Chapter 03 - Test bank PDF

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Business Essentials, Canadian Edition, 9e (Ebert) Chapter 3 Conducting Business Ethically and Responsibly3 Multiple Choice Questions The term "ethics" refers to A) standards or moral values regarding what is right and wrong. B) avoiding doing things that, if everyone did it, we would have a real mes...

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Business Essentials, Canadian Edition, 9e (Ebert) Chapter 3 Conducting Business Ethically and Responsibly 3.1 Multiple Choice Questions 1) The term "ethics" refers to A) standards or moral values regarding what is right and wrong. B) avoiding doing things that, if everyone did it, we would have a real mess. C) believing what's right for one person is wrong for another. D) conflicts of interest that develop between two co-workers. E) bad behaviour by top managers in a company. Answer: A Diff: 1 Type: MC Page Ref: 42 Skill: Knowledge Objective: 3.1 2) What is the difference between "ethics" and "business ethics"? A) The former refers to beliefs about what is right and wrong, while the latter doesn't deal with right and wrong, only with economic issues. B) The former refers to a restricted range of acceptable behaviours, while the latter refers to a much broader range of acceptable behaviours. C) There are no differences between the two terms. D) The former refers to beliefs about what is right or wrong, while the latter refers to behaviours by managers or employees. E) The former refers to the actions of government employees, while the latter refers to the actions of employees in private-sector firms. Answer: D Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 3) Behaviour that conforms to individual beliefs and social norms about what is right and good is referred to as A) social reaction behaviour. B) ethical behaviour. C) generally accepted behaviour. D) collusion E) motivational behaviour. Answer: B Diff: 1 Type: MC Page Ref: 43 Skill: Knowledge Objective: 3.1

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4) ________ refers to ethical or unethical behaviours by a manager or employee of an organization. A) Social ethics B) Social responsibility C) Business ethics D) Collusion E) Cartelling Answer: C Diff: 2 Type: MC Page Ref: 43 Skill: Knowledge Objective: 3.1 5) Ethical and unethical behaviour is determined partly by the ________ and partly by ________. A) society; culture B) society; values C) individual; culture D) person; religion E) culture; society Answer: C Diff: 2 Type: MC Page Ref: 43 Skill: Knowledge Objective: 3.1 6) With regard to the distinction between unethical and illegal behaviour, it is correct to say that A) something that is illegal is also unethical. B) a given act can be ethical, yet illegal. C) the distinction between unethical and illegal behaviour has no practical significance. D) it is impossible for something to be unethical and legal at the same time. E) all of these are correct. Answer: B Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 7) "Cooking the books" to make a company's financial situation look better than it really is illustrates a behaviour that is A) ethical but illegal. B) ethical and illegal. C) unethical but legal. D) unethical and illegal. E) There is no consensus on how this behaviour should be classified. Answer: D Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 2 Copyright © 2020 Pearson Canada Inc.

8) Breaking the law in a totalitarian regime in order to carry out humanitarian efforts would probably be seen by most people as A) ethical but illegal. B) ethical and illegal. C) unethical but legal. D) unethical and illegal. E) There is no consensus on how this behaviour should be classified. Answer: A Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 9) John is a salesperson who feels that he is not paid nearly enough money for the work that he does. He therefore "pads" his expense account in order to receive increased financial benefits. John's behaviour would be ethical according to which criterion? A) Rights B) Justice C) Utility D) Caring E) None of these Answer: E Diff: 2 Type: MC Page Ref: 44 Skill: Comprehension Objective: 3.1 10) The Personal Information Protection and Electronic Documents Act (PIPEDA) A) is designed to protect electronic documents from computer hackers. B) requires organizations to obtain consent before they collect, use, or disclose information about individuals. C) has been declared unconstitutional. D) prohibits organizations from using personal information about their employees. E) applies almost exclusively to universities. Answer: B Diff: 1 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1

