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Sample Questions Posted Below
Chapter 05 – Ethics and Social Responsibility
Chapter 05
Ethics and Social Responsibility
True / False Questions
1. Ethical behaviour requires more than following the law.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
2. Legal behaviour and ethical behaviour are basically the same.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
3. Many immoral and unethical acts fall well within our laws.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
5-1Chapter 05 – Ethics and Social Responsibility
4. Ethical behaviour refers to the standards that are accepted by society as right or wrong.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
5-2Chapter 05 – Ethics and Social Responsibility
5. Ethical behaviour requires individuals to decide for themselves what is right and wrong in
each situation they face.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
6. Given the level of diversity within Canada, agreement on common standards of ethical
behaviour is unachievable.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
7. Unethical behaviour is restricted to for-profit businesses only.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
8. Ethical behaviour involves the clear and easy choice of right and wrong actions toward
others.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
5-3Chapter 05 – Ethics and Social Responsibility
9. The question “Is it legal?” establishes ethical behaviour.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
10. Ethics are the standards of moral behaviour.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
11. Trying to make decisions that will benefit all parties involved is consistent with the
question “How will it make me feel about myself?”
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
12. The most basic question in business ethics is, “Is it legal?”
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-4Chapter 05 – Ethics and Social Responsibility
13. Legal behaviour includes more aspects of our relationships with others than does ethical
behaviour.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
14. Legal behaviour is a first step toward ethical behaviour.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
15. Ethical behaviour looks at treating others fairly.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
16. An ethical manager’s decisions are based on the following questions: “Is it legal?” and “Is
it profitable?”
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-5Chapter 05 – Ethics and Social Responsibility
17. Behaviour that is in conflict with your values and sense of right and wrong can damage
your self-esteem.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
18. Barney extends his lunch break beyond the allotted time. Wilma uses the office telephone
for an unauthorized personal phone call. Fred misrepresents his product to a potential
customer. All of these are examples of unethical behaviour.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
19. Business behaviour determines the ethics of society. We can improve society’s moral and
ethical behaviour by first making a commitment to improving business’ moral and ethical
behaviour.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
20. In reality, ethical behaviour depends on the situation. For example, in negotiating a
contract with your employees, the way they win higher wages is by you losing the fight to
hold down labour costs. Often, it is a win-lose relationship.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-6Chapter 05 – Ethics and Social Responsibility
21. Trust between workers and managers must be based on a foundation of fairness, honesty,
openness, and moral integrity.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
22. A growing number of people feel that an employee’s ethics are a personal matter and have
nothing to do with management.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
23. The majority of CEOs believe that employee misconduct results from a failure in
organizational leadership in establishing ethical standards.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
24. Management can create an environment in which unethical behaviour can develop.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
5-7Chapter 05 – Ethics and Social Responsibility
25. Corporate values, like personal values, are learned by observing what others do.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
26. Effective corporate values start with employees and develop throughout the organization
to include top management.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
27. Corporate standards can lead to unethical behaviour.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
28. Integrity-based ethics codes are based on avoiding legal punishment.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-8Chapter 05 – Ethics and Social Responsibility
29. The number of companies with formal, written codes of conduct is steadily increasing.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
30. Businesses with a formal code of ethics are less common now than in the past.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
31. Compliance-based ethics codes focus on preventing unlawful behaviour by increasing
control and by penalizing wrongdoers.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
32. A code of ethics designed to avoid criminal misconduct is an example of a compliance-
based ethics code.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-9Chapter 05 – Ethics and Social Responsibility
33. An integrity-based ethics code moves beyond legal compliance in order to create a “do-
the-right-thing” climate.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
34. Dewy Cheatum encourages his employees to create and use legal loopholes to gain a
competitive advantage. This is both legal and consistent with the compliance-based code of
ethics.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
35. The brewers of Molson beer encourage their customers to drink responsibly and “know
when to say when.” This reflects a compliance-based approach to ethics.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
36. Cigarette producers label their products with warnings of potential health hazards. This is
an example of a compliance-based code of ethics.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-10Chapter 05 – Ethics and Social Responsibility
37. The purpose of the Sarbanes-Oxley Act in the United States is to provide financial
rewards for whistleblowers.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
38. As a manager you are responsible for the unethical behaviour of your employees.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
