Name: Class: Date:
Test Bank For
Business Ethics Ethical Decision Making and Cases 14e O. C. Ferrell, John Fraedrich, Linda Ferrell
Chapter 1-12 Answers are at the End of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. ISO 19600 is a set of 10 principles concerning human rights, labor, the environment, and anti-corruption.
a. True
b. False
2. Every organization has the potential for unethical behavior, even if it is not a business.
a. True
b. False
3. Morals are enduring beliefs and ideals that are socially enforced.
a. True
b. False
4. The Consumers' Bill of Rights developed by John F. Kennedy maintains that consumers have the right to safety, the
right to be heard, the right to free speech, and the right to choose.
a. True
b. False
5. A majority of consumers believe it is a company’s responsibility to have a moral or ethical viewpoint.
a. True
b. False
6. Prior to the 1960s, ethical issues related to business were often discussed in the domain of theology or philosophy.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
7. Corporate social responsibility is defined as which of the following?
a. An organization’s obligation to maximize its positive effects and minimize its negative effects on stakeholders
b. Principles, values, and norms that primarily guide individual and group behavior in the world of business
c. The institutionalization of business ethics into all levels of business decision making
d. A business’s responsibility to manufacture products that function properly
e. Charitable contributions made by a business to enhance its reputation with stakeholders
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,Name: Class: Date:
8. Investors are concerned about business ethics because they know that misconduct can _______.
a. harm the ability to monitor changes
b. increase prices of consumer products
c. cause delays in government intervention
d. lower stock prices
e. complicate business financial reporting
9. Which of the following statements about values is true?
a. Values are specific and pervasive boundaries for behavior that should not be violated.
b. Values are acceptable behavior as defined by the company and industry.
c. Values are attempts by businesses to minimize their negative impact on society.
d. Values are a person's moral philosophies about what is right or wrong.
e. Values are enduring beliefs and ideals that are socially enforced.
10. Which business ethics issue was a major concern during the 1920s?
a. Sustainability
b. Consumerism
c. Living wage
d. Bribery
e. Abusive managers
11. A global compliance management standard that addresses risks, legal requirements, and stakeholder needs is known as
_______.
a. the Ethical Trading Initiative
b. the UN Global Compact
c. the Defense Industry Initiative on Business Ethics and Conduct
d. stakeholder theory
e. ISO 19600
12. The 1960s saw a rise of consumerism. What is consumerism?
a. An increase in consumer rights by individuals, organizations, and governments
b. The growth of international retail chain stores that served global consumers
c. Activities undertaken by independent individuals, groups, and organizations to protect their rights as
consumers
d. The widespread adoption of consumer-oriented marketing strategies among businesses
e. The tendency of organizations to view consumers as their most important stakeholder
13. Employees' perceptions of their firm as having an ethical climate lead to which of the following?
a. Lack of focus on goals
b. Greater focus on education
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,Name: Class: Date:
c. Increased community involvement
d. Improved relationships with competitors
e. Performance-enhancing outcomes
14. Firms taking action to prevent and detect business misconduct in cooperation with government regulation are
incentivized to do so by the rewards that are the focus of which of the following?
a. U.S. Sentencing Commission
b. Defense Industry Initiative on Business Ethics and Conduct
c. World Trade Organization
d. United Nations Global Compact
e. Federal Sentencing Guidelines for Organizations
15. Ethical culture is defined as which of the following?
a. Ethical culture refers to rules, standards, and moral principles regarding what is right or wrong in specific
situations.
b. Ethical culture is the establishment and enforcement of ethical codes throughout an organization.
c. Ethical culture involves the development of rules and norms that are socially enforced.
d. Ethical culture refers to the codification of laws to reward organizations for taking action to prevent
misconduct.
e. Ethical culture is acceptable behavior as defined by the company and industry.
16. In the Reagan/Bush eras, the major focus of the business world was on which of the following?
a. Self-regulation rather than regulation by government
b. Decreasing the number of mergers
c. Decreasing the multinational presence in the U.S. marketplace
d. Increasing government influence on the economic arena
e. Improving business ethics
17. Employees who view their organizational culture as ethical are more likely to _______.
a. ask for a raise
b. use their personal moral philosophies in decision making
c. make personal sacrifices for the organization
d. gain more organizational training
e. have a greater desire to become managers themselves
18. The six principles of the Defense Industry Initiative on Business Ethics and Conduct became the foundation for which
of the following?
a. The Foreign Corrupt Practices Act
b. The Federal Sentencing Guidelines for Organizations
c. The Ethical Trading Initiative
d. The Federal Trade Commission compliance requirements
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
e. The Sarbanes-Oxley Act
19. Which of the following concepts refers to a person’s personal philosophy about what is right or wrong?
a. Philosophy
b. Values
c. Principles
d. Integrity
e. Morals
20. Which of the following statements about the Dodd-Frank Wall Street Reform and Consumer Protection Act is true?
a. It was very popular among Wall Street bankers.
b. It represented modest reform to the finance industry.
c. It came out of theological discussions in the 1920s.
d. It was designed to make the financial services industry more responsible.
e. It made it mandatory for public corporations to hire ethics officers.
