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Chapter 04
Ethics and Corporate Responsibility
True / False Questions
1. Unethical behavior happens only in a business environment.
True False
2. Employees, organizations, and communities thrive over the long term when managers apply ethical
standards that direct them to act with integrity.
True False
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McGraw-Hill Education.
3. Most people have unconscious biases that favor themselves and their own group.
True False
4. When faced with an ethical issue in business, people must rely on the laws enacted by Congress to decide
what is right or wrong.
True False
5. Unlike utilitarianism, egoism directly seeks the greatest good for the greatest number of people.
True False
6. According to utilitarianism, all people should uphold certain values, such as honesty and other values that
society needs to function.
True False
7. Relativism defines ethical behavior based on the opinions and behaviors of associated people.
True False
8. According to Kohlberg's model of cognitive moral development, people in the conventional stage conform to
the expectations of ethical behavior held by groups or institutions.
True False
9. It is a common perception that business leaders use illegal means to gain competitive advantage or improve
their personal positions.
True False
10. An ethical leader is one who is both a moral person and a moral manager influencing others to behave
ethically.
True False
11. An integrity-based ethics program is designed to instill in people a personal responsibility for ethical
behavior.
True False
12. Moral awareness ends with considering whether a decision has ramifications that disadvantage employees.
True False
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13. Using online platforms that allow anonymous feedback exposes whistleblowers.
True False
14. The economic responsibilities of business include satisfying its obligations to investors.
True False
15. Milton Friedman contended that a business cannot increase its profits while conforming to society's laws and
ethical customs.
True False
16. Business should look at environmental issues as a no-win situation.
True False
17. A company can easily avoid environmental issues since the creation and distribution of wealth generates
very few by-products.
True False
18. Ecocentric management focuses on practices that maximize current economic growth, irrespective of the
potential harm to future generations.
True False
19. Life-cycle analysis (LCA) quantifies the total use of resources and the releases into the air, water, and land.
True False
Multiple Choice Questions
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20. According to Professor Edward Freeman, which of the following is true of ethics and corporate
responsibility?
A. Managers can benefit their organizations only by growing profits.

B. It is not the responsibility of managers to behave ethically when dealing with their stakeholders.
C. Managers can benefit their organizations by growing profits as well as behaving ethically
toward stakeholders.
D. Managers must emphasize ethical behavior toward stakeholders at the cost of growing profits.
E. In business, it is a myth that profits and ethical behavior go hand in hand.
21. _____ refers to the moral principles and standards that guide the behavior of an individual or group.
A. Prioritization
B. Ethics
C. Corporate legitimacy
D. Theology
E. The legal system
22. Caring, being honest, showing loyalty, being fair, and acting with integrity are all examples of:
A. rules.
B. strategies.
C. values.
D. conventions.
E. norms.
23. A situation, problem, or opportunity in which an individual must choose among several actions that must be
evaluated as morally right or wrong is called a(n):
A. ethical standard.
B. ethical issue.
C. business norm.
D. personal right.
E. moral right.
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24. Haseen, an employee in a company, is facing a situation in which she has to choose between going along
with her colleagues and filling out inaccurate feedback against a new employee or informing her manager
about the malpractice. In this context, Haseen is faced with a(n):
A. moral rights issue.

B. ethical issue.
C. diversity issue.
D. corporate social responsibility.
E. human rights violation.
25. The moral principles and standards that guide behavior in the world of business are known as:
A. business norms.
B. business strategies.
C. business goals.
D. business ethics.
E. business politics.
26. _____ refers to the principles, rules, and values people use in deciding what is right or wrong.
A. Corporate legislation
B. Business responsibility
C. Moral philosophy
D. Sustainability index
E. Ecocentric management
27. Diya uses certain principles, rules, and values such as honesty, compassion, and integrity in her daily life to
determine what is right or wrong. Which of the following does she employ when making decisions?
A. Moral philosophy
B. Moral right
C. Business ethics
D. Autocracy
E. Egoism
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28. _____ is an ethical system, which states that all people should uphold certain values that society needs to
function.
A. Egoism
B. Relativism
C. Universalism
D. Ethnocentrism
E. Utilitarianism
29. Two basic ethical ideals underpin the Caux Principles for Business. They are:
A. right and wrong.

B. shinpai suna and corporate social responsibility.
C. profits and pride.
D. kyosei and human dignity.
E. self-fulfillment and happiness.
30. Tia had differences of opinion with her boss, who discriminated against employees based on their ethnicity
and social background. In one instance, her boss falsely accused a member of a minority race of fraud. Tia
took this up to the top management as she believed all members of the organization should uphold some
values for it to function well. Tia was following the ethical system known as:
A. egoism.
B. ethnocentrism.
C. communism.
D. relativism.
E. universalism.
31. According to the Caux Principles for Business, the ethical ideal of kyosei means:
A. deciding what is right by using a set of rules and regulations.

B. being aware of moral situations and acting accordingly.
C. accepting the moral constraints of living in a society.
D. living and working together for the common good.
E. recognizing the intrinsic worth of every human being.
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32. The notion of _____, an ethical system, is similar to Adam Smith's concept of the invisible hand in business.
A. utilitarianism
B. universalism
C. egoism
D. relativism
E. humanitarianism
33. According to _____, an ethical system, individual self-interest is the actual motive of all conscious action.
A. egoism
B. universalism
C. relativism
D. utilitarianism
E. humanitarianism
34. According to the ethical system of utilitarianism, which of the following is true?
A. Some values must always be upheld, regardless of the consequences.

B. Societal rules or customs should be used to mold values.
C. Society will be enhanced if we all take care of ourselves and do not harm others.
D. Individuals might choose between conflicting values by tallying the final results of the various
acts.
E. Seeking the greatest good for the greatest number of people should be the overriding concern
of decision makers.
35. _____, an ethical system, defines ethical behavior based on the opinions and behaviors of associated
people.
A. Egoism
B. Utilitarianism
C. Relativism
D. Universalism
E. Totalitarianism
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36. Nicki usually makes decisions on the basis of what her friends would expect her to do. Which ethical system
do Nicki's actions reflect the most?
A. Egoism
B. Utilitarianism
C. Relativism
D. Universalism
E. Humanitarianism
37. Which ethical system acknowledges the existence of different ethical viewpoints?
A. Relativism
B. Utilitarianism
C. Egoism
D. Universalism
E. Totalitarianism
38. _____, an ethical system, defines ethical behavior according to how others behave.
A. Totalitarianism
B. Relativism
C. Universalism
D. Utilitarianism
E. Egoism
39. In the context of ethical systems, which of the following is true of virtue ethics?
A. It suggests that what is moral comes from what a mature person with good "moral character"
would deem right.
B. It bases ethical behavior on the opinions and behaviors of relevant other people and focuses
on what peers think is right.
C. It states that rights and wrongs cannot be decided by a few good people alone.
D. It implies that individuals have the right to decide what is good for themselves.
E. It holds that individual self-interest is the actual motive of all conscious action.
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40. According to Kohlberg's model of cognitive moral development, people in the _____ stage make decisions
based on concrete rewards and punishments and immediate self-interest.
A. conventional
B. principled
C. preconventional
D. utilitarian
E. universal
41. According to Kohlberg's model of cognitive moral development, people in the _____ stage see beyond
authority, laws, and norms and follow their self-chosen ethical principles.
A. conventional
B. principled
C. preconventional
D. universal
E. postconventional
42. Amelie conforms to the norms established by her church and ensures that her behavior always meets the
expectations set forth by her parents and the church. According to Kohlberg's model of cognitive moral
development, she resides in the _____ stage.
A. utilitarian
B. principled
C. preconventional
D. conventional
E. postconventional
43. Nate, a teenager, helps his grandmother by bringing in her weekly supplies and taking out the garbage, only
if he receives a weekly allowance from his parents. According to Kohlberg's model of cognitive development,
he resides in the _____ stage.
A. conventional
B. principled
C. preconventional
D. postconventional
E. universal
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44. Chang prefers gymnastics to music. However, he agrees to attend music lessons because his parents want
him to become a musician. According to Kohlberg's model of cognitive moral development, Chang resides in
the _____ stage.
A. preconventional
B. universal
C. conventional
D. principled
E. utilitarian
45. Jade, a scientist working in the research department of Corals Cosmetics, is asked to not report the ill-
effects of using a new product that Corals has decided to launch. Jade's boss offers a hike and a permanent
job in exchange for skipping a few details in the report. Jade refuses to do this and asks him to withhold the
product from entering the market. According to Kohlberg's model of cognitive moral development, Jade
resides in the _____ stage.
A. conventional
B. principled
C. preconventional
D. universal
E. postconventional
46. CEO pay packages, wages, antibrand attitudes, and religion at work are some of the _____ that challenge
American managers and employees today.
A. personal issues
B. ethical dilemmas
C. market issues
D. cognitive conflicts
E. business malpractices
47. In the context of business ethics and the law, which of the following statements is true regarding the
Sarbanes-Oxley Act?
A. It was passed by Congress in 1992 to improve consumer satisfaction through quality.

B. It requires companies to strictly adhere to a policy of sustainable development.
C. It was passed by the Congress in response to a series of corporate scandals.
D. It requires organizations to have more company insiders as members of the board of directors.
E. It prohibits senior managers from personally signing off on financial results.
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48. The _____ Act established strict accounting and reporting rules to make senior managers more accountable
and to improve and maintain investor confidence.
A. Securities Exchange
B. Glass-Steagall
C. Commodity Futures Modernization
D. Gramm-Leach-Bliley
E. Sarbanes-Oxley
49. The _____ of an organization refers to the processes by which decisions are evaluated and made on the
basis of right and wrong.
A. distribution policy
B. ethical climate
C. strategic objective
D. legal responsibility
E. span of control
50. Alia, a graphic artist at an advertising firm, realizes that the head designer, Ryan, has been copying designs
from the Internet and passing them off as his own. Alia informs the marketing head about this, which leads
to Ryan getting fired. However, after this event, Alia is ostracized by her co-workers. This indicates that the
organization has a poor:
A. strategic objective.
B. span of control.
C. ethical climate.
D. distribution policy.
E. administrative framework.
51. A company regularly conducts classes in moral philosophy for its employees. In addition, it ensures that
whistleblowers are protected from ostracism or mistreatment. These measures have been specifically taken
to:
A. develop a compliant workforce in the organization.

