TEST BANK BUSINESS ETHICS EXAM
PREP QUESTIONS WITH 100% SOLVED
Which-one of the following statements is correct? (p. 5)
I) In the context of business ethics, the notion "ethics" refers to both, to a specific behaviour of
members of an organisation as well as to the decisions made within the framework of an organisation's
values.
II) In the context of business ethics, the notion "ethics" refers to both, to a specific behaviour of
members of an organisation as well as to a person's personal philosophies about what is right or wrong.
III) In the context of business ethics, there exists a difference between an ordinary decision and an
ethical-one. For instance, contrary to an ordinary decision, an ethical decision requires the weighing of
values in order to reach a judgement regarding a situation the decision maker has not faced before.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements - ANS-O d. Only statements I and III are correct.
Which-one of the following statements is most likely to be correct? (pp. 5-8; ch. 8)
O a. When the concept of business ethics is applied to a firm, the generation of legal and sustained
profits is no longer one of the firm's main concerns.
O b. When the concept of business ethics is applied to a firm, it must balance its desire for profits
against the needs and desires of society.
O c. According to many studies, firms that operate under an ethical framework often have less than
average stock performance.
O d. Firms operating under an ethical framework usually rely mainly on the moral standards of
important members of staff when developing an effective ethical framework.
O e. Individuals with strong moral values usually are not affected by ethical dilemmas they might be
faced with in a business context. - ANS-O b. When the concept of business ethics is applied to a firm, it
must balance its desire for profits against the needs and desires of society.
Which-one of the following statements is correct? (p. 15; p. 30)
I) The goal of an ethical culture is to minimise the need for enforced compliance of rules and maximise
the use of principles that contribute to ethical reasoning in difficult or new situations.
,II) Most ethical issues exist because of conflicts in values and belief patterns about right and wrong
among and within stakeholder groups.
III) Most unethical acts discovered in firms are committed by isolated individuals. Complicity or the
cooperation of other employees can rarely be identified.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements I and III are correct.
O e. Only statement III is correct. - ANS-O c. Only statements I and II are correct.
Which-one of the following statements is most likely to be correct? (pp. 13-17)
O a. The Sarbanes-Oxley Act, passed by the American Congress in 2002, was an important step towards
the creation of a legal framework that forces firms to adopt environmentally responsible strategies.
O b. Given a firm has a sound ethical framework, top management and the board of directors are no
longer accountable for discovering risk associated with ethical conduct.
O c. One of the greatest dangers to a firm, in the context of business ethics, lies in notdiscovering any
serious misconduct or illegal activities of a firm's associates.
O d. In the context of business ethics, the term "ethical culture" refers to the firm's associates' personal
moral values.
O e. A firm's ethical culture is primarily related to employee commitment and trust, as well as customer
satisfaction. Investor loyalty, instead, is only little affected by a firm - ANS-O c. One of the greatest
dangers to a firm, in the context of business ethics, lies in notdiscovering any serious misconduct or
illegal activities of a firm's associates.
Please complete the following phrase in the correct way. (p. 32/moderate)
Stakeholders' power over businesses stems from their ...
O a. stock ownership.
O b. ability to generate profits.
O c. media impact.
O d. political influence
O e. ability to withdraw or withhold resources. - ANS-O e. ability to withdraw or withhold resources.
Please fill in the missing part in a manner consistent with business ethics. (p. 33/moderate)
A firm that makes use of a __________ recognizes other stakeholders beyond investors, employees, and
suppliers, and explicitly acknowledges the two-way dialog that exists between a firm's internal and
external environments.
O a. stakeholder model of corporate governance.
O b. stakeholder bias.
,O c. code of ethics.
O d. stakeholder interaction model
O e. corporate interface model. - ANS-O d. stakeholder interaction model
Please complete the following phrase in the correct way. (p. 33/easy)
The degree to which a firm understands, and addresses stakeholder demands can be referred to as
O a. a stakeholder orientation.
O b. a shareholder orientation.
O c. the stakeholder interaction model.
O d. a two-way street.
O e. a continuum. - ANS-O a. a stakeholder orientation.
Which-one of the following statements is correct? (p. 64, p. 69 and p. 76/easy)
I) Fraud is the engagement of one or more individuals in intentional deceptive practices to advance their
own interests over those of the organisation or some other group.
II) Commission lying is creating a perception or belief by word that intentionally deceives the receiver of
the message.
III) Omission lying is telling a joke, or, in other words, the making of statements meant to entertain
others without malice.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements I and III are correct.