21. What happens when society deems a particular business action as wrong or unethical?
a. Legislation usually follows.
b. The guilty individual is jailed.
c. Self-regulation is deemed a failure.
d. The company goes bankrupt.
e. Fines automatically follow.
22. When an organization has a strong ethical environment, it usually focuses on the core value of placing whose interests
first?
a. Customers'
b. Employees'
c. Stockholders'
d. Suppliers'
e. Distributors'
23. Why is the public more tolerant of consumer misconduct than business misconduct?
a. Businesses are expected to have a better idea of right and wrong.
b. The decisions of individuals have little to do with ethics in the business world.
c. There are big differences in wealth and success between businesses and consumers.
d. More organizations commit misconduct than individual consumers.
e. There is a large income disparity among professional businesspeople.
24. Which of the following statements about business ethics is true?
a. A firm that has ethical management will succeed financially.
b. Codes of ethics should cover every business ethics issue.
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
c. Business ethics focuses more on laws than on values.
d. Individuals apply the same ethical rules in business as they do at home.
e. Conflict or trade-offs do not exist between profits and business ethics.
25. The Foreign Corrupt Practices Act outlawed which of the following?
a. Global accounting fraud
b. Price collusion
c. Corruption in foreign governments
d. Bribery of a foreign public official
e. Executive misconduct
26. A far-reaching change to organizational control and accounting systems, making securities fraud a criminal offense,
was accomplished by which of the following?
a. Foreign Corrupt Practices Act
b. Sarbanes-Oxley Act
c. Consumer Protection Act
d. Defense Industry Initiative on Business Ethics and Conduct
e. Dodd-Frank Wall Street Reform and Consumer Protection Act
27. As more than a compliance program, what is business ethics becoming?
a. An integral part of management’s efforts to achieve competitive advantage
b. A guaranteed way to earn higher financial returns
c. Mainly a government regulatory issue
d. An initiative led by nonprofit organizations
e. A program that decreases profits but increases societal benefits
28. Ethically charged decisions _______.
a. are made at all levels of work and management
b. are made primarily by top management
c. stem from individual moral philosophies
d. are less important than other decision-making processes
e. are an isolated personal issue
29. Specific and pervasive boundaries for behavior that should not be violated are known as _______.
a. philosophy
b. values
c. principles
d. business ethics
e. morals
Copyright Cengage Learning. Powered by Cognero. Page 5
, Name: Class: Date:
30. The Federal Sentencing Guidelines for Organizations are described by which of the following statements?
a. They use a routine mechanical approach that forces all firms to use the same means to avert serious penalties.
b. They strive to prosecute misconduct.
c. They encourage companies to develop standards and procedures for penalizing misconduct.
d. They utilize a carrot-and-stick approach by taking preventive action against misconduct.
e. They encourage self-regulation as opposed to oversight of compliance.
31. President Obama’s administration focused on which of these major ethical issues?
a. Decreasing environmental legislation
b. Deregulation
c. Tax decreases
d. Incentives to oil companies
e. Healthcare and consumer protection
32. When building long-term relationships between businesses and consumers, which of the following is essential for
success?
a. Profit
b. Governance
c. Trust
d. Knowledge
e. A code of ethics
33. Because of Sarbanes-Oxley, what must publicly traded companies develop in order to assist in maintaining
transparency in financial reporting?
a. Ethics officers
b. Ethics programs
c. Codes of ethics
d. Legal counsel
e. Accountants
34. Which of the following is one of the rights spelled out by John F. Kennedy in his ―Consumers’ Bill of Rights‖?
a. The right to consumerism
b. The right to safety
c. The right to be protected
d. The right to be ethical
e. The right to be heard
35. The Sarbanes-Oxley Act resulted in which of the following?
a. It stiffened penalties for personal fraud.
b. It created an accounting oversight board that requires corporations to establish codes of ethics for financial
reporting.
