TEST BANK

(Chapter 1-11)

Business Ethics & Social Responsibility

Course Code: MGMT 303

1. You have recently joined a firm as a manager and after learning about ethical behavior in
the firm now you are in the process of rationalizing the ethics of the firm, which of the
following types of ethics are you dealing with?
a. Descriptive Ethics
b. Normative Ethics
c. Analytical Ethics
d. Narrative Ethics

2. As a manager you make ethical decisions based on checking the feelings of your team
members. Which of the following ethical framework do you apply to justify your actions?
a. Teleological
b. Duty based
c. Deontological
d. Mixed

3. Sidgwick’s Dualism attempts to bridge the gap between?

a. Existentialism and Utilitarianism
b. Kant’s Ethics and Ethical Egoism
c. Utilitarianism and Ethical Egoism
d. Existentialism and Kant’s Ethics

4. ____________ is the one and only non-human, with no voice, stakeholder among many
others for a firm that affects the firms and gets affected by the firms operations directly.
a. Society
b. Political groups
c. Suppliers
d. Environment

5. Your organization requires you to resolve conflicts among the team members based on the
organizational policies and without checking the feeling individuals. Which of the
following ethical framework would you apply in this case?

a. Teleological
b. Deontological
c. Sidwick Dualism
d. Ethical Egoism

6. The basic difference between ethical egoism and utilitarianism lies in :

 a. Ethical egoism is based on making decision in the favor of the group and in
utilitarianism in the favor of individuals.

b. Ethical egoism is based on making decision in the favor of self-interest and in

utilitarianism in the favors of others.

c. Ethical egoism is based on making decision in the favor of the individuals and in
utilitarianism in the favor of all the stakeholders.

d. Ethical egoism is based on making decision in the favor of self-interest and in

utilitarianism in the favors of firm.

7. The obligation companies have to develop and implement courses of action that aid in
social issues is called:
a. Corporate social obligation
b. Corporate social responsibility
c. Corporate social action
d. Corporate social performance

8. ____________ of integrity is based on whether an individual would be comfortable if his

or her actions were publicized in a newspaper or on television?
a. Trusted friend test
b. Publicity test
c. Universality test
d. Obituary test

9. The presentation of facts related to the specific ethical actions of an individual or

organization is referred to:
a. Descriptive ethics
b. Normative ethics
c. Analytical ethics
d. Comparative ethics

10. All of the following are true about immoral manager EXCEPT:
a. They do not care how their decisions impact the stakeholders
b. They focus only on the goals of the company.
c. They consider employees a valuable asset
d. They considers laws as constants or barriers that are ignored in the company

11. In which of the following critical area the ethical behavior must be the norm for
customers to support the business?
a. The manufacturing process
 b. Sales and quotes
c. Distribution
d. All of the above
e. None of the above

12. As manager you have been advised by the top management to make ethical decision
based on universality test of integrity. Which of the following options would you apply
for this test?
a. You want to look back in hindsight and be comfortable with the decision.
b. You would consider it acceptable behavior if someone else did the same action
c. You would be comfortable telling your best friend about your actions
d. You treat others as you would like to be treated

13. The managers who used to treat their employees as means of productions were advised by
the company to give employees their legal rights. In your opinion, managers are being
asked to be?
a. Immoral
b. Unmoral
c. Amoral
d. Moral

14. A manager who remains ethical while making decisions is what type of manager?
a. Immoral
b. Unmoral
c. Amoral
d. Moral

15. Triple Bottom Line reporting refers to:

a. Using a low, medium and high estimates for profitability forecasts
b. Measuring the impact of the firm on stockholders, customers and employees
c. Measuring the social, economic, and financial performance of the firm
d. Measuring the impact of local, state, and federal governments on the firm

16. According to Carroll’s pyramid of corporate social responsibility or four parts definition, which of
the following responsibility is not an obligation on the firms?
a. Ethical
b. Legal
c. Economic
d. Philanthropic

