Business Ethics Mid-Term 1 Exam

The Sarbanes-Oxley (SOX) Act was passed to provide federal oversight of _______. a. federal sentencing guidelines' compliance requirements b. corporate environmental practices c. nonprofit organizations' governance practices d. price discrimination practices e. corporate accounting practices

e. corporate accounting practices

Which of the following is considered a primary stakeholder group? a. Employees b. Special interest groups c. Television news reporters d. Magazines e. Trade associations

a. Employees

ISO 19600 is a set of 10 principles concerning human rights, labor, the environment, and anti-corruption. (TRUE or FALSE)

FALSE

During the 1990s the institutionalization of business ethics was largely driven by which piece of legislation?

Federal Sentencing Guidelines for Organizations

One of the major ethical issues President Obama's administration focused on was

Health care and consumer protection

If a message has a tendency to mislead, confuse, or deceive the public, it is considered ______

Implied falsity

The act/agency that enforces regular surprise inspections to ensure businesses maintain safe working environments is called the _______. a. Equal Safety Act b. Occupational Safety and Health Administration c. Title VII of the Civil Rights Act d. Immigration Reform and Control Office e. ICE Agency

b. Occupational Safety and Health Administration

Creating a perception or belief by words that intentionally deceive someone is defined as _______. a. context and intent b. lying by commission c. lying by omission d. active bribery e. "white lies"

b. lying by commission

Which of the following concepts is defined as a person's personal philosophy about what is right or wrong? a. Values b. Morals c. Emotional intelligence d. Principles e. Business ethics

b. morals

Exaggerated advertising, blustering, and boasting upon which no reasonable buyer would rely is known as _______. a. dishonesty b. puffery c. fraud d. lying e. implied falsity

b. puffery

Harassment is defined as discrimination on the basis of which of the following? a. Age b. Marital status c. Union affiliation d. National origin e. Gender

c. Union affiliation

Which of the following methods of corporate espionage involves tricking individuals into revealing their passwords or other valuable corporate information?

Social engineering

A problem, situation, or opportunity requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong is called a(n) _______. a. ethical issue b. indictment c. conflict of interest d. personal crisis e. fraud

a. ethical issue

Corporate governance is defined as _______. a. formal systems of accountability, oversight, and control b. an approach that recognizes other stakeholders and explicitly acknowledges that dialogue exists between a firm's internal and external environments c. the legal obligation of an individual or organization to make informed and prudent decisions and avoid behavior that could cause harm to others d. the management style of the firm's CEO e. the governing authority

a. formal systems of accountability, oversight, and control

The concept that refers to how closely workplace decisions align with a firm's stated strategic direction and its compliance with ethical and legal considerations is known as _______. a. control b. accountability c. a duty of loyalty d. a duty of oversight e. oversight

b. accountability

An organization that has a strong ethical environment usually has a core value of placing _______ interests first. a. competitors' b. customers' c. stockholders' d. government's e. management's

b. customers'

Which of the following refers to precedents established by judges? a. Civil Law b. Statutory Law c. Common Law d. Constitutional Law e. Administrative Law

c. Common Law

Many businesses can benefit from urban renewal movements that reduce sprawl, but it can create disadvantages for _____

Car and Oil Companies

The most controversial form of alternative energy is _______. a. hydropower b. geothermal power c. nuclear power d. biofuels e. wind power

c. nuclear power

Values are

Enduring beliefs and ideals that are socially enforced

Which of the following is one of the biggest contributors to illnesses in developing countries? a. Land pollution b. Air pollution c. Urban sprawl d. Food contamination e. Water pollution

e. Water pollution

The practice of offering something in order to gain an illicit advantage is known as _______. a. a conflict of interest b. commission lying c. intimidating behavior d. collusion e. bribery

e. bribery

An ethical issue is defined as a problem, situation, or opportunity that _______

must be evaluated as right or wrong, ethical or unethical.

What is the first step in implementing a stakeholder perspective in an organization?

