moral standards ought to be based on an individual's feelings of what is right and what is wrong.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

44) According to ethical relativism, an action that is usually thought to be unethical would not be considered unethical if the perpetrator thought it was ethical.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

45) Under the moral theory of ________, a person looks to an outside source for ethical rules or commands.

Answer:  ethical fundamentalism

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

46) The ________ Statute is a federal statute that permits private parties to sue companies for fraud on behalf of the government.

Answer:  Whistleblower

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

47) ________ is a moral theory with origins in the works of Jeremy Bentham and John Stuart.

Answer:  Utilitarianism

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

48) The moral theory that dictates that people should choose the action or follow the rule that provides the greatest good to society is referred to as ________.

Answer:  utilitarianism

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

49) ________ is one of the two principles of Kantian ethics according to which the actor must abide by the rule he or she uses to judge the morality of someone else's conduct.

Answer:  Reversibility

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

50) Kantian ethics is also referred to as ________ ethics.

Answer:  duty

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

51) According to Rawls's social justice theory, ________ is considered the essence of justice.

Answer:  fairness

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

52) Rawls's social justice theory is based on the ________ theory of morality proposed by John Locke and Jean-Jacques Rousseau.

Answer:  social contract

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

53) Under the moral theory of ________, if a person meets his or her own moral standard in making a decision, no one can criticize him or her for it.

Answer:  ethical relativism

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

 

54) Explain the two principles on which the universal rules of Kantian ethics are based.

Answer:  The universal rules of Kantian ethics are based on two important principles:

(1) Consistency—that is, all cases are treated alike, with no exceptions—and

(2) Reversibility—that is, the actor must abide by the rule he or she uses to judge the morality of someone else's conduct. Thus, if one makes an exception for oneself, that exception becomes a universal rule that applies to all others.

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

55) What is ethical relativism?

Answer:  Ethical relativism holds that individuals must decide what is ethical based on their own feelings about what is right and wrong. Under this moral theory, if a person meets his or her own moral standard in making a decision, no one can criticize him or her for it. Thus, there are no universal ethical rules to guide a person's conduct. This theory has been criticized because action that is usually thought to be unethical would not be unethical if the perpetrator thought it was ethical. Few philosophers advocate ethical relativism as an acceptable moral theory.

Diff: 1

Skill:  Legal Concepts

LO:  2.2 Describe the moral theories of business ethics.

AACSB:  Analytical thinking

Classification:  Concept

 

56) What does "maximizing profits" as a social responsibility theory in business imply?

  1. A) A corporation must consider the effects of its actions on persons other than its shareholders.
  2. B) A corporation's duty is to make a profit while avoiding causing harm to others.
  3. C) A corporation owes a duty to take actions that increase profits for its shareholders.
  4. D) A corporation has the prime responsibility of increasing its profits in order to benefit the society at large.

Answer:  C

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

 

57) A social responsibility theory of business according to which a corporation's duty is to make a profit while avoiding causing harm to others is referred to as ________.

  1. A) stakeholder interest
  2. B) corporate citizenship
  3. C) maximizing profits
  4. D) moral minimum

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

58) Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. But closing the plant would be a blow to the employees as they will lose their jobs, and the local suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have an adverse effect on the community of Kantron, as the plant is one of the main sources of employment for the locals. Steve Templeton considered all these factors before making a decision on the fate of the plant. If Steve Templeton decides not to close the plant in Kantron, what business social responsibility will Steve Templeton be achieving?

  1. A) moral minimum
  2. B) corporate citizenship
  3. C) maximizing profits
  4. D) stakeholder interest

Answer:  D

Diff: 3

Skill:  Factual Application

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Application of knowledge

Classification:  Application

 

 

59) Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown of a plant in Kantron. The plant has been unprofitable for some time now, and there is increasing pressure from shareholders to shut it down so as to balance the loss being incurred by the shareholders. But closing the plant would be a blow to the employees as they will lose their jobs, and the local suppliers will lose a major buyer. There is also fear that the sudden closing of the plant will have an adverse effect on the community of Kantron, as the plant is one of the main sources of employment for the locals. Steve Templeton considered all these factors before making a decision on the fate of the plant. If Steve Templeton decides to close the plant in Kantron, what important business social responsibility will Steve Templeton accomplish?

  1. A) moral minimum
  2. B) corporate citizenship
  3. C) maximizing profits
  4. D) stakeholder interest

Answer:  C

Diff: 3

Skill:  Factual Application

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Application of knowledge

Classification:  Application

 

60) Sinbad Cola, a soft drink manufacturer, opened a plant in Buron. The waste from the plant was released into the Buron Sea, which was situated a mile away from the plant. Releasing the wastes into the sea resulted in water pollution and groundwater contamination. The water pollution in turn negatively affected Buron's fishing business. Sinbad Cola compensated for this by bringing the contamination levels down with additional filters and paying for the damages to the local fisheries. Which theory of business social responsibility did Sinbad Cola comply with when it compensated for its harmful waste disposal methods?

