Test Answers on Chapter 2

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Business ethics refers to principles and standards that define acceptable conduct in business organizations.
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TRUE
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Ethics and social responsibility mean the same thing.
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FALSE
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Nearly all business decisions may be judged as right or wrong, ethical or unethical.
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TRUE
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The most basic ethical concerns have been formalized through laws and regulations that encourage conformity to society’s values and norms
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TRUE
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Business ethics are the same as legal issues.
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FALSE
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Only corporations have to worry about ethics scandals and social responsibility issues
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FALSE
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Which of the following statements about business ethics is false?
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It concerns the impact of a business’s activities on society.
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Studying business ethics will not necessarily
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tell you what you ought to do.
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Ethical violations destroy
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Trust
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The Sarbanes-Oxley Act was passed to
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help restore confidence in Corporate America.
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Which of the following have been cited as incidents of unethical business activity recently?
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Unfair competitive practices in the computer industry. Deceptive advertising of medicines and toys. Accounting fraud. Deceptive advertising of food products.
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Which of the following statements is false?
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Ethical issues are limited to for-profit organizations.
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An ethical issue is an identifiable problem, situation, or opportunity that requires a person or organization to choose from among several actions that may be evaluated as ethical or unethical.
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TRUE
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The best way to judge the ethics of a decision is to look at it from a manager’s or employee’s point of view.
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FALSE
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The size of the transaction, the history of personal relationships within the particular company, and many other factors may determine whether a customer gift will be judged as ethical.
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TRUE
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Conflicts of interest are payments, gifts, or special favors intended to influence the outcome of a decision.
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FALSE
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Ethics is related to the culture in which a business operates.
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TRUE
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Workplace bullying is an increasing problem.
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TRUE
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Which of the following is not considered unethical behavior in the workplace?
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Using your cell phone to make a doctor’s appointment during your lunch break
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In the United States, if a businessperson brought an elaborately wrapped gift to a prospective client on their first meeting, it might be viewed as
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a bribe
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If a corporate manager makes a decision that results in personal financial benefit while the company’s owners lose financially, this is an ethical issue related to
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conflicts of interest.
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If the owner of a toy store seeking a price reduction gives the manager of a toy manufacturing company a new personal computer, the toy-store owner is using which approach to influence the manufacturer’s decision making?
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Bribery
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A supplier of a component part has offered Karen’s family a free two-week cruise if his firm gets a very large order from Karen’s company. The most ethical course of action for Karen to take would be to
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politely turn it down and discuss the offer with her boss.
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That businesspeople are expected not to harm customers, clients, and competitors knowingly through deception, misrepresentation, coercion, or discrimination is part of
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fairness and honesty.
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When the video game marketer Nintendo was investigated for allegedly raising prices excessively during the Christmas buying season and thereby manipulating the supply of games available at that time, this was an ethical issue concerned primarily with
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fairness and honesty.
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When Kellogg changed the name of its Heartwise cereal to Fiberwise, it was in response to growing concern from the public and the government about unsubstantiated health claims. The primary area of ethical concern in this case was questionable
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communications.
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The Surgeon General’s warning on cigarette packages about the health implications of smoking is an example of which of the following ethical issues?
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Communications
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The following behavior is an example of ethical consideration within business relationships:
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keeping company secrets.
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If a manager pressures a subordinate to engage in activities that he or she may otherwise view as unethical, such as accounting fraud or stealing a competitor’s secrets, there exists an ethical issue related to
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business relationships.
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If an employee learned of a significant cost-saving idea from a coworker and then informed management of the idea without revealing its true source, then the employee would be involved in
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plagiarism.
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Establishing and enforcing ethical standards and policies within business can help reduce unethical behavior by prescribing which activities are acceptable and which are not and by removing the opportunity to act unethically.
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TRUE
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Without a code of ethics or formal policy on ethics, employees are likely to base their decisions on how their peers and superiors behave.
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TRUE
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Codes of ethics foster ethical behavior because they expand the opportunity to behave unethically.
