ethics final
Most employers are prohibited from using lie detectors in pre-employment testing under the
Employee Polygraph Protection Act.
Which of the following is a primary ethical issue concerning employee monitoring?
It often involves gathering information about employees without informed consent.
According to your instructor, which of the following types of whistle-blowing is always morally permissible assuming the whistle-blower is acting for moral reasons?
Nongovernmental, Personal Whistle-Blowing
____________________ requires the more than 20,000 food labels found on grocery store shelves to disclose the number of calories derived from fat and the amount of dietary fiber, saturated fat, cholesterol, and a variety of other substances.
Nutrition Labeling and Education Act
Which of the following is a generally acknowledged weakness of polygraphy?
The polygraph cannot reveal with certainty whether a person is telling the truth.
A contract restricting an employees ability to work with a competitor or start a competing company is
a non-competition agreement.
The disparity between private industrial costs and public social costs is terme
a spillover or externality.
Bona Fide Occupational Qualifications
allow an employer to legally and morally discriminate in some limited circumstances.
Utilitarians typically avoid speaking of animals rights, stressing instead that moral duties to animals are derived from:
animals sentience, or the ability to experience suffering.
A properly implemented personality test helps screen job applications by indicating
areas of adequacy and inadequacy.
Moral issues that arise in interviewing generally relate to
both the manner in which the interview was conducted and the method of the interview.
Under Section 1107 of the Sarbanes-Oxley Act, employers who retaliate against employees who report any federal offense
can be sued, forced to rehire whistle-blowers, and may face up to ten years imprisonment.
There are two areas of workers rights which have growing needs due to the growing presence of women in the workplace. Which are they
day care and maternity leave
Under the Americans with Disabilities Act (ADA), employers must make reasonable accommodations for employees with disabilities as long as:
doing so does not inflict undue hardship on the business.
Which of the following refers to the rate of speed and unpredictability of change within the industry?
environmental dynamism
_______________ is based on the belief that additional commitment is needed for a course of action even if this is not the correct course of action.
escalation of commitment
The FTC now follows the reasonable-consumer standard in all matters of advertising, sales and marketing.
false
The Supreme Court has rejected the idea that inside trading involves "misappropriating" confidential information.
false
Which of the following would not be covered under the Federal Food, Drug, and Cosmetic Act?
household soap
The term used to describe the interdependence that exists among all entities in the environment is:
interrelationships
A recent health implication has been recognized, one which is closely related to fatigue. This condition is known as
job stress
According to the instructor, governmental whistle-blowing involves
leaks by government employees to the media.
The ________________ refers to the level of diversity of the markets and customers, which must be addressed by the firm.
level of environmental heterogeneity
Job satisfaction has been found to be a strong predictor of
longevity
People who reject the eating of meat on moral grounds are called:
moral vegetarians
Unlike many other industrialized nations, the United States does not provide public subsidies for child care or require companies to provide paid maternity leave. Such worker benefits are not viewed as
national responsibilities.
The view that natural objects are morally considerable in their own right and are not a function of human interests is a(n):
naturalistic ethic
The human-centered approach that justifies preserving the environment solely because it is beneficial for human beings, reflects the attitude that:
nature has no intrinsic value outside of the value determined by human beings.
The practice of showing favoritism to relatives and close friends is
nepotism
One of these terms is not a form of insider trading, that is, using nonpublic information to make decisions based on an individual's self-interests rather than those of the firm.
ponzi schemes
Some "economy size" items sell for a higher per unit price than their smaller counterparts. This deceptive labeling practice is known as:
quantity surcharge
A _____________ involves a company that does not directly employ the workers who are involved in the dispute.
secondary boycott.
______________ is when an individual is selective pertaining to the information given to him or her when a decision needs to be made.
selective perception
With regard to establishing product safety rules and resolving disputes, businesses generally prefer:
self-regulation, competition and voluntary safety standards
Actions taken above and beyond the call of duty are called
supercategory
The four types of discharge are firing, layoff, position elimination and
termination
The 1970 Occupational Safety and Health Act established that the prime responsibility for regulating working conditions resides with
the federal government
In the Tragedy of the Commons, each person follows his own self-interest and affects the environment negligibly. The cumulative result is:
the gradual destruction of the public domain.
All of the following are heuristics that would bias the evaluation of the financial statements except
the halo effect
Spillovers or externalities become a moral problem when:
the purchasers of a good that generates external costs are not paying its true price.
