Business Ethics - Final Exam
emotional intelligence
the ability to manage themselves and their relationships with others effectively, characterized by self-awareness, self-control, and relationship building
ethical awareness
the ability to perceive whether a situation or decision has an ethical dimension
legitimate power
the belief that a certain person has the right to exert influence and certain others have an obligation to accept it
opportunity
the conditions in an organization that limit or permit ethical or unethical behavior
What are some advantages of referent power?
the greater the attraction, the greater the identification, and consequently the greater the referent power; can lead to enthusiastic and unquestioning trust, compliance, loyalty, and commitment from subordinates
spheres of influence
the group of people who you know or know of you; examples include inner circle, personal community, and the wider community
power
the influence leaders and managers have over the behavior and decisions of subordinates
nationality
the legal relationship between a person and the country in which they are born
ethical issue intensity
the relevance or importance of an event or decision in the eyes of the individual, work group, and/or organization
corporate culture
the shared beliefs top managers in a company have about how they should manage themselves and other employees, and how they should conduct their business(es)
What are some disadvantages of referent power?
this power is easily lost
significant others
those who have influence in a work group, including peers, managers, coworkers, and subordinates
mission statement
used by a company to explain, in simple and concise terms, its purpose(s) for being; it is usually one sentence or a short paragraph, explaining a company's culture, values, and ethics
referent power
when one person perceives that their individual goals or objectives are similar to another's
What are some disadvantages of legitimate power?
can create dissatisfaction, resistance, and frustration among employees, does not harness loyalty or respect, can be easily abused toward personalized needs
What are some disadvantages of expert power?
can decrease respect of superiors as knowledge and skills are shared, need to update skill sets frequently to keep power base, does not necessarily carry common sense with it
What are some advantages of expert power?
can reduce resistance to leaders' authority, able to influence due to knowledge and skills, easier to get promoted to senior management, increased trust and respect, can build up self confidence in the workplace
The hierarchy of authority in a centralized organization is...
centralized.
The division of labor in a centralized organization is...
clear-cut.
codes of ethics
consists of general statements, sometimes altruistic or inspirational, that serve as principles and as the basis for rules of conduct
What are some advantages of reward power?
encourages employees to work hard to achieve the reward, promotes loyalty, creates healthy competition, helps improve retention
The use of managerial techniques in a centralized organization is...
extensive.
Rules and procedures in a decentralized organization is...
few and informal.
The span of control in a decentralized organization is...
few employees.
Coordination and control in a centralized organization is...
formal and impersonal.
Rules and procedures in a centralized organization is...
formal and many.
codes of conduct
formal statements that describe what an organization expects of its employees
What are some possible influences that can shape decision-making?
gender, education, nationality, age, locus of control, significant others, obedience to authority, opportunity
Dealing with changes in a decentralized organization is...
good.
What are some advantages of legitimate power?
helps ensure employee compliance with a manager's orders, establishes a hierarchy enabling employees to understand who has authority over whom, accepted as cultural norm in most societies
integrative culture
high concern for people and performance (e.g. Starbucks)
caring culture
high concern for people but minimal concern for performance issues (e.g. Ben & Jerry's)
ethics officers
high-level executives responsible for managing their organizations' ethics and legal compliance programs
Implementation in a centralized organization is...
high.
Problem recognition in a decentralized organization is...
high.
The adaptability in a decentralized organization is...
high.
The flexibility in a decentralized organization is...
high.
What are the steps of the four-step decision making model?
identification of ethical dilemma/problem, identification of alternatives, evaluation of alternatives, resolution/decision
What are some disadvantages of reward power?
if used continually, can cause some rewards to lose their appeal, can be costly, can cause employees who didn't receive the reward to feel less motivated, creates expectations of similar rewards in the future
A major step in developing an effective ethics program is...
implementing a training program and communication system to educate employees about the firm's ethical standards.
gender
in ethical decision making, research shows that in many aspects there are no differences between men and women
locus of control
individual differences in relation to a generalized belief about how one is affected by internal versus external events or reinforcements
internal control
individuals with this locus of control believe they control the events in their lives by their own effort and skill; they view themselves as masters of their destinies and trust in their capacity to influence their environment
external control
individuals with this locus of control see themselves as going with the flow because that is all they can do (life events are due to uncontrollable forces)
moral intensity
individuals' perceptions of social pressure and the harm they believe their decisions will have on others
Coordination and control in a decentralized organization is...
informal and personal.
authentic leaders
leaders who are passionate about the company, live out corporate values daily in their behavior in the workplace, and form long-term relationships with employees and other stakeholders
transactional leaders
leaders who create employee satisfaction through negotiating, or "bartering," for desired behaviors or levels of performance
transformational leaders
leaders who strive to raise employees' level of commitment and foster trust and motivation
exacting culture
little concern for people but a high concern for performance (e.g. United Parcel Systems (UPS))
Implementation in a decentralized organization is...
low.
Problem recognition in a centralized organization is...
low.
The adaptability in a centralized organization is...
low.
The flexibility in a centralized organization is...
low.
What are some disadvantages of coercive power?
lowers job satisfaction, potentially higher turnover, threat of backlash from employees, close supervision needed, doesn't work if you are not able to carry out the threat, reduces innovation
The span of control in a centralized organization is...
many employees.
apathetic culture
minimal concern for either people or performance (e.g. Countrywide Financial)
The use of managerial techniques in a decentralized organization is...
minimal.
What does RADAR stand for?
Recognize, Avoid, Discover, Answer, Recover
value statement
a declaration of an organization's top priorities that serves the general public and also addresses distinct groups such as stakeholders
compliance culture
a legalistic approach to ethics; codes of conduct established with compliance as their focus, revolves around risk management, lack of long-term focus on values and integrity
reward power
a person's ability to influence the behavior of others by offering them something desirable
obedience to authority
a reason employees resolve business ethics issues by simply following the directives of a superior
education
a significant factor in the ethical decision-making process; generally, the more education or work experience people have, the better they are at making ethical decisions
ethics audit
a systematic evaluation of an organization's ethics program and performance to determine whether it is effective
ethical culture
acceptable behavior, defined by the company and industry
The division of labor in a decentralized organization is...
ambiguous.
age
an individual factor that has a complex relationship with business ethics, e.g. younger managers are far more influenced by organizational culture
The hierarchy of authority in a decentralized organization is...
decentralized.
centralized organization
decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels; suited to organizations that make high-risk decisions and have lower-level managers not highly skilled in decision-making. typically have little upward communication, strict formalization, may be more ethical than decentralized
decentralized organization
decision-making authority is delegated as far down the chain of command as possible; flow of information in both directions, managers can react more quickly to changes
expert power
derived from a person's knowledge and usually stems from a superior's credibility with subordinates
What is the RADAR model?
describes how to deal with ethical misconduct
Who is responsible for developing and managing an ethical culture?
organizations
coercive power
penalizes actions or behavior
Dealing with changes in a centralized organization is...
poor environmental complexity.
What are some advantages of coercive power?
quickness of results
values-based ethics culture
relies on an explicit mission statement that defines the core values of the firm and how customers and employees should be treated
Sarbanes-Oxley 404
requires firms to adopt a set of values that forms a portion of the company's culture
What are the key goals of successful ethics training programs?
sensitize employees and managers to recognize and navigate ethical issues
