Business Ethics Final Review
The ____ rule explains variation in employee conduct through generalizing on the percentage of employees in any given organization who will seek to do right versus how many will be indifferent.
10-40-40-10
More than a compliance program, business ethics is becoming
A management issue to achieve competitive advantage
Ethical culture is defined as
Acceptable behavior as defined by the company and industry
The 1960s saw a rise of consumerism. What is consumerism?
Activities undertaken by independent individuals, and groups to protect their rights as consumers
_ is considered the father of free market capitalism. He believed that business was and should be guided by the morals of good men.
Adam Smith
The originator of the idea of the invisible hand, which is a fundamental concept in free market capitalism, was
Adam smith
Which leadership type values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking?
Affiliative leadership
What is the first step in implementing a stakeholder perspective in an organization?
Assessing the corporate culture
_____ assumes that economic decisions are influenced by human behavior.
Behavioral economics
_____ assumes that humans may not act rationally because of genetics, learned behavior, and rules of thumb.
Behavioral economics
_____ occurs when the middle class shrinks, resulting in highly concentrated wealth amongst the rich and a large number of poor people with very few resources.
Bimodal wealth distribution
____ is the offering of something of value in order to gain an illicit advantage.
Bribery
The Foreign Corrupt Practices Act outlawed
Bribery of officials in other countries
_____ is associated with a hostile workplace where someone considered a target is threatened, harassed, belittled, or verbally abused.
Bullying
_____ tie(s) an organization's product(s) directly to a social concern through a marketing program.
Cause-related marketing
Which two developing countries are expected to generate some of the largest increases in consumption in the future?
China and India
_____ law defines the rights and duties of individuals and organizations (including businesses).
Civil
Because of Sarbanes-Oxley, publicly traded companies must develop _____ to assist in maintaining transparency in financial reporting.
Code of ethics
____ are formal statements that describe what an organization expects of its employees in terms of ethical behavior.
Codes of conduct
Leaders with a(n) _____ conflict management style desire to meet the needs of stakeholders and strongly adhere to organizational values and principles.
Collaborating
At which stage of the ethics auditing process would a hospital conduct focus groups with management, doctors, nurses, related health professionals, support staff, and patients?
Collect and analyze relevant information
What type of fraudulent activity involves an employee who assists a consumer in fraud?
Collusion
Public health and safety and support of local organizations are issues most relevant to which stakeholder group
Community
Which of the following is a major ethical concern among corporate boards of directors?
Compensation
High levels of _____ create a higher probability that firms cut corners because margins are usually low.
Competition
What type of fraud involves intentional deception on the part of an individual or group in order to derive an unfair economic advantage over an organization?
Consumer
In corporate governance, _____ is the process of auditing and improving organizational decisions and actions.
Control
The term used to express how a firm meets its stakeholder expectations of its economic, legal, ethical, and philanthropic responsibilities is
Corporate citizenship
____ law not only prohibits specific actions in business such as fraud, theft, or securities trading violations, but also imposes fines or imprisonment as punishment for breaking the law.
Criminal
Over the years, scholars have developed more than 100 definitions of culture. According to the text, all have the following common elements:
Culture is shared, relatively stable, and is formed over a long period of time.
Most organizations with strong ethical climates usually focus on the core value of placing _____ interests first.
Customers'
Which type of leader relies on participation and teamwork to reach collaborative decisions?
Democratic
Many managers are reluctant to engage in this step of the RADAR model because they fear doing so will uncover questionable conduct that could put the firm in an unfavorable light.
Detect
The _____ states that economic and social equalities should be arranged to provide the most benefit to the least-advantaged members of society.
Difference principle
The _____ was called "a sweeping overhaul of the financial regulatory system...on a scale not seen since the reforms that followed the Great Depression."
Dodd-Frank Wall Street Reform and Consumer Protection Act
Which of the following is not one of the six "spheres of influence" to which individuals are subject when confronted with an ethical issue?
Educational attainment
Which of the following is an advantage of a values-based ethics program over a compliance-based one?
Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency.
Minimizing the use of energy and reducing emissions and waste are issues of importance to which stakeholder?
Environmental groups
_____ is the ability to perceive whether a situation or decision has an ethical dimension.
Ethical awareness
A(n) _____ is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.
Ethics audit
____ are used to obtain or retain business and are not generally considered illegal in the U.S.
Facilitation payments
During the 1990s the institutionalization of business ethics was largely driven by which piece of legislation?
Federal Sentencing Guidelines for Organizations
Passed by Congress in 1991, the _____ created incentives for organizations to develop and implement ethical compliance programs.
Federal Sentencing Guidelines for Organizations
The _____ focus(es) on firms taking action to prevent and detect business misconduct in cooperation with government regulation.
Federal Sentencing Guidelines for Organizations
All of the following are goals of the Environmental Protection Agency, except:
Focus on the activities of business
____ is defined as any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression.
Fraud
Which of the following is not one of the top challenges facing CEOs today? .