17. _____________ refers to individuals who view decisions based on their self-interests
whereas ________________ refers to making decisions that do the greatest good for the
greatest number of people.
 a. Egoism: Moral relativism
b. Utilitarianism: Moral relativism
c. Utilitarianism: Virtue ethics
d. Egoism: Utilitarianism

18. Which of the following is NOT the name of a type of statement, which presents the firm’s
view on ethics?
a. Ethical Philosophies
b. Codes of Ethics
c. Values statement
d. Corporate credos
19. Analytical ethics:
a. Understanding the reasons a course of action that may have an ethical impact
took place

b. Also called metaethics, moves from the how and when inquiry, which is the basis
of the descriptive ethics viewpoint, to asking why

c. Hypotheses can be developed to help understand the relationships among

different variables impacting ethical behavior

d. All of the above

20. Normative ethics:

a. A prescribed course of action that attempts to ensure that ethical behavior will be
followed in the future

b. Moves the evaluation of ethical behavior from the past to future tense

c. Allows employees and managers to address potential ethical issues before they occur

d. All of the above.

21. Which one of the following is not among the seven guiding principles that are considered
part of the prima facie obligation an individual has to society?

a. Justice: an individual should try to see that any goods are fairly distributed.

b. Beneficence: an individual should focus on trying to improve the lives of others.

c. Self-Improvement: an individual should improve oneself by focusing on virtue

and intelligence.

d. Existentialism

22. Based on the belief that every employee should respect property as well as the rights of
the owners of the property is best explained by?

1. Fairness principle
 2. Citizenship principle

3. Property principle

4. Reliability principle

23. Fiduciary Principle is best explained by which of the following statement?

a. States that managers have a legal responsibility to protect the interests of the
stakeholders.
b. Each employee must honor his/her commitments to the firm.
c. Each employee should conduct business in a truthful and open manner.
d. Based on the belief that each employee needs to respect the dignity of all
individuals
24. Expected that employees respect the laws of the community – criminal, competition,
environmental, corporate social responsibility
a. Citizenship Principle
b. Property principle
c. Responsiveness
d. Reliability

25. A firm adherence to a code of especially moral or artistic values is the definition of

a. Ethics

b. Scruples.

c. Integrity

d. Creditability

26. Integrity can be defined as

a. the ability to ensure that the decision maker considers what is best for the
firms stakeholders

b. the ability to ensure a firm adherence to specific moral values

c. the ability to ensure that everyone who is impacted by a decision is satisfied

with the final result

d. the ability to ensure that a persons individual ethical values are consistent
with the firms ethical values.

27. Which of the following is not a test that can be used to validate the integrity of a decision
makers actions?

a. publicity

b. stakeholder
 c. universality

d. reciprocity

28. Which of the following is not a specific behaviour of high integrity?

a. humility
b. Truthful
c. earnestness
d. fairness

29. Which of the following is not a specific behaviour of high integrity?

a. takes responsibility
b. develop others
c. extend self for others
d. consults others before making a decision

30. Which is the correct sequence of steps in the ethical cycle?

a. problem analysis; ethical –judgment; options for actions

b. ethical judgment; problem analysis; options for actions
c. problem analysis; options for actions; ethical judgment
d. ethical judgment; problem analysis; options for actions

31. What step comes before ethical judgment in the ethical cycle?

a. moral problem statement

b. Options for actions

c. Problem analysis

d. Reflection

32. What step comes after problem analysis in the ethical cycle?

a. moral problem statement

b. reflection

c. ethical judgment

d. options for actions

33. What creative ideas can I develop as a company executive to help convert my ethical
Vision into a personal and organizational reality is based on which defining moment question?

a. Who am I?

b. Who are we?

c. Who do we serve?
 d. who is the company

34. Which of the following is not a benefit for firms to focus on ethical issues in the
workplace?

a. Ethics programs help maintain a moral course in turbulent times

b. Ethics programs cultivate strong teamwork and productivity
c. Ethics programs are a requirement for international expansion of the firm
d. Ethics programs help avoid criminal acts of omission and can lower fines.