Assessing the corporate culture

In the past, bond ratings agencies were paid by the organizations that they rated, so organizations would shop around for the agency that gave them the best rating. This led to the agencies being accused of having which of the following?

Conflict of interests

_____ focuses on developing sound organizational practices and integrity for financial and nonfinancial performance measure, rather than on an individual's morals.

Core practices

Greenwashing is a strategy involving stakeholder assessment to create meaningful long-term relationships with customers, while maintaining, supporting, and enhancing the natural environment. (TRUE or FALSE)

FALSE

Which of the following is one of an organization's greatest intangible assets with tangible values?

Reputation

Because ethanol is created from corn in the United States, there are concerns that the increased use of ethanol will decrease food supplies. (TRUE or FALSE)

TRUE

Prior to the 1960s, ethical issues related to business were discussed mainly in the domain of theology or philosophy. (TRUE or FALSE)

TRUE

Business ethics, as a field, has passed through which of the following states? a. A field of study to theological discussion to recognition of social issues. b. Recognition of social issues to a field of study to theological discussion. c. A field of study to recognition of social issues to theological discussions. d. Recognition of social issues to theological discussion to a field of study. e. Theological discussion to recognition of social issues to a field of study.

Theological discussion to recognition of social issues to a field of study

Which of the following are among the top types of observed misconduct? (Select three) a. Internet abuse b. Working more hours than reported c. Puffery d. Conflicts of interest e. Abusive behavior

a. Internet abuse d. Conflicts of interest e. Abusive behavior

Which of the following statements describes sustainable development? a. It has become a top concern for many businesses as it involves meeting the needs of the present without compromising the ability of future generations to meet their own needs. b. It involves meeting only the needs of the present. c. It has the same meaning globally. d. It has an emphasis on viable infrastructure. e. It is relatively simplistic, so it's easy for businesses to determine what to evaluate when investigating ways to increase the sustainable impact of their organizations.

a. It has become a top concern for many businesses as it involves meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Which of the following is an office created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and is charged with creating a better system for analyzing the financial industry? a. The Office of Financial Research b. The Financial Stability Oversight Council c. The Consumer Financial Protection Bureau d. The Public Company Accounting Oversight Board e. The Office of Whistle-Blower Protection

a. The Office of Financial Research

A payment made to obtain or retain business that is not considered a bribe within the United States is defined as _______. a. facilitation b. insider trading c. passive bribery d. duplicity e. active bribery

a. facilitation

Accountants, lawyers, financial rating agencies, financial reporting services, and risk assessors of financial products—who must trust and be trusted by stakeholders to make business work—are all examples of _______. a. gatekeepers b. core practices c. lawmakers d. financial gurus e. secondary stakeholders

a. gatekeepers

Groups that influence and/or are affected by a company yet do not typically engage directly in transactions with that company are known as _______. a. secondary stakeholders b. significant others c. market constituents d. regulatory agencies e. primary stakeholders

a. secondary stakeholders

Which of the following steps in implementing a stakeholder perspective has the explicit purpose to identify the organizational mission, values, norms, and behavior likely to have implications for social responsibility? a. Identifying stakeholder groups b. Assessing the corporate culture c. Identifying resources and determining urgency d. Identifying stakeholder issues e. Assessing organizational commitment to stakeholders and social responsibility

b. Assessing the corporate culture

A set of 10 principles concerning human rights, labor, the environment, and anti-corruption, which seeks to create openness and alignment among business, government, society, labor, and the United Nations, is known as the _____. a. MERCOSUR b. Global Compact c. Ethics & Compliance Initiative (ECI) d. CERES Principals e. USMCA

b. Global Compact

Alternative energy sources have had what effect on the carbon footprint of communities, cities, and even countries? a. Significantly increased the carbon footprint b. Significantly decreased the carbon footprint c. Moderately increased the carbon footprint d. Maintained the carbon footprint e. Completely eliminated the carbon footprint

b. Significantly decreased the carbon footprint

Which of the following statements is true? a. Failure to acknowledge or be aware of ethical issues is the best thing for an organization. b. Some ethical issues are difficult to recognize because they are gray areas that are hard to navigate. c. Employees will never engage in questionable behaviors because they are trying to achieve firm objectives related to sales or earnings. d. In a dilemma, none of the alternatives have negative consequences. e. The work environment makes it easy to define and reduce ethical issues.

b. Some ethical issues are difficult to recognize because they are gray areas that are hard to navigate.