B. establish an ethnocentric work environment in the organization.
C. increase punitive actions against wrongdoers in the organization.
D. stay away from ethical dilemmas in the organization.
E. create an ethical climate in the organization.
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52. Which of the following may prevent the creation of a business climate conducive to unethical behavior?
A. Excessive emphasis on short-term revenues

B. Failure to establish a written code of ethics
C. A desire for "quick fix" solutions to ethical problems
D. Consideration of ethics solely as a legal issue or a public relations tool
E. Willingness to take an ethical stand that may impose financial costs
53. Which of the following is true of unethical corporate behavior?
A. Unethical corporate behavior is the sole responsibility of unethical individuals.

B. Managers must adhere to firm standards in different cultural contexts rather than decide when
relativism is appropriate.
C. Business ethics are shaped exclusively by laws and by individual development and virtue.
D. Companies with international activities find it easier to maintain a positive ethical climate.
E. Unethical corporate behavior reveals a company culture that is ethically lax.
54. In the context of business ethics, which of the following is true of an ethical leader?
A. An ethical leader lets ethics be managed by benign neglect.

B. An ethical leader has a strong personal character.
C. An ethical leader should solely focus on being a moral manager.
D. An ethical leader is quick to take credit for the accomplishments of his subordinates.
E. An ethical leader places personal interest before the common good of the organization.
55. In the context of business ethics, which of the following statements regarding ethics codes is true?
A. The Sarbanes-Oxley Act requires all private companies to disclose their financial statements.
B. The statements provided by public companies regarding their code of ethics, as required by
the Sarbanes-Oxley Act, are often just for show.
C. Ethical codes focus exclusively on employee conduct and avoid subjects such as the
environment, technology, and political activity.
D. The code of ethics is drawn up by an organization's administrative department.
E. Executives pay most attention to their company's code of ethics when their senior managers
instruct them to do so.
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56. In the context of business ethics, which of the following principles is helpful in making an ethics code
effective?
A. Focusing on punitive action for any wrongdoing or noncompliance

B. Making the code as lengthy as possible so that it covers all possible aspects
C. Writing about high ideals so that people can aspire to live up to them
D. Involving those who have no relationship with the code in writing it in order to maintain
objectivity
E. Focusing on real-life situations that employees can relate to
57. In the context of corporate ethics programs, which of the following is a function of ethics committees?
A. They develop policies, evaluate actions, and investigate violations.

B. They resort to punitive measures to deal with all ethical issues.
C. They take disciplinary action against whistleblowers.
D. They work to cover the unethical acts committed by the organization.
E. They encourage eavesdropping as a means of gathering information about employees.
58. _____ ethics programs are designed by corporate counsel to prevent legal violations.
A. Integrity-based
B. Compliance-based
C. Competency-based
D. Awareness-based
E. Responsibility-based
59. The primary focus of compliance-based ethics programs is on:
A. creating awareness about ethical issues.

B. giving tools to make ethical decisions.
C. detecting and punishing legal violations.
D. increasing individual ethical responsibility.
E. training employees on financially viable methods.
60. Which of the following is true of compliance-based corporate ethics programs?
A. They are designed to instill in people a personal responsibility for ethical behavior.
B. They increase surveillance and controls on people and impose punishments on wrongdoers.
C. They go beyond the mere avoidance of illegality.
D. They help companies and people govern themselves through a set of guiding principles.
E. They are not concerned with the legal repercussions of unethical behavior.
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61. An ethics program that is designed to instill in people a personal responsibility for ethical behavior is called
a(n) _________ ethics program.
A. integrity-based
B. compliance-based
C. rule-based
D. law-based
E. conformity-based
62. A company was required by law to change its physical work environment in such a way so as to enable
disabled people to function properly. Since the company followed a(n) _____ ethics program, it did not stop
at just making changes that would help it stay out of trouble with the law. It went further and trained its
employees to be sensitive toward disabled people.
A. competency-based
B. conformity-based
C. rule-based
D. integrity-based
E. compliance-based
63.Which of the following is true of integrity-based ethics programs in business organizations?
A. They are designed by corporate counsel to prevent, detect, and punish legal violations.
B. They increase surveillance and controls on people and impose punishments on wrongdoers.
C. Companies and people govern themselves through a set of guiding principles that they
embrace.
D. Program elements include establishing and communicating legal standards and procedures.
E. They include assigning high-level managers to ensure compliance among employees.
64. In the context of ethics programs in organizations, programs tend to be better integrated into operations,
thinking, and behavior when:
A. every employee has signed the code of ethics.

B. top management has a personal commitment to responsible ethical behavior.
C. employees see top managers go unpunished for their wrongdoings.
D. managers use punishment to motivate employees to "be good."
E. managers use humiliation and bullying to prevent bad behavior.
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65. In the context of making ethical decisions, knowing what actions are morally defensible is referred to as:
A. moral awareness.
B. moral judgment.
C. moral character.
D. moral right.
E. moral characteristic.
66. Nina, a manager, is considering reducing the workforce to cut down on costs. She realizes that this decision
will have a huge impact on her employees. In the context of making an ethical decision, this stage is known
as:
A. moral certainty.
B. moral ability.
C. moral awareness.
D. moral judgment.
E. moral characterization.
67. In the context of making ethical decisions, the strength and persistence to act in accordance with one's
ethics despite the challenges is known as:
A. moral certainty.
B. moral awareness.
C. moral judgment.
D. moral character.
E. moral actionability.
68. John Rawls, a philosopher, maintained that only a person unaware of his or her own identity can make a
truly ethical decision. This thought experiment is based on:
A. the "sunshine" ethical framework.

B. the concept of a transcendent education.
C. the veil of ignorance.
D. the concept of "strategic philosophy."
E. the "light of day" principle.
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69. A supervisor of a retail outlet is facing an ethical dilemma. She uses the formal process of ethical decision
making to resolve the issue. Which of the following steps will she begin with?
A. Defining the complete moral problem

B. Determining the legal requirements
C. Understanding all the moral standards
D. Proposing a convincing moral solution
E. Evaluating the success of the solution
70. What is the most important purpose of an ethical decision-making process in terms of recognizing moral
impacts?
A. Determining the economic outcomes

B. Considering the legal requirements
C. Evaluating the moral duties
D. Determining the strategic pros and cons
E. Determining the potential media coverage
71. In the context of the business costs of ethical failures, which of the following costs is incurred at Level 3?
A. Employee cynicism cost

B. Administrative and audit cost
C. Cost of remedial education
D. Cost of corrective actions
E. Cost of government oversight
72. In the context of the business costs of ethical failures, Level 1 costs that are less damaging and get more
executive attention are the costs of:
A. government fines and penalties.

B. remedial education.
C. corrective actions.
D. loss of reputation.
E. employee turnover and replacement.
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73. Behaving ethically requires not just moral awareness and moral judgment but also moral character. When it
is very hard to do the right thing, the quality that is required the most is _____.
A. ambiguity
B. compliance
C. conformity
D. courage
E. deference
74. Some organizations have platforms that allow employees to provide anonymous feedback about the work
and behavior of colleagues and seniors. What is the primary purpose of such methods?
A. Environmental preservation
B. Protection of whistleblowers
C. Punitive action against sexual harassers
D. Protection of human rights
E. Increase in workforce diversity
75. Teal Inc., a manufacturer of designer journals and notebooks, switched to using recycled paper to
manufacture its products. It also changed the design such that the book covers and spiral cords used as
spines were not made out of plastic. The changes made by Teal Inc., are an example of:
A. philanthropic responsibility
B. legal responsibility
C. economic responsibility
D. corporate social responsibility
E. shareholder responsibility
76. The _____ responsibilities of business are to produce goods and services that society wants at a price that
perpetuates the business and satisfies its obligations to investors.
A. economic
B. legal
C. ethical
D. political
E. philanthropic
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77. Corporate social responsibility refers to:
A. taking an active role in training employees to be productive.