According to the text, nothing affects the work environment more than
the style and quality of management.
"A formula, pattern, device, or compilation of information that is not generally known and is used in ones business to obtain competitive advantage" is called a:
trade secret
Traditionally, the obligations between a business organization and its employees could be boiled down to "A fair wage for an honest days work."
true
The ultimate moral judgment on whether or not a gift or entertainment expense is acceptable hinges on
whether it might lead the recipient to sacrifice the interest of the firm.
The act of informing on another or disclosure of corruption or wrongdoing is referred to as
whistle-blowing.
In the opening case, HSBC held more than _______ accounts with connections to the United States.
2
In a 2003 survey of 153 Boards of Directors, _________ considered that SOX had a postive impact on firms
70%
Which best characterizes advertising that the FTC currently seeks to prohibit?
Advertising that misleads a significant number of consumers in a vulnerable group.
According to FTC guidelines, which of the following would constitute price misrepresentation?
An object with a $100 price tag that never sold for more than $95 marked as "Formerly $100."
Some jobs are by their nature dangerous. Which two conditions are necessary to ensure that such risks are morally acceptable?
Assumption of risk and right to refuse dangerous work
United States corporations are forbidden by law from bribing overseas officials. Which of the following is a common criticism of this law?
Because the law affects only U.S. companies, foreign companies are given an unfair advantage in corrupt nations.
The Act which proclaimed the goal of eliminating all water pollution by 1985 is the
Clean water act of 1972
The agency responsible for protecting consumers against deceptive marketing promotions and fraudulent commercial practices is the:
FTC
Bribing foreign officials for business favors was declared illegal in the United States under the
Foreign Corrupt Practices Act (FCPA).
Most of us agree that it would be immoral to make the world uninhabitable for future people. What aspect of this view is philosophically difficult?
It seems to depend on the rights of future generations and they seem to have no interests at all.
Some argue that those who benefit from environmental controls should bear the cost of these controls. What do the authors consider the most serious objection to this thesis?
It seems to leave out responsibility as a legitimate criterion.
This law prevents sellers from disclaiming implied warranty of merchantability and the implied warranty of fitness for a particular purpose in the sale of consumer goods.
Magnuson-Moss Warranty Act
The legislation that provides protection for employees who report possible securities fraud is called the
Sarbanes-Oxley Act of 2002.
The buying or selling of financial securities by business "insiders" on the basis of information that has not been made public is called:
Section 10(b) insider trading.
The authors describe which premise of personality tests as "questionable"?
That individuals fit into a small number of personality types.
In the Hawthorne studies, the researchers found that productivity increased when the lighting was made brighter, but it also increased when the lighting was made dimmer. What conclusion did they draw?
That workers respond well to attention and recognition.
The text suggests that when we are faced with an ethical problem, it is useful to discuss the problem with a friend. What advantage can be had this way?
The friend can help us avoid bias and gain a better perspective.
Which of the following rights has been acknowledged by the Supreme Court?
The right to refuse dangerous work.
The watershed legislation passed in 1935 that prohibited firing employees because of union membership or activities is known as the:
Wagner Act
Businesses traditional attitude toward the environment has contributed to the problem of degradation of natural resources. It is the tendency to view the natural world as:
a free and unlimited good.
A marketing promotion that is deceptive because it can be understood in more than one way is:
ambiguous
A living wage is the
amount of money a full-time employee needs to afford the necessities of life, support a family, and live above the poverty line
Which is not one of the responsiblities of management in ensuring accuracy and transparency in providing financial statements?
auditor- shareholder conflict of interest
Philosophers who discuss moral rights generally doubt that plants have rights because having rights presupposes:
beliefs and desires from which genuine interests are derived.
Acknowledging employees civil liberties by respecting their rights and dignity:
can enhance employee morale and improve competitive performance.
All of the following are industry-based issues related to the antecedents of fraud except
characteristics of the organization
Some critics of consumer product safety regulations are concerned about the cost-effectiveness of safety regulations. They calculate the economic costs by:
comparing the number of lives saved with the cost of implementing the regulation.
There are two versions of the polluter-should-pay-the-bill thesis: that big business should pay and that ________ should pay.
consumers
Businesses' heightened responsibility for providing for consumers' needs derives from:
consumers' dependence on business for their survival and enrichment.
