BUSINESS ETHICS MCQs

Which
statement
does not
correctly
reflects the
free market
view of
business
social
responsibility?
In addition to making a profit, businesses are just as responsible for seeing to
A) the well-being of their employees and the communities in which they operate
No one other than the managers and owners of a business may claim to have
B) any stake in the business decisions managers make.
In the process of providing goods and services to customer who need and want
C) them and maximizing profits for its shareowners, a business fulfills its social
responsibility
A business is responsible for maximizing profits for its shareowners, but, in
D) special circumstances, may have to sacrifice profits in the interest of the
community whose citizens depend on it for employment.

2 Which of the following statements is decisive in determining whether or not to study business
ethics?
Business managers don’t need to study ethics in order to know how to treat
A) employees, shareowners, and customers.
Business and ethics simply don’t mix. In the final analysis, self-interest
B) represented by profit overrides the interests of employees, customers, and
communities. Opinion and sentiment get in the way of efficient business
decision-making.
Ethical concerns are as unavoidable in business as are concerns of marketing,
C) accounting, finance, and human resources. Formal study of business ethics
helps address these concerns so that decisions of right and wrong may be
made deliberately. and conscientiously
The answers to ethical questions are clear-cut enough; all business people
D) already know right from wrong.

3 Which statement correctly describes the relationship between philosophical ethics and ethos?
Individuals who obey the conventions, mores, and rules of their cultures are
A) already acting ethically. No further philosophical reflection is required.
Philosophical ethics distinguishes what people do value from what they should
B) value.
What people do value and should value are, for all practical purposes, the
C) same.
Philosophical ethics is too abstract to be useful in everyday life situations.
D) Following the mores and customs of one’s culture is a more dependable way to
make moral decisions.
2

4 Identify the statement that is consistent with utilitarian ethical theory:

Adhering to a set of principles may well forbid an act that would otherwise
A) provide overall net good consequences.
No act is ever morally right or wrong in all cases, in every situation. It will all
B) depend on the act's consequences.
Some actions like murder, theft, rape, and lying are wrong of their very nature,
the kind of acts they are. No amount of net good consequences could ever justify
C) them.

The end never justifies the means.

D)

5 Which statements are legitimate challenges to utilitarian ethical theory?

The end may justify the means.

A)
There is no consensus among utilitarians on how to measure and determine the
B) overall good.
It is difficult to know how to consider the consequences for all the parties that
C) will be affected by an act.
It is difficult for the utilitarian to find a balance between individual freedom and
the overall good. The more utilitarians emphasize freedom the more likely they
D) hold more relativistic accounts of the good.

E)All of the above.

F)None of the above.

6 Which of the following reasons accounts for utilitarianism's dominance among policy makers and
administrators?
It seems obvious that policy questions should be judged by results and
A) consequences.

Policy experts at all levels are focused on results and getting things done.
B)

Efficiency is simply another word for maximizing happiness.

C)
 Policy experts focus on the collective or aggregate good.
D)

E)All of the above.

F)None of the above.

7 Which proposition correctly describes the concept of a right?

Rights protect a person's wants.

A)
There is really no distinction between a person's wants and interests. Rights
B) protect both.

Rights protect a person's interests.

C)
My rights never correspond to your duties and your duties never correspond to
D) my rights.

2 The ethical roots of the classical model of corporate social responsibility are found in which
statement:
The idea that the interests of stakeholders are as important as the interests of a
A) corporation's stockholders.
The free market theory which holds that managers are ethically obliged to make as
much money as possible for their stockholders because to do otherwise would
B) undermine the very foundations of our free society.

The ethical imperative to cause no harm.

C)

The ethical imperative to prevent harm.

D)

3 Which of the following reasons might a free market economic theorist use to justify the hostile
takeover of a company?
The takeover target company's stock is undervalued. That is evidence that the
A) resources are being inefficiently used.
If current management is not maximizing profits, it is violating the utilitarian
B) imperative to maximize the overall good.
The organization seeking to take over the target company will maximize profits for
the stockholders and will be serving the public's interests because it is only by
C) satisfying consumer (public) demand that a business can make profits.

If the takeover target's managers are using their stockholders' money to serve
D) interests other than those of the stockholders, they are stealing from them.

