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Chapter 02 - Business Ethics and Social Responsibility
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Chapter 02
Business Ethics and Social Responsibility
True / False Questions
1. All business decisions cannot be judged as right or wrong, ethical or unethical.
FALSE
Whether made in science, politics, sports, or business, any organizational decision can be
judged as right or wrong, ethical or unethical.
AACSB: Ethics
Accessibility: Keyboard Navigation
Bloom's: Understand
Difficulty: 2 Medium
Learning Objective: 02-01 Define business ethics and social responsibility and examine their importance.
Topic: The Ethical Concerns that Affect Business
2. An ethical issue is an identifiable problem, situation, or opportunity that requires a person

or organization to choose from among several actions that may be evaluated as ethical or
unethical.
TRUE
An ethical issue is an identifiable problem, situation, or opportunity that requires a person to

choose from among several actions that may be evaluated as right or wrong, ethical or
unethical. In business, this choice usually involves weighing monetary gain against what a
person considers appropriate conduct.
2-1
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 02-02 Detect some of the ethical issues that may arise in business.
2-2
3. Ethical decisions in an organization are influenced by individual moral standards.
TRUE
Ethical decisions in an organization are influenced by three key factors: individual moral standards, the influence of
managers and coworkers, and the opportunity to engage in misconduct
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 02-03 Specify how businesses can promote ethical behavior.
4. The concept of social responsibility is universally accepted.
FALSE
Although the concept of social responsibility is receiving more and more attention, it is still
not universally accepted.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
Learning Objective: 02-04 Explain the four dimensions of social responsibility.
Topic: Corporate Social Responsibility
2-3
5. A major social responsibility for business is providing equal opportunities for all
employees.
TRUE
A major legal and social responsibility for business is providing equal opportunities for all
employees regardless of their sex, age, race, religion, or nationality.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
Learning Objective: 02-05 Debate an organization's social responsibilities to owners, employees, consumers, the environment, and the
community.
Topic: Corporate Social Responsibility
Multiple Choice Questions
6. The principles and standards that determine acceptable conduct in business organizations
are referred to as:
A. social responsibility.
B. business strategies.
C. business ethics.
D. business stances.
E. corporate citizenship.
Business ethics is defined as the principles and standards that determine acceptable conduct in
business organizations.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-4
7. Which of the following statements is true?

A. All actions deemed unethical by society are also illegal.
B. The concerns of what is legal and ethical do not change over time.
C. The terms social responsibility and ethics should be used interchangeably.
D. Companies can be both profitable and socially responsible.
E. Businesses whose sole objective is to earn profit may not consider their social
responsibility.
Many consumers and social advocates believe that businesses should not only make a profit
but also consider the social implications of their activities. Socially responsible businesses
win the trust and respect of their employees, customers, and society and, in the long run,
increase profits.
AACSB: Ethics
Bloom's: Understand
8. The term refers to a business's obligation to maximize its positive impact and
minimize its negative impact on society.
A. social citizenship
B. social strategy
C. social ethics
D. social responsibility
E. social rule
Social responsibility refers to a business's obligation to maximize its positive impact and
minimize its negative impact on society.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-5
9. Which of the following statements is true?

A. Business ethics relates to an individual's values, principles, and standards of conduct.
B. The acceptability of behavior in business is determined only by the organization in
question.
C. Social responsibility and social ethics do not mean the same thing.
D. Businesses should only make a profit rather than consider the social implications of their
activities.
E. Most unethical activities within organizations are not supported by an organizational
culture that encourages employees to bend the rules.
Although many people use the terms social responsibility and ethics interchangeably, they do
not mean the same thing. Business ethics relates to an individual's or a work group's decisions
that society evaluates as right or wrong.
AACSB: Ethics
Bloom's: Remember
10. The Act criminalized securities fraud and toughened penalties for corporate fraud.
A. Dodd-Frank
B. Federal Trade Commission
C. Foreign Corrupt Practices
D. Sarbanes-Oxley
E. Sherman Antitrust
Congress passed the Sarbanes-Oxley Act in response to several prominent accounting

scandals. The law criminalized securities fraud and stiffened penalties for corporate fraud.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-6
11. Which of the following laws criminalized securities fraud and stiffened penalties for
corporate fraud?
A. The Glass-Steagall Legislation
B. The Sherman Act
C. The Sarbanes-Oxley Act
D. The Clayton Act
E. The Celler-Kefauver Act
The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud as
well as stiffen penalties for corporate fraud. This was a response to public outcry regarding
accounting scandals in the early 2000s and to restore confidence in corporate America.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
12. The Sarbanes-Oxley Act was passed to:

A. punish those who committed accounting fraud in the late 1990s.
B. improve corporate profits.
C. help laid-off employees get their jobs back.
D. help investors recoup their losses.
E. help restore confidence in corporate America.
The Sarbanes-Oxley Act was passed in 2002 by Congress to criminalize securities fraud as
well as stiffen penalties for corporate fraud. This was a response to public outcry regarding
accounting scandals in the early 2000s and to restore confidence in corporate America.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-7
13. One of the most difficult things for a business to restore after an ethics scandal is:
A. regulations.
B. ethics training programs.
C. trust.
D. codes of conduct.
E. morale.
Ethical conduct builds trust and credibility. Establishing trust and confidence is much more
difficult in organizations that have reputations for acting unethically.
AACSB: Ethics
Bloom's: Understand
14. Which of the following does ethical conduct build among individuals and in business
relationships, which validates and promotes confidence in business relationships?
A. Pride
B. Trust
C. Self-reliance
D. Creativity
E. Rigor
Ethical conduct builds trust among individuals and in business relationships, which validates
and promotes confidence in business relationships.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-8
15. Which of the following statements is true of ethics?

A. Ethical issues are not limited to for-profit organizations.
B. Business ethics do not go beyond legal issues.
C. Ethical conduct does not have any impact on business relationships.
D. Ethical conflicts do not evolve into legal disputes.
E. Ethical issues are not affected by social perceptions.
Ethical issues are not limited to for-profit corporations but also affect government, non-profits
such as universities, sports, and individuals.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
16. Which of the following is a key step in evaluating ethical decisions in business?
A. Assuming that ethical issues do not include all areas of organizational activities
B. Recognizing that social responsibility and ethics are inversely related to each other
C. Understanding that business ethics does not go beyond legal issues
D. Identifying that ethics is not culture-specific
E. Learning how to recognize and resolve ethical issues
Learning how to recognize and resolve ethical issues is a key step in evaluating ethical
decisions in business.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-9
17. are payments, gifts, or special favors intended to influence the outcome of a
decision.
A. Bribes
B. Emoluments
C. Stipends
D. Grants
E. Recompenses
Bribes are payments, gifts, or special favors intended to influence the outcome of a decision.
A bribe benefits an individual or a company at the expense of other stakeholders.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
18. Which of the following is the most common ethical problem for employees?
A. Theft of time
B. Misuse of company resources
C. Intimidating behavior
D. Insider trading
E. Conflict of interest
Abusive or intimidating behavior is the most common ethical problem for employees. These
concepts can mean anything from physical threats, false accusations, profanity, insults,
yelling, harshness, and unreasonableness to ignoring someone or simply being annoying; and
the meaning of these words can differ by person.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-10
19. Abusive behavior is difficult to assess and manage because of:

A. the debate surrounding the acceptability.
B. ethical issues that often emerge from conflict.
C. different rating companies.
D. diversity in culture and lifestyle.
E. the fact that they lead to higher levels of unemployment.
Abusive behavior is difficult to assess and manage because of diversity in culture and
lifestyle.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
20. Which of the following acts amounts to bullying?

