Business Law Midterm Set 7

Absolute mandates such as the commandment "Thou shalt not steal" can be justifiably broken if there is a benevolent motive.

FALSE

According to German philosopher Immanuel Kant, individuals should evaluate their actions in light of the consequences that would follow if they were the only members of society that acted in that way.

FALSE

Adhering strictly to all business laws is all that is necessary to fulfill all business ethics obligations.

FALSE

Business ethics is not more complicated than personal ethics

FALSE

EthicsPoint is an organization through which employees can report unethical behavior as long as they are willing to identify themselves.

FALSE

Few companies provide any kind of support such as ethical training programs and seminars to make their ethical codes more effective.

FALSE

It is not possible to violate a business regulation without realizing it.

FALSE

Restricting the bonuses that are paid to executives is unethical.

FALSE

Setting realistic workplace goals can increase the probability that employees will act unethically.

FALSE

Stock buybacks are illegal and serve no legitimate purposes.

FALSE

The categorical imperative cannot be applied to many business actions.

FALSE

The legality of an action is always clear.

FALSE

A business firm can sometimes predict whether a given action is legal.

TRUE

A business firm's profits may suffer if the firm is not a "good corporate citizen."

TRUE

According to utilitarianism, an action that affects the majority adversely is morally wrong.

TRUE

According to utilitarianism, it matters how many people suffer a negative effect from an act.

TRUE

Acting in good faith gives a business firm a better chance of defending its actions in court.

TRUE

An action may be legal and ethical

TRUE

An ethics program can clarify what a company considers to be unacceptable conduct.

TRUE

Bribery of foreign government officials is both an ethical and a legal issue.

TRUE

Business ethics focuses on ethical behavior in the business world.

TRUE

Corporations can be good citizens by promoting goals that society deems worthwhile.

TRUE

Corporations can be perceived as owing ethical duties to groups other than their shareholders.

TRUE

Duty-based ethical standards often come from religious precepts or through philosophical reasoning.

TRUE

Ethical codes of conduct can set the ethical tone of a firm.

TRUE

Ethical reasoning is the process through which an individual links his or her moral convictions or ethical standards to the particular situation at hand.

TRUE

Ethics is concerned with the fairness or justness of an action

TRUE

Focusing on a firm's short-term profits without considering the company's long-term needs may be acting unethically.

TRUE

If the interests of different stakeholders conflict, it can be difficult to determine which group's interest should receive greater weight.

TRUE

In ethical terms, a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on individuals

TRUE

Management's behavior sets the ethical tone of a firm.

TRUE

Managers should apply the same ethical standards to themselves and to their employees.

TRUE

Obeying the law does not necessarily fulfill all ethical obligations.

TRUE

Some companies set up confidential systems for employees to "raise red flags" about suspected unethical practices.

TRUE

The main individual beneficiaries of stock buybacks are corporate executives.

TRUE

Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the company knows drives longer hours than federal regulations permit. One night, Garn exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water source, forcing the residents to move away. Flexo acted unethically because a. Flexo showed reckless disregard for Hill City's residents and others. b. Garn exceeded the federal time limit. c. harm was caused by an unfortunate accident. d. Hill City should have better protected its water source.

a. Flexo showed reckless disregard for Hill city's residents and other

Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious ethical standards. With respect to their application, these standards are a. absolute. b. analytical. c. discretionary. d. utilitarian.

a. absolute

In judging her action as a corporate employee of Music Notes Corporation, Brooke always lets her conscience be her guide. As an effective alternative, Brooke could a. ask herself whether she would be happy to be interviewed by the national media about the action. b. consider only the benefits that would accrue to her personally. c. look only at the result, regardless of the means to attain it. d. consider how she would like to have others treat her in a similar situation.

a. ask herself whether she would be happy to be interviewed by the national media about the action.

Straitway Company encourages its managers to behave ethically, reasoning that the employees will take their cues from management. One of the most important ways to create and maintain an ethical behavior workplace is for management to a. demonstrate a commitment to ethical decision making. b. discreetly engage in unethical or illegal acts. c. look the other way when an employee engages in an unethical act. d. direct employees to "do as we say, not as we do."

a. demonstrate a commitment to ethical decision making

In studying the legal environment of business, Professor Dooley's students also review ethics in a business context. Ethics includes the study of what constitutes a. fair or just behavior. b. financially rewarding behavior. c. legal behavior. d. religious behavior.

a. fair or just behavior

Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that Flo-Thru's activities are legal and ethical. The best course for Eden and Flo-Thru is to act in a. good faith. b. ignorance of the law. c. regard for the firm's shareholders only. d. their own self interest.

a. good faith

Bilt-Well Construction Corporation makes a side payment to a government official in Nigeria to obtain a contract. In the United States, this is a. illegal and unethical. b. illegal but not unethical. c. unethical but not illegal. d. legal and ethical.

a. illegal and unethical

Rio Business Corporation pays potential clients, including private foreign companies and the representatives of foreign labor organizations to facilitate business. If Rio knows that the payments will be passed on to a foreign government, this practice is a. illegal if the payments violate the Foreign Corrupt Practices Act. b. legal because a third party acts as a "go-between." c. legal because private parties are involved on both sides of the deal. d. legal because the payments are intended to facilitate business.

a. illegal if the payments violate the Foreign Corrupt Practices Act.