______________ accounting comes from the concept that management can manipulate the financial results of a company by adding or taking away reserves depending on the circumstances.
cookie
An important analytic technique used to determine whether or not it is worth undertaking a pollution-control device is:
cost-benefit analysis.
The concept of informed consent implies
deliberation and free choice
Although some writers believe that a fair wage is determined by what is acceptable to an employee, in an ethical organization, the central question with regard to remuneration should be
distributive justicebased on the employees value to the business.
David Ewing, former editor of Harvard Business Review, recognizes two historical factors contributing to the decline of civil liberties. One is professional management that puts the system over the person, and the other is the:
doctrine of employment-at-will.
In a non-legal sense, ________ is the idea that sellers and buyers do not meet as equals in a way that makes consumers particularly vulnerable to being harmed by the manufacturer.
due care
Galbraith's "dependence effect" is the idea that:
due to increasing affluence, advertising creates new consumer wants rather than satisfying consumer needs.
The new discipline of ________ calculates the value of an ecosystem in terms of what it would cost to provide the benefits and services it now furnishes us.
ecological economics
The total ecological community of both living and nonliving things is called a(n)
ecosystems
Which of the following is NOT one of the three potential conflicts of interest that can take place during the audit process?
employee-supervisor
Contractual obligations to purchasers that arise from an explicit statement made by a seller are:
express warranties.
In 2002, the following firms except one were awarded the Ig Nobel Prize for the development and application of the concept of "imaginary numbers" that are used in creative accounting in the business world, except
exxonmobil
A psychological appeal is one that aims to persuade by appealing primarily to reason and not to human emotional needs.
false
According to Jeremy Bentham, the question is not whether animals can feel pain, but whether they can talk and reason.
false
According to William F. Baxter, we ought to respect the "balance of nature" and "preserve the environment" even if doing so brings no benefit to human beings.
false
Advocates of a "naturalistic ethic" believe that penguins are important only because people like them.
false
All gifts are bribes.
false
As the level of environmental dynamism increases, the potential for top level managers to commit fraud decreases.
false
As the level of experience of the top level managers increase, the likelihood of the top level managers commit fraud also increases.
false
Business is right to insist that accidents occur exclusively as a result of product misuse and that it is thereby absolved of all responsibility.
false
Congress has now outlawed puffery.
false
Corporate-level fraud refers to fraud which benefits the individual while occupational management fraud would focus on making materially misleading information pertaining to the financial status of the firm.
false
Economists favor legal paternalism because it prevents individuals from balancing safety against price.
false
Employees have no obligations to people with whom they have no business relations.
false
Environmental protection is always a static trade-off, with a fixed economic price to be paid for the gains we want.
false
Escalation of commitment occurs when the individual is hesitant to reject a biased proposal from someone else.
false
In his books The Affluent Society and The New Industrial State, John Kenneth Galbraith argues that consumer wants determine what gets produced.
false
In the 1960 case Henningsen v. Bloomfield Motors and the 1963 case Greenman v. Yuba PowerProducts, injured consumers were awarded damages based on their proving that the manufacturers of the defective products were negligent.
false
Inbreeding is the practice of showing favoritism to relatives and close friends.
false
Increased productivity by changing the color of the surrounding working environment is known as the "Hawthorne effect."
false
Legal paternalism is the doctrine that the law should not be used to restrict the freedom of individuals for their own good.
false
Nepotism is the practice of promoting exclusively from within the firm or externally hiring employees with the same demographic characteristics.
false
Notification of employee monitoring constitutes consent on the part of the employee to be monitored.
false
Plausible deniability is based on the belief that additional commitment is needed for a course of action even if this is not the correct course of action.
false
Prudential reasons are reasons that refer to the interests of others and the demands of morality.
false
Regulation is always the most effective way to allocate the costs of environmental protection.
false
Strict liability is the same thing as absolute liability.
false
The Fair Packaging and Labeling Act empowers representative agencies to rank and list all ingredients in the order of decreasing percentage of total contents.The Fair Packaging and Labeling Act empowers representative agencies to rank and list all ingredients in the order of decreasing percentage of total contents.
false
The Foreign Corrupt Practices Act forbids companies to pay kickbacks in the United States, but permits them to pay kickbacks to companies outside the United States.
false
The disparity between private industrial costs and public social costs is what economists call an "internality."
false
The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of individuals for their own good.
false
The law precisely defines the concept of a trade secret, just as it does patents and copyrights.
false
The rising affluence of people in the United States has meant a corresponding decrease in pollution and its attendant environmental problems in the United States.
false
When advertisers conceal facts, they suppress information that is favorable to their products.
false
William T. Blackstone rejects the idea that each person has a human right to a livable environment on the grounds that it is technically infeasible.
false
When direct competitors agree to a set price schedule, it is:
horizontal price fixing.