39. Avoiding lawsuits is one reason to manage a firm ethically.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
40. The Federal Accountability Act (FAA) provides ethics guidelines to all organizations
operating in Canada with more than 500 employees.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-11Chapter 05 – Ethics and Social Responsibility
41. Written ethics codes influence employees more than management’s tolerance or
intolerance of ethical misconduct.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
42. In order to be successful, efforts to improve the ethical behaviour of businesses must
begin with top management’s support of a corporate code of conduct.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
43. Businesses recognize that pressure to violate ethical standards can come from either inside
or outside of the firm.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
44. People who report illegal or unethical behaviour are known as whistleblowers.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-12Chapter 05 – Ethics and Social Responsibility
45. An ethics officer serves both as a counsellor and as an investigator.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
46. Individuals who can set a positive tone, relate well to others, and communicate effectively,
make the most effective ethics officers.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
47. Enforcement is perhaps the most important step in an effective code of ethics.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
48. To be effective, an organization’s code of ethics needs to be communicated to outsiders
such as suppliers, subcontractors, and customers.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-13Chapter 05 – Ethics and Social Responsibility
49. Businesses can avoid ethical dilemmas by requiring written contracts with their
employees, customers, and owners.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
50. Corporate social responsibility refers to the concern businesses have for their employees.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
51. Corporate philanthropy refers to the position a firm takes on issues that affect society.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
52. A charitable donation by a corporation is an example of corporate philanthropy.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-14Chapter 05 – Ethics and Social Responsibility
53. Ethical behaviour will allow a firm to meet its corporate social responsibility.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
54. Minority hiring practices and pollution control are both areas of corporate responsibility.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
55. Corporate philanthropy refers to the position a firm takes on social and political issues.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
56. Businesses can have either a positive or negative impact on society, although the news
coverage tends to focus on the negative.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-15Chapter 05 – Ethics and Social Responsibility
57. A business that takes a public position on a political issue is exercising corporate social
responsibility.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
58. Defining a socially responsible company is complicated. There does not appear to be a
consensus on what, precisely, is involved in being socially responsible.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
59. “My only social responsibility is to make a profit. I will show my concern for society by
providing my customers with a product that they need and desire.” This statement is
consistent with the concept of corporate social responsibility.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
60. At a recent town hall meeting, citizens expressed concern regarding the impact of a
proposed new gambling casino. The owner of the proposed casino responds, “I don’t know
what all of this fuss is about. I’m just a businessman trying to earn a profit, provide new jobs,
and pay taxes.” His response reflects a commitment to corporate social responsibility.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-16Chapter 05 – Ethics and Social Responsibility
61. A new law requiring businesses to give 90-day notice of their plans to close an office or
factory was recently enacted. This action indicates the public’s desire for businesses to behave
in a socially responsible manner.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
62. Promoting social justice is a responsibility of society, not businesses.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
63. Both the strategic and pluralist approaches recognize the responsibility of management to
optimize profits.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility
64. Being responsible to your customers may require your firm to provide more information
regarding your product than the law demands.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-08 Responsibility to Customers
5-17Chapter 05 – Ethics and Social Responsibility
65. One responsibility of business is to satisfy customers by offering them goods and services
of real value.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-08 Responsibility to Customers
66. Studies show that consumers are not concerned about the socially conscious behaviour of
the firms with which they do business.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-08 Responsibility to Customers
67. Ethical behaviour comes at the expense of stockholder wealth.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
68. In the discussion of corporate social responsibility, stakeholders and stockholders refer to
the same group.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
5-18Chapter 05 – Ethics and Social Responsibility
69. Investors can profit from choosing to invest their money in companies whose goods and
services benefit the community and the environment.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
70. Insider trading occurs when employees of a company use private company information to
profit in the stock market.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
71. Insider trading provides the information needed for the securities market to operate fairly
and efficiently.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
72. Out-Tel, a computer chip manufacturer, knowingly sold defective chips and failed to
notify customers of the potential problems. When the problem became public knowledge, the
firm’s stock price fell dramatically. This illustrates the value that investors place on the ethical
behaviour of businesses.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