  1. A) moral minimum
  2. B) stakeholder interest
  3. C) corporate citizenship
  4. D) maximizing profits

Answer:  A

Diff: 3

Skill:  Factual Application

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Application of knowledge

Classification:  Application

 

 

61) ULab Inc., a biotechnology firm, lost one of its offices in a fire. The employees did not have a fire drill, and the 10-story building had no fire escape. This resulted in many employees being hospitalized for physical injuries, burns, and toxic smoke inhalation. What important social responsibility theory did ULab neglect by not having a fire drill for its employees and not installing a fire exit?

  1. A) corporate citizenship
  2. B) moral minimum
  3. C) stakeholder interest
  4. D) maximizing profits

Answer:  B

Diff: 3

Skill:  Factual Application

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Application of knowledge

Classification:  Application

 

62) ________ is a social responsibility theory of business according to which a corporation must consider the effects that its actions have on persons other than its shareholders.

  1. A) Corporate citizenship
  2. B) Maximizing profits
  3. C) Moral minimum
  4. D) Stakeholder interest

Answer:  D

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

63) What does "corporate citizenship" as a social responsibility theory in business imply?

  1. A) Businesses are responsible for helping to solve social problems that they did little, if anything, to cause.
  2. B) Businesses owe a duty to take actions that increase profits for shareholders.
  3. C) Businesses have a responsibility solely to their stakeholders and strive to maximize their well-being.
  4. D) Businesses are obliged to consider the effects of their actions on persons other than their shareholders.

Answer:  A

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

 

64) Conch Corporation, a global oil and gas company, plans to open a subsidized postsecondary vocational school in the town of Cristen, where one of its offices is situated. The plan is put to vote and then approved despite some objection from shareholders. The school is being opened in collaboration with the local government. Its objective is to help the youth of the neighborhood, especially dropouts, learn a vocational skill. What social responsibility theory describes Conch Corporation's move to open the school?

  1. A) moral minimum
  2. B) maximizing profits
  3. C) corporate citizenship
  4. D) stakeholder interest

Answer:  C

Diff: 3

Skill:  Factual Application

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Application of knowledge

Classification:  Application

 

65) The traditional view of social responsibility of business emphasized maximizing profits for employees rather than shareholders.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

66) The moral minimum theory emphasizes correcting social injuries caused by a business.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

67) The moral minimum theory emphasizes making a profit even while causing harm to others.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

 

68) There are no specific governmental laws endorsing the moral minimum of social responsibility for corporations.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

69) The stakeholder interest theory compels a corporation to consider the effects of its actions specifically on shareholders.

Answer:  FALSE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

70) The corporate citizenship theory contends that corporations have to promote the same social goals as individual members of the society.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

71) The ________ theory of social responsibility compels a corporation to correct the social injury it causes.

Answer:  moral minimum

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

72) The legislative and judicial branches of government have established laws that enforce the ________ of social responsibility for corporations.

Answer:  moral minimum

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

73) The ________ theory of social responsibility states that a corporation must consider the effects its actions have on persons other than its shareholders.

Answer:  stakeholder interest

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

74) The ________ theory of social responsibility requires corporations to solve social problems, including ones it did little, if anything, to cause.

Answer:  corporate citizenship

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

75) Give an account of the social responsibility of businesses. List its four main theories.

Answer:  Businesses do not operate in a vacuum. Decisions made by businesses have far-reaching effects on society. In the past, many business decisions were based solely on a cost-benefit analysis and how they affected the bottom line. Such decisions, however, may cause negative externalities for others. Social responsibility requires corporations and businesses to act with awareness of the consequences and impact that their decisions will have on others. Thus, corporations and businesses are considered to owe some degree of responsibility for their actions. The four theories of the social responsibility of business are maximize profits, moral minimum, stakeholder interest, and corporate citizenship.

Diff: 2

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

76) What is the moral minimum theory in the social responsibility of businesses?

Answer:  Some proponents of corporate social responsibility argue that a corporation's duty is to make a profit while avoiding causing harm to others. This theory of social responsibility is called the moral minimum. Under this theory, as long as business avoids or corrects the social injury it causes, it has met its duty of social responsibility. The legislative and judicial branches of government have established laws that enforce the moral minimum of social responsibility for corporations.

Diff: 1

Skill:  Legal Concepts

LO:  2.3 Describe the theories of the social responsibility of business.

AACSB:  Analytical thinking

Classification:  Concept

 

77) The ________ Act enacted by Congress in 2002 requires public companies to adopt codes of ethics and establishes criminal penalties for companies that partake in violations.