Contractual obligations to purchasers that can arise automatically through a transaction with a seller are:
implied warranties.
The practice of promoting exclusively from within the company can lead to
inbreeding.
A morally complicated problem arises when employees who are privy to proprietary information are restricted in various ways when they choose to change jobs. While the company may be motivated by the need to protect proprietary information, such restrictions may be unfair to the employee because they
infringe on the employees right to seek new employment.
In general, if the contents of the work agreement are legal and an employee freely consents to them, then he or she
is obliged to fulfill the terms of the work contract.
The courts repudiated the doctrine of caveat emptor in the first part of the twentieth century, largely on the grounds of:
its unrealistic assumptions about consumers' knowledge, competence, and behavior.
In a situational interview
job candidates engage in role playing in a mock office scenario.
A ________ describes the minimum qualifications an employee needs, such as knowledge, skills, and abilities.
job specification
In order to create an atmosphere of fairness in which rules and standards of discipline are applied equally, the principles of ________ must operate.
just cause and due process
Authors Fagothey and Gonsalves have suggested that the conditions that are necessary for a strike to be just are
just cause, proper authorization and last resort.
The doctrine that the law may justifiably be used to restrict the freedom of individuals for their own good is called:
legal paternalism.
All of the following are principles on which the American Institute of Certified Public Accountants current code of conduct is based except
management interest
______________ financing creates separate legal entities from the parent company. Since these entities are not wholly owned subsidiaries they can be hidden from the investors by keeping the entities off the financial statements.
off-shore
The use of ones official position for personal gain raises moral concerns because of the likelihood that
one is violating ones obligations to the firm or organization.
The most common reason cited by employees for leaving a job is
poor relationships with their immediate supervisors
________ is when a seller takes advantage of a short-term situation in which buyers have few purchase options for a much-needed product by raising prices.
price gouging
Which approach for achieving environmental goals charges companies for the amount of environmental damage caused?
pricing mechanisms
The Taft-Hartley Act, which amended the National Labor Relations Act, allowed for the creation of right-to-work states. They are called that because they
prohibit union contracts requiring all employees to join the union or pay the equivalent of union dues.
A consideration from self-interest is called a(n)
prudential reason
A(n) ________ is aimed primarily at emotion, not reason, and is potentially the advertising technique of greatest moral concern.
psychological appeal
The statement by an automobile seller that "You will not find a better automobile at this price" is an example of
puffery
Prior to 1916, injured consumers were limited to:
recovering damages only from the retailer of the product.
The term "grease payments"
refers to payments to minor foreign officials that may be necessary to ensure that they carry out their administrative job duties.
test validity
refers to whether test scores correlate with performance in some other activity.
One method of achieving environmental goals is criticized because it takes away an industrys motivation to do more than the minimum required. Which method is this?
regulation
Testing is an integral part of the hiring process especially with large firms. If tests are used, companies using them are obliged to ensure that they are
reliable and valid
Which of the following is not a firm-level antecedent in developing fraudulent behavior?
remuneration strategies
The theory that holds manufacturers responsible for compensating users who have suffered injuries from defective products, irrespective of fault on the part of the manufacturer is called:
strict product liability.
The government agency responsible for regulating product safety was established pursuant to:
the Consumer Product Safety Act of 1972.
As a general rule, whenever an organization infringes on what would normally be defined as the personal sphere of an individual
the burden is on the organization to establish the legitimacy of that infringement.
The FTC now follows which standard in determining that a marketing promotion may be misleading?
the modified ignorant-person standard
One of the defenses used by high level executives who engage in illegal insider trading is that
trading on the basis of non-public information seldom harms anyone.
