Chapter 1—Business Ethics, the Changing Environment, and Stakeholder
Management
TRUE/FALSE
1. Stockholders are individuals, companies, groups, and nations that cause and respond to external
issues, opportunities, and threats.
ANS: F DIF: Moderate REF: p. 3
2. A first step toward understanding stakeholder issues is to gain an understanding of environment
forces that influence issues and stakes of different groups.
ANS: T DIF: Moderate REF: p. 5
3. Demographically, the workforce has become more homogeneous.
ANS: F DIF: Easy REF: p. 7
4. Theft costs companies $60 billion annually.
ANS: F DIF: Hard REF: p. 11
5. For business leaders and managers, managing ethically also means managing with integrity.
ANS: T DIF: Moderate REF: p. 11
6. Ethical and moral issues in business can be examined from three levels: individual, group, and
organizational level.
ANS: F DIF: Moderate REF: p. 12
7. Ethics is a personal, individual affair, not a public or debatable matter.
ANS: F DIF: Moderate REF: p. 16
8. Business is a human activity and as such can be evaluated from a moral perspective.
ANS: T DIF: Hard REF: p. 17
9. Good business means good ethics is a myth.
ANS: T DIF: Easy REF: p. 18
, 10. Given that laws cover all aspects of a problem, ethical reasoning becomes optional when laws
exist.
ANS: F DIF: Moderate REF: p. 21
MULTIPLE CHOICE
1. ____ are individuals, companies, groups, and nations that cause and respond to external issues,
opportunities, and threats.
a. Ethicists
b. Stakeholders
c. Environmental forces
d. Stockholders
ANS: B DIF: Easy REF: p. 3
2. Which of the following is not a macro level environmental force?
a. Technological
b. Economic
c. Governmental/regulatory
d. Industry
ANS: D DIF: Moderate REF: p. 5
3. Which of the following environmental dimensions continues to evolve into a more global context
of trade, markets, and resource flows?
a. Political
b. Technological
c. Economic
d. Governmental/regulatory
ANS: C DIF: Moderate REF: p. 5
4. Terrorism and the fall of the Communist regime are examples of which environmental dimension
that affects industries and organizations?
a. Political
b. Governmental
c. Legal
d. Economic
ANS: A DIF: Moderate REF: p. 6
5. Deregulation of industries falls under which of the following environmental dimensions?
a. Governmental/regulatory
, b. Political
c. Economic
d. Social/demographic
ANS: A DIF: Moderate REF: p. 7
6. Demographically, the workforce has become more
a. white.
b. diverse.
c. limited.
d. younger.
ANS: B DIF: Moderate REF: p. 7
7. Which of the following is considered a secondary stakeholder group?
a. Suppliers
b. Employees
c. Local community groups
d. Customers
ANS: C DIF: Moderate REF: p. 8
8. Which of the following is not a secondary stakeholder group?
a. Media
b. Consumer groups
c. Environmental groups
d. Suppliers
ANS: D DIF: Moderate REF: p. 8
9. Which of the following is considered a primary stakeholder group?
a. Customers
b. Suppliers
c. Employees
d. All of the above
ANS: D DIF: Easy REF: p. 8
10. Win-win strategies are based on all of the following except
a. prioritizing threats.
b. mapping stakeholders.
c. determining members of the coalition.
d. collaborative negotiation.
ANS: D DIF: Moderate REF: p. 8
, 11. Which of the following was the most frequently observed misconduct in business in the past 12
months?
a. Conflict of interest
b. Lying
c. Withholding information
d. Misreporting work hours
ANS: A DIF: Hard REF: p. 10
12. According to Laura Nash, ____ is the study of how personal moral norms apply to the activities
and goals of commercial enterprise.
a. business ethics
b. stakeholder approach
c. social contract
d. preconventional level
ANS: A DIF: Moderate REF: p. 9
13. According to Nash, business ethics deals with which of the following areas of managerial
decision making?
a. Choices about what the laws should be and whether to follow them
b. Choices about economic and not social issues outside the domain of law
c. Choices about competitors’ over company’s interests
d. All of the above
ANS: A DIF: Hard REF: p. 9
14. How many companies have a well implemented ethics program?
a. 15%
b. 65%
c. 50%
d. 75%
ANS: B DIF: Hard REF: p. 10
15. _____ in 5 of employees who saw misconduct did not report it.
a. One
b. Two
c. Three
d. Four
ANS: B DIF: Medium REF: p. 10
16. Reporting rates are almost _____ times as high in companies that have well implemented ethics
and compliance programs.
a. .5
Management
TRUE/FALSE
1. Stockholders are individuals, companies, groups, and nations that cause and respond to external
issues, opportunities, and threats.