A. Trading within insiders
B. Discrediting others' ideas and opinions
C. Lobbying for or against someone
D. Mediating as a third party
E. Buying or selling of stocks by insiders
Actions associated with bullies include spreading rumors to damage others and discrediting
others' ideas and opinions.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-11
21. Within the concept of abusive behavior, should be a consideration.

A. intent
B. context
C. natural environment
D. cultural norms
E. business ethics
Within the concept of abusive behavior, intent should be a consideration.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
22. is the buying or selling of stocks by insiders who possess material that is still not
public.
A. Gatekeeping
B. Whistleblowing
C. Downcycling
D. Insider trading
E. Plagiarizing
Insider trading is an example of a conflict of interest. Insider trading is the buying or selling
of stocks by insiders who possess material that is still not public. The Justice Department has
taken an aggressive stance toward insider trading.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-12
23. According to the National Business Ethics Survey, is the number one area of
misconduct observed in the workplace.
A. plagiarism
B. discrimination
C. abusive behavior
D. misuse of company time
E. stealing
According to the National Business Ethics Survey, abusive behavior is the number one area of
misconduct observed in the workplace.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
24. Identify a true statement about ethics and code of conduct.

A. One of the principal causes of unethical behavior in organizations is less aggressive
financial or business objectives.
B. Among the several ethical issues of today, time theft costs can be easy to measure.
C. Within the concept of abusive behavior, intent should not be a consideration.
D. Ethics is related to the culture in which a business operates.
E. Bullying has more legal recourse than sexual harassment.
Ethics is also related to the culture in which a business operates. In the United States, for
example, it would be inappropriate for a businessperson to bring an elaborately wrapped gift
to a prospective client on their first meeting—the gift could be viewed as a bribe.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-13
25. Which of the following has developed a Corruption Perceptions Index?

A. Financial Executives International
B. Texas Instruments
C. National Business Ethics International
D. ORC International
E. Transparency International
Transparency International has developed a Corruption Perceptions Index.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
26. Which of the following is true of bullying?

A. Bullying is not a widespread problem in the United States.
B. Bullying can occur between companies that are intense competitors.
C. 21 percent of workplace bullies are supervisors.
D. Bullying cannot occur in all types of businesses.
E. To avoid bullying, employees must be able to consider their personal financial interests and
their business dealings as one unit.
Bullying can also occur between companies that are intense competitors. For example,
European antitrust regulators alleged that some of the world's biggest banks—including
Goldman Sachs, Morgan Stanley, and J.P. Morgan— collaborated with an industry
association to prevent exchanges from offering and trading in credit derivatives.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-14
27. in particular have the opportunity to influence employees' actions.

A. Managers
B. Subordinates
C. Junior level employees
D. Financiers
E. Customers
Managers in particular, because of the authority of their position, have the opportunity to
influence employees' actions. For example, a manager might influence employees to use
pirated computer software to save costs.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
28. Open discussion of ethical issues:

A. does not promote trust in an organization.
B. does not eliminate ethical problems.
C. leads to more unethical practices.
D. eliminates the process of resolving an issue.
E. leads to a gridlock of a situation.
Open discussion of ethical issues does not eliminate ethical problems, but it does promote
both trust and learning in an organization. When people feel that they cannot discuss what
they are doing with their coworkers or superiors, there is a good chance that an ethical issue
exists.
AACSB: Ethics
Bloom's: Understand
2-15
29. Laura, a manager, makes decisions that benefit her financially at the expense of her firm.
Which of the following ethical issues in business is addressed in this example?
A. Bullying
B. Bribery
C. Conflict of interest
D. Intimidating behavior
E. Misuse of company time
A conflict of interest occurs when an employee must choose whether to advance his or her
own interests or those of the firm. If managers make decisions that give them more power or
money but do not help the company, then they have a conflict of interest.
AACSB: Ethics
Bloom's: Apply
30. Which of the following is associated with a hostile workplace when a person or group is
targeted and is threatened, harassed, belittled, verbally abused, or overly criticized?
A. Conflict of interest
B. Bribery
C. Treachery
D. Treason
E. Bullying
Bullying is associated with a hostile workplace when a person or group is targeted and is
threatened, harassed, belittled, verbally abused, or overly criticized. Bullying may create what
some consider a hostile environment, a term generally associated with sexual harassment.
AACSB: Ethics
Bloom's: Understand
2-16
31. Which of the following is true of bullying?

A. Surveys reveal that bullying in the workplace is on the decline.
B. Bullying cannot occur in all types of businesses.
C. Flaunting status or authority to take advantage of others does not amount to the act of
bullying.
D. Although sexual harassment has legal recourse, bullying has little legal recourse at this
time.
E. Insider trading is an example of bullying.
Although sexual harassment has legal recourse, bullying has little legal recourse at this time.
Bullying is a widespread problem in the United States, and can cause psychological damage
that can result in health-endangering consequences to the target.
AACSB: Ethics
Bloom's: Understand
32. Which of the following exists when a person must choose whether to advance his or her
own personal interests or those of others?
A. An act of impeachment
B. A conflict of interest
C. A fiduciary
D. An escrow
E. A recusal
A conflict of interest, one of the most common ethical issues identified by employees, exists
when a person must choose whether to advance his or her own personal interests or those of
others.
AACSB: Ethics
Bloom's: Understand
2-17
33. Which of the following is an example of a conflict of interest?

A. Third-party transaction
B. Insider trading
C. Mediation
D. Arbitration
E. Renegotiated buyout
Insider trading is an example of a conflict of interest. Insider trading is the buying or selling
of stocks by insiders who possess material that is still not public.
AACSB: Ethics
Bloom's: Understand
34. The fact that businesspersons are expected not to harm customers, clients, and competitors
knowingly through deception, misrepresentation, coercion, or discrimination is part of the
practice of:
A. business relationships.
B. communications.
C. conflict of interest.
D. fairness and honesty.
E. consumerism.
Fairness and honesty are at the heart of business ethics and relate to values of decision
makers. Businesspersons obeying the law are expected not to harm customers, employees,
clients, or competitors knowingly through deception, misrepresentation, coercion, or
discrimination.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-18
35. A video gaming company was investigated for allegedly raising prices of its video game
consoles during the Christmas shopping season and manipulating the supply of games
available at that time. This ethical issue is primarily concerned with:
A. conflict of interest.
B. communications.
C. fairness and honesty.
D. cost control.
E. rules of games.
One aspect of fairness relates to competition. Companies sometimes attempt to gain control
over markets by using questionable practices, such as manipulating the supply of products
that harm competition.
AACSB: Ethics
Bloom's: Understand
36. Which of the following is an Internet service that allows teachers to determine if their
students have plagiarized content?
A. Kioskea
B. Turnitin
C. Savee
D. G-NetLog
E. Mobgo Secure
TurnItIn is an Internet service that allows teachers to determine if their students have
plagiarized content.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-19
37. In the realm of business ethics, making claims about dietary supplements or the health
benefits of certain unproven ingredients is an issue related to:
B. communications.
C. product design.
D. business relationships.
E. financing.
Truthfulness about product quality and effectiveness is important to consumers. Many

