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Chapter Test
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1
Ethical principles in business
A)concern the behavioral guidelines a company's top management and board of directors set for company personnel regarding "what is right" and "what is wrong" in conducting the company's business.
B)deal chiefly with the actions and behaviors required to operate companies in a socially responsible manner.
C)are arrived at by picking and choosing among the consensus ethical standards of society to come up with a set of ethical standards that apply directly to operating a business.
D)are not materially different from ethical principles in general and have to be judged in the context of society's standards of right and wrong, not by a special set of rules that business people decide to apply to their own conduct.
E)involve behavioral guidelines for balancing the interests of non-owner stakeholders (customers, employees, suppliers, and the communities in which the company has operations) against the interests of company shareholders.
2
According to the school of ethical universalism,
A)what behaviors are "ethically right" and "ethically wrong" vary across religions, but the boundaries of what is ethical or not are universal within religions.
B)concepts of right and wrong universally apply to all business situations within a given country but can vary across countries or cultures.
C)ethical guidelines exist only when there is universal agreement as to what behaviors are "ethically right" and "ethically wrong"; anything not universally viewed as unethical is thus within the bounds of what is ethically permissible.
D)all societies and countries have some definition of what is ethically permissible (in this sense ethics are universal); however, the definitions of what is ethically permissible vary according to the prevailing religious doctrines in each country.
E)many of the same standards of what's ethical and what's unethical resonate with peoples of most societies regardless of local traditions and cultural norms—hence, to the extent there is common moral agreement about right and wrong actions, common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances.
3
The thesis that since different societies and cultures have divergent values and standards of what is "ethically right" and "ethically wrong" it is appropriate to judge behavior as ethical/unethical in the light of local customs and social mores
A)is the basis for the theory of ethical variation.
B)defines what is meant by "integrated social contracts theory."
C)is a view that characterizes the school of ethical relativism.
D)accounts for why there is no such thing as ethical standards for business enterprises.
E)is the reason why codes of ethical and social morality have been established country by country.
4
If one adopts the thinking of the school of ethical relativism, then
A)there are multiple sets of ethical standards because what is ethical or unethical depends on local customs and social mores and can vary from one culture or nation to another.
B)there is a "one-size-fits-all" set of authentic ethical standards.
C)the preferred set of ethical standards is the one which society at large has put in place in the form of laws and regulations.
D)the prevailing ethical standards are the product of a system of "integrated social contracts."
E)no ethical standards are ever truly "authentic"—they exist only to the extent that there is a temporary shared conviction among company managers and company personnel that a particular behavior is either ethically permissible or ethically impermissible.
5
Paying bribes and kickbacks to expedite winning orders from customers or to facilitate business transactions
A)is ethically acceptable according to both the school of ethical relativism and the school of ethical universalism, provided the payment of such bribes and kickbacks is permitted by local laws.
B)is a thorny ethical issue for multinational companies because in some countries such payments are considered unethical whereas in other countries the payment of bribes and kickbacks is very much in accord with local customs and social mores (which makes such payments "ethically acceptable" according to the school of ethical relativism).
C)is a clear violation of ethical principles in all countries.
D)is ethically acceptable according to "integrated social contract theory."
E)is a clear violation of ethical standards only if one accepts the arguments and reasoning of the school of ethical relativism.
6
According to integrated social contracts theory,
A)the views and principles of the school of ethical universalism are definitely wrong; the correct view is that ethics is a matter of personal responsibility not a matter of management concern.
B)the ethical standards a company should try to uphold are governed both by (1) a limited number of universal ethical principles that are widely recognized as putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances of local cultures, traditions, and shared values that further prescribe what constitutes ethically permissible behavior and what does not—however, universal ethical norms take precedence over local ethical norms.
C)the standards of what is ethically permissible and what is not should be based on a code of ethical and moral conduct which each society/country/culture adopts and then enacts into law.
D)the standards of what is ethically permissible should be determined by the terms of an "ethics contract" which each company employee signs as a condition of employment.
E)the only valid ethical standards are those which are universal—and then only if the standards are not absolute and provide some wiggle room according to the circumstances of the each situation.