Gaining adequate compensation
_____ identified four cultural dimensions that can have a profound impact on the business environment: individualism/collectivism, power distance, uncertainty avoidance, and masculinity/femininity.
Geert Hofstede
___ involves transactions across national boundaries. It is a practice that brings together people who have different cultures, values, laws, and ethical standards.
Global business
Accountability, oversight, and control all fall under the definition and implementation of corporate
Governance
_____ occurs when one or more group members feel pressured to conform to the group's decision even if they personally disagree.
Groupthink
Which of the following is not a method typically employed by firms when researching relevant stakeholder groups?
Guessing
____ serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most appropriate for handling a specific case.
Hotlines
Which of the following would not be considered a negative reinforcement of employee behavior?
Ignoring the behavior
The _____ includes the motivational "carrots and sticks" superiors use to influence employee behavior.
Immediate job context
Which of the following is a measure taken by governments to curtail MNC practices that create ethical issues?
Imposing export taxes to force MNCs to share more of their profits
Most executives feel that which of the following is the primary reason for much of the unchecked misconduct in business?
Inadequate ethics and compliance programs
The word _____ implies a balanced organization that makes ethical financial decisions and also is ethical in more subjective matters of corporate culture.
Integrity
_____ is an important element of virtue and means being whole, sound, and in unimpaired condition.
Integrity
Concerns involving copyright infringement on books, movies and music, and other illegally produced goods relate to which type of ethical issue?
Intellectual property rights
Which of the following statements about training is false?
It can dictate personal ethics on the job
Which of the following is not a benefit of ethics auditing?
It can harm relationships with stakeholders
Why do critics argue that high compensation for boards of directors is a bad thing?
It could cause conflicts of interest between the directors and the organization.
What is a major role of the International Monetary Fund (IMF)?
It makes short-term loans to member countries that have deficits and provides foreign currencies for its members.
Who argued during the 1930s that the state could stimulate economic growth and improve stability in the private sector?
John Maynard Keynes
Which is not one of the four sources of criminal and civil laws?
Judicial law
_____ deals with the issue of what individuals feel they are due based on their rights and performance in the workplace, and therefore is more likely to be based on deontological moral philosophies than on teleological or utilitarian ones.
Justice
____ products encourage consumers to return and buy more. This approach is also known as planned obsolescence.
Made-to-break
The ethical decision making process in business includes all of the following except
Making ethical decisions
Which of the following acts exempted the insurance industry from antitrust legislation?
McCarran-Ferguson Act of 1944
The idea that the mission of business is to produce goods and services at a profit, thus maximizing its contribution to society is associated with
Milton Friedman
____ relates to individuals' perceptions of social pressure and the harm they believe their decisions will have on others.
Moral intensity
Which is not considered a white collar crime?
Mugging someone
An individual who emphasizes others rather than himself or herself in making decisions is in which of the following of Kohlberg's stages of development?
Mutual interpersonal expectations, relationships, and conformity (3rd stage)
Which of the following is not an issue that helps in business ethics evaluations and decisions?
Personal guilt
___ believe that no one thing is intrinsically good.
Pluralists
Normative business ethics takes into account the _____ realities outside the legal realm in the form of industry standards.
Political
The _______________ focuses on reducing pollution through cost-effective changes in production, operation, and raw materials use.
Pollution Prevention Act
A stakeholder group that is absolutely necessary for a firm's survival is defined as
Primary
When a person defines right and wrong on the basis of legal contracts, he or she is using which of Kohlberg's stages of development?
Prior rights, social contract, or utility (5th stage)
Which of the following is not a benefit that primary stakeholders tend to provide to organizations?
Pro-bono bookkeeping
___ justice considers the processes and activities that produce the outcome or results.
Procedural
These leaders are characterized as having superficial charm, no conscience, grandiose self-worth, little or no empathy, and enjoy flouting rules.
Psychopathic leaders
The Sarbanes-Oxley Act created the _____ to oversee the accounting firms that audit public corporations and to establish rules and standards for auditing.
Public Company Accounting Oversight Board
Which of the following acts, passed in response to public outrage over conditions described in Upton Sinclair's The Jungle, was the first consumer protection legislation?
Pure Food and Drug Act of 1906
_____ is based upon the assumption that people are predictable and will maximize the utility of their choices relative to their needs and wants.
Rational economics
Which of the following is the first step in the ethical decision making process?
Recognizing that an issue requires an individual or work group to make a choice that ultimately will be judged by stakeholders as right or wrong
__________ is one of the country's greatest sustainability success stories.
Recycling
What should be the final step in the ethics auditing process?
Report the findings
When The Gap posts the results of its ethics audit on its web site, it is engaged in which of the following steps of the ethics auditing process?
Report the results
Which of the following is not a step in the ethics auditing process?