5-19Chapter 05 – Ethics and Social Responsibility
73. Businesses have a social responsibility to create jobs.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-10 Responsibility to Employees
74. In the long run, a firm’s loyalty to their employees can pay off financially.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-10 Responsibility to Employees
75. Retribution or ‘getting even’ is one of the most powerful incentives for good people to do
bad things.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-10 Responsibility to Employees
76. A recent study revealed that employee theft has increased dramatically, however it is still
insignificant compared to shoplifting.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-10 Responsibility to Employees
5-20Chapter 05 – Ethics and Social Responsibility
77. Businesses are partially responsible for promoting social justice.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-11 Responsibility to Society
78. Today we are seeing more and more organizations and governments making efforts to
reverse years of neglect to the environment.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-12 Responsibility to the Environment
79. A firm’s triple-bottom line looks at a company’s positive economic contributions, as well
as the environmental and social value they add and destroy.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
80. A social audit attempts to measure a firm’s progress in the area of worker-management
relations.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
5-21Chapter 05 – Ethics and Social Responsibility
81. A problem with conducting a social audit is establishing procedures for measuring a firm’s
activities and its effects on society.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
82. As a response to the federal government sponsorship scandal, the federal government now
requires social audits of all Canadian businesses.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
83. Sustainable development is the enterprise growth process whereby companies expand and
increase profit margins over time.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
84. Charges of unethical business practices are common outside Canada.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
5-22Chapter 05 – Ethics and Social Responsibility
85. The ethical standards by which international political leaders are judged are less strict
today than they were in years past.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
86. Many Canadian companies are demanding socially responsible behaviour from their
international suppliers.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
87. Canadian businesses are not socially responsible for the activities of a foreign supplier.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
88. The economic power of large multinational firms allows them to ignore the ethical
standards of a society without consequences.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
5-23Chapter 05 – Ethics and Social Responsibility
89. Canadian businesses and consumers have little influence over the behaviour of businesses
from other countries.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
90. Applying the ethical standards of Canada to foreign firms is more difficult than judging
the behaviour of Canadian firms.
TRUE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
91. “Hear no evil, see no evil, speak no evil” is the best policy for Canadian firms to follow in
their dealings with corrupt foreign suppliers.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
92. While “doing the right thing” is an admirable code of ethics, there are no international
organizations dealing with global ethics and corruption.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
5-24Chapter 05 – Ethics and Social Responsibility
93. A product with the FAIRTRADE mark means that it can be sold in foreign countries.
FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
Multiple Choice Questions
94. In 2014, a Conservative Party staffer was found guilty under the Elections Act of willfully
preventing a voter from casting a ballot. This is an example of behaviour that is _______.
A. legal but unethical
B. predictable
C. illegal
D. ethical
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
95. Obeying the law is ________ ethical behaviour.
A. essentially the same as
B. the first step toward
C. the opposite of
D. unlikely to lead to
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
5-25Chapter 05 – Ethics and Social Responsibility
96. ________ refers to the standards of moral behaviour.
A. Legality
B. Responsibility
C. Integrity
D. Ethics
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
97. Ethics and legality are:
A. essentially the same.
B. exactly the same.
C. two different things.
D. the only two steps to consider during any business action.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
98. Legality is:
A. narrower than ethical behaviour.
B. broader than ethical behaviour.
C. the same as ethical behaviour.
D. the only consideration for ethical behaviour.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-02 Ethical Standards Are Fundamental
5-26Chapter 05 – Ethics and Social Responsibility
99. Three questions often help individuals and organizations in deciding if their decisions are
ethical. All of the following are ethics check questions, except:
A. Is it legal?
B. Is it balanced?
C. Has it been done before?
D. How will it make me feel about myself?
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
100. When discussing moral and ethical issues, it is helpful to remember that ethical
behaviour begins with:
A. schools.
B. religious institutions.
C. law enforcement officers.
D. each of us.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
101. The first step when facing an ethical dilemma is to ask:
A. Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. Is it ethical?
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-27Chapter 05 – Ethics and Social Responsibility
102. Which of the following reflects the desire of an ethical manager to achieve a “win-win”
relationship with others?
A. Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. How can I benefit at the expense of others?
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
103. Which of these questions can help us avoid a decision that would injure our self-esteem?
A. Is it legal?
B. Is it balanced?
C. How will it make me feel about myself?
D. How can I avoid taking the blame?
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
104. Considering the potential impact on others, before actually making a decision that could
affect them is consistent with ________ behaviour.
