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