1. THE INTERNATIONAL UNIVERSITY (IU) – VIETNAM NATIONAL UNIVERSITY – HCMC
THE FINAL EXAMINATION
Date: ......................................
Duration: 90 minutes
Student ID: .................................. Name:................................................
SUBJECT: BUSINESS ETHICS
Dean of School of Business Administration Lecturer
Signature: Signature:
Full name: Nguyen Quynh Mai, PhD Full name: Luu Trong Tuan
GENERAL INSTRUCTION(S)
1 This is an open book examination
2. No talking during the exam
3. No cellphones used during the exam
4. No dictionaries allowed.
GOOD LUCK!
SECTION 1: For each question, choose the best answer. (50 points)
1. Which of the following displays examples of celebrating ethical behavior?
i. Award prizes for new and creative ideas–and let the employee choose the reward.
ii. Celebrate examples of good ethical behavior in your company newsletter.
iii. Declare an Ethics Day on which rewards for good ethical behaviors are chosen by
employees.
iv. Recognize employees who represent the standard of behavior to which you are
committing.
A. i, ii, and iii
B. i, ii, and iv
C. i, iii, and iv
D. ii, iii, and iv
2. Which of the following statements is true about business ethics?
A. Business ethics are basically different from personal ethics.
B. Ethical behaviour is not in the long-term interest of businesses.
C. Ethical business practice requires, above all else, an active awareness and
consideration of the likely long-term consequence of any action.
D. The business / organisational framework has no influence on ethical behaviour.
3. Research suggests that unethical behaviour is viewed most seriously by stakeholders if
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2. A. a standards agency criticises the organisation
B. some customers are upset
C. it has a long-term, negative impact on organisational effectiveness
D. unfavourable reports appear in the media
4. A well-written code of ethics can do the following except
A. State policies for behavior in particular situations.
B. Reward the ethical behavior demonstrated by your employees.
C. Establish a detailed guide to acceptable behavior.
D. Capture what the organization understands ethical behavior to mean–your values
statement.
5. According to Adam Moore, which of the following creates a distinction between thin and
thick consent?
A. The state of the job market
B. The employee position on privacy at work
C. The extent to which employees are committed to the company
D. The purpose of the electronic surveillance
6. A code of ethics is defined as a company’s written standards of ethical behavior that are
designed to
A. limit managers’ and employees’ actions.
B. guide the appointment of corporate ethics officers.
C. guide managers and employees in making the decisions and choices they face every
day.
D. guide managers in establishing standards of ethical conduct in their firm’s daily
operations.
7. A firm has been inspired to introduce or modify its code of ethics by the large number of
zeroes that can now be tacked on to financial penalties for corporate misconduct. This is an
example of
A. transparent organization.
B. organizational integrity
C. reactive ethical policy
D. proactive ethical policy
8. Which of the following does HR’s involvement in the employee contract NOT embrace?
A. The documentation of periodic performance reviews.
B. The creation of the job description for the position.
C. The documentation of disciplinary behavior and remedial training, if needed.
D. The modification of the company’s strategic plan after the departure of an
employee.
9. Which of the following denotes the first stage of the six stages in Lawrence Kohlberg’s three
levels of moral development?
A. Preconventional.
B. Obedience and punishment orientation.
C. Individualism, instrumentalism, and exchange.
D. Universal ethical principle orientation.
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3. 10. Which of the following aspects of an organization helps in building an ethical organization?
i. The organization's values
ii. The organization's mission
iii. Its policies
iv. Responsibility towards environment
A. Only i
B. ii and iii
C. i, ii and iii
D. All the above
11. The employee position on privacy at work is that
A. employees’ productivity during their time at work represents the “performance” portion
of the “pay-for-performance” contract they entered into with the company when they
were hired.
B. employees should not be notified of any electronic surveillance and the purpose of that
surveillance.
C. employees’ actions during their time at work–their allotted shift or normal work period–
are at the discretion of the company.
D. employees recognize that their time “at work” represents the productivity for which
they receive an agreed amount of compensation–either an hourly rate or an annual
salary.
12. Which of the following displays certain characteristics of a tough market?
A. Demanding creditors, aggressive managers, and aggressive vendors.
B. Demanding customers, demanding employees, and impatient stakeholders.
C. Impatient stockholders, aggressive competitors, demanding customers.
D. Demanding federal, state, and local officials, demanding ethics officers, and aggressive
competitors.
