Ethics Exam 3 study guide MASTER
24. In 2011, what percentage of corporate officers of the Fortune 500 companies were women?
A. 14 percent.
44. The Securities and Exchange Commission outlaws:
A. Any manipulative or deceptive device used to trade stocks.
37. The right to free speech is protected in the United States by the:
A. Constitution.
30. How are directors (members of corporate boards) selected?
A. Shareholders elect the directors from a list of candidates.
40. Many companies have argued that the evolution of strict liability has:
A. Unfairly burdened them with excess costs.
24. According to the U.S. Bureau of Labor statistics, the highest injury rates are found in which of these industries?
A. Warehousing.
16. A prime social responsibility of business is to safeguard consumers:
A. While continuing to supply them with goods and services they want.
30. The Equal Employment Opportunity Commission was created in:
B. 1964.
26. "Glass walls" refers to:
B. Fewer opportunities to move sideways into jobs that lead to the top.
28. Which of the following is not true about women business owners?
B. They are forming businesses at roughly the same rate that men are.
16. Which of the following statements is not true about stockholders?
B. They own equal shares of company assets.
18. Institutional investors are sometimes referred to as:
B. Wall Street investors.
16. Which company donates 5 percent of its branches or stores' [{'}]total sales revenue to a worthy local nonprofit organization three days a year?
B. Whole Foods Markets.
24. Which of the following statements is true about community relations?
C. About 80 percent of companies factor community involvement into their overall strategic plan.
34. Which of the following is not true about employee theft?
C. Almost half of all employees have stolen from an employer at least once in his or her career.
43. One alternative to product liability lawsuits is called:
C. Alternative dispute resolution.
36. Sexual harassment applies to:
C. Either men or women who are being harassed.
33. The "agency problem" arises when:
C. Managers act in their own interest, rather than in the interest of shareholders.
30. Which of the following is true about romantic relationships in the workplace?
C. Many companies allow managers to become romantically involved with subordinates, so long as they do not supervise them directly.
27. Which company provided one million free vouchers for its online technology skills courses and certification exams during 2009?
C. Microsoft Corporation.
19. Under U.S. laws:
C. Most private and public workers have the right to hold an election to choose what union they want to represent them, if any.
36. What company gives all of its earnings to charity?
C. Newman's Own.
29. Habitat for Humanity is considered a:
C. Nongovernmental organization.
33. The Americans with Disabilities Act defines a "disabled worker" as:
C. One who can perform the "essential functions" of a job, with or without reasonable accommodations.
43. When a mother or father is granted time off when children are born or adopted and during the early months of a child's development, this is called:
C. Parental leave.
33. Another term for corporate giving is corporate:
C. Philanthropy.
43. In response to concerns about the lack of transparency in financial accounting, Congress passed a new law called the:
C. Sarbanes-Oxley Act.
40. Which of the following is not an example of fulfilling social objectives through stock ownership?
C. Selling stock of companies with a below-market rate of return.
32. The main responsibility of the National Highway Traffic Safety Administration is to:
C. Set motor vehicle safety standards.
41. According to a Harvard Business Review study, which of the following is not an area in which corporate contributions are most likely to enhance a company's competitiveness?
C. Stakeholder management.
25. The Occupational Safety and Health Act gives workers the right to a job:
C. That is free from recognized hazards that are likely to cause death or serious injury.
32. By 2010, out of the 100 largest US companies, how many had separated the positions of CEO and board chairman?
C. Thirty-one.
40. Which law allows individuals who sue federal contractors for fraud to receive up to 30 percent of any amount recovered by the government?
C. U.S. False Claims Act (as amended in 1986).
44. In some cases, businesses have banded together to agree on how they will treat their customers. This is called:
C. Voluntary industry codes of conduct.
38. When an employee believes their employer has done something that is wrong or harmful to the public, and he or she reports alleged organizational misconduct to the media, government, or high-level company officials, what has occurred?
