Business Ethics: Decision Making for
Personal Integrity & Social Responsibility
6th Edition (PDF) – Hartman – Solutions
Manual (Chapters 1–10)
Instructions: Choose the best answer for each question.
• Correct answer in bold
• Rationale in italics
Business Ethics Exam
Part 1: Foundations of Business Ethics (Questions 1–25)
1. Which of the following best defines business ethics?
• A) The legal requirements a company must follow to avoid penalties
• B) The application of moral principles and values to business decision-
making
• C) A set of financial guidelines for maximizing shareholder profit
• D) The study of consumer behavior in competitive markets
• E) A marketing strategy to improve brand image
Rationale: Business ethics involves applying moral principles—such as honesty,
fairness, integrity, and respect—to business decisions, policies, and practices,
going beyond mere legal compliance.
2. The term "stakeholder" refers to:
• A) Only shareholders who own company stock
, • B) Only employees who work for the company
• C) Any individual or group affected by a company's decisions and actions
• D) Only government regulators overseeing the industry
• E) Only customers who purchase products
Rationale: Stakeholders include anyone with an interest or stake in the
organization: employees, customers, suppliers, shareholders, community
members, government, and society at large.
3. The ethical theory that focuses on the consequences of an action to
determine its morality is called:
• A) Deontology
• B) Virtue ethics
• C) Utilitarianism
• D) Relativism
• E) Egoism
Rationale: Utilitarianism (a form of consequentialism) judges actions based on
their outcomes—specifically, maximizing overall happiness or "the greatest good
for the greatest number."
4. Which ethical framework emphasizes duties, rules, and obligations regardless
of consequences?
• A) Utilitarianism
• B) Deontology
• C) Ethical egoism
• D) Relativism
• E) Pragmatism
,Rationale: Deontology, associated with Immanuel Kant, holds that certain actions
are morally required or forbidden based on rules and duties (e.g., "do not lie")
irrespective of their outcomes.
5. A company that prioritizes profit above all else, even at the expense of
employees and the environment, is operating under which view?
• A) Stakeholder theory
• B) Shareholder primacy (or Friedman doctrine)
• C) Corporate social responsibility
• D) Conscious capitalism
• E) Servant leadership
Rationale: Milton Friedman's shareholder primacy theory argues that a
corporation's only social responsibility is to increase profits within the rules of the
game, prioritizing shareholder returns above other stakeholders.
6. The ethical concept of "virtue ethics" focuses on:
• A) The consequences of actions
• B) Following universal rules
• C) The character and moral virtues of the decision-maker
• D) Maximizing shareholder wealth
• E) Cultural norms only
Rationale: Virtue ethics (Aristotle) asks "What would a virtuous person do?"
emphasizing traits like honesty, courage, temperance, and justice rather than rules
or outcomes alone.
7. Which of the following is NOT a common source of ethical standards in
business?
• A) Legal regulations
• B) Professional codes of conduct
, • C) Organizational values and culture
• D) Maximum profit calculations
• E) Religious and cultural traditions
Rationale: While profit is a business goal, it is not an ethical standard. Ethical
standards derive from laws, professional codes, organizational values, cultural
norms, and philosophical principles.
8. A conflict of interest occurs when:
• A) Two employees disagree on a work project
• B) An individual's personal interests interfere with their professional
obligations
• C) The company loses money on a product line
• D) A competitor launches a similar product
• E) A customer files a complaint
Rationale: A conflict of interest arises when personal interests (financial,
relational, or otherwise) could compromise or appear to compromise professional
judgment, loyalty, or duty to the organization.
9. Ethical relativism is the view that:
• A) There are universal ethical truths applicable to all cultures
• B) Ethical standards are determined by local cultural norms and practices
• C) Ethics should be based solely on religious teachings
• D) Only laws define what is ethical
• E) Profit is the ultimate ethical measure
Rationale: Ethical relativism holds that morality is culturally determined—what is
"right" varies by culture or context, and there are no universal ethical standards.
