1.

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Business ethics can be defined as ________________________
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special standards that are only applicable for business situations.
principles that are popular in conducting business but generally do not find consideration when crafting
and executing a strategy.
a company's duty to operate in an honorable manner and provide good working conditions for
employees.
rules each company makes about "what is right" and "what is wrong" for top management and the board
of directors.
the application of ethical principles and standards to the actions and decisions of business organizations
and the conduct of their personnel.
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2.
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According to the school of ethical universalism, the most important concepts of what is right and what is wrong
_____________
are universal and transcend culture, society, and religion.
are mandatory and every company has to apply and to adhere to a set of rules.
are based on the belief that local moral standards should take precedence over what the ethical
standards may be in the company's home market.
vary significantly according to local cultural beliefs, traditions, or religious convictions.
are dictated by subjectively provable moral principles but not by objectively provable moral principles.
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3.
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Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical _____________
vary enormously from country to country across the world.
are present in all societies and subcultures.
ultimately depend on the circumstances; nothing is really black or white when it comes to ethical
standards.

are determined by senior management when developing a company's corporate values and code of
conduct.
ultimately depend on a person's own values and beliefs.
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4.
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Which of the following statements adhere to the basic tenets of the school of ethical relativism?
The standards of what constitutes ethical and unethical behavior in business situations are partly
universal, but in the main are governed by local business norms.
Many basic moral standards travel well across cultures and countries and really do not vary significantly
according to local cultural beliefs, social mores, religious convictions, and/or the circumstances of the
situation.
Individuals and businesses have a basic right to "moral free space" and it is inappropriate to specify
ethically permissible and ethically impermissible actions and behaviors.
What constitutes ethical or unethical behavior on the part of local businesspeople is properly governed
by local ethical standards rather than the standards that prevail in other locations.
Concepts of right and wrong as applied to business situations are always a function of each company's
own set of values, beliefs, and ethical convictions (as stated in the company's code of ethical conduct).
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5.
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Which of the following is a major drawback of ethical relativism?
The adoption of ethical relativism can be dangerous and might lead to the conclusion that if a country's
culture is accepting of bribery, environmental degradation, and exposing workers to dangerous
conditions, then managers are free to engage in such activities.
The adoption of ethical relativism creates unnecessary rigidity that comes from having universal ethical
standards for company personnel.
There is no possibility to measure the compliance of company personnel to ethical relativism due to the
different standards worldwide.
The one-size-fits-all set of ethical standards hinders personnel to do their work properly and effectively.
By adopting an ethics policy shaped by ethical relativism, the company will end up allowing each
employee to determine what set of ethical standards to observe.
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6.
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According to integrated social contracts theory, ____________________________

there is no "moral free space" for the people in a particular country (or local culture or even a company)
to decide what actions may or may not be permissible within the bounds of business ethics.
local ethical norms always take precedence over universal ethical norms, thus local ethical norms can
be less stringent than the universal ethical standards.
universal ethical principles or norms are based on the collective views of multiple cultures and societies
combined to form a "social contract" that all individuals, groups, organizations, and businesses in all
situations have a duty to observe.
the slippery slope of ethical relativism is rejected and the ethical universalism is embraced.
cultural differences that give rise to different ethical standards so there is no one culture that is more
"ethically correct" than another.
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7.
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Which of the following describes the strength of integrated social contracts theory?
The integrated social contracts theory correctly recognizes all soundly reasoned ethical standards are
universal and local adaption should be dismissed.
The integrated social contracts theory recognizes that individuals and businesses have a basic right to
"moral free space" and that it is inappropriate to specify ethically permissible and ethically impermissible
actions and behaviors.
The integrated social contracts theory puts no absolute limits on what actions and behaviors fall inside
the boundaries of what is ethically or morally right and which actions and behaviors fall outside.
The integrated social contracts theory allows the use of a one-size-fits-all set of authentic ethical norms
resulting in efficient processes and effective compliance measurements.
The integrated social contracts theory accommodates the best parts of ethical universalism and ethical
relativism.
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8.
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The major drivers of unethical managerial behavior include __________________

greed, atheism, pervasive managerial immorality, and a general lack of scruples on the part of top
executives regarding how customers and suppliers should be treated.
overzealous pursuit of wealth and other selfish interests, heavy pressures on company managers to
meet or beat performance targets, and a company culture that puts profitability and good business
performance ahead of ethical behavior.
widespread managerial belief in the ethical relativism school of thinking.
an aversion to ethical correctness on the part of top executives and a belief that unethical behavior is
unimportant and probably won't be discovered.
intense competitive pressures.
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9.
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A company's strategy needs to be ethical because ___________________
of the danger that top management will be embarrassed if the company's unethical behavior is publicly
exposed.
a deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky practice from
both a shareholder perspective and a reputational standpoint.
everyone is an ethics watchdog and somebody is sure to blow the whistle on the company's unethical
behavior.
of the risks of getting caught and prosecuted by governmental authorities if an unethical strategy is
used.
unethical strategies are inconsistent with or weaken the corporate culture.
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Multiple Choice