  1. A) Glass-Steagall
  2. B) Sarbanes-Oxley
  3. C) False Claims
  4. D) Business Norms

Answer:  B

Diff: 1

Skill:  Legal Concepts

LO:  2.4 Examine the provisions of the Sarbanes-Oxley Act.

AACSB:  Analytical thinking

Classification:  Concept

 

78) Section 406 of the Sarbanes-Oxley Act requires a public company to disclose whether it has adopted a code of ethics for senior financial officers.

Answer:  TRUE

Diff: 1

Skill:  Legal Concepts

LO:  2.4 Examine the provisions of the Sarbanes-Oxley Act.

AACSB:  Analytical thinking

Classification:  Concept

 

79) Section 406 of the ________ Act requires a public company to disclose whether it has adopted a code of ethics for senior financial officers.

Answer:  Sarbanes-Oxley

Diff: 1

Skill:  Legal Concepts

LO:  2.4 Examine the provisions of the Sarbanes-Oxley Act.

AACSB:  Analytical thinking

Classification:  Concept

 

 

------

Free Business Ethics Resources

1. See full list of videos: 

Link 1 - Youtube channel www.youtube.com/ecomftu2012

Link 2 - Youtube channel 

2. Free Business Ethics - 2016 Ebooks (free download)

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

 

3. Link to power point slides (Free Download)

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

LINK DOWNLOAD FREE PPT - LINK

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

LINK DOWNLOAD FREE PPT - LINK

Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

4. Test Bank - Free download

Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman

Link - Test bank - free download 

REVEL for Ethics and the Conduct of Business -- Access Card, 8th Edition, 2016, John R Boatright, Jeffery D. Smith

Link - Test bank - free download

 

For Test Bankz, Quiz Answers and Case study Guides, email to: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Good Luck and Success, Enjoy Your Study !

 

----------

 

 

       

 

Business Ethics 2016, Lecture, Video, Case Study Guides and Quiz, Test Bank, Free Download
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Revel for Ethics and the Conduct of Business, 8th Edition, 2016, John R Boatright, Jeffery D. Smith
Legal Environment of Business: Online Commerce, Ethics, and Global Issues, 8th Edition, 2016, Henry R. Cheeseman
Business Ethics: Concepts and Cases, 7th Edition, 2012, Manuel G. Velasquez, Santa Clara University

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1. Ethics in the World of Business
2. Ethical Decision Making
3. Ethical Theories
4. Whistle-Blowing
5. Business Information and Conflict of Interest
6. Privacy
7. Discrimination and Affirmative Action
8. Employment Rights
9. Health and Safety
10. Marketing and Advertising
11. Ethics in Finance
12. Corporate Social Responsibility
13. Governance, Accountability, and Compliance
14. International Business Ethics
------
Part I: Legal and Ethical Environment

1. Legal Heritage and the Digital Age
2. Ethics and Social Responsibility of Business
3. Courts, Jurisdiction, and Administrative Law
4. Judicial, Alternative, and E-Dispute Resolution

Part II: Constitution and Public Law
5. Constitutional Law for Business and E-Commerce
6. Torts and Strict Liability
7. Criminal Law and Cyber Crimes
8. Intellectual Property and Cyber Piracy

Part III: Contracts, Commercial Law, and E-Commerce
9. Formation and Requirements of Contracts
10. Performance and Breach of Contracts
11. Digital Law and E-Commerce
12. UCC Sales Contracts, Leases, and Warranties
13. Credit, Secured Transactions, and Bankruptcy

Part IV: Business Organizations, Corporate Governance, and Investor Protection
14. Small Business, General Partnerships, and Limited Partnerships
15. Limited Liability Companies, Limited Liability Partnerships, and Special Forms of Business
16. Corporations and Corporate Governance
17. Investor Protection and E-Securities Transactions

Part V: Agency, Employment, and Labor Law
18. Agency Law
19. Equal Opportunity in Employment
20. Employment Law and Worker Protection
21. Labor Law and Immigration Law

Part VI: Government Regulation
22. Antitrust Law and Unfair Trade Practices
23. Consumer Protection
24. Environmental Protection
25. Real Property and Land Use Regulation

Part VII: Global Environment
26. International and World Trade Law

Part VIII: Accounting Profession
27. Accountants’ Duties and Liability
------
PART ONE Basic Principles

Chapter 1 Ethics and Business
Introduction
1.1 The Nature of Business Ethics
ON THE EDGE: Was National Semiconductor Morally Responsible?
1.2 Ethical Issues in Business
ON THE EDGE: A Traditional Business
1.3 Moral Responsibility and Blame
ON THE EDGE: WorldCom’s Whistleblower
ON THE EDGE: Gun Manufacturers and Responsibility
CASES FOR DISCUSSION
Slavery in the Chocolate Industry
Aaron Beam and the HealthSouth Fraud

