Business Ethics Ch 14

The "subjective calculation" for value is a comparison of quality received for the price spent.

T

One concern about product liability is the size of the financial awards won in court.

T

Quality and safety of products are central to consumers' concerns.

T

The Food and Drug Administration and the CPSC have been controversial over the decades.

T

The Food and Drug Administration grew out of the work of one man.

T

Under the doctrine of strict liability, there is no legal defense for placing on the market a product that is dangerous to a consumer because of a known or knowable defect unless an argument of due diligence is allowed.

T

Court cases and legal doctrine now make it clear that business is responsible for product safety. T a. True b. False

a. True

No matter how careful business is regarding the safety of its products, product liability suits are inevitable. T a. True b. False

a. True

The Consumer Product Safety Commission is the only clearinghouse for consumers regarding unsafe products T a. True b. False

a. True

The Consumer Product Safety Commission's power and budgets have been subject to the administration in office. T a. True b. False

a. True

The challenge that management faces is to make products as safe as possible and affordable to consumers. T a. True b. False

a. True

U.S. residents, more than people in other countries, tend to sue when they are harmed. T a. True b. False

a. True

Which of the following is not one of the top ten list of safety principles? a. Build safety into product design. b. Educate consumers about product safety. c. Allow a margin of error for the consumer. d. Learn from your and others' mistakes.

c

Programs that attempt to blend all of the functions of a business into a holistic, integrated philosophy built around teamwork, productivity, and customer satisfaction are called a. Six Sigma programs. b. total care programs. c. total quality management programs. d. customer focus programs.

c

The Food and Drug Administration is involved in the regulation of a. pet food. b. weight loss programs. c. dietary supplements. d. fast foods.

c

The Tylenol case in the 1980s, in which capsules were injected with cyanide, is an example of a. product extortion. b. product liability. c. product tampering. d. product packaging.

c

The body of methodologies and techniques for achieving quality that focuses on the number of defects is called a. Seven Standards. b. Six Smith. c. Six Sigma. d. Seven Severance.

c

The ethical theory based on the concept of duty that suggests that if a product causes harm, the firm should pay the costs of any injury is a. contractual theory. b. due care theory. c. social costs view. d. caveat vendor.

c

The two central issues of goods and services are a. price and warranties. b. reliability and durability. c. quality and safety. d. value and function.

c

The Consumer Product Safety Improvement Act of2008 does not cover which of the following? a. ATVs b. toy safety c. cotton d. phthalates

c. cotton

Due diligence means that a company a. has done sufficient preparatory work to produce a safe product. b. the company has successfully passed an OSHA safety audit. c. has taken every possible precautionary step possible and followed all industry standards. d. has studied the problem extensively.

c. has taken every possible precautionary step possible and followed all industry standards.

Business's response to consumerism over time has been one of a. benign neglect. b. rapid response. c. ineffective action, followed by improved responses. d. extreme care.

c. ineffective action, followed by improved responses.

Which of the following is not a way in which the Consumer Product Safety Commission works to reduce the risk of harm from consumer products? a. developing voluntary standards within an industry b. issuing and enforcing mandatory standards c. lobbying Congress to pass new consumer protection laws d. conducting research on potential product hazards

c. lobbying Congress to pass new consumer protection laws

Six Sigma practitioners believe in fixing the rather than the . a. practice; theory b. product; worker c. process; product d. worker; customer

c. process; product

The primary responsibility for product safety lies with the a. consumer. b. goverrnnent. c. producer. d. Consumer Product Safety Commission.

c. producer.

Businesses have responded to consumer activism with all of the following efforts except a. toll-free hot lines. b. user-friendly Web sites. c. rebate and discount programs. d. consumer representatives.

c. rebate and discount programs.

Which of the following is not a dimension of quality listed in the textbook? a. performance b. durability c. status d. aesthetics

c. status

A company that is held responsible for the damage caused by its product in proportion to its percentage of industry sales is subject to a. strict liability. b. absolute liability. c. relative liability. d. market share liability.

d

Early research conducted in the organization later known as the Food and Drug Administration fed small doses of poison to a. rats. b. chimpanzees. c. the "Death Squad." d. the "Poison Squad."

d

The Food and Drug Administration regulates all of the following except a. food. b. drugs. c. cosmetics. d. personal care products.

d

The legal view of "let the buyer beware" that prevailed throughout most of history was a. caveat vendor. b. e pluribus unum. c. norvus ordo seclorum d. caveat emptor.

d

Which of the following is not one of the top consumer product categories most frequently associated with injuries requiring hospital treatment? a. sports and recreational activities b. horne maintenance and construction c. toys and children's products d. automobiles

d

Which of the following is not an allegation commonly made in product liability suits? a. The product was improperly manufactured. b. The product's design was defective. c. The manufacturer failed to provide satisfactory instructions. d. The product was produced under inhumane conditions.

d. The product was produced under inhumane conditions.

One of the strengths of Six Sigma program's has been its a. laser-like focus on worker satisfaction. b. increase in customer loyalty. c. contribution to research in production quality. d. clarity of process and the steps companies must take to adopt it.

d. clarity of process and the steps companies must take to adopt it.

