1.The study of business ethics is important to better understand all of the following except

A.that a person’s own moral philosophies and decision-making experiences may not be sufficient to guide him or her in the business world.
B .how and why people make ethical or unethical decisions.
C. how to cope with conflicts between a person’s own values and those of the organization in which he or she works.
D. that business ethics is merely an extension of an individual’s own personal ethics.
E. how to identify ethical issues that arise in the business world.

Answer: that business ethics is merely an extension of an individual’s own personal ethics.

2. Social responsibility is

A. an organization’s obligation to maximize its positive effects and minimize its negative effects on stakeholders.
B. principles and standards that guide behavior in the world of business.
C. a business’s responsibility not to pollute the environment.
D. a business’s responsibility to manufacture products that function properly without harming consumers.
E. charitable contributions made by a business to enhance its image.

Answer: an organization’s obligation to maximize its positive effects and minimize its negative effects on stakeholders.

3. Which of the following was (were) developed in the 1980s to encourage corporate support for ethical conduct by establishing a method for discussing “best practices?”

A.Federal Sentencing Guidelines for Organizations
B.Defense Industry Initiative on Business Ethics and Conduct
C.Corporate Codes of Conduct
D.United States Sentencing Commission
E. MERCOSUR

Answer Defense Industry Initiative on Business Ethics and Conduct

4. The _______________ was (were) enacted to restore confidence in financial reporting and business ethics after the accounting scandals of the early 2000s.

A. Defense Industry Initiative on Business Ethics and Conduct
B. Federal Sentencing Guidelines for Organizations
C. Sarbanes-Oxley Act
D.Foreign Corrupt Practices Act
E.Ferrell-Fraedrich Act

Answer: Sarbanes-Oxley Act

5. In the history of business ethics, the 1990s can best described as a time when business ethics was

A. formalized.
B. consolidated.
C. institutionalized.
D. popularized.
E  marginalized.

Answer: formalized.

6. Which of the following is not one of the rewards for being ethical and socially responsible in business?

A. Greater employee commitment
B. Greater employee turnover
C.Improved customer trust and satisfaction
D. Increased investor willingness to entrust funds
E. Better financial performance

Answer: Greater employee turnover

7. When employees see honesty, respect, and trust applied frequently in the workplace, they

A. feel less pressure to compromise ethical standards.
B. observe less misconduct.
C .are more satisfied with their organizations overall.
D.feel more valued as employees.
E .All of these.

Answer:All of these.

8. Most strong organizational climates focus on the value of placing _________ interests first.

A. customers’
B. employees’
C. stockholders’
D. suppliers’
E. distributors’

Answer: customers’

9. To be successful, relationships with investors must rest on dependability, ________, and commitment.

A. profits
B. dividends
C. confidence
D. trust
E.code of ethics

Answer:trust

10. The rise of consumerism occurred during the

A .1940s
B. 1950s
C. 1960s
D. 1970s
E. 1980s

Answer: 1960s

11. Which of the following is the first step in the ethical decision-making process?

A.  Being socialized into the firm’s corporate culture
B.  Applying a personal moral philosophy
C. Recognizing that an issue requires an individual or work group to make a choice that ultimately will be judged by stakeholders as right or wrong
D. Soliciting the opinions of others in the work group and the overall business
E. Enforcing the firm’s ethical standards with rewards and punishment

Answer: Recognizing that an issue requires an individual or work group to make a choice that ultimately will be judged by stakeholders as right or wrong

12. Which of the following is not one of the six “spheres of influence” to which individuals are subject when confronted with an ethical issue?

A. Education
B. Workplace
C. Family
D. Legal system
E . Community

Answer: Education

13. Which statement best describes the relationship between those who believe in external control (externals) and those who believe in internal control (internals)?

A. Externals believe that they control events in their lives by their own effort and skill, while internals believe in going with the flow.
B. Both groups believe in going with the flow.
C. Both groups believe that they are in control of their destinies.
D. Externals believe in going with the flow, while internals believe that they control events in their lives by their own effort and skill.
E. Both groups believe that they control events in their lives by their own effort and skill.