C. Whistle-blowing.
26. In 2010, median compensation for directors at the largest U.S. corporations was (rounded to the nearest $10):
D. $212,510.
31. What percentage of AT&T's procurement spending went to minority, women, and disabled veteran-owned businesses in 2011?
D. 25 percent.
29. The audit committee is required by U.S. law to be:
D. A and B, but not C.
39. Companies can combat sexual and racial harassment—and protect themselves from expensive lawsuits--by:
D. A and B, but not C.
29. Which of the following government rules on equal treatment of employees does not apply to businesses?
D. Affirmative action plans must be permanent.
23. Social capital is a phrase that describes the following, except:
D. All of the above are described by social capital.
18. Business depends on the community for:
D. All of the above.
19. The growing diversity in the U.S. workforce is due to:
D. All of the above.
35. Which of the following arguments opposes the idea of high executive pay?
D. High salaries divert resources that could be used to invest in the business.
23. Which of the following is not true about occupational segregation?
D. The large pay gap for Hispanic workers partly reflects their concentration in several high-paying occupations.
29. A reason for an increase in employee monitoring does not include:
D. To reduce the employer's health insurance premiums.
21. Which if the following is not a legal right of stockholders?
D. To vote on who will become chief executive officer (CEO).
45. Which of the following is not a distinct period in corporate involvement in education reform from the 1980s to the present?
D. Total quality management of the education system.
1. The Latin phrase, caveat emptor, meaning "let the seller beware" has put sellers on alert to look after their own interests.
False
7. Deceptive advertising is still legal in most countries.
False
7. The construction industry has taken the lead in creating programs to revitalize neighborhood housing.
False
7. The major agency charged with enforcing equal opportunity laws and executive orders in the United States is the Americans with Disabilities Council (ADC).
False
7. Under the new social contract, the bond between the employer and employee has become stronger.
False
8. Affirmative action occurs when one group is unintentionally discriminated against in an effort to help another group.
False
9. Corporations are prohibited from giving more than 10 percent of its income for philanthropic purposes.
False
9. Most management experts recommend that employers let employees know whenever they are being electronically monitored.
False
9. Sexual harassment is limited to overt acts of individual coworkers or supervisors.
False
1. The employment relationship confers rights and duties on both sides.
True
1. The term community refers to a company's area of local business influence.
True
1. The term diversity refers to variation in the important human characteristics that distinguish people from one another.
True
10. Foreign-owned corporations typically establish and use corporate foundations less frequently than U.S. firms.
True
10. Most boards now staff their compensation committees exclusively with outside directors and permit them to hire their own consultants.
True
10. The number of working women that have told researchers they have been sexually harassed on the job is between 40 and 70 percent.
True
11. Drug testing for cause is commonly used after an accident or some observable change in behavior.
True
12. A diversity council is a group of managers and employees responsible for developing and implementing specific action plans to meet an organization's diversity goals.
True
12. In general, employee assistance programs have been very cost effective.
True
12. Many companies have turned to technology to improve the amount and effectiveness of employee volunteerism.
True
13. Companies that promote equal employment opportunity generally do better at attracting and retaining workers from all backgrounds.
True
13. One reason for business efforts to reform product liability laws is the increasing cost of insuring against liability suits.
True
14. The term labor standards refers to the conditions under which a company's employees work.
True
8. The Children's Online Privacy Protection Act limits the collection of information online from and about children under the age of 13.
True
25. Which of the following is true about corporate boards?
A. Corporate boards average 12 members.
21. Since the mid-1950s the proportion of American workers represented by unions has:
A. Decreased.
26. What is the most important social issue facing communities, according to a survey of community relations managers?
A. Education.
23. The directors of a company are a central factor in corporate governance because they:
A. Exercise formal legal authority over company policy.
30. Which of the following departments was established in 1914 and has been given additional powers to protect consumers over the years, including in the area of online privacy?
