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BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

After reading this chapter, you will be able to:

Chapter 1

1. Explain why ethics is important in the business environment.


2. Explain the nature of business ethics as an academic discipline.
3. Distinguish the ethics of personal integrity from the ethics of social responsibility.
4. Distinguish ethical norms and values from other business-related norms and values.
5. Distinguish legal responsibilities from ethical responsibilities.
6. Explain why ethical responsibilities go beyond legal compliance.
7. Describe ethical decision making as a form of practical reasoning.

Learning Objectives
(See related pages)

Chapter quizzes
1. Responsible decision making must rely on the personal values and principles of
the individuals involved.
A) True
B) False
2. An ethics course will change one's capacity to think.
A) True
B) False
3. At its most basic level, ethics is concerned with how we act and how we live our
lives.
A) True
B) False
4. To say that ethics is a descriptive discipline is to say that it deals with norms.
A) True
B) False

BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

5. It was the failure of personal ethics among companies like Enron and WorldCom
that led to the creation of the Gramm-Leach-Bliley Act.
A) True
B) False
6. The Grayson-Himes Pay for Performance Act of 2009 was passed to amend the
executive compensation provisions of the:
A) Emergency Economic Stabilization Act of 2008.
B) Federal Privacy Act of 1974.
C) Corporate and Auditing Accountability, Transparency, and Responsibility Act of
2002.
D) Financial Services Modernization Act 1999.
7. According to philosophical ethics, teaching ethics must:
A) consider acceptance of customary norms as an adequate ethical perspective.
B) proclaim telling students how they ought to behave.
C) challenge students to think for themselves.
D) preach ethical dogma to a passive audience.
8. Philosophers often emphasize that ethics is normative in nature. What does this
mean?
A) It provides an account of how we act the way we do.
B) It deals with our reasoning about how we should act.
C) It provides an account of why we act the way we do.
D) It distinguishes between what is ethical and what is not.
9. Which of the following set the standards or guidelines for determining what one
should do, how one should act, and what type of person one should be?
A) Characters
B) Values
C) Norms
D) Roles
10.Reasoning about what we should do is referred to as _____.
A) cognitive reasoning
B) philanthropic reasoning

BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

C) theoretical reasoning
D) practical reasoning

ANSWER KEY
1. A
2. B
3. A
4. B
5. B
6. A
7. C
8. B
9. C
10.D

1. What is the primary purpose of company values?


To attract investors.
To attract employees.
To put on a plaque in the company lunchroom.
To form the basis for decision making.

2. A company's core values may be ascertained by:


Reading the stated values in a publication or on a website
Observing employees attitudes
Looking at a similar companies' values
Looking at the industry as a whole

3. Where do company core values originate?


They are based on other companies in the same industry.
They come from company leadership.
They are based on new employee preferences.
They are based on the geographical location of the company.

BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

1 Which statement correctly reflects the free market view of business social
responsibility?
A) In addition to making a profit, businesses are just as responsible for seeing to the
well-being of their employees and the communities in which they operate
B) No one other than the managers and owners of a business may claim to have
any stake in the business decisions managers make.
This is the correct answer.
C) In the process of providing goods and services to customer who need and want
them and maximizing profits for its shareowners, a business fulfills its social
responsibility
D) A business is responsible for maximizing profits for its shareowners, but, in
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?
A) Business managers dont need to study ethics in order to know how to treat
employees, shareowners, and customers.
B) Business and ethics simply dont mix. In the final analysis, self-interest
represented by profit overrides the interests of employees, customers, and
communities. Opinion and sentiment get in the way of efficient business decisionmaking.
This is the correct answer.
C) Ethical concerns are as unavoidable in business as are concerns of marketing,
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
D) The answers to ethical questions are clear-cut enough; all business people
already know right from wrong.

True or False
1 According to one perspective of business ethics, no one other than business
managers and owners may claim to have a stake in the business decisions
managers make.
A) TRUE

BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

B) FALSE
2 The free market view holds that maximizing profits for its shareowners and
providing the public with the goods and services they want, is enough to satisfy a
business social responsibility.
A) TRUE
B) FALSE
3 The common understanding of business social responsibility is that business
owners may well have to sacrifice profits if the well-being of its employees and the
community it operates in demands it.
A) TRUE
B) FALSE
4 Because the language of ethics is so different from talk about the operational
fields of finance, marketing, accounting, management, law, and human resources,
ethical concepts and categories are not relevant to these fields.
A) TRUE
B) FALSE
5 Because people already know right from wrong, the study of business ethics is
simply an unprofitable exercise.
A) TRUE
B) FALSE
6 If something is seriously wrong, the law will prohibit it. Consequently, its enough
to rely on the law for deciding whats right or wrong.
A) TRUE
B) FALSE
7 What people do value and what they should value are not necessarily the same
A) TRUE
B) FALSE
8 The major reason to study ethics is that whether or not we examine the questions
what should I do? or what type of person should I be? or how shall we live in
community? we answer them in the course of living our everyday lives.
A) TRUE
B) FALSE
9 As long as individuals follow the mores, customs, and rules of their culture or
society, they are assured that their actions are ethically correct.

BUSINESS ETHICS: MAKING FOR PERSONAL INTEGRITY & SOCIAL RESPONSIBILITY

A) TRUE
B) FALSE
10 Philosophical ethics distinguishes what people do value from what they should
value.
A) TRUE
B) FALSE