File: Chapter 1, Introducing Straight Talk about Managing Business Ethics: Where we’re Going
and Why
True/False
1. The interest in business ethics is just a fad that has only recently been created by popular
scandals (i.e., Enron, WorldCom, etc.) reported in the news.
Ans: False
Response: See Introduction.
Difficulty: Easy
2. The activities that brought down the U.S. economy and others around the world, in 2008,
were unethical in that they ultimately produced great harm and were contrary to a number of
ethical principles such as responsibility, transparency, and fairness.
Ans: True
Response: The Financial Disaster of 2008.
Difficulty: Moderate
,3. In the early 2000s, borrowers no longer needed to provide proof of employment or income.
These were popularly called “no doc” or “liar loans” because banks weren’t bothering to
verify the “truth” of what borrowers were claiming on their mortgage applications. This was
one of the factors that laid the groundwork for the disaster in the United States.
Ans: True
Response: Mortgage Originators Peddled “Liar Loans”.
Difficulty: Moderate
4. In 2010, the U.S. Congress abolished the Dodd‐Frank Financial Regulation Legislation—an
attempt to revive the economy through stabilizing the financial industry.
Ans: False
Response: Those Who Were Supposed to Protect Us Didn’t.
Difficulty: Moderate
5. Discarding the few “bad apples” will usually solve all of the ethical problems within an
organization.
Ans: False
Response: See Can Business Ethics Be Taught?
Difficulty: Easy
,6. Good character is the main factor determining whether an individual acts ethically within an
organization.
Ans: False
Response: See Shouldn’t Employees Already Know the Difference between Right and Wrong?
Difficulty: Moderate
7. According to research, one’s ethics are fully formed and unchangeable by the time one is old
enough to enter college or a job.
Ans: False
Response: See Aren’t Adults’ Ethics Fully Formed and Unchangeable?
Difficulty: Moderate
8. Federal laws define what is ethical. Therefore, all unethical behavior is considered unlawful.
Ans: False
Response: See Ethics and the Law. Some unethical behavior is not covered by law (for example,
lying to a manager about the reason for taking a sick day).
Difficulty: Difficult
, 9. Both characteristics of the environment and the individual contribute to unethical behavior.
Ans: True
Response: See Aren’t Bad Apples the Cause of Ethical Problems in Organizations?
Difficulty: Easy
10. When employees come to an organization, they have already developed into “good” or “bad”
apples. Therefore, there is little a manager can do to impact an employee’s ethical behavior.
Ans: False
Response: See Aren’t Adults’ Ethics Fully Formed and Unchangeable?
Difficulty: Moderate
11. According to the authors, most people are guided by a strict internal moral compass and will
not be swayed by organization factors.
Ans: False
Response: See Aren’t Bad Apples the Cause of Ethical Problems in Organizations?
Difficulty: Moderate
12. By ignoring the topic of ethical behavior, an organization may actually be encouraging
unethical behavior through benign neglect.
and Why
True/False
1. The interest in business ethics is just a fad that has only recently been created by popular
scandals (i.e., Enron, WorldCom, etc.) reported in the news.
Ans: False
Response: See Introduction.
Difficulty: Easy
2. The activities that brought down the U.S. economy and others around the world, in 2008,
were unethical in that they ultimately produced great harm and were contrary to a number of
ethical principles such as responsibility, transparency, and fairness.
Ans: True
Response: The Financial Disaster of 2008.
Difficulty: Moderate
,3. In the early 2000s, borrowers no longer needed to provide proof of employment or income.
These were popularly called “no doc” or “liar loans” because banks weren’t bothering to
verify the “truth” of what borrowers were claiming on their mortgage applications. This was
one of the factors that laid the groundwork for the disaster in the United States.
Ans: True
Response: Mortgage Originators Peddled “Liar Loans”.
Difficulty: Moderate
4. In 2010, the U.S. Congress abolished the Dodd‐Frank Financial Regulation Legislation—an
attempt to revive the economy through stabilizing the financial industry.
Ans: False
Response: Those Who Were Supposed to Protect Us Didn’t.
Difficulty: Moderate
5. Discarding the few “bad apples” will usually solve all of the ethical problems within an
organization.
Ans: False
Response: See Can Business Ethics Be Taught?
Difficulty: Easy
,6. Good character is the main factor determining whether an individual acts ethically within an
organization.
Ans: False
Response: See Shouldn’t Employees Already Know the Difference between Right and Wrong?
Difficulty: Moderate
7. According to research, one’s ethics are fully formed and unchangeable by the time one is old
enough to enter college or a job.
Ans: False
Response: See Aren’t Adults’ Ethics Fully Formed and Unchangeable?
Difficulty: Moderate
8. Federal laws define what is ethical. Therefore, all unethical behavior is considered unlawful.
Ans: False
Response: See Ethics and the Law. Some unethical behavior is not covered by law (for example,
lying to a manager about the reason for taking a sick day).
Difficulty: Difficult
, 9. Both characteristics of the environment and the individual contribute to unethical behavior.
Ans: True
Response: See Aren’t Bad Apples the Cause of Ethical Problems in Organizations?
Difficulty: Easy
10. When employees come to an organization, they have already developed into “good” or “bad”
apples. Therefore, there is little a manager can do to impact an employee’s ethical behavior.
Ans: False
Response: See Aren’t Adults’ Ethics Fully Formed and Unchangeable?
Difficulty: Moderate
11. According to the authors, most people are guided by a strict internal moral compass and will
not be swayed by organization factors.
Ans: False
Response: See Aren’t Bad Apples the Cause of Ethical Problems in Organizations?
Difficulty: Moderate
12. By ignoring the topic of ethical behavior, an organization may actually be encouraging
unethical behavior through benign neglect.
