1
Interactive Quiz for ALT-12e, Chapter 5
Chapter 5 – Ethics and Business Decision Making
1.
Ethics may be defined as:
a. the study of voluntary exchange.
b. the study of what constitutes right and wrong behavior.
c. the study of psychological phenomena.
d. the study of beliefs in otherworldly beings.
Answers:
a. Incorrect. This would define trade.
b. Correct. This statement defines the term ethics.
c. Incorrect. We may act for psychological reasons, but the study of
psychological phenomena is a better definition of psychology.
d. Incorrect. Some people may act ethically because of their belief in
otherworldly beings or forces, but the study of such beings and forces
is not a definition for the term ethics.
2.
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.
3.
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.
2
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.
4.
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. The Enron Espionage Act.
b. The Sarbanes-Oxley Act.
c. The Private Compliance Act.
d. The Litigation of Ethics Act.
Answers:
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.
5.
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.
3
6.
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.
7.
Duty-based ethical standards very often derive from:
a. civil law codes.
b. principles rooted in religion.
c. administrative rulings.
d. environmental regulations.
Answers:
a. Incorrect. Although the law and morality often overlap, duty-based
ethics do not derive from law; rather, law derives from ethical norms.
b. Correct. Principles rooted in religion provide the basis from which
many duty-based ethical standards are derived.
c. Incorrect. As a kind of positive law, administrative rulings may,
themselves, derive from ethical standards, but the ethical standards do
not derive from the administrative rulings.
d. Incorrect. As with administrative rulings, environmental regulations
may be based on ethical standards, but the standards do not derive
from the regulations.
8.
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.
4
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.
9.
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.
10.
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:
5
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.