"Weasel words" are words used to evade or retreat from a direct or forthright statement.
true
A bribe is remuneration for the performance of an act thats inconsistent with the work contract or the nature of the work one has been hired to perform.
true
A conflict of interest arises when an employee has private interests that are substantial enough to interfere with his or her job duties.
true
A kickback is a kind of bribe.
true
A moral of Garrett Hardins parable "The Tragedy of the Commons" is that there can be a difference between the private costs and the social costs of a business activity.
true
A workplace environment in which employees are treated fairly and their inherent dignity respected is compatible with a firms business goals
true
An early 1970s government survey of worker dissatisfaction identified the lack of opportunities to be ones own boss as one of the three chief sources of worker dissatisfaction.
true
An employee can have a conflict of interest even if he or she doesnt act to the detriment of the organization.
true
Anti-paternalism gains plausibility from the view that individuals know their own interests better than anyone else and that they are fully informed and able to advance those interests.
true
Any drug-testing program, assuming it is warranted, must be careful to respect the dignity and rights of the persons to be tested.
true
Any equitable solution to the problem of who should pay the bill for environmental cleanup should take into account responsibility as well as benefit.
true
As an industry increases in concentration, the chance that collusion will take place in the industry also increases.
true
As top level managers get older they are less likely to take risks and are not as concerned about short term gratification.
true
Auditors are considered gatekeepers for the stakeholders.
true
Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.
true
Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.
true
Businesses often claim polygraphs are a fast and economical way to verify the information provided by a job applicant.
true
Cost-benefit analysis is a device used to determine whether its worthwhile to incur a particular cost.
true
Creative accounting can be defined as the deviation from the traditional methods used to interpret an accounting rule or standard.
true
Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the First Amendment as a form of speech.
true
Due process requires specific and systematic means for workers to appeal discharge or disciplinary decisions.
true
Earnings management is the purposeful intervention in the process of reporting income numbers with the objective of dampening the fluctuations of those numbers around their trend.
true
Employees have a legal right to refuse to work when it exposes them to imminent danger.
true
From the beginning, unions have been driven by an attempt to protect workers from abuses of power at the hands of employers.
true
From the consumer's standpoint, one problem with implied warranties is that the law allows the seller to disclaim or limit the warranty in most circumstances.
true
In direct response to the corporate scandals of Enron and WorldCom, the U.S. Congress passed the Sarbanes-Oxley Act in 2002.
true
Informed consent implies deliberation and free choice.
true
Job performance and the fairness of the work contract are relevant to the issue of fair wages.
true
Just cause requires that reasons for discipline or discharge be related directly to job performance.
true
Off-balance sheet financing creates separate legal entities from the parent company.
true
One decisive case in the legal transition away from the reasonable-consumer standard in matters of advertising, sales and marketing was FTC v. Standard Education.
true
One of the attitudes prevalent in business that has led to increased environmental problems is the tendency to view the natural world as a free and unlimited good.
true
One of the chief concerns of nepotism is the disregard of managerial responsibilities to the organization and of fairness to other employees.
true
One study suggests a positive correlation between job satisfaction and longevity.
true
Privacy is widely acknowledged today to be a fundamental human right
true
Statistics indicate that the faith consumers place in manufacturers is often misplaced.
true
Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.
true
Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness.
true
The Federal Trade Commission (FTC) was established over seventy-five years ago to protect consumers against deceptive advertising.
true
The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare.
true
The fundamental flaw of a Ponzi scheme is that it never ends until the person committing the fraud is caught and disappears.
true
The general proposition that a firm has a legitimate interest only in employee behavior that significantly influences work performance applies equally to off-the-job conduct.
true
The new discipline of "ecological economics" calculates the value of an ecosystem, not in terms of what people are willing to pay for it, but in terms of what it would cost to provide the benefits and services that the ecosystem now furnishes us.
true
The nonlegal concept of due care is the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and expertise the consumer does not have.
true
The word "ecology" refers to the science of the interrelationships among organisms and their environment.
true
Three approaches have gained the most attention when it comes to achieving our environmental goals: the use of regulations, incentives, and pricing mechanisms/permits.
true
Under the cookie jar system, management will build up financial reserves in profitable years and release the financial reserves into the financial statements during unprofitable years.
true
When weighing the decisions to terminate employees, companies need to remember that employment affects families and communities, not just individuals.
true
Observers who take the broad view of corporate social responsibility maintain that businesses refusal to incorporate spillovers into their costs of production is unethical because they are:
violating the implicit social contract.
General contractual obligations to purchasers that sellers assume are:
warranties.
Firms that exercise explicit or implicit pressure on employees to engage in volunteer activities, can be guilty of attempting to influence the personal choices of employees in ways that constitute invasion of privacy. In doing so, they are, in fact, communicating the firms notion of
what to believe, what values to support, and what goals to promote outside work.
The firm has a legitimate interest in
whatever significantly influences work performance.