B. the obligation toward society assumed by businesses.
C. just following the laws that govern the industry in which a company operates.
D. encouraging cost reduction to increase return to investors.
E. maximizing shareholder wealth.
78. In the context of corporate social responsibility, _____ responsibilities are to obey local, state, federal, and
relevant international laws.
A. economic
B. legal
C. moral
D. philanthropic
E. ethical
79. In the context of corporate social responsibility, _____ responsibility involves meeting other societal
expectations that are not written as law.
A. economic
B. legal
C. human rights
D. ethical
E. fiscal
80. Gaia's Spa believes in meeting societal expectations whether or not mandated by law. It only uses organic
products that are environment friendly. At which level of the pyramid of corporate social responsibility is
Gaia's operating?
A. Philanthropic responsibility
B. Legal responsibility
C. Economic responsibility
D. Ethical responsibility
E. Administrative responsibility
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81. In the context of corporate social responsibility, _____ includes additional behaviors and activities that
society finds desirable and that the values of the business support.
A. economic responsibility
C. ethical responsibility
D. philanthropic responsibility
E. political responsibility
82. In the context of corporate social responsibility, supporting community projects and making charitable
contributions are examples of _____.
83. The _____ model is a theory of corporate social responsibility that holds that managers are agents of
stockowners whose primary objective is to maximize profits.
A. philanthropic
B. ethical
C. shareholder
D. customer
E. stakeholder
84. Fire Inc., a sports brand, gives a portion of its profits to the local sports club that offers free coaching to
children from lower income groups. This donation to a community organization is an example of:
A. economic responsibility.
B. legal responsibility.
C. ethical responsibility.
D. philanthropic responsibility.
E. political responsibility.
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85. According to Robert Giacalone, a(n) _____ education teaches students to leave a legacy that extends
beyond the bottom line.
A. business
B. fiscal
C. transcendent
D. cultural
E. mainstream
86. Which of the following goals of transcendent education is described as viewing success not merely as
personal gain but as a common victory?
A. Empathy
B. Generativity
C. Mutuality
D. Civil aspiration
E. Intolerance of ineffective humanity
87. Which of the following is true of Milton Friedman's dictum about the social responsibility of business?
A. Organizations can improve the quality of life so long as their actions are directed at increasing
profits.
B. The responsibilities of an organization are clearly defined by the laws and regulations imposed
upon them.
C. Organizations need to focus primarily on environmental factors to create sustainable growth.
D. The goal of an organization is to satisfy stakeholders despite economic or political conditions.
E. The goal of an organization is to provide customer satisfaction and employee well-being even
at the cost of revenues.
88. Which of the following goals of transcendent education is described as thinking not just in terms of "don'ts"
(lie, cheat, steal, kill), but also in terms of positive contributions?
A. Empathy
B. Generativity
C. Mutuality
D. Intolerance of ineffective humanity
E. Civil aspiration
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89. Which of the following goals of transcendent education is described as speaking out against unethical
actions?
A. Empathy
B. Generativity
C. Mutuality
D. Civil aspiration
90. Who among the following persons said, "The social responsibility of business is to increase profits"?
A. Adam Smith
B. Milton Friedman
C. Benjamin Franklin
D. Thomas Jefferson
E. Robert Giacalone
91. In the context of a transcendent education, _____ refers to learning how to give as well as take, to others in
the present as well as to future generations.
A. generativity
B. empathy
C. mutuality
D. civil aspiration
E. intolerance of ineffective humanity
92. In the context of a transcendent education, _____ refers to feeling one's decisions as potential victims might
feel them, to gain wisdom.
A. empathy
B. generativity
C. mutuality
D. intolerance of ineffective humanity
E. civil aspiration
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93. The goal of _____ is to create sustainable economic development and improve the quality of life worldwide
for all organizational stakeholders.
A. ethnocentric management
B. stonewalling
C. ecocentric management
D. stereotyping
E. egoism
94. Economic growth and development that meet an organization's present needs without harming the ability of
future generations to meet their needs is known as:
A. ethnocentric management.
B. ergonomic development.
C. sustainable growth.
D. ethnocentric growth.
E. legal responsibility.
95. The process of evaluating all inputs and outputs, through the entire "cradle-to-grave" journey of a product, in
order to determine the total environmental impact of its production and use is known as:
A. life cycle analysis.

B. cost benefit analysis.
C. ethnocentric management.
D. compliance building.
E. ergonomic development.
Essay Questions
96. In the context of business ethics, discuss the ethical system of universalism.
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97. Describe Kohlberg's model of cognitive moral development.
98. What are some of the danger signs that an organization may be encouraging unethical behavior?
99. Explain the thought experiment created by John Rawls based on the "veil of ignorance," using an example
to show how a decision maker can tactically apply this concept to minimize personal bias.
100.Describe the four levels of corporate social responsibility.
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101.Discuss ecocentric management and sustainable growth.
Use the information given below to answer the following three questions: A paint manufacturer,
Blink Corp., faces an ethical question. There has been a problem with the ingredients used in the
last batch of paint that has been dispatched. They suspect that a toxic chemical could have been
used in the production of the non-toxic product line recommended for play schools and hospitals.
The production head along with the marketing head and quality supervisor need to decide
Scenario A quickly on whether they should report the error and pull back the products before they reach the
market. Nate, the production head, wants to report the error to the senior management because
he is worried about his job should the information about a cover-up be leaked. Lila wants to
report the error because it is the right thing to do, and the health of customers and children are at
stake. After hearing the opinion of his colleagues, Keith says he wants to report the error as well
because he prefers to agree with the consensus.
102.Which ethical system does Nate use in his decision making?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism
103.Which ethical system does Lila use to make her decision?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism
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104.Which ethical system does Keith use to guide him in his decision making?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism
Use the information given below to answer the following three questions:
A sales manager, Jordon, is facing an ethical situation wherein his bicycle company that
specializes in mountain bikes sold a bicycle with a defective component. If he informs the
Scenario B.
customer and issues a recall, it would cost him a substantial amount of money. If the bike
malfunctions, it could cause serious injury to the cyclist who might use it on rough terrain. His
colleagues have suggested three options:
Option 1: Remaining silent about the defect
Option 2: Reviewing company policy, industry practices, and advice from experts
Option 3: Disclosing the defect and suggesting alternatives to eliminate the risk of injury
105.Which ethical approach is illustrated by Option 1?
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Life-cycle analysis
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Universalism
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Universalism
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Scenario C.
108.The processes by which decisions are evaluated and made on the basis of right and wrong in a company
refers to its:
A. distribution channel.
B. ethical climate.
C. legal responsibility.
D. organizational dynamics.
E. corporate code.
109.Which type of ethics program does Neil prefer for the company?
A. Associate-based
B. Compliance-based
C. Integrity-based
D. Systems-based
E. Consensus-based
110.On the basis of Zoe's response, which type of ethics program does she prefer?
A. Associate-based
B. Compliance-based
C. Integrity-based
D. Systems-based
E. Consensus-based
Scenario D.
111.In the context of the four levels of corporate social responsibility, the shareholders' concerns would best be
described as the _____ of Ink Corp.
A. sustainability responsibility
B. virtual responsibility
C. philanthropic responsibility
E. economic responsibility
4-26
112.In the context of the four levels of corporate social responsibility, Natalie believes they can benefit by
increasing the work hours without an increase in pay because the _____ in the host countries may be less.
B. ethical responsibility
113.In the context of the four levels of corporate social responsibility, Ahmed's concerns can be best described
as the _____ of Ink Corp.
A. environmental responsibility
4-27
Chapter 04 Ethics and Corporate Responsibility Answer Key
True / False Questions
1. Unethical behavior happens only in a business environment.
FALSE
Unethical behavior can happen anywhere not just in business. It occurs when police officers “take care of
parking tickets” so friends and family members do not have to pay fines.
AACSB: Ethics
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium
Learning Objective: 04-01 Describe how different ethical perspectives guide managerial decision making.
Topic: Ethics and Corporate Responsibility
2. Employees, organizations, and communities thrive over the long term when managers apply ethical
standards that direct them to act with integrity.
TRUE
Ethics is the moral principles and standards that guide the behavior of an individual or group. Employees,
organizations, and communities thrive over the long term when managers apply ethical standards that
direct them to act with integrity.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-28
3. Most people have unconscious biases that favor themselves and their own group.
TRUE
Most people have unconscious biases that favor themselves and their own group. For example,
managers often hire people who are like them, think they are immune to conflicts of interest, take more
credit than they deserve, and blame others when they deserve some blame themselves.
AACSB: Ethics
Blooms: Understand
4. When faced with an ethical issue in business, people must rely on the laws enacted by Congress to
decide what is right or wrong.
FALSE
Ethical issues arise in every facet of life. Moral philosophy refers to the principles, rules, and values
people use in deciding what is right or wrong. This seems to be a simple definition but often becomes
terribly complex and difficult when facing real choices.
AACSB: Ethics
Blooms: Understand
Topic: Five Perspectives Shape Your Ethics
5. Unlike utilitarianism, egoism directly seeks the greatest good for the greatest number of people.
FALSE
According to egoism, individual self-interest is the actual motive of all conscious action. Unlike egoism,
utilitarianism directly seeks the greatest good for the greatest number of people.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-29
6. According to utilitarianism, all people should uphold certain values, such as honesty and other values
that society needs to function.
FALSE
Utilitarianism is an ethical system, which states that the greatest good for the greatest number should be
the overriding concern of decision makers. According to universalism, all people should uphold certain
values, such as honesty and other values that society needs to function.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
7. Relativism defines ethical behavior based on the opinions and behaviors of associated people.
TRUE
Relativism defines ethical behavior based on the opinions and behaviors of relevant other people.
Relativism acknowledges the existence of different ethical viewpoints. For example, norms, or standards
of expected and acceptable behavior, vary from one culture to another.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
8. According to Kohlberg's model of cognitive moral development, people in the conventional stage conform
to the expectations of ethical behavior held by groups or institutions.
TRUE
Kohlberg's model of cognitive moral development classifies people into categories based on their level of
moral judgment. People in the conventional stage conform to the expectations of ethical behavior held by
groups or institutions such as society, family, or peers.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-30
9. It is a common perception that business leaders use illegal means to gain competitive advantage or
improve their personal positions.
TRUE
Insider trading, illegal campaign contributions, bribery and kickbacks, famous court cases, and other
scandals have created a perception that business leaders use illegal means to gain competitive
advantage, increase profits, or improve their personal positions.
AACSB: Ethics
Blooms: Remember
Learning Objective: 04-02 Identify the ethics-related issues and laws facing managers.
Topic: Business Ethics Matter
10. An ethical leader is one who is both a moral person and a moral manager influencing others to behave
ethically.
TRUE
An ethical leader needs to be both a moral person and a moral manager to influence others to behave
ethically.
AACSB: Ethics
Blooms: Remember
Learning Objective: 04-03 Explain how managers influence their ethics environment.
Topic: Managers Shape Behavior
11. An integrity-based ethics program is designed to instill in people a personal responsibility for ethical
behavior.
TRUE
Integrity-based ethics programs go beyond the mere avoidance of illegality; they are concerned with the
law but also with instilling in people a personal responsibility for ethical behavior. With such a program,
companies and people govern themselves through a set of guiding principles that they embrace.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-31
12. Moral awareness ends with considering whether a decision has ramifications that disadvantage
employees.
FALSE
Moral awareness begins with considering whether a decision has ramifications that disadvantage
employees, the environment, or other stakeholders. Then the challenge is to apply moral judgment.
AACSB: Ethics
Blooms: Understand
Learning Objective: 04-04 Outline the process for making ethical decisions.
Topic: You Can Learn To Make Ethical Decisions
13. Using online platforms that allow anonymous feedback exposes whistleblowers.
FALSE
Besides online reporting systems, such as e-mail and web-based tools, companies can use drop boxes
and telephone hotlines. Often these channels of communication are administered by third-party
organizations, whose employees protect whistleblowers' identity and have procedures to follow if the
complaint involves higher-level executives who might be part of the usual group charged with responding
to reports.
AACSB: Ethics
Blooms: Understand
14. The economic responsibilities of business include satisfying its obligations to investors.
TRUE
The economic responsibilities of business are to produce goods and services that society wants at a
price that perpetuates the business and satisfies its obligations to investors. Economic responsibility may
also extend to offering certain products to needy consumers at a reduced price.
AACSB: Ethics
Blooms: Understand
Learning Objective: 04-05 Summarize the important issues surrounding corporate social responsibility.
Topic: Corporate Social Responsibility
4-32
15. Milton Friedman contended that a business cannot increase its profits while conforming to society's laws
and ethical customs.
FALSE
Milton Friedman, the Nobel Prize–winning economist of the University of Chicago is known for his now-
famous dictum “The social responsibility of business is to increase profits.” Friedman contended that
organizations may help improve the quality of life as long as such actions are directed at increasing
profits. In addition, the context of Friedman’s famous statement includes the qualifier that business
should increase its profits while conforming to society’s laws and ethical customs.
AACSB: Ethics
Blooms: Understand
16. Business should look at environmental issues as a no-win situation.
FALSE
Business used to look at environmental issues as a no-win situation: either you help the environment and hurt your business
companies "go green" to satisfy consumer demand, react to a competitor's actions, meet requests from customers or supplie
AACSB: Ethics
Blooms: Understand
Learning Objective: 04-06 Discuss the growing importance of managing the natural environment.
Topic: The Natural Environment
17. A company can easily avoid environmental issues since the creation and distribution of wealth generates
very few by-products.
FALSE
The creation and distribution of wealth generate by-products that can cause injury, loss, or danger to
people and the environment. The fundamental sources of risk in modern society are the excessive
production of hazards and ecologically unsustainable consumption of natural resources.
AACSB: Ethics
Blooms: Understand
4-33
18. Ecocentric management focuses on practices that maximize current economic growth, irrespective of the
potential harm to future generations.
FALSE
Ecocentric management has as its goal the creation of sustainable economic development and
improvement of quality of life worldwide for all organizational stakeholders.
AACSB: Ethics
Blooms: Understand
19. Life-cycle analysis (LCA) quantifies the total use of resources and the releases into the air, water, and
land.
TRUE
Life cycle analysis (LCA) is a process of analyzing all inputs and outputs, through the entire "cradle-to-
grave" life of a product, to determine the total environmental impact of its production and use. LCA
quantifies the total use of resources and the releases into the air, water, and land. Multiple Choice
Questions
AACSB: Ethics
Blooms: Understand
4-34
20. According to Professor Edward Freeman, which of the following is true of ethics and corporate
responsibility?
A. Managers can benefit their organizations only by growing profits.

