Chapter 3—Emerging Business Ethics Issues

MULTIPLE CHOICE

1. An ethical issue is a problem, situation, or opportunity

a. that harms consumers.
b. that harms the environment.
c. requiring society to choose among several actions that must be evaluated as right or
wrong.
d. requiring an individual, group, or organization to choose among several actions that must
be evaluated as right or wrong, ethical or unethical.
e. requiring an individual, group, or organization to choose between harming consumers or
the environment and earning more profits.
ANS: D PTS: 1

2. Ethical issues in business typically arise because of conflicts among individuals' personal moral
philosophies and values and the
a. values and attitudes of the organization in which they work.
b. values and attitudes of the society in which they live.
c. values and attitudes of the organization in which they work and the society in which they
live.
d. laws and regulations of the country in which they live.
e. values and attitudes of their parents and religion.
ANS: C PTS: 1

3. Ethical issues in business are defined by

a. customers.
b. government regulators.
c. employees.
d. shareholders.
e. stakeholders.
ANS: E PTS: 1

4. An employee for Acme, Inc. has been asked to carry out an assignment that she believes is wrong. This
situation can be classified as
a. ethical.
b. unethical.
c. an ethical issue.
d. a dilemma.
e. a violation of the law.
ANS: C PTS: 1

5. A person uncomfortable with his employer's hiring only white men is experiencing
a. a conflict of interest.
b. an ethical issue.
c. a feeling of guilt.
d. intraorganizational conflict.
1
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 e. a moral attribute.
ANS: B PTS: 1

6. Issues related to fairness and honesty may arise because business is sometimes regarded as a
a. contest, with the most profitable firm "winning."
b. contest, with the most ethical firm "winning."
c. war requiring surprise attacks, guerrilla warfare, and other warlike tactics to win the battle
for consumers' dollars.
d. game governed by its own rules rather than those of society.
e. game governed by the rules of society.
ANS: D PTS: 1

7. To avoid conflicts of interest, employees must

a. abide by their company's code of ethics.
b. be able to separate their private interests from their business dealings.
c. do what they see their peers do.
d. do everything their supervisors tell them to do.
e. obey the law.
ANS: B PTS: 1

8. Conflicts of interest exist when employees must choose whether to

a. advance their own personal interests, those of the organization, or those of some other
group.
b. advance the interests of the organization or those of society.
c. accept bribes.
d. carry out an assignment they perceive as unethical.
e. report an unethical coworker.
ANS: A PTS: 1
9. ____ is the offering of something in order to gain an illicit advantage.
a. Shoulder surfing
b. Hacking
c. Gift exchange
d. Conflicts of interest
e. Bribery
ANS: E PTS: 1
10. Concerns involving copyright infringement on books, movies and music, and illegally produced goods
relate to which classification of ethical issue?
a. Conflict of interest
b. Honesty
c. Communications
d. Discrimination
e. Intellectual property rights
ANS: E PTS: 1

11. ____ is any purposeful communication that deceives, manipulates, or conceals facts in order to create a
false impression.
a. Stealing
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 b. Lying
c. Fraud
d. Misappropriation
e. Accounting fraud
ANS: C PTS: 1

12. In marketing communications, lying causes predicaments for companies because it destroys
a. trust.
b. honor.
c. confidence.
d. integrity.
e. products.
ANS: A PTS: 1

13. When a commercial states that a product is superior to any other on the market, the marketer risks
accusations of
a. concealed facts.
b. false labeling.
c. deceptive advertising.
d. concealed facts.
e. puffery.
ANS: E PTS: 1

14. Which of the following is likely not a pressure felt by accountants?

a. Accepting commissions
b. Religious value conflicts
c. Increased competition
d. Client pressure for altered opinions
e. Data overload
ANS: B PTS: 1

15. According to your text, which of the following represents the area where fraudulent activity is
increasing the most rapidly?
a. Consumer fraud
b. Shoplifting
c. Direct selling
d. Direct marketing
e. The Internet
ANS: D PTS: 1
16. An activity is probably ethical if it
a. is approved of by most individuals in the organization and is customary in the industry.
b. is approved of by most individuals in the organization.
c. is customary in the industry.
d. is legal.
e. makes consumers feel cheated, deceived, or manipulated.
ANS: A PTS: 1

3
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17. The first step toward understanding business ethics is to
a. know your company's ethical policies.
b. know your own morals and philosophies.
c. know society's ethical policies.
d. develop ethical-issue awareness.
e. develop a set of decision-making rules.
ANS: D PTS: 1

18. Those who have a claim in some aspect of a firm's products, operations, markets, industry, and
outcomes are known as
a. shareholders.
b. stockholders.
c. stakeholders.
d. claimholders.
e. special-interest groups.
ANS: C PTS: 1

19. The ethical decision-making process begins

a. with a conflict of interest.
b. with a conflict in values.
c. when an individual recognizes that an ethical issue exists and can openly discuss it with
others.
d. when an individual experiences a conflict between his or her values and those of his or her
firm.
e. when an individual experiences a conflict between his or her values and those of society.
ANS: C PTS: 1

