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BLTS-10E PRACTICE QUIZ
CHAPTER 7: ETHICS AND BUSINESS DECISION MAKING
1. Ethics may be defined as:
a.
b.
c.
d.
The study of voluntary exchange.
The study of what constitutes right and wrong behavior.
The study of psychological phenomena.
The study of beliefs in otherworldly beings.
ANS:
a. Incorrect. This would define trade.
b. Correct. This statement defines the term ethics.
c. Incorrect. We may act for psychological reasons, but the study of
psychological phenomena is a better definition of psychology.
d. Incorrect. Some people may act ethically because of their belief in
otherworldly beings or forces, but the study of such beings and forces is
not a definition for the term ethics.
2. Which of the following actions would NOT be an important factor in setting the
right ethical tone for a company?
a.
b.
c.
d.
Ethical behavior on the part of top management.
Setting realistic goals for employees.
Creating an ethical code of conduct.
Establishing a corporate noncompliance program.
ANS:
a. Incorrect. This action WOULD be an important factor in setting the right
ethical tone in a company.
b. Incorrect. This action WOULD be an important factor in setting the right
ethical tone in a company.
c. Incorrect. This action WOULD be an important factor in setting the right
ethical tone in a company.
d. Correct. A corporate compliance program (not a corporate noncompliance
program) is important in setting the right ethical tone in a company.
3. Which of the following acts requires companies to set up confidential systems
so that employees and others may “raise red flags” about suspected illegal and
unethical auditing and accounting practices?
a. The Enron Espionage Act.
b. The Sarbanes-Oxley Act.
c. The Private Compliance Act.
d. The Litigation of Ethics Act.
ANS:
a. Incorrect. There is no such act.
b. Correct. Companies are required to set up these systems by the
Sarbanes-Oxley Act.
c. Incorrect. There is no such act.
d. Incorrect. There is no such act.
4. With respect to business ethics, the moral minimum is:
a.
b.
c.
d.
Establishing an ethical code.
Compliance with the law.
Looking the other way when an employee behaves unethically.
Instituting ethical training seminars.
ANS:
a. Incorrect. The moral minimum--or the minimum acceptable standard for
ethical business behavior--is legal compliance.
b. Correct. This is the minimum acceptable standard for ethical business
behavior.
c. Incorrect. This practice would encourage, not discourage, unethical
behavior.
d. Incorrect. Instituting such seminars goes beyond what is regarded as the
moral minimum in business--legal compliance.
5. There are two fundamental approaches to ethical reasoning in a business
environment. These are:
a.
b.
c.
d.
The regulatory and the command.
The existentialist and postmodernist.
The rationalist and irrationalist.
The duty-based and the outcome-based.
ANS:
a. Incorrect. Regulatory and command are not fundamental ethical
approaches for businesses.
b. Incorrect. Existential and postmodern philosophical theories have been
popular among academics in the past two decades, but they are not two
fundamental approaches to ethical reasoning in a business environment.
c. Incorrect. While people behave rationally or irrationally, these are not
identified as approaches to ethical reasoning in a business environment.
d. Correct. Duty-based ethics and outcome-based ethics have been the
favored approaches to ethical reasoning in a business environment.
6. Duty-based ethical standards very often derive from:
a.
b.
c.
d.
Civil law codes.
Principles rooted in religion.
Administrative rulings.
Environmental regulations.
ANS:
a. Incorrect. Although the law and morality often overlap, duty-based ethics
do not derive from law; rather, law derives from ethical norms.
b. Correct. Principles rooted in religion provide the basis from which many
duty-based ethical standards are derived.
c. Incorrect. As a kind of positive law, administrative rulings may,
themselves, derive from ethical standards, but the ethical standards do not
derive from the administrative rulings.
d. Incorrect. As with administrative rulings, environmental regulations may
be based on ethical standards, but the standards do not derive from the
regulations.
7. Kant’s “categorical imperative” states that:
a. The morality of an action should be judged by the effects the action would
have if everyone in the same situation or category acted the same way.
b. The morality of an action should be judged on how much happiness it
creates for one person.
c. The morality of an action should be judged on how effective it is at
accomplishing a particular political goal.
d. The morality of an action should be judged solely on its basis in Muslim
law.
ANS:
a. Correct. This summarizes Kant’s categorical imperative.
b. Incorrect. This is not what the “categorical imperative” means.
c. Incorrect. The effectiveness of political programs often has little to do with
the ethics of the program.
d. Incorrect. Though essential for some, an action’s basis in Muslim law is
not essential for Kant’s categorical imperative.
8. A key technique employed by utilitarians to determine the morality of a given
action is:
a. To consult a lawyer.
b. To consult a religious text for a particular rule.
c. To conduct a cost-benefit analysis.
d. To toss a coin.
ANS:
a. Incorrect. A lawyer’s ideas are not a key part of the process.
b. Incorrect. Utilitarians would not be likely to consult religious texts for rules.
c. Correct. Utilitarians will weigh the overall costs of an action against the
expected benefits of the action to determine the merits of the action.
d. Incorrect. Coin-tossing is not a key technique used by utilitarians.
9. The Foreign Corrupt Practices Act would prohibit which of the following
actions?
a. The payment of a relatively small sum of money to a minor official with
ministerial duties.
b. All payments to foreign companies for the purposes of securing a contract.
c. All payments to third parties who help secure a contract in a foreign
country.
d. The bribery of a prime minister of a foreign country to further the chances
that the company paying the bribe will obtain a lucrative government
contract.
ANS:
a. Incorrect. Payments to minor officials in their ministerial capacities are not
illegal.
b. Incorrect. Some payments to foreign companies are not illegal.
c. Incorrect. Some payments to third parties in these situations are not
illegal.
d. Correct. A U.S. company may not bribe most officials of foreign countries
if the purpose of the bribe is to have the foreign official use his or her
influence to help the U.S. company secure a contract.