marketers of dietary supplements make unproven or even false claims that their products will
help the consumer lose weight, gain muscle, or improve their overall health.
AACSB: Ethics
Bloom's: Understand
38. Alcoholic beverage and cigarette manufacturers have argued that a total ban on cigarette
and alcohol advertisements violates the:
A. Sixth Amendment
B. Thirteenth Amendment
C. Tenth Amendment
D. First Amendment
E. Second Amendment
Alcoholic beverage and cigarette manufacturers have argued that a total ban on cigarette and
alcohol advertisements violates the First Amendment. Internet regulation, particularly that
designed to protect children and the elderly, is at the forefront in consumer protection
legislation.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-20
39. The National Business Ethics Survey found that employees who feel pressured to
compromise ethical standards view as the greatest source of such pressure.
A. CEOs
B. shareholders and stakeholders
C. clients
D. top and middle managers
E. coworkers
Managers, because of the inherent authority of their position, have the opportunity to
influence employees' actions. The National Business Ethics Survey found that employees who
feel pressured to compromise ethical standards view top and middle managers as the greatest
source of such pressure.
AACSB: Ethics
Bloom's: Understand
40. involves taking someone else's work and presenting it as your own.
A. Conflict of interest
B. Bullying
C. Inspiration
D. Bribery
E. Plagiarism
In business, the ethical issue of plagiarism arises when an employee copies reports or takes
the work or ideas of others and presents it as his or her own without mentioning the source.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-21
41. The warning on cigarette packages about the health implications of smoking is an example
of:
B. fairness and honesty.
C. communications.
D. relationships within a business.
E. environmental issues.
An important aspect of communications regarding an ethical issue is product labeling such as

the Surgeon General's warning on cigarette packages.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
42. Which of the following behavior is an example of ethical consideration within the purview
of business relationships?
A. Keeping company secrets
B. Communicating with customers
C. Whistleblowing
D. Obeying environmental laws
E. Donating to local charities
Ethical behavior within a business involves keeping company secrets, meeting obligations and
responsibilities, and avoiding undue pressure that may force others to act unethically.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-22
43. If a manager pressures a subordinate to engage in activities that he or she may otherwise
view as unethical, such as engaging in accounting fraud or stealing a competitor's secrets, this
would be an ethical issue related to:
A. plagiarism.
B. business relationships.
C. communications.
D. fairness and honesty.
E. conflicts of interest.
Ethical behavior within a business involves keeping company secrets, meeting obligations and
responsibilities, and avoiding undue pressure that may force others to act unethically.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
44. If an employee learned of a significant cost-saving idea from a coworker and then
informed management of the idea without revealing its true source, the employee would be
involved in:
A. keeping a secret.
B. misuse of resources.
C. plagiarism.
D. bullying.
E. bribery.
Plagiarism is taking someone else's work or idea and presenting it as one's own without giving
credit to its source.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
2-23
45. A manager attempting to take credit for a subordinate's ideas is engaging in a type
of .
A. conflict of interest
B. plagiarism
C. whistleblowing
D. misplaced loyalty
E. capture bonding
A manager attempting to take credit for a subordinate's ideas is engaging in a type of

plagiarism. Plagiarism refers to taking someone else's work and presenting it as one's own
without mentioning the source, which is an ethical issue.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
46. Ethical decisions in an organization are influenced by individual moral standards, the
influence of managers and coworkers, and .
A. individual religious values
B. informal ethical policies or rules
C. the opportunity to engage in misconduct
D. family influence
E. ethical values of clients
Ethical decisions in an organization are influenced by three key factors: individual moral
standards, the influence of managers and coworkers, and the opportunity to engage in
misconduct.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-24
47. Which of the following is true of professional codes of ethics?

A. They are informal rules of ethics followed by employees.
B. They do not have to provide any guidelines and principles.
C. They do not have to be too detailed.
D. They should only be developed by the board of directors of a firm.
E. They should take into account every ethical situation possible.
Professional codes of ethics do not have to be so detailed that they take into account every
situation, but they should provide guidelines and principles that can help employees achieve
organizational objectives and address risks in an acceptable and ethical way. The development
of a code of ethics should include not only a firm's executives and board of directors, but also
legal staff and employees from all areas of a firm.
AACSB: Ethics
Bloom's: Understand
48. Which of the following is true of ethics?

A. Ethical conflict increases when employees feel that their company is exerting pressure on
them to engage in unethical conduct.
B. Professional codes of ethics are informal rules and standards that describe what the
company expects of its employees.
C. Codes of ethics need to be very detailed so that they take into account every situation.
D. The development of a code of ethics should include only a firm's executives and board of
directors.
E. Employees always utilize the same ethical standards at work as they do at home.
Business managers and employees often experience some tension between their own ethical
beliefs and their obligations to the organizations in which they work. Many employees utilize
different ethical standards at work than they do at home. This conflict increases when
employees feel that their company is encouraging unethical conduct or exerting pressure on
them to engage in it.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
2-25
49. A set of formalized rules and standards that describes what a company expects of its
employees is called a(n) _.
A. contractual capacity
B. consumerist code
C. moral philosophy
D. social responsibility
E. code of ethics
Codes of ethics are formalized rules and standards that describe what the company expects of
its employees.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
50. Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior
because they:
A. do not limit the opportunity for misconduct.
B. result in expensive litigation.
C. infringe on consumers' rights to be informed.
D. prescribe which activities are acceptable and which are not.
E. are strictly voluntary in nature.
Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior
because they prescribe which activities are acceptable and which are not, and they limit the
opportunity for misconduct by providing punishments for violations of the rules and
standards.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-26
51. A professional code of ethics represents the .

A. unofficial rules of ethics followed by the employees
B. employee perceptions of various ethical issues faced by an organization
C. detailed ethical responses for every possible scenario
D. formalized rules and standards that help employees to act in an ethical way
E. ethical behaviors that an organization expects its customers to follow
A code of ethics establishes which types of behavior are acceptable and which are not. It
limits the opportunity for misconduct by clearly defining violations and establishing
punishment.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
52. Codes of ethics foster ethical behavior by:

A. highlighting the religious implications of behaving in an unethical manner.
B. limiting the opportunity to behave unethically by providing punishments for violations of
the rules and standards.
C. making the employees understand that they should use their own judgment to determine if
an action is ethical.
D. pointing out to the employees that ethical behaviors are subjective and are dependent on
social perceptions.
E. encouraging employees to be more competitive and profit-oriented.
Codes of ethics, policies on ethics, and ethics training programs advance ethical behavior
because they prescribe which activities are acceptable and which are not, and they limit the
opportunity for misconduct by providing punishments for violations of the rules and
standards.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-27
53. A large number of cases result in retaliation against the employee, even though the
government has tried to take steps to protect workers and to encourage reporting of
misconduct.
A. executive
B. civil
C. whistleblowing
D. petty theft
E. federal
The government seeks to reward firms that report misconduct; however, many whistleblowers
still suffer retaliation. Congress has taken steps to close a legislative loophole that resulted in
the dismissal of many whistleblowers.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
54. Identify a key aspect to consider in developing a code of ethics.