John is sales manager for Kleen 'N Brite Products, Inc. Compared to John's personal activities, his business activities most likely involve a. more complex ethical issues. b. no ethical issues. c. simpler ethical issues. d. the same ethical issues.

a. more complex ethical issues

A common ethical dilemma faced by the management of Spencer Hydraulics Corporation involves the effect that its decision will have on a. one group as opposed to another. b. the firm's competitors. c. the government. d. the U.S. Chamber of Commerce.

a. one group as opposed to another

Julia, the head executive of Fine Woolen Sweaters, Inc., is a committed Christian who strongly adheres to the Ten Commandments. One of Julia's employees is found to be stealing sweaters and giving them to a local homeless shelter. Julia is likely to a. punish the employee for stealing even though the employee's motive was benevolent. b. view the employee's actions as justified because the employee was clothing the poor. c. contribute more sweaters to the homeless shelter. d. gently reprimand the employee without suggesting that the employee's actions were unethical.

a. punish the employee for stealing even though the employee's motive was benevolent.

Carrie Ann works at Paper Products, Inc. She considers taking home a few sheets of stationery so she can write letters to her ailing grandmother. Since Paper Products produces thousands of sheets of stationery every day no one will miss the few sheets she takes and company profits will not be affected. Carrie Ann then considers what would happen if every employee took some stationery home and decides not to take any. Carrie Ann is being influenced by a. the categorical imperative. b. the principle of rights. c. a cost-benefit analysis. d. outcome-based ethics.

a. the categorical imperative

Richard suspects his supervisor of unethical accounting practices. However, he does not want to lose his job if he reports the supervisor and the supervisor finds out who reported him. An important feature of online reporting systems like EthicsPoint is a. the employee reporting the unethical behavior can do so anonymously. b. the employee reporting the unethical behavior is financially compensated if he loses his job as a result of the report. c. the employee reporting the unethical behavior must give his full name when making the report. d. the employee reporting the unethical behavior must have another employee supporting him.

a. the employee reporting the unethical behavior can do so anonymously

Whirlwind Financial Corporation sends its executives to a resort in Mexico—at taxpayers' expense—to consider using the firm's cash to buy back its stock and thereby prop up the value. Many of its competitors are doing the same thing. One of the best ways to learn about the ethical responsibilities inherent in operating a business is to look at a. the mistakes made by other companies. b. the benefits of pursuing profit despite the appearance of impropriety. c. the prevalence of a practice among other corporations. d. who is footing the bill for a particular action.

a. the mistake made by other companies

Hailey, a lawyer on the staff of International Group, always considers the consequences of an action rather than the nature of the action itself when making ethical decisions in a business context. Hailey is applying a. the utilitarian theory of ethics in business contexts. b. religious beliefs in business contexts. c. Kantian ethics in business contexts. d. the principle of rights theory of ethics in business contexts.

a. the utilitarian theory of ethics in business contexts

Ergonomic Corporation convenes its employees for its managers to announce (1) a new company-wide ethical code of conduct, (2) an ad campaign to publicize the new code, and (3) the discharge of employees who do not adhere to the code. One of the most effective ways to set a tone of ethical behavior within a business organization is a. to create an ethical code of conduct. b. todischarge employees who create the appearance of impropriety. c. to post a marketing campaign online touting the firm's ethical tone. d. for management to direct employees to "do as we say, not as we do."

a. to create an ethical code of conduct

Peak & Vale Accountants provides other firms with accounting services.Questions of what is ethical involve the extent to which Peak & Vale has a. a legal duty beyond those duties mandated by ethics. b. an ethical duty beyond those duties mandated by law. c. any duty beyond those mandated by both ethics and the law. d. any duty when it is uncertain whether a legal duty exists.

b. an ethical duty beyond those mandated by law

MeatMen, Inc. spends a great deal of money and effort to ensure that all employees are safe on the job, that all products are safe for consumers, and that the environmental impact of the corporation is minimal. MeatMen appears to strongly believe in the concept of a. the moral minimum. b. corporate social responsibility. c. "grey areas" in the law. d. government oversight.

b. corporate social responsibility

Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate's decision makers can predict whether a given business action would be legal in a. all situations. b. many situations. c. no situations. d. practically no situations.

b. many situations

Margaret is the top manager of Pecans, Inc. She sets strict ethical standards for all employees. Margaret, however, often takes some of the company's best nuts and sells them from her house. The ethical tone at Pecans, Inc. is a. likely to be good because Margaret has set such strict standards for her employees. b. not likely to be good because although Margaret sets strict ethical standards for the other employees, she does not follow them. c. not related to either Margaret's ethical standards or her own unethical behavior. d. not likely to be good because employees tend to resent strict ethical standards.

b. not likely to be good because although Margaret sets strict ethical standards for the other employees, she does not follow them.