A. Federal Trade Commission.
40. Which of the following sectors receives the largest percentage of corporate cash and in-kind contributions?
A. Health and human services.
28. Before deregulation, government agencies frequently:
A. Held prices artificially high, shielding businesses from competition.
31. Which of the following is a key feature of effective boards of directors?
A. Hold regular meetings without the CEO present.
38. When businesses adopt voluntary policies for protecting the privacy of individuals' information disclosed during electronic transactions, this is called:
A. Industry self-regulation.
37. A reason for institutions becoming more assertive in promoting the interests of their member investors is:
A. It is difficult for institutions to sell their holdings.
19. Which of the following statements is true about the relationship between business and the community?
A. It is one of mutual interdependence.
31. Which of the following is true about random drug testing of employees?
A. It screens randomly-selected employees at various times through the year.
42. The conditions under which a company's employees work is called:
A. Labor standards.
22. Which of the following statements are not true about the right to a safe and healthy workplace?
A. Over recent years no new categories of accidents or illnesses have emerged.
34. The main reason that American executives are paid so much is:
A. Pay is set by the compensation committees of the board, largely comprised of other CEOs who have an interest in pushing compensation up.
17. Age, ethnicity, gender, mental or physical abilities, race, and sexual orientation are what dimensions of diversity?
A. Primary.
41. The mission of the Securities and Exchange Commission (SEC) is to:
A. Protect shareholders' rights by making sure that stock markets are run fairly.
22. The "right to be heard" assures that consumers' interests will:
A. Receive full and sympathetic consideration.
38. The share of all giving made up by in-kind contributions of products and services has been:
A. Rising steadily over the past decade.
39. Under what legal doctrine does a firm bear legal responsibility for injuries caused by something it made or sold, whether or not it was negligent or breached a warranty?
A. Strict liability.
20. The term civic engagement describes:
A. The active involvement of businesses and individuals in improving communities.
17. Consumers have become more dependent on businesses for product quality because:
A. The complexity of products makes choices complicated for consumers.
21. Which of the following is (are) core rights of consumers?
A. The right to safety.
42. Factor conditions are strategic contributions focusing on:
A. The supply of trained workers, physical infrastructure, and natural resources.
41. Which of the following is not a benefit of managing diversity effectively?
A. These businesses get tax breaks from the federal government.
37. Racial harassment is illegal under:
A. Title VII of the Civil Rights Act.
33. Which of the following is a mission of the Food and Drug Administration?
A. To assure the safety and effectiveness of a wide range of consumer products.
38. The activism of institutional investors in other countries has been spearheaded by:
A. U.S.-based pension and mutual funds that in recent years acquired large stakes in foreign countries.
18. By 2020, the Bureau of Labor Statistics estimates that what percentage of all workers will be women?
B. 47 percent.
45. Which of the following is not an instance of "insider trading"?
B. A marketing executive briefing stock analysts on the company's sales performance.
32. Executive Order 11246, established in 1965, mandates:
B. Affirmative action for all federal contractors and subcontractors.
26. According to the new social contract:
B. Companies try to attract workers by giving them interesting and challenging work.
41. Under proposals to establish uniform federal standards for determining liability:
B. Companies would not have to go through repeated trials on the same charges in different states.
18. Which organization brings together 300 nonprofit groups to espouse the consumer viewpoint?
B. Consumer Federation of America.
45. Businesses can take a number of measures to respond voluntarily to consumer demands. Which of the following is an example of such a measure?
B. Consumer call centers.
22. The pay gap for Hispanic women (relative to white men) has:
B. Declined by almost 5 percent since 2000.
16. Variation in the important human characteristics that distinguish people from one another is called:
B. Diversity.
22. Corporate governance involves the exercise of control over a company's:
B. Entire operations.
26. Which of the following is not a goal of consumer protection laws?
B. Facilitate consumers' getting extended credit when making purchases.
27. Manufacturers making false or misleading claims about a competitor's product is:
B. Illegal and unethical.
35. Average corporate giving in the Unites States:
B. Is far below the 10 percent tax deduction now permitted.
36. Which of the following is (are) true about honesty tests?.
B. It is a written psychological test trying to predict employee honesty on the job.
37. Foreign-owned corporations use foundations:
B. Less frequently than U.S. firms.
32. As communications improve and people around the world are able to witness the horrors of natural disasters, terrorism, and war, international relief efforts by corporations are becoming:
B. More important.
35. Reverse discrimination occurs when:
B. One group is unintentionally discriminated against in an effort to help another group.
39. The Sarbanes-Oxley Act makes it illegal for employers to:
B. Retaliate against whistle-blowers who report information that could have an impact on the value of a company's shares.
