Chapter 02 - Chapter 2Entrepreneurial Integrity and Ethics...

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Chapter 2—Entrepreneurial Integrity and Ethics TRUE/FALSE 1. Many entrepreneurs are people of principle, and integrity regulates their quest for profits. ANS: T PTS: 1 REF: p. 34 OBJ: 2-1 TYPE: C 2. Small businesses that practice skimming of income are acting unethically and illegally. ANS: T PTS: 1 REF: p. 41 OBJ: 2-2 TYPE: C 3. Income-tax cheating by small business is sufficiently widespread to be recognized as a general prob- lem. ANS: T PTS: 1 REF: p. 41 OBJ: 2-2 TYPE: C 4. According to a recent survey, many small business owners experienced ethical problems pertaining to the environment, but very few of them reported ethical problems in relationships with customers. ANS: F The survey actually showed that few small business owners experienced ethical problems pertaining to the environment, but many of them reported ethical problems in relationships with customers. PTS: 1 REF: p. 34 OBJ: 2-2 TYPE: D 5. Sales people must often walk a fine line between persuasion and deception. ANS: T PTS: 1 REF: p. 37 OBJ: 2-2 TYPE: C 6. Entrepreneurs who do not behave in a way consistent with the noble values, beliefs, and principles they claim to hold are said to be compromising their integrity. ANS: T PTS: 1 REF: p. 33 OBJ: 2-1 TYPE: D 7. Unlike employees in small firms, those who work for large corporations face pressure from various sources to act in ways that conflict with their own sense of what is right and wrong. ANS: F These pressures are indeed great for employees in large firms, but small firm employees also face these pressures. PTS: 1 REF: p. 43 OBJ: 2-1 TYPE: C 8. In a recent survey of employees of small firms, less than half reported feeling no pressure to comprom- ise their own ethical standards. ANS: F PTS: 1 REF: p. 39 OBJ: 2-2 TYPE: C 9. Nobel Prize winning economist Milton Friedman stated that there is only one social responsibility of business – to use its resources and engage in activities designed to increase profits no matter what is required.
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ANS: F PTS: 1 REF: p. 36 OBJ: 2-2 TYPE: C 10. Unethical business behaviors take place in every country, but some countries must deal with more seri- ous forms of illegal business activity than others. ANS: T PTS: 1 REF: p. 46 OBJ: 2-4 TYPE: C 11. Temptations and pressures to act unethically are thought to be greater in big business than in small business. ANS: F As a result of their size and low public profile, temptations and pressures to act unethically are thought to be greater in small business than in big business. PTS: 1 REF: p. 43 OBJ: 2-3 TYPE: C 12. The essence of ethical relativism is captured in the following statement: "When in Rome, do as the Ro- mans do." ANS: T PTS: 1 REF: p. 46 OBJ: 2-4 TYPE: C 13. Small firm owners may be tempted to rationalize bribery as a way of offsetting what seems to be a competitive disadvantage. ANS: T
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This note was uploaded on 11/24/2011 for the course BUSINESS mgmt313 taught by Professor Shadi during the Spring '09 term at American Dubai.

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Chapter 02 - Chapter 2Entrepreneurial Integrity and Ethics...

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