Answer: . Externals believe in going with the flow, while internals believe that they control events in their lives by their own effort and skill.

14. Obedience to authority is part of which of the following components of the ethical decision-making framework?

A. Moral philosophy
B. Cognitive moral development
C. Individual variables
D. Opportunity
E. Superiors

Answer: Superiors

15. External rewards and internal rewards relate to which part of the ethical decision-making framework?

A. Individual factors
B. Opportunity
C. Cognitive moral development
D. Intentions
E.Significant others

Answer: Opportunity

16. It is impossible to agree on ________ judgments about what is ethical.

A. normative
B. descriptive
C. regular
D. acceptable
E. typical

Answer: A. normative

17. The role of leadership in developing an ethics program includes all of the following except

A. maintaining commitment from top managers.
B. providing timely training to reinforce knowledge.
C. ensuring consistent implementation.
D. carefully archiving and not distributing the ethical policies of the firm.
E. communicating ethical standards through multiple channels.

Answer: carefully archiving and not distributing the ethical policies of the firm.

18. The ________ leader values people, their emotions, and their needs, and relies on friendship and trust to promote flexibility, innovation, and risk-taking.

A. coercive
B. pacesetting
C. democratic
D. authoritative
E. affiliative

Answer:affiliative

19. What is the difference between transactional leaders and transformational leaders?

A. The former are emotional leaders, whereas the latter are stoic leaders.
B. The former attempt to create employee satisfaction through negotiating or bartering, while the latter strive to raise employees’ level of commitment and foster trust and motivation.
C. The former set low standards for employees, whereas the latter set high standards.
D. The former set high standards for employees, whereas the latter set low standards.
E. The former strive to raise employees’ level of commitment and foster trust and motivation, while the latter attempt to create employee satisfaction through negotiating or bartering.

Answer: The former attempt to create employee satisfaction through negotiating or bartering, while the latter strive to raise employees’ level of commitment and foster trust and motivation.

20. Which of the following statements is false regarding strong ethical leaders?

A. Strong ethical leaders are reactive.
B. Strong ethical leaders are proactive.
C. Strong ethical leaders have strong personal character.
D. Strong ethical leaders are role models for the organization’s values.
E .Strong ethical leaders are competent managers who take a holistic view of the firm’s ethical culture.

Answer: Strong ethical leaders are reactive.

21. An unconscious reference to one’s own cultural values, experiences, and knowledge is referred to as the

A. cultural reference criterion.
B. unconscious cultural criterion.
C. cultural-self criterion.
D. self-reference criterion.
E. unconscious cultural-self criterion.

Answer:self-reference criterion.

22. Cultural differences in _______ may result in international ethical issues if a businessperson stands far away from a customer during negotiations and the customer regards it as a personal insult.

A. price negotiations
B. local discrimination
C . multinational corporations
D. time perception
E. body language

Answer: body language

23. The defense of paying bribes and other questionable practices in other countries is called

A. relativism.
B. corporate relativism.
C. cultural relativism.
D. adaptability.
E. cultural malaise.

Answer: cultural relativism.

24. Which of the following created an international ethics code?

A. Federation of Korean Industries
B. Organization of Petroleum Exporting Countries
C. U.S. Foreign Corrupt Practices Act
D. Omnibus Trade and Competitiveness Act
E .Caux Round Table

Answer: Caux Round Table

25. Which of the following is not a criticism of or charge against multinational corporations?

A. They transfer jobs overseas, where wage rates are lower.
B. They increase the gap between rich and poor nations.
C. They pay high taxes everywhere.
D. They exploit the labor market of host countries.
E. They have an unfair advantage when competing with local businesses.

Answer: They pay high taxes everywhere.

26. Discrimination in international business

A. is often justified on the basis of local cultural norms and values.
B. does not exist.
C. is never justified on the basis of cultural norms and values.
D. is wrong because it violates U.S. laws.
E. reduces conflict between cultures.

Answer: is often justified on the basis of local cultural norms and values.