35. Which of the following is not a traditional stakeholder?

a. suppliers
b. customers
c. Competitors
d. investors

36. Which of the following is not one of the concepts used to determine ethical behaviours?

a. Transparency

b. Effect

c. Fairness

d. Equal

37. Determining what is equal for everyone who is impacted by the decision is called:

a. Transparency
b. Effect
c. Fairness
d. Equal

38. Making sure others know what one has decided is called:

1. Transparency
b. Effect
c. Fairness
d. Equal

39. Which Stakeholder is more important, Company decides based on:

a. Power
b. Legitimacy
c. Urgency
d. All of the above.

40. Stakeholder Communications includes?

a. Open houses
 b. Public service announcements

c. Both a and b above

d. None of the above.

41. Critical areas in which ethical behavior must be the norm for customers as stakeholders:

a. The manufacturing process

b. Customer service

c. None of the above

d. Both a & b above

42. The obligation companies have to develop and implement courses of action that aid in
social issues that impact society refers to:

a. CSR
b. Stakeholder management
c. Ethical management
d. integrity

43. Which of the following are the Components of CSR?

a. Economic Responsibilities
b. Legal Responsibilities
c. Discretionary Responsibilities
d. All of the above.

44. The benefits a firm gets by integrating CSR into its operations:

a. Good relations with stakeholders and interested communities

b. Enhanced brand value and reputation

c. Both a & b above

d. Only a above.

45. The laws and regulations that all firms are expected to abide by as they perform their
daily functions refers to:

a. Legal Responsibilities component of CSR

b. Discretionary Responsibilities
c. Economic Responsibilities
d. a & b above

46. Which one of the following is true with respect to employees as stakeholders?
 a. the more dissatisfied the employee, the more likely the employee will
engage in unethical behavior
b. Firm wants to attract, select and retain the best qualified employees
c. a only
d. both a & b above.

47. Corporations are facing increasing pressures to respond to their stakeholders?

a. not true at all

b. partially true
c. true
d. Can’t say.

48. Which Stakeholders are more important, company usually decide based on the following
attributes;
a. Power, commitment, and legitimacy
b. Power, legitimacy, and loyalty
c. Power, legitimacy, and urgency
d. Power, commitment, and urgency

49. Business ethics can be defined as:

a. the determination of accountable behavior within an organization

b. an evaluation of the ethical and legal conduct of employees within an
organization
c. the collective values of a business organization used to evaluate the collective
behavior of members within an organization
d. the collected values of the top decision makers within an organization

50. Which of the following is not a specific behavior of high integrity?

a. Cheat others
b. Extend self to others
c. Have respect for others
d. Possess humility

51. Which one of the following statement is correct about the Corporate Governance (CG)?

a. CG is a system that is used by firms to control and direct their operations and the
operations of their representatives, the employees.
b. Through the corporate governance structure, firms can ensure that the needs of all
stakeholders are satisfied.
c. CG Provides a means to measure and validate the ethical vision.
d. All of the above.

52. The corporate governance system ensures:

a. That the behavior of the employees within the firm is fair, just, and transparent
b. That there is no CEO duality in the company.
 c. That objective of the stakeholders is not met.
d. None of the above.

53. Which one of the following is not the type of BOD?

a. Passive Board
b. Certifying Board
c. Engaged Board
d. CEO Board

54. Intervening Board means a board that is

a. Actively involved in major decisions.

b. A rubber stamp board.
c. Only a, above
d. Both a and b above.

