Sir Syed CASE Institute of Technology, Islamabad

Bachelor In Business Administration (BBA)

Midterm Examinations Fall 2021

Course: Business Ethics

Course Code: (HU-3206)

Total Marks: 30 Time Allowed: 1 hour & 30 mins

Note: attempt all questions. Each question carries equal marks.

Choose the best answers (10 Marks)

1. Which of the following describes the duties others have to not interfere in certain activities of another
person who is exercising a given right?
a. Contractual rights
b. Obligations
c. Negative rights
d. Duties

Answer: C
Topic: Rights and Duties
Learning Objective 2.3: Examine a rights-based approach to business ethics
Skill Level: Apply what you know
Difficulty Level: Moderate

2. Which type of rights are outcomes of a specific transaction between particular individuals?
a. Positive
b. Contractual
c. Moral
d. Utility

Answer: B
Topic: Rights and Duties
Learning Objective 2.3: Examine a rights-based approach to business ethics
Skill Level: Analyze it
Difficulty Level: Easy

3. Which of the following best explains the idea of distributive justice?

a. Punishments and penalties should be given to all those who do wrong.

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b. The larger the injustice, the more compensation an injured party should receive.
c. Equals should be treated as equals; those who are not equal should be treated differently.
d. Punishment should be greater for those who intentionally do wrong.

Answer: C
Topic: Justice and Fairness
Learning Objective 2.4: Explain justice and fairness as key ethical principles
Skill Level: Understand the concepts
Difficulty Level: Difficult

4. Which of the following statements support the views of egalitarians in terms of equality?

a. All humans are equal and goods should be allocated in equal portions.
b. There are differences among people that justify unequal treatment.
c. If all cannot be served equally, those who are first, or senior, should be served first.
d. Goods should be allocated based on need, ability, and effort.

Answer: A
Topic: Justice and Fairness
Learning Objective 2.4: Explain justice and fairness as key ethical principles
Skill Level: Understand the concepts
Difficulty Level: Moderate

5. The idea that benefits should be distributed based on the value of contribution is a principle of which
concept?
a. Socialism
b. Work ethic
c. Egalitarianism
d. Justice

Answer: D
Topic: Justice and Fairness
Learning Objective 2.4: Explain justice and fairness as key ethical principles
Skill Level: Apply what you know
Difficulty Level: Moderate

6. An ethic based on the fundamental value that relationships should be preserved and maintained is a
_____ ethic.
a. socialist
b. retributive
c. compensatory
d. communitarian

Answer: D
Topic: An Ethic of Care
Learning Objective 2.5: Analyze an ethic of care as applied to business decisions and practices
Skill Level: Analyze it
Difficulty Level: Moderate

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7. Which of the following is one of the advantages of ethical decision-making as a long-term business
strategy?
a. Ethical behavior will increase short-term profits.
b. Ethical behavior will provide positive press opportunities.
c. Ethical behavior can ensure positive employee relationships.
d. Ethical behavior can provide significant competitive advantage.

Answer: D
Topic: The Nature of Business Ethics
Learning Objective: 1.1: Analyze the basic nature of business ethics
Skill Level: Understand the concepts
Difficulty Level: Moderate

8. Which of the following is defined as standards of what a group or individual feels is right or wrong, or
good or evil?
a. Morality
b. Ethics
c. Standards
d. Values

Answer: A
Topic: Moral Reasoning and Moral Decision Making
Learning Objective: 1.2: Emphasize the importance of moral reasoning and moral decision-making in
business ethics
Skill Level: Understand the concepts
Difficulty Level: Difficult

9. Which of the following best describes the criteria by which we judge manners and rules of behavior?
a. Ethical norms
b. Moral norms
c. Nonmoral standards
d. Standard values

Answer: C
Topic: Moral Reasoning and Moral Decision Making
Learning Objective: 1.2: Emphasize the importance of moral reasoning and moral decision-making in
business ethics

10. Because companies intentionally engage in actions such as production and sales, some people believe
they should be held morally responsible for their decisions and actions. This view considers companies as
having to act as
e. moral agents.
f. machines.
g. individuals.
h. regulators.