A. legal
B. anti-social
C. ethical
D. self-motivated
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-28Chapter 05 – Ethics and Social Responsibility
105. Treating others unfairly can result in retaliation from the injured party. This will likely
create a:
A. lose-win situation.
B. win-win situation.
C. lose-lose situation.
D. Golden Rule application.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
106. Purposefully understating your firm’s income to avoid paying higher taxes is an example
of:
A. an accepted business practice.
B. tax accountants doing their job.
C. illegal behaviour.
D. a firm’s responsibility to its owners.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
107. While it is easy to criticize business for moral and ethical shortcomings, it is important to
remember that:
A. when in Rome, do what the Romans do.
B. each of us have moral shortcomings as well.
C. values must sometimes be compromised to satisfy investors’ demand for profits.
D. the ends justify the means.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-29Chapter 05 – Ethics and Social Responsibility
108. An ethical dilemma refers to a situation where you must:
A. treat someone unfairly.
B. choose between equally unsatisfactory alternatives.
C. choose between a correct and an incorrect option.
D. balance the concerns of profit and legality.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
109. A Canadian government official has indicated that for a generous contribution to his re-
election fund, he would ignore your firm’s apparent violation of several anti-pollution laws.
Which of the following “Ethics Check Questions” would you consider first?
A. Is it legal?
B. Is it fair?
C. How will it make me feel about myself?
D. How much do you want?
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
110. A friend offers to share with you a term paper she prepared for her “Introduction to
Business” class last semester. When you tell her that it wouldn’t be fair, she reminds you of
your habit of reading an entire Harry Potter book at the local bookstore without paying for the
book. Which ethics-based question would be the most helpful in evaluating these situations?
A. Is it legal?
B. Am I acting fairly?
C. Who wins and who loses?
D. Will I get caught?
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-30Chapter 05 – Ethics and Social Responsibility
111. The majority of CEOs blame unethical employee conduct on:
A. the breakdown of traditional religious institutions.
B. a failure of leadership to establish ethical standards.
C. the increase in lawsuits used to avoid personal responsibility.
D. the nation’s business schools that tolerate unethical behaviour in students.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
112. Ethical behaviour will result in all of the following, except:
A. greater trust and cooperation between employees and managers.
B. balanced, fair agreements that create benefits for all involved.
C. negative publicity from the news media.
D. improved self-esteem.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
113. Organizational ethics are learned by:
A. attending corporate responsibility seminars.
B. tracking the failures of those who are caught in business scandals.
C. attending business classes and regularly taking notes.
D. observing the actions of others.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
5-31Chapter 05 – Ethics and Social Responsibility
114. All of the following are reasons why a business should be managed ethically, except:
A. because it is the right thing to do.
B. because strict global regulations require it.
C. to attract new customers and retain existing customers.
D. to please customers, employees, and society.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
115. A competitive corporate environment:
A. can encourage employees to deceive customers.
B. should focus on improving corporate profit.
C. must be ignored when corporate ethics are developed.
D. can best define ethical behaviour based on current circumstances.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
116. The Hummer Corporation has recently instituted a corporate ethics code. The president
of the company realizes that ethical relationships are based on:
A. trust and cooperation.
B. strict penalties for illegal activities.
C. a well-developed corporate code of ethics.
D. watchdogs and whistleblowers.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-03 Describe management’s role in setting ethical standards.
Topic: 05-04 Managing Businesses Ethically and Responsibly
5-32Chapter 05 – Ethics and Social Responsibility
117. Establishing a formal code of ethics is:
A. more common with small businesses than large businesses.
B. unnecessary given the level of government regulation.
C. growing in popularity.
D. mandated by the Corporate and Criminal Fraud Accountability Act.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
118. A(n) ________-based ethics code emphasizes the prevention of unlawful behaviour by
increasing control and penalizing wrongdoers.
A. legal
B. corporate responsibility
C. compliance
D. integrity
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
119. A(n) ________-based ethics code defines corporate values, creates a supportive
environment, and stresses shared accountability among employees.
A. social
B. corporate responsibility
C. compliance
D. integrity
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-33Chapter 05 – Ethics and Social Responsibility
120. After developing a code of ethics, it should be communicated to:
A. everyone with whom the business has dealings.
B. the police in jurisdictions where the business has operations.
C. only senior-level management.
D. stockholders.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
121. The purpose of the Federal Accountability Act is to:
A. ensure that whistle-blowers within the government receive due recognition and reward.
B. protect government employees from reprisal for making good faith allegations of
wrongdoing.
