MINISTRY OF EDUCATION AND TRAINING MIDTERM EXAM

NATIONAL ECONOMICS UNIVERSITY

BUSINESS ETHICS
Date: 13/11/202319 /3 Time: 13h00
Time allowed : 60 minutes
Delivery: Full-time Intake: 64
FACULTY OF BUSINESS MANAGEMENT Name: ..................................................................
Student ID: .........................................................

TEST CODE: 01

1. Which of the following statement about business ethics is true? Business ethics
A. is the interdisciplinary study of ethical problems in business.
B. is divided into the three domains of business ethics, deontology, consequentialism and
virtue ethics.
C. and business morality have the same meaning.
D. is divided into the three domains of normative ethics, ethics management, and
utilitarianism.
2. Imagine you had overheard the following statement at work: “I really thought it does not matter
if I used some of the company stationery at home, but then I thought about what would happen
if everybody did this!” With which of the following terms is the argumentation best applied?
A. Greatest happiness principle.
B. Virtuous (good) life.
C. Categorical imperative.
D. Fairness.
3. Imagine a company establishes an accounting process to measure the number of calls made at
their ethics hotline, which also registers and categorizes the type of ethical issues raised by
callers. The goal is to understand better what ethical challenges employees typically encounter
and with what frequency. The situation is an application of which of the domains of business
ethics?
A. Normative ethics.
B. Virtue ethics.
C. Economic ethics.
D. Descriptive ethics.
4. “It judges right or wrong by referring to higher duties that must be derived from universal
rules.” Which of the following terms does the definition describe?
A. Deontology.
B. Consequentialism.
C. Virtue Ethics.
 D. Moral philosophy.
5. Which sequence of the components of the ethical decisions and actions framework is correct?
A. Motivation, awareness, judgment, behavior.
B. Awareness, judgment, motivation, behavior.
C. Individual factors, situational factors, ethics management.
D. Descriptive ethics, normative ethics, ethics management.
6. When talking about companies and their motivation for engaging in responsible business
practices, a colleague states “I frankly don´t care if a company does good things only to sell
more - in the end the thing that counts is they do good things, isn´t it?” This argument of
moral philosophy is a good example of
A. deontology.
B. professional ethics.
C. consequentialism.
D. virtue ethics.
7. “A situation that requires an ethically relevant decision where right or wrong is questioned
through a set of alternative actions that are likely to have significant effects on others.”
Which of the following terms is described by this definition?
A. Compliance
B. Moral dilemma
C. Ethics
D. Moral laxity problem
8. Imagine you have a job in a convenience store as a sales clerk. There is a special “meal deal”
where customers can save more than 50 percent if they pick a certain combination of food
items. Often customers pick the wrong combination of items without knowing and many
sales clerks tell them how to save the money. One of your colleagues does not do this and
you ask him why. Here is his answer: “I know I should tell them, but why should I make the
extra effort?” You look up the customer policy of the convenience store, but it does not
mention what to do in such a situation. This is a
A. compliance problem
B. moral laxity problem
C. no-problem problem
D. genuine ethical dilemma
9. Which of the following definitions describes an ethics program?
A. A situation where ethical behavior has become part of the natural character of the company.
B. The management of ethical problems with the goal of achieving maximum moral
performance.
C. A set of ethics management instruments chosen by a specific organization to create ethics
performance.
D. An issue that is best solved by the ethics management process.
10. Which of the following is a situational influence factor?
A. Locus of control.
B. Moral complexity.
C. Level of education.
D. Gender.
11. “Follow higher principles and duties!” This statement is the central theme of which of the
following theories of moral philosophy?
A. Virtue ethics.
B. Consequentialism.
C. Deontology.
D. Descriptive ethics.
12. “A set of rules to guide the ethical behavior of individuals.” What does this definition
describe?
A. Code of ethics.
B. Whistleblowing.
C. Ethics training.
D. Ethics audit.
13. You listen to a TV discussion on CNN about offshoring jobs from economically developed to
developing countries, a typical dilemma of globalized companies. Person A is of the opinion
that companies should outsource as long as consumers buy the company´s product and do not
punish it through consumer boycotts. Person B stresses that it is not fair to have people in
economically developing countries work for less than a dollar a day under inhumane working
conditions only so that people in economically developed countries can buy goods a couple
of cents cheaper. Person C interjects that the US American citizens expect the government to
provide jobs for all and that every job offshored means another unhappy citizen. Using
Kohlberg´s theory of moral development, which of the following statements about the
situation is right?
A. Argument A is a typical example of Stage 5, “social contract.”
B. Assessing the moral maturity of the three arguments on Kohlberg´s pyramid we find that
Argument A represents the lowest moral development out of the group, Argument B the
highest, and Argument C takes the middle position between A and B.
C. Argument C is a typical example for Stage 1, “obedience and punishment.”
D. Assessing the moral maturity of the three arguments on Kohlberg´s pyramid we find that
Argument A represents the lowest moral development out of the group, Argument C the
highest, and Argument B takes the middle position between A and C.