Created in 1997, which of the following was an international treaty meant to curb global greenhouse gas emissions by having countries voluntarily reduce national outputs? a. The Coalition for Environmentally Responsible Economies b. The Kyoto Protocol c. Green Marketing d. The Environmental Protection Act e. Greenwashing

b. The Kyoto Protocol

Social responsibility can be viewed as a(n) _______. a. corporation's image and an intangible asset with tangible value b. contract with society c. approach that recognizes other stakeholders d. right to be forgotten e. carefully thought-out rules or heuristics of business conduct that guide decision making

b. contract with society

Which of the following are considered alternative sources of energy? (Select three) a. gas power b. geothermal power c. nuclear power d. wind power e. coal-based power

b. geothermal power c. nuclear power d. wind power

One of the most important and oft-cited elements of virtue, which refers to being whole, sound, and in an unimpaired condition, is known as _______. a. honesty b. integrity c. value d. fairness e. reciprocity

b. integrity

The reprocessing of materials for reuse, especially steel, aluminum, paper, glass, rubber, and some plastics, is known as _______. a. waste management b. recycling c. greenwashing d. green marketing e. the Kyoto protocol

b. recycling

Most ethical issues concerning a business will become visible through _______. a. criminal prosecution b. stakeholder concerns c. civil litigation d. stock market performance e. congressional legislation

b. stakeholder concerns

Climate change refers to _______. a. plant and animal DNA that is manipulated to produce a desired effect b. the long-term variation in average weather patterns c. a program to protect threatened and endangered species as well as the habitats in which they live d. nitrous oxides and sulfur dioxides in the air and rain e. gasoline, natural gas, oil, and coal

b. the long-term variation in average weather patterns

Which program recognizes sustainable building practices and strategies? a. ELLED b. EPA c. LEED d. AICPA e. FCP

c. LEED

The concept that all director decisions should be in the best interests of the corporation and its stakeholders is known as a _______. a. duty of oversight b. duty of control c. duty of loyalty d. duty of conflict e. duty of accountability

c. duty of loyalty

Many studies have found a positive relationship between which of the following? a. High cultural values and low industry competition b. High levels of government regulation and cultural values c. Unmotivated employees and good business performance d. An ethical culture and good business performance e. Apathetic boards of directors and an ethical culture

d. An ethical culture and good business performance

Which of the following are the three fundamental elements that motivate people to be fair? a. Charity, fidelity, and harmony b. Honesty, integrity, and morality c. Truthfulness, fidelity, and harmony d. Equality, reciprocity, and optimization e. Equality, reciprocity, and harmony

d. Equality, reciprocity, and optimization

The U.S. Sentencing Commission continued to emphasize that there should be standards and procedures in place to prevent and detect misconduct along with the importance of _______. a. the firm's board b. hiring an external CEO c. the honor system d. eliminating federal prosecutions of organizations e. organizational culture

e. organizational culture

Investors are concerned about business ethics because they know that misconduct can

Lower the stock value and prices

_____ responsibilities relate to a business's contributions to stakeholders

Voluntary

Which of the following best describes a dual relationship?

Where there is a power differential???

