Chapter 01
Ethics and Capitalism

True / False Questions
 
1. A shift has occurred in what society believes business responsibilities should be; today there is a greater emphasis on the bottom line than ever before. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-01 Describe the complexity of the interrelationships between business and society.
Topic: 01-01 The Business and Society Relationship
 
2. Responses to social and environmental issues will determine which corporations are able to survive in today's competitive environment. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-01 Describe the complexity of the interrelationships between business and society.
Topic: 01-01 The Business and Society Relationship
 
3. Integrity refers to the appropriateness of a corporation's behaviour, not to its adherence to moral principles. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business

4. Ethics apply to business in the same manner as they apply to religion. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
5. A responsible corporation is a business undertaking that responds to social, ethical, and environmental responsibilities in addition to its economic obligations. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
6. The triple-E bottom line (3E) is the evaluation of a corporation's performance according to a summary of the economic, social or ethical, and environmental value the corporation adds or destroys. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
7. There is little concern that a lack of academic integrity will have an influence on business integrity. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-03 Integrity of Business Students

8. Until recently, business schools had largely neglected ethics and emphasized functional areas, some of which have focused on the financial rather than the social responsibilities of business. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-03 Integrity of Business Students
 
9. Most people agree there is a universal way to approach ethics and as such, there is widespread agreement as to the appropriate behaviour by business in society. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
10. Deontological theories of ethics are rule-based. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
11. Virtue ethics emphasizes the situation that individuals find themselves in and focuses on what they are doing. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking

12. The teleological approach to ethics is also referred to as a rule-based theory. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
13. Virtue ethics focuses upon ‘doing' rather than ‘being'. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
14. One advantage of virtue ethics is that there is general agreement as to what constitutes a virtue. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
15. Utilitarianism is one form of rule-based ethical theories. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking

16. The ‘greatest good for the greatest number" is a feature of consequentialist theories. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
17. An economic system defines the political party most active in any country. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
18. The responsible enterprise system acknowledges that business has a responsibility beyond profit maximization for shareholders. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
19. Adam Smith argued for a system of capitalism that would see an enhanced role for government. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System

20. The non-profit sector is alternately known as the third sector or the plural sector. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
21. The economic system in Canada is a laissez-faire system. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
22. There are very few legal requirements for an individual establishing or operating a business in Canada. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
23. A partnership may involve two or more than two individuals sharing the ownership of a business. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System

24. The concession doctrine implies that incorporation is a right, not a privilege for businesses. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
25. The ‘freedom of association' doctrine implies that incorporation should occur without government intervention. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
26. Legislative safeguards are imposed upon incorporation processes to create and preserve an atmosphere of public confidence, as well as to create protections for investors and creditors. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
27. A social licence guarantees the absence of government regulation in an open market. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Recognize that business operates with the consent of society.
Topic: 01-07 Society's Permission for Business

28. A minority of Canadians are owners of businesses, either directly or indirectly. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business
 
29. Strategic planning is a function of the board of directors. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business
 
30. The board of directors is responsible to the manager of the corporation. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business
 
31. Integrity is becoming an increasingly important attribute for managers to possess. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business

32. Canadians' overall attitude towards business has been basically positive over the last ten years. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
33. Self-interest by firms is an issue that the Canadian public consistently identifies as a negative attribute of the business enterprise system. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
34. Self-interest acts as a motivator in the business enterprise system and provides the drive for profit that encourages individuals to get things done. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
35. A system based on a capitalistic market virtually guarantees an equitable distribution of income. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business

36. Social media describes the various forms of interaction or communication enabled by technology-based tools, most of which are Internet based. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
37. Legitimacy requires belief, trust, and confidence in the business system. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Recognize that business operates with the consent of society.
Topic: 01-07 Society's Permission for Business
 
38. For a business to be legitimate, the business enterprise system must report positive profits and pay dividends to shareholders on a consistent basis. 
FALSE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Recognize that business operates with the consent of society.
Topic: 01-07 Society's Permission for Business
 
39. The concept of a ‘social licence' which is based on ethics, values, expectations, and self-regulation, is considered preferable to social or governmental control, which is based on regulation, legislation, litigation, and compliance. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-06 Recognize that business operates with the consent of society.
Topic: 01-07 Society's Permission for Business

40. There exists a reciprocal relationship between business and society. 
TRUE

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-09 Describe the integration of business and society.
Topic: 01-14 Integration of Business and Society