O e. Only statement III is correct. - ANS-O c. Only statements I and II are correct.
Which-one of the following statements is most likely to be correct? (p. 74, p. 84/moderate)
O a. Especially ethical issues that do principally concern secondary stakeholders are unlikely to become
visible and known to a corporation.
O b. A change in societal values only becomes an ethical issue for a corporation if their main clients are
end-consumers.
O c. It is important for a corporation to determine whether or not it wants to adopt specific policies
regarding an activity that could become an ethical issue.
O d. One way for an organisation to determine whether or not a specific activity is ethical, is to check
whether the activity is approved by all members of the board of directors.
O e. In order to establish whether an activity can be classified as sexual harassment, it is important to
understand the definition of a hostile work environment. A hostile work environment is characterised by
, activities which do - ANS-O c. It is important for a corporation to determine whether or not it wants to
adopt specific policies regarding an activity that could become an ethical issue.
Please fill in the missing part in a manner consistent with business ethics. (p. 135/moderate)
According to the ethical decision-making framework, the absence of punishment provides a(n)
__________ for unethical behaviour.
O a. reason
O b. significant other
O c. individual factor
O d. opportunity
O e. best explanation - ANS-O d. opportunity
Please fill in the missing part in a manner consistent with business ethics. (p. 131/moderate)
Multiple elements work on individuals to affect their behaviour. While an individual may intend to do
the right thing __________ can alter this intent.
O a. cognitive dissonance
O b. familial expectations
O c. religious beliefs
O d. the desire for financial gain
O e. organisational or social forces - ANS-O e. organisational or social forces
Please fill in the missing part in a manner consistent with business ethics. (p. 139/moderate)
Codes, rules, and compliance are essential in organizations. However, an organization built on
__________ is more likely to develop a high integrity corporate culture.
O a. the standards set by a charismatic leader
O b. the preferences of the CEO
O c. the grapevine
O d. formal relationships
O e. informal relationships - ANS-O e. informal relationships
External and internal rewards relate to which part of the ethical decision-making framework? (p.
134/moderate)
O a. Individual factors
O b. Significant others
O c. Cognitive moral development
O d. Obedience to authority
O e. Opportunity - ANS-O e. Opportunity
Please fill in the missing part in a manner consistent with business ethics. (p. 144/moderate)
PREP QUESTIONS WITH 100% SOLVED
Which-one of the following statements is correct? (p. 5)
I) In the context of business ethics, the notion "ethics" refers to both, to a specific behaviour of
members of an organisation as well as to the decisions made within the framework of an organisation's
values.
II) In the context of business ethics, the notion "ethics" refers to both, to a specific behaviour of
members of an organisation as well as to a person's personal philosophies about what is right or wrong.
III) In the context of business ethics, there exists a difference between an ordinary decision and an
ethical-one. For instance, contrary to an ordinary decision, an ethical decision requires the weighing of
values in order to reach a judgement regarding a situation the decision maker has not faced before.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements - ANS-O d. Only statements I and III are correct.
Which-one of the following statements is most likely to be correct? (pp. 5-8; ch. 8)
O a. When the concept of business ethics is applied to a firm, the generation of legal and sustained
profits is no longer one of the firm's main concerns.
O b. When the concept of business ethics is applied to a firm, it must balance its desire for profits
against the needs and desires of society.
O c. According to many studies, firms that operate under an ethical framework often have less than
average stock performance.
O d. Firms operating under an ethical framework usually rely mainly on the moral standards of
important members of staff when developing an effective ethical framework.
O e. Individuals with strong moral values usually are not affected by ethical dilemmas they might be
faced with in a business context. - ANS-O b. When the concept of business ethics is applied to a firm, it
must balance its desire for profits against the needs and desires of society.
Which-one of the following statements is correct? (p. 15; p. 30)
I) The goal of an ethical culture is to minimise the need for enforced compliance of rules and maximise
the use of principles that contribute to ethical reasoning in difficult or new situations.
,II) Most ethical issues exist because of conflicts in values and belief patterns about right and wrong
among and within stakeholder groups.
III) Most unethical acts discovered in firms are committed by isolated individuals. Complicity or the
cooperation of other employees can rarely be identified.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements I and III are correct.
O e. Only statement III is correct. - ANS-O c. Only statements I and II are correct.
Which-one of the following statements is most likely to be correct? (pp. 13-17)
O a. The Sarbanes-Oxley Act, passed by the American Congress in 2002, was an important step towards
the creation of a legal framework that forces firms to adopt environmentally responsible strategies.