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11) Marlene is a shoe buyer for a large department store. Six months ago, she accepted a free trip to Barbados from one of the companies that she buys shoes from. Now, the company is strongly hinting that it wants Marlene to increase the size of her next order, and Marlene feels some obligation to do so because of the free trip she received. Marlene is involved in A) illegal behaviour. B) a conflict of interest. C) collusion. D) illegal and unethical behaviour. E) unethical behaviour. Answer: B Diff: 1 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 12) A manager who discriminates against any ethnic minority in hiring exhibits behaviour that is A) ethical but illegal. B) ethical and illegal. C) unethical but legal. D) unethical and illegal. E) There is no consensus on how this behaviour should be classified. Answer: D Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 13) The practice of jeitinho is an element of business activity in which country? A) Canada B) Japan C) Indonesia D) Brazil E) Czech Republic Answer: D Diff: 1 Type: MC Page Ref: 42 Skill: Knowledge Objective: 3.1

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14) Which of the following statements is correct with regard to the conflict of interest idea in business? A) Conflicts of interest exist only in people's minds. B) A conflict of interest occurs when an activity benefits an individual at the expense of the employer. C) A conflict of interest occurs when employees of equal rank have a disagreement. D) A conflict of interest occurs when a boss and a subordinate have a disagreement. E) All of the statements are correct. Answer: B Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 15) A survey of global managers found that an average of ________ percent of managers felt that corruption was widespread in their country. A) 10 B) 30 C) 40 D) 60 E) 70 Answer: C Diff: 2 Type: MC Page Ref: 43 Skill: Knowledge Objective: 3.1 16) Which of the following behaviours is illegal? A) Company executives encourage employees to invest in company stock. B) An employee accepts a gift from a supplier in return for a large order. C) A manager refuses to hire or promote a qualified visible minority despite company policy. D) A manager underpays an employee, knowing that the employee can't afford to quit. E) All of these actions are illegal. Answer: C Diff: 3 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 17) What is the difference between illegal behaviour and unethical behaviour? A) What is illegal varies from country to country, but what is unethical does not. B) Illegal behaviour is that which breaks a country's laws, but unethical behaviour may not break any laws. C) It is not possible to say what the difference is between illegal and unethical behaviour. D) Illegal behaviour covers a broader range of issues than unethical behaviour. E) There is no real difference between illegal and unethical behaviour. Answer: B Diff: 3 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 5 Copyright © 2020 Pearson Canada Inc.

18) Joe paid his subordinate John less than John deserved because Joe knew that John needed the job badly. Joe's behaviour is A) illegal but not unethical. B) unethical but not illegal. C) both illegal and unethical. D) neither illegal nor unethical. E) It is not possible to say without determining how John feels about his pay. Answer: B Diff: 3 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 19) Jennifer is about to start her first job. Which of the following is least likely to be an influence on her ethics and behaviour? A) Her past experiences B) The code of ethics in that firm C) Her family and friends D) Her peers at school E) Religious teaching she may have received Answer: B Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 20) Georgia wants to make sure that her employees behave in a highly ethical fashion. What should she avoid doing? A) Emphasizing the importance of ethics to all employees B) Helping employees to follow the company's ethical standards C) Modelling behaviour that employees should adopt D) Relying on managers to report ethics violations E) Ensuring that a strict code of ethics is in place Answer: D Diff: 2 Type: MC Page Ref: 45 Skill: Application Objective: 3.1

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21) The first step in the simplified three-step model for applying ethical judgments to situations that may arise during the course of business activities is to A) determine the norms that relate to the situation. B) determine the most appropriate moral values. C) determine the implications of breaching the activity or policy. D) gather the relevant factual information. E) make an ethical judgment based on the rightness or wrongness of the proposed activity or policy. Answer: D Diff: 1 Type: MC Page Ref: 43-44 Skill: Comprehension Objective: 3.1 22) While on a business trip, a manager takes some friends to dinner for a social evening and then charges the dinner to his company's expense account. The ________ norm would ask "Is this fair"? A) utility B) rights C) justice D) caring E) reciprocity Answer: C Diff: 2 Type: MC Page Ref: 44 Skill: Comprehension Objective: 3.1 23) Miranda has decided to evaluate a decision she made based on the ethical norm of rights. What questions should she ask? A) Does the decision optimize the satisfaction of all constituencies? B) Is the decision consistent with what we regard as fair? C) Does the decision respect the rights of the individuals involved? D) Is the decision consistent with people's responsibilities to each other? E) How much will the decision cost if it is wrong? Answer: C Diff: 2 Type: MC Page Ref: 44 Skill: Application Objective: 3.1