24. The paramount duty of the board of directors of a public corporation is to:
B. Select and oversee competent and ethical management to run the company.
40. Which of the following is an action that companies take to manage diversity effectively?
B. Set up a diversity council to monitor the company's goals.
25. A study by Catalyst found that companies with three or more female directors had:
B. Significantly higher returns on equity than those with no female directors.
44. The Council of Economic Priorities has developed a set of workplace rules called:
B. Social Accountability 8000.
42. Consumer groups have generally opposed the idea of product liability reform using which of the following arguments?
B. Strict liability should be retained.
20. During the 1930s, many workers in the United States joined unions, and the ranks of organized labor grew rapidly. This historical period was called:
B. The New Deal.
17. Which of the following is not true about institutional investors?
B. The proportion of institutional ownership of stock in the U.S. has declined slowly since the 1960s.
20. A goal of the consumer movement is to make consumer power:
C. An effective counterbalance to the rights and powers of firms that sell goods and services.
20. Which ethnic group, as defined by the U.S. Census, represents the fastest-growing percentage of the labor force?
C. Asians.
20. In 2008 and early 2009, share values declined sharply as the global economy fell into a severe recession. This type of stock market is referred to as a:
C. Bear market.
37. Advertising that is targeted to particular customers, based on their observed online behavior, is called:
C. Behavioral advertising.
41. Only after which of the following conditions is (are) met, should the whistle-blower go public?
C. Both A and B.
44. Under the Family and Medical Leave Act (FMLA), passed in 1993:
C. Companies that employ 50 or more people must grant unpaid, job protected leaves of up to 12 weeks to employees faced with serious family needs.
25. The law requiring that toys and infant products be tested before sale is called the:
C. Consumer Product Safety Improvement Act.
36. An identifying marker placed on a user's computer hard drive during visits in order to identify the user during each subsequent visit and to build profiles of their behavior over time is called a:
C. Cookie.
43. Which of the following is not a strategy to help companies get the most benefit from their contributions?
C. Establish priorities even if they come into conflict with firm core values.
24. In the United States, which of the following agencies enforces the laws prohibiting deceptive advertising?
C. Federal Trade Commission.
35. Polygraph testing:
C. Has been replaced by written psychological tests.
38. Since the early 1990s racial harassment charges filed:
C. Have more than doubled to about 9,000 a year.
44. A financial services firm decided to assess the return on its social investment in an educational program in local schools. As part of its assessment, it measured the improvement in learning among students who had participated in the program, compared with the learning of students who had not. Which of the following elements was assessed?