13. As a employer, you could be held liable for the actions of your employees in their Internet
communications to the same degree as if they had written those communications on company
letterhead. This refers to
A. discrimination
B. vicarious liability
C. cyberliability
D. intellectual output.
14. Which of the following shows stakeholders of an organization and their respective interests
in the ethical operation of that organization?
i. Federal government a. “Fair exchange”–a product or service of
ii. Employees acceptable value and quality for the money
iii. Customers spent
iv. Managers b. Growth in the value of company stock
v. Stockholders c. Dividend income
d. Operation in compliance with all relevant
legislation
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4. e. Stable employment at a fair rate of pay
A. 1d, 2c, 3b, 4e, 5c
B. 1d, 2c, 3a, 4c, 5b
C. 1d, 2e, 3a, 4e, 5b
D. 1c, 2e, 3d, 4b, 5c
15. Which of the following examples illustrates the problem with universal ethics?
A. Embryonic stem cells (ESCs) will be used in researching a cure for Parkinson’s
disease.
B. Adolf Hitler and his Nazi party launched a national genocide against Jews and
“defective” people.
C. Christian societies value wisdom, courage, and justice.
D. Greek society at the time of Aristotle valued wisdom, courage, and justice. By contrast,
Christian societies value faith, hope, and charity.
16. The argument against merging the roles of chairman and CEO is
A. that the potential for conflict is minimized by putting the leadership of the board of
directors and the senior management team in the hands of the same person.
B. that governance of the corporation is now in the hands of one person, which
eliminates the “checks and balances” process that the board was created for in the
first place.
C. that the board is given the benefit of leadership from someone who is in touch with the
inner workings of the organization.
D. that the independence of the board and the power of the stockholders are maximized.
17. Which of the following is not the responsibility of a business corporation towards its
customers?
A. Providing goods according to the specific needs of consumers
B. Improving living standards by producing goods and services of high quality
C. Ensuring the health and safety of consumers
D. Providing technologically superior goods and services at discounted prices
18. Which of the following is NOT an example of evidence that good corporate governance can
pay off for organizations?
A. In a 2002 McKinsey survey, institutional investors said they would pay premiums to own
well-governed companies.
B. A Harvard/Wharton study showed that if an investor purchased shares in U.S.
firms with the weakest shareholder rights, and sold shares in the ones with the
strongest shareholder rights, the investor would have earned abnormal returns of
8.5 percent per year.
C. A study of Standard & Poor 500 firms by Deutsche Bank showed that companies with
strong or improving corporate governance outperformed those with poor or deteriorating
governance practices by about 19 percent over a two-year period.
D. A Harvard/Wharton study found that U.S.-based firms with better governance have faster
sales growth and were more profitable than their peers.
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5. 19. When faced with the requirement to select a model of how we ought to live our lives, many
people choose the idea of ethical relativism,
A. where a value is a good thing in itself and is pursued for its own sake, whether any thing
good comes from that pursuit or not.
B. where the virtues you hope to achieve aren’t a direct reflection of the values of the
society in which you live.
C. where their ethical principles are defined by the traditions of their society, their
personal opinions, and the circumstances of the present moment.
D. where there is no obvious “right” or “wrong” decision, but rather a “right” or “right”
answer.
20. Which of the following statements best explains the difference between ethics and morality?
A. Ethics refers to standards of behavior whereas morality refers to system of beliefs
B. Ethics refer to system of beliefs whereas morality refers to standards of behavior
C. Morality refers to the interrelated beliefs than an single opinion as considered in ethics
D. Morality encompasses the system of beliefs
21. Which of the following shows stakeholders of an organization and how they could be
negatively impacted by unethical corporate behavior?
i. Community a. Cancellation of dividends
ii. CEOs b. Loss of employment
iii. Suppliers/vendor c. Unemployment of local residents
partners d. Delayed payment for delivered goods and
iv. Employees services
v. Stockholders e. False and misleading financial information on
which to base investment decisions
A. 1e, 2a, 3d, 4c, 5e
B. 1e, 2b, 3e, 4c, 5a
C. 1c, 2a, 3e, 4b, 5a
D. 1c, 2b, 3d, 4b, 5e
22. Which of the following can NOT be regarded as an example that your organization is
committed to wining the trust of your stakeholders?
A. If you overcharge a client by mistake, give them a refund plus interest before their
accounting department figures out the error and asks for the money.
B. Share your success stories with all of your employees, but not with the other
stakeholders.
C. Invite your stakeholders to your Ethics Day celebration.
D. Get your clients involved in the development of your ethics policies.
23. Wondering whether you tell the truth or remain loyal to the person or organization that is
asking you not to reveal that truth refers to which type of ethical conflict?
