Business Law – Chapter 2 – Flashcards

Ethics is the study of how people should act.

There is strong evidence that ethical behavior pays off financially for businesses.

Unethical behavior is a bar to financial success.

Society is hurt when business managers behave ethically.

Generally, ethical managers have happier, more satisfying lives.

The behavior of top executives regarding ethical issues has little effect on the behavior of the employees of the organization.

A company that engages in unethical behavior may suffer severe consequences.

Wever, Inc. is considering relocating a facility to Mexico. The interests of the various stakeholders affected by this decision may conflict.

In analyzing a situation to determine how to act ethically, a business manager should:

Zeno, Inc. is considering relocating its manufacturing facility from Illinois to Mexico City. The stakeholders in this decision might include:

Ethics is the study of:

Does ethical behavior maximize profitability?

Why should ethics be a concern to a business?

Which of the following are alternatives with issues of ethics in advertising?

Research has shown that the least important motivation for managers in behaving ethically is:

Why do many major corporations actively encourage ethical behavior?

Unethical behavior in an organization can create:

The observation that "The one and only social responsibility of business is to increase its profits" can be attributed to:

E-presto, Inc. has established an EthicsLine. EthicsLine is a toll-free phone number that employees can call any time of the day, any day of the week to discuses ethics and report suspected unethical or improper conduct. Why would E-presto establish the EthicsLine?

Ethical companies:

Paul decided he did not want the new jeans he had purchased from a large discount department store. He had worn them three times and decided he just did not like them. The jeans fit him fine and there is nothing wrong with them. He takes the jeans back to the store and, as is its policy, the store gave him a full refund of his money. Which statement is correct?

The Chief Executive Officer of Ticor, Inc. must decide about the disposal of toxic waste materials. Which of the following considerations should help the CEO reach an ethical business decision?

Don runs a construction company. He hires people to work on his projects and tells them they are all "independent contractors." Legally, they are not independent contractors since Don tells the workers when to come to work, how long to work, what days to work, what they are to do each day, and so forth. At the end of each week, Don pays his workers in cash rather than with a check. Also, he does not withhold any state, federal or local withholding tax (since he claims the workers are independent contractors). Which statement is correct?

Nortron Corporation wants to create an ethical environment in its company. Which of the following has been found to help foster a sense of ethics within an organization?

Lois is running for political office. She trails the incumbent and decides to start running a series of "attack ads." The attack ads are very effective and one week before the election it appears that she has drawn even with her opponent. Lois admits that the attack ads were exaggerations and contained some distortions. Which statement is correct?

John discovered his company's accountant was "skimming" money from the business. The accountant agreed to pay John a one-time payment of $25,000 not to report the skimming to company officials. The accountant promised she would pay the money back when she could. John accepted the money and never reported what he knew. A year later the accountant was fired when the embezzlement was discovered. She was also prosecuted for theft. The payment to John was never discovered. Which statement is correct?