A. Solicit input from employees from different departments, functions, and regions.
B. Ensure that specific U.S. laws and regulations or those of specific countries are referenced,
particularly for codes that will be distributed to employees in multiple regions.
C. Ensure that employee group meetings are not carried out on a complete draft version.
D. Make certain that the headings of the code sections are broad and not easily understood by
all sections.
E. Inform employees that the code of ethics has to be very generic and should not take into
account every situation.
One of the key aspects to consider while developing a code of ethics is to solicit input from
employees from different departments, functions, and regions to compile a list of common
questions and answers to include in the code document.
AACSB: Ethics
Bloom's: Understand
2-28
55. According to the National Business Ethics Survey (NBES), is the greatest
determinant of future misconduct.
A. a company's workforce
B. the external environment
C. the universal business overview
D. a company's ethical culture
E. a company's stakeholders
According to the National Business Ethics Survey (NBES), employees in organizations that
have written codes of conduct and ethics training, ethics offices or hotlines, and systems for
reporting are more likely to report misconduct when they observe it. The survey found that a
company's ethical culture is the greatest determinant of future misconduct.
AACSB: Ethics
Bloom's: Understand
56. is the act of an employee exposing an employer's wrongdoing to outsiders.

A. Fraud
B. Whistleblowing
C. Plagiarism
D. Bullying
E. Gatekeeping
Whistleblowing occurs when there is a lack of anonymous reporting mechanisms in a

company and an employee therefore finds it necessary to expose the firm's wrongdoing to the
government or media.
AACSB: Ethics
Bloom's: Remember
Difficulty: 1 Easy
2-29
57. Which of the following is true of the Dodd-Frank Act passed by the U.S. Congress in
2010?
A. It is an act that rewards organizations that follow high standards of business ethics.
B. It punishes business organizations that are found to be involved in unethical practices.
C. It protects the rights of foreign businesses operating in the United States.
D. It provides monetary rewards to those organizations that take action against employees
involved in professional misconduct.
E. It encourages whistleblowers to provide information about corporate misconduct through
monetary rewards.
In 2010, Congress passed the Dodd-Frank Act, which includes a "whistleblower bounty
program." The Securities and Exchange Commission can now award whistleblowers between
10 and 30 percent of monetary sanctions over $1 million.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
58. Which of the following acts includes a whistleblower bounty program?

A. The Clayton Act
B. The Sherman Antitrust Legislation
C. The Celler-Kefauver Act
D. The Hobbs Act
E. The Dodd-Frank Act
In 2010, Congress passed the Dodd-Frank Act, which includes a "whistleblower bounty
program." The Securities and Exchange Commission can now award whistleblowers between
10 and 30 percent of monetary sanctions over $1 million.
AACSB: Ethics
Bloom's: Understand
Difficulty: 1 Easy
2-30
Another random document with
no related content on Scribd:
"What America owed abroad can never be computed; it is enough
that it reached an enormous sum, to refund which, even under
favorable circumstances, would have taken years of effort;
actually forced payment brought the nation to the brink of a
convulsion. Perhaps no people ever faced such an emergency and
paid, without recourse to war. America triumphed through her
inventive and administrative genius. Brought to a white heat
under compression, the industrial system of the Union suddenly
fused into a homogeneous mass. One day, without warning, the
gigantic mechanism operated, and two hemispheres vibrated with
the shock. In March, 1897, the vast consolidation of mines,
foundries, railroads, and steamship companies, centralized at
Pittsburg, began producing steel rails at $18 the ton, and at
a bound America bestrode the world. She had won her great
wager with fate. … The end seems only a question of time.
Europe is doomed not only to buy her raw material abroad, but
to pay the cost of transport. And Europe knew this
instinctively in March, 1897, and nerved herself for
resistance. Her best hope, next to a victorious war, lay in
imitating America, and in organizing a system of
transportation which would open up the East.
"Carnegie achieved the new industrial revolution in March,

1897. Within a twelvemonth the rival nations had emptied
themselves upon the shore of the Yellow Sea. In November
Germany seized Kiao-chau, a month later the Russians occupied
Port Arthur, and the following April the English appropriated
Wei-hai-wei; but the fact to remember is that just 400 miles
inland, due west of Kiao-chau, lies Tszechau, the centre,
according to Richthofen, of the richest coal and iron deposits
in existence. There with the rude methods used by the Chinese,
coal actually sells at 13 cents the ton. Thus it has come to
pass that the problem now being attacked by all the statesmen,
soldiers, scientific men, and engineers of the two eastern
continents is whether Russia, Germany, France, England, and
Japan, combined or separately, can ever bring these resources
on the market in competition with the United States."
B. Adams,
The New Industrial Revolution
(Atlantic Monthly, February, 1901).
UNITED STATES OF AMERICA: A. D. 1897 (January-May).

Arbitration Treaty with Great Britain rejected by the Senate.
See, (in this volume),

VENEZUELA: A. D. 1896-1899.
The correspondence which took place between the governments of