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FALSE
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Ethical decisions in an organization are influenced by three key factors.
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TRUE
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Codes of ethics are formalized rules and standards that describe what the company expects of its employees.
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TRUE
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A set of formalized rules and standards that describe what a company expects of its employees is called a(n)
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code of ethics.
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What occurs when an employee exposes an employer’s wrongdoing to outsiders?
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Whistleblowing
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Codes of ethics foster ethical behavior by
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limiting the opportunity to behave unethically by providing punishments for violations of the rules and standards.
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Unethical behavior in business can be reduced if management does all of the following except
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depend totally on employees’ personal ethics.
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According to the text, ethical decisions in an organization are influenced by (1) individual moral standards, (2) the influence of managers and co-workers, and (3)
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opportunity codes and compliance requirements.
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Which of the following should help reduce the incidence of unethical behavior in an organization?
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Understanding that individual moral standards, the influence of managers and coworkers, and opportunity influence ethical behavior
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The concept of social responsibility is universally accepted.
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FALSE
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The dimensions of social responsibility include economic, legal, ethical, and voluntary responsibilities.
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TRUE
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Increasingly, consumers are choosing not to patronize businesses that receive negative publicity concerning misconduct.
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TRUE
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Corporate citizenship is the extent to which businesses meet the legal, ethical, economic, and voluntary responsibilities placed on them by their owners.
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FALSE
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Voluntary responsibilities are optional activities that promote human welfare or goodwill.
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TRUE
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Being profitable relates to which social responsibility dimension?
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Economic
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Which of the following is not one of the dimensions of social responsibility?
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Altruistic
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Philanthropic contributions made by a business to a charitable organization represent which dimension of social responsibility?
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Voluntary
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Consumers vote against firms they view as socially irresponsible by not
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buying the company’s products.
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Studies have found a direct link between social responsibility and _________ in business
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Profitability
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Managers consider social responsibility on an annual basis.
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FALSE
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Recycling is a business response to employee issues.
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FALSE
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The right to safety requires that businesses provide a safe place for consumers to shop.
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TRUE
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A major social responsibility for business is providing equal opportunities for all employees.
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TRUE
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One way companies are helping consumers contribute to social causes is through offering some products at higher prices, the extra money going to global charities
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TRUE
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In addressing social responsibility, managers must consider their firms’ relations with
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employees. owners. customers. the community.
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Managers consider social responsibility
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on a daily basis
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All of the following are arguments against social responsibility except
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businesses have the financial resources to help society.
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All of the following are arguments in favor of social responsibility except
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businesses may lose their focus on profit-making.
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Businesses must first be responsible to
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owners
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A business’s responsibilities to its owners and investors include
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protecting the owners’ rights and investments. maintaining proper accounting procedures. providing all relevant information about current and projected performance of the firm. maximizing their investment in the firm.
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Many of the laws regulating safety in the workplace are enforced by
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OSHA
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The activities that independent individuals, groups, and organizations undertake to protect their rights as consumers are known as
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consumerism.
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Writing letters to companies, making public service announcements, lobbying government agencies, and boycotting irresponsible companies are activities involved with which social responsibility issue?
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Consumer relations
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Which right assures the fair treatment of consumers who voice complaints about a purchased product?
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The right to be heard
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The assurance of satisfactory quality and service at a fair price is part of a consumer’s right to
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choose
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Which of the following is not highlighted in John F. Kennedy’s 1962 consumer bill of rights?
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The right to minimum prices
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One of the most important things companies can do to curb global warming is reduce greenhouse gas emissions. Of the options below, which is NOT a good way to reduce daily carbon and greenhouse gas output?
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keeping the air conditioner running all summer long
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Cosmetic and drug testing on animals is a primary concern under which social responsibility issue?
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Environmental issues
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Which of the following is not an area of environmental concern in society today?
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The hard-core unemployed
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Which of the following is not an area of environmental concern in society today?
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The hard-core unemployed
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Which of the following is not an area of environmental concern in society today?
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The hard-core unemployed

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