Copyright Cengage Learning. Powered by Cognero. Page 6
Test Bank For
Business Ethics Ethical Decision Making and Cases 14e O. C. Ferrell, John Fraedrich, Linda Ferrell
Chapter 1-12 Answers are at the End of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. ISO 19600 is a set of 10 principles concerning human rights, labor, the environment, and anti-corruption.
a. True
b. False
2. Every organization has the potential for unethical behavior, even if it is not a business.
a. True
b. False
3. Morals are enduring beliefs and ideals that are socially enforced.
a. True
b. False
4. The Consumers' Bill of Rights developed by John F. Kennedy maintains that consumers have the right to safety, the
right to be heard, the right to free speech, and the right to choose.
a. True
b. False
5. A majority of consumers believe it is a company’s responsibility to have a moral or ethical viewpoint.
a. True
b. False
6. Prior to the 1960s, ethical issues related to business were often discussed in the domain of theology or philosophy.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
7. Corporate social responsibility is defined as which of the following?
a. An organization’s obligation to maximize its positive effects and minimize its negative effects on stakeholders
b. Principles, values, and norms that primarily guide individual and group behavior in the world of business
c. The institutionalization of business ethics into all levels of business decision making
d. A business’s responsibility to manufacture products that function properly
e. Charitable contributions made by a business to enhance its reputation with stakeholders
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
8. Investors are concerned about business ethics because they know that misconduct can _______.
a. harm the ability to monitor changes
b. increase prices of consumer products
c. cause delays in government intervention
d. lower stock prices
e. complicate business financial reporting
9. Which of the following statements about values is true?
a. Values are specific and pervasive boundaries for behavior that should not be violated.
b. Values are acceptable behavior as defined by the company and industry.
c. Values are attempts by businesses to minimize their negative impact on society.
d. Values are a person's moral philosophies about what is right or wrong.
e. Values are enduring beliefs and ideals that are socially enforced.
10. Which business ethics issue was a major concern during the 1920s?
a. Sustainability
b. Consumerism
c. Living wage
d. Bribery
e. Abusive managers
11. A global compliance management standard that addresses risks, legal requirements, and stakeholder needs is known as
_______.
a. the Ethical Trading Initiative
b. the UN Global Compact
c. the Defense Industry Initiative on Business Ethics and Conduct
d. stakeholder theory
e. ISO 19600
12. The 1960s saw a rise of consumerism. What is consumerism?
a. An increase in consumer rights by individuals, organizations, and governments
b. The growth of international retail chain stores that served global consumers
c. Activities undertaken by independent individuals, groups, and organizations to protect their rights as
consumers
d. The widespread adoption of consumer-oriented marketing strategies among businesses
e. The tendency of organizations to view consumers as their most important stakeholder
13. Employees' perceptions of their firm as having an ethical climate lead to which of the following?
a. Lack of focus on goals
b. Greater focus on education
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
c. Increased community involvement
d. Improved relationships with competitors
e. Performance-enhancing outcomes
14. Firms taking action to prevent and detect business misconduct in cooperation with government regulation are
incentivized to do so by the rewards that are the focus of which of the following?
a. U.S. Sentencing Commission
b. Defense Industry Initiative on Business Ethics and Conduct
c. World Trade Organization
d. United Nations Global Compact
e. Federal Sentencing Guidelines for Organizations
15. Ethical culture is defined as which of the following?
a. Ethical culture refers to rules, standards, and moral principles regarding what is right or wrong in specific
situations.
b. Ethical culture is the establishment and enforcement of ethical codes throughout an organization.
c. Ethical culture involves the development of rules and norms that are socially enforced.
d. Ethical culture refers to the codification of laws to reward organizations for taking action to prevent
misconduct.
e. Ethical culture is acceptable behavior as defined by the company and industry.
16. In the Reagan/Bush eras, the major focus of the business world was on which of the following?
a. Self-regulation rather than regulation by government
b. Decreasing the number of mergers
c. Decreasing the multinational presence in the U.S. marketplace
d. Increasing government influence on the economic arena
e. Improving business ethics
17. Employees who view their organizational culture as ethical are more likely to _______.
a. ask for a raise
b. use their personal moral philosophies in decision making
c. make personal sacrifices for the organization
d. gain more organizational training
e. have a greater desire to become managers themselves
18. The six principles of the Defense Industry Initiative on Business Ethics and Conduct became the foundation for which
of the following?
a. The Foreign Corrupt Practices Act
b. The Federal Sentencing Guidelines for Organizations
c. The Ethical Trading Initiative
d. The Federal Trade Commission compliance requirements
Copyright Cengage Learning. Powered by Cognero. Page 3
,Name: Class: Date:
e. The Sarbanes-Oxley Act
19. Which of the following concepts refers to a person’s personal philosophy about what is right or wrong?
a. Philosophy
b. Values
c. Principles
d. Integrity
e. Morals
20. Which of the following statements about the Dodd-Frank Wall Street Reform and Consumer Protection Act is true?
a. It was very popular among Wall Street bankers.
b. It represented modest reform to the finance industry.
c. It came out of theological discussions in the 1920s.
d. It was designed to make the financial services industry more responsible.
e. It made it mandatory for public corporations to hire ethics officers.