the United States and Great Britain, on the subject of an
arbitration of the Venezuela Boundary dispute, having led to
the revival of a project for the negotiation of a general
treaty of arbitration, which the late American Secretary of
State, Mr. Gresham, had broached to the British government in
the spring of 1895, the terms of such an arrangement were
carefully and fully discussed between Secretary Olney and Lord
Salisbury, during the year 1896, and an agreement was reached
which took form in a solemn compact for the settlement by
arbitration of all matters in difference between the two
countries, signed at Washington on the 11th of January, 1897.
The treaty thus framed was as follows:
"ARTICLE I.
The High Contracting Parties agree to submit to Arbitration in
accordance with the provisions and subject to the limitations
of this Treaty all questions in difference between them which
they may fail to adjust by diplomatic negotiation.
"ARTICLE II.
All pecuniary claims or groups of pecuniary claims which do
not in the aggregate exceed £100,000 in amount, and which do
not involve the determination of territorial claims, shall be
dealt with and decided by an Arbitral Tribunal constituted as
provided in the next following Article. In this Article and in
Article IV the words 'groups of pecuniary claims' mean
pecuniary claims by one or more persons arising out of the
same transactions or involving the same issues of law and
fact.'
"ARTICLE III.
Each of the High Contracting Parties shall nominate one
arbitrator who shall be a jurist of repute and the two
arbitrators so nominated shall within two months of the date
of their nomination select an umpire. In case they shall fail
to do so within the limit of time above mentioned, the umpire
shall be appointed by agreement between the Members for the
time being of the Supreme Court of the United States and the
Members for the time being of the Judicial Committee of the
Privy Council in Great Britain, each nominating body acting by
a majority. In case they shall fail to agree upon an umpire
within three months of the date of an application made to them
in that behalf by the High Contracting Parties or either of
them, the umpire shall be selected in the manner provided for
in Article X. The person so selected shall be the President of
the Tribunal and the award of the majority of the Members
thereof shall be final.
{578}
"ARTICLE IV.
All pecuniary claims or groups of pecuniary claims which shall
exceed £100,000 in amount and all other matters in difference,
in respect of which either of the High Contracting Parties
shall have rights against the other under Treaty or otherwise,
provided that such matters in difference do not involve the
determination of territorial claims, shall be dealt with and
decided by an Arbitral Tribunal, constituted as provided in
the next following Article.
"ARTICLE V.
Any subject of Arbitration described in Article IV shall be
submitted to the Tribunal provided for by Article III, the
award of which Tribunal, if unanimous, shall be final. If not
unanimous either of the High Contracting Parties may within
six months from the date of the award demand a review thereof.
In such case the matter in controversy shall be submitted to
an Arbitral Tribunal consisting of five jurists of repute, no
one of whom shall have been a member of the Tribunal whose
award is to be reviewed and who shall be selected as follows,
viz:—two by each of the High Contracting Parties, and one, to
act as umpire, by the four thus nominated and to be chosen
within three months after the date of their nomination. In
case they shall fail to choose an umpire within the limit of
time above-mentioned, the umpire shall be appointed by
agreement between the Nominating Bodies designated in Article
III acting in the manner therein provided. In case they shall
fail to agree upon an umpire within three months of the date
of an application made to them in that behalf by the High
Contracting Parties or either of them, the umpire shall be
selected in the manner provided for in Article X. The person
so selected shall be the President of the Tribunal and the
award of the majority of the Members thereof shall be final.
"ARTICLE VI.
Any controversy which shall involve the determination of
territorial claims shall be submitted to a Tribunal composed
of six members, three of whom (subject to the provisions of
Article VIII) shall be Judges of the Supreme Court of the
United States or Justices of the Circuit Courts to be
nominated by the President of the United States, and the other
three of whom (subject to the provisions of Article VIII)
shall be Judges of the British Supreme Court of Judicature or
Members of the Judicial Committee of the Privy Council to be
nominated by Her Britannic Majesty, whose award by a majority
of not less than five to one shall be final. In case of an
award made by less than the prescribed majority, the award
shall also be final unless either Power shall, within three
months after the award has been reported, protest that the
same is erroneous, in which case the award shall be of no
validity. In the event of an award made by less than the
prescribed majority and protested as above provided, or if the
members of the Arbitral Tribunal shall be equally divided,
there shall be no recourse to hostile measures of any
description until the mediation of one or more friendly Powers
has been invited by one or both of the High Contracting
Parties.
"ARTICLE VII.
Objections to the jurisdiction of an Arbitral Tribunal
constituted under this Treaty shall not be taken except as
provided in this Article. If before the close of the hearing
upon a claim submitted to an Arbitral Tribunal constituted
under Article III or Article V either of the High Contracting
Parties shall move such Tribunal to decide, and thereupon it
shall decide that the determination of such claim necessarily
involves the decision of a disputed question of principle of
grave general importance affecting the national rights of such
party as distinguished from the private rights whereof it is
merely the international representative, the jurisdiction of
such Arbitral Tribunal over such claim shall cease and the
same shall be dealt with by arbitration under Article VI.
"ARTICLE VIII.
In cases where the question involved is one which concerns a
particular State or Territory of the United States, it shall
be open to the President of the United States to appoint a
judicial officer of such State or Territory to be one of the
Arbitrators under Article III or Article V or Article VI. In
like manner in cases where the question involved is one which
concerns a British Colony or possession, it shall be open to
Her Britannic Majesty to appoint a judicial officer of such
Colony or possession to be one of the Arbitrators under
Article III or Article V or Article VI.
"ARTICLE IX.
Territorial claims in this Treaty shall include all claims to
territory and all claims involving questions of servitudes,
rights of navigation and of access, fisheries and all rights
and interests necessary to the control and enjoyment of the
territory claimed by either of the High Contracting Parties.
"ARTICLE X.
If in any case the nominating bodies designated in Articles
III and V shall fail to agree upon an Umpire in accordance
with the provisions of the said Articles, the Umpire shall be
appointed by His Majesty the King of Sweden and Norway. Either
of the High Contracting Parties, however, may at any time give
notice to the other that, by reason of material changes in
conditions as existing at the date of this Treaty, it is of
opinion that a substitute for His Majesty should be chosen
either for all cases to arise under the Treaty or for a
particular specified case already arisen, and thereupon the
High Contracting Parties shall at once proceed to agree upon
such substitute to act either in all cases to arise under the
Treaty or in the particular case specified as may be indicated
by said notice; provided, however, that such notice shall have
no effect upon an Arbitration already begun by the constitution
of an Arbitral Tribunal under Article III. The High
Contracting Parties shall also at once proceed to nominate a
substitute for His Majesty in the event that His Majesty shall
at any time notify them of his desire to be relieved from the
functions graciously accepted by him under this Treaty either
for all cases to arise thereunder or for any particular
specified case already arisen.
"ARTICLE XI.
In case of the death, absence or incapacity to serve of any
Arbitrator or Umpire, or in the event of any Arbitrator or
Umpire omitting or declining or ceasing to act as such,
another Arbitrator or Umpire shall be forthwith appointed in
his place and stead in the manner provided for with regard to
the original appointment.
{579}
"ARTICLE XII.
Each Government shall pay its own agent and provide for the
proper remuneration of the counsel employed by it and of the
Arbitrators appointed by it and for the expense of preparing
and submitting its case to the Arbitral Tribunal. All other
expenses connected with any Arbitration shall be defrayed by
the two Governments in equal moieties. Provided, however,
that, if in any case the essential matter of difference
submitted to arbitration is the right of one of the High
Contracting Parties to receive disavowals of or apologies for
acts or defaults of the other not resulting in substantial
pecuniary injury, the Arbitral Tribunal finally disposing of
the said matter shall direct whether any of the expenses of
the successful party shall be borne by the unsuccessful party,
and if so to what extent.
"ARTICLE XIII.
The time and place of meeting of an Arbitral Tribunal and all
arrangements for the hearing and all questions of procedure
shall be decided by the Tribunal itself. Each Arbitral
Tribunal shall keep a correct record of its proceedings and
may appoint and employ all necessary officers and agents. The
decision of the Tribunal shall, if possible, be made within
three months from the close of the arguments on both sides. It
shall be made in writing and dated and shall be signed by the
Arbitrators who may assent to it. The decision shall be in
duplicate, one copy whereof shall be delivered to each of the
High Contracting Parties through their respective agents.
"ARTICLE XIV.
This Treaty shall remain in force for five years from the date
at which it shall come into operation, and further until the
expiration of twelve months after either of the High
Contracting Parties shall have given notice to the other of
its wish to terminate the same.
"ARTICLE XV.
The present Treaty shall be duly ratified by the President of
the United States of America, by and with the advice and
consent of the Senate thereof, and by Her Britannic Majesty;
and the mutual exchange of ratifications shall take place in
Washington or in London within six months of the date hereof
or earlier if possible."
United States, 54th Congress, 2d Session,