7
Unintentionally amoral managers
A)are nearly always ethically-principled in their personal behavior but can inadvertently violate the principles of business ethics because they are unsure of the differences between standards of business ethics and standards of personal ethics.
B)do not violate ethical principles deliberately but rather because they have not been instructed by their superiors to steadfastly observe ethical principles in doing their jobs.
C)believe that ethical standards apply only to one's personal life but not to conduct in matters of business.
D)end up sometimes violating ethical principles merely because they are simply casual about, careless about, or inattentive to the fact that certain kinds of business decisions or company activities are unsavory or may have deleterious effects on others—in short, they go about their jobs as best they can without giving serious thought to the ethical dimension of decisions and business actions.
E)end up sometimes violating ethical principles because they believe that whatever is legal is also ethical.
8
According to the information presented in Table 9.1, the perceived degree of governmental corruption is
A)highest in such places as Germany, France, Hong Kong, Chile, and Finland and lowest in such countries as India, Paraguay, Indonesia, and South Africa.
B)is highest in Finland, Denmark, New Zealand, and Sweden and lowest in Indonesia, Kenya, Paraguay, and Bangladesh.
C)about the same in all countries that were surveyed.
D)is lowest in the U.S., Japan, and Spain.
E)is lowest in Finland, New Zealand, Denmark, Singapore, and Sweden.
9
Unethical managerial behavior tends to be driven by such factors as
A)overzealous or obsessive pursuit of personal gain, wealth, and other selfish interests; a company culture that puts the profitability and good business performance ahead of ethical behavior; and heavy pressures on company managers to meet or beat performance targets.
B)the lack of a company code of ethics.
C)a lack of training in what is ethical and what is not.
D)confusing differences between what is ethical behavior in one's personal life and what is ethically permissible in business.
E)All of the above factors.
10
A company's strategy needs to be ethical because
A)institutional investors are more inclined to purchases shares of companies demonstrating high ethical standards.
B)everyone is an ethics watchdog and somebody is sure to blow the whistle on the company's unethical behavior.
C)of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is used.
D)(1) a strategy that is unethical in whole or in part is morally wrong and reflects badly on the character of the company personnel involved and (2) an ethical strategy is good business and in the best interest of shareholders.
E)All of the above.
11
The business case for an ethical strategy
A)relates to the company's business model and business-level strategy.
B)must be articulated by the company's senior managers and reinforced by pronouncements from the board of directors.
C)starts with managers who understand there is big difference between adopting values statements and codes of ethics that serve merely as window dressing and those that truly paint the white lines for a company's actual strategy and business conduct.
D)emphasizes that pursuing unethical strategies not only damages a company's reputation but can also have costly consequences that are wide ranging.
E)can be effectively made by executives subscribing to the damage control approach to managing a company's ethical conduct.
12
The underlying belief of the "unconcerned or non-issue" approach to dealing with or managing ethics-related issues and ethics conduct is that
A)a company needs to make only a token gesture in the direction of having acceptable ethical standards (usually adopting a code of ethics and instituting very light enforcement is sufficient).
B)the business of business is business not ethics.
C)unethical behavior should be punished only if it results in a public scandal which cannot be ignored by management.
D)ethics is a matter of personal responsibility not a matter of management concern.
E)what is right and what is wrong is a matter for each individual to decide and not something that a company should try to impose on its personnel.
13
According to the chapter discussion and the summary in Table 9.2, the underlying belief of the "damage control" approach to dealing with or managing ethics-related issues and ethics conduct is that
A)a company needs to make only a token gesture in the direction of having acceptable ethical standards (usually adopting a code of ethics and instituting very light enforcement is sufficient); the primary objective is to protect the company against any fallout from unethical strategies and behavior.
B)a company does not need a code of ethics so long as top management makes a show of punishing unethical conduct whenever its shady actions are put in the public spotlight.
C)unethical behavior should be punished only if it results in a public scandal which cannot be ignored by management.
D)a reputation for high ethical standards is important to every company.
E)the business of business is business not ethics.