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24) Bernard has decided to evaluate a decision he made based on the ethical norm of utility. What question should he ask? A) Does the decision optimize the satisfaction of all constituencies? B) Is the decision consistent with what we regard as fair? C) Does the decision respect the rights of the individuals involved? D) Is the decision consistent with people's responsibilities to each other? E) How much will the decision cost if it is wrong? Answer: A Diff: 2 Type: MC Page Ref: 49 Skill: Application Objective: 3.1 25) Belinda has decided to evaluate a decision she made based on the ethical norm of justice. What question should she ask? A) Does the decision optimize the satisfaction of all constituencies? B) Is the decision consistent with what we regard as fair? C) Does the decision respect the rights of the individuals involved? D) Is the decision consistent with people's responsibilities to each other? E) How much will the decision cost if it is wrong? Answer: B Diff: 2 Type: MC Page Ref: 44 Skill: Application Objective: 3.1 26) Barrie has decided to evaluate a decision he made based on the ethical norm of caring. Which of the following questions does he need to ask? A) Does the decision optimize the satisfaction of all constituencies? B) Is the decision consistent with what we regard as fair? C) Does the decision respect the rights of the individuals involved? D) Is the decision consistent with people's responsibilities to each other? E) How much will the decision cost if it is wrong? Answer: D Diff: 2 Type: MC Page Ref: 44 Skill: Application Objective: 3.1 27) Sam has decided to apply the three-step model to help him decide whether a business decision he is thinking about making is ethical or unethical. What should he do first? A) Reflect on his own ethical standards as background for the decision B) Gather the relevant factual information C) Consult with his boss about the situation D) Make an ethical judgment about the rightness or wrongness of the situation E) Determine the most appropriate moral values Answer: B Diff: 2 Type: MC Page Ref: 43 Skill: Application Objective: 3.1 8 Copyright © 2020 Pearson Canada Inc.

28) All things considered, what is generally the best ethical norm to use when a person is trying to determine whether a decision is ethical? A) Rights B) Caring C) Justice D) Utility E) None of these Answer: E Diff: 2 Type: MC Page Ref: 44 Skill: Application Objective: 3.1 29) Marilyn has decided to use the three-step model to decide whether a business decision is ethical or unethical. She has already gathered the relevant factual information about the situation. What should she do next? A) Reflect on her own ethical standards as background for the decision B) Gather the relevant factual information C) Consult with her boss about the situation D) Make an ethical judgment about the rightness or wrongness of the situation E) Determine the most appropriate moral values Answer: E Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 30) Peter, the president of a small company, wants his employees to be aware that they should act ethically. Which of the following has proven most effective in improving ethical behaviour in a business firm? A) Reward managers who have secured an advantage for the firm, even if their behaviour might be seen by some people as unethical B) Demonstrate top management commitment to high ethical standards C) Do not publicly bring attention to unethical behaviour, instead deal with it privately D) Fire all unethical employees E) Do nothing to reinforce the undesirable behaviour and it will not be repeated Answer: B Diff: 2 Type: MC Page Ref: 45 Skill: Comprehension Objective: 3.1

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31) Which of the following is correct with regard to managerial ethics? A) A manager who discriminates against any ethnic minority in hiring is exhibiting illegal, but not unethical, behaviour. B) If a manager pays an employee less than he deserves because the manager knows the employee can't afford to quit, the manager is clearly behaving unethically. C) Ethics are not usually an issue when a firm deals with customers. D) It is difficult to deal with ethical issues because there is a lot of global variation in business practices. E) All of the statements are correct. Answer: D Diff: 3 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 32) When a Canadian company is operating in a country where bribes are legal, the Canadian government expects the company to A) use their judgment, since Canadian laws are not applicable. B) not pay any bribes at all. C) notify Canadian authorities that they may have to pay a bribe in order to do business in the foreign country. D) match the bribes that other competitive firms are paying so they can get the business. E) None of the statements are accurate. Answer: B Diff: 2 Type: MC Page Ref: 43 Skill: Comprehension Objective: 3.1 33) To show the company's desire for employee ethical behaviour, many business firms have established A) an ethical review board. B) an office of ethical affairs. C) a whistle-blower reward system. D) random ethical audits. E) codes of conduct. Answer: E Diff: 1 Type: MC Page Ref: 45 Skill: Knowledge Objective: 3.1