Senate Document Number 63.
Public feeling in both countries gave joyful welcome to this

nobly conceived treaty when it was announced. All that was
best in English sentiment and American sentiment had been
shuddering at the thought of possible war between the kindred
peoples, and thanked God for what promised some certitude that
no dispute would be pushed to that barbarous appeal. Only the
mean thought and temper of either country was provoked to
opposition; but, unhappily, the meaner temper and the narrower
and more ignorant opinion on one side of the sea had been
getting so strong a representation in the United States Senate
as to prove capable of much mischief there, on this and other
matters of most serious public concern. When the great
covenant of peace went to that body for approval, there were
senators who found it offensive to them because it came from
the hands of President Cleveland and Secretary Olney; and
there were other senators whose dignity was hurt by the eager
impatience with which the public voice cried out for their
ratifying vote; and still others there were who looked with
official jealousy at the project of an arbitral tribunal which
might sometimes take something from senatorial functions in
foreign affairs. And the combination of pitiful motives had
strength enough to baffle the high hopes and defeat the will
of the American people.
Of the public feeling thus outraged, the following is one
expression of the time, among many which it would be possible
to quote:
Many people "are represented by influential papers like the

St. Paul 'Pioneer Press' and the Minneapolis 'Journal,' the
latter declaring that it is humiliating to think that, widely
as the treaty is favored throughout the country, a few
ill-natured men in the Senate have the power to delay
ratification. In the Central West the feeling is generally
strong for arbitration, if we may judge from the Chicago
'Times-Herald,' the St. Louis 'Republic,' the Indianapolis
'Journal,' and the Cleveland 'Leader.' In the South there are
such cheering reports as this from the Memphis 'Scimetar'; 'If
the treaty now under consideration in the Senate Committee on
Foreign Relations should fail of ratification, public opinion
in this country would demand that the incoming Administration
provide another embodying the same vital principle.' In the
East the sentiment in favor of immediate ratification of the
original draft has been almost universal, the only two
journals of note differing from this being the New York 'Sun'
and the Washington 'Post.' The trend of opinion is shown in
the adoption by the Massachusetts House of Representatives of
an endorsement by a vote of 141 to 11. An important meeting
took place last week in Washington in favor of ratification.
The speakers were ex-Secretary of State Foster, Mr. G. G.
Hubbard, Professor B. L. Whitman, ex-Senator J. B. Henderson,
ex-Governor Stanard, and Justice Brewer, of the Supreme Court.
The last named said; 'I do not believe in saying to the
gentlemen charged with the duty of considering carefully that
treaty, that "you must vote for it." There is something in my
own nature which, when anybody says to me "you must," causes
something to run up my spinal column which says "I won't." It
is the Senate's duty to consider that treaty carefully, and
when I say that, I say it is no trespass upon their rights for
American citizens to express their views of that treaty. What are
the errors and losses incidental to arbitration compared to
the horrors of war? What are a few million dollars of wrongful
damages in comparison to the sacrifice of thousands of human
lives?'"
The Outlook, February 6, 1897.
"This treaty was greeted with widespread favor in the press,

but was antagonized at once in the Senate by the jingo element
and by the personal adversaries of the administration. The
committee on foreign relations reported the draft favorably,
but with certain amendments, on February 1. The ensuing debate
soon revealed that a vote on ratification could not be
obtained before March 4, and the whole matter was dropped. At
the opening of the new Congress the Senate Committee again
considered the treaty and reported it, with amendments, on
March 18. During two weeks' discussion the Senate adopted the
committee's amendments and also others, with the result that
the draft was radically transformed.
{580}
Instead of the general reference of all disputes to the
tribunals, it was provided that any difference 'which, in the
judgment of either power, materially affects its honor or its
domestic or foreign policy,' should be submitted to
arbitration only by special agreement; that no question should
be submitted save with the consent of the Senate in its
treaty-making capacity; and that no claim of a British subject
against a state or territory of the United States should be
submitted under any circumstances. The first of these changes
was due mainly to the objection that without it the Monroe
Doctrine might be subjected to arbitration; the second to the
sensitiveness of senators as to their constitutional functions
in foreign relations; and the third to a desire to protect
states against claims on their defaulted bonds. Other changes
modified materially the method of appointing the arbitrators
for the United States, and struck out entirely the designation
of the King of Sweden as umpire. Even with these amendments,
the opposition to the treaty was not overcome; and the final
vote on ratification, taken May 5, resulted in its rejection,
the vote standing 43 to 26, less than two-thirds in the
affirmative. Thirty Republicans and 13 Democrats voted for the
treaty; 8 Republicans, 12 Democrats and 6 Populists against
it."
Political Science Quarterly,

June, 1897.
UNITED STATES OF AMERICA: A. D. 1897 (March).

Inauguration of President McKinley.
Leading topics of the inaugural address.
The President's Cabinet.
The inauguration of President McKinley was performed with the

customary ceremonies on the 4th of March. In his inaugural
address, the new President laid somewhat less emphasis than
might have been expected on the need of measures for reforming
the monetary system of the country, but strongly urged that
instant steps be taken to increase the revenues of the
government by a return to higher tariff charges. "With
adequate revenue secured," he argued, "but not until then, we
can enter upon such changes in our fiscal laws as will, while
insuring safety and volume to our money, no longer impose upon
the government the necessity of maintaining so large a gold
reserve, with its attendant and inevitable temptations to
speculation. Most of our financial laws are the outgrowth of
experience and trial, and should not be amended without
investigation and demonstration of the wisdom of the proposed
changes. We must be both 'sure we are right' and 'make haste
slowly.' …
"The question of international bimetallism will have early and

earnest attention. It will be my constant endeavor to secure
it by cooperation with the other great commercial powers of
the world. Until that condition is realized, when the parity
between our gold and silver money springs from and is
supported by the relative value of the two metals, the value
of the silver already coined, and of that which may hereafter
be coined, must be kept constantly at par with gold by every
resource at our command. The credit of the government, the
integrity of its currency, and the inviolability of its
obligations must be preserved. This was the commanding verdict
of the people, and it will not be unheeded.
"Economy is demanded in every branch of the government at all

times, but especially in periods like the present of
depression in business and distress among the people. The
severest economy must be observed in all public expenditures,
and extravagance stopped wherever it is found, and prevented
wherever in the future it may be developed. If the revenues
are to remain as now, the only relief that can come must be
from decreased expenditures. But the present must not become
the permanent condition of the government. It has been our
uniform practice to retire, not increase, our outstanding
obligations; and this policy must again be resumed and
vigorously enforced. Our revenues should always be large
enough to meet with ease and promptness not only our current
needs and the principal and interest of the public debt, but
to make proper and liberal provision for that most deserving
body of public creditors, the soldiers and sailors and the
widows and orphans who are the pensioners of the United
States. …
"A deficiency is inevitable so long as the expenditures of the

government exceed its receipts. It can only be met by loans or
an increased revenue. While a large annual surplus of revenue
may invite waste and extravagance, inadequate revenue creates
distrust and undermines public and private credit. Neither
should be encouraged. Between more loans and more revenue
there ought to be but one opinion. We should have more
revenue, and that without delay, hindrance, or postponement. A
surplus in the treasury created by loans is not a permanent or
safe reliance. It will suffice while it lasts, but it cannot
last long while the outlays of the government are greater than
its receipts, as has been the case during the last two years.
… The best way for the government to maintain its credit is to
pay as it goes—not by resorting to loans, but by keeping out
of debt—through an adequate income secured by a system of
taxation, external, or internal, or both. It is the settled
policy of the government, pursued from the beginning and
practiced by all parties and administrations, to raise the
bulk of our revenue from taxes upon foreign productions
entering the United States for sale and consumption, and
avoiding, for the most part, every form of direct taxation
except in time of war.
"The country is clearly opposed to any needless additions to