B. It is not the responsibility of managers to behave ethically when dealing with their
stakeholders.
C. Managers can benefit their organizations by growing profits as well as behaving ethically
toward stakeholders.
D. Managers must emphasize ethical behavior toward stakeholders at the cost of growing
profits.
E. In business, it is a myth that profits and ethical behavior go hand in hand.
Professor Edward Freeman, an early champion of stakeholder theory, and business and academic
thought leaders from the Business Roundtable Institute for Corporate Ethics at the University of Virginia
believe that managers benefit their organizations not only by growing profits, but also by behaving
ethically when dealing with individuals and groups (known as stakeholders) that interact with their
organizations.
AACSB: Ethics
Blooms: Remember
21. _____ refers to the moral principles and standards that guide the behavior of an individual or group.
A. Prioritization
B. Ethics
C. Corporate legitimacy
D. Theology
E. The legal system
Ethics refers to the moral principles and standards that guide the behavior of an individual or group.
Employees, their organizations, and their communities thrive over the long term when managers apply
ethical standards that direct them to act with integrity.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-35
22. Caring, being honest, showing loyalty, being fair, and acting with integrity are all examples of:
A. rules.
B. strategies.
C. values.
D. conventions.
E. norms.
Values are principles of conduct such as caring, being honest, keeping promises, pursuing excellence,
showing loyalty, being fair, acting with integrity, respecting others, and being a responsible citizen.
AACSB: Ethics
Blooms: Remember
23. A situation, problem, or opportunity in which an individual must choose among several actions that must
be evaluated as morally right or wrong is called a(n):
A. ethical standard.
B. ethical issue.
C. business norm.
D. personal right.
E. moral right.
Ethics becomes a more complicated issue when a situation dictates that one value overrules others. An
ethical issue is a situation, problem, or opportunity in which an individual must choose among several
actions that must be evaluated as morally right or wrong.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-36
24. Haseen, an employee in a company, is facing a situation in which she has to choose between going
along with her colleagues and filling out inaccurate feedback against a new employee or informing her
manager about the malpractice. In this context, Haseen is faced with a(n):
A. moral rights issue.

B. ethical issue.
C. diversity issue.
D. corporate social responsibility.
E. human rights violation.
In this case, Haseen is faced with an ethical issue. Ethics becomes a more complicated issue when a
situation dictates that one value overrules others. An ethical issue is a situation, problem, or opportunity
in which an individual must choose among several actions that must be evaluated as morally right or
wrong.
AACSB: Reflective Thinking

Blooms: Apply
Difficulty: 3 Hard
25. The moral principles and standards that guide behavior in the world of business are known as:
A. business norms.
B. business strategies.
C. business goals.
D. business ethics.
E. business politics.
Business ethics comprises the moral principles and standards that guide behavior in the world of
business.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-37
26. _____ refers to the principles, rules, and values people use in deciding what is right or wrong.
A. Corporate legislation
B. Business responsibility
C. Moral philosophy
D. Sustainability index
E. Ecocentric management
Moral philosophy refers to the principles, rules, and values people use in deciding what is right or wrong.
This seems to be a simple definition but often becomes terribly complex and difficult when facing real
choices.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
27. Diya uses certain principles, rules, and values such as honesty, compassion, and integrity in her daily life
to determine what is right or wrong. Which of the following does she employ when making decisions?
A. Moral philosophy
B. Moral right
C. Business ethics
D. Autocracy
E. Egoism
Diya employs moral philosophy when making decisions. Moral philosophy refers to the principles, rules,
and values people use in deciding what is right or wrong. This seems to be a simple definition but often
becomes terribly complex and difficult when facing real choices.

Blooms: Apply
Difficulty: 3 Hard
4-38
28._____ is an ethical system, which states that all people should uphold certain values that society needs to
function.
A. Egoism
B. Relativism
C. Universalism
D. Ethnocentrism
E. Utilitarianism
Universalism is the ethical system stating that all people should uphold certain values that society needs to
function. Universal values are principles so fundamental to human existence that they are important in all
societies-for example, rules against murder, deceit, torture, and oppression.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
29. Two basic ethical ideals underpin the Caux Principles for Business. They are:
A. right and wrong.

B. shinpai suna and corporate social responsibility.
C. profits and pride.
D. kyosei and human dignity.
E. self-fulfillment and happiness.
The Caux Roundtable, a group of international executives based in Caux, Switzerland, worked with
business leaders from Japan, Europe, and the United States to create the Caux Principles for Business.
Two basic ethical ideals underpin the Caux Principles: kyosei and human dignity.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-39
30. Tia had differences of opinion with her boss, who discriminated against employees based on their
ethnicity and social background. In one instance, her boss falsely accused a member of a minority race
of fraud. Tia took this up to the top management as she believed all members of the organization should
uphold some values for it to function well. Tia was following the ethical system known as:
A. egoism.
B. ethnocentrism.
C. communism.
D. relativism.
E. universalism.
Tia was following the ethical system known as universalism. According to universalism, all people should
uphold certain values, such as honesty and other values that society needs to function. Universal values
are principles so fundamental to human existence that they are important in all societies-for example,
rules against murder, deceit, torture, and oppression.

Blooms: Apply
Difficulty: 3 Hard
31. According to the Caux Principles for Business, the ethical ideal of kyosei means:
A. deciding what is right by using a set of rules and regulations.

B. being aware of moral situations and acting accordingly.
C. accepting the moral constraints of living in a society.
D. living and working together for the common good.
E. recognizing the intrinsic worth of every human being.
Two basic ethical ideals underpin the Caux Principles: kyosei and human dignity. Kyosei means living
and working together for the common good, allowing cooperation and mutual prosperity to coexist with
healthy and fair competition.
AACSB: Ethics
Blooms: Remember
4-40
32. The notion of _____, an ethical system, is similar to Adam Smith's concept of the invisible hand in
business.
A. utilitarianism
B. universalism
C. egoism
D. relativism
E. humanitarianism
According to egoism, individual self-interest is the actual motive of all conscious action. "Doing the right
thing," the focus of moral philosophy, is defined by egoism as "do the act that promotes the greatest
good for oneself." If everyone follows this system, according to its proponents, the well-being of society
as a whole should increase. This notion is similar to Adam Smith's concept of the invisible hand in
business.
AACSB: Ethics
Blooms: Remember
33. According to _____, an ethical system, individual self-interest is the actual motive of all conscious action.
A. egoism
B. universalism
C. relativism
D. utilitarianism
E. humanitarianism
According to egoism, individual self-interest is the actual motive of all conscious action. "Doing the right
thing," the focus of moral philosophy, is defined by egoism as do the act that promotes the greatest good
for oneself.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-41
34. According to the ethical system of utilitarianism, which of the following is true?
A. Some values must always be upheld, regardless of the consequences.