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34) Due to his formal position, John has access to certain information. If John uses this information to facilitate unethical behaviour and to keep it secret, he is illustrating which of the following reasons for unethical behaviour? A) Pressure B) Opportunity C) Rationalization D) Manipulation E) None of these Answer: B Diff: 1 Type: MC Page Ref: 45 Skill: Knowledge Objective: 3.1 35) The three general factors that have been identified as important in causing individuals to behave in unethical ways are A) pressure, opportunity, and rationalization. B) the chance for financial gain, increased status, and poor control systems. C) the chance for financial gain, status, and power. D) pressure from peers, subordinates, and superiors. E) pressure from external competitors, bosses, and investors. Answer: A Diff: 1 Type: MC Page Ref: 45 Skill: Comprehension Objective: 3.1 36) All of the following are functions of codes of ethics except A) they increase public confidence in a firm or its industry. B) they ensure that unethical behaviour will not occur in the firm. C) they may help stem the tide of government regulation. D) they improve internal operations by providing consistent ethical standards. E) they help management respond to problems that arise as a result of unethical behaviour. Answer: B Diff: 1 Type: MC Page Ref: 45 Skill: Comprehension Objective: 3.1 37) Approximately ________ of Canadian firms have codes of ethics, while approximately ________ of U.S. firms have them. A) one-third; two-thirds B) two-thirds; nine-tenths C) one-fifth; one-fourth D) one-half; one-half E) one-half; three-quarters Answer: B Diff: 3 Type: MC Page Ref: 45 Skill: Knowledge Objective: 3.1 11 Copyright © 2020 Pearson Canada Inc.

38) John wants his employees to be aware that they should act ethically. He should A) fire anyone who behaves unethically. B) not draw public attention to any employee's unethical behaviour, but instead deal with it privately. C) publicly reward ethical behaviour and ignore unethical behaviour. D) publicly discipline employees who behave unethically, but don't fire them. E) adopt a written code of ethics. Answer: E Diff: 2 Type: MC Page Ref: 45 Skill: Application Objective: 3.1 39) Which of the following statements is most likely to be included in a company's code of ethics? A) We reward high achievers. B) We strive for domination in the market. C) We achieve our objective by raising capital. D) We believe in our company brand. E) We reward all valuable contributions. Answer: E Diff: 2 Type: MC Page Ref: 45 Skill: Application Objective: 3.1 40) ________ is the view that a company's only social responsibility is to make as much money as possible for its shareholders. A) Free market capitalism B) Managerial capitalism C) Globalization D) Mixed economy capitalism E) None of these Answer: B Diff: 1 Type: MC Page Ref: 46 Skill: Knowledge Objective: 3.2

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41) The view that business should balance its commitments to important individuals and groups in its environment is known as A) managerial capitalism. B) social auditing. C) social responsibility. D) business ethics. E) stakeholder theory. Answer: C Diff: 2 Type: MC Page Ref: 46 Skill: Knowledge Objective: 3.2 42) All of the following groups are organizational stakeholders except A) employees. B) investors. C) customers. D) competitors. E) All of these groups are organizational stakeholders. Answer: D Diff: 2 Type: MC Page Ref: 47 Skill: Knowledge Objective: 3.2 43) Social return on investment (SROI) helps companies to A) improve their financial return on investment. B) increase employee satisfaction. C) understand, manage, and communicate the social value of their activities for stakeholders. D) respond to required government regulations on social responsibility. E) improve the level of ethics within the company. Answer: C Diff: 2 Type: MC Page Ref: 47 Skill: Comprehension Objective: 3.2 44) Why did the fair-trade movement develop? A) Because large industrialized countries were using unfair trading practices with developing countries B) Because pollution was increasing too rapidly in developing countries as a result of excessive investment in mining operations C) Because workers involved in producing commodities like coffee were not receiving fair payment for their products D) Because free trade agreements were hurting smaller producers E) Because there was a surplus of cotton as a result of highly efficient U.S. production Answer: C Diff: 2 Type: MC Page Ref: 46 Skill: Comprehension Objective: 3.2 13 Copyright © 2020 Pearson Canada Inc.

45) Which of the following is the greatest challenge in meeting a firm's social responsibility? A) Determining when to conduct ethical training B) Determining the contents of...