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Chapter 3BUSINESS ETHICS, SOCIAL FORCES, AND THE LAW TRUE/FALSE 1. Ethics is a philosophical concept that deals with values related to the nature of human conduct. ANS: T MSC: AACSB Analytic 2. The field of business ethics recognizes that social values typically must yield to the profitability motive. ANS: F MSC: AACSB Analytic 3. Moral standards based on positive law may allow businesses to conduct them-selves unfairly so long as their actions are not illegal. ANS: T MSC: AACSB Analytic 4. Under a moral standard based on natural law, it may be necessary to violate positive law to preserve fundamental individual rights. ANS: T MSC: AACSB Analytic 5. Situational ethics is a moral system whose rigidity makes it unnecessary to examine motivation behind conduct in order to label it right or wrong. ANS: F MSC: AACSB Analytic 6. In applying the stakeholder model of business ethics, only the interests of important constituencies af- fected by an action need to be satisfied. ANS: F MSC: AACSB Analytic 7. There is often a conflict between the goal of making money for shareholders and the goal of solving social problems through business. ANS: T MSC: AACSB Analytic 8. In addition to issues of social responsibility, business values and ethics play an important role in the success or failure of a business. ANS: T MSC: AACSB Analytic 9. Trust is a fundamental basis of the capitalist system that is central to the expectations of investors, cus- tomers, and other firm stakeholders. ANS: T MSC: AACSB Analytic 10. Ethical conduct is desirable but not necessary; business could be done relying solely on positive law and its enforcement in the courts. ANS: F MSC: AACSB Analytic 11. Economic growth tends to be fastest among developing countries where payments to key administrat- ors can increase transaction efficiency. ANS: F MSC: AACSB Analytic 12. Unfortunately, there is no evidence that commitment to ethical values is linked with financial perform- ance of business organizations. ANS: F MSC: AACSB Analytic 13. Evidence suggests that there may be relationships among ethical customer and employee relations and long-term ability to pay dividends. ANS: T MSC: AACSB Analytic 14. Ethical violations can cause lasting detriment to a company's ability to do business through impacts on the company's reputation. ANS: T MSC: AACSB Analytic 15. An accumulation of complaints from employees, customers, or investors can lead to imposition of re- strictive new regulations and laws. ANS: T MSC: AACSB Analytic 16. Unwillingness of businesses to voluntarily improve the ethics of their practices has little practical ef- fect on the regulatory environment. ANS: F MSC: AACSB Analytic 17. Under U.S. law, the legal owner (titleholder) of property is free to engage in any use of the property that he or she may desire.... View Full Document

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