The Legal and Regulatory Environment of
s s s s s s s s s s
Business, 18e (Pagnattaro) s s s s ss
Chapter s s 2 The ss s s Role s s of s s Ethics s s in s s Decision Making ss
1) Federal sentencing guidelines reduce criminal fines for legal violations in
s s s s s s s s s s s s s s s s s s
s scompanies that have taken specific steps to self-police ethical/legal
s s s s s s s s s s s s s s s s
s conduct.
s
Answer: TRUE
Explanation: Federal sentencing guidelines reduce criminal fines for legal
s s s s s s s s s s s s s s s s s s
violations in companies that have taken specific steps to self-
s s s s s s s s s s s s s s s s s s s s
police ethical/legal conduct. Federal law encourages self-regulation.
s s s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: Contemporary Business Ethics
s s s s s s s s s s
Learning Objective: 02-01 To compare the connection between law and ethical
ss s s ss ss ss ss ss ss ss ss
s principles. Bloom's:
s Remember s s s s s s
AACSB: Analytical Thinking
s s s s s s s s
2) In society, the
s s s s s s sharing of morals s s s s s s promotes s s social s s cooperation s s and
s s is a means
s s s s s s of social control.
ss s s
Answer: TRUE
Explanation: In society at large, the sharing of moral values s s s s s s s s s s s s s s s s
s promotes social cooperation and is a significant means of social
s s s ss s s s s s s s s s s s s s s
s control. Shared moral values lead one to accept and trust others.
s s s s s s s s s ss s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
3) With s s greater s s diversity s s comes s s greater s s concern s s over s s ethical s s values.
Answer: TRUE
Explanation: Diversity fosters concern over values, and as s s s s s s s s s s s s
s America becomes increasingly diverse, changes in traditional norms
s s s ss s s s s s s s s s s
create challenges in establishing shared ethical values. Difficulty: 1
s s s s s s s s s s s s s s s s s s
s Easys
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
1
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved. s s s s s s
No reproduction or s s s s s s distribution without the prior written consent of mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
,4) Increasing economic interdependence prevents executives and managers
s s s s s s s s s s s s
at a firm from manipulating corporate actions for their own
s s s s s s s s s s s s s s s s s s s s
s benefit.
s
Answer: FALSE
Explanation: A serious ethical problem arises from economic s s s s s s s s s s s s
s interdependence and the modern corporation, which is the structure
s s s s s s s s s s s s s s s s s
s of most large businesses in this country. The problem is that the
s s s s s s s s s s s ss s s s s s s s s s s
s corporate leaders are not the real owners of corporations. The
s s s s s s s s s s s s s s s ss s s
s stockholders are, and although corporate executives and managers may
s s s s s s s s s s s s s s s ss
s own some stock, they seldom own significant percentages of very
s s s s s s s s s s s s s s s s s s s
s large companies. The ethical problem that can arise is that the
s ss s s s s s s s s s s s s s s s s s s
s executives and managers who control what the stockholders own are
s s s s s ss s s s s s s s s s s s s
s sometimes able to manipulate corporate actions for their own benefit,
s s s s s s s s s ss s s s s s s s s
s actions that have unacceptable risks to the owners and others.
s s s s s s s s s s s s s s s s s ss
Increasing economic interdependence promotes concerns about business
s s s s s s s s s s s s
ethics. Difficulty: 1 Easy
s s ss s s s s
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
5) Increasing coverage of business decisions by the s s s s s s s s s s s s s s news media s s
s sand the Internet has made it harder for large
s s s s ss s s s s s s s s s s s s organizations to s s
s hide their questionable behavior.
s s s s s s s
Answer: TRUE
Explanation: The news media and the Internet have made it harder for
s s s s s s s s s s s s s s s s s s s s s s s s
large organizations to hide their questionable behavior. Extensive media and
s s ss s s s s s s s s s s s s s s s s
Internet coverage of business decisions and their effect on society
s s s s s s s s s s s s s s s s s s s s
s makes us more aware than ever of failures of business ethics.
s s s s s s s ss s s s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: The Nature of Ethics
s s s s s s s s s s s s
Learning Objective: 02-01 To compare the connection between law and ethical
ss s s ss ss ss ss ss ss ss ss
s principles. Bloom's:
s Remember s s s s s s
AACSB: Analytical Thinking s s s s s s s s
6) According to Adam Smith, leading a good s s s s s s s s s s s s s s life means s s s s being
solely concerned about the fortunes of oneself.
s s s s ss s s s s s s s s
Answer: FALSE
Explanation: The end result of ethical examination is what s s s s s s s s s s s s s s
s philosophers call the good. The concept of the good is central to
s s s s s ss s s s s s s s s s s s s s s s s
s the study of morality. The good may be defined as those moral
s s s s s s s s s s s s s s s s s s s s s s s
s goals and objectives one chooses to pursue. Thus, leading a good
s s s s s s s s s s s s s s s s s ss s s
s life means more than having the good life. It means more than
s s s s s s s s s s s s s s s s s s s s s s s
s material possessions and luxury. It means pursuing intangibles, being
s ss s s s s s s s s s s s s s s
2
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved. s s s s s s
No reproduction or s s s s s s distribution without the prior written consent of mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
, concerned, as Adam Smith put it,
s s s s s s ss s s s s s s about s s the s s fortunes s s of s s others.
Difficulty: 1 Easys s s s
Topic: The Nature of Ethics
s s s s s s
Learning Objective: 02-01 To compare
s s s s s s s s the s s connection s s between s s law s s and
s ethical
s
3
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved.
s s s s s s
No reproduction or
s s s s s s distribution without the prior written consent of
mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
, principles. Bloom's: Remember
s s
AACSB:
ss Analytical Thinking
s s
4
Copyright ©
s s 2019 s s s s McGraw-Hill Education. All rights reserved.
s s s s s s
No reproduction or
s s s s s s distribution without the prior written consent of
mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
s s s s s s s s s s
Business, 18e (Pagnattaro) s s s s ss
Chapter s s 2 The ss s s Role s s of s s Ethics s s in s s Decision Making ss
1) Federal sentencing guidelines reduce criminal fines for legal violations in
s s s s s s s s s s s s s s s s s s
s scompanies that have taken specific steps to self-police ethical/legal
s s s s s s s s s s s s s s s s
s conduct.
s
Answer: TRUE
Explanation: Federal sentencing guidelines reduce criminal fines for legal
s s s s s s s s s s s s s s s s s s
violations in companies that have taken specific steps to self-
s s s s s s s s s s s s s s s s s s s s
police ethical/legal conduct. Federal law encourages self-regulation.
s s s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: Contemporary Business Ethics
s s s s s s s s s s
Learning Objective: 02-01 To compare the connection between law and ethical
ss s s ss ss ss ss ss ss ss ss
s principles. Bloom's:
s Remember s s s s s s
AACSB: Analytical Thinking
s s s s s s s s
2) In society, the
s s s s s s sharing of morals s s s s s s promotes s s social s s cooperation s s and
s s is a means
s s s s s s of social control.
ss s s
Answer: TRUE
Explanation: In society at large, the sharing of moral values s s s s s s s s s s s s s s s s
s promotes social cooperation and is a significant means of social
s s s ss s s s s s s s s s s s s s s
s control. Shared moral values lead one to accept and trust others.
s s s s s s s s s ss s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
3) With s s greater s s diversity s s comes s s greater s s concern s s over s s ethical s s values.
Answer: TRUE
Explanation: Diversity fosters concern over values, and as s s s s s s s s s s s s
s America becomes increasingly diverse, changes in traditional norms
s s s ss s s s s s s s s s s
create challenges in establishing shared ethical values. Difficulty: 1
s s s s s s s s s s s s s s s s s s
s Easys
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
1
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved. s s s s s s
No reproduction or s s s s s s distribution without the prior written consent of mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
,4) Increasing economic interdependence prevents executives and managers
s s s s s s s s s s s s
at a firm from manipulating corporate actions for their own
s s s s s s s s s s s s s s s s s s s s
s benefit.
s
Answer: FALSE
Explanation: A serious ethical problem arises from economic s s s s s s s s s s s s
s interdependence and the modern corporation, which is the structure
s s s s s s s s s s s s s s s s s
s of most large businesses in this country. The problem is that the
s s s s s s s s s s s ss s s s s s s s s s s
s corporate leaders are not the real owners of corporations. The
s s s s s s s s s s s s s s s ss s s
s stockholders are, and although corporate executives and managers may
s s s s s s s s s s s s s s s ss
s own some stock, they seldom own significant percentages of very
s s s s s s s s s s s s s s s s s s s
s large companies. The ethical problem that can arise is that the
s ss s s s s s s s s s s s s s s s s s s
s executives and managers who control what the stockholders own are
s s s s s ss s s s s s s s s s s s s
s sometimes able to manipulate corporate actions for their own benefit,
s s s s s s s s s ss s s s s s s s s
s actions that have unacceptable risks to the owners and others.
s s s s s s s s s s s s s s s s s ss
Increasing economic interdependence promotes concerns about business
s s s s s s s s s s s s
ethics. Difficulty: 1 Easy
s s ss s s s s
Topic: The Nature of Ethics s s s s s s
Learning Objective: 02-01 To compare the connection between law and
s s s s s s s s s s s s s s s s
ethical principles. Bloom's:
s s s Remember
s s s
AACSB: Analytical Thinking; Ethics s s s s
5) Increasing coverage of business decisions by the s s s s s s s s s s s s s s news media s s
s sand the Internet has made it harder for large
s s s s ss s s s s s s s s s s s s organizations to s s
s hide their questionable behavior.
s s s s s s s
Answer: TRUE
Explanation: The news media and the Internet have made it harder for
s s s s s s s s s s s s s s s s s s s s s s s s
large organizations to hide their questionable behavior. Extensive media and
s s ss s s s s s s s s s s s s s s s s
Internet coverage of business decisions and their effect on society
s s s s s s s s s s s s s s s s s s s s
s makes us more aware than ever of failures of business ethics.
s s s s s s s ss s s s s s s s s s s s s
Difficulty: 1 Easy s s s s
Topic: The Nature of Ethics
s s s s s s s s s s s s
Learning Objective: 02-01 To compare the connection between law and ethical
ss s s ss ss ss ss ss ss ss ss
s principles. Bloom's:
s Remember s s s s s s
AACSB: Analytical Thinking s s s s s s s s
6) According to Adam Smith, leading a good s s s s s s s s s s s s s s life means s s s s being
solely concerned about the fortunes of oneself.
s s s s ss s s s s s s s s
Answer: FALSE
Explanation: The end result of ethical examination is what s s s s s s s s s s s s s s
s philosophers call the good. The concept of the good is central to
s s s s s ss s s s s s s s s s s s s s s s s
s the study of morality. The good may be defined as those moral
s s s s s s s s s s s s s s s s s s s s s s s
s goals and objectives one chooses to pursue. Thus, leading a good
s s s s s s s s s s s s s s s s s ss s s
s life means more than having the good life. It means more than
s s s s s s s s s s s s s s s s s s s s s s s
s material possessions and luxury. It means pursuing intangibles, being
s ss s s s s s s s s s s s s s s
2
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved. s s s s s s
No reproduction or s s s s s s distribution without the prior written consent of mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
, concerned, as Adam Smith put it,
s s s s s s ss s s s s s s about s s the s s fortunes s s of s s others.
Difficulty: 1 Easys s s s
Topic: The Nature of Ethics
s s s s s s
Learning Objective: 02-01 To compare
s s s s s s s s the s s connection s s between s s law s s and
s ethical
s
3
Copyright © 2019 s s s s s s McGraw-Hill Education. All rights reserved.
s s s s s s
No reproduction or
s s s s s s distribution without the prior written consent of
mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
, principles. Bloom's: Remember
s s
AACSB:
ss Analytical Thinking
s s
4
Copyright ©
s s 2019 s s s s McGraw-Hill Education. All rights reserved.
s s s s s s
No reproduction or
s s s s s s distribution without the prior written consent of
mm mm mm mm s s s s
McGraw-Hill Education.
s s s s
