1.
Which of the following is not an example of ethical dilemma facing a business manager
involving a conflict between the:
a. Part versus whole.
b. Individual versus organization.
c. Organization versus society.
d. Individual versus family.
Answer: d. Most likely to be an example of an ethical dilemma facing a manager is
between the organization, stakeholders, or society. Ethical dilemmas in business always
involve conflicts either inside or outside that have connections with the organization.
2. Abusive acts can be:
a. Legal but unethical.
b. Ethical but illegal.
c. Legal and ethical.
d. Illegal and unethical.
Answer: d. Abusive acts such as verbal harassment, bullying, and other acts can be
considered illegal and unethical in an organization. There are laws for some abusive acts
in order to prevent them. It has been considered unethical because businesses are
legally bound and socially obligated to conduct business in an ethical manner.
3. Which of the following statement is not true about ethics and law?
a. Ethical behavior resides above the legal behavior.
b. Law embodies notions of ethics.
c. Law addresses all ethical questions.
d. Law and ethics have clear roles to play in the society
Answer: c. It is a fact that law embodies notions of ethics. However, it cannot address all
ethical questions because ethics is a broad topic that requires deeper understanding that
extends beyond legal understanding, and ethical behavior resides above legal behavior;
both have clear roles to play in society.
4. Which type of social responsibility embraces those activities and practices that are expected
or prohibited by societal members even though they are not codified into law?
a. Ethical responsibilities
b. Legal responsibilities
c. Philanthropic responsibilities
d. Economic responsibilities
Answer: a. These include activities and practices that societal members expect
individuals and organizations to uphold, even though they are not legally required. These
include fairness, honesty, and treating employees and customers with respect.
5. Which of the following refers to the corporate behavior in response to market forces or legal
constraints?
a. Social obligation.
b. Social responsibility
c. Social responsiveness
d. Social attitude
Answer: a. Social obligation refers to a company’s behavior that complies with legal
requirements or market forces without going beyond what is required. This is a minimal
approach to corporate social responsibility (CSR), where a business acts only when
necessary.
6. Which of the following is the application of ethics to special problems and opportunities
experienced by those in business?
a. Business utilitarianism
b. Business ethics
c. Situational ethics
d. Professional ethics
Answer: b. This is the application of ethical principles to issues that arise in the business
environment. It deals with the special problems and opportunities that businesses face,
ensuring that business practices align with ethical standards.
7. An electrician working in a small town is the only electrician within a 100-mile radius. He
knows that people who have medical equipment at home have the highest need for power, so
he charges them double to fix problems with their electricity, compared with the average
customer. The community is angry about this choice. This business practice is most likely:
a. Ethical because it is not illegal for a company to set its prices based on maximizing profits.
b. Ethical because owners should focus only on the impact of decisions on the firm.
c. Unethical because businesses operate in a community and communities have expectations
for behavior of individuals, groups, and businesses.
d. Unethical because it is against the law for a company to charge one customer more than
another.
Answer: c. Businesses should have ethical responsibilities in the community they are
engaging with. What the electrician did may not be illegal, but it is considered unethical
knowing that he used his customers’ vulnerability to have an advantage over them.
Businesses are legally and socially obligated to conduct business in an ethical manner.
8. If a company does not care about community expectations:
a. It should honor them anyway, to a certain extent, because of the threat that legislation will
impose social obligations on them.
b. It should ignore them completely because a company's ethical obligation is to maximize
profits to shareholders.
c. It should ignore them completely because a company's only obligation is to obey the law.
d. It should inform the community it will not honor its expectations because the company has a
moral obligation to provide this information
Answer: a. Businesses exist in society, and community expectations may influence laws,
public perception, and profitability. Even if a corporation does not care about these
expectations, failure to meet them may result in government intervention, tighter laws, or
a loss of customer trust.
9. A company wants to open a branch in a foreign country but discovers it would have to bribe
government officials to get a permit to obtain the materials necessary to build its headquarters.
Which of the following is an example of an ethical response?
a. Paying the bribe because the company's first obligation is to its shareholders.
b. Not paying the bribe and convincing a local company to illegally sell materials to them, since
demanding bribes is unethical behavior.
c. Paying the bribe because the company only has to comply with the community standards in
the community where it will be operating.
d. Not paying the bribe and bringing in outside materials from a foreign country to complete the
construction.
Answer: d. Not engaging in an unethical manner is an organization’s responsibility.
Bribery is unlawful and frequently illegal, even when it is normal practice in other places.
A company committed to ethical business operations should refrain from engaging in
corruption.
10. Which of the following is true under a 'Who-Purpose-How' process of ethical decision
making?
a. When decisions are made, the interest of the community as a whole is considered last.
b. The interest of owners is ranked higher than that of both employees and management when
decisions are made.
c. There is not a framework under WPH for ranking one stakeholder above another.
d. The interest of management is ranked higher than that of employees when decisions are
made.
Answer: c. The Who-Purpose-How (WPH) framework is a structured approach to ethical
decision-making that helps businesses evaluate who is affected, the purpose behind the
decision, and how to implement ethical actions. WPH does not establish a fixed ranking
of stakeholders but encourages decision-makers to balance competing interests
ethically.