C. restrict the investigation of any wrongdoing that occurs within the public sector.
D. ensure that any corporate whistleblower in Canada is reimbursed for lost wages if they are
fired by their employers.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
122. Which of the following is not included in a compliance-based ethics code?
A. Increased control over employee actions.
B. Shared accountability among employees.
C. Penalties for wrongdoers.
D. Awareness of the relevant laws.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-34Chapter 05 – Ethics and Social Responsibility
123. Which of the following would be a unique focus of an integrity-based ethics code?
A. Increased control over employee actions.
B. Shared accountability among employees.
C. Increased penalties for code violators.
D. Improved awareness of the relevant laws.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
124. As a new employee, Vanessa has heard her boss say, “Do whatever it takes to meet your
sales quota. However, anyone caught violating a law will be immediately fired”. Vanessa
recognizes this as a(n) ________-based code of ethics.
A. Internet
B. personal responsibility
C. compliance
D. integrity
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
125. In an effort to help employees resist the pressure to make an unethical decision, the
Johnston Petroleum Company has communicated their code of ethics statement to their
suppliers, subcontractors, distributors, and customers. This approach is consistent with a(n):
A. integrity-based ethics code.
B. compliance-based ethics code.
C. response to a government mandate.
D. personal responsibility commitment.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-35Chapter 05 – Ethics and Social Responsibility
126. Which of the following terms describes someone who reports illegal or unethical
behaviour?
A. Whistleblower
B. Hornblower
C. Watch tower sentinel
D. Integrity watchdog
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
127. Whistleblowers from the private sector in Canada:
A. are protected under the Federal Accountability Act.
B. cannot be protected under the Sarbanes -Oxley Act.
C. have no comprehensive protection whatsoever.
D. must organize a union and register with KPMG if they desire whistleblower protection.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
128. All of the following are characteristics of an effective ethics officer, except:
A. a background in human resource management.
B. ability to relate with employees at every level of the company.
C. capacity to serve as a counsellor and an investigator.
D. good communication skills.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-36Chapter 05 – Ethics and Social Responsibility
129. Which of the following is the most important step to help improve Canada’s business
ethics?
A. Middle management support
B. Training
C. Enforcement
D. Identification of the organizational ethics officer
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
130. A phone call to a government official by an employee of the XYZ Corporation disclosed
the deception and dishonesty of the firm’s accounting records. This employee played the role
of a:
A. whistleblower
B. hornblower
C. cheerleader
D. morality officer
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
131. Integrity-based ethics codes are similar to compliance-based ethics codes. Which of the
following is an objective of compliance-based codes?
A. Avoid criminal misconduct
B. Conform to chosen internal standards
C. Enable responsible employee conduct
D. Accountability
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-37Chapter 05 – Ethics and Social Responsibility
132. Which step is the most critical to help improve business ethics?
A. Top management must adopt and support a corporate code of conduct.
B. The ethics code must be enforced.
C. An ethics office must be set up.
D. Outsiders must be told about the ethics program.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
133. Corporate social responsibility describes the firm’s:
A. responsibility to their stockholders.
B. ability to plan for the unexpected.
C. commitment to a management training program.
D. concern for the welfare of society.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
134. Which of the following describes charitable donations by corporations to nonprofit
organizations?
A. Corporate philanthropy
B. Corporate responsibility
C. Corporate strategy
D. Structural commitment
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-38Chapter 05 – Ethics and Social Responsibility
135. The position a firm takes on issues that affect the corporation as well as society is known
as its:
A. political philanthropy.
B. corporate policy.
C. target posturing.
D. structural positioning.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
136. Corporate ________ encompasses various issues such as setting minority hiring
practices, manufacturing safe products, and minimizing pollution.
