Business and law questions

1. Which of the following is a correct statement regarding the definition of corporate “social responsibility”?

In the interests of preserving personal freedom, the law in the United States codifies in detail social responsibility rules.

For a social responsibility analysis the acceptable standard for moral behavior is compliance with the legal law.

A minimum socially responsible standard for business is compliance with the law.

By law in the U.S., an employer typically is required to provide to the mayor of a local community where the employer does business a clear set of social responsibility standards and rules based on the values of the community.

2 Someone who argues that General Motors owes an obligation to take into account the interests of the community where it has its Michigan factories in decisions involving the plant is arguing most directly for which theory to be applied to business?

Machiavellian ethics

Corporate social responsibility

Maximizing profits

Legal misfeasance

3. Which of the following statements is incorrect?

Basing one’s behavior on the adage, “Do unto others as you would have them do unto you,” is part of Kantian ethics.

An ethical theory that says each person is presumed to have entered into an agreement with all others in society to obey moral rules that are necessary for people to live in peace and harmony is called Social Contract ethics.

A doctrine that says that a corporation should consider its presence in the community and society and the effects its actions have on persons or groups other than the shareholders is called Corporate Social Responsibility.

A theory of social responsibility that says that business must solve global problems such as poverty and disease is called Legal Nonfeasance.

4. A conservative interpretation and definition of corporate “social responsibility” would typically reflect the view that:

Corporate social responsibility should be mandated and closely regulated by the Securities and Exchange Commission in the United States.

There is insufficient government regulation in the U.S. in place to deal with corporate socially responsible decision-making.

Social responsibility decisions in business should be decided on Kant’s Categorical Imperative since that is the highest ethical principle.

Profit-maximization by lawful means is socially responsible behavior and that market forces will deter corporate socially irresponsible conduct.

5. Which of the following is a correct statement regarding the definition of the term “social responsibility” in a business context?

A socially responsible business person believes that the formal legal law is inferior to universal moral and ethical principles that can be determined by intuition.

Social responsibility is the branch of philosophy that focuses on morally right and wrong behavior.

Social responsibility is based on current societal views as to how and the extent a business should contribute to charities and civic organizations and be involved in helping the community.

A business cannot adhere to social responsibility principles and the doctrine of ethical egoism since both are always mutually exclusive.

6. Not being socially responsible most likely subjects one and one’s company to:

Civil legal liability based on the principle of Last Resort.

Criminal legal liability based on the principle of Nonfeasance.

Moral condemnation for the failure to rescue the poor in the local community.

Criticism in the local community for not being a “good corporate citizen”

 

7. A business that undertakes charitable activities that benefit persons who are not connected to the business is most directly applying which value?

Moral minimum

Maximizing profit

Social responsibility

Legal.

 

8. Which of the following is NOT among the assertions typically made by “socially responsible” critics of the modern corporation’s activities?

Many large corporations have not been sufficiently focused on maximizing profits for shareholders and granting bonuses to executives.

Corporations should not merely obey the law but rather should seek and observe social responsibility standards higher than the law since at times the law is “silent” or is not enforced.

Corporate profit-seeking at times involves unacceptable social costs.

Forces in a free market are at times inadequate to prevent many of the social costs stemming from corporate profit-seeking.

 

9. The U.S. government bans the sale in the United States of Whirly-Wheel, a child’s toy, which the government deems dangerous. For this reason, it is most accurate to say that it is:

Illegal to sell the toy outside the United States

Illegal and unethical to sell the toy outside of the United States

Legal but possibly immoral to sell the toy outside of the United States

Socially responsible to sell the toy outside of the U.S. if the manufacturer’s shareholders benefit.

10. Chainsaw Charlie is the CEO of a big, successful corporate employer with a major presence in the community. The company pays its taxes and obeys the law. Charlie is asked by community leaders to get his company involved in some charitable and civic activities in the community. Chainsaw Charlie’s haughty and mocking response is: “Screw the museum! We pay our taxes, so let the government take care of the poor, the homeless, and the hungry. That’s not our job. But feel free to give you own money. Ha!” Chainsaw Charlie is acting:

a. In a socially irresponsible manner based on modern day notions and societal expectations of “corporate social responsibility.”

b. Legally since there generally is no legal obligation for business to help charities and get involved in civic affairs.

c. Immorally pursuant to Ethical Egoism if by being socially responsible in a prudent, smart, shrewd, and strategic manner would help and benefit Charlie and his company in the long-term.

d. All of the above.

