Chapter 5 - Business Ethics

In 1977 Congress passed the Foreign Corrupt Practices Act (FCPA), which prohibits U.S. businesspersons from: a. bribing foreign officials to secure beneficial contracts. b. asking foreign officials for beneficial contracts. c. employing foreign officials to secure beneficial contracts. d. None of these choices.

a. bribing foreign officials to secure beneficial contracts.

The second part of the Foreign Corrupt Practices Act (FCPA) is directed toward accountants. All companies must keep detailed records that: a. "accurately and fairly" reflect their financial activities. b. "reasonably" reflect their financial activities. c. "supposedly" reflect their financial activities. d. "completely" reflect their financial activities.

a. "accurately and fairly" reflect their financial activities.

A recent survey of U.S. Executives found: a. 60% said that CSR improved their bottom lines. b. 30% admitted to conducting business unethically. c. 50% said that CSR was not a necessary or helpful concept. d. None of these choices.

a. 60% said that CSR improved their bottom lines.

The final step of the Business Process Pragmatism procedure is: a. Evaluation. b. Justification. c. Inquiry. d. Decision.

a. Evaluation.

A central theme in Kantian ethics is that individuals should evaluate their actions in light of the consequences that would follow if everyone in society acted the same way. This concept is known as the: a. categorical imperative. b. utilitarian approach. c. cost-benefit analysis. d. principle of rights.

a. categorical imperative.

In Business Process Pragmatism approach to business decision-making, the first step is to understand the problem. This includes all of these, EXCEPT: a. considering the financial impact of the decision on the executives' stock options. b. identifying all of the stakeholders c. collecting the relevant facts. d. listing any relevant legal and ethical principles that will help guide the decision.

a. considering the financial impact of the decision on the executives' stock options.

In the case of the powerful narcotic OxyContin, company executives: a. misled regulators, patients, and physicians about the drug's risks of addiction. b. courageously told the truth to regulators, patients, and physicians about the drug's risks of addiction. c. focused on the good of the consumer rather than on short-term profit. d. allowed their racist views to negatively impact the workplace environment.

a. misled regulators, patients, and physicians about the drug's risks of addiction.

The employees of a manager who asks for ethical behavior in their conduct, but exhibits unethical behavior in his own conduct: a. rarely succeeds in creating an ethical workplace. b. always creates an ethical workplace, as long as he insists on ethical conduct. c. relies on laws and internal company policies. d. None of these choices.

a. rarely succeeds in creating an ethical workplace.

The first part of the Foreign Corrupt Practices Act (FCPA) applies to: a. only Fortune 500 U.S. companies and their directors, officers, shareholders, employees, and agents. b. all U.S. companies and their directors, officers, shareholders, employees, and agents. c. U.S. companies with more than 1,000 employees, as well as their directors, officers, shareholders, employees, and agents. d. U.S. companies and their directors and officers only.

b. all U.S. companies and their directors, officers, shareholders, employees, and agents.

The most common reason that ethical problems occur in business is: a. sexist attitudes and actions that poison the workplace environment. b. an overemphasis on short-term profit maximization. c. the failure of management to commit totally to an ethical workplace. d. None of these choices.

b. an overemphasis on short-term profit maximization.

The Sarbanes-Oxley Act of 2002 requires that companies set up: a. confidential systems so that employees may "raise red flags" about suspected illegal discrimination. b. confidential systems so that employees and others may "raise red flags" about suspected illegal or unethical auditing and accounting practices. c. public systems so that employees and others may "raise red flags" about suspected illegal and unethical auditing and accounting practices. d. None of these choices.

b. confidential systems so that employees and others may "raise red flags" about suspected illegal or unethical auditing and accounting practices.

The Foreign Corrupt Practices Act: a. does not require companies to keep detailed financial records. b. does not prohibit payment of substantial sums to minor officials whose duties are ministerial. c. prohibits all payments to private foreign companies. d. prohibits any so-called "facilitating payments" to foreign officials.

b. does not prohibit payment of substantial sums to minor officials whose duties are ministerial.

The Foreign Corrupt Practices Act (FCPA) provides that business firms that violate the act may be fined up to: a. $3 million. b. $1 million. c. $2 million. d. $4 million.

c. $2 million.

In this step of the Business Process Pragmatism procedure, a list of action options is developed, each of which carries certain ethical principles. a. Decision. b. Inquiry. c. Discussion. d. Evaluation.

c. Discussion.

Costco's social media policy prohibited employees from posting negative comments on social media about the firm or fellow employees, or risk discipline or being fired. The employees contended the policy was illegal and brought a case to the NLRB. The NLRB ruled that: a. Employers could legally prohibit employees from posting negative comments on social media. b. Employers could not legally prohibit employees from posting negative comments on social media, since the employees had the right of free speech. c. Employers could not legally prohibit employees from posting negative comments on social media, since the employees had the right to engage in concerted activities. d. None of these choices.

c. Employers could not legally prohibit employees from posting negative comments on social media, since the employees had the right to engage in concerted activities.

The idea that those who run corporations can and should act ethically and be accountable to society for their actions is known as: a. social responsibility. b. business social responsibility. c. corporate social responsibility. d. None of these choices.

c. corporate social responsibility.

The minimum acceptable standard for ethical business behavior, which equates to compliance with the law, is the: a. ethical minimum. b. moral maximum. c. moral minimum. d. ethical maximum.

c. moral minimum.

CSR stresses that corporations have a duty not just to shareholders but also to other groups affected by corporate decisions, called: a. accountants. b. stockholders. c. stakeholders. d. none of these.

c. stakeholders.

Applying the utilitarian theory of ethics requires: a. a choice among alternative actions that will produce the greatest positive net benefits for the greatest number of individuals. b. determining which individuals will be affected by the decision. c. doing a cost-benefit analysis, assessing the negative and positive effects of alternative actions on the individuals. d. All of these choices.

d. All of these choices.

When making a business decision, a business should consider: a. the safety risks for consumers and employees. b. the legal implications of each decision. c. the public relations impact. d. All of these choices.

d. All of these choices.

At the most basic level, ethics has to do with the ________ of an action: a. rightness. b. fairness. c. justness. d. all of these.

d. all of these.

These days, a prospective employer may not only call a previous employer for a reference, but also: a. see what the prospective employee has posted on blogs or twitter. b. conduct internet searches of the prospective employee. c. see what the prospective employee has posted on Facebook. d. all of these.

d. all of these.

Utilitarianism is an example of: a. rights theory. b. duty-based ethics. c. Kantian ethics. d. outcome-based ethics.

d. outcome-based ethics.

Many U.S. businesses contract with companies in developing nations to produce goods because: a. foreign workers produce a higher level of quality goods than American workers. b. employees in developing nations work harder than American workers. c. the standards of workplace ethics is generally higher in foreign countries than in the United States. d. the wage rates in those nations are significantly lower than those in the United States.

d. the wage rates in those nations are significantly lower than those in the United States.