A. Truth versus mercy
B. Justice versus commitment
C. Truth versus loyalty
D. Justice versus loyalty
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6. 24. Celebrating ethical behavior demonstrated by your employees
A. goes against the goal of increasing customer satisfaction.
B. increases employee loyalty.
C. makes ethics program quickly become very harsh.
D. removes the threats of punishment.
25. Boyer Corporation has recently instituted a new corporate ethics code. Jeanette Boyer,
president of the company, knows that ethical relationships are based on:
A. trust and cooperation
B. strict penalties for illegal activities
C. a traditional, conservative frame of mind
D. federal government audits
SECTION 2: ESSAYS (each essay in 250 words at least)
(1) Reach the following case and discuss the extent to which the firm’s action was ethical. (25
points)
An employee at a major food retailer wrote a Weblog (blog) and, in one of his writings,
complained that his boss wouldn’t let him go home when he felt sick and that his district
manager refused to promote him because of his dreadlocks. His blog named the employer, but
the employee didn’t use his real name. Although all blogs are on the Internet, the employee
claims that his was low-profile and that it didn’t show up when doing a Google search of his
name or the company. Still, the employer somehow discovered the blog, figured out the
emplyoyee’s real name, and fired him for “speaking ill of the company in public domain.”
(2) Jim Howard is a sales manager at a software company that produces a search interface for
databases with indexed information. The company is an established vendor and has a good
reputation in the market for its high quality of products, fast and personal customer support, and
strong loyalty to its customers. Part of the values statement of the company includes, “We will
treat our customers with respect and dignity.”
In his first year with the company, Jim noticed that the sales force was having difficulties in
acquiring new customers and retaining existing ones. The problem was complex: a shrinking
market with continuously increasing buying power, increasing competition, and the emergence
of free alternative services from the Internet. These problems started to significantly affect the
company’s revenues. The company’s reaction was to drastically decrease the cost of its products,
bundle databases into packages, and start to alter production introductions by including several
value-added services that were new to the market.
Jim Howard’s boss suggested that Jim take over the responsibility for the yearly renewals of
customer subscriptions, which previously had been regarded as an easy clerical procedure, from
the company’s secretary. When he started to check the old accounts and follow up with the
renewals, he faced a problem that he thought would never have occurred: unfair treatment of old
customers in comparison to new customers in terms of the product pricing. Existing customers
were offered renewal at triple the price of the same package and renewals offered to new
customers.
When he asked his boss whether he should inform the old customer that the price had
changed and whether the old cusomter could now benefit from the lowered price, the answer
was, “Why don’t we try to get this price? If the customer refuses to pay it, the we’ll negotiate.”
An additional difficulty was that, in the last few months, information had been disseminated to
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7. all customers (old and new) that made the company’s new pricing strategy visible to customers.
Jim shared the fact that this information was already available to customers with his boss and
pointed out the contradiction. His boss remained insistent, to the point of shouting, that Jim
follow his previous instructions with the sales force.
Jim felt he was betraying the company, the customer, his sales force, and his own
professional values. He didn’t want to lose his job and he didn’t want to lose any more customer
accounts.
What are the issues here? For whom? Who stands to be hurt the most from following the
advice of Jim’s boss? If you were Jim, what would you do in this situation? (25 points)
(3)
Last year, I worked as a marketing manager in Belgium for a mid-sized engineering company.
Total revenues for the company were $120 million. The company had recently gone public and,
in two public offerings, had raised over $60 million dollars. The firm was organized into four
distinct strategic business units, based on products. The group that I worked in was responsible
for over $40 million in sales. We had manufacturing plants in four countries.
Our plant in Belgium manufactured a component that was used in several products, which
produced $15 million in revenue. However, these products were old technology and were slowly
being replaced in the industry. The overhead associated with the plant in Belgium was hurting
the company financially, so they decided to sell the facility. The unions in Belgium are very
strong and had approved the final sale agreement. After this sale, the work force was going to be
reduced to half its size. Those who were laid off were not going to receive full severance pay,
which in Belgium could take several years and then workers would receive only 80% of total
payment – a drastic change from what is offered in the United States. I was surprised that our
executives in the U.S. had stated that the sales agreement was more than fair – contrary to the
union’s position. A strike was imminent; the materials manager was told to stock 10 weeks of
product.
My ethical dilemma started after the strike began. Originally, the company thought the strike
would not last longer than a couple of days. Instead of causing a panic among our customers,
management decided to withhold information on the strike from our customers and sales force. I
could understand the delay in telling our customers, but to withhold informa from our sales force
was, I believed, unconscionable. Inevitably, our inside sales representatives became suspicious
when they called the Belgium plant to get status ona an order, and nobody answered. They called
me, and I ignored the corporate request and informed them of the strike. When it became obvious
that the strike was going to be longer than anticipated, I asked the vice presidents of marketing
and sales about our strategy for informing the affected customers. They looked at me quizzically
and told me to keep things quiet (“don’t open a can of worms”) because the strike should be over
soon. In addition, they dictated that customer service should not inform customers of the strike
and that excuses should be developed for late shipments.
END-OF-TEST
ANSWER KEY
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8. 1. B 11. D 21. D
2. C 12. C 22. B
3. C 13. C 23. C
4. B 14. C 24. B
5. A 15. A 25. A
6. C 16. B
7. C 17. D
8. D 18. B
9. B 19. C
10. C 20. B
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