Multiple Choice Questions
 
41. Corporate activities demonstrating the inclusion of social and environmental as well as economic responsibilities in business operations as they impact all stakeholders to ensure the long-term survival of the corporation is called: 
A. Corporate sustainability (CS)
B. Corporate social responsibility (CSR)
C. Ethics of business
D. Triple bottom line
E. Corporate citizenship

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
42. A corporation demonstrating that it considers its role in, and complete impact on, society and the environment as well as its economic influence is called: 
A. Corporate sustainability (CS)
B. Corporate social responsibility (CSR)
C. Ethics of business
D. Triple bottom line
E. Corporate citizenship

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business

43. The way a corporation achieves a balance among its economic, social, and environmental responsibilities in its operations to address stakeholder expectations is referred to as: 
A. Corporate sustainability (CS)
B. Corporate social responsibility (CSR)
C. Ethics of business
D. Triple bottom line
E. Corporate citizenship

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
44. The three dominant approaches to normative theories of ethics include all of the following, except? 
A. Deontological
B. Teleological
C. Justice
D. Virtue
E. All four of these choices are legitimate approaches to normative theories of ethics.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
45. One prominent ethicist who wrote extensively about virtue ethics was: 
A. Kant
B. Locke
C. Bentham
D. Aristotle
E. Mills

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking

46. The ‘veil of ignorance' test is a variation of _________ theories. 
A. teleological
B. virtue
C. deontological
D. consequentialist
E. justice

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
47. Which of the following ethicists wrote that leadership can create opportunities for all to realize their potential? 
A. Kant
B. Plato
C. Bentham
D. Aristotle
E. Smith

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
48. Government and business work collaboratively with multiple stakeholders to use resources to meet the needs of the members of a society. This arrangement is called the ________ of a nation. 
A. economic system
B. free enterprise
C. responsible enterprise
D. laissez-faire ideology
E. political manifesto

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System

49. The discussion of the business enterprise system in the Business and Society class today was stimulating. Jasmine argued that the Canadian government should apply a _________ model whereby economic decision making is left to those individuals or enterprises who own the means of production. 
A. capitalism
B. free enterprise
C. laissez-faire capitalism
D. responsible enterprise
E. stakeholder

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
50. Price fixing and supplier discrimination sometimes signal: 
A. responsible corporations
B. monopolistic behaviour
C. laissez-faire governance
D. stakeholder capitalism
E. free enterprise

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System

51. The discussion of the business enterprise system in the Business and Society class today became interesting when Roberto took the position that the Canadian government should apply a _________ model whereby economic decision making is left to those individuals or enterprises who own the means of production and the government has only the most minimal, strictly limited role. 
A. capitalism
B. free enterprise
C. laissez-faire capitalism
D. responsible enterprise
E. stakeholder capitalism

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-04 Provide a brief description of the Canadian business system.
Topic: 01-05 Business as an Economic System
 
52. Raminder is starting a business to sell handmade greeting cards online. She is forming a(n) ________ in that she is planning to assume all the risks and accept all the rewards of business ownership. 
A. partnership
B. proprietorship
C. going concern
D. incorporated business
E. virtual model

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System

53. Julio and Julie are planning to start a business providing holistic, herbal products to consumers. This is an exciting business opportunity which has considerable growth potential. Concerned, however, about assuming a personal level of responsibility for the financial outcome of the enterprise, they decide to structure the business through: 
A. proprietorship
B. partnership
C. corporation
D. incorporation
E. limited liability

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
54. By incorporating his business, Gordon has taken on partners who will provide financial backing. However, there are governmental requirements that shape the process. This contrasts with the __________ doctrine that allowed state control over the granting of incorporation. 
A. freedom of association
B. going concern
C. concession
D. voluntary
E. legal

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
55. The modern corporation is described by: 
A. the concession doctrine
B. the freedom of association doctrine
C. the rule of proprietorship
D. the profit maximization doctrine
E. the freedom of referral doctrine

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System

56. Lucinda is a shareholder in ABC Enterprises Ltd., but doesn't even know it! For years, she believed that her pension was just sitting in a bank vault somewhere waiting for her to retire. Lucia is a(n) _________ of ABC Enterprises Ltd. 
A. direct owner
B. indirect owner
C. silent shareholder
D. preferred shareholder
E. privileged shareholder

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business
 
57. Frankie is a shareholder in VNO Corporation and regularly attends annual shareholder meetings voting on policies that he feels are particularly relevant to the firm's social responsibilities. Frankie is: 
A. a direct owner
B. an indirect owner
C. member of the board of directors
D. manager
E. active stakeholder

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business
 
58. Karandeep's responsibility is to manage the daily operation of NYZ Inc., including the management of over 30 full-time employees. This organization manufactures ceramic products for distribution in various retail outlets. Karandeep is a(n) __________ of NYZ Inc. 
A. direct owner
B. indirect owner
C. member of the board of directors
D. manager
E. philanthropist

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business

59. LK Corporation has recently downsized its operations. The trend towards healthy eating has led to fewer purchases of lollipops and suckers, the principal product of the firm. Knowing that Halloween is approaching and that sales will improve, the company has told the media that the workers will be rehired as soon as sales improve. In planning to rehire the laid off workers, LK Corporation is attributing the layoffs to the: 
A. principle of self-interest
B. efficient allocation of resources
C. decentralized decision making
D. business cycle
E. sustainability dilemma

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
60. Social media has enabled society to hold business: 
A. more accountable
B. less accountable
C. to a lower ethical standard
D. responsible to stakeholders for profits
E. responsible to the government for sustainability initiatives

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
61. The holiday season is approaching and Kasia's mom is delighted with the range of offerings on the shelves of the toy store. It seems like every single toy manufacturer had a different strategy for the season. This range of offerings is the result of: 
A. self-interest
B. allocation of resources
C. decentralized decision making
D. business cycle
E. innovation

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business

62. When purchasing a new vehicle, Robert asked the dealer: "So when will the car actually do the driving for me?" The dealer laughed and then showed Robert the new model that parallel parks for the driver. This example is addressing which issue related to society's attitude towards business? 
A. Self-interest
B. Allocation of resources
C. Decentralized decision making
D. Business cycle
E. Technological Innovation

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
63. The shareholders of DCV Corporation have agreed to coordinate their share purchases so that the stock looks more profitable just prior to the merger so that the public will see the company as a desirable investment. This is an example of: 
A. misleading financial statements
B. kickbacks
C. corporate wrongdoing
D. bid rigging
E. stock-splitting

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business

64. In recruiting skilled professionals, JKL Recruiting Consultants Inc. provides incentives to potential employees for attending interviews. For example, Xiao Lin is encouraged to bring her husband, Robert, to the job interview at the company's expense. This is an example of what form of corporate wrongdoing? 
A. Misleading financial statements
B. Kickbacks
C. Stock manipulation
D. Bid rigging
E. There is no wrongdoing

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
65. The belief in the rightness of an institution, in this case the appropriateness of our business system to supply the goods and services wanted by Canadian society, is called: 
A. Relevancy
B. Righteousness
C. Legitimacy
D. Licensing
E. Conventionality

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-06 Recognize that business operates with the consent of society.
Topic: 01-07 Society's Permission for Business
 
66. The privilege of operating in society with minimal formalized restrictions, based on maintaining public trust is called: 
A. Relevancy
B. Righteousness
C. Legitimacy
D. Social Licence
E. Social Preference

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business

67. Which of the following is true regarding the relationship between business and society? 
A. Society needs businesses, but the reverse is not true.
B. Business needs society but the reverse is not true.
C. Society and business need each other.
D. Society needs the government, and the government needs business.
E. Business needs the government, and the government needs society.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-09 Describe the integration of business and society.
Topic: 01-14 Integration of Business and Society

Short Answer Questions
 
68. Why is the term ‘ethics of business' preferred over the term ‘business ethics'? 
When referring to business ethics, what is meant is the ethics that apply to business. It does not mean there is a special kind of ethics peculiar to business and not applicable elsewhere in life. Thus, the phrase "ethics of business" is used in this book unless referring to another work or spokesperson.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business
 
69. What is a responsible corporation? 
A responsible corporation is defined in the text as a business undertaking that responds to social, ethical, and environmental responsibilities in addition to its economic obligations.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-02 Integrity in Business

70. Contrast deontological and teleological theories. 
Answers will vary.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-03 Differentiate between the three main approaches to ethical thinking.
Topic: 01-04 Main Approaches to Ethical Thinking
 
71. The business enterprise system has been described in multiple ways. How would you describe our economic system to a new Canadian? 
Answers will vary.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
72. Identify the five primary tasks of the board of directors as outlined in the text. 
The board's main tasks are to:

Select, evaluate, and terminate employment of top management, including planning executive succession.
Provide shareholders with financial statements and an external auditor's report on the financial affairs of the corporation presented in an annual corporate report.
Direct and evaluate strategic planning including formulating plans, keeping management accountable for implementation, and assessing performance.
Represent shareholders by participating in any major decisions impacting the corporation's operations relating to ownership, investments, acquisitions, divestments, takeovers, or insolvency.
Fulfill the fiduciary and legal requirements as outlined in the Canada Business Corporations Act.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-08 Identify the groups that are mainly responsible for the operation of Canadian businesses.
Topic: 01-10 The People Who Run Canadian Business

73. Describe two ethical issues which will need to be addressed in an era of artificial intelligence (AI). 
Answers will vary. See Everyday Ethics 1.4, Artificial Intelligence and Ethical Issues. Some of the issues include:

 Challenges of programming AI tools to make decisions involving ethics and social responsibility.
 The social and economic impact of robots and other AI tools must be understood and planned for, particularly the possible loss of jobs.
 The collection, compilation, and use of data gathered by AI tools will make more information available, but, on the other hand, is a threat to privacy.
 The security of data collected by AI tools must be assured.
 Managers will need to understand the capabilities of AI tools and determine the best way to deploy them and to identify what they can and cannot do.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
74. How does social media enable society to hold business more accountable? 
Answers will vary.

Unethical practices are more likely disclosed and sooner.
Bloggers are free to make comments about the corporation that may or may not be accurate, placing the corporation in a difficult position to respond or counter untruths.
Fake blogs might exist that portray corporations negatively.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-09 Factors Influencing Attitudes toward Business

75. Some critics of the business enterprise system claim that a system based on a capitalistic market leads to inequities. What is the response by supporters of the capitalist system? 
Answers will vary.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-05 Explain the role of the corporation as the main economic institution in the business system.
Topic: 01-06 The Corporation and the Business System
 
76. Name and discuss four factors influencing attitudes towards business systems. 
Standard of living — A prominent argument used in justifying or supporting the business enterprise system is the standard of living that it provides. As living standards increase, it is more likely society will view business in a positive manner.

Decentralized decision making — Another factor of the business system considered desirable is the decentralized decision-making process involved. Millions of businesses make decisions independently of one another, ensuring that a wide variety of goods and services are available. This choice is viewed favourably by consumers.

Allocation of resources — Some argue that the efficient allocation of resources is more likely to occur with a business system, as allocation is based on the price and availability of resources. However, critics of the business system challenge the efficiency claim. They argue that enterprises control prices, for example in oligopolistic industries, or that business enterprises control the availability of resources, creating artificial scarcities.

Self-interest — In a business enterprise system, the individual can behave in his or her own self-interest. Self-interest acts as a motivator, and provides the drive for profit that encourages individuals to get things done. In a competitive business enterprise system, consumers choose among businesses that provide basically the same goods and services.

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business

77. Explain how integrity applies to business students. 
Answers will vary.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-02 Define the terminology relating to the integrity of business and recognize integrity issues with students.
Topic: 01-03 Integrity of Business Students
 
78. How does unemployment affect attitudes about business? 
Employment is associated with a country's economic performance, business cycles, and productivity. How well the country's major industries are performing, and the levels of consumer spending determine employment levels. Unemployment occurs when business lays off or fails to hire employees as business activity declines. Declining productivity of Canadian business may result in goods and services being provided from other countries.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-08 Attitudes toward Business
 
79. How does globalization affect attitudes about business? 
Increased competition comes from foreign producers, job loss occurs as production is outsourced to other countries, and businesses must respond to the demands of customers in other nations. Corporations operating globally are faced with ethical, social, and environmental issues relevant to local areas. As an example, Canadian mining corporations have had to respond to complaints about pollution and poor working conditions in their international operations. Chapter 15 will discuss the implications and challenges of globalization.

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 01-07 Summarize factors that influence society's attitudes toward business that lead to criticisms of the system.
Topic: 01-09 Factors Influencing Attitudes toward Business

80. Why does business need society and society need business? 
An article by Porter and Kramer made a good case for business and society needing each other. Business needs a healthy society in which education and health-care systems exist. There should be equal opportunity in the workforce and safe products for consumers. Carefully developed government policies increase the efficiency of business. This creates demand for products and services, and corporations pursuing profits at the expense of society are naïve. On the other hand, society needs successful companies. Business is needed to create jobs, wealth, and innovations that improve the standard of living for society. If business is weakened by governments and non-governmental organizations jobs disappear, competitiveness is lost, wages stagnate, and wealth declines.

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 01-09 Describe the integration of business and society.
Topic: 01-14 Integration of Business and Society