Ranging from making environmental claims that are required by law and are therefore irrelevant (CFC-free) to puffery, or exaggerating environmental claims, to fraud, which of the following involves misleading a consumer into thinking that a product or service is more environmentally friendly than it really is? a. Greenwashing b. The triple bottom line approach c. Genetic modification d. Sustainability e. Green marketing

a. Greenwashing

The Consumer Financial Protection Bureau (CFPB) _______. a. has supervisory power over credit markets as well as the authority to monitor lenders b. has no responsibility to check the safety of financial products before their launch into the market c. has no responsibility to curtail unfair lending and credit card practices d. has no supervisory power over credit markets e. has no authority to monitor lenders

a. has supervisory power over credit markets as well as the authority to monitor lenders

Human rights, freedom of speech, and the fundamentals of justice are examples of which of the following concepts? a. Principles b. Morals c. Values d. Business ethics e. Emotional intelligence

a. principles

Which of the following business practices show a social commitment to sustainability? (Select three) a. reevaluating the effects of their products and the natural environment b. sponsoring cleanup events c. eliminating costly recycling programs d. redesigning manufacturing processes to reduce waste and pollution e. reducing alternative energy sources

a. reevaluating the effects of their products and the natural environment b. sponsoring cleanup events d. redesigning manufacturing processes to reduce waste and pollution

The term ethical culture is associated with which of the following? (Select three) a. Maximizing profits and placing shareholder's concerns first b. Acceptable behavior as defined by the company and industry c. Openness and alignment among businesses, government, society, labor, and the United Nations d. A culture that creates shared values and support for ethical decisions and is driven by the ethical leadership of top management e. Workplace confrontation over ethics issues, reports to management of observed misconduct, and the presence of ethics hotlines

b. Acceptable behavior as defined by the company and industry d. A culture that creates shared values and support for ethical decisions and is driven by the ethical leadership of top management e. Workplace confrontation over ethics issues, reports to management of observed misconduct, and the presence of ethics hotlines

Efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against are involved in which of the following? a. Employment quotas b. Affirmative action programs c. Facilitation payments d. Dual relationships e. Optimizations

b. Affirmative action programs

Which of the following are outcomes of a firm "going green"? (Select three) a. Costs associated with improving risk management and stakeholder relationships are increased. b. Firms can differentiate their products from competitors'. c. Firms can focus more on their own efforts as a distinct unit rather than on the entire supply chain. d. Goodwill from stakeholders is increased and money is saved from being more efficient and less wasteful. e. Revenue is increased through better access to certain markets, differentiation of products, and the sale of pollution-control technology.

b. Firms can differentiate their products from competitors'. d. Goodwill from stakeholders is increased and money is saved from being more efficient and less wasteful. e. Revenue is increased through better access to certain markets, differentiation of products, and the sale of pollution-control technology.

Which of the following, developed by the International Organization for Standardization, is a comprehensive set of environmental standards that encourages a cleaner, safer, and healthier world? a. Kyoto protocol b. ISO 14000 c. Leadership in Energy & Environmental Design (LEED) d. Green Globes e. Environmental, social, governance (ESG)

b. ISO 14000

The most common reason for greenwashing is to_____. a. decrease sales in the short term b. make products more like competitors' products c. intentionally mislead consumers d. attract environmentally conscious consumers e. consider the sustainability practices throughout the supply chain

d. attract environmentally conscious consumers

Which of the following does a cap-and-trade program reduce a. carbon emissions b. waste c. water pollution d. deforestation e. fracking

Carbon Emissions

An interchange of giving and receiving in social relationships is known as

Reciprocity

Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as

Stakeholders

Which of the following statements is true of the Dodd-Frank Wall Street Reform Act? a. It contains five provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives. b. It seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008-2009 financial crisis. c. It contains 10 provisions that include increasing the accountability and transparency of financial institutions, creating a bureau to educate consumers in financial literacy and protect them from deceptive financial practices, implementing additional incentives for whistle-blowers, increasing oversight of the financial industry, and regulating the use of complex derivatives. d. It created only one financial agency (The Financial Consumer Protection Agency). e. It created only one financial agency (The Financial Stability Oversight Council).

b. It seeks to improve financial regulation, increase oversight of the industry, and prevent the types of risk-taking, deceptive practices, and lack of oversight that led to the 2008-2009 financial crisis.