14. You discuss with a friend, an environmentalist, about business responsibilities. He says that
what he does not like about the topic is that companies “always think that humans go first- I
think the bigger responsibility is the one we have for the environment!” Which of the
following sentences describes this statement best?
 A. Your friend says, companies should focus on implicit business responsibility.
B. Your friend proposes a soft approach to business responsibility.
C. The statement is a call for accountability.
D. Your friend stresses the importance of non-social stakeholders.
15. Which of the following statements is the most complete to define business responsibility?
Business
A. Activities focusing on businesses´ role in and contribution to community.
B. Activities to voluntarily assume accountability for issues related to its stakeholders and
aiming to maximize stakeholder value.
C. Business activities conducted with an altruistic mind-set.
D. Activities with an entrepreneurial venture approach to addressing social and environmental
issues.
16. A retail business works with suppliers and customers to jointly reach a zero-carbon goal. The
company before had achieved an integration of carbon into managerial practices and an
excellent alignment with its strategy. Among the company´s stakeholders, the issue of carbon
is one that is well-known, but has not yet been formalized in legislation. Based on this
information, which of the following statements is true about the company´s corporate social
performance with regard to the carbon issue?
A. The company´s stakeholder responsiveness is reactive.
B. The company´s issue maturity is on the “consolidated” level.
C. The company´s organizational implementation is on the civic level.
D. The responsibility category of the company is discretionary.
17. Carroll´s responsibility pyramid
A. includes economic responsibilities as the highest level.
B. includes discretionary responsibilities as the lowest level..
C. describes responsibility categories in the sequence of economic, legal, ethical, and
discretionary (also called philanthropic) responsibilities.
D. describes responsibility categories in the sequence of legal, economic, philanthropic, and
ethical responsibilities.
18. The company GoodCorp has just begun to provide employees with free gym membership
which they can use during work hours. The employees are stunned. They had not even
thought that such a thing was possible. Which of the following statements can we make about
the company´s corporate social performance?
A. The company is proactive in stakeholder responsiveness.
B. The company has achieved the highest level of organizational implementation.
C. The company assumes responsibilities in the legal responsibility category.
D. The company scores low in the performance dimension of issues maturity.
19. Which of the following texts is the most complete and concise definition of stakeholders?
A. Stakeholders are all suppliers, employees, customers, and owners of a company.
 B. Stakeholders are any “groups and individuals that can affect or are affected” by business
activity.
C. A stakeholder is anyone who owns shares of a company.
D. Stakeholders are all groups and individuals that have an interest into a company.
20. Which of the following statements related to stakeholder management is true?
A. The focal entity is a term describing the most important stakeholder of an activity.
B. The distinction into core, strategic, and environmental stakeholders is one of the schemes
to prioritize stakeholders.
C. Stakeholder engagement is a synonym for stakeholder communication.
D. The term “materiality” describes the degree of importance a stakeholder has for the
company.
21. Which of the following statements related to stakeholder assessment is wrong?
A. Employees are internal and primary stakeholders at the same time.
B. External stakeholders are also always secondary stakeholders.
C. An environmental stakeholder is one that is neither important for the survival, nor for the
success of a company.
D. A non-stakeholder is one that has no relationship with the focal entity.
22. A mining company is in the process of stakeholder assessment and aims to define the
strategic priority of their local community which had almost succeeded in closing the mine
through a petition. The issue was that dust from the mining operations had damaged the
property of dwellers and caused pulmonary diseases. The court had decided the mine to
remain open if they are able to satisfy the needs of the local community. Which of the
following is the correct classification for the local community stakeholder?
A. Definitive stakeholder.
B. Non-stakeholder.
C. Marginal stakeholder.
D. Environmental stakeholder.
23. Which of the following “ancient examples” is not a success case for sustainability?
A. Australian Nhunggabarra aboriginal tribe.
B. The Polynesian Maori people.
C. Tikopa.
D. The Easter Islands.
24. Which of the following statements about sustainable development is wrong? Sustainable
development
A. is based on inter-generational justice between the people living today on planet earth.
B. is related to the triple bottom line.
C. is a development that meets the needs of the present, without compromising the needs of
future generations.
D. has been defined by the Brundtland Report.
25. In the Venn diagram of sustainability, a situation that is satisfies all the social and economic
dimensions is called
A. bearable. .
B. sustainable.
C. economic.
D. equitable.
26. Imagine that from a local petroleum refinery chemical substances have leaked into the
groundwater? As a consequence people drinking the water got sick, the local ecosystem was
affected and the company had to pay a fine of 500 000 USD. Which of the following
sentences is an accurate evaluation of the situation?
A. The situation is an excellent example for “weak sustainability”.
B. The triple bottom line of this event is negative in all three dimensions.
C. The event must have happened in a sustainably developing country.
D. Social and environmental capital was reduced, while economic capital was increased.
27. You started discussing with a friend about sustainable development. Your friend opines that
environmental sustainability is not a real issue. “All you have to do is to invent a machine
that absorbs carbon dioxide better than any plant. That solves global warming and everything
can go on as always. Who cares about a couple of extinct bugs and weeds, if they weren´t
even of any use to us? We are the ones ruling the planet.” Which of the following statements
describes the attitude of your friend accurately?