B. Societal rules or customs should be used to mold values.
C. Society will be enhanced if we all take care of ourselves and do not harm others.
D. Individuals might choose between conflicting values by tallying the final results of the
various acts.
E. Seeking the greatest good for the greatest number of people should be the overriding
concern of decision makers.
Utilitarianism is an ethical system, which states that the greatest good for the greatest number should be
the concern of decision makers.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
35. _____, an ethical system, defines ethical behavior based on the opinions and behaviors of associated
people.
A. Egoism
B. Utilitarianism
C. Relativism
D. Universalism
E. Totalitarianism
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-42
36. Nicki usually makes decisions on the basis of what her friends would expect her to do. Which ethical
system do Nicki's actions reflect the most?
A. Egoism
B. Utilitarianism
C. Relativism
D. Universalism
E. Humanitarianism
Nicki's actions reflect relativism. Relativism defines ethical behavior based on the opinions and behaviors
of relevant other people. Relativism acknowledges the existence of different ethical viewpoints. For
example, norms, or standards of expected and acceptable behavior, vary from one culture to another.

Blooms: Apply
Difficulty: 3 Hard
37. Which ethical system acknowledges the existence of different ethical viewpoints?
A. Relativism
B. Utilitarianism
C. Egoism
D. Universalism
E. Totalitarianism
AACSB: Ethics
Blooms: Remember
4-43
38. _____, an ethical system, defines ethical behavior according to how others behave.
A. Totalitarianism
B. Relativism
C. Universalism
D. Utilitarianism
E. Egoism
Relativism defines ethical behavior according to how others behave. It acknowledges the existence of
different ethical viewpoints.
AACSB: Ethics
Blooms: Remember
39. In the context of ethical systems, which of the following is true of virtue ethics?
A. It suggests that what is moral comes from what a mature person with good "moral
character" would deem right.
B. It bases ethical behavior on the opinions and behaviors of relevant other people and
focuses on what peers think is right.
C. It states that rights and wrongs cannot be decided by a few good people alone.
D. It implies that individuals have the right to decide what is good for themselves.
E. It holds that individual self-interest is the actual motive of all conscious action.
Virtue ethics is a perspective that goes beyond the conventional rules of society by suggesting that what
is moral must also come from what a mature person with good "moral character" would deem right.
AACSB: Ethics
Blooms: Remember
4-44
40. According to Kohlberg's model of cognitive moral development, people in the _____ stage make
decisions based on concrete rewards and punishments and immediate self-interest.
A. conventional
B. principled
C. preconventional
D. utilitarian
E. universal
moral judgment. People in the preconventional stage make decisions based on concrete rewards and
punishments and immediate self-interest.
AACSB: Ethics
Blooms: Remember
41. According to Kohlberg's model of cognitive moral development, people in the _____ stage see beyond
authority, laws, and norms and follow their self-chosen ethical principles.
A. conventional
B. principled
C. preconventional
D. universal
E. postconventional
moral judgment. People in the principled stage see beyond authority, laws, and norms and follow their
self-chosen ethical principles.
AACSB: Ethics
Blooms: Remember
4-45
42. Amelie conforms to the norms established by her church and ensures that her behavior always meets
the expectations set forth by her parents and the church. According to Kohlberg's model of cognitive
moral development, she resides in the _____ stage.
A. utilitarian
B. principled
C. preconventional
D. conventional
E. postconventional
moral judgment. People in the conventional stage conform to the expectations of ethical behavior held by
groups or institutions such as society, family, or peers.
AACSB: Ethics
Blooms: Apply
Difficulty: 3 Hard
43. Nate, a teenager, helps his grandmother by bringing in her weekly supplies and taking out the garbage,
only if he receives a weekly allowance from his parents. According to Kohlberg's model of cognitive
development, he resides in the _____ stage.
A. conventional
B. principled
C. preconventional
D. postconventional
E. universal
According to Kohlberg's model cognitive moral development, Nate resides in the preconventional stage.
People in the preconventional stage make decisions based on concrete rewards and punishments and
immediate self-interest.

Blooms: Apply
Difficulty: 3 Hard
4-46
44. Chang prefers gymnastics to music. However, he agrees to attend music lessons because his parents
want him to become a musician. According to Kohlberg's model of cognitive moral development, Chang
resides in the _____ stage.
A. preconventional
B. universal
C. conventional
D. principled
E. utilitarian
According to Kohlberg’s model cognitive moral development, Chang resides in the conventional stage.
People in the conventional stage conform to the expectations of ethical behavior held by groups or
institutions such as society, family, or peers.

Blooms: Apply
Difficulty: 3 Hard
45. Jade, a scientist working in the research department of Corals Cosmetics, is asked to not report the ill-
effects of using a new product that Corals has decided to launch. Jade's boss offers a hike and a
permanent job in exchange for skipping a few details in the report. Jade refuses to do this and asks him
to withhold the product from entering the market. According to Kohlberg's model of cognitive moral
development, Jade resides in the _____ stage.
A. conventional
B. principled
C. preconventional
D. universal
E. postconventional
According to Kohlberg's model cognitive moral development, Jade resides in the principled stage. People
in the principled stage see beyond authority, laws, and norms and follow their self-chosen ethical
principles.

Blooms: Apply
Difficulty: 3 Hard
4-47
46. CEO pay packages, wages, antibrand attitudes, and religion at work are some of the _____ that
challenge American managers and employees today.
A. personal issues
B. ethical dilemmas
C. market issues
D. cognitive conflicts
E. business malpractices
Brands, CEO pay, commercialism in schools, religion at work, sweatshops, and wages are just a few of
the dilemmas challenging managers and employees today.
AACSB: Ethics
Blooms: Remember
47. In the context of business ethics and the law, which of the following statements is true regarding the
Sarbanes-Oxley Act?
A. It was passed by Congress in 1992 to improve consumer satisfaction through quality.

B. It requires companies to strictly adhere to a policy of sustainable development.
C. It was passed by the Congress in response to a series of corporate scandals.
D. It requires organizations to have more company insiders as members of the board of
directors.
E. It prohibits senior managers from personally signing off on financial results.
Responding to a series of corporate scandals-particularly the high-profile cases of Enron and WorldCom-
Congress passed the Sarbanes-Oxley Act in 2002 to improve and maintain investor confidence. The law
requires companies to have more independent board directors, adhere strictly to accounting rules, and
have senior managers personally sign off on financial results.
AACSB: Ethics
Blooms: Remember
4-48
48. The _____ Act established strict accounting and reporting rules to make senior managers more
accountable and to improve and maintain investor confidence.
A. Securities Exchange
B. Glass-Steagall
C. Commodity Futures Modernization
D. Gramm-Leach-Bliley
E. Sarbanes-Oxley
The Sarbanes-Oxley Act is an act that established strict accounting and reporting rules to make senior
managers more accountable and to improve and maintain investor confidence.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
49. The _____ of an organization refers to the processes by which decisions are evaluated and made on the
basis of right and wrong.
A. distribution policy
B. ethical climate
C. strategic objective
E. span of control
Ethics are not shaped only by laws and by individual development and virtue. They also may be influenced by the company'
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-49
50. Alia, a graphic artist at an advertising firm, realizes that the head designer, Ryan, has been copying
designs from the Internet and passing them off as his own. Alia informs the marketing head about this,
which leads to Ryan getting fired. However, after this event, Alia is ostracized by her co-workers. This
indicates that the organization has a poor:
A. strategic objective.
B. span of control.
C. ethical climate.
D. distribution policy.
E. administrative framework.
In this scenario, the incident suggests that the organization has a poor ethical climate. Ethics are not
shaped only by laws and by individual development and virtue. They also may be influenced by the
company's work environment. The ethical climate of an organization refers to the processes by which
decisions are evaluated and made on the basis of right and wrong.

Blooms: Apply
Difficulty: 3 Hard
51. A company regularly conducts classes in moral philosophy for its employees. In addition, it ensures that
whistleblowers are protected from ostracism or mistreatment. These measures have been specifically
taken to:
A. develop a compliant workforce in the organization.

B. establish an ethnocentric work environment in the organization.
C. increase punitive actions against wrongdoers in the organization.
D. stay away from ethical dilemmas in the organization.
E. create an ethical climate in the organization.
Ethics are not shaped only by laws and by individual development and virtue. They also may be
influenced by the company's work environment. The ethical climate of an organization refers to the
processes by which decisions are evaluated and made on the basis of right and wrong.

Blooms: Apply
Difficulty: 3 Hard
4-50
52. Which of the following may prevent the creation of a business climate conducive to unethical behavior?
A. Excessive emphasis on short-term revenues

B. Failure to establish a written code of ethics
C. A desire for "quick fix" solutions to ethical problems
D. Consideration of ethics solely as a legal issue or a public relations tool
E. Willingness to take an ethical stand that may impose financial costs
Some of the factors that create a climate conducive to unethical behavior include excessive emphasis on
short-term revenues over longer-term considerations; failure to establish a written code of ethics; desire
for simple, "quick fix" solutions to ethical problems; unwillingness to take an ethical stand that may
impose financial costs.
AACSB: Ethics
Blooms: Remember
53.Which of the following is true of unethical corporate behavior?
A. Unethical corporate behavior is the sole responsibility of unethical individuals.