14
Which one of the following is not a key trait of the ethical culture approach to managing ethical conduct?
A)The ethical culture approach is favored at companies where top managers are very concerned about gaining employee buy-in to the company's ethical standards, business principles, and corporate values and see the company's code of ethics and/or its statement of corporate values as integral to the company's identity and ways of operating.
B)The ethical culture approach is especially well-suited for companies that favor a light approach to ethics compliance.
C)There are strong peer pressures from coworkers to observe ethical norms.
D)Compliance procedures need to be an integral part of the ethical culture approach to help send the message that management takes the observance of ethical norms seriously and that behavior that fall outside ethical boundaries will have negative consequences.
E)The integrity of the ethical culture approach depends heavily on the ethical integrity of the executives who create and nurture the culture.
15
Which of the following is not an action typically taken by companies that adopt a compliance approach to managing ethical conduct or that are serious about company employees observing high ethical standards?
A)Making the company's code of ethics a visible and regular part of communications with employees, providing ethics training, and establishing formal ethics compliance procedures
B)Implementing ethics training programs and giving ethics awards to employees for outstanding efforts to create an ethical climate and improve ethical performance
C)Requiring all job applicants to sign a form stating that they will faithfully observe the company's ethical standards, subject to immediate dismissal if they are found guilty of any ethical violations or ethical misconduct
D)Trying to deter violations by setting up ethics hotlines for anonymous callers to use in reporting possible violations
E)Appointing a chief ethics officer or ethics ombudsperson charged with giving guidance on ethics matters and/or instituting formal procedures for investigating alleged ethics violations
16
The notion of social responsibility as it applies to businesses concerns
A)a company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.
B)a company's duty to put the public interest ahead of shareholder interests.
C)societal expectations that all company stakeholders will be treated equally and fairly.
D)a company's duty to establish socially acceptable core values and to have a strictly enforced code of ethical conduct.
E)the responsibility that top management has for ensuring that the company's actions and decisions are in the best interest of society at large.
17
Which of the following is not something a company should normally consider in crafting a social responsibility strategy?
A)Actions to promote workforce diversity
B)Actions to raise worker wages and salaries and/or provide attractive incentive compensation for good performance
C)The resources it will devote to charitable contributions, community service endeavors, various worthy organizational causes, and reaching out to make a difference in the lives of the disadvantaged
D)Actions to protect or enhance the environment and, in particular, to minimize or eliminate any adverse impact on the environment stemming from the company's own business activities (such actions must be over and above what is legally required)
E)Actions to create a work environment that enhances the quality of life for employees and makes the company a great place to work
18
An environmental sustainability strategy consists of a company's deliberate actions to
A)provide good working conditions for employees and to actively work to enhance the quality of life in the local communities where it operates and in society at large.
B)redesign products and alter production practices to satisfy the expectations of various environmental protection groups.
C)meet the current needs of customers, suppliers, shareholders, employees and other stakeholders in a manner that protects the environment, provides for the longevity of natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet.
D)apply universal norms regarding the protection of the environment to its everyday operations.
E)balance commonly held views about what constitutes environmentally appropriate actions against its ability to make a profit.
19
Which one of the following is not part of the moral case for why a company should actively promote the betterment of society?
A)"It's the right thing to do."
B)A corporation's highest priority is to satisfy the unmet needs of society.
C)Most business leaders can be expected to acknowledge that socially responsible actions and environmental sustainability are important and that businesses have a duty to be good corporate citizens.
D)In return for society granting a business a "license to operate" and not be unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a responsible citizen and do its fair share to promote the general welfare.
E)Every business has a moral duty to take corporate citizenship into consideration and to do what's best for shareholders within the confines of discharging its duties to operate honorably, provide good working conditions to employees, be a good environmental steward, and display good corporate citizenship.
20
Which one of the following is not a part of the business case for why companies should act in a socially responsible manner?
A)Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.
B)Acting in a socially responsible manner is in the overall best interest of shareholders.
C)Every business has a moral duty to promote the general welfare of society.
D)To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.
E)Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).







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