55. Which one of the following option regarding types of BOD Committees is correct?

a. Executive committee, Nominating committee, Compensation committee

b. Finance committee, Succession committee, Audit committee
c. a above only
d. Both a and b above

56. Which one of the following option is not correct regarding the responsibilities for Board
Members?

a. Establishing and maintaining internal financial controls

b. Not establishing and revising the company’s code of ethics and ethical standards
c. Selecting the external auditor
d. Establishing different board committees

57. Selecting the external auditor remains the main function of which of the following BOD
committee:

a. Executive committee
b. Succession committee
c. Audit committee
d. Nominating committee

58. Deloitte & Touche argues that corporate compliance should not be considered a penalty of
doing business, but an opportunity to incorporate a value-based approach to compliance
issues comprising of the following steps:

a. Step 1: risk/cultural assessment; Step 2: review of current compliance

program; Step 3: review the current ethical policies and procedures; Step 4:
review and revise if necessary the communication, training, and
 implementation phases of the compliance program.; Step 5: develop ongoing
self-assessment of the compliance program

b. Step 1: risk/cultural assessment; Step 2: review the current ethical policies

and procedures Step 3: review of current compliance program;; Step 4:
review and revise if necessary the communication, training, and
implementation phases of the compliance program; Step 5: develop ongoing
self-assessment of the compliance program

c. Step 1: risk/cultural assessment; Step 2: review and revise if necessary the

communication, training, and implementation phases of the compliance
program. Step 3: review of current compliance program; Step 4: risk/cultural
assessment; Step 5: develop ongoing self-assessment of the compliance
program

d. Step 1: review of current compliance program; Step 2: review and revise if

necessary the communication, training, and implementation phases of the
compliance program. Step 3: risk/cultural assessment; Step 4: risk/cultural
assessment; Step 5: develop ongoing self-assessment of the compliance
program

59. _____________ the use of intimidation or power in return for financial benefit?

a. Extortion

b. Embezzlement

c. Influence Peddling

d. Petty Corruption

60. Influence Peddling occurs when:

a. Illegal financial incentives are given to higher ranked public officials

b. Illegal transactions take place along with legal transactions
c. Private individuals give illegal financial incentives to non-elected public officials in
exchange for favorable dealings with certain government transactions
d. giving a financial benefit in return for influencing the decision of a person in a position of
trust

61. Which of the following is a Generic Competitive Environmental Strategy?

a. Eco effectiveness

b. Eco improvement

c. Eco efficiency
d. Eco performance

62. Which Competitive Environmental Strategy focuses on low cost competitive advantage
and organizational process competitive focus?
a. Eco efficiency

b. Beyond Compliance Leadership

c. Environmental Cost Leadership

d. Eco branding

63. The systematic equal allocation of environmental benefits and burdens is called:
a. environnemental equity

b. environnemental balance

c. environnemental justice

d. Environmental cost/benefit

64. The ability of an organization to protect the use of future resources is called:

a. Environmental pro activeness

b. Environmental sustainability

c. Environmental protection

d. Environmental responsibility

65. The Greenhouse Gas Effect is:

a. As Greenhouse Gases increase, more heat is trapped in Earth’s atmosphere

b. As Greenhouse Gases increase, it replaces oxygen in the air

c. Is completely man made since there are no natural Greenhouse Gases

d. Not proven yet to impact the climate

66. Capturing, tracking and monitoring information flows is which management issue related
to information technology?
a. Ownership

b. Control

c. Accuracy

d. Security

67. Which of the following is not included in the information technology critical analysis?
a. Utilitarian Goal-based Analysis
b. Ethical Egoism-based Analysis

c. Rights-Based Analysis

d. Duty-Based Analysis

68. Which of the following is not an ethical issue facing Internet usage?
a. Privacy

b. Plagiarism

c. False advertising

d. Speed

69. The use of e-mail to try to mimic a legal legitimate company to obtain personal
information is called:
a. Copying

b. Mimicking

c. Phishing

d. Cookies

70. The use of computer technology to commit terrorism crimes is called:

a. Internet terrorism

b. Electronic terrorism

c. Cyber terrorism

d. Computer terrorism

71. In the Ethical Decision Tree model, what is the first step ?
a. Would it be ethical or not to take the action?

b. Does it maximize shareholder value?

c. Do our ethical standards support this action?

d. Is the proposed action legal?

