1. Which of the following is true of the Organization for Economic Cooperation and Development (OECD)?
A) Asserts that most company codes tend to speak in positive terms such as a commitment to honesty.
B) Created to promote rules for the corporations based on the culture of the place.
C) Coordinates domestic and international policies of developing countries.
D) Asserts that most enterprises' codes of conduct expressly publish policies that deal directly with corruption.

2. The phenomenon of "risky shift" means:
A) that groups do not accept higher risks than individuals.
B) the tendency for members of a group to internalize the group's values and perceptions and to suppress critical thought.
C) that a corporation will shift its risk onto its customers.
D) that a group of people who must reach a consensus on an acceptable level of risk often decide on a level of risk higher than the risk they would accept as individuals.

3. The tendency to internalize group values and suppress critical thought is known as:
A) herd behavior.
B) social loafing.
C) risky shift.
D) groupthink.

4. The problem with looking to "values that find wide acceptance" as a guide to ethical corporate behavior is that:
A) in today's global world, culture has no effect on the ethical attitudes of business managers.
B) modern life holds a diversity of conflicting ethical views.
C) most widely-accepted values are uninformed.
D) companies will always look to profit maximization over anything else.

5. Law may not be up to the task of forcing corporations to engage in ethical behavior for a number of reasons, including that:
A) judges are likely to be sympathetic to corporations.
B) it is not clear that all corporations will respond to the threat of financial penalties imposed by law.
C) Sarbanes-Oxley decreases the likelihood that illegal behavior will be detected.
D) corporations voluntarily elect to pursue ethical ends.

6. Law may not be up to the task of forcing corporations to engage in ethical behavior for a number of reasons, including that:
A) judges are likely to be sympathetic to corporations.
B) it is not clear that all corporations will respond to the threat of financial penalties imposed by law.
C) Sarbanes-Oxley decreases the likelihood that illegal behavior will be detected.
D) corporations voluntarily elect to pursue ethical ends.

7. Advocates for socially responsible corporations sometimes recommend that corporations can sensitize themselves to outside concerns by restructuring their decision making processes to include:
A) giving greater immunity to corporates.
B) changing the composition of the corporate board.
C) promoting lesser transparency within corporate structures.
D) giving shareholders lesser power.

8. A corporate manager looking for ethical guidance that neither the law nor social norms accounts for must rely on:
A) his/her individual conscience.
B) a strategy that will maximize profits.
C) his/her system of delegation to subordinates.
D) the advice of other managers.

9. Modern rights theory:
A) must determine the fundamental rights and how they are ranked in importance.
B) argues for a just distribution of society's resources.
C) holds that we should not abide by a rule unless a more important rule conflicts with it.
D) holds that duties are absolute.

10. Many corporations initiate legislation in order to:
A) enhance the community in which the company is located.
B) maximize the risk of more costly regulations for competitors.
C) ensure that their competitors are subject to more rigid constraints than is applicable to them.
D) head off the risk of future unpredictable lawsuits.

11. The theory that calls for a fair allocation of society's benefits and burdens among all members of society is:
A) the justice theory.
B) the allocational efficiency theory.
C) Kantianism.
D) the modern rights theory.

12. Under the allocational efficiency theory, the primary objective of a business corporation is to:
A) maximize profit.
B) maximize corporate social responsibility.
C) minimize fraudulent activities.
D) minimize criticism.

13. The problem with looking to "values that find wide acceptance" as a guide to ethical corporate behavior is that:
A) in today's global world, culture has no effect on the ethical attitudes of business managers.
B) modern life holds a diversity of conflicting ethical views.
C) companies will always look to profit maximization over anything else.
D) most widely-accepted values are uninformed.

14. The problem with the view that a corporation should attempt to act in the best interests of all of its various constituencies is that:
A) this tactic ignores the bottom line.
B) corporate managers often have a better sense of what is right.
C) the values of these constituencies may conflict.
D) local communities will not benefit from these values.