Any decision by the management of Fast-Food Franchise Corporation may significantly affect its a. operators only. b. operators, owners, suppliers, the community, or society as a whole. c. owners only. d. suppliers, the community, or society as a whole only.

b. operators, owners, suppliers, the community, or society as a whole.

Lia works for Media Marketing Company. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics consist of a. "bad" versus "good" publicity. b. questions of rightness and wrongness. c. the firm's quarterly revenue. d. whatever is legal.

b. questions of rightness and wrongness

Ryan, the owner of SuperMart Stores, Inc., adheres to the "principle of rights" theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision affects a. the right determination under a cost-benefit analysis. b. the rights of others. c. the "right" thing to do. d. the right to make a profit.

b. the rights of others

Mary works in the public relations department of New Trends Sales Company. Her job includes portraying New Trends's activities in their best light. In this context, ethics consist of a. a different set of principles from those that apply to other activities. b. the same moral principles that apply to non-business activities. c. those principles that produce the most favorable financial outcome. d. whatever saves New Trends's "face."

b. the same moral principles that apply to non-business activities

David, the chief accounting officer of Tension Fencing Corporation, wants to be sure that all the company's accounts are legal and ethical. Sometimes, however, he is unsure exactly what is legal and what is illegal. David should a. not worry about what is legal or illegal as long as the corporate executives benefit in the short run. b. try his best to not do anything illegal and keep documentation showing that he always acts in good faith. c. not worry about what is legal or illegal as long as it benefits the shareholders. d. not worry about what is legal or illegal as long as it benefits the chief executive of the corporation.

b. try his best to not do anything illegal and keep documentation showing that he always acts in good faith

Applied Business Corporation makes and markets its products nationwide. Under the stakeholder approach, to be considered socially responsible when making a business decision, Applied must take into account the needs of a. its consumers, the community, and society only. b. its employees and owners only. c. its employees, owners, consumers, the community, and society. d. no one.

c. its employees, owners, consumers, the community, and society

Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions most likely include all of the following except a. an individual's conscience. b. business rules and procedures. c. loopholes in the law or company policies. d. promises to others.

c. loopholes in the law or company policies

In business deals, Fiona, the chief executive officer of Snacks n' Bites, Inc., follows duty-based ethical standards. These are most likely derived from a. a corporate ethics code. b. a cost-benefit analysis. c. philosophical reasoning. d. the law.

c. philosophical reasoning

Sharon, the human resources director for Tempo Corporation, attempts to comply with the law in dealing with applicants and employees. One of the challenges Sharon faces is that the legality of an action is a. always clear. b. never clear. c. sometimes clear. d. usually clear.

c. sometimes clear

In making business decisions,Glenda, personnel manager for HVAC Maintenance, Inc., applies her belief that all persons have fundamental rights. This is a. a religious rule. b. the categorical imperative. c. the principle of rights. d. utilitarianism.

c. the principle of rights

In deciding questions of corporate social responsibility, Valley Disposal & Recycling, Inc., is concerned with a. how the corporation can best fulfill any ethical duty to society. b. the effect on corporate profits of ignoring any ethical duty to society. c. whether the corporation owes any ethical duty to society. d. all of the choices.

d. all of the choices

Megan is the ethics officer for Nature's Eggs, Inc., an organic egg raising company. In overseeing the application of the company's ethical code of conduct, Megan is most likely not in charge of a. an ethics committee. b. ethical training programs. c. internal ethical audits. d. ethical reviews of employees' family members.

d. ethical reviews of employee' family members

In making a decision as chief executive officer of Straightarrow Archery Supplies, Robin always considers whether he would feel any guilt about a particular action. As a guide, Robin is using a. the categorical imperative. b. internal company policies. c. the law. d. his conscience.

d. his conscience

Bob, research manager for CornAgri Products, Inc., applies utilitarian ethics to determine that an action is morally correct when it produces the greatest good for a. Bob. b. CornAgri. c. the fewest people. d. the most people.

d. the most people

In making decisions for Smartt Investments, Rita uses a cost-benefit analysis. This is a part of a. duty-based ethics. b. Kantian ethics. c. rights-based ethics. d. utilitarian ethics.

d. utilitarian ethics