A. responsibility
B. philanthropy
C. diversity
D. structure and strategy
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
137. Determining what is involved for a firm to be socially responsible:
A. Can be easily determined considering the goals of the stakeholders.
B. varies even among those who are interested in corporate responsibility.
C. helps government officials develop appropriate legislation.
D. varies from industry to industry.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-39Chapter 05 – Ethics and Social Responsibility
138. Top management at Lancer Distributing is convinced that they have a social
responsibility to their community. They believe that they can have the greatest impact in this
area through cash contributions to nonprofit organizations. This is an example of corporate:
A. guilt payments.
B. philanthropy.
C. structure and strategy.
D. short-run profit maximization.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
139. Those who argue in favour of corporate social responsibility suggest that:
A. you need to justify socially responsible behaviour from an investor’s standpoint only.
B. being socially responsible is all about being ethical.
C. business exists only to make money for shareholders.
D. companies who are perceived as being socially responsible will attract and retain better
employees and draw more customers.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
140. Which of the following is a strategy where “companies provide products that appeal to
people’s best selves”?
A. Ethical philanthropy
B. Corporate consumerism
C. Ethical consumerism
D. Social entrepreneurship
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-40Chapter 05 – Ethics and Social Responsibility
141. Which of the following is the dimension of social responsibility that includes enhanced
forms of corporate philanthropy that are more directly related to the company’s
competencies?
A. Ethical philanthropy
B. Corporate consumerism
C. Ethical consumerism
D. Corporate social initiatives
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
142. Management and employees at Boyer Enterprises are given time off each year to work in
local charities. This firm clearly practices:
A. corporate philanthropy.
B. social irresponsibility.
C. community mediation services.
D. participative funding.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
143. Corporate ___________ is the concern businesses have for the welfare of society.
A. philanthropy
B. responsibility
C. policy
D. social responsibility
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
5-41Chapter 05 – Ethics and Social Responsibility
144. When management’s primary objective is the economic interests of shareholders, this is
known as:
A. philanthropy
B. responsibility
C. the strategic approach
D. the pluralistic approach
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility
145. According to Milton Friedman, businesses can best meet their responsibility to society
by:
A. creating markets for domestic products.
B. shifting the blame for product liability cases onto the legal system.
C. supporting their preferred government officials.
D. creating wealth for their stockholders.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility
146. One strategy guaranteed to displease your customers is to:
A. delight them with a quality product at a fair price.
B. focus on cost and quality control systems within your organization.
C. practice deception regarding product safety issues.
D. shift the production of goods to foreign facilities and layoff Canadian workers.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-08 Responsibility to Customers
5-42Chapter 05 – Ethics and Social Responsibility
147. Insider trading involves:
A. an Internet activity that establishes a barter exchange system between businesses.
B. investors using private company information to further their own fortunes.
C. the exchange of assets between companies in the same industry.
D. a payment or reward for socially conscious behaviour.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
148. When it comes to social responsibility, some people feel that “before you can do good,
you must do well”. This reflects a firm’s primary responsibility is to their:
A. customers.
B. investors.
C. employees.
D. community.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-09 Responsibility to Investors
149. If a business fails in meeting its responsibilities to its employees, all of the following are
likely to occur, except:
A. reduced employee turnover.
B. disgruntled workers manipulating budgets and expenses.
C. a loss of employee commitment and trust in the company and its management.
D. employee retaliation by doing the minimum needed to get by.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-10 Responsibility to Employees
5-43Chapter 05 – Ethics and Social Responsibility
150. Environmental quality is:
A. a pluralistic approach
B. a public good
C. a private resource
D. a role for only the public sector
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-12 Responsibility to the Environment
151. Environmental quality is considered to be a public good. This means that:
A. ultimately it is the public that pays for environmental clean-up.
B. businesses have a responsibility to minimize their environmental pollution.
C. everyone enjoys a cleaner environment regardless of who pays for it.
D. society places a higher value on private goods and services.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-12 Responsibility to the Environment
152. The triple-bottom line measures:
A. social audit performance.
B. profits, people, and places.
C. economic, social, and environmental parameters.
D. public private partnerships.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
5-44Chapter 05 – Ethics and Social Responsibility
153. The purpose of a(n) ________ is to evaluate an organization’s progress toward
implementing programs to achieve social responsibility.
A. accountability review
B. social audit
C. federal disclosure statement
D. annual report
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
154. Which of the following activities would generally not be included in the social audit of a
business?
A. Support for higher education, the arts, and non-profit groups.
B. Employee-related activities.
C. Comparisons of profits versus the profits of other firms.
D. Consumer activities such as product safety, honest advertising, and fair pricing.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
155. Many businesses have developed internal procedures to enforce their ethical policies.
Which of the following is an example of an outside group urging ethical behaviour in
businesses?
