BLT&E-7e: Practice Quiz
Chapter 2:
Ethics in Business
1.
Business ethics focuses on:
a. what constitutes ethical behavior in the business world.
b. how government intervention results in unethical treatment of some
groups.
c. how businesses are treated under the law.
d. how businesses best accommodate regulatory requirements.
Answers:
a. Correct. Ethical issues face businesses as entities as well as
individuals.
b. Incorrect. The problems associated with government interventions
have ethical components, but these problems are not synonymous with
business ethics.
c. Incorrect. The treatment of businesses under the law is a legal issue,
not an ethical one (although the law is often rooted in ethical precepts).
d. Incorrect. The ways in which businesses meet the vast number of
regulatory requirements they face may have ethical implications, but
generally they are legal, not ethical, decisions.
2.
One way that businesses can better promote ethical behavior in the
workplace is to institute:
a. mandatory dating policies.
b. corporate compliance programs.
c. “one-touch you’re fired” rules.
d. “don’t ask, don’t tell” rules.
Answers:
a. Incorrect. This coercive action would not promote ethical behavior and
would probably violate the rights of employees.
b. Correct. Corporate compliance programs typically include codes of
ethics that provide guidelines to solve ethical dilemmas facing
employees.
c. Incorrect. Such a policy may violate the rights of the accused
harasser.
d. Incorrect. This rule may work for the military, but it would not promote
ethical behavior in the workplace.
3.
A company that will symbolize the harmfulness of unethical behavior—to
management, employees, suppliers, shareholders, the community, and
society generally—for years to come is:
a. Johnson & Johnson.
b. Costco.
c. Enron Corporation.
d. The Sarbanes-Oxley Company.
Answers:
a. Incorrect. In fact, Johnson & Johnson has been known for its ethical
business behavior.
b. Incorrect. Costco is an example of a company that strives to act
ethically.
c. Correct. Enron Corporation’s defiance of commonly accepted ethical
(and legal) practices was widely publicized in the early 2000s.
d. Incorrect. Sarbanes and Oxley were the sponsors of a congressional
act aimed at curbing corporate fraud and wrongdoing.
4.
With respect to business ethics, the “moral minimum” is:
a. establishing an ethical code.
b. compliance with the law.
c. looking the other way when an employee behaves unethically.
d. instituting ethical training seminars.
Answers:
a. Incorrect. The “moral minimum”—or the minimum acceptable standard
for ethical business behavior—is legal compliance.
b. Correct. This is the minimum acceptable standard for ethical business
behavior.
c. Incorrect. This practice would encourage, not discourage, unethical
behavior.
d. Incorrect. Instituting such seminars goes beyond what is regarded as
the “moral minimum” in business—legal compliance.
5.
There are two fundamental approaches to ethical reasoning in a business
environment. These are:
a. the regulatory and the command.
b. the existentialist and postmodernist.
c. the rationalist and irrationalist.
d. the duty-based and the outcome-based.
Answers:
a. Incorrect. Regulatory and command are not fundamental ethical
approaches for businesses.
b. Incorrect. Existential and postmodern philosophical theories have
been popular among academics in the past two decades, but they are
not two fundamental approaches to ethical reasoning in a business
environment.
c. Incorrect. While people behave rationally or irrationally, these are not
identified as approaches to ethical reasoning in a business
environment.
d. Correct. Duty-based ethics and outcome-based ethics have been the
favored approaches to ethical reasoning in a business environment.
6.
Kant’s “categorical imperative” states that:
a. the morality of an action should be judged by the effects the action
would have if everyone in the same situation or category acted the
same way.
b. the morality of an action should be judged on how much happiness it
creates for one person.
c. the morality of an action should be judged on how effective it is at
accomplishing a particular political goal.
d. the morality of an action should be judged solely on its basis in Muslim
law.
Answers:
a. Correct. This summarizes Kant’s categorical imperative.
b. Incorrect. This is not what the “categorical imperative” means.
c. Incorrect. The effectiveness of political programs often has little to do
with the ethics of the program.
d. Incorrect. Though essential for some, an action’s basis in Muslim law
is not essential for Kant’s categorical imperative.
7.
Proponents of a rights-based theory of ethics believe that the key factor in
ethical decision-making is:
a. how a decision will affect people’s rights.
b. how decisions will affect a corporation’s profit stream.
c. how decisions will affect the leisure time of most employees.
d. how decisions will affect the utility of managers.
Answers:
a. Correct. Proponents of a rights-based theory are concerned with
rights, above all, and how a decision will affect people’s rights.
b. Incorrect. Proponents of a rights-based theory are more concerned
with rights than with profits.
c. Incorrect. The leisure time of employees is not the key factor in ethical
decision making for proponents of a rights-based theory.
d. Incorrect. Utility is the key factor in ethical decision making for
utilitarians.
8.
The primary focus of utilitarian ethics is:
a. the outcome of actions.
b. the nature of the actions themselves.
c. the thought-process involved in literary creation.
d. the role of God-given commandments in ethics.
Answers:
a. Correct. Utilitarianism is concerned mostly with outcomes.
b. Incorrect. A concern with the nature of actions themselves is a
characteristic of duty-based ethics.
c. Incorrect. Utilitarians are concerned with outcomes, not with the
thought-process involved in literary creation.
d. Incorrect. A concern with God-given commandments would be a
feature of some duty-based ethics.
9.
The Foreign Corrupt Practices Act would prohibit which of the following
actions?
a. The payment of a relatively small sum of money to a minor official with
ministerial duties.
b. All payments to foreign companies for the purposes of securing a
contract.
c. All payments to third parties who help secure a contract in a foreign
country.
d. The bribery of a prime minister of a foreign country to further the
chances that the company paying the bribe will obtain a lucrative
government contract.
Answers:
a. Incorrect. Payments to minor officials in their ministerial capacities are
not illegal.
b. Incorrect. Some payments to foreign companies are not illegal.
c. Incorrect. Some payments to third parties in these situations are not
illegal.
d. Correct. A U.S. company may not bribe most officials of foreign
countries if the purpose of the bribe is to have the foreign official use
his or her influence to help the U.S. company secure a contract.
10.
Which of the following acts requires companies to set up confidential
systems so that employees and others may “raise red flags” about
suspected illegal and unethical auditing and accounting practices?
a.
b.
c.
d.
The Enron Espionage Act.
The Sarbanes-Oxley Act.
The Private Compliance Act.
The Litigation of Ethics Act.
Answer:
a. Incorrect. There is no such act.
b. Correct. Companies are required to set up these systems by the
Sarbanes-Oxley Act of 2002.
c. Incorrect. There is no such act.
d. Incorrect. There is no such act.