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Enforcement is perhaps the most important step in an effective code of ethics.

A) True
B) False

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Identify the six-step approach to achieve a long-term improvement of business ethics.

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1. Top management must adopt and uncondi...

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An integrity-based ethics code moves beyond legal compliance in order to create a "do-the-right-thing" climate.

A) True
B) False

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One problem with conducting a social audit is


A) that most businesses are really not very concerned with these issues.
B) how to determine what should be measured and how to calculate the effect on society.
C) that the primary focus of management is on the interests of stakeholders.
D) governmental "red-tape."

E) B) and C)
F) A) and D)

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Ethical behavior refers to the standards that are accepted by society as true or false.

A) True
B) False

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Business behavior determines the ethics of society. We can improve society's moral and ethical behavior by first making a commitment to improving business's moral and ethical behavior.

A) True
B) False

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A(n) ________-based ethics code emphasizes the prevention of unlawful behavior by increasing control and penalizing wrongdoers.


A) legal
B) corporate responsibility
C) compliance
D) integrity

E) B) and C)
F) A) and D)

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America's business ethics can improve simply by requiring written contracts with employees, customers, and owners. This alone will do the job!

A) True
B) False

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"Fair disclosure" refers to a Securities and Exchange Commission rule that states when a publicly traded firm discloses information, it must share it with everyone.

A) True
B) False

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Making accounting records more transparent may help restore trust in the free-market system and leaders in general.

A) True
B) False

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In the Reaching Beyond Our Borders box, the story demonstrates the many ethical similarities between North and South American businesses. This is fortunate for large firms that do business south of the U.S. border. They can depend on their subsidiary firms to have no problems when implementing U.S. company employee policies.

A) True
B) False

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When Kira graduated with a degree in computer science, she started her software company. On her first day of operations, she posted a sign that read, "This company will always operate within the legal limits of the law." Posted where all employees could clearly see it each day, this demonstrated


A) her commitment to high ethical standards of behavior.
B) her commitment to respect the law.
C) her expectation that all employees follow the laws that apply to the business.
D) her aversion to cheating, stealing, and dishonesty.

E) All of the above
F) B) and C)

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In order to be successful, efforts to improve the ethical behavior of businesses must begin with top management's support of a corporate code of conduct.

A) True
B) False

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An ethical manager's decisions are based only on the following questions: "Is it legal?" and "Is it profitable?"

A) True
B) False

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When Blake Mycoskie started TOMS, he took the concept of ________ to a new level. With its well-known "one for one" shoe giving program, TOMS social causes are directly related to the firm's expertise of selling shoes.


A) social auditing
B) corporate social initiative
C) corporate policy
D) corporate philanthropy

E) A) and B)
F) A) and C)

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After years of customer feedback, Bank of Bux is finally going paperless. The bank's communications team promoted the strategy both internally and externally. Customers were strongly encouraged to utilize the bank's website and mobile system for all their banking needs. Customers unfamiliar or uncomfortable with online banking could sign up for workshops where employees show them how to navigate both the bank's new website and mobile app. The bank's initiative demonstrates


A) a gimmick for cutting costs that watchdogs will soon uncover.
B) an effort to not be left in the lurches by its competitors who are using state-of-the-art website technology.
C) an area where the firm can contribute to the green effort, as well as cut costs.
D) a costly effort because at least 50% of all customers still prefer a paper trail due to safety concerns such as identity theft, when it comes to online banking.

E) A) and D)
F) B) and D)

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Some critics of corporate social responsibility view spending money on CSR as


A) a necessary evil.
B) stealing from investors.
C) important for America.
D) moving toward capitalism.

E) None of the above
F) All of the above

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Compliance-based ethics codes focus on preventing unlawful behavior by increasing control and by penalizing wrongdoers.

A) True
B) False

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Which of the following indicates that U.S. businesses are demanding socially responsible behavior from their international suppliers?


A) The establishment of the Equal Opportunity Employment Commission
B) The decision of Walmart to open stores worldwide
C) The decision of Nike to cancel orders from suppliers that violate its ethics code
D) The creation of the North American Free Trade Zone (NAFTA) between the U.S., Canada, and Mexico

E) All of the above
F) A) and B)

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When it comes to social responsibility, some people feel that "before you can do good, you must do well." This reflects a firm's primary responsibility to its


A) customers.
B) investors.
C) employees.
D) community.

E) A) and B)
F) A) and C)

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