ANS: F DIF: Moderate REF: p. 3
2. A first step toward understanding stakeholder issues is to gain an understanding of environment
forces that influence issues and stakes of different groups.
ANS: T DIF: Moderate REF: p. 5
3. Demographically, the workforce has become more homogeneous.
ANS: F DIF: Easy REF: p. 7
4. Theft costs companies $60 billion annually.
ANS: F DIF: Hard REF: p. 11
5. For business leaders and managers, managing ethically also means managing with integrity.
ANS: T DIF: Moderate REF: p. 11
6. Ethical and moral issues in business can be examined from three levels: individual, group, and
organizational level.
ANS: F DIF: Moderate REF: p. 12
7. Ethics is a personal, individual affair, not a public or debatable matter.
ANS: F DIF: Moderate REF: p. 16
8. Business is a human activity and as such can be evaluated from a moral perspective.
ANS: T DIF: Hard REF: p. 17
9. Good business means good ethics is a myth.
ANS: T DIF: Easy REF: p. 18
, 10. Given that laws cover all aspects of a problem, ethical reasoning becomes optional when laws
exist.
ANS: F DIF: Moderate REF: p. 21
MULTIPLE CHOICE
1. ____ are individuals, companies, groups, and nations that cause and respond to external issues,
opportunities, and threats.
a. Ethicists
b. Stakeholders
c. Environmental forces
d. Stockholders
ANS: B DIF: Easy REF: p. 3
2. Which of the following is not a macro level environmental force?
a. Technological
b. Economic
c. Governmental/regulatory
d. Industry
ANS: D DIF: Moderate REF: p. 5
3. Which of the following environmental dimensions continues to evolve into a more global context
of trade, markets, and resource flows?
a. Political
b. Technological
c. Economic
d. Governmental/regulatory
ANS: C DIF: Moderate REF: p. 5
4. Terrorism and the fall of the Communist regime are examples of which environmental dimension
that affects industries and organizations?
a. Political
b. Governmental
c. Legal
d. Economic
ANS: A DIF: Moderate REF: p. 6
5. Deregulation of industries falls under which of the following environmental dimensions?
a. Governmental/regulatory
, b. Political
c. Economic
d. Social/demographic
ANS: A DIF: Moderate REF: p. 7
6. Demographically, the workforce has become more
a. white.
b. diverse.
c. limited.
d. younger.
ANS: B DIF: Moderate REF: p. 7
7. Which of the following is considered a secondary stakeholder group?
a. Suppliers
b. Employees
c. Local community groups
d. Customers
ANS: C DIF: Moderate REF: p. 8
8. Which of the following is not a secondary stakeholder group?
a. Media
b. Consumer groups
c. Environmental groups
d. Suppliers
ANS: D DIF: Moderate REF: p. 8
9. Which of the following is considered a primary stakeholder group?
a. Customers
b. Suppliers
c. Employees
d. All of the above
ANS: D DIF: Easy REF: p. 8
10. Win-win strategies are based on all of the following except
a. prioritizing threats.
b. mapping stakeholders.
c. determining members of the coalition.
d. collaborative negotiation.
ANS: D DIF: Moderate REF: p. 8
, 11. Which of the following was the most frequently observed misconduct in business in the past 12
months?
a. Conflict of interest
b. Lying
c. Withholding information
d. Misreporting work hours
ANS: A DIF: Hard REF: p. 10
12. According to Laura Nash, ____ is the study of how personal moral norms apply to the activities
and goals of commercial enterprise.
a. business ethics
b. stakeholder approach
c. social contract
d. preconventional level
ANS: A DIF: Moderate REF: p. 9
13. According to Nash, business ethics deals with which of the following areas of managerial
decision making?
a. Choices about what the laws should be and whether to follow them
b. Choices about economic and not social issues outside the domain of law
c. Choices about competitors’ over company’s interests
d. All of the above
ANS: A DIF: Hard REF: p. 9
14. How many companies have a well implemented ethics program?
a. 15%
b. 65%
c. 50%
d. 75%
ANS: B DIF: Hard REF: p. 10
15. _____ in 5 of employees who saw misconduct did not report it.
a. One
b. Two
c. Three
d. Four
ANS: B DIF: Medium REF: p. 10
16. Reporting rates are almost _____ times as high in companies that have well implemented ethics
and compliance programs.
a. .5