15. The Sarbanes-Oxley Act requires that:
A) private corporations report any change in their code of ethics.
B) privately traded corporations have board audit committees comprising only of dependent directors.
C) special committees of the board be assigned to special areas of concern.
D) public corporations disclose whether they have adopted a code of ethics for senior financial officers.

16. The new federal sentencing guidelines implemented as part of Sarbanes-Oxley:
A) are designed to give management immunity.
B) assign specific oversight responsibilities to directors.
C) apply both to individual board members and the corporation itself.
D) call for special committees of the board to be assigned similar functions.

17. The OECD's Principles of Corporate Governance insists on:
A) greater concealment of corporate governance policies to avoid conflicts of interest.
B) greater immunity power for corporate managers.
C) greater protection for whistleblowers.
D) lesser transparency within corporate structures.

18. The Foreign Corrupt Practices Act (FCPA):
A) does not require a U.S. parent corporation to make a good faith effort if the parent owns less than a majority interest in the foreign corporation.
B) prohibits payments of kickbacks to foreign businesses and their corporate officials.
C) imposes recordkeeping and internal-controls requirements on any corporation whose shares are privately traded in the United States.
D) deals only with payments to foreign governmental officials.

19. The regulatory agency "capture" usually occurs through:
A) the frequent exchange of personnel between a governmental agency and the industry it was intended to regulate.
B) litigation between a corporation and governmental agency.
C) the use of political influence to reduce the funding received by the agency enforcing the legislation.
D) the official governmental dissolution of an agency.

20. The Sarbanes-Oxley Act:
A) adopts the theory of allocational efficiency.
B) motivates executives to inflate reports of corporate profits.
C) gives corporations greater freedom from government control.
D) substantially increases the penalties for corporate wrongdoing.

21. Corporate codes of ethical conduct:
A) accurately reflect the values of society.
B) are sometimes viewed as a thinly-veiled attempt to mislead the public into thinking that the company behaves ethically.
C) effectively deter unethical behavior.
D) tend to expressly publish policies that deal directly with corruption to avert legal measures that might impose severe constraints.

22. It is unlikely that greater control by shareholders will lead to greater corporate social responsibility because:
A) there is a definite chance that the values of "ethical" shareholders would be representative of society as a whole.
B) many shareholders have access to the information necessary to closely monitor the noneconomic performance of a company.
C) shareholders will have the power to adopt resolutions binding the corporate managers.
D) most shareholders are motivated by maximizing profits and are unlikely to approve corporate actions contrary to that end.

23. Some of the problems raised by corporate reward structures include:
A) managers being inclined sometimes to act irresponsibly and/or illegally without an eye to legal trouble that may occur in the future.
B) firms sacrificing the present to the future thereby promoting long-term allocational inefficiency.
C) focusing on long-term rather than short-term profitability.
D) the interests of managers always being aligned with the long-range interests of the company.

24. The Sarbanes-Oxley Act:
A) decreases the likelihood of detection and prosecution of illegal behavior.
B) adopts the theory of allocational efficiency, under which the primary objective of a business corporation is to maximize profits.
C) creates a PCA Oversight Board with the authority to regulate CPA firms that audit publicly-traded companies.
D) narrowly defines the meaning of "obstruction of justice" and decreases the penalties for conscious law breaking.

25. A grease payment:
A) is an offer to make a prohibited payment.
B) is any gift of value to government officials for the purpose of obtaining business.
C) is one that is made by a company to the government for the purpose of obtaining goods-and-services contracts.
D) is one that is made by a company toward foreign governmental officials to secure routine governmental action.

26. Corporate social responsibility argues that ethical guidance for corporate managers may come from:
A) values that are influenced by culture.
B) corporate or industry codes of conduct.
C) corporations giving preference to their employees over the other constituencies.
D) an array of conflicting ethical views.