27. Gouging is

A. different prices charged to different groups of customers.
B. a price increase that exceeds the costs of additional expenditures, such as transportation and taxes.
C. selling products for high prices in domestic markets while selling the same products in foreign markets for low prices that do not cover all the costs of exporting the products.
D. ethical.
E. the international price of a specific product.

Answer: a price increase that exceeds the costs of additional expenditures, such as transportation and taxes.

28. All of the following are listed as steps that companies can take to address discrimination issues except

A. establish a company policy on discrimination.
B. develop an action plan.
C. take action.
D. list all possible discrimination acts in the policy.
E. identify indicators of possible noncompliance.

Answer: list all possible discrimination acts in the policy.

29. Which of the following prohibits U.S. companies from offering or providing payments to officials of foreign governments for the purpose of obtaining or retaining business abroad?

A. Sullivan Act
B. Eckhardt Amendment
C. Foreign Corrupt Practices Act
D. Omnibus Trade and Competitiveness Act
E. Sarbanes-Oxley Act

Answer: Foreign Corrupt Practices Act

30. Traditionally safe and adequately tested products may still harm consumers and thus create ethical issues because

A. they discriminate against some types of customers.
B. of illiteracy, unsanitary conditions, or cultural values.
C. of chemical reactions with local water supplies.
D. of improper advertising and sales promotion.
E. they may boost a nation’s military advantage.

Answer: of illiteracy, unsanitary conditions, or cultural values.

31. ___________ means using or transferring illegally received funds in a financial transaction to conceal their source or ownership or to facilitate an illegal activity.

A. Money laundering
B. Electronic funds transfer
C. Counterfeiting
D. Unethical funds transfer
E.Gouging

Answer: Money laundering

32. Which of the following has the power to enact legally binding ground rules for international commerce and trade policy?

A. Caux Round Table
B. Global Sullivan Organization
C. Federal Trade Commission
D. Global Commerce Association
E. World Trade Organization

Answer: World Trade Organization

33. The primary responsibility of ensuring that ethical, legal, and social standards are adhered to within a business rests with

A. the investors.
B. the government.
C. the management board.
D. the employees.
E. the customers.

Answer: the management board.

34. How can a company align the interests of its owners with those of its managers through executive compensation?

A. By significantly reducing executive pay across the board
B. By basing compensation on performance and achievement of goals
C. By setting executive compensation at a level equal to the industry average
D. By capping executive compensation at ten times that of the lowest-paid employee
E. By basing salaries on seniority within the company

Answer: By basing compensation on performance and achievement of goals

35. The agency problem, wherein ownership and control of a corporation are separate, is associated with

A. the shareholder model of corporate governance.
B. the stakeholder model of corporate governance.
C. the ethical model of corporate governance.
D. the agency model of corporate governance.
E. the investor model of corporate governance.

Answer: the shareholder model of corporate governance.

36. Which of the following are typically not secondary stakeholders?

A. The media
B. Special-interest groups
C. Customers
D. Trade associations
E. None of the above

Answer: Customers

37. Assessment of corporate culture will help with all of the following except

A. identifying the goal/mission of the organization.
B. identifying the values that underlie the organizational functioning.
C. determining the issues that need prioritized attention.
D. determining the line of business.
E. identifying key stakeholders.

Answer: determining the line of business.

38. Those who have a claim on some aspect of a firm’s products, operations, markets, industry, or outcomes are known as

A. shareholders.
B. stockholders.
C. stakeholders.
D. claimholders.
E. special-interest groups.

Answer: stakeholders.

39. A stakeholder orientation is not complete unless it includes

A. finance.
B. marketing.
C. special-interest groups.
D. activities that actually address stakeholder issues.
E. accounting.

Answer: activities that actually address stakeholder issues.

40. Which of the following is not one of the four hierarchical levels of social responsibility?

A. Ethical
B. Economic
C. Communal
D. Philanthropic
E. Legal

Answer: Communal

41. The reputation of a company as a good corporate citizen is influenced by

A. the extent of geographic coverage of the company’s operations.
B. the width and depth of the product line offered.
C. whether the company is global or local.
D. the attitude and behavior of the company toward the community of which the company is part.
E. the industry the company is part of.

