Chapter 7: Common Unethical Practices Of Business Establishments

Question 1

What are the two common unethical practices of business establishments?

Answer 1

1. Misrepresentation
2. Over-Persuasion

Question 2

Direct misrepresentation is committed by business firms such as… (7)

Answer 2

1. Deceptive packaging
2. Misbranding or mislabeling
3. False and misleading advertising
4. Adulteration
5. Weight understatement
6. Measurement understatement
7. Quantity understatement

Question 3

Indirect misrepresentation is done by business firms such as… (3)

Answer 3

1. Caveat emptor
2. Deliberate withholding of information
3. Passive deception

Question 4

This is the active misrepresentation about products or customers.

Answer 4

Direct misrepresentation

Question 5

This is the practice of making false statements on the product label or making its container similar to a well-known product for the purpose of deceiving the customer as to the quality or quantity of product being sold.

Answer 5

Misbranding or mislabeling

Question 6

An example of this is when containers are only filled with products up to its 85% or 95% capacity.

Answer 6

Deceptive packaging

Question 7

It is the principal means by which people are informed about availability, nature, and uses of old and new products.

Answer 7

Advertising

Question 8

If advertising does not provide a useful service anymore to customers.

Answer 8

False or misleading advertising

Question 9

The unethical practices of debating oure or genuine commodity by initiating or counterfeiting it.

Answer 9

Adulteration

Question 10

Where the measuring stick or standard is shorter than the real length or smaller in volume than the standard.

Answer 10

Measurement understatement or Short measurement

Question 11

Where the mechanism of the weighing scale is tampered with or something is unobstrusively attached to it.

Answer 11

Weight understatement or Short weighing

Question 12

An example of this unethical business practice is an advertisement using fictitious or obsolete testimonials.

Answer 12

False or Misleading advertising

Question 13

This unethical business practice is applied when the products are being sold in a shape that would make counting them inconvenient or difficult.

Answer 13

Quantity understatement or Short numbering

Question 14

This happens when companies omit adverse or unfavorable information about the product or service.

Answer 14

Indirect misrepresentation

Question 15

“Let the buyer beware”

Answer 15

Caveat emptor

Question 16

As a witness, the seller’s obligation is to “_ _ _ _ _ _ _ _”

Answer 16

“Tell the truth and nothing but the truth”

Question 17

This is where one of the parties does not exactly know what he is giving away or receiving in return.

Answer 17

Deliberate withholding of information

Question 18

This is a form of passive deception because businessmen are unable to provide customers with complete information for creating fair decisions.

Answer 18

Business ignorance

Question 19

This is the process of appealing to the emotions of a prospective customer and urging him to buy an item of merchandise he needs.

Answer 19

Over-persuasion

Question 20

A legitimate and necessary process in the selling of goods if it is done in the interest of the buyer.

Answer 20

Persuasion

Question 21

A common instance of this unethical process is when sellers urge customers to satisfy low-priority needs for merchandise.

Answer 21

Over-persuasion

Question 22

This applies when sellers generate profit by taking advantage of the buyer’s lack of information.

Answer 22

Caveat emptor

Question 23

Under this concept, sellers are not obligated to reveal any defects in the product or service he is selling, and the determination of such defects is a responsibility of the customer.

Answer 23

Caveat emptor

Question 24

An example of this unethical business practice is playing upon intense emotional agitation to convince a person to buy.

Answer 24

Over-persuasion

Question 25

This is an unethical practice of the Board of Directors where they help themselves with the earnings that otherwise would go to other stockholders.

Answer 25

Plain graft

Question 26

This unethical practice of directors involves a person who holds directorial positions in two or more corporations that do business with each other, involving conflict of interest and results in disloyal selling.

Answer 26

Interlocking directorship

Question 27

An insider trading is considered ___ if directors purchase or sell shares, and such transactions are disclosed.

Answer 27

Legal insider trading

Question 28

This is any information that could substantially impact an investor's decision to buy or sell the security that has not been made available to the public.

Answer 28

Material non-public information

Question 29

Director's ___ in board meetings could result in betrayal of trust of the parties who elected him/her to the position.

Answer 29

Non-attendance

Question 30

This unethical director behavior involves trading in public company's stock by someone who has non-public material information about that stock for any reason.

Answer 30

Insider trading

Question 31

What are the four unethical practices of the Board of Directors?

Answer 31

1. Plain graft 2. Interlocking directorship 3. Negligence of duty 4. Insider trading

Question 32

Insider trading is considered ___ id the material information is still non-public.

Answer 32

Illegal

Question 33

This involves tipping others when you have any sort of material non-public information.

Answer 33

Illegal insider trading

Question 34

What are some unethical practices of executive officers and lower level managers?

Answer 34

1. Claiming a vacation trip to be a business trip 2. Having employees do work unrelated to the business 3. Loose or ineffective controls 4. Unfair labor practices 5. Making false claims about losses to free themselves from paying the compensation and benefits provided by law 6. Making employees signs documents showing that they receive filly what they are entitled to under the law when in fact they are only receiving a fraction of what they are supposed to get 7. Sexual harrasment

Question 35

Sexual harassment of any person having authority, influence, or moral ascendancy over another involves __, __, or __ sexual favor from the other, regardless of whether these three is accepted or not by the object. (DRR)

Answer 35

Demand, request, requirement for submission

Question 36

This arises when an employee who is duty bound to protect and promote the interest of his employer violates this obligation by getting himself into a situation where his decision or actuation is influenced by what he can personally gain rather than what his employer may gain.

Answer 36

Conflict of interest

Question 37

These are applied by employers who claim non-existent losses so they can be exempted from paying the minimum wage and emergency cost-of-living allowances required by law.

Answer 37

Making false claims about losses to free themselves from paying the compensation and benefits provided by law

Question 38

An example of this is to contract out services or functions being performed by union members when such will interfere with, restrain, or coerce employees in the exercise of their rights to self-organization.

Answer 38

Unfair labor practices

Question 39

A type of unethical practice not only limited to business transactions with outside parties.

Answer 39

Dishonesty

Question 40

What are some unethical practices of employees? (2)

Answer 40

1. Conflict of interest 2. Dishonesty

Question 41

This happens when the president or vice president reports his personal vacation as a business trip to receive reimbursement.

Answer 41

Claiming a vacation trip to be a business trip