 

11. Which of the following is the most accurate statement?

A small shareholder can never be held morally responsible for what a large corporation does.

One function of a corporate ethics audit will be to conduct a moral audit of the firm to ascertain if it is acting morally.

The principal purpose of a moral audit of the firm is to ensure that the company is acting in a legal manner.

A corporate code of ethics needs only to restate minimum legal principles and rules in its “practices” section.

12. CEO Alfredo is a devout believer in freedom of contract and the free use of one’s private property. Considering these facts, which of the following may best be classified as an accurate statement about Alfredo?

He will always follow the Utilitarian approach to the resolution of moral issues in business.

He is a socially responsible “satisfier” rather than a profit-maximizer.

He is not a Natural Rights believer.

He is not disqualified from being an ethical thinker and actor concerning business-related moral issues.

13. Which of the following is true about modern business corporations?

The current societal expectation is that a corporation should just make money legally and not worry about the local community or society or ethics.

Since the corporation is not a real person it can never be judged from an ethical point of view.

The corporate vice-president of ethics has the power to veto what he or she considers as immoral corporate actions, but the veto according to the SEC can be overridden by a two-thirds vote of the board of directors.

None of the above.

14. Happy Feet manufactures shoes in Country Y for sale in the United States. Happy Feet’s president discovers that the Country Y workers’ average age is sixteen and that they work on average of 13.2 hours per day in a 90 degree warehouse with insufficient safety precautions, all of which practices are legal in Country Y. The president of Happy Feet decides to improve the working hours and conditions of the company’s workforce, even though these actions will be more expensive for the company. The president’s decision is best described as

Lawful profit maximization

Moral profit-making

Illegal since the shareholders of Happy Feet might be harmed

Social Darwinism.

15.A spray paint company discovers that its products are being misused by children and young people, who get “high” sniffing the fumes. There are no warning labels on the spray paint cans. The company would be best deemed to have what type(s) of obligation and duty to take steps to protect children and young people?

An ethical obligation but not a legal duty

A legal obligation but not an ethical obligation

Both an ethical obligation and a legal duty

Neither an ethical obligation nor a legal duty.

16. Which of the following questions should be answered first in the process of ethical decision-making in business?

Is the action profitable?

Is the action moral?

Is the action a socially responsible one?

Is the action good public relations?

17. There is a desperate need for AIDS drugs for sick people in certain very poor African countries, whose governments cannot afford to buy the drugs from the big multinational pharmaceutical companies who make the drugs and possess the patents for the drugs. The pharmaceutical companies are considering either selling the drugs deeply discounted or for that matter just giving them for free to the governments of these African nations. Which of the following is likely true about this scenario?

a. Legally, there is no obligation.

b. Morally, act to provide the drugs, if they are the last real alternative to help the African AIDS sufferers and the Principle of Last Resort applies, or else risk being condemned as an immoral industry.

c. Be socially responsible and supply the drugs, even if neither legally nor morally obligated to do so, if doing so can be accomplished effectively and in a prudent manner without harming the companies since “Big Pharma” will gain a good reputation world-wide as a humanitarian industry.

d. All of the above.

18. Which of the following statements is or are accurate?

There is no such thing as an unjust law if one is a Legal Positivist

All bad actions are immoral if one is a Machiavellian

Both a and b

None of the above.

19. Which of the following will the executives of Mink, Inc, a fur sale company, likely take into account in carrying out their business?

Adverse publicity and threat of boycotts

Legal restrictions on the production and sale of animal fur products

Societal norms as to the morality of selling fur products

All of the above

20. International Manufacturing Corporation’s “side payments” to government officials in exchange for favorable business contracts in foreign countries over more deserving competitors are likely to be considered in the United States as

Illegal only

Unethical only

Illegal and unethical

None of the above.

 

21. Which of the following statements is NOT correct?

 

a. Laws change but ethics is constant for Kantians.

 

b. Laws change and ethics are ever changeable for a Sophist.

 

c. Laws stay the same, but definitions of corporate social responsibility are constant.

 

d. Morality is constant for Socrates, but changes for an ethical relativist.

 

22. Nan sells her boat to Owen and Pat, who are not married. The contract of sale says that the buyers each have a right to survivorship in the boat. Owen and Pat likely own the boat as

community property.

joint tenants.

tenants by the entirety.

tenants in common.