C. Impacts.
36. Which of the following is not an argument for high executive compensation?
C. Inflated executive pay helps U.S. firms compete with foreign rivals.
28. Privacy rights seek to protect the employees' private lives from:
C. Intrusive and unwarranted business actions.
34. Which of the following is an argument against affirmative action?
C. It is inconsistent with the principles of fairness and equality.
19. Which of the following statements is not true about the organization Consumer reports?
C. It is supported by the federal government.
31. Which of the following is not true about the Equal Employment Opportunity Commission (EEOC)?
C. It monitors foreign governments' employment practices.
21. Which of the following is a good way for a business to express its commitment to corporate citizenship?
D. All of the above.
21. Women have entered the workforce:
D. All of the above.
22. Which of the following is a reason for businesses to get involved in the community?
D. All of the above.
30. Minority enterprises often do business in locations with:
D. All of the above.
31. Which agency(ies) was (were) created during the great wave of consumer regulations in the 1960s and early 1970s?
D. All of the above.
33. Which of the following is (are) true about Employee Assistance Programs (EAPs)?
D. All of the above.
39. How do companies encourage their employees to volunteer their time?
D. All of the above.
39. Social investors seek to eliminate from their investment portfolios companies that:
D. All of the above.
42. Reports filed with the SEC provide information on a company's:
D. All of the above.
42. Which of the following is (are) true about child care programs?
D. All of the above.
45. What steps have companies been taking to support their Lesbian, gay, bisexual, and transgender employees?
D. All of the above.
34. The major federal consumer protection agencies are authorized by law to:
D. Both A and B, but not C
17. Employees in the United States have a legal right to:
D. Both A and B, but not C.
27. Which of the following led to significant corporate restructuring and downsizing?
D. Both A and B, but not C.
45. A strong employer-employee relationship is central to:
D. Both A and B, but not C.
23. According to the US Department of Labor:
D. Both A and C, not B.
18. Where are workers not permitted to form independent unions?
D. Both B and C, but not A.
19. Investors may receive an economic benefit from the ownership of stock by receiving:
D. Both B and C, but not A.
27. The board committee that administers and approves salaries and benefits of high-level managers in a company is called the:
D. Compensation committee.
43. Universal rules establishing a common set of labor standards worldwide are called:
D. Fair labor standards.
27. How do "glass walls" differ from "glass ceilings?"
D. Glass walls focus on sideways promotions in the organization.
17. Which company paid its employees to volunteer in their communities two days a week after a tsunami in Japan disrupted operations at its U.S. facilities?
D. Honda Motor Company.
35. Online shoppers have always been concerned that:
D. Information they reveal in the course of a sales transaction might be misused.
32. Which of the following is not an argument favoring employee drug testing?
D. It is an intrusion on individual privacy.
34. Which region received the most U.S. international charitable contributions in 2011?
D. Latin America-Caribbean.
25. Which of the following is not included among purposes for establishing community relations departments by businesses?
D. Manage international relations projects for economic development.
28. Which of the following non-profit, locally funded and controlled organizations offer housing rehabilitation and financial services to neighborhood residents?
D. Neighborhood Housing Services.
16. If someone is entitled to be treated a certain way, this refers to a(n):
D. Right.
29. Which of the following limits the collection of information online from and about children under the age of 13?
D. The Children's Online Privacy Protection Act.
23. The act that requires lenders to inform borrowers of the annual rate of interest to be charged, plus related fees and services charges is called:
D. The Truth in Lending Act.
28. Which of the following is not a function of board committees?
D. The finance committee works closely with the human resources department to fund employee salaries.
1. The three types of stockholders that own shares of stock in U.S. corporations are individuals, institutions, and government.
False
10. According to a recent study, nearly all companies test employees or job applicants for drugs.
False
10. The Environmental Protection Agency's mission is to assure the safety and effectiveness of a wide range of consumer products including pharmaceutical drugs and foods.
False
11. Charitable donations are defined as gifts of products or services.
False
11. In the "consumer self-help" approach to protecting consumer privacy rights, new government regulations will protect the consumer online.
False
11. Sexual and racial harassment will happen, and there is little a business can do to eliminate the problem.
False
11. Shareholders must rely exclusively on the board of directors to protect their interests.
False
12. Institutional investors have little incentive to hold their shares and organize to change management policy.
False
12. The doctrine of strict liability extends only to the retailer who is involved in selling the product, not the manufacturer.
False
13. The U.S. Constitution protects the right to free speech—which means only the government can take away this right.
False
13. The activism of institutional shareholders has often worsened company performance.
False
14. According to U.S. Census data released in 2012, in about one-third of all married couples with children, both parents worked at least part-time.
False
14. All corporate contributions benefit their donors directly.
False
14. Quality management emphasizes high quality and customer satisfaction through continuous improvement of a company's product or service at the final stages of the production process.