O b. Given a firm has a sound ethical framework, top management and the board of directors are no
longer accountable for discovering risk associated with ethical conduct.
O c. One of the greatest dangers to a firm, in the context of business ethics, lies in notdiscovering any
serious misconduct or illegal activities of a firm's associates.
O d. In the context of business ethics, the term "ethical culture" refers to the firm's associates' personal
moral values.
O e. A firm's ethical culture is primarily related to employee commitment and trust, as well as customer
satisfaction. Investor loyalty, instead, is only little affected by a firm - ANS-O c. One of the greatest
dangers to a firm, in the context of business ethics, lies in notdiscovering any serious misconduct or
illegal activities of a firm's associates.
Please complete the following phrase in the correct way. (p. 32/moderate)
Stakeholders' power over businesses stems from their ...
O a. stock ownership.
O b. ability to generate profits.
O c. media impact.
O d. political influence
O e. ability to withdraw or withhold resources. - ANS-O e. ability to withdraw or withhold resources.
Please fill in the missing part in a manner consistent with business ethics. (p. 33/moderate)
A firm that makes use of a __________ recognizes other stakeholders beyond investors, employees, and
suppliers, and explicitly acknowledges the two-way dialog that exists between a firm's internal and
external environments.
O a. stakeholder model of corporate governance.
O b. stakeholder bias.
,O c. code of ethics.
O d. stakeholder interaction model
O e. corporate interface model. - ANS-O d. stakeholder interaction model
Please complete the following phrase in the correct way. (p. 33/easy)
The degree to which a firm understands, and addresses stakeholder demands can be referred to as
O a. a stakeholder orientation.
O b. a shareholder orientation.
O c. the stakeholder interaction model.
O d. a two-way street.
O e. a continuum. - ANS-O a. a stakeholder orientation.
Which-one of the following statements is correct? (p. 64, p. 69 and p. 76/easy)
I) Fraud is the engagement of one or more individuals in intentional deceptive practices to advance their
own interests over those of the organisation or some other group.
II) Commission lying is creating a perception or belief by word that intentionally deceives the receiver of
the message.
III) Omission lying is telling a joke, or, in other words, the making of statements meant to entertain
others without malice.
O a. All of the above statements are correct.
O b. Only statement I is correct.
O c. Only statements I and II are correct.
O d. Only statements I and III are correct.
O e. Only statement III is correct. - ANS-O c. Only statements I and II are correct.
Which-one of the following statements is most likely to be correct? (p. 74, p. 84/moderate)
O a. Especially ethical issues that do principally concern secondary stakeholders are unlikely to become
visible and known to a corporation.
O b. A change in societal values only becomes an ethical issue for a corporation if their main clients are
end-consumers.
O c. It is important for a corporation to determine whether or not it wants to adopt specific policies
regarding an activity that could become an ethical issue.
O d. One way for an organisation to determine whether or not a specific activity is ethical, is to check
whether the activity is approved by all members of the board of directors.
O e. In order to establish whether an activity can be classified as sexual harassment, it is important to
understand the definition of a hostile work environment. A hostile work environment is characterised by
, activities which do - ANS-O c. It is important for a corporation to determine whether or not it wants to
adopt specific policies regarding an activity that could become an ethical issue.
Please fill in the missing part in a manner consistent with business ethics. (p. 135/moderate)
According to the ethical decision-making framework, the absence of punishment provides a(n)
__________ for unethical behaviour.
O a. reason
O b. significant other
O c. individual factor
O d. opportunity
O e. best explanation - ANS-O d. opportunity
Please fill in the missing part in a manner consistent with business ethics. (p. 131/moderate)
Multiple elements work on individuals to affect their behaviour. While an individual may intend to do
the right thing __________ can alter this intent.
O a. cognitive dissonance
O b. familial expectations
O c. religious beliefs
O d. the desire for financial gain
O e. organisational or social forces - ANS-O e. organisational or social forces
Please fill in the missing part in a manner consistent with business ethics. (p. 139/moderate)
Codes, rules, and compliance are essential in organizations. However, an organization built on
__________ is more likely to develop a high integrity corporate culture.
O a. the standards set by a charismatic leader
O b. the preferences of the CEO
O c. the grapevine
O d. formal relationships
O e. informal relationships - ANS-O e. informal relationships
External and internal rewards relate to which part of the ethical decision-making framework? (p.
134/moderate)
O a. Individual factors
O b. Significant others
O c. Cognitive moral development
O d. Obedience to authority
O e. Opportunity - ANS-O e. Opportunity
Please fill in the missing part in a manner consistent with business ethics. (p. 144/moderate)