72. The ability to change the viewpoint of another person is called:

a. Persuasion

b. Influence

c. Convince

d. Negotiation
73. Using whatever means possible to create and maintain power is called:
a. Controlism

b. Mainipulatism

c. Machiavellianism

d. Influencalism

74. Which of the following is not a factor that would affect whether an employee will commit
fraud or not?
a. Financial condition of the organization

b. Internal accounting controls

c. The competitive pressure of the industry

d. The state of the economy

75. What is the process called that evaluates the ethical values within the firm?
a. Values analysis

b. Morals analysis

c. Ethical analysis

d. Integrity analysis

76. A Weak Moral Manager and a Weak Moral Person results in what kind of leader?
a. Hypocritical

b. Ethical

c. Unethical

d. Inconsistent

77. A Strong Moral Manager and a Strong Moral Person results in what kind of leader?
a. Hypocritical

b. Ethical

c. Unethical

d. Inconsistent

78. The shared values and beliefs of employees within any given organization are called:
a. Corporate climate

b. Corporate values

c. Corporate culture
d. Corporate beliefs

79. Factors such as what is seen and heard within a firm are called:
a. Symbols

b. Artifacts

c. Legacies

d. Identifiers

80. The deviation from the traditional methods used to interpret an accounting rule or
standard is called:
a. Aggressive accounting

b. Creative Accounting

c. Interpretive Accounting

d. Deviate Accounting

81. The ethical perspective of economic efficiency would correspond with which accounting
application?
a. Accountants must focus on always reducing costs

b. Management must embrace total quality management in production and in developing

financial information.

c. Accountants must understand the cost of inaccurate financial statements

d. Management must highlight efficiency benefits in the financial statements

82. If an auditor has a financial interest in the firm, it would correspond to which type of
conflict of interest?
a. Auditor-firm

b. Firm-Professional Standards

c. Shareholder-Management

d. Self Interest-Professional Standards

83. Which of the following is in the first step or the getting started stage of an audit?
a. The audit firm performs a risk assessment test

b. The audit firm inspects the company’s computer

c. The audit firm inspects the firm’s internal accounts

d. The audit firm reviews the firm’s previously reported financial statements

84. What type of audit model is based on the audit firm focusing a disproportionate amount
of time on high-risk areas within the firm?
a. High-risk model

b. Risk-adverse model

c. Risk-exception model

d. Risk-based model

85. Which of the following is not a question auditors should ask to help detect fraud?
a. Why does the client use multiple banks?

b. Why is there missing information, such as an address, on the work invoice?

c. Why does the company use only cashiers’ checks for financial transactions?

d. Why does the firm not rotate their suppliers?

86. Which of the following is not a clue that may indicate financial trouble for a firm?
a. Large financial gap between sales and receivables growth

b. Large financial gap between domestic and international sales

c. Large financial gap between sales and inventory growth

d. Heavy deficit in cash as compared to their levels of net income

87. GAAP stands for:

a. Greater American Accounting Practitioners

b. Generally Accepted Accounting Principles

c. Giant Applied Acceptable Principles

d. Good Accountants Accept Punishment

88. The statement that provides information pertaining to the company’s cash receipts and
payments is called:
a. Balance Sheet

b. Income Statement

c. Statement of Revenue

d. Statement of Cash Flows

89. The balance sheet is also called the

a. Statement of financial performance

b. Statement of assets and liabilities

c. Statement of financial position

d. Statement of financial security

90. If the CFO stated he needed to have a “clean audit” to keep his job, it would correspond
to which type of conflict of interest?
a. Auditor-firm

b. Firm-Professional Standards

c. Shareholder-Management

d. Self Interest-Professional Standards

91. Which of the following is not a method that can be used to manipulated financial
statements?
a. Revenue recognition

b. Lease accounting

c. Generally accepted auditing standards

d. Cookie jar accounting

92. The ethical perspective of utilitarian beliefs would correspond with which accounting
application?
a. The gap between short-term and long-term benefits

b. The financial records need to be accurate for everyone’s use

c. Each accounting decision must help the greatest number

d. Each accounting report must be acceptable based on accounting standards.

