Business Ethics Exam 1

When do ethical decisions occur?

When accepted rules no longer serve and decision makers must weigh values and reach a judgment

oversight

a system of checks and balances to minimize opportunities for misconduct

interlocking directorate

concept of board members being linked to more than one company

duplicity

consumer duping a store

primary stakeholders

continued association is absolutely necessary for firm's survival

commission lying

creating a false perception with words that deceive the receiver

secondary stakeholders

don't engage in transactions with the firm, aren't essential to its survival

What are the four levels of CSR?

economic, legal, ethical, philanthropic

collusion

employee helps a consumer commit fraud

Ethical culture influences which three sectors of loyalty and trust?

employee, investor, customer

What are examples of primary stakeholders?

employees, customers, investors, governments, and communities

Define values

enduring beliefs and ideals that are socially enforced

puffery

exaggerated advertising claims, blustering, boasting

Instrumental theory

examines stakeholder relationships and describes outcomes for particular behaviors

True of sale: most decisions in business ethics are made by one individual

false

True or false: CSR means maximizing the visibility of social involvement

false

True or false: It is legal to discharge an individual as long as you give a reason

false

True or false: Stakeholders don't care if board of directors is transparent

false

True or false: The financial sector has fully regained stakeholder trust

false

True or false: a reputation is easy to quantify

false

True or false: business ethics focuses mostly on personal ethical issues

false

True or false: the most significant influence on ethical behavior is the opportunity to engage in unethical behavior

false

True or false: the trend is away form cultural or ethically based initiatives to legal initiatives in organizations

false

True or false: Fraud occurs when a false impression exists, which conceals facts

false; must be purposeful

Business can be considered a game people play. Why or why not?

false; people are not economically self sufficient and cannot withdraw from the "game" of business

Descriptive theory

focuses on actual behavior, addressing decision and strategies in stakeholder relationships

What is corporate governance?

formal system of accountability and control of ethical and socially responsible behavior by accountability, oversight, and control

accountability

how closely workplace decisions align with a firm's strategic direction

equality

how wealth or income is distributed

What are three examples of principles?

human rights, freedom of speech, justice

conflict of interest

individual must choose to advance his or her personal interests, or the organization

What is important in determining abuse?

intent

dishonesty

lack of integrity, incomplete disclosure, unwillingness to tell the truth

Board of directors rarely _______ but instead __________ ___________ ________

manage; monitor executive decisions

CI includes the collection and analysis of

markets, technology, customers, competitors, social, economic, and political trends

What is the goal of a shareholder model?

maximizing wealth for investors and owners

What are examples of secondary stakeholders?

media, trade associations, special interest groups

What is the leading form of misconduct?

misuse of company resources, mostly time theft

What are the three approaches to the stakeholder theory?

normative, descriptive, instrumental

reputation

one of an organization's greatest intangible assets with tangible value

active bribery

person who promises or gives the bribe commits the offense

passive bribery

person who receives the bribe commits the offense

guile

person who uses tricks to obtain an unfair advantage ex) lying to obtain discounts

Define morals

personal philosophies about what is right or wrong

Morals are ______ and ________

personal; singular

Normative theory

principles and values identify ethical guidelines that dictate how to treat stakeholders

Affirmative Action Programs

recruit, hire, train and promote qualified individuals from groups that have traditionally been discriminated against

What are four social responsibility issues?

social, consumer protection, sustainability, corporate governance

Define principles

specific and pervasive boundaries for behavior that should not be violated

What are three examples of values?

teamwork, trust, integrity

literally false

tests prove (establishment claims) and bald assertions (non establishment claims)

Honesty issues arise when people think _________

that normal rules do not apply to businesses

What is corporate citizenship?

the extent to which businesses strategically meed economic, legal, ethical, and philanthropic needs

control

the process of auditing and improving organizational decisions and actions

A dual relationship becomes unethical when...

the relationship causes a conflict of interest or impairment of professional judgment

Name four collaborative efforts to establish ethical behavior

EU, NAFTA, MERCOSUR, WTO

True or false: The relationship between companies and their stakeholders is a one-way street

False

True or false: There are universally accepted approaches for resolving issues

False

True or false: investments in business ethics do not support the bottom line

False

What are the six steps to implementing a stakeholder perspective?

1) assessing the corporate culture 2) identifying stakeholder groups 3) identifying stakeholder issues 4) assessing CSR 5) identifying resources and determining urgency 6) gaining stakeholder feedback

What were the results of the financial crisis?

1) decisions became more scrutinized 2) greater accountability from boards

What does a stakeholder framework achieve?

1) helps identify internal and external stakeholders 2) helps monitor and resound to needs values, and expectations of stakeholders

Three types of lies

1) joking without malice 2) commission lying 3) omission lying

What are three issues of executive compensation?

1) many boards spend more time discussing compensation than ensuring integrity of financial reporting systems 2) how closely linked is executive compensation to company performance 3) does performance linked compensation encourage executives to focus on short-term performance at the expense of long-term growth?

What are the two goals of ethical culture?

1) minimize need for enforced compliance 2) maximize utilization of principles/ethical reasoning in difficult or new situations

Name five observed misconduct practices in the workplace

1) misuse of company resources 2) harassment 3) accounting fraud 4) bribery 5) employee theft

What are the three CI models?

1) passive monitoring system for early warning 2) tactical field support 3) support dedicated to top management strategy

What are the four interrelated dimensions of corporate citizenship?

1) strong sustained economic performance 2) rigorous compliance 3) ethical actions beyond what is legally required 4) voluntary contributions to advance reputation and stakeholder commitment

What are the four right vs right dilemmas?

1) truth v loyalty 2) individual v community 3) short term v long term 4) justice v mercy

What are the three criteria of a hostile work environment?

1) unwelcome 2) severe, pervasive, and regarded by claimant as hostile 3) reasonable person would find it hostile

True or false: Ethics is as important as functional areas of business

True

True or false: ethics is a part of decision making at all levels of work and management

True

What is the definition of ethics?

comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business

Ethics questions whether practices are _________

acceptable

What is ethical culture?

acceptable behavior as defined by the company and industry

implied falsity

ad that misleads, confuses, or misleads the public

What is CSR?

an organization's obligation to maximize positive impact and minimize negative impact on stakeholders

fraud

any purposeful communication that deceives, manipulates, conceals facts in order to create a false impression

optimization

the tradeoff between equity and efficiency

Facilitation payments are legal as long as _________

they're small

Ethical culture is driven by who?

top management

True or false: Business ethics deals with right or wrong

true

True or false: Many firms rewarded risk-taking

true

True or false: an ethical culture is based upon the norms and values of the company

true

True or false: individuals must separate personal interests from business dealings

true

True or false: stakeholders provide resources that are more or less critical to a firm's long term success

true

True or false: the stakeholder perspective is useful i managing social responsibility and business ethics

true

honesty

truthfulness to the best of your knowledge, or trustworthiness

integrity

uncompromising adherence to ethical values

Integrity is related to ______

virtue

When does the ethical decision making process begin?

when ethical issue awareness occurs and a discussion begins

ethical dilemma

you have to choose among several wrong choices, as there are no ethical choices