the subjects of internal taxation, and is committed by its
latest popular utterance to the system of tariff taxation.
There can be no misunderstanding either about the principle
upon which this tariff taxation shall be levied. Nothing has
ever been made plainer at a general election than that the
controlling principle in the raising of revenue from duties on
imports is zealous care for American interests and American
labor. The people have declared that such legislation should
be had as will give ample protection and encouragement to the
industries and the development of our country. … The paramount
duty of congress is to stop deficiencies by the restoration of
that protective legislation which has always been the firmest
prop of the treasury. The passage of such a law or laws would
strengthen the credit of the government both at home and
abroad, and go far toward stopping the drain upon the gold
reserve held for the redemption of our currency, which has
been heavy and well-nigh constant for several years. In the
revision of the tariff, especial attention should be given to
the re-enactment and extension of the reciprocity principle of
the law of 1890, under which so great a stimulus was given to
our foreign trade in new and advantageous markets for our
surplus agricultural and manufactured products."
{581}
Without effect, the incoming President urged the ratification

of the treaty of arbitration with Great Britain, negotiated by
his predecessor and still pending in the Senate. In concluding
his address he announced his intention to convene Congress in
extra session, saying: "The condition of the public treasury
demands the immediate consideration of congress. It alone has
the power to provide revenue for the government. Not to
convene it under such circumstances, I can view in no other
sense than the neglect of a plain duty."
On the day following his inauguration, the President sent to

the Senate the following nominations for his Cabinet, which
were confirmed:
Secretary of State, John Sherman of Ohio;

Secretary of the Treasury, Lyman J. Gage of Illinois;
Secretary of War, Russel A. Alger of Michigan;
Attorney-General, Joseph McKenna of California;
Postmaster-General, James A. Gary of Maryland;
Secretary of the Navy, John D. Long of Massachusetts;
Secretary of the Interior, Cornelius N. Bliss of New York;
Secretary of Agriculture, James Wilson of Iowa.
UNITED STATES OF AMERICA: A. D. 1897 (March-July).

Passage of the Dingley Tariff Act.
Carrying out an intention announced in his Inaugural Address,

President McKinley called Congress together in extra session
on the 15th of March, asking for immediate action to increase
the revenue of the government by increased duties, "so levied
upon foreign products as to preserve the home market, so far
as possible, to our own producers." In his Inaugural Address
the President had expressed the understanding of his party as
to the chief meaning of the late election, by saying that "the
country is … committed by its latest popular utterance to the
system of tariff taxation. … The people have declared that
such legislation should be had as will give ample protection
and encouragement to the industries and development of our
country. … The paramount duty of Congress is to stop
deficiencies by the restoration of that protective legislation
which has always been the firmest prop of the treasury." To
the majority in both Houses of Congress these views were
entirely acceptable, and they were acted upon at once. The
Ways and Means Committee of the House of Representatives in
the previous Congress had already prepared a comprehensive new
tariff bill, which it passed on to its successor. This
ready-made bill was reported to the House on the first day of
the session, by Mr. Dingley, chairman of the newly appointed
committee, as he had been of the one before it. Debate on the
measure began a week later, and was controlled by a fixed
programme, which required it to be ended on the 31st of March.
The bill was then passed, by a vote of 205 against 121. Of the
action of the Senate upon it, and of the main features of the
bill as it was finally shaped and became law, the following is
a succinct account:
"The bill, referred at once to the Senate Committee on

Finance, was reported after a month, on May 8, with important
amendments. There was an attempt to impose some purely revenue
duties, and, as to the protective duties, the tendency was
towards lower rates than in the House bill, though on certain
articles, such as wools of low grade, hides, and others (of
which more will be said presently), the drift was the other
way. The Senate, however, paid much less respect than the
House to the recommendations of the committee in charge. In
the course of two months, from May 4 to July 7, it went over
the tariff bill item by item, amending without restraint,
often in a perfunctory manner, and not infrequently with the
outcome settled by the accident of attendance on the
particular day; on the whole, with a tendency to retain the
higher rates of the House bill. As passed finally by the
Senate on July 7, the bill, though it contained some 872
amendments, followed the plan of the House Committee rather
than that of the Senate Committee. As usual, it went to a
Conference Committee. In the various compromises and
adjustments in the Senate and in the Conference Committee
there was little sign of the deliberate plan and method which
the House had shown, and the details of the act were settled
in no less haphazard fashion than has been the case with other
tariff measures. As patched up by the Conference Committee,
the bill was promptly passed by both branches of Congress, and
became law on July 24. In what manner these political
conditions affected the character of the act will appear from
a consideration of the more important specific changes.
"First and foremost was the reimposition of the duties on

wool. As the repeal of these duties had been the one important
change made by the act of 1894, so their restoration was the
salient feature in the act of 1897. … Clothing wool was
subjected once more to a duty of 11 cents a pound, combing
wool to one of 12 cents. On carpet wool there were new graded
duties, heavier than any ever before levied. If its value was
12 cents a pound or less the duty was 4 cents; if over 12
cents, the duty was 7 cents. … The duties on carpet wool, as
has already been noted, were made higher than ever before. In
the House the rates of the act of 1890 had been retained; but
in the Senate new and higher rates were inserted. … They were
demanded by the Senators from some States in the Far West,
especially from Idaho and Montana. … They [the Senators in
question] needed to be placated and they succeeded in getting
higher duties on the cheap carpet wools, on the plea of
encouragement for the comparatively coarse clothing wool of
their ranches. … The same complications that led to the high
duty on carpet wool brought about a duty on hides. This rawest
of raw materials had been on the free list for just a quarter
of a century, since 1872, when the duty of the war days had
been repealed. … But here, again, the Senators from the
ranching States were able to dictate terms. … In the Senate a
duty of 20 per cent. was tacked on. The rate was reduced to 15
per cent. in the Conference Committee, and so remains in the
act. The restored duties on wool necessarily brought in their
train the old system of high compensating duties on woollens.
… In the main, the result was a restoration of the rates of
the act of 1890. There was some upward movement almost all
along the line; and the ad valorem duty alone, on the classes
of fabrics which are most largely imported, crept up to 55 per
cent. …
{582}
"On cotton goods the general tendency was to impose duties