23. Great Goods, Inc. is a consumer products firm. As a source of authority for its organization and functions, its articles of incorporation are

 

a primary source.

 

a secondary source.

 

a source of final resort.

 

not a reliable source.

 

24. Bob and Carol work for Delta Company. Bob is Carol’s super¬visor. During work, Bob touches Carol in ways that she perceives as sexually offensive. Carol resists the advances. Bob cuts her pay. Delta is

 

liable, because Bob’s conduct constituted sexual harassment.

 

liable, because Carol resisted Bob’s advances.

 

not liable, because Bob’s conduct was not job-related.

 

not liable, because Carol resisted Bob’s advances.

 

25. Jughead Construction Company puts in a bid to build the new town library. Its bid is $1 million. The other bids range from $2 to $4 million, and the town’s architect estimated to town officials that the library would cost about $3 million. The town accepts Jughead’s bid offer. Jughead’s best defense to any lawsuit for breach of contract under these circumstances would be:

 

Unilateral mistake

 

Fraud by the town for keeping the architect’s estimate secret.

 

Bilateral mistake.

 

Unilateral palpable mistake.

 

26. Louie, Hughie, Dewey, and Daffy Duck formed a partnership. Since they had a lot in common and were good friends and had high hopes, they did not include in their partnership agreement a provision pertaining to the expulsion of a partner. Unfortunately, acrimony developed and now Louie, Hughie, and Dewey vote to expel Daffy from the partnership. The legal result can be:

 

A). There is no legal effect on the partnership since majority rules.

 

B). Daffy can dissolve the partnership and force a liquidation and termination.

 

C). The partnership is dissolved, and, with Daffy’s agreement, he is paid his interest in the partnership, and the partnership continues with Louie, Hughie, and Dewey.

 

D). B and C.

 

27. Big Oil Company requires that all employees when working on an oil rig in its Gulf of Mexico holdings must speak English to enhance communication, for safety reasons, and so rig foreman-woman can do their supervisory jobs. Big Oil Company has notified the employees of the policy, given them time to adapt, and will provide English language training to those employees whose English language skills are poor. Also, while the employee are on the rig but not working, that is, in the cafeteria, dormitory, and “break” rooms, they can speak any language they want, though the company has advised them to be inclusive of their fellow employees. Big Oil Company is likely acting how?

 

a. Illegally since language discrimination in the form of English-only policies is always a Title VII violation since people have the civil right to speak their primary language at all times and places.

 

b. Illegally since language discrimination is illegal discrimination in all cases under Title VII of the Civil Rights Act.

 

c. Legally since there was a legitimate reason for the policy and it was gradually adopted.

 

d. Legally but only if the primary non-English language spoken by the majority of the non-English-speaking employees which was prohibited was Spanish, whereas other “foreign” languages not as frequently heard were permitted.

 

28. Jill and Ken are involved in an automobile accident. Lyle is a passenger in Ken’s car. Jill wants to ask Lyle, as a witness, some questions in person concerning the acci¬dent. Lyle’s answers to the questions characteristically are given in

a deposition.

a response to interrogatories.

a response to a judge’s request at a pretrial conference.

none of the above.

 

29. Under the employment at will doctrine as a general rule:

The employer may discharge an employee for an immoral and unethical reason

Neither party may terminate the employment relationship at any time and for any reason.

Only the employee may terminate the employment relationship at any time and for any reason.

Only the employer may terminate the employment relationship at any time and for any reason.

 

30. Fran owns a restaurant business, Ocean’s Harvest, Inc., which she has incorporated as a one-person corporation (that is, she is the sole shareholder, director, and serves as all corporate officers) specializing in gourmet seafood. Unfortunately, one of the company’s employees, a cook, improperly prepares a fish dinner consisting of shellfish and poisons a customer, who becomes very seriously ill. When the customer recovers, he sues and wins his lawsuit. Which statement is the MOST accurate?

 

a. The obligation to the customer is solely the responsibility of the corporation, Ocean’s Harvest, Inc.

b. The obligation to the customer is the responsibility of the corporation, Ocean’s Harvest, Inc, but also may be Fran’s personal obligation if the “corporate veil” is “pierced” (that is, “corporateness” is disregarded) by the court.

c. The obligation to the customer is the responsibility of the corporation and also Fran personally since one-person corporations are usually shams and thus illegal pursuant to federal law.

d. There is no obligation to the customer based on the old legal doctrine of Caveat Emptor (“Let the buyer beware.”) as applied to eating shellfish.