MGMT 4073 EXAM 1 QUESTIONS AND ANSWERS | MGMT 4073 EXAM 1 STUDY
GUIDE & PRACTICE TEST 2026/2027
Causes of the Financial Disaster of 2008 - correct answer ✔✔loosened restrictions on loans (subprime
mortgages, liar, no document loans). Mortgages were sold off to larger banks in order to spread or risks
they were then "sliced and diced". Bottom line, greed, arrogance, total recklessness.
Result of the Financial Disaster of 2008 - correct answer ✔✔business failures, layoffs, government
bailouts(Fannie Mae, AiG), distrust in governments/corporations.
Cynicism - correct answer ✔✔an inclination to believe that people are motivated purely by self interest.
Edelman Trust Barometer - correct answer ✔✔trust level decreased in 16/27 countries. US being in the
middle of the pack. BRIC is at the bottom of the list
Why are we cynical? - correct answer ✔✔Society's emphasis on money and material success. Children
are raised to succeed at any cost (cheating). The media (depiction of business and leaders in movies and
TV)
Can Ethics Be taught? - correct answer ✔✔It can be taught. "Bad apples", its easier to get rid of the bad
apple than to figure out why they went bad. People's ethics can be changed over time.
Ethical Dilemma - correct answer ✔✔Situation where two or more (right) values are in conflict. (Layoff
example)
Focus on consequences (consequentialist theories) - correct answer ✔✔Utilitarianism (an ethical
decision should maximize benefits to society and minimize harms). A utilitarian would approach an
ethical dilemma by systematically identifying the stakeholders in a particular situation as well as the
alternative actions and the consequences for each. (stakeholder are those directly and indirect effected
by decision)
Advantages of consequentialist theories - correct answer ✔✔practical already underlies business
thinking.
Disadvantages of consequentialist theories - correct answer ✔✔difficult to evaluate all consequences,
rights of minorities can be sacrificed.
Practical Preventative Medicine - correct answer ✔✔Be prepared (read your companies code of ethics
and policy book), ask questions, and develop relationships outside of your chain of command.
Ethical Awareness - correct answer ✔✔with ethical awareness a person recognizes that a situation or
issue is one that raises ethical concerns and must be thought about in ethical terms. Influences are
1. If peers agree
2. If ethical language is used
3. If the decision is seen as having the potential to produce serious harm to others.
GUIDE & PRACTICE TEST 2026/2027
Causes of the Financial Disaster of 2008 - correct answer ✔✔loosened restrictions on loans (subprime
mortgages, liar, no document loans). Mortgages were sold off to larger banks in order to spread or risks
they were then "sliced and diced". Bottom line, greed, arrogance, total recklessness.
Result of the Financial Disaster of 2008 - correct answer ✔✔business failures, layoffs, government
bailouts(Fannie Mae, AiG), distrust in governments/corporations.
Cynicism - correct answer ✔✔an inclination to believe that people are motivated purely by self interest.
Edelman Trust Barometer - correct answer ✔✔trust level decreased in 16/27 countries. US being in the
middle of the pack. BRIC is at the bottom of the list
Why are we cynical? - correct answer ✔✔Society's emphasis on money and material success. Children
are raised to succeed at any cost (cheating). The media (depiction of business and leaders in movies and
TV)
Can Ethics Be taught? - correct answer ✔✔It can be taught. "Bad apples", its easier to get rid of the bad
apple than to figure out why they went bad. People's ethics can be changed over time.
Ethical Dilemma - correct answer ✔✔Situation where two or more (right) values are in conflict. (Layoff
example)
Focus on consequences (consequentialist theories) - correct answer ✔✔Utilitarianism (an ethical
decision should maximize benefits to society and minimize harms). A utilitarian would approach an
ethical dilemma by systematically identifying the stakeholders in a particular situation as well as the
alternative actions and the consequences for each. (stakeholder are those directly and indirect effected
by decision)
Advantages of consequentialist theories - correct answer ✔✔practical already underlies business
thinking.
Disadvantages of consequentialist theories - correct answer ✔✔difficult to evaluate all consequences,
rights of minorities can be sacrificed.
Practical Preventative Medicine - correct answer ✔✔Be prepared (read your companies code of ethics
and policy book), ask questions, and develop relationships outside of your chain of command.
Ethical Awareness - correct answer ✔✔with ethical awareness a person recognizes that a situation or
issue is one that raises ethical concerns and must be thought about in ethical terms. Influences are
1. If peers agree
2. If ethical language is used
3. If the decision is seen as having the potential to produce serious harm to others.