All of the above.

E)
None of the above.
 F)

4 Which of the following statements does not represent a market failure, i.e., a situation in which
the pursuit of profit will not result in a net increase in consumer satisfaction?
The costs of pollution, groundwater contamination and depletion, soil erosion and
nuclear waste disposal are borne by parties external to the economic exchange
A) between buyer and seller.
Where there is no mechanism for pricing, for setting a value on, public goods,
there is no guarantee that the markets result in the optimal satisfaction of the
B) public interest in regards to public goods.

Situations in which externalities have been internalized result in an equilibrium in

C) the exchange price between true costs and benefits.
The pursuit of individual self-interest results in a worse outcome than would have
occurred had the behavior of the parties involved in the economic exchange been
D) coordinated through cooperation or regulation rather than mere competition.

5 Which statement does not support the claim that an unconditioned ethical directive such as the
one the classical model of corporate social responsibility demands of business management is
inappropriate for utilitarian theory?
Markets can work to prevent harm only by first-hand experience with harms that
A) have to occur before they can be remedied.
It is claimed that once market failures are adequately addressed by the
government, business just needs to obey the law that addressed them. Business,
B) however, has the ability to inappropriately influence government policy and the
law.
Business has the ability to influence consumers' desires by helping shape those
C) desires through advertising.
A more precise formulation of a utilitarian-based principle would be to maximize
profit whenever doing so produces the greatest good for the greatest number, with
D) the proviso that managers must consider the impact a decision will have in many
ways other than merely financial.

6 According to the private property defense of the classical model of corporate social responsibility,
managers who use corporate funds for projects that are not directly devoted to maximizing
profits are stealing from their owners. Which statement supports this view?
Property rights are restricted when they conflict with the basic rules of society as
A) embodied in law and custom.
The connection between ownership and control that exists for personal property
B) does not legally exist for corporate property.

Investors buy their stocks with the hope of maximizing return on their investment.
C)
Stockholders in publicly traded corporations are better understood as investors
D) rather than owners.

8 Select the reasons, historically speaking, why the modern corporation was established as a legal
entity:

Social benefits flow from corporate institutions.

A)
Corporations provide an efficient means for raising large amounts of capital needed
B) to produce and distribute socially desired goods and services.
Corporations distribute risks widely over large populations, minimizing the risk to
C) any one individual.
Corporations provide individuals with efficient means for the creation of wealth and
D) for supplying jobs.

All of the above.

E)

None of the above.

F)

1
1. Business ethics comprises the principles and standards that guide behavior of
individuals and groups in the world of business.

A. ? True

B. ? False

2. A(n) ________ is a problem, situation, or opportunity requiring an individual,

group, or organization to choose among several actions that must be evaluated
as right or wrong.

A. ? crisis
 B. ? ethical issue

C. ? indictment

D. ? fraud

3. Which moral philosophy seeks the greatest good for the greatest number of
people?

A. ? Consequentialism

B. ? Utilitarianism

C. ? Egoism

D. ? Ethical formalism

4. What type of justice exists if employees are being open, honest, and truthful in
their communications at work?

A. ? Procedural

B. ? Distributive

C. ? Ethical

D. ? Interactional

5. Ethical climate is an aspect of corporate culture that relates to an organization's

expectations about appropriate conduct.

A. ? True

B. ? False
6. One key to successful ethics training is to eliminate the belief that unethical
behaviour is ever justifiable.

A. ? True

B. ? False

7. Front-line employees have the ultimate responsibility of establishing the ethical

tone of the entire organization.

A. ? True

B. ? False

8. To be successful, business ethics training programs need to:

A. ? focus on personal opinions of employees.

B. ? be limited to upper executives.

C. ? educate employees on formal ethical frameworks and models of

ethical decision making.

D. ? promote the use of emotions in making tough ethical decisions.

9. Most companies begin the process of establishing organizational ethics

programs by developing:

A. ? ethics training programs.

B. ? codes of conduct.

C. ? ethics enforcement mechanisms.

D. ? hidden agendas.
10. For referent power to be effective, what must exist between individuals in the
relationship?

A. ? Antipathy

B. ? Rivalry

C. ? History

D. ? Empathy