Report the results to the U.S. Sentencing Commission.
The four categories of communication include all of the following except
Reporting
Which moral philosophy evaluates the morality of an action on the basis of its conformity to general moral principles and respect for individual rights?
Rule deontology
Under the _____, CEOs and CFOs may be criminally prosecuted if they knowingly certify misleading financial statements.
Sarbanes-Oxley Act
Which of the following legislation has increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?
Sarbanes-Oxley Act
Which represented a far-reaching change to organizational control and accounting systems, making securities fraud a criminal offense?
Sarbanes-Oxley Act.
What should be the first step in the auditing process?
Secure the commitment of top executives and directors
The _____ model is founded in classic economic precepts.
Shareholder
____ involves tricking individuals into revealing their passwords or other valuable corporate information.
Social engineering
Principles are
Specific and pervasive boundaries for behavior that are universal and absolute
Which of the following is not considered a significant other group in the workplace?
Spouses
Which option includes the assessment and improvement of business strategies, economic ectors, work practices, technologies, and lifestyles while maintaining the natural environment?
Sustainability
The _____ regulates tobacco, dietary supplements, vaccines, veterinary drugs, medical devices, cosmetics, products that give off radiation, and biological products.
The Food and Drug Administration
These values were developed by a reverend and the UN Secretary General. They express support for universal human rights.
The Global Sullivan Principles
What is not a necessity for strong ethical leaders to make good decisions?
The ability to coerce subordinates
Which industry invests the most in alternative clean energy sources?
The automobile industry
Through time an act can come to be viewed as unethical under which of the following philosophies and perspectives?
The relativist perspective
Which moral perspective defines ethical behavior subjectively from the unique experiences of individuals and groups?
The relativist perspective
Which of the following does not have a significant impact on the success of an ethics program?
The size of the company
The world's forests are being destroyed at a rate of nearly 50,000 square miles annually. The reasons for this wide-scale destruction are varied and include all except:
The soil is great for farming
___ may be more inclined to engage in unethical organizational conduct because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making.
Top managers
Which of the following are not typically primary stakeholders?
Trade associations
____ leaders communicate a sense of mission, stimulate new ways of thinking, and enhance as well as generate new learning experiences.
Transformational
Which of the following leadership types has a strong influence on coworker support and building an ethical culture through increasing employee commitment and fostering motivation?
Transformational leaders
___ and reporting are two major dimensions of ethical communication.
Transparency
In marketing communications, lying causes predicaments for companies because it destroys
Trust
is essential in building long-term relationships between businesses and consumers.
Trust
The _____ makes it illegal for individuals, firms, or third parties doing business in American markets to "make payments to foreign government officials to assist in obtaining or retaining business."
U.S. Foreign Corrupt Practices Act (FCPA)
The benefit of healthcare is being debated as to whether it is a right or privilege. Which of the following countries does not consider health care to be a right?
USA
____ refers to how members of a society respond to ambiguity. A high score means that a culture tends to minimize risk-taking.
Uncertainty avoidance
Which of the following is a possible unintended consequence of an organization's focusing more on ethics planning than on implementation?
Unethical conduct is viewed as acceptable behavior.
Which is the last of Kohlberg's stages of cognitive moral development?
Universal ethical principles
Which of the following is a statement that attests that the financial statements made in an audit are fairly stated, without limitations?
Unqualified opinion
In the long run, a(n) ______ orientation may be better for companies, perhaps because it increases employees' awareness of ethics issues at work.
Values
Organizations that have ethics programs based on a _____ orientation are found to make a greater contribution than those based simply on compliance, or obeying laws and regulations.
Values
_____ is an independent assessment of the quality, accuracy, and completeness of a company's social or ethics report.
Verification
The elements of _____ important to business transactions have been defined as trust, self-control, empathy, fairness, and truthfulness.
Virtue
_____ argues that ethical behavior involves not only adhering to conventional moral standards but also considering what a mature person with a "good" moral character would deem appropriate.
Virtue ethics
_____ responsibilities relate to a business's contributions to stakeholders.
Voluntary
All of the following are facts about water pollution, except:
Water use is projected to decrease by 50% within 20 years.
Retaliation against employees that report misconduct is a problem in _____ cultures.
Weak ethical
shoulder surfing
When Devon looked at what another employee was typing in order to get a password, he committed
The _____ formed in 1995 and administers its own trade agreements, facilitates future trade negotiations, settles trade disputes, and monitors the trade policies of member nations
World Trade Organization
A strong ethics program includes all of the following elements except
a clause promising good stock market performance
The degree to which a firm understands and addresses stakeholder demands can be referred to as
a stakeholder orientation
Expert power usually stems from
a superior's credibility with his or her subordinates
Optimization is defined as
a trade-off between equity and efficiency.
A stakeholder orientation is not complete unless it includes
activities that actually address stakeholder issues
Conflicts of interest exist when employees