lower than those of 1890. This was indicated by the drag-net
rate, on manufactures of cotton not otherwise provided for,
which had been 50 per cent. in 1890, and was 45 per cent. in
1897. On two large classes of textile goods new and distinctly
higher duties were imposed,—on silks and linens. … The mode of
gradation was to levy the duties according to the amount of
pure silk contained in the goods. The duties were fixed by the
pound, being lowest all goods containing a small proportion of
pure silk, and rising as that proportion became larger; with
the proviso that in no case should the duty be less than 50
per cent. … Thus, the duty on certain kinds of silks was $1.30
cents per pound, if they contained 45 per cent in weight of
silk; but advanced suddenly to $2.25, if they contained more
than 45 per cent. … On linens another step of the same kind
was taken, specific duties being substituted here also for
ad-valorem. … Linens were graded somewhat as cottons had been
graded since 1861, according to the fineness of the goods as
indicated by the number of threads to the square inch. If the
number of threads was 60 or less per square inch, the duty was
1¾ cents a square yard; if the threads were between 60 and
120, the duty was 2¾ cents; and so on,—plus 30 per cent.
ad-valorem duty in all cases. But finer linen goods, unless
otherwise specially provided for, were treated leniently. If
the weight was small (less than 4½ ounces per yard), the duty
was but 35 per cent. On the other hand, linen laces, or
articles trimmed with lace or embroidery, were dutiable at 60
percent.,—an advance at 10 per cent. over the rate of 1890. …
It was inevitable, under the political conditions of the
session, that in this schedule something should again be
attempted for the farmer; and, accordingly, we find a
substantial duty on flax. The rate of the act of 1890 was
restored,—3 cents a pound on prepared flax, in place of the
rate of 1½ cents imposed by the act of 1894. …
"On chinaware the rates of 1890 were restored. The duty on the
finer qualities which are chiefly imported had been lowered to
35 per cent. in 1894, and was now once more put at 60 per
cent. On glassware, also, the general ad-valorem rate, which
had been reduced to 35 per cent. in 1894, was again fixed at
45 per cent., as in 1890. Similarly the specific duties on the
cheaper grades of window-glass and plate-glass, which had been
lowered in 1894, were raised to the figures of 1890. … The metal
schedules in the act of 1897 showed in the main a striking
contrast with the textile schedules. Important advances of
duty were made on many textiles, and in some cases rates went
considerably higher even than those of 1890. But on most
metals, and especially on iron and steel, duties were left
very much as they had been in 1894. … On steel rails there was
even a slight reduction from the rate of 1894—$6.72 per ton
instead of $7.84. On coal there was a compromise rate. The
duty had been 75 cents a ton in 1890, and 40 cents in 1894; it
was now fixed at 67 cents. On the other hand, as to certain
manufactures of iron and steel farther advanced beyond the
crude stage, there was a return to rates very similar to those
of 1890. Thus, on pocket cutlery, razors, guns, we find once
more the system of combined ad-valorem and specific duties,
graded according to the value of the article. … Copper
remained on the free list, where it had been put in 1894. …
For good or ill the copper duty had worked out all its effects
years before. On the other hand, the duties on lead and on
lead ore went up to the point at which they stood in 1890.
Here we have once more the signs of concession to the silver
Republicans of the far West. … The duty on tin plate, a bone
of contention under the act of 1890, was disposed of, with
little debate, by the imposition of a comparatively moderate
duty. …
"A part of the act which aroused much public attention and
which had an important bearing on its financial yield was the
sugar schedule—the duties on sugar, raw and refined. … The act
of 1890 had admitted raw sugar free, while that of 1894 had
imposed a duty of 40 per cent. ad valorem. … The price of raw
sugar had maintained its downward tendency; and the duty of 40
per cent. had been equivalent in 1896 to less than one cent a
pound. In the act of 1897 the duty was made specific, and was
practically doubled. Beginning with a rate of one cent a pound
on sugar tested to contain 75 per cent., it advanced by stages
until on sugar testing 95 per cent. (the usual content of
commercial raw sugar) it reached 1.65 cents per pound. The
higher rate thus imposed was certain to yield a considerable
increase of revenue. Much was said also of the protection now
afforded to the beet sugar industry of the West. That
industry, however, was still of small dimensions and uncertain
future. … On refined sugar, the duty was made 1.95 cents per
pound, which, as compared with raw sugar testing 100 per
cent., left a protection for the domestic refiner,—i. e., for
the Sugar 'Trust,'—of 1/8 of one cent a pound. Some intricate
calculation would be necessary to make out whether this
'differential' for the refining interest was more or less than
in the act of 1894; but, having regard to the effect of the
substitution of specific for ad-valorem duties, the Trust was
no more favored by the act of 1897 than by its predecessor,
and even somewhat less favored. The changes which this part of
the tariff act underwent in the two Houses are not without
significance." In the bill passed by the House. "the so-called
differential, or protection to the refiners, was one-eighth of
a cent per pound. In the Senate there was an attempt at
serious amendment. The influence of the Sugar Trust in the
Senate had long been great. How secured, whether through party
contributions, entangling alliances, or coarse bribery, the
public could not know; but certainly great, as the course of
legislation in that body demonstrated." The Senate attempted

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True / False Questions

1. All business decisions cannot be judged as right or wrong, ethical or unethical.

2. An ethical issue is an identifiable problem, situation, or opportunity that requires a person

An ethical issue is an identifiable problem, situation, or opportunity that requires a person to

3. Ethical decisions in an organization are influenced by individual moral standards.

4. The concept of social responsibility is universally accepted.

Multiple Choice Questions

7. Which of the following statements is true?

9. Which of the following statements is true?

Congress passed the Sarbanes-Oxley Act in response to several prominent accounting

12. The Sarbanes-Oxley Act was passed to:

15. Which of the following statements is true of ethics?

19. Abusive behavior is difficult to assess and manage because of:

20. Which of the following acts amounts to bullying?

21. Within the concept of abusive behavior, should be a consideration.

Within the concept of abusive behavior, intent should be a consideration.

24. Identify a true statement about ethics and code of conduct.

25. Which of the following has developed a Corruption Perceptions Index?

Transparency International has developed a Corruption Perceptions Index.

26. Which of the following is true of bullying?

27. in particular have the opportunity to influence employees' actions.

28. Open discussion of ethical issues:

31. Which of the following is true of bullying?

33. Which of the following is an example of a conflict of interest?

Truthfulness about product quality and effectiveness is important to consumers. Many

An important aspect of communications regarding an ethical issue is product labeling such as

A manager attempting to take credit for a subordinate's ideas is engaging in a type of

47. Which of the following is true of professional codes of ethics?

48. Which of the following is true of ethics?

51. A professional code of ethics represents the .

52. Codes of ethics foster ethical behavior by:

54. Identify a key aspect to consider in developing a code of ethics.

56. is the act of an employee exposing an employer's wrongdoing to outsiders.

Whistleblowing occurs when there is a lack of anonymous reporting mechanisms in a

58. Which of the following acts includes a whistleblower bounty program?

"Carnegie achieved the new industrial revolution in March,

UNITED STATES OF AMERICA: A. D. 1897 (January-May).

See, (in this volume),

The correspondence which took place between the governments of

United States, 54th Congress, 2d Session,

Public feeling in both countries gave joyful welcome to this

Many people "are represented by influential papers like the

"This treaty was greeted with widespread favor in the press,

Political Science Quarterly,

UNITED STATES OF AMERICA: A. D. 1897 (March).

The inauguration of President McKinley was performed with the

"The question of international bimetallism will have early and

"Economy is demanded in every branch of the government at all

"A deficiency is inevitable so long as the expenditures of the

"The country is clearly opposed to any needless additions to

Without effect, the incoming President urged the ratification

On the day following his inauguration, the President sent to

Secretary of State, John Sherman of Ohio;

UNITED STATES OF AMERICA: A. D. 1897 (March-July).