A. Management teams
B. Union officials
C. Suppliers
D. Foreign trade representatives
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
5-45Chapter 05 – Ethics and Social Responsibility
156. Sustainable development means:
A. using processes to sustain a business through good times and bad.
B. implementing a social audit.
C. selling your product in the developing world.
D. implementing environmental, economic, and social considerations into decision-making.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
157. One problem of conducting a social audit is:
A. that most businesses are really not very concerned with these issues.
B. determining what should be measured and how to calculate the effect on society.
C. the primary focus of management is on the interests of stakeholders.
D. governmental “red-tape.”
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
158. One factor causing businesses to vigorously enforce ethical standards is the:
A. desire to eliminate employee turnover.
B. fear of negative publicity.
C. focus on criminal penalties.
D. evasion of social audit measurements.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
5-46Chapter 05 – Ethics and Social Responsibility
159. Doogood Corporation would like its employees, customers, and the general public to be
aware of the activities and programs they have done for the community over the past year.
The company might consider doing a:
A. contributory analysis.
B. responsibility review.
C. social audit.
D. annual payment report.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
160. Several outside groups regularly monitor the activities of Metro Chemical Corporation.
These groups are interested in the firm’s involvement and enforcement of their ethical and
social responsibility policies. Who of the following is the least likely to be among the
“watchdog” groups?
A. The financial officer of a church with funds invested in the chemical company.
B. Overseers from the World Trade Organization (WTO).
C. A student of environmental engineering attending a local college.
D. The president of the union representing the workers at the chemical company.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-13 Social Auditing
161. Ethical problems and issues of social responsibility are:
A. unique to firms involved in global trade.
B. unique to Canada.
C. not unique to Canada.
D. less important now than in the past.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
5-47Chapter 05 – Ethics and Social Responsibility
162. When working with international firms, Canadian businesses:
A. tend to ignore the ethics of their international partners.
B. expect socially responsible behaviour from their business partners.
C. feel that their responsibility is limited to Canada.
D. try to avoid judging their international business partners by Canadian standards.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
163. Issues of social responsibility and ethical behaviour are:
A. the result of greed found in capitalist countries.
B. found primarily in countries with a low standard of living.
C. a concern only of business professors.
D. found in many different countries.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
164. The Fairtrade mark on a package indicates that:
A. the company must not be involved in weapons or tobacco businesses.
B. the company has contributed to the development of disadvantaged producers and workers.
C. the company must behave ethically.
D. the company cannot participate in insider trading.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
5-48Chapter 05 – Ethics and Social Responsibility
165. __________ has been accused by human rights and labour groups of treating its workers
poorly while lavishing millions of dollars on star athletes to endorse its products.
A. McDonald’s
B. Sears
C. Phillips-Van Heusen
D. Nike
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
166. Stories of political leaders accepting bribes in return for their influence have occurred
worldwide. Unlike the past, these leaders have been forced to resign under intense public
pressure. This indicates that:
A. politicians and religious leaders are above the law.
B. people are demanding higher standards of their leaders.
C. it is important not to get caught accepting a bribe.
D. the WTO has established global standards.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-06 Discuss the importance of ethical behaviour and social responsibility in global markets.
Topic: 05-14 International Ethics and Social Responsibility
Short Answer Questions
5-49Chapter 05 – Ethics and Social Responsibility
167. Given the ethical lapses that are so prevalent today, what can be done to restore trust in
the free-market and leaders in general?
Those who have broken the law need to be punished accordingly. Arrest business leaders, put
them in handcuffs and take them to jail. This will show the public that it is time to get serious
about legal and ethical behaviour in business. Write new laws making accounting records
more transparent and more laws making businesspeople and others more accountable.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-01 Ethics is More Than Legality
5-50Chapter 05 – Ethics and Social Responsibility
168. Identify and discuss the three questions that an ethics-based manager should ask when
facing a potentially unethical action.
A) Is it legal? Am I violating any law or company policy? Regardless of the situation, this is
the most basic step in an ethics-based management system.
B) Is it balanced? Am I acting fairly? Would I want to be treated this way? If a situation arises
where one party wins everything at the expense of another party, the future may bring
retaliation from the loser. While every situation cannot be completely balanced, it is important
for the health of business relationships that we avoid major imbalances over time. An ethics-
based manager maintains a win-win attitude.
