Question

1. A social contract view of morality regards general agreement to follow certain rules or guidelines for behaviour to be

Select one:

a. something only the weakest members of society would want.

b. something people would only accept if they also believed in God.

c. something every rational individual would want.

d. something that threatens free enterprise.

Question 2.

It's pretty clear that all shareholders have an interest in the long term growth of the companies they are invested in.

Select one:

True

False

Question 3.

One important moral reason why businesses should take care to ensure their advertising is not deceptive is

Select one:

a. To ensure the integrity of contracts with customers

b. They will encourage everyone to lie.

c. Deceptive advertising will become morally acceptable

d. None of the above

Question 4.

The free market is inherently designed to provide a living wage to workers.

Select one:

True

False

Question 5.

What is the best normative premise implied by the following argument:

Your corporation has received tax breaks, interest free loans, and even direct financial assistance from our government. You cannot now close down a very profitable factory here and move to Mexico just because you can get cheaper labour and so make bigger profits.  

Select one:

a. The only obligation of a business is to maximize shareholder value

b. A business has obligations to those who have assisted it.

c. Canadians have a right to a good income.

d. A business should never accept government assistance.

Question 6.

Moral disagreements can involve

Select one:

a. A disagreement over the facts.

b.  A disagreements over the law.

c. A disagreement over both the law and facts.

d. Neither facts or the law.

Question 7.

Which statement best characterizes the stakeholders model for business ethics?

Select one:

a. Businesses should not seek or accept public funding.

b. A business should always be on the lookout for new opportunities.

c. Businesses have obligations to several different groups.

d. Workers and creditors also own the business they have a relationship with.

Question 8.

What is meant by the term “social license”?

Select one:

a.   The issuing of legal documents permitting a practice.

b. Implied public permission for, or acceptance of, a particular kind of activity such as business.

c. Provisions for preserving traditions deemed to be under threat.

d. A license to engage socially.

Question 9.

History shows that the less ethical a company is, the more successful it is in the long run.

Select one:

True

False

Question 10.

Which of these constitute a problem for shareholder activism?

Select one:

a. Government regulations.

b. Buy and hold investors.

c. Day Traders.

d. Ethical Business Management.

Answer 1

1. Option C - Something every rational individual would want
According to the social contract view of morality, behaviour is something that every rational individual would want. It has nothing to do with the weakest members of society, or a belief in god, or a free enterprise that the other options suggest. So, option A is right.

2. Option B: False
Not all shareholders are interested in long-term profits. Some shareholders are interested in the short-term growth of the company to gain profits in a shorter period of time called 'short-term profits'.

3. Option A: To ensure the integrity of the contract with customers
The moral reason why businesses should take care to ensure that their advertising is not deceptive is to make sure they preserve the integrity between the business and the customer. Not because deceptive advertisement will become acceptable, or that it would encourage everyone to lie. So, Option A is right.

4. Option B - False
A free market is an economy which is not restricted by the government. It is self-regulated. The prices in such a market are determined by consumers and the open market. It can sometimes result in an increase in workers' wages. But, however, it is not inherently designed to provide a living wage to the workers.

5. Option A - The only obligation of a business is to maximise shareholder value
The normative premise implied by the 'Shareholder Theory' suggests that its main responsibility is towards its shareholders. The ultimate goal of a firm must be to maximise the value of shareholders. Hence, option A is apt.

6. Option C - A disagreement over both Law and Facts
Moral disagreements are not only confined to disagreements over facts but rather involve disagreements over the law too because 'laws' are nothing but the 'moral' principles of the society.

7. Option C - Businesses have obligations to several groups
According to the Stakeholder Theory, stakeholders are an integral part of a business. It is the business's responsibility to provide certain obligations to these groups of stakeholders.

8. Option B - Implied public permission or acceptance
Social License is defined as the ongoing approval of the general public. It is an implied acceptance. It does not involve issuing legal documents or preservation of tradition. It simply implies that the local society and stakeholders approve of the firm. So, option B is apt.

9. Option B - False
Unethical companies may be successful in the short-run, but in the long-run, they might not be successful. This is because unethical practices affect the employees thereby affecting the company's success. Better ethics result in a sustained company. So, the assumption that unethical companies are more successful in the long-run is False.

10. Option A - Government Regulations
Government regulations can sometimes constitute a problem for shareholder activism because of their rigid nature. The other options given do not pose a problem. So, option A is right.