Chapter 2 Ethical Principles in Business
Introduction
2.1 Utilitarianism: Weighing Social Costs and Benefits
2.2 Rights and Duties
ON THE EDGE: Should Companies Dump Their Wastes In Poor Countries?
ON THE EDGE: Working for Eli Lilly & Company
ON THE EDGE: Conflict Diamonds
ON THE EDGE: ExxonMobil, Amerada Hess, and Marathon Oil in Equatorial Guinea
CASES FOR DISCUSSION
Traidos Bank and Roche’s Drug Trials in China

PART TWO The Market and Business

Chapter 3 The Business System: Government, Markets, and International Trade
Introduction
3.1 Free Markets and Rights: John Locke
3.2 Free Markets and Utility: Adam Smith
3.3 Free Trade and Utility: David Ricardo
3.4 Marx and Justice: Criticizing Markets and Free Trade
ON THE EDGE: Commodification or How Free Should Free Markets Be?
ON THE EDGE: Marx’s Children
3.5 Conclusion: The Mixed Economy, the New Property, and the End of Marxism
ON THE EDGE: Napster’s Lost Revolution
ON THE EDGE: Brian’s Franchise
CASES FOR DISCUSSION
The GM Bailout Accolade versus Sega

Chapter 4 Ethics in the Marketplace
Introduction
4.1 Perfect Competition
4.2 Monopoly Competition
ON THE EDGE: Drug Company Monopolies and Profits
4.3 Oligopolistic Competition
4.4 Oligopolies and Public Policy
ON THE EDGE: Fixing the Computer Memory Market
ON THE EDGE: Oracle and Peoplesoft
CASES FOR DISCUSSION
Intel’s “Rebates” and Other Ways It “Helped” Customers
Archer Daniels Midland and the Friendly Competitors

PART THREE Business and Its External Exchanges: Ecology and Consumers

Chapter 5 Ethics and the Environment
Introduction
5.1 The Dimensions of Pollution and Resource Depletion
5.2 The Ethics of Pollution Control
5.3 The Ethics of Conserving Depletable Resources
ON THE EDGE: Ford’s Toxic Wastes
ON THE EDGE: The Auto Companies in China
ON THE EDGE: Exporting Poison
CASES FOR DISCUSSION
The Ok Tedi Copper Mine
Gas or Grouse?

Chapter 6 The Ethics of Consumer Production and Marketing
Introduction
6.1 Markets and Consumer Protection
6.2 The Contract View of Business Firm’s Duties to Consumers
6.3 The Due Care Theory
ON THE EDGE: The Tobacco Companies and Product Safety
6.4 The Social Costs View of the Manufacturer’s Duties
ON THE EDGE: Selling Personalized Genetics
6.5 Advertising Ethics
ON THE EDGE: Advertising Death to Kids?
ON THE EDGE: New Balance and the “Made in USA” Label
6.6 Consumer Privacy
CASES FOR DISCUSSION
Becton Dickinson and Needle Sticks
Reducing Debts at Credit Solutions of America

PART FOUR Business and Its Internal Constituencies

Chapter 7 The Ethics of Job Discrimination
Introduction
7.1 Job Discrimination: Its Nature
ON THE EDGE: Helping Patients at Plainfield Healthcare Center
7.2 Discrimination: Its Extent
7.3 DISCRIMINATION: UTILITY, RIGHTS, AND JUSTICE
7.4 Affirmative Action
ON THE EDGE: Driving for Old Dominion
ON THE EDGE: Peter Oiler and Winn-Dixie Stores
CASES FOR DISCUSSION
Should Kroger pay now for what a Ralphs’ Employee did in the Past
Wal-Mart’s Women

Chapter 8 Ethics and the Employee
Introduction
8.1 The Rational Organization
8.2 The Political Organization
8.3 The Caring Organization
ON THE EDGE: HP’s Secrets and Oracle’s New Hire
ON THE EDGE: Insider Trading or: What Are Friends For?
ON THE EDGE: Delivering Pizza
ON THE EDGE: Sergeant Quon’s Text Messages
ON THE EDGE: Employment at Will at Howmet Corporation?
CASES FOR DISCUSSION
Death at Massey Energy Company
Who Should Pay?
------
key words
Ethics,
Ethical Decision Making,
Ethical Theories,
Whistle-Blowing,
Conflict of Interest,
Privacy,
Discrimination, Affirmative Action,
Employment Rights,
Health and Safety,
Ethics in Finance,
Corporate Social Responsibility,
Governance, Accountability, Compliance,
International Business Ethics,

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