10. The Sarbanes-Oxley Act (SOX) of 2002 was enacted primarily in response to:
Personal Integrity & Social Responsibility
6th Edition (PDF) – Hartman – Solutions
Manual (Chapters 1–10)
Instructions: Choose the best answer for each question.
• Correct answer in bold
• Rationale in italics
Business Ethics Exam
Part 1: Foundations of Business Ethics (Questions 1–25)
1. Which of the following best defines business ethics?
• A) The legal requirements a company must follow to avoid penalties
• B) The application of moral principles and values to business decision-
making
• C) A set of financial guidelines for maximizing shareholder profit
• D) The study of consumer behavior in competitive markets
• E) A marketing strategy to improve brand image
Rationale: Business ethics involves applying moral principles—such as honesty,
fairness, integrity, and respect—to business decisions, policies, and practices,
going beyond mere legal compliance.
2. The term "stakeholder" refers to:
• A) Only shareholders who own company stock
, • B) Only employees who work for the company
• C) Any individual or group affected by a company's decisions and actions
• D) Only government regulators overseeing the industry
• E) Only customers who purchase products
Rationale: Stakeholders include anyone with an interest or stake in the
organization: employees, customers, suppliers, shareholders, community
members, government, and society at large.
3. The ethical theory that focuses on the consequences of an action to
determine its morality is called:
• A) Deontology
• B) Virtue ethics
• C) Utilitarianism
• D) Relativism
• E) Egoism
Rationale: Utilitarianism (a form of consequentialism) judges actions based on
their outcomes—specifically, maximizing overall happiness or "the greatest good
for the greatest number."
4. Which ethical framework emphasizes duties, rules, and obligations regardless
of consequences?
• A) Utilitarianism
• B) Deontology
• C) Ethical egoism
• D) Relativism
• E) Pragmatism
,Rationale: Deontology, associated with Immanuel Kant, holds that certain actions
are morally required or forbidden based on rules and duties (e.g., "do not lie")
irrespective of their outcomes.
5. A company that prioritizes profit above all else, even at the expense of
employees and the environment, is operating under which view?
• A) Stakeholder theory
• B) Shareholder primacy (or Friedman doctrine)
• C) Corporate social responsibility
• D) Conscious capitalism
• E) Servant leadership
Rationale: Milton Friedman's shareholder primacy theory argues that a
corporation's only social responsibility is to increase profits within the rules of the
game, prioritizing shareholder returns above other stakeholders.
6. The ethical concept of "virtue ethics" focuses on:
• A) The consequences of actions
• B) Following universal rules
• C) The character and moral virtues of the decision-maker
• D) Maximizing shareholder wealth
• E) Cultural norms only
Rationale: Virtue ethics (Aristotle) asks "What would a virtuous person do?"
emphasizing traits like honesty, courage, temperance, and justice rather than rules
or outcomes alone.
7. Which of the following is NOT a common source of ethical standards in
business?
• A) Legal regulations
• B) Professional codes of conduct
, • C) Organizational values and culture
• D) Maximum profit calculations
• E) Religious and cultural traditions
Rationale: While profit is a business goal, it is not an ethical standard. Ethical
standards derive from laws, professional codes, organizational values, cultural
norms, and philosophical principles.
8. A conflict of interest occurs when:
• A) Two employees disagree on a work project
• B) An individual's personal interests interfere with their professional
obligations
• C) The company loses money on a product line
• D) A competitor launches a similar product
• E) A customer files a complaint
Rationale: A conflict of interest arises when personal interests (financial,
relational, or otherwise) could compromise or appear to compromise professional
judgment, loyalty, or duty to the organization.
9. Ethical relativism is the view that:
• A) There are universal ethical truths applicable to all cultures
• B) Ethical standards are determined by local cultural norms and practices
• C) Ethics should be based solely on religious teachings
• D) Only laws define what is ethical
• E) Profit is the ultimate ethical measure
Rationale: Ethical relativism holds that morality is culturally determined—what is
"right" varies by culture or context, and there are no universal ethical standards.
10. The Sarbanes-Oxley Act (SOX) of 2002 was enacted primarily in response to:
