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Business Ethics case studies and selected readings 8th edition by Marianne M. Jennings Test Bank
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,Business Ethics, 8e JenningsJennings
TEST BANK
UNIT ONE – ETHICAL THEORY, PHILOSOPHICAL
FOUNDATIONS,
OUR REASONING FLAWS, AND TYPES OF ETHICAL
DILEMMAS
True/False Questions
F 1. A credo consists of how you define yourself by job title and income.
T 2. Part of a credo includes a list of lines you would never cross to be successful.
T 3. An ethical breach is not necessarily a violation of the law.
T 4. Unwritten rules of conduct are part of our normative standards.
F 5. Self-interest is the same as selfishness.
F 6. Ethical egoism is selfishness.
F 7. Kant would label paying lower wages in developing countries than the wages paid in
developed economies as unethical.
F 8. Kant is part of the utilitarian school of thought on ethics.
T 9. Kant and Rand do not agree on the importance of self-interest in ethical theory.
T 10. Locke and Rawls develop their ethical theory on the basis of a tabula rasa.
T 11. Locke and Rawls are contractarians.
F 12. The Rights Theory is generally associated with Plato and Aristotle.
F 13. Robert Nozick is the leading thinker for utilitarianism.
T 14. Third-trimester abortions would be supported under a Rights Theory.
T 15. Robert Solomon is a proponent of virtue ethics.
F 16. “It’s a gray area,” is an example of ethical analysis.
T 17. “We all don’t share the same ethics” fails to consider common values that do exist in
business.
T 18. Hank Greenberg’s ability to find a way around rules was evident from his conduct as a
soldier in London.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
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T 19. Hank Greenberg was ousted from his position as CEO of AIG.
T 20. Laura Nash provides tools for examining how a company got into an ethical dilemma.
T 21. It is not plagiarism to use facts obtained from several sources that are footnoted or listed
as sources.
T 22. It is plagiarism to rewrite the phrasing of another source and not use quotes or a footnote.
F 23. A conflict of interest is unethical only if those involved actually change their decision
based on the benefits to be derived.
T 24. An illegal act is an unethical act.
T 25. Using positive law as an ethical standard means simply compliance with the law.
T 26. The element of balance in the Blanchard/Peale ethical model requires an examination of
the issue from the perspective of the affected party.
T 27. A valid ethical barometer is the reaction of family and friends outside the business setting
to your proposed decision.
F 28. An agreement by an agent to accept a 10% commission from a seller who will sell goods
to the agent’s employer is ethical so long as the agent would have chosen that seller
anyway.
T 29. A real estate agent who recommends a management firm to an apartment complex buyer
without disclosing that the agent owns 50% of the firm has committed an ethical violation.
F 30. A commercial broker who accepts fees from both the seller and the buyer of the business
without disclosure to either has not committed an ethical violation if both parties are
happy with the transaction.
T 31. A member of the city council who is employed by a waste management firm would have a
conflict of interest in voting on the city’s award of a contract for the handling of the city’s
waste.
F 32. A physician conducting a study on a new prescription drug manufactured by a firm in
which he is a 10% shareholder does not have a conflict of interest so long as his stock
ownership is disclosed in his report on the drug.
T 33. A physical fitness expert retained by a fitness magazine to evaluate walking shoes has a
conflict of interest if she has an endorsement contract with one of the shoe companies
that manufactures the shoes she will be evaluating.
F 34. Giving preferential treatment in contract bidding to the daughter of a member of the
company board is not a conflict of interest.
F 35. A major donation by one of your long-term suppliers to a non-profit organization run by
your spouse should not create perception problems so long as your purchasing decisions
are based on the merits.
F 36. Having loan applicants pay for the expenses of bank officer travel for purposes of
evaluating collateral is not a conflict of interest.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
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T 37. Purchasing agents accepting a pleasure trip from a supplier when no bids are pending is
still an ethical violation.
T 38. Payments of royalties from drug sales by a pharmaceutical firm to the university where a
researcher conducting studies has validated the firm’s claims is a conflict of interest.
T 39. The failure to disclose that your college degree was withheld because of outstanding
parking fines and violations is unethical.
F 40. Taking information from a confidential file accidentally left on your desk is not unethical.
T 41. The failure to speak out when an ethical or legal lapse occurs within your firm is in itself
an ethical violation.
T 42. “Everyone else does it,” is a signal of an ethical pitfall.
F 43. “The lawyers have okayed this,” is a signal that the decision/action is legal and ethical.
T 44. Labeling infertility surgery as “diagnostic surgery” in order to allow the patient to recover
the costs from an insurer is unethical.
T 45. A company executive exerting pressure on a scientist and her university to delay
disclosure of study results harmful to the company and its products would be unethical.
T 46. Ethical choices often prove costly to firms in the short term.
F 47. Taking advantage of a party in a contract situation due to the party’s inexperience, and
not due to any lack of disclosure on your part, is ethical.
T 48. The failure to disclose relevant information about a product or service is unethical.
T 49. Long-term relationships create ethical and legal obligations between the parties through
conduct and accommodations.
T 50. If I worked in purchasing in my company, it would be unethical for me to accept season
tickets for my city's NBA team from the company that has supplied catering for the
company's training sessions.
F 51. If I discover that a fellow employee is reporting falsely his overtime hours, it is best for me
to say nothing and ignore the situation.
F 52. If I discovered that I unintentionally violated a federal environmental regulation, I should
just wait and see if anything happens before taking any action.
F 53. If my supervisor asked me to cover for him by lying about his whereabouts, I should
agree to do it but remind him that I can't make it a habit.
T 54. Your company's policy on company vehicles is that no family members may use them or
ride in them. It would be unethical to use a company car to drive you and your spouse to
a movie.
T 55. You are taking a graduate level course in management that will help you in performing
your duties at work. Each week you must submit case analyses to your professor. Using
work time to complete the analyses would be unethical.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
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T 56. With respect to #55, using your work computer and paper to complete the case analyses
would be unethical.
T 57. Attending a class on company time would be unethical.
F 58. A supplier has just been awarded a large contract by your company. As an employee in
purchasing, you were largely responsible for awarding that supplier the contract. The
supplier's sales representative has just called and would like to take you to lunch to thank
you for the support. Going to lunch with the sale representative does not present any
ethical problems.
F 59. Accepting gifts from suppliers and vendors is not a problem so long as no bid decisions
are pending.
F 60. You are a building inspector for the county. A friend of yours is a plumbing contractor.
Under county regulations, all steps in plumbing construction from the initial dig to the final
installation of sink and bathroom fixtures requires an inspection sign-off. Your plumbing
contractor friend has just called and wants to take you to dinner for your birthday at a
five-star restaurant. Because you are friends anyway, the dinner presents no ethical
problems.
T 61. Your company has several outdated computers sitting in a storage closet that no one is
using. You have taken one home and set it up for personal use. This is unethical
conduct.
T 62. You work for a school district as a facilities coordinator. You drive to the various schools
in the district and supervise construction and remodeling and assess various building
needs. When you are traveling around to the various schools, you use a district vehicle
that is clearly marked as such. One day you stop at the country club and have lunch
before heading to the next school since the country club is on the way. You also stop at
the bank drive-thru teller to do some personal banking business. Both the lunch and the
bank stop are ethical breaches.
F 63. Your supervisor has told you that he wants to "get rid of Jane." Jane is a Hispanic female
co-worker who is very bright and capable and hardworking. Your supervisor has asked
you to document everything Jane does and says that will help build a case for
termination. You should do as your supervisor tells you.
T 64. Alice is a co-worker who is going through a divorce and has two small children. Alice's
husband is not paying the child support the temporary court order requires. As a result,
Alice is broke until she can get her court hearing. Alice has been able, through diverting
checks returned to the company, to take about $2200 from the company to "temporarily
help her cover her bills," as she has explained to you. You must report Alice's
embezzlement.
T 65. The mayor owns property next to one of the proposed sites for the city's new baseball
stadium. The mayor has a conflict of interest and should not vote on the location of the
stadium when the city council takes action on the site.
F 66. Although you are not part of your company's engineering group, you have discovered a
major flaw in the company's new paper-thin solar calculator. The calculator adds when
the subtract button is pressed if there are more than 3 figures to the right of the decimal
point. Since it is not your area, you should do and say nothing.
F 67. With respect to #66, it is not necessary for the company to take any action to correct the
problem or refund money for those who already own the new calculator.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
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T 68. Alice is a secretary in your department. Alice is also a member of the American Guild of
Organists. Alice has been placed in charge of the Guild's national convention. Each time
you pass by Alice's desk or go to her to have some work done, you notice she is on the
phone discussing or working on the convention. Alice's work on the convention during
work hours is an ethical violation.
F 69. Your supervisor has had a calendar with pictures of naked women on the inside panel of
his desk for several months. A secretary spotted the calendar and commented to your
supervisor that it was not appropriate for an office. Your supervisor took down the
calendar and has asked you to back him up if any complaints are filed. He has asked
you to say that you never saw the calendar. It would not be unethical for you to do as
your supervisor requests because he has removed the calendar.
T 70. A newspaper reporter is interviewing you about your experiences in working for a
member of Congress. You have indicated you have information about his private life but
will not share it. The reporter responds, "Tell me, just between you and me." You share
the information and a quote from you on the private life of the member of Congress
appears in the newspaper the next day. The reporter was unethical in violating a trust.
F 71. It would not be unethical for you to accept two employment offers in case one fell
through.
F 72. It would not be unethical to continue interviewing for positions after you have already
accepted employment with a particular firm.
T 73. You work for a construction firm that is submitting a bid for the construction of a new
company headquarters building for Smithco. A friend you have known since high school
works in Smithco's capital budgeting area and has full knowledge of all the bids from all
firms. It would be unethical for your friend to share that information with you before you
submitted your bid.
T 74. With respect to #73, it would be unethical for you to hire your friend to get him to bring the
information to your company.
F 75. Your college of business is sponsoring a case competition. All teams must watch the
other teams compete. The order of presentation is by luck of a draw. The team that is
the last to present left during one of the presentations, went to the computer room and
redid its PowerPoint slides and restructured its presentation based on what other teams
had presented. This team has done nothing wrong.
T 76. Conduct may comply with the law but still be unethical.
T 77. Following positive law is not the full extent of ethics.
F 78. It is not your responsibility to report a co-worker who leaves the office early each day
without taking time off.
F 79. Using things of minimal value that belong to your employer for personal reasons (such as
paper, paper clips, pens) is not an ethical violation.
T 80. You should disclose to your employer if a relative of yours has submitted a bid for work
with your company.
T 81. It is an ethical violation to disclose personnel information about your co-workers even to
your family.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
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F 82. If you are fired from your job, you can use any information you gained while employed to
help your next employer.
F 83. You need not disclose in your employment application those positions you held which will
not result in good feedback about you if your supervisors there are contacted.
F 84. Violation of company rules is not considered an ethical violation.
T 85. Employee hotlines exist to help employees who feel they cannot communicate concerns
through the lines of authority.
F 86. A false impression, unlike lying, is not an ethical violation.
T 87. A journalist who fails to disclose his or her financial interest in the subject of a story he or
she is covering has a conflict of interest.
F 88. A purchasing agent for a company could accept a Rolex from a supplier so long as there
is no bid pending.
T 89. The safest and simplest conflict of interest policy for purchasing agents is to accept
nothing from suppliers.
T 90. A purchasing agent whose daughter works for a supplier has a conflict of interest.
F 91. A purchasing agent who is an owner of 25% of the shares in a supplier does not have a
conflict of interest.
F 92. Putting down a degree on a resume that is not yet earned is acceptable if the degree is
pending.
F 93. Claiming a computer is stolen in order to obtain insurance when the computer is simply
outmoded is acceptable when the insurer doesn’t question claims that amount to less
than $2,000.
F 94. Peter Drucker believes that the ethical obligation of business is to bluff within reason.
F 95. One of the questions in the Laura Nash model is whether the proposed conduct is legal.
T 96. One of the questions in the Laura Nash model is to examine your intentions in choosing a
particular course of conduct.
T 97. Warren Buffett is credited with the development of the “Front Page of the Newspaper”
tests as a means for resolving ethical dilemmas.
F 98. Laura Nash does not see any purpose in examining how an ethical dilemma occurs.
T 99. Submitting a new pair of shoes as a travel expense is an example of a dishonest act.
F 100. Using co-workers to give your supervisor the impression that you are in the office is not
an ethical issue.
T 101. In the story of the “Parable of the Sadhu,” the author never learns whether the Sadhu
lived or died.
F 102. In the story of the “Parable of the Sadhu,” the author never helped the Sadhu.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
Jennings
T 103. In the “Parable of the Sadhu,” Bowen McCoy makes the point that many may act, but
none assume accountability.
T 104. In the “Parable of the Sadhu,” the hikers don’t know why the Sadhu is on the mountain.
T 105. In the “Parable of the Sadhu,” Bowen McCoy realizes that the times when he didn’t reach
the summit were more memorable than when he did.
F 106. Most ethical lapses are sudden and not foreseen.
T 107. Ethical lapses involve gradual decision processes.
F 108. Taking your current employer’s supply chain management system to a prospective
employer is not a breach of trust.
T 109. Taking your current employer’s customer list to a prospective employer is a breach of
trust.
T 110. The failure to disclose a current employee’s conduct that resulted in dismissal and harm
to a prospective employer is a breach of ethics.
F 111. It is more ethical to remain silent about misdeeds.
T 112. Plato believed one cannot make ethical decisions without first developing virtue.
F 113. Normative standards are the same as legal standards.
T 114. The Divine Command Theory includes the principles of natural law.
T 115. The United States Declaration of Independence is grounded in natural law.
F 116. Ayn Rand was the philosophical thinker who developed the Divine Command Theory.
T 117. Acting in one’s own self-interest is a description of ethical egoism.
F 118. Ayn Rand wrote The Moral Sentiments of Markets.
F 119. Adam Smith is part of the Divine Command School.
T 120. Temporary chaos can result as markets make adjustments under Adam Smith’s theories.
T 121. Jeremy Bentham is a proponent of utilitarianism.
T 122. Utilitarianism is described as the “greatest happiness principle”.
T 123. Immanuel Kant is the creator of the Categorical Imperative.
F 124. John Stuart Mill wrote The Moral Sentiments of Markets.
T 125. The Golden Rule is a form of the Categorical Imperative.
F 126. Kant believes so long as you do the right thing, it does not matter what your reasons
were.
F 127. The Theory of Justice is the same as the Categorical Imperative.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Business Ethics, 8e Jennings
Jennings
T 128. The Theory of Justice is subscribed to by contractarians.
F 129. John Locke is the creator of the Self-Interest Theory.
T 130. John Rawls is a contractarian.
T 131. Making your rules assuming you don’t know which side you will be on in any given
dilemma is the Theory of Justice.
F 132. The Rights Theory is the same as the Theory of Justice.
T 133. Under the Rights Theory, government exists to protect rights.
F 134. Robert Nozick is a moral relativist.
T 135. Moral relativism is circumstantial ethics.
T 136. Plato and Aristotle were moral relativists.
T 137 Thomas Hobbes felt that we needed strong government control in order to achieve
ethical behavior.
T 138. Ayn Rand and Thomas Hobbes were proponents of ethical egoism.
F 139. Those who hit a car in a parking lot without being seen and don’t leave a note are
Kantian in their ethical standards.
F 140. “We didn’t think of them as bribes. We thought of them as useful expenditures,” is an
example of virtue ethics.
T 141. Professor Dan Ariely’s work focuses on the impact of stepping outside ethical norms.
F 142. The “Parable of the Sadhu” is an essay in support of the theory of survival of the fittest.
T 143. Steve Cohen was fired from a trading job and banned from trading for four weeks, but still
created one of Wall Street's most successful hedge funds.
T 144. Murry Gunry was a Harvard MBA who rigged his election as an officer in the Finance
Club.
F 145. Murry Gunty was expelled from Harvard.
T 146. A newspaper reporter is interviewing you about your experiences in working for a
member of Congress. You have indicated you have information about his private life but
will not share it. The reporter responds, "Tell me, just between you and me." You share
the information and a quote from you on the private life of the member of Congress
appears in the newspaper the next day. The reporter was unethical in violating a trust.
Multiple Choice Questions
1. A recent survey found that 24% of Americans feel that it is always wrong to speed. In which of
the following schools of ethical thought would this 24% fit best?
a. Moral relativists
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Business Ethics, 8e Jennings
Jennings
b. Utilitarians
c. Ethical egoists
d. Virtue
2. Two male students fired guns off the balcony of Linda’s apartment. The police were able to see
which apartment it was by counting floors and windows. While the police run to Linda’s
apartment, her two friends run out her door and disappear into the crowd of students out and
about on a Friday night. When the police question Linda she refuses to tell them who her two
friends with the guns were. “I would never rat on a friend,” is Linda’s statement. One of the
police officers tells Linda she could be charged with obstruction of justice. Linda still refuses.
Which school of ethical thought would best suit Linda?
a. Moral relativists
b. Utilitarians
c. Ethical egoist
d. Virtue
3. Which of the following people is associated with the “Front-Page-of-the-Newspaper” test for
ethical dilemmas?
a. Warren Buffett
b. Ken Blanchard
c. Laura Nash
d. John Rawls
4. Which philosopher would start with a tabula rasa and then develop ethical standards?
a. Aristotle
b. Plato
c. John Rawls
d. Robert Nozick
5. Which philosopher feels that we all hold a set of rights and that it is the role of government to
protect those rights?
a. John Stuart Mill
b. Robert Nozick
c. John Locke
d. Adam Smith
6. Which philosopher developed the “greatest happiness principle”?
a. Immanuel Kant
b. Adam Smith
c. John Stuart Mill
d. Jeremy Bentham
7. Which of the following would be considered a utilitarian?
a. Immanuel Kant
b. Robert Nozick
c. Jeremy Bentham
d. Adam Smith
8. Which school of ethical thought is found in The Fountainhead and Atlas Shrugged?
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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