C) How will it make me feel about myself? Will I feel proud when my family learns of my
decision? Decisions that go against our sense of right and wrong make us feel bad and cause
us to lose our self-esteem.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
169. When faced with an ethical dilemma it might be helpful to ask yourself, is it legal? Give
an example of a situation where you could ask yourself, am I violating any law or company
policy?
Whether you are thinking about having a drink and then driving home, gathering marketing
intelligence, designing a product, hiring or firing employees, etc.
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-02 Ask the three questions to answer when faced with a potentially unethical action.
Topic: 05-03 Ethics Begins with Each of Us
5-51Chapter 05 – Ethics and Social Responsibility
170. Explain the difference between a compliance-based ethics code and an integrity-based
ethics code.
A. Compliance-based ethics codes emphasize preventing unlawful behaviour by increasing
control and penalizing wrongdoers. The primary focus is to conform to outside standards,
(laws and regulations), and avoid criminal misconduct.
B. An integrity-based code of ethics defines the organization’s guiding values, creates an
environment that supports ethically sound behaviour, and stresses a shared accountability
among employees. There is still a requirement to conform to outside standards, but that is just
a starting point. Integrity-based ethics codes move beyond legal compliance to create a “do-it-
right” climate that emphasizes core values, such as honesty and fair play.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
171. Identify the six-step approach to achieve a long-term improvement of business ethics.
1) Top management must adopt and unconditionally support an explicit corporate code of
conduct.
2) Employees must understand that expectations for ethical behaviour begin at the top and
that senior management expects all employees to act accordingly.
3) Managers and others must be trained to consider the ethical implications of all business
decisions.
4) An ethics office must be set up with phone lines to allow employees to report questionable
activities.
5) Suppliers, subcontractors, distributors, and customers must be told about the ethics
program. Often pressure to put aside ethical considerations comes from outsiders, and it helps
employees resist such pressure when everyone knows what the ethical standards are.
6) The ethics must be strictly enforced with timely action if any rules are broken.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-04 Distinguish between compliance-based and integrity-based ethics codes; and list the six steps that can be
considered when setting up a corporate ethics code.
Topic: 05-05 Setting Corporate Ethical Standards
5-52Chapter 05 – Ethics and Social Responsibility
172. Why should a business be managed ethically?
To maintain a good reputation; to keep existing customers; to attract new customers; to avoid
lawsuits; to reduce employee turnover; to avoid government intervention; to please customers,
employees, and society; to do the right thing.
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-06 Corporate Social Responsibility
173. Identify and discuss the social responsibilities of a firm to three stakeholder groups.
Customers. Businesses are responsible to satisfy customers by offering them goods and
services of real value.
Investors. According to Milton Friedman, businesses are responsible to generate profits for
their owners and investors. Some people believe that before “you can do good, you must do
well”.
Employees. Firms have the responsibility to create jobs in which hard work and talent are
respected and fairly rewarded.
Society and the Environment. Business organizations are responsible to create new wealth,
promote social justice, and to improve the quality of the environment.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility
174. Businesses demonstrate corporate responsibility towards what four types of
stakeholders?
Customers, investors, employees, society and the environment.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-07 Concepts of Social Corporate Responsibility
5-53Chapter 05 – Ethics and Social Responsibility
175. Give an example of where the Canadian government has been involved with business in
environmental issues.
Syncrude and ducks, Sydney Tar Ponds
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 05-05 Define corporate social responsibility and compare corporations’ responsibilities to various stakeholders.
Topic: 05-12 Responsibility to the Environment
176. Identify and discuss the five types of groups that serve as “watchdogs” regarding how
well companies enforce their ethical and social responsibility policies.
1) Socially conscious investors who insist that companies extend the firm’s own high
standards to all their suppliers.
2) Socially conscious research organizations, such as Ethisphere.
3) Environmentalists who apply pressure by naming names of companies that don’t abide by
the environmentalists’ standards.
4) Union officials who hunt down violations and force companies to comply to avoid negative
publicity.
5) Customers who take their business elsewhere if a company demonstrates unethical and
socially irresponsible practices.
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 05-01 Explain why obeying the law is only the first step in behaving ethically.
Topic: 05-13 Social Auditing
5-54
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