Answer: the attitude and behavior of the company toward the community of which the company is part.

42. Fiduciaries are persons in positions of ___________ who use _________ and _________ in acting on behalf of the best interests of the ______________.

A. control; strategy; decisions; consumers
B. trust; due care; loyalty; organization
C. importance; power; market intelligence; shareholders
D. senior management; information; intelligence; community
E. decision making; caution; allegiance; stakeholders

Answer: trust; due care; loyalty; organization

43. The three main components of corporate governance are

A. accountability, oversight, and control.
B. responsibility, formalization, and influence.
C. audits, omissions, and checks.
D. community welfare, employee benefits, and shareholder wealth maximization.
E. adherence to legal, ethical, and economic standards.

Answer: accountability, oversight, and control.

44. Fostering ethical decision making within an organization requires improving the firm’s ethical standards an

A. conducting simulation exercises.
B. improving unethical persons.
C. terminating ethical persons.
D. terminating unethical persons.
E. securing ethical suppliers.

Answer: terminating unethical persons.

45. Which of the following statements about codes of conduct is false?

A. They are formal statements of what an organization expects in the way of ethical behavior.
B. They guarantee an ethical business climate.
C. They help employees determine what behaviors are acceptable.
D. They provide rules and guidelines for employees to follow.
E. They should be specific enough to be reasonably capable of preventing misconduct.

Answer: They guarantee an ethical business climate

46. A(n) _____ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) _____ orientation strives to develop shared standards.

A. obedience; values
B. compliance; values
C. legal; values
D. values; compliance
E. values; obedience

Answer: compliance; values

47. At the heart of the Federal Sentencing Guidelines for Organizations is the

A. “tit-for-tat” philosophy.
B. Golden Rule philosophy.
C. Iron Rule philosophy.
D. carrot-and-stick philosophy.
E. utilitarian philosophy.

Answer: carrot-and-stick philosophy.

48. Which of the following places more pressure on ethics officers to monitor financial and sales reporting?

A. Sarbanes-Oxley Act
B. Federal Sentencing Guidelines for Employees
C. Ethics Officer Responsibility Act
D. Sherman Antitrust Act
E. Enron Financial Responsibility Act

Answer: Sarbanes-Oxley Act

49. All of the following are useful in monitoring ethical conduct and measuring the effectiveness of the ethical program except

A. observation of employees.
B. internal audits.
C. firing.
D. surveys.
E. reporting systems.

Answer: firing.

50. Which of the following is not a typical activity for an ethics officer?

A. Coordinating the U.S. Sentencing Commission annual ethics audit
B. Assessing needs and risks that the ethics program must address
C. Developing and distributing a code of ethics
D. Conducting ethics training programs
E. Monitoring and auditing ethical conduct

Answer: Coordinating the U.S. Sentencing Commission annual ethics audit

51. Which of the following is a common mistake made in implementing an ethics program?

A. Setting realistic and measurable program objectives
B. Developing materials that do not meet the needs of the average employee
C. Adapting a firm’s ethics program for its international operations
D. Allowing employees to practice the skills they learn in ethics training through case studies and/or group exercises
E. Management taking “ownership” of the ethics program

Answer:Developing materials that do not meet the needs of the average employee

52. One of the most effective methods of ethics training is

A. videos that demonstrate ethical decisions in the real world.
B. religious training.
C. surveys.
D. exercises in resolving ethical dilemmas that relate to actual situations employees may face on the job.
E. lectures.

Answer: exercises in resolving ethical dilemmas that relate to actual situations employees may face on the job.

53. ______serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most capable of handling the specific case.

A. Training programs
B. Mission statements
C. Codes of conduct
D. Help lines
E. Boards of directors

Answer: Help lines

54. An organizational ethics program should help reduce the possibility of penalties and

A. positive public reaction to misconduct.
B. negative public reaction to ethical conduct.
C. negative public reaction to misconduct.
D. positive public reaction to ethical conduct.
E. indifferent public reaction to conduct.

Answer: negative public reaction to misconduct.

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