A. Your friend could be characterized as a proponent of strong sustainability.
B. Your friend asks for drastic systemic changes to make sustainability work.
C. Your friend, among others, argues from a “substitutionist” viewpoint of sustainability.
D. Your friend tends in the “masters versus equals” polarization toward the “equals” point of
view.
28. In the news you have heard about the country Bhutan which measures both the Gross
Domestic Product (GDP) and the Gross National Happiness (GNH). This is an example for
which of the following discussion points in sustainability?
A. Well-having or well-being.
B. Process or outcome.
C. Growth or de-growth.
D. Intergenerational or intragenerational justice.
29. Imagine a country, in which the environmental footprint is still above the sustainability line,
but decreasing and in which economic wealth is increasingly equal in distribution? Which
would be the right term to describe the country on the sustainability Kuznets curve?
A. Economically underdeveloped country.
B. Sustainably developing country.
C. Economically developing country.
D. Sustainably developed country.
30. A factory with an own wastewater treatment system is not able to completely filter all
phosphates out of its wastewater, which is channeled into a local marsh area. Before the
water was allowed to be channeled into the marsh, an environmental impact analysis had
shown that the marsh is able to completely absorb the phosphate without negative effects.
The environmental impact of the wastewater in this example is
A. unsustainable.
B. restoratively sustainable.
C. restorative.
D. neutrally sustainable.
31. GreenInc, a small cleaning company addresses all good social and environmental practices of
its sector. The company pays very fair wages which is often an issue in the cleaning industry,
applies the most advanced ecological cleaning supplies, and has achieved to do so with a very
decent profit margin. As none of the companies in the cleaning industry, also GreenInc is not
able to apply cleaning supplies that can be fully neutralized by the local ecosystem. We can
classify this business as
A. an average unsustainable business.
B. a neutral impact business.
C. a sustainable business.
D. a restorative business.
32. At what stage of Kohlberg’s Cognitive Moral Development Model, what is right is judged in
terms of a “you scratch my back, I’ll scratch yours” reciprocal relationship?
A. Stage 3
B. Stage 5
C. Stage 2
D. Stage 4
33. Sally attributes her success at work to luck. Sally can be characterized by:
A. high internal locus of control
B. high external locus of control
C. Stage 2 moral reasoning
D. Stage 4 moral reasoning
34. Which of these terms is used to describe individuals who act in self-interested, opportunistic,
deceptive, and manipulative ways to win no matter what the cost or how it affects other
people?
A. Relativism
B. Idealism
C. Locus of control
D. Machiavellianism
35. As a new real estate agent, Marcia wanted to believe that buying a large property is always
better for investment. She researches and finds the supportive documents for this claim about
 how people enjoy large space and appreciation of large property prices. This is an example of
which of the following barriers to good ethical judgement?
A. Illusion of control
B. Escalation of commitment
C. Illusion of morality
D. Confirmation trap
36. After seeing the price of the stock decline precipitously and the stock exchange declaring the
stock as a junk investment, Jason buys significantly more number of shares in that company
hoping that dollar cost averaging will help when the price rises. This is an example of which
of the following barriers to good ethical judgement?
A. Illusion of control
B. Escalation of commitment
C. Illusion of morality
D. Confirmation trap
37. The ___________ approach to ethical decision making focuses on what decision an
individual should make.
A. prescriptive
B. descriptive
C. illustrative
D. regulatory
38. The prescriptive approach is to ____________ as the descriptive approach is to
_____________.
A. psychology; philosophy
B. philosophy; psychology
C. would; does
D. none of these
39. Jerome abides by the “Golden Rule -- Do unto others as you would have them do unto you.”
This is an example of which of these approaches to ethical decision making?
A. Utilitarian
B. Deontological
C. Teleological
D. Consequentialist
40. A marketing manager who orders that a manufacturing plant be refitted to make it safer for
workers, no matter what the cost, may be a(n) _____ because he believes in the rights of all
individuals.
A. egoist
B. utilitarian
C. deontologist
D. relativist
41. _____ justice is based on the evaluation of outcomes or results of the business relationship.
A. Procedural
B. Interactional
C. Distributive
D. Ethical
42. The term business ethics is best described by the following statement:
A. It is the study and philosophy of human conduct, with an emphasis on determining right
and wrong.
B. It is an "inquiry into the nature and grounds of morality where the term morality is taken
to mean moral judgments, standards and rules of conduct."
C. It is an organization's obligation to maximize its positive effects and minimize its negative
effects on stakeholders.
D. It comprises the principles, values, and standards that guide behavior in the world of
business.
43. Morals...
A. are the same as principles and ethics.
B. relate to the business's ethical culture.
C. are emphasized in business ethics programs.
D. relate to you and you alone.
44. Values are
A. specific and pervasive boundaries for behavior that should not be violated.
B. enduring beliefs and ideals that are socially enforced
C. attempts by businesses to minimize their negative impact on society.
D. a person's moral philosophies about what is right or wrong.
45. Which of the following are not typically secondary stakeholders?
A. Television news anchors
B. Special-interest groups
C. Customers
D. Trade associations