93. External Realism makes what presupposition about external financial reporting?
a. All conceptual frameworks are based on a human perspective, and therefore are socially
constructed.

b. The financial statements are independent of the actual items they represent.

c. The accountants’ ability to make valid judgments about the economic reality of the
financial statements is influenced by cultural, economic, political and psychological factors.

d. Information and knowledge is epistemologically objective only to the point where society
can agree.

94. The system and procedures of the organization is an example of:

a. Primary Embedding Mechanisms

b. Secondary Embedding Mechanisms

c. Primary Articulation and Reinforcement Mechanisms

d. Secondary Articulation and Reinforcement Mechanisms

95. What groups within the firm learn about what is acceptable and not acceptable is called:
a. Norms

b. Shared values

c. Cognitive learning

d. Corporate learning

96. A Weak Moral Manager and a Strong Moral Person results in what kind of leader?
a. Hypocritical

b. Ethical

c. Unethical

d. Inconsistent

97. A Strong Moral Manager and a Weak Moral Person results in what kind of leader?
a. Hypocritical

b. Ethical

c. Unethical

d. Inconsistent

98. Which of the following is not a behavior of a moral person?

a. Do the Right Thing

b. Being Open

c. Presenting Your Values To Others

d. Personal Morality

99. Whether the crisis issue is internal or external is called the:

a. Vortex of Crisis

b. Center of Gravity

c. Focus of Crisis

d. Issue Determination

100. Hosmer’s Model of Trust, Commitment, and Effort , which of the following is not a
question asked in the model?
a. What is duty?

b. What is truth?

c. What is right?
d. What is integrity?

101. Which of the following questions is not asked when deciding on how to resolve an
ethical issue?
a. Why is this bothering me?

b. Is it my responsibility?

c. What will the estimated cost be?

d. What do others think?

102. Am I being true to myself? Is also called the:

a. Truthfulness test

b. Honesty test

c. Mirror test

d. Reflective test

103. What act allows employers to consider employees’ e-mail corporate property?
a. Electronic Communications Privacy Act

b. Electronic Corporate Privacy Act

c. Electronic Control Privacy Act

d. Electronic Command Privacy Act

104. Which of the following analyzes whether the manager is being honest and fair to anyone
who is impacted by the decision?
a. Stakeholder analysis

b. Utilitarian goal-based analysis

c. Rights-based analysis

d. Duty-based analysis

105. Collective rule-based ethics corresponds with:

a. Ethical egoism

b. Utilitarianism

c. Kant’s ethics

d. Sedgwick’s dualism

106. Equator Principles address:

a. Social and environmental issues when financial institutions consider project financing
b. The principles used to help countries along the equator with global warming

c. The principles used by developed countries to help survival economies

d. The principles used by governments to develop global warming solutions

107. Which of the following is not a major component of sustainability

a. A system to ensure the sustainable management of the earth’s natural resources

b. The development of social and institutional structures that would support sustainable
management

c. Changes in the legal framework to support sustainability

d. Changes in the economic framework to support sustainability

108. What does NIMBY stand for?

a. New Independent Management BuyIn Yield

b. Not In My Back Yard

c. Negative Image Maintenance Bonus Yield

d, No Initiative, Management By Young Views

109. Stanwick and Stanwick found that:

a. Firms with a low level of financial performance had the highest incidences of
environmental policies.

b. Firms with a medium level of financial performance had the highest incidences of
environmental policies.

c. Firms with a high level of financial performance had the highest incidences of
environmental policies.

d. They could not determine a relationship between level of financial performance and
incidences of environmental policies.

110. Which Competitive Environmental Strategy focuses on differentiation competitive

advantage and organizational processes competitive focus?
a. Eco efficiency

b. Beyond Compliance Leadership

c. Environmental Cost Leadership

d. Eco branding

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