B. Managers must adhere to firm standards in different cultural contexts rather than decide when
relativism is appropriate.
C. Business ethics are shaped exclusively by laws and by individual development and virtue.
D. Companies with international activities find it easier to maintain a positive ethical climate.
E. Unethical corporate behavior reveals a company culture that is ethically lax.
Unethical corporate behavior may be the responsibility of an unethical individual, but it often also reveals a
company culture that is ethically lax. Maintaining a positive ethical climate is always challenging, but it is
especially complex for organizations with international activities.
AACSB: Ethics
Blooms: Understand
4-51
54. In the context of business ethics, which of the following is true of an ethical leader?
A. An ethical leader lets ethics be managed by benign neglect.

B. An ethical leader has a strong personal character.
C. An ethical leader should solely focus on being a moral manager.
D. An ethical leader is quick to take credit for the accomplishments of his subordinates.
E. An ethical leader places personal interest before the common good of the organization.
When you are both personally moral and a moral manager, you will truly be an ethical leader. Managers
can have strong personal character, but if they pay more attention to other things, and ethics is
"managed" by "benign neglect", then they won't have a reputation as an ethical leader.
AACSB: Ethics
Blooms: Understand
55. In the context of business ethics, which of the following statements regarding ethics codes is true?
A. The Sarbanes-Oxley Act requires all private companies to disclose their financial
statements.
B. The statements provided by public companies regarding their code of ethics, as required
by the Sarbanes-Oxley Act, are often just for show.
C. Ethical codes focus exclusively on employee conduct and avoid subjects such as the
environment, technology, and political activity.
D. The code of ethics is drawn up by an organization's administrative department.
E. Executives pay most attention to their company's code of ethics when their senior
managers instruct them to do so.
The Sarbanes-Oxley Act requires that public companies periodically disclose whether they have adopted
a code of ethics for senior financial officers-and if not, why not. Often the statements are just for show,
but when implemented well, they can change a company's ethical climate for the better and truly
encourage ethical behavior.
AACSB: Ethics
Blooms: Understand
4-52
56. In the context of business ethics, which of the following principles is helpful in making an ethics code
effective?
A. Focusing on punitive action for any wrongdoing or noncompliance

B. Making the code as lengthy as possible so that it covers all possible aspects
C. Writing about high ideals so that people can aspire to live up to them
D. Involving those who have no relationship with the code in writing it in order to maintain
objectivity
E. Focusing on real-life situations that employees can relate to
To make an ethics code effective, it is important to involve those who have to live with the code in writing
it; focus on real-life situations that employees can relate to; keep it short and simple, so it is easy to
understand and remember; write about values and shared beliefs that are important and that people can
really believe in; set the tone at the top, having executives talk about and live up to the statement.
AACSB: Ethics
Blooms: Remember
57. In the context of corporate ethics programs, which of the following is a function of ethics committees?
A. They develop policies, evaluate actions, and investigate violations.

B. They resort to punitive measures to deal with all ethical issues.
C. They take disciplinary action against whistleblowers.
D. They work to cover the unethical acts committed by the organization.
E. They encourage eavesdropping as a means of gathering information about employees.
Corporate ethics programs commonly include formal ethics codes articulating the company's
expectations regarding ethics; ethics committees that develop policies, evaluate actions, and investigate
violations; ethics communication systems giving employees a means of reporting problems or getting
guidance; ethics officers or ombudspersons who investigate allegations and provide education; ethics
training programs; and disciplinary processes for addressing unethical behavior.
AACSB: Ethics
Blooms: Remember
4-53
58. _____ ethics programs are designed by corporate counsel to prevent legal violations.
A. Integrity-based
B. Compliance-based
C. Competency-based
D. Awareness-based
E. Responsibility-based
Compliance-based ethics programs are designed by corporate counsel to prevent, detect, and punish
legal violations. Compliance-based programs increase surveillance and controls on people and impose
punishments on wrongdoers.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
59. The primary focus of compliance-based ethics programs is on:
A. creating awareness about ethical issues.

B. giving tools to make ethical decisions.
C. detecting and punishing legal violations.
D. increasing individual ethical responsibility.
E. training employees on financially viable methods.
legal violations.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-54
60. Which of the following is true of compliance-based corporate ethics programs?
A. They are designed to instill in people a personal responsibility for ethical behavior.
B. They increase surveillance and controls on people and impose punishments on
wrongdoers.
C. They go beyond the mere avoidance of illegality.
D. They help companies and people govern themselves through a set of guiding principles.
E. They are not concerned with the legal repercussions of unethical behavior.
legal violations. Compliance-based programs increase surveillance and controls on people and impose
punishments on wrongdoers.
AACSB: Ethics
Blooms: Understand
61. An ethics program that is designed to instill in people a personal responsibility for ethical behavior is
called a(n) _________ ethics program.
A. integrity-based
B. compliance-based
C. rule-based
D. law-based
E. conformity-based
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-55
62. A company was required by law to change its physical work environment in such a way so as to enable
disabled people to function properly. Since the company followed a(n) _____ ethics program, it did not
stop at just making changes that would help it stay out of trouble with the law. It went further and trained
its employees to be sensitive toward disabled people.
A. competency-based
B. conformity-based
C. rule-based
D. integrity-based
E. compliance-based
AACSB: Ethics
Blooms: Understand
63. Which of the following is true of integrity-based ethics programs in business organizations?
A. They are designed by corporate counsel to prevent, detect, and punish legal violations.
B. They increase surveillance and controls on people and impose punishments on
wrongdoers.
C. Companies and people govern themselves through a set of guiding principles that they
embrace.
D. Program elements include establishing and communicating legal standards and
procedures.
E. They include assigning high-level managers to ensure compliance among employees.
Integrity-based ethics programs go beyond the mere avoidance of illegality; they are concerned with the law but also with ins
AACSB: Ethics
Blooms: Understand
4-56
64. In the context of ethics programs in organizations, programs tend to be better integrated into operations,
thinking, and behavior when:
A. every employee has signed the code of ethics.

B. top management has a personal commitment to responsible ethical behavior.
C. employees see top managers go unpunished for their wrongdoings.
D. managers use punishment to motivate employees to "be good."
E. managers use humiliation and bullying to prevent bad behavior.
When top management has a personal commitment to responsible ethical behavior, programs tend to be
better integrated into operations, thinking, and behavior.
AACSB: Ethics
Blooms: Remember
65. In the context of making ethical decisions, knowing what actions are morally defensible is referred to as:
A. moral awareness.
B. moral judgment.
C. moral character.
D. moral right.
E. moral characteristic.
Making ethical decisions takes three things. They are moral awareness-realizing the issue has ethical
implications; moral judgment-knowing what actions are morally defensible; moral character-the strength
and persistence to act in accordance with your ethics despite the challenges.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-57
66. Nina, a manager, is considering reducing the workforce to cut down on costs. She realizes that this
decision will have a huge impact on her employees. In the context of making an ethical decision, this
stage is known as:
A. moral certainty.
B. moral ability.
C. moral awareness.
D. moral judgment.
E. moral characterization.
AACSB: Ethics
Blooms: Understand
67. In the context of making ethical decisions, the strength and persistence to act in accordance with one's
ethics despite the challenges is known as:
A. moral certainty.
B. moral awareness.
C. moral judgment.
D. moral character.
E. moral actionability.
AACSB: Ethics
Blooms: Remember
4-58
68. John Rawls, a philosopher, maintained that only a person unaware of his or her own identity can make a
truly ethical decision. This thought experiment is based on:
A. the "sunshine" ethical framework.

B. the concept of a transcendent education.
C. the veil of ignorance.
D. the concept of "strategic philosophy."
E. the "light of day" principle.
The philosopher John Rawls created a thought experiment based on the 'veil of ignorance.' Rawls
maintained that only a person ignorant of his or her own identity can make a truly ethical decision. A
decision maker can tactically apply the veil of ignorance to help minimize personal bias.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
69. A supervisor of a retail outlet is facing an ethical dilemma. She uses the formal process of ethical
decision making to resolve the issue. Which of the following steps will she begin with?
A. Defining the complete moral problem

B. Determining the legal requirements
C. Understanding all the moral standards
D. Proposing a convincing moral solution
E. Evaluating the success of the solution
A process for ethical decision making begins with understanding all the moral standards and recognizing
all moral impacts.
AACSB: Ethics
Blooms: Remember
4-59
70. What is the most important purpose of an ethical decision-making process in terms of recognizing moral
impacts?
A. Determining the economic outcomes

B. Considering the legal requirements
C. Evaluating the moral duties
D. Determining the strategic pros and cons
E. Determining the potential media coverage
Evaluating ethical duties is the most important purpose of recognizing moral impacts. Recognizing all
moral impacts includes benefits to some, harms to others, rights exercised, and rights denied.
AACSB: Ethics
Blooms: Remember
71. In the context of the business costs of ethical failures, which of the following costs is incurred at Level 3?
A. Employee cynicism cost

B. Administrative and audit cost
C. Cost of remedial education
D. Cost of corrective actions
E. Cost of government oversight
In the context of the business costs of ethical failures, Level 3 costs include customer defections, loss of
reputation, employee cynicism, lost employee morale, employee turnover, government cynicism, and
government regulation.
AACSB: Ethics
Blooms: Remember
4-60
72. In the context of the business costs of ethical failures, Level 1 costs that are less damaging and get more
executive attention are the costs of:
A. government fines and penalties.

