Chapter 2 Economics

Define business ethics. ANSWER: Ethics is the study of right and wrong and of the morality of the choices individuals make. Business ethics, more specifically defined, is the application of moral standards to business situations. POINTS: 1 DIFFICULTY: Easy REFERENCES: p. 34 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Business Ethics Defined KEYWORDS: Bloom's: Knowledge 2. Why are fairness and honesty in business important ethical concerns? Give examples. ANSWER: Fairness and honesty in business are considered as two important ethical concerns. In addition to obeying all laws and regulations, businesspeople are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others. The PricewaterhouseCoopers LLP and Anderson’s Ark and Associates cases prove that the lack of fairness and honesty also is an expensive proposition. POINTS: 1 DIFFICULTY: Moderate REFERENCES: p. 35 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Ethical Issues KEYWORDS: Bloom's: Comprehension 3. What are the major ethical issues businesspeople face? ANSWER: Challenges to being fair and honest, temptations of placing personal welfare above the welfare of the organization, and conflicts of interest are among common ethical issues that businesspeople may regularly face. Business communications, especially advertising, can also present ethical questions for employees within organizations. POINTS: 1 DIFFICULTY: Moderate REFERENCES: pp. 34-36 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Ethical Issues KEYWORDS: Bloom's: Comprehension *You can buy complete chapters by: Www.TestbankU.com Contact Us: ACCOUNTING 110 4. What are the three major sets of factors believed to affect ethical behavior in an organization? ANSWER: Individual factors such as individual knowledge of issues, personal values, and personal goals influence the level of ethical behavior in an organization. Social factors such as cultural norms, actions and decisions of co-workers, significant others, and the use of the Internet affect ethical behavior. Also, the amount of freedom an organization gives an employee to behave unethically affects ethical behavior in an organization. POINTS: 1 DIFFICULTY: Easy REFERENCES: pp. 37-38 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Factors Affecting Ethical Behavior KEYWORDS: Bloom's: Knowledge 5. What are some of the social factors that affect ethical decisions? ANSWER: Cultural norms is an important factor in considering ethical decision making. The actions and decisions of coworkers impact other employees’ sense of business ethics. Significant others--spouses, friends, and relatives--also can affect an employee’s perception of ethical and unethical decisions in the workplace. Also, the use of the Internet by employees in a business setting is also an important social factor that affects ethical decision making. POINTS: 1 DIFFICULTY: Easy REFERENCES: pp. 37-38 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Factors Affecting Ethical Behavior KEYWORDS: Bloom's: Knowledge 6. How can the government encourage ethical behavior? Give an example. ANSWER: The government encourages ethical behavior by legislating regulations. One of the important landmark regulations that the government has created is the SarbanesOxley Act of 2002 which deals with corporate responsibility, conflicts of interest, and corporate accountability. POINTS: 1 DIFFICULTY: Easy REFERENCES: p. 38 LEARNING OBJECTIVES: FOBU.PRIDE.15.2-4 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Encouraging Ethical Behavior *You can buy complete chapters by: Www.TestbankU.com Contact Us: Testban