Buisness Law Test 1 Question Bank (Chapter 2)
The either/or conundrum is an example of moral relativism.
True
Unethical behavior is not necessarily illegal behavior.
True
"Everybody else does it" is a valid test for determining whether conduct is ethical.
False
"I was just following orders," is a defense in law and a test for ethical behavior.
False
"It's a gray area," if it applies, means that the conduct you are evaluating is ethical, so long as you stay in the gray
False
A 2012 Joseph Institute study found nearly half of high school students copied homework from other students.
False
A company that self-reports a legal violation risks a higher penalty
False
Business ethics provides a guarantee of profitability.
False
Business self-regulation has been effective in solving social problems.
False
Compliance with the law meets all ethical standards.
False
Having a code of ethics does not reduce a company's sentence under the federal sentencing guidelines.
False
In the Parable of the Sadhu, the hikers are certain the religious pilgrim survived.
False
Milton Friedman's standard for business social responsibility is one that requires a company to do all that it can for its community.
False
Most businesses today do not have a code of ethics
False
Natural law and positive law are one and the same theories of moral standards.
False
Personal choices and lifestyles have no impact on one's business ethics.
False
Rationalization is an effective means of analysis for ethical issues.
False
Rationalization is one form of ethical analysis.
False
The 2009 Corruption Perceptions Index lists Denmark as the least corrupt country.
False
The enlightened self-interest school manager serves only the shareholder.
False
The inherence school is one that follows the standard of society's interest coming first.
False
The least corrupt countries have the most stable economies.
False
The level of cheating in high schools and colleges is declining.
False
Trust is not critical to investment or economic success.
False
When Danica Patrick stated she would take performance-enhancing drugs if she would never get caught, she was just saying what everyone else does in a highly competitive field, so it is not unethical.
False
When Hilton Hotels hired Ross Klein and Amar Lalvani from Starwood Hotels, Klein and Lalvani took many electronic documents with them from Starwood. What they did was simply good business and presented no ethical problems.
False
Whether everyone else does it is one method for evaluating the ethics of a particular course of action.
False
An example of unethical behavior in the New York City and Boston marathon races was committed by:
Rosie Ruiz
Which country is perceived as the most corrupt country in the 2012 Corruption Perceptions Index?
Somalia
Invisible hand managers do not become involved in social issues.
True
Once a legal loophole has been used to the advantage of business and the disadvantage of a customer, the number of options for self-regulation declines.
True
Pressure contributes to the use of the either/or test for resolving ethical dilemmas
True
Sarbanes-Oxley is the most extensive regulation of companies since the 1933 and 1934 Securities laws.
True
Sexual harassment is a form of interpersonal as well as organizational abuse.
True
Situational ethics is also known as moral relativism.
True
The "Tony Bennett Factor" refers to the importance of adhering to values as a key to longterm success.
True
The "front page of the newspaper test" is an application of whether conduct gives the appearance of impropriety.
True
The 2012 corruption index shows that Somalia is considered the most corrupt country.
True
The first question of the Blanchard/Peale model for resolving ethical dilemmas is whether the conduct is legal.
True
The first question of the Wall Street Journal model is whether the conduct complies with the law.
True
The regulatory cycle provides an opportunity for self-regulation during the latency stage.
True
The social-responsibility school holds that businesses profit by being responsive to society.
True
To obtain the protections and benefits of the sentencing guidelines, companies must have a code of ethics.
True
To obtain the protections and benefits of the sentencing guidelines, companies must have some form of anonymous reporting.
True
Training employees in ethics is a factor that reduces a company's sentence under the federal sentencing guidelines.
True
Warren Buffett follows the Front-Page-of-the-Newspaper test as a guide for his businesses.
True
Which of the following models has a question that requires analysis of the effect of a decision on stakeholders?
Wall Street Journal model
Milton Friedman's philosophy on corporate behavior is:
a business serves its shareholders best by serving shareholders.
Which of the following actions would be permitted under the Friedman philosophy of business involvement in social issues?
a corporate contribution to a mass transit system that will serve the offices of the company throughout the city
Sarbanes-Oxley is:
federal legislation that imposed ethics requirements on corporations
Which of the following is not a benefit of using ethics as a business strategy?
firm's profits increase
Which of the following is not important for capitalism to function?
grease payments
Enron Corporation filed for bankruptcy following a number of revelations about its accounting procedures. Enron used a complex structure of corporations and off-the-books debt to mask its true financial picture from the markets. When asked about the propriety of Enron's reporting methods, many analysts have responded, "They simply did what most corporations do." Their comments:
reflect rationalization.
The Corruptions Perceptions Index compiled by Transparency International:
shows a correlation between corruption and the lack of economic development.
An inherence school company would become involved in a residential property tax for schools only if:
the issue would affect the company's performance.
In the Parable of the Sadhu:
the lesson of personal values vs. organizational or group values is drawn.
Milton Friedman's view of the social responsibility of business is best described as:
the social responsibility of a business is to make money within the rules of the game.
Why does the late Dr. Milton Friedman feel that managers should not involve their companies in social issues?
they are agents of the shareholders and should act in their best interests
In international business:
trust and honesty are required for investment and economic growth.
The "front page of the newspaper test":
uses the perspective of an objective reporter.
A parents' group and the National Association of Teachers is concerned about the lyrics on the albums of some rock music groups and has expressed the concern publicly. Capitol Records adopted a voluntary labeling system that provides warning labels on albums that contain explicit lyrics about sex, drugs, or satanic worship. Capitol's action is an example of a:
a. nonmandated ethical response.