B. remedial education.
C. corrective actions.
D. loss of reputation.
E. employee turnover and replacement.
In the context of the business costs of ethical failures, Level 1 costs include government fines and
penalties.
AACSB: Ethics
Blooms: Remember
73. Behaving ethically requires not just moral awareness and moral judgment but also moral character.
When it is very hard to do the right thing, the quality that is required the most is _____.
A. ambiguity
B. compliance
C. conformity
D. courage
E. deference
Behaving ethically requires not just moral awareness and moral judgment but also moral character,
including the courage to take actions consistent with your ethical decisions.
AACSB: Ethics
Blooms: Remember
4-61
74. Some organizations have platforms that allow employees to provide anonymous feedback about the
work and behavior of colleagues and seniors. What is the primary purpose of such methods?
A. Environmental preservation
B. Protection of whistleblowers
C. Punitive action against sexual harassers
D. Protection of human rights
E. Increase in workforce diversity
The primary purpose of such methods is protection of whistleblowers. The system also provides early
warnings in case of problems and maintains an overall culture of valuing ethics.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
75. Teal Inc., a manufacturer of designer journals and notebooks, switched to using recycled paper to
manufacture its products. It also changed the design such that the book covers and spiral cords used as
spines were not made out of plastic. The changes made by Teal Inc., are an example of:
A. philanthropic responsibility
C. economic responsibility
D. corporate social responsibility
E. shareholder responsibility
The changes made by Teal Inc., are an example of corporate social responsibility. This is the obligation
toward society assumed by the business. A socially responsible business maximizes its positive effects
on society and minimizes its negative effects.

Blooms: Apply
Difficulty: 3 Hard
4-62
76. The _____ responsibilities of business are to produce goods and services that society wants at a price
that perpetuates the business and satisfies its obligations to investors.
A. economic
B. legal
C. ethical
D. political
E. philanthropic
price that perpetuates the business and satisfies its obligations to investors.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
77. Corporate social responsibility refers to:
A. taking an active role in training employees to be productive.

B. the obligation toward society assumed by businesses.
C. just following the laws that govern the industry in which a company operates.
D. encouraging cost reduction to increase return to investors.
E. maximizing shareholder wealth.
Corporate social responsibility refers to the obligation toward society assumed by businesses.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-63
78. In the context of corporate social responsibility, _____ responsibilities are to obey local, state, federal,
and relevant international laws.
A. economic
B. legal
C. moral
D. philanthropic
E. ethical
Legal responsibilities are to obey local, state, federal, and relevant international laws.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
79. In the context of corporate social responsibility, _____ responsibility involves meeting other societal
expectations that are not written as law.
A. economic
B. legal
C. human rights
D. ethical
E. fiscal
Ethical responsibilities involve meeting other societal expectations, not written as law.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-64
80. Gaia's Spa believes in meeting societal expectations whether or not mandated by law. It only uses
organic products that are environment friendly. At which level of the pyramid of corporate social
responsibility is Gaia's operating?
A. Philanthropic responsibility
B. Legal responsibility
C. Economic responsibility
D. Ethical responsibility
E. Administrative responsibility
Gaia's is operating at the ethical level of corporate social responsibility. Ethical responsibilities include
meeting other societal expectations, not written as law, and doing what is expected by global
stakeholders.

Blooms: Apply
Difficulty: 3 Hard
81. In the context of corporate social responsibility, _____ includes additional behaviors and activities that
society finds desirable and that the values of the business support.
Philanthropic responsibilities are additional behaviors and activities that society finds desirable and the
values that the business supports.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-65
82. In the context of corporate social responsibility, supporting community projects and making charitable
contributions are examples of _____.
Philanthropic responsibilities are additional behaviors and activities that society finds desirable and that
the values of the business support. Examples include supporting community projects and making
charitable contributions.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
83. The _____ model is a theory of corporate social responsibility that holds that managers are agents of
stockowners whose primary objective is to maximize profits.
A. philanthropic
B. ethical
C. shareholder
D. customer
E. stakeholder
The shareholder model is a theory of corporate social responsibility that holds that managers are agents
of shareholders whose primary objective is to maximize profits.
AACSB: Ethics
Blooms: Remember
4-66
84. Fire Inc., a sports brand, gives a portion of its profits to the local sports club that offers free coaching to
children from lower income groups. This donation to a community organization is an example of:
A. economic responsibility.
B. legal responsibility.
C. ethical responsibility.
D. philanthropic responsibility.
E. political responsibility.
Philanthropic responsibility are additional behaviors and activities that society finds desirable and that the
values of the business support, such as supporting community projects and making charitable
contributions.

Blooms: Apply
Difficulty: 3 Hard
85. According to Robert Giacalone, a(n) _____ education teaches students to leave a legacy that extends
beyond the bottom line.
A. business
B. fiscal
C. transcendent
D. cultural
E. mainstream
Robert Giacalone, who teaches business ethics at Temple University, believes that a 21st-century
education must help students think beyond self-interest and profitability. A real education, he says,
teaches students to leave a legacy that extends beyond the bottom line-a transcendent education.
AACSB: Ethics
Blooms: Remember
4-67
86. Which of the following goals of transcendent education is described as viewing success not merely as
personal gain but as a common victory?
A. Empathy
B. Generativity
C. Mutuality
D. Civil aspiration
A transcendent education has five higher goals that balance self-interest with responsibility to others.
They are empathy-feeling your decisions as potential victims might feel them, to gain wisdom;
generativity-learning how to give as well as take, to others in the present as well as to future generations;
mutuality-viewing success not merely as personal gain, but a common victory; civil aspiration-thinking not
just in terms of "don'ts" (lie, cheat, steal, kill), but also in terms of positive contributions; intolerance of
ineffective humanity-speaking out against unethical actions.
AACSB: Ethics
Blooms: Remember
87. Which of the following is true of Milton Friedman's dictum about the social responsibility of business?
A. Organizations can improve the quality of life so long as their actions are directed at
increasing profits.
B. The responsibilities of an organization are clearly defined by the laws and regulations
imposed upon them.
C. Organizations need to focus primarily on environmental factors to create sustainable
growth.
D. The goal of an organization is to satisfy stakeholders despite economic or political
conditions.
E. The goal of an organization is to provide customer satisfaction and employee well-being
even at the cost of revenues.
Milton Friedman, the Nobel Prize-winning economist of the University of Chicago states in his now-
famous dictum. "The social responsibility of business is to increase profits." Friedman contended that
organizations may help improve the quality of life as long as such actions are directed at increasing
profits.
AACSB: Ethics
Blooms: Remember
4-68
88. Which of the following goals of transcendent education is described as thinking not just in terms of
"don'ts" (lie, cheat, steal, kill), but also in terms of positive contributions?
A. Empathy
B. Generativity
C. Mutuality
D. Intolerance of ineffective humanity
E. Civil aspiration
AACSB: Ethics
Blooms: Remember
89. Which of the following goals of transcendent education is described as speaking out against unethical
actions?
A. Empathy
B. Generativity
C. Mutuality
D. Civil aspiration
AACSB: Ethics
Blooms: Remember
4-69
90. Who among the following persons said, "The social responsibility of business is to increase profits"?
A. Adam Smith
B. Milton Friedman
C. Benjamin Franklin
D. Thomas Jefferson
E. Robert Giacalone
Milton Friedman, the Nobel Prize-winning economist of the University of Chicago, said. "The social
responsibility of business is to increase profits."
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
91. In the context of a transcendent education, _____ refers to learning how to give as well as take, to others
in the present as well as to future generations.
A. generativity
B. empathy
C. mutuality
D. civil aspiration
E. intolerance of ineffective humanity
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-70
92. In the context of a transcendent education, _____ refers to feeling one's decisions as potential victims
might feel them, to gain wisdom.
A. empathy
B. generativity
C. mutuality
D. intolerance of ineffective humanity
E. civil aspiration
AACSB: Ethics
Blooms: Remember
93. The goal of _____ is to create sustainable economic development and improve the quality of life
worldwide for all organizational stakeholders.
A. ethnocentric management
B. stonewalling
C. ecocentric management
D. stereotyping
E. egoism
improvement of quality of life worldwide for all organizational stakeholders.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
4-71
94. Economic growth and development that meet an organization's present needs without harming the ability
of future generations to meet their needs is known as:
A. ethnocentric management.
B. ergonomic development.
C. sustainable growth.
D. ethnocentric growth.
E. legal responsibility.
Sustainable growth is economic growth and development that meet the organization's present needs
without harming the ability of future generations to meet their needs.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
95. The process of evaluating all inputs and outputs, through the entire "cradle-to-grave" journey of a
product, in order to determine the total environmental impact of its production and use is known as:
A. life cycle analysis.

B. cost benefit analysis.
C. ethnocentric management.
D. compliance building.
E. ergonomic development.
Life cycle analysis (LCA) is a process of analyzing all inputs and outputs, through the entire "cradle-to-
grave" life of a product, to determine the total environmental impact of its production and use. Essay
Questions
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Essay Questions
4-72
96. In the context of business ethics, discuss the ethical system of universalism.
According to universalism, all people should uphold certain values, such as honesty and other values
that society needs to function. Universal values are principles so fundamental to human existence that
they are important in all societies-for example, rules against murder, deceit, torture, and oppression.
Some efforts have been made to establish global, universal ethical principles for business. The Caux
Roundtable, a group of international executives based in Caux, Switzerland, worked with business
leaders from Japan, Europe, and the United States to create the Caux Principles for Business. Two basic
ethical ideals underpin the Caux Principles: kyosei and human dignity. Kyosei means living and working
together for the common good, allowing cooperation and mutual prosperity to coexist with healthy and
fair competition. Human dignity concerns the value of each person as an end, not a means to the
fulfillment of othersâ€™ purposes. Research conducted by the Institute for Global Ethics identified five
core ethical values that are found in all human cultures, including truthfulness, responsibility, fairness,
respectfulness, and compassion. Universal principles can be powerful and useful, but what people say,
hope, or think they would do is often different from what they really do, faced with conflicting demands in
real situations.
AACSB: Ethics
Blooms: Remember
97. Describe Kohlberg's model of cognitive moral development.
moral judgment. People in the preconventional stage make decisions based on concrete rewards and
punishments and immediate self-interest. People in the conventional stage conform to the expectations
of ethical behavior held by groups or institutions such as society, family, or peers. People in the
principled stage see beyond authority, laws, and norms and follow their self-chosen ethical principles.
Some people forever reside in the preconventional stage, some move into the conventional stage, and
some develop even further into the principled stage. Over time, and through education and experience,
people may change their values and ethical behavior. The last stage is the principled stage wherein
people make decisions based on self-chosen ethical principles.
AACSB: Analytic
Blooms: Remember
4-73
98. What are some of the danger signs that an organization may be encouraging unethical behavior?
In organizations, maintaining consistent ethical behavior by all employees is an ongoing challenge. Many
factors, including the following, create a climate conducive to unethical behavior. They include excessive
emphasis on short-term revenues over longer-term considerations; failure to establish a written code of
ethics; desire for simple, "quick fix" solutions to ethical problems; unwillingness to take an ethical stand
that may impose financial costs; consideration of ethics solely as a legal issue or a public relations tool;
lack of clear procedures for handling ethical problems; responsiveness to the demands of shareholders
at the expense of other constituencies.
AACSB: Ethics
Blooms: Remember
99. Explain the thought experiment created by John Rawls based on the "veil of ignorance," using an
example to show how a decision maker can tactically apply this concept to minimize personal bias.
The philosopher John Rawls created a thought experiment based on the "veil of ignorance." Imagine a
manager is making a decision about a policy that will benefit or disadvantage some groups more than
others. For example, a policy might provide extra vacation time for all employees but eliminate flex time,
which allows parents of young children to balance their work and family responsibilities. Or, one is a
university president considering raising tuition or cutting financial support for study abroad. Now, pretend
that the manager belongs to one of the affected groups, but doesn’t know which one-for instance, those
who can afford to study abroad or those who can't, or a young parent or a young single person. It
wouldn’t be possible to find out until after the decision is made. How would the manager then decide?
Would she or he be willing to risk being in the disadvantaged group? Would the decision be different if
she or he were in a group other than her or his own? Rawls maintained that only a person ignorant of his
or her own identity can make a truly ethical decision. A decision maker can tactically apply the veil of
ignorance to help minimize personal bias.
AACSB: Ethics
Blooms: Remember
4-74
100. Describe the four levels of corporate social responsibility.
Social responsibilities can be categorized specifically. The economic responsibilities of business are to
produce goods and services that society wants at a price that perpetuates the business and satisfies its
obligations to investors. Economic responsibility may also extend to offering certain products to needy
consumers at a reduced price. Legal responsibilities are to obey local, state, federal, and relevant
international laws. Ethical responsibilities include meeting other societal expectations, not written as law.
Finally, philanthropic responsibilities are additional behaviors and activities that society finds desirable
and that the values of the business support. Philanthropic activities can be more than mere altruism;
managed properly, â€œstrategic philanthropyâ€� can become not an oxymoron but a way to build
goodwill in a variety of stakeholders and even add to shareholder wealth.
AACSB: Analytic
Blooms: Understand
101. Discuss ecocentric management and sustainable growth.
improvement of quality of life worldwide for all organizational stakeholders. Sustainable growth is
economic growth and development that meet the organization’s present needs without harming the
ability of future generations to meet their needs. Sustainability is fully compatible with the natural
ecosystems that generate and preserve life. Some believe that the concept of sustainable growth can be
applied in several ways. For instance, it could be applied as a framework for organizations to use in
communicating to all stakeholders, as a planning and strategy guide, or as a tool for evaluating and
improving the ability to compete. The principle can begin at the highest organizational levels and be
made explicit in performance appraisals and reward systems.
AACSB: Analytic
Blooms: Remember
4-75
Use the information given below to answer the following three questions: A paint m
Scenario A for play schools and hospitals. The production head along with the marketing head
information about a cover-up be leaked. Lila wants to report the error because it is
102. Which ethical system does Nate use in his decision making?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism
According to egoism , individual self-interest is the actual motive of all conscious action. “Doing the right
thing,” the focus of moral philosophy, is defined by egoism as "do the act that promotes the greatest
good for oneself." If everyone follows this system, according to its proponents, the well-being of society
as a whole should increase.

Blooms: Apply
Difficulty: 3 Hard
103. Which ethical system does Lila use to make her decision?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism
According to universalism, all people should uphold certain values, such as honesty and other values
that society needs to function.

Blooms: Apply
Difficulty: 3 Hard
4-76
104. Which ethical system does Keith use to guide him in his decision making?
A. Universalism
B. Egoism
C. Utilitarianism
D. Relativism
E. Conventionalism

Blooms: Apply
Difficulty: 3 Hard
Use the information given below to answer the following three questions
Scenario B. A sales manager, Jordon, is facing an ethical situation wherein his bicyc
rough terrain. His colleagues have suggested three options:
Option 1: Remaining silent about the defect
Option 2: Reviewing company policy, industry practices, and advice from
Option 3: Disclosing the defect and suggesting alternatives to eliminate
105. Which ethical approach is illustrated by Option 1?
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Life-cycle analysis
According to egoism, individual self-interest is the actual motive of all conscious action. “Doing the right
thing,” the focus of moral philosophy, is defined by egoism as “do the act that promotes the greatest
good for oneself.”

Blooms: Apply
Difficulty: 3 Hard
4-77
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Universalism
Relativism is a philosophy that bases ethical behavior on the opinions and behaviors of relevant other
people.

Blooms: Apply
Difficulty: 3 Hard
A. Egoism
B. Utilitarianism
C. Relativism
D. Virtue ethics
E. Universalism
Virtue ethics is a perspective that goes beyond the conventional rules of society by suggesting that what
is moral must also come from what a mature person with good “moral character” would deem right.

Blooms: Apply
Difficulty: 3 Hard
4-78
Scenario C.
108. The processes by which decisions are evaluated and made on the basis of right and wrong in a company
refers to its:
A. distribution channel.
B. ethical climate.
C. legal responsibility.
D. organizational dynamics.
E. corporate code.
The ethical climate of an organization refers to the processes by which decisions are evaluated and
made on the basis of right and wrong.

Blooms: Apply
109. Which type of ethics program does Neil prefer for the company?
A. Associate-based
B. Compliance-based
C. Integrity-based
D. Systems-based
E. Consensus-based
legal violations.

Blooms: Apply
Difficulty: 3 Hard
4-79
110. On the basis of Zoe's response, which type of ethics program does she prefer?
A. Associate-based
B. Compliance-based
C. Integrity-based
D. Systems-based
E. Consensus-based
law but also with instilling in people a personal responsibility for ethical behavior.

Blooms: Apply
Difficulty: 3 Hard
Scenario D.
111. In the context of the four levels of corporate social responsibility, the shareholders' concerns would best
be described as the _____ of Ink Corp.
B. virtual responsibility
price that perpetuates the business and satisfies its obligations to investors.

Blooms: Apply
Difficulty: 3 Hard
4-80
112. In the context of the four levels of corporate social responsibility, Natalie believes they can benefit by
increasing the work hours without an increase in pay because the _____ in the host countries may be
less.
Legal responsibilities are to obey local, state, federal, and relevant international laws.

Blooms: Apply
Difficulty: 3 Hard
113. In the context of the four levels of corporate social responsibility, Ahmed's concerns can be best
described as the _____ of Ink Corp.
A. environmental responsibility
Ethical responsibilities include meeting other societal expectations, not written as law.

Blooms: Apply
Difficulty: 3 Hard
4-81

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Ethics and Corporate Responsibility

True / False Questions

1. Unethical behavior happens only in a business environment.

16. Business should look at environmental issues as a no-win situation.

Multiple Choice Questions

A. Managers can benefit their organizations only by growing profits.

A. moral rights issue.

A. right and wrong.

A. deciding what is right by using a set of rules and regulations.

A. Some values must always be upheld, regardless of the consequences.

A. It was passed by Congress in 1992 to improve consumer satisfaction through quality.

A. develop a compliant workforce in the organization.

A. Excessive emphasis on short-term revenues

53. Which of the following is true of unethical corporate behavior?

A. Unethical corporate behavior is the sole responsibility of unethical individuals.

A. An ethical leader lets ethics be managed by benign neglect.

A. Focusing on punitive action for any wrongdoing or noncompliance

A. They develop policies, evaluate actions, and investigate violations.

59. The primary focus of compliance-based ethics programs is on:

A. creating awareness about ethical issues.

60. Which of the following is true of compliance-based corporate ethics programs?

63.Which of the following is true of integrity-based ethics programs in business organizations?

A. every employee has signed the code of ethics.

A. the "sunshine" ethical framework.

A. Defining the complete moral problem

A. Determining the economic outcomes

A. Employee cynicism cost

A. government fines and penalties.

A. taking an active role in training employees to be productive.

A. life cycle analysis.

100.Describe the four levels of corporate social responsibility.

Multiple Choice Questions

103.Which ethical system does Lila use to make her decision?

106.Which ethical approach is illustrated by Option 2?

107.Which ethical approach is illustrated by Option 3?

True / False Questions

1. Unethical behavior happens only in a business environment.

16. Business should look at environmental issues as a no-win situation.

Multiple Choice Questions

A. Managers can benefit their organizations only by growing profits.

A. moral rights issue.

AACSB: Reflective Thinking

AACSB: Reflective Thinking

A. right and wrong.

AACSB: Reflective Thinking

A. deciding what is right by using a set of rules and regulations.

A. Some values must always be upheld, regardless of the consequences.

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

AACSB: Reflective Thinking

A. It was passed by Congress in 1992 to improve consumer satisfaction through quality.

AACSB: Reflective Thinking

A. develop a compliant workforce in the organization.

AACSB: Reflective Thinking