10.
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The business case for an ethical strategy ____________________
focuses primarily on costs that are difficult to quantify (for example, customer defections and adverse
effects on employee productivity) but can often be the most devastating.
emphasizes that pursuing unethical strategies not only damages a company's reputation but can also
have costly consequences that are wide ranging.
starts with numerous ethical rules and guidelines and an environment where employees rely on these
rules for moral guidance.
starts with managers who understand there is big difference between adopting values statements and
codes of ethics that serve merely as window dressing and those that truly paint the white lines for a
company's actual strategy and business conduct.
begins with ethical guidelines that help send the message that management takes the observance of
ethical norms seriously and that behavior falling outside ethical boundaries will have negative
consequences.
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11.
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According to integrated social contracts theory, the ethical standards a company should try to uphold
_______________________
are governed by the school of ethical universalism.
are governed both by (1) a limited number of universal ethical principles that are widely recognized as
putting legitimate ethical boundaries on actions and behavior in all situations and (2) the circumstances

of local cultures, traditions, and shared values that further prescribe what constitutes ethically
permissible behavior and what does not.
are governed by each country's code of required ethical conduct, which sets forth that each
individual/group/business/organization has a "social contract" to observe the ethical and moral
standards that the country has adopted.
should be determined by the company's moral managers.
should never be absolute but rather always provide some wiggle room according to the circumstances
of the situation.
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12.
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The "triple bottom line" refers to what three performance metrics?
Economic, social, environmental
Pay, power, performance
Planning, exertion, results
None of the above
All of the above
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13.
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Costs companies incur when ethical wrongdoing is disclosed include _______________________
primarily visible costs in the form of government fines and penalties.
visible costs, internal administrative costs, as well as intangible or less visible costs.
lost profits because of customer dissatisfaction with the company's poor ethical standards.
legal fees and compensatory and punitive damage awards.
primarily visible and internal administrative costs; intangible costs account for barely a fraction and do
not need to be considered.
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14.
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Which of the following statements best describes the core concept of corporate social responsibility (CSR)?

CSR is the responsibility that top management has for ensuring that the company's actions and
decisions are in the best interest of society at large.
CSR consists of the company's deliberate actions to protect the environment, provide for the longevity of
natural resources, maintain ecological support systems for future generations, and guard against
ultimate endangerment of the planet.
A CSR strategy is defined by the specific combination of financially beneficial activities the company
opts to support with its contributions of time, money, and other resources.
CSR is a company's duty to operate in an honorable manner, provide good working conditions for
employees, encourage workforce diversity, be a good steward of the environment, and actively work to
better the quality of life in the local communities where it operates and in society at large.
CSR primarily focuses on fostering social betterment disregarding shareholders' expectations of
maximum return.
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15.
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A company's corporate social responsibility strategy commonly does not include

__________
actions to ensure the company operates honorably and ethically.
actions to protect and sustain the environment.
actions to promote workforce diversity.
actions to enhance employee well-being and make the company a great workplace.
actions to maximize the return for shareholders (among others: raising dividends and boosting stock
prices).
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16.
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An environmental sustainability strategy consists of a company's deliberate actions to _____________
operate in an honorable manner, provide good working conditions for employees, and actively work to
enhance the quality of life in the local communities where it operates and in society at large.
meet the current needs of customers, suppliers, shareholders, employees, and other stakeholders in a
manner that protects the environment, provides for the longevity of natural resources, maintains
ecological support systems for future generations, and guards against ultimate endangerment of the
planet.
apply ethical principles of right and wrong regarding the protection and enhancement of natural
resources and ecological support systems as set forth in the Global Code of Ethical Behavior adopted
by 150 nations of the world.
apply universal norms regarding the protection of the environment to its everyday operations and to
establish guidelines regarding what actions are ecologically sound based on the findings of the scientific
community.

balance commonly held views about what constitutes environmentally appropriate actions against its
ability to make a profit.
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17.
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Which of the following statements does not accurately describe sustainability?
More often sustainability concerns a firm's relationship to the environment and its use of natural
resources.
Sustainable business practices are those capable of meeting the needs of the present without
compromising the world's ability to meet future needs.
A company's environmentally sustainable strategy consists of its deliberate actions to protect the
environment, provide for the longevity of natural resources, maintain ecological support systems for
future generations, and guard against ultimate endangerment.
The term sustainability is used in a variety of ways and often is synonymous with corporate social
responsibility.
Sustainability requires that shareholders be prepared to accept lower returns to support environmental
protection.
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18.
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Which of the following statements is accurate in regard to a company's environmental sustainability strategy?
The environmental strategy is primarily concerned with business practices that meet the needs of the
future by rationing what is provided to present-day customers.
Besides deliberate actions to protect the environment, companies adopting environmental sustainable
strategies must become members of the Global Environmental Council.
To reverse global warming, more than 75 percent of global corporations must adopt environmental
sustainability strategies before 2020.
The environmental strategy consists of its deliberate actions to protect the environment, provide for
longevity of natural resources, and maintain ecological support systems for future generations.
Environmental sustainability strategies take precedence over strategies designed to improve a
company's standing in the marketplace.
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19.
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The exercise of corporate social responsibility is good business because __________

such actions can lead to increased buyer patronage.

a strong commitment to socially responsible behavior reduces the risk of reputation-damaging incidents.
socially responsible actions yield internal benefits (particularly as concerns employee recruiting,
workforce retention, and training costs) and can improve operational efficiency.
well-conceived social responsibility strategies work to the advantage of shareholders.
All of these are correct.
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20.
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The strength of the beliefs underlying ethical universalism is that __________________
ethical universalism recognizes the obviousbasic moral standards vary significantly according to local
cultural beliefs, local religious beliefs, and social mores.
ethical standards are objectively determined by religious and moral experts.
what is deemed right or wrong, fair or unfair, moral or immoral, ethical or unethical is (or should be)
grounded in religious doctrine and applied strictly to all business situations.
it draws upon the collective views of multiple societies and cultures to put some clear boundaries on
what constitutes ethical business behavior no matter what country its personnel are operating in.
it leaves no room for thinking that concepts of right and wrong can be varying shades of gray; they are
always absolute and unambiguous.
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