21. What happens when society deems a particular business action as wrong or unethical?
a. Legislation usually follows.
b. The guilty individual is jailed.
c. Self-regulation is deemed a failure.
d. The company goes bankrupt.
e. Fines automatically follow.
22. When an organization has a strong ethical environment, it usually focuses on the core value of placing whose interests
first?
a. Customers'
b. Employees'
c. Stockholders'
d. Suppliers'
e. Distributors'
23. Why is the public more tolerant of consumer misconduct than business misconduct?
a. Businesses are expected to have a better idea of right and wrong.
b. The decisions of individuals have little to do with ethics in the business world.
c. There are big differences in wealth and success between businesses and consumers.
d. More organizations commit misconduct than individual consumers.
e. There is a large income disparity among professional businesspeople.
24. Which of the following statements about business ethics is true?
a. A firm that has ethical management will succeed financially.
b. Codes of ethics should cover every business ethics issue.
Copyright Cengage Learning. Powered by Cognero. Page 4
,Name: Class: Date:
c. Business ethics focuses more on laws than on values.
d. Individuals apply the same ethical rules in business as they do at home.
e. Conflict or trade-offs do not exist between profits and business ethics.
25. The Foreign Corrupt Practices Act outlawed which of the following?
a. Global accounting fraud
b. Price collusion
c. Corruption in foreign governments
d. Bribery of a foreign public official
e. Executive misconduct
26. A far-reaching change to organizational control and accounting systems, making securities fraud a criminal offense,
was accomplished by which of the following?
a. Foreign Corrupt Practices Act
b. Sarbanes-Oxley Act
c. Consumer Protection Act
d. Defense Industry Initiative on Business Ethics and Conduct
e. Dodd-Frank Wall Street Reform and Consumer Protection Act
27. As more than a compliance program, what is business ethics becoming?
a. An integral part of management’s efforts to achieve competitive advantage
b. A guaranteed way to earn higher financial returns
c. Mainly a government regulatory issue
d. An initiative led by nonprofit organizations
e. A program that decreases profits but increases societal benefits
28. Ethically charged decisions _______.
a. are made at all levels of work and management
b. are made primarily by top management
c. stem from individual moral philosophies
d. are less important than other decision-making processes
e. are an isolated personal issue
29. Specific and pervasive boundaries for behavior that should not be violated are known as _______.
a. philosophy
b. values
c. principles
d. business ethics
e. morals
Copyright Cengage Learning. Powered by Cognero. Page 5
, Name: Class: Date:
30. The Federal Sentencing Guidelines for Organizations are described by which of the following statements?
a. They use a routine mechanical approach that forces all firms to use the same means to avert serious penalties.
b. They strive to prosecute misconduct.
c. They encourage companies to develop standards and procedures for penalizing misconduct.
d. They utilize a carrot-and-stick approach by taking preventive action against misconduct.
e. They encourage self-regulation as opposed to oversight of compliance.
31. President Obama’s administration focused on which of these major ethical issues?
a. Decreasing environmental legislation
b. Deregulation
c. Tax decreases
d. Incentives to oil companies
e. Healthcare and consumer protection
32. When building long-term relationships between businesses and consumers, which of the following is essential for
success?
a. Profit
b. Governance
c. Trust
d. Knowledge
e. A code of ethics
33. Because of Sarbanes-Oxley, what must publicly traded companies develop in order to assist in maintaining
transparency in financial reporting?
a. Ethics officers
b. Ethics programs
c. Codes of ethics
d. Legal counsel
e. Accountants
34. Which of the following is one of the rights spelled out by John F. Kennedy in his ―Consumers’ Bill of Rights‖?
a. The right to consumerism
b. The right to safety
c. The right to be protected
d. The right to be ethical
e. The right to be heard
35. The Sarbanes-Oxley Act resulted in which of the following?
a. It stiffened penalties for personal fraud.
b. It created an accounting oversight board that requires corporations to establish codes of ethics for financial
reporting.
Copyright Cengage Learning. Powered by Cognero. Page 6