Decreed by President John F. Kennedy in 1962, which of the following outlined four basic consumer rights: the right to safety, the right to be informed, the right to choose, and the right to be heard? a. Federal Sentencing Guidelines for Organizations b. Sarbanes-Oxley Act c. Consumers' Bill of Rights d. Defense Industry Initiative on Business Ethics and Conduct e. Dodd-Frank Wall Street Reform and Consumer Protection Act

c. Consumers' Bill of Rights

Which of the following are not typically secondary stakeholders? a. Television new anchors b. Special-interest groups c. Customers d. Trade associations e. Journalists

c. Customers

Which of the following can be broadly defined as a lack or absence of integrity, incomplete disclosure, and an unwillingness to tell the truth? a. Lying b. Reciprocity c. Dishonesty d. Value e. Conflict of interest

c. Dishonesty

Relating to stakeholder demands for firms to protect the environment, contribute to social causes, and engage in conduct that is responsible and ethical, which of the following is becoming an important initiative in the 2020s? a. Dodd-Frank Wall Street Reform and Consumer Protection Act b. Global Compact c. Environmental Social Governance (ESG) d. Federal Sentencing Guidelines for Organizations e. Sarbanes-Oxley Act

c. Environmental Social Governance (ESG)

Which economist believed the market is a better deterrent to wrongdoing than new laws and regulations? a. John Maynard Keynes b. Adam Smith c. Milton Friedman d. David Ricardo e. Janet Yellen

c. Milton Friedman

Businesses may improve their communities, reduce government involvement by providing assistance to stakeholders, develop employee leadership skills, and foster an ethical culture and values that deter organizational misconduct by addressing which one of the following? a. Economic responsibilities b. Cause-related marketing c. Voluntary responsibilities d. International responsibilities e. Goodwill responsibilities

c. Voluntary responsibilities

What does the Federal Sentencing Guidelines for Organizations (FSGO) focus on? a. Schemes by top management to hide losses and other performance problems b. Background checks on employees and other agents c. Improving the quality of life for employees and communities d. Encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs e. Penalties for companies convicted of restraint of trade charges

d. Encouraging ethical and legal compliance by reducing penalties for firms with effective compliance programs

Which of the following refers to acceptable behavior as defined by the company and industry and is a function of many factors, including corporate policies, top management's leadership on ethical issues, the influence of coworkers, and the opportunity for unethical behavior? a. Regulation b. Ethical dilemmas c. Consumerism d. Ethical culture e. Corporate social responsibility

d. Ethical culture

What is the final step in implementing a stakeholder perspective? a. Assessing organizational commitment to stakeholders and social responsibility b. Identifying stakeholder groups c. Identifying stakeholder issues d. Gaining stakeholder feedback e. Identifying resources and determining urgency

d. Gaining stakeholder feedback

Which of the following statements describes the Sherman Antitrust Act? a. It refines copyright laws to protect digital versions of copyrighted materials, including music and movies. b. It prohibits the use of price maintenance agreements among manufacturers and in interstate commerce. c. It bans price discrimination between retailers and wholesalers. d. It prohibits organizations from holding monopolies in their industries. e. It prohibits unfair and deceptive acts and practices, regardless of whether competition is impaired.

d. It prohibits organizations from holding monopolies in their industries.

An organization's obligation to maximize its positive impact on stakeholders and to minimize its negative impact refers to its _______. a. environmental social governance b. regulation mandates c. moral justice d. corporate social responsibility e. consumerism

d. corporate social responsibility

Fines or imprisonment may be imposed as punishment for breaking the law under _______. a. civil law b. voluntary compliance c. the honor system d. criminal law e. international guidelines

d. criminal law

The four levels of social responsibility are _______. a. political, economic, legal, and ethical b. economic, legal, political, and social c. economic, legal, philanthropic, and social d. economic, legal, ethical, and philanthropic e. ethical, philanthropic, social, and religious

d. economic, legal, ethical, and philanthropic

Issues related to fairness and honesty may arise because business is often regarded as which of the following? a. legal case, where everything must be done to the letter of the law b. contest, which the most ethical form "winning" c. guerilla war where businesses seek to destroy each other. d. game governed by its own rules rather than those of society e. game governed by social values.

d. game governed by its own rules rather than those of society.

Which of the following describes a situation where a person is faced with multiple choices, all of which are undesirable as defined by that person? a. Value dilemma b. Workplace integrity dilemma c. Principles dilemma d. Moral dilemma e. Cultural dilemma

d. moral dilemma

When business strategies, economic sectors, work practices, technologies, and lifestyles are assessed and improved while maintaining the natural environment, this is known as _______. a. recycling b. the Kyoto protocol c. social responsibility d. sustainability e. greenwashing

d. sustainability

A company can be sued for discrimination if it does which of the following? a. abuses or intimidates its employees b. creates an anti-competitive corporate culture c. discharges a minority individual, but has just cause for doing so. d. uses age as hiring or firing criterion e. has more men that women staff. than

d. uses age as a hiring or firing criterion

What ties an organization's products directly to a social concern through a marketing program? a. Strategic philanthropy b. Strategic marketing c. Gatekeepers d. Social entrepreneurship e. Cause-related marketing

e. Cause-related marketing

When an individual must choose whether to advance his or her own interests, those of the organization, or those of some other group, which of the following exists? a. Corporate intelligence b. Facilitation payment c. Discrimination situation d. Ethical dilemma e. Conflict of interest

e. Conflict of interest

Advertising, environmental hazards, financial practices, and product safety are all major areas of concern in what social responsibility issue? a. Data privacy b. Health issues c. Outsourcing d. Sustainability e. Consumer protection

e. Consumer protection

Which approach to stakeholder theory focuses on the actual behavior of the firm and usually addresses how decisions and strategies are made for stakeholder relationships? a. Control approach b. Instrumental approach c. Strategic decision-making approach d. Normative approach e. Descriptive approach

e. Descriptive approach

Which of the following statements regarding social responsibility and stakeholder orientation is true? a. The support stakeholders have for companies they perceive to be socially responsible cannot serve to enhance the firms' profitability. b. Most studies associate a stakeholder orientation with decreased profits. c. Legal and economic responsibilities are generally accepted as the least important determinants of performance. d. The purpose of a stakeholder orientation is to eliminate positive outcomes that meet stakeholder needs. e. Evidence suggests caring about the well-being of stakeholders leads to increased profits.

e. Evidence suggests caring about the well-being of stakeholders leads to increased profits

Which of the following is defined as the pressure to compromise organizational standards, observed misconduct, reporting of misconduct when observed, and retaliation against reports? a. Moral dilemma b. Value dilemma c. Political ethics d. "Good citizen" organization e. Workplace integrity

e. Workplace integrity

The concept of board members being linked to more than one company is known as _______. a. the shareholder concept b. the stakeholder model of corporate governance c. a board member compensation problem d. the stakeholder theory e. an interlocking directorate

e. an interlocking directorate

The Sarbanes-Oxley (SOX) Act _______. a. is the same as the Public Company Accounting Oversight Board (PCAOB) b. did not modify the attorney-client relationship in that it does not require lawyers to report wrongdoing to top managers and/or the board of directors c. does not provide protection for "whistle-blowing" employees d. does not impose additional requirements on executives e. attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee

e. attempts to eliminate conflicts of interest by prohibiting accounting firms from providing both auditing and consulting services to the same client companies without special permission from the client firm's audit committee

Externally imposed levels of appropriate conduct, such as laws, rules, and regulations, are known as _______. a. voluntary boundaries b. core practices c. philanthropy boundaries d. individual boundaries e. mandated boundaries

e. mandated boundaries