In the Parable of the Sadhu, the hikers' climb is successful.
True
Which of the following is not a consequence of poor ethical choices by company?
All of the above are consequences of poor ethical choices.
Which of the following is not an ethical breach?
All of the above are ethical breaches.
Which of the following ethical models incorporates conscience into the decision-making process?
Blanchard and Peale model
Which of the following is not a question for the Blanchard/Peale test for ethical behavior?
Does it follow industry code?
Which of the following statements is true about an ethical business?
It will avoid the consequences of unethical behavior.
Giving a false impression, although not actually an untruth, is still an ethical violation.
True
According to the 2012 Corruption Perception Index, which country is perceived as the least corrupt?
New Zealand
"That's the way it has always been done," is a phrase that often signals ethical difficulties.
True
"When in Rome, do as the Romans do," is an example of moral relativism.
True
A code of ethics is an individual firm's behavior standard for employees.
True
A lack of business ethics can result in a lack of business goodwill.
True
A relativist asks why someone is engaged in unethical or illegal conduct before determining whether the conduct is right or wrong.
True
An anonymous reporting system is a requirement for companies under Sarbanes-Oxley.
True
An ombudsperson and/or ethics hotline are both critical to an ethical culture in a company.
True
Business ethics is the application of standards for moral reasoning to business dilemmas.
True
Condoning unethical behavior is an ethical breach.
True
Conflicts of interest can result in the use of quid pro quo.
True
Corruption impedes economic development.
True
Ethics are key to the success of economic systems.
True
Ethics can provide a strategic advantage for companies.
True
Ethics consists of the unwritten rules we apply in both business and personal lives.
True
Jane Eyring works for PharmaMeds, Inc. Jane is a physician-scientist who is responsible for running the pilot tests on PharmaMed's new oral spray medication for individuals with adult onset diabetes. Jane has discovered that if those in the test group do not spray the medicine correctly or if they spray for too short of a time, the medicine is not effective, or as effective, and insulin shock has resulted in a few of the patients. Jane talks with one of her colleagues who responds, "Look, there's no need to stop the testing or the drug's release. Just tell them in the test and in the brochures that will be with the spray, 'Spray correctly! If you do not, you may not receive your necessary dose.'" Jane is not sure anyone can be 100% accurate in spraying all the time. What risks does the company run if the spray doesn't work for the patients?
all of the above
Jane Eyring works for PharmaMeds, Inc. Jane is a physician-scientist who is responsible for running the pilot tests on PharmaMed's new oral spray medication for individuals with adult onset diabetes. Jane has discovered that if those in the test group do not spray the medicine correctly or if they spray for too short of a time, the medicine is not effective, or as effective, and insulin shock has resulted in a few of the patients. Jane talks with one of her colleagues who responds, "Look, there's no need to stop the testing or the drug's release. Just tell them in the test and in the brochures that will be with the spray, 'Spray correctly! If you do not, you may not receive your necessary dose.'" Jane is not sure anyone can be 100% accurate in spraying all the time. Whom is affected by Jane's decision, regardless of what decision she makes?
all of the above
Which of the following is not an element of the Nash test?
b. Is it legal?
Which of the following statements best describes the ethical position of Enron executives?
both a and b
Which of the following is not a requirement of Sarbanes-Oxley?
both a and c
Enron's failure to disclose its off-the-book debts was legal. Which of the following ethical categories do you think apply to that type of financial reporting?
both b and c
The invisible hand school and the inherence school:
both refuse involvement in social issues.
The policy on travel reimbursement at Public Service Company is that receipts for meals under $25.00 are not required. Internal auditors at Public Service have recently discovered that 80 percent of all meal submissions are in a range from $12.50 to $12.99. When one manager is questioned about his submissions and those of his employees he responds, "So, they make a little bit on meals - it helps their miserable salaries." The manager's evaluation:
demonstrates a lapse in the company's ethical culture.
Which of the following is not an indication of a company environment ripe for unethical behavior?
employees who are independent
A law firm in the Phoenix area provides "sick care" for employees' children. Sick care can be used when the child is too ill to go to school or its regular care facility. The law firm manager claims the program has cut down on sick days taken by employees to care for sick children. The program is an illustration of which type of social responsibility school?
enlightened self-interest school
An employer instituted a wellness program for all employees. The wellness program includes an exercise facility and several pay incentives for losing weight, quitting smoking, or beginning an exercise program. The program is not required under any state or national laws. Which of the following schools of social responsibility applies to this employer?
enlightened self-interest school
A manager at a chemical weapons plant discovered that toxic by-products from chemical manufacturing at the plant are simply put in barrels and stacked near the boundary lines of the plant property. Children in the homes near these boundaries have an unusually high rate of kidney disease. The manager does not want to disclose the barrels' contents because he will lose his job and the town will lose its major employer. Which of the following ethical tests would support the manager's decision?
ethical relativism
Under which of the schools is the corporation best served by serving only the shareholders?
inherence school
Which school most parallels the Friedman model for social responsibility?
inherence school
The statement, "What's good for GM is good for the country," is an example of the thoughts of a manager from the:
inherence school.
Which of the following is not always a result of unethical behavior?
loss of profits
Which of the two following groupings of ethical thought would you describe as opposites?
natural law and moral relativism