Essential aspects of quality include which of the following? a. advertising b. color c. attributes d. durability

d. durability

All of the following are reasons given for the current obsession with quality except a. the average consumer demands more. b. global competitiveness. c. the Internet. d. employee satisfaction.

d. employee satisfaction.

Today, the FDA regulates all of these except a. vacc1nes b. blood products c. prescription drugs d. medical care

d. medical care

All of the following are dimensions of quality except a. features. b. conformance. c. serviceability. d. objectivity.

d. objectivity.

A basic premise of Total Quality Management (TQM) is that the product designer is the final judge of quality.

F

The current legal view of "let the seller take care" is a. caveat vendor. b. e pluribis unum. c. norvus ordo sec forum. d. caveat emptor.

a

The ethical theory based on the concept of duty that states that fmns have a responsibility to comply with the terms of the sale, inform the customer about the product, not misrepresent anything, and not coerce the customer is a. contractual theory. b. due care theory. c. social costs view. d. caveat emptor.

a

The legal principle that anyone in the value chain of a product is liable for harm caused to the user if the product as sold was unreasonably dangerous is a. strict liability. b. absolute liability. c. relative liability. d. market share liability.

a

Which of the following is not part of the FDA's mission? a. to help identify and develop new foods and drugs b. to promote the public health c. to protect the public health d. to help reduce the burden of regulation

a

The initial part of the total quality management process is to a. define quality in terms of customer expectations and requirements. b. develop standards and specifications for quality. c. design efficient production processes. d. develop customer satisfaction surveys.

a. define quality in terms of customer expectations and requirements.

The driving force behind guidelines for product liability is which of the following? a. legal responsibility b. selling products c. ethical reasoning d. immoral people

a. legal responsibility

Customer service is provided by all of the following except? a. passing the buck b. offices of consumer affairs c. warranties d. money back guarantees

a. passing the buck

With respect to service, consumers are concerned with which of the following? a. performance b. building time c. provider attributes d. durability

a. performance

The Food and Drug Administration is part of a. Housing and Urban Development. b. the Health and Human Services Department. c. the Interstate Commerce Commission. d. the Federal Trade Commission.

b

The ethical theory based on the concept of duty that focuses on the relative vulnerability of the customer is a. contractual theory. b. due care theory. c. social costs view. d. caveat vendor.

b

The fact that a company is responsible for the harm done to customers by its product even if it can show that it did its best according to the state of the art in the industry at that time is called a. strict liability. b. absolute liability. c. historical liability. d. market share liability.

b

Which of the following is not an activity engaged in by the Food and Drug Administration? a. analysis b. promotion c. surveillance d. correction

b

Business's response to consumerism has consistently been to meet consumers' demands as quickly and effectively as possible. F a. True b. False

b. False

By defrnition, quality does not include service. F a. True b. False

b. False

Market share liability is rarely successful in current product liability lawsuits. F a. True b. False

b. False

The Consumer Product Safety Commission is an independent laboratory that has power of persuasion only. F a. True b. False

b. False

The debate over product liability law continues. F a. True b. False

b. False

The meaning of product quality is uniform to all. F a. True b. False

b. False

The standard of absolute liability is less demanding than that of strict liability. F a. True b. False

b. False

Traditionally, the Food and Drug Administration's primary concern has been the "War on Drugs." F a. True b. False

b. False

Business claims that curreut product liability law suffers from all of the following problems except a. inefficieucy. b. bias. c. raising the costs oflitigation. d. imposition of a hiddeu tax on consumers.

b. bias.

Which of the following is not a driver of the quest to improve product and service quality? a. the demands of a competitive marketplace b. cost controls c. an increasingly sophisticated consumer base d. the threat of product liability lawsuits

b. cost controls

All of the following are in the top ten principles of safety except a. fully investigate product safety incidents. b. encourage customers to try out the product before purchasing it. c. report product safety defects promptly. d. track your product's safety performance.

b. encourage customers to try out the product before purchasing it.

TQM must emphasize all of the following except? a. leadership b. individualism c. recognition d. communication

b. individualism

The Consumer Product Safety Commission works to reduce the risk of harm from consumer products in all of the following ways except a. banning consumer products. b. passing legislation outlawing products. c. obtaining recall of products. d. informing and educating consumers.

b. passing legislation outlawing products.

An important criticism of total quality management is that it a. tried to do too much. b. quality means different things to different people. c. actually took focus off of the customer. d. focused too much on adherence to standards, taking the enjoyment out of work.

b. quality means different things to different people.

Which of the following is not impacted by tort risk? a. relocation of a new plant b. selling products c. expanding operations d. introducing a new product

b. selling products

The focus of total quality management programs is a. quality. b. the customer. c. efficiency. d. worker satisfaction.

b. the customer.

Reasons to be concerned about product liability include all of the following except a. the sheer number of cases. b. the number of trial attorneys being licensed. c. the propensity of people to sue when they are unhappy. d. the growing size offrnancial awards.

b. the number of trial attorneys being licensed.