20. Two dimensions related to consumer privacy involve

a. consumer awareness of information collection and lack of consumer control over use of
collected information.
b. management awareness of information collection and a high level of consumer control
over use of collected information.
c. consumer awareness of information collection and a high level of managerial control over
use of collected information.
d. management awareness of information collection and lack of managerial control over use
of collected information.
e. online marketing and website development.
ANS: A PTS: 1
21. Accountants must abide by a strict code of ethics which defines their responsibilities to
a. their clients.
b. their clients and the public interest.
c. only the public.
d. their investors.
e. government regulators.
ANS: B PTS: 1
22. Which of the following statements is most correct?
a. Affirmative action programs require quotas to govern employment decisions.
b. Affirmative action programs have eliminated discrimination in employment.
4
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from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 c. Affirmative action programs are required by law.
d. Affirmative action programs involve efforts to recruit, hire, train, and promote qualified
individuals from groups that have traditionally been discriminated against on the basis of
race, gender, or other characteristics.
e. Affirmative action programs involve efforts to avoid recruiting, hiring, training, and
promoting qualified individuals from groups that have traditionally been discriminated
against on the basis of race, gender, or other characteristics.
ANS: D PTS: 1
23. A clearly conveyed policy on workplace privacy should reduce the opportunity for
a. employee lawsuits and the resulting costs of such actions.
b. employer lawsuits and the resulting costs of such actions.
c. decreased employee productivity.
d. decreased employee performance.
e. monitoring of office resources for employees' personal use.
ANS: A PTS: 1

24. ____ is associated with a hostile workplace where someone considered a target is threatened, harassed,
belittled, or verbally abused.
a. A code of conduct
b. Sexual harassment
c. Coercive Power
d. Bullying
e. Rewards
ANS: D PTS: 1

25. The Kyoto Protocol is an international treaty committed to

a. lower greenhouse gas emissions.
b. limiting bribery in international business relations.
c. making medical care available to the poverty stricken.
d. eliminating the exploitation of third-world workers.
e. third-world workers.
ANS: A PTS: 1

26. ____ is one ____ method of obtaining trade secrets.

a. Remote Hacking, illegal
b. Bribery, legal
c. System Hacking, legal
d. Researching press releases, illegal
e. None of these choices
ANS: A PTS: 1

27. The Age Discrimination in Employment Act specifically outlaws hiring practices that discriminate
against people
a. who are under the age of 18.
b. who are between 16 and 20.
c. who are between 49-69.
d. who are past retirement age.
e. None of these statements are true.
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 ANS: C PTS: 1

28. Abusive or intimidating behavior is the most common ethical problem for employees. Which of the
following is not related to this concept?
a. Physical threats
b. False accusations
c. Being annoying
d. Profanity
e. All of these actions are related to this concept.
ANS: E PTS: 1

29. Bullying
a. can even occur between companies that are in intense competition.
b. is not as serious within the workplace as is believed.
c. always occurs within companies, not between them.
d. has been clearly defined by the court system.
e. should be handled very differently than discriminatory harassment complaints.
ANS: A PTS: 1

30. Mr. Smith told his client, Mr. Jabar, who was not an IT expert, that the new software systems were
much better than his existing ones. To convince Mr. Jabar, Mr. Smith used a great deal of technical
jargon that his client did not really understand. Mr. Smith knew this when he used it. This is an
example of
a. lying.
b. commission lying.
c. omission lying.
d. noise.
e. surrogate lying.
ANS: D PTS: 1

31. A lie becomes unethical in business

a. solely based on the context.
b. solely based on intent.
c. when it is based on intent and context.
d. when it is a moral decision no matter if it is within business or not.
e. when it is based on beliefs and culture.
ANS: C PTS: 1

32. When Jamal looked over the shoulder of another employee to get a password, he committed
a. shoulder surfing.
b. whacking
c. discrimination
d. password guessing
e. hacking
ANS: A PTS: 1

33. According to the text a company can be sued for discrimination if

6
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from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
 a. it hires minorities.
b. maintains reasonable minority standards.
c. discharges a minority individual, but has a just cause for doing so.
d. uses age as a hiring or firing criterion.
e. none of these actions has the potential for discrimination.
ANS: D PTS: 1

34. Affirmative action programs

a. only involve the promotion of unqualified employees.
b. are not imposed by federal law on an employers.
c. cannot be imposed by federal law on subcontractors.
d. only involve the training of individuals.
e. involve the recruitment, hiring, promotion, and training of qualified individuals.
ANS: E PTS: 1

35. What type of fraud involves intentional deception on the part of an individual or group in order to
derive an unfair economic advantage over an organization?
a. Channel
b. Integrative
c. Consumer
d. Product
e. Conventional
ANS: C PTS: 1

36. What type of fraudulent activity could involve a consumer staging an accident to seek damages?
a. Collusion
b. Duplicity
c. Guile
d. Defamation
e. Collusion
ANS: B PTS: 1
37. What type of fraudulent activity involves an employee who assists a consumer in fraud?
a. Collusion
b. Duplicity
c. Guile
d. Defamation
e. Collusion
ANS: A PTS: 1

ESSAY

38. Discuss how one goes about recognizing an ethical issue.

ANS:
Pages 112-113

PTS: 1
7
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from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
39. List three business problems, situations, or opportunities that you believe are ethical issues. Explain
why.

ANS:
Pages 112-113

PTS: 1

40. Why do ethical issues related to honesty often arise in businesses?

ANS:
Page 114

PTS: 1

41. What is a conflict of interest? Provide an example.

ANS:
Page 120

PTS: 1
42. What are the different definitions of bribery?

ANS:
Page 120

PTS: 1
43. What are some ethical issues related to the environment?

ANS:
Pages 126-128

PTS: 1

8
© 2011 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different
from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.