False
15. Managing for product quality is an attempt by business to address its suppliers' needs.
False
2. The term community is sometimes improperly used to refer to a range of groups that are affected by an organization's actions, whether or not they are in the immediate vicinity.
False
3. As business firms grow in size and market power, they have increasingly lost the ability to dominate marketplace transactions with their customers.
False
3. Investors always choose to invest in the stock of companies that pay high dividends.
False
3. The community relies heavily on business, but business is not mutually dependent on the community.
False
3. The term pay gap refers to the inequitable concentration of a group, such as minorities or women, in a particular job category.
False
4. A corporation's stockholders have a right to inspect the company's books for any reason.
False
4. Under the "right to be heard" protection, the consumer is to be assured satisfactory quality and service at fair prices.
False
5. By 2010, around 25 percent of businesses were owned or controlled by women, according to the Center for Women's Business Research.
False
6. Community relations departments work primarily on the national level to link the corporation to community stakeholders.
False
6. Consumers make less rational choices when they have accurate information about a product.
False
9. The Department of Agriculture has authority over genetically modified food and some chemicals that may affect consumers.
False
9. The ratio of average executive to average worker pay tends to increase during recessions and fall back during periods of economic expansion.
False
13. Strategic philanthropy emphasizes the links between corporate contributions and business goals, such as creating demand for a product or service.
True
14. In U.S. vs. O'Hagen, the court ruled that someone who traded on the basis of inside information when he or she knew the information was confidential was guilty of misappropriation.
True
15. Many community problems are people problems, involving hopes, attitudes, sentiments, and expectations for better human conditions.
True
15. Stockholders have become an increasingly powerful and vocal stakeholder group in corporations.
True
15. The Council for Economic Priorities has developed a set of workplace rules called Social Accountability 8000, or SA 8000.
True
15. Under the Family Medical Leave Act, companies that employ 50 or more people must grant unpaid, job-protected leaves for up to 12 weeks to employees with serious family needs, including the birth or adoption of a baby.
True
2. Consumer advocacy groups in the United States actively promote and speak for the interests of millions of consumers.
True
2. Employees in the United States have the right to organize and bargain collectively.
True
2. Since the 1960s, there has been phenomenal growth in the numbers of institutional investors in the United States.
True
2. Workforce diversity represents both a challenge and an opportunity for businesses.
True
3. Employers are not required by law to agree to the union's demands, but they are required to bargain in good faith.
True
4. Civic engagement is a major way in which companies carry out their corporate citizenship mission.
True
4. Even though racial and gender bias has been lowered in most organizations, women and persons of color remain underrepresented in executive level positions.
True
4. Some labor unions have departed from their traditional adversarial approach to work cooperatively with employers for their mutual benefit.
True
5. It is the responsibility of the board of directors and its audit committee to engage an independent accounting firm to audit the financial statements prepared by management.
True
5. Social capital refers to the norms and networks that enable collective action.
True
5. The Occupational Safety and Health Act gives workers the right to a job "free from recognized hazards that are causing or likely to cause death or serious physical harm."
True
5. The consumer's right to privacy assures that information disclosed in the course of a commercial transaction is not shared with others unless authorized.
True
6. Beginning on a major scale in the 1960s, U.S. presidents issued executive orders and Congress enacted laws intended to promote equal treatment of employees.
True
6. Employment-at-will is a legal doctrine that means employees are hired and retain their jobs at the sole discretion of the employer.
True
6. When boards of directors meet without management present, they are more likely to have completely candid discussions about a company's affairs.
True
7. The Organization for Economic Cooperation and Development (OECD), representing 30 nations, issued a revised set of principles of corporate governance in 2004 to serve as a benchmark for companies and policymakers worldwide.
True
8. An important aspect of the business-community relationship is corporate philanthropy.
True
8. In a business context, privacy rights refer to protecting an individual's personal life from unwarranted intrusion by his or her employer.
True
8. Stock options represent the right to buy a company's stock at a set price for a certain period.
True