Answer: A
Topic: Moral Reasoning and Moral Decision Making

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Learning Objective: 1.2: Emphasize the importance of moral reasoning and moral decision-making in
business ethics
Skill Level: Analyze it
Difficulty Level: Easy

SHORT ANSWER: (5*4=20 Marks)

Q1: As a senior manager operating in another country, how should you enforce U.S. ethical standards
in a culture that has different standards?
Sample Answer: Some scholars have suggested that senior managers who operate in a less well-developed
country should follow the higher ethical standards that are typically used in their home country. However,
those ethical standards must be used with care as they can sometimes create more harm than good in the
host nation. Social norms and expectations must also be carefully considered. Therefore, each case must be
judged individually, instead of attempting to apply one rule or level of standards to all issues. When
determining how ethical a decision is in a host country, several things must be considered including the
nature of the country’s laws, how corrupt a government is, the level of technological, social, and economic
development, and cultural acceptance.
Topic: Ethical Issues in International Business
Learning Objective: 1.3: Examine ethical issues arising from globalization and international
business connections and practices

Q2: Compare the shareholder view of corporate social responsibility to the stakeholder view of
corporate social responsibility.
Sample Answer: According to Milton Friedman, shareholders own the company in which they have shares.
These owners “hire” executives to run the organization in the best interest of the shareholders, with the goal
of increasing profits and returns for the shareholders. Therefore, under the shareholder view of CSR, the
company should not use resources to benefit society; those resources belong to the shareholders. However,
by maximizing profits for stockholders, the companies will end up benefiting society.

According to Freeman and Reed, a stakeholder is any group or individual who can help the organization
achieve its objectives or who are affected by the achievements of the organization. This means that a
stakeholder can harm, benefit, or influence. Therefore, anyone can be a stakeholder in an organization.
Under this theory, the organization should be run for the benefit of all stakeholders.
Topic: Moral Reasoning and Moral Decision Making
Learning Objective: 1.2: Emphasize the importance of moral reasoning and moral decision-making
in business ethics

Q3: Discuss reasons why ethics are an important part of an organization.

Sample Answer: Ethical behavior can be good for a business in that it can promote trust, provide safeguards,
and improve profit. Business interactions with employees and customers are ongoing. Ethical behavior can
encourage mutually beneficial interactions with others. Additionally, unethical behaviors tend to generate
harmful reprisals instead of cooperative behavior. Second, ethical behaviors on the part of an organization
can help the organization avoid reprisals, improve work relationships, and encourage people to reward the
organization with loyalty and commitment. Third, ethical behaviors increase the chances of success for an
organization. A majority of studies have found there is a positive relationship between socially responsible
acts and profitability. Businesses cannot survive without ethics and ethics are consistent with profit seeking.
This is because employees, customers, and people in general care about ethics.
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 Topic: Moral Reasoning and Moral Decision Making
Learning Objective: 1.2: Emphasize the importance of moral reasoning and moral decision-making
in business ethics

Q4: Explain the moral difference between rights and justice.

Sample Answer: Rights are based on the ethical principles that advocate respect for people’s freedom and
well-being. Justice is based on ethical principles that identify just and unjust ways of distributing benefits
and burdens among members of societies.
Topic: Approaches to Moral Decision Making
Learning Objective 2.1: Examine the foundations of moral decision-making in business

Q5: Describe how socialism supports justice based on needs and abilities of people.
Sample Answer: The socialist principle is based on the idea that all members of the community live up to
their full potential by using their abilities in productive work. Work should be distributed according to
ability, and the benefits produced by this work provide for the basic needs of the workers, including
happiness and well-being. The socialist view uses the model of a family supporting each family member,
where everyone contributes willingly to provide benefits and share burdens. Needs and abilities are taken
into account when determining how to distribute the burdens and the benefits.
Topic: Justice and Fairness
Learning Objective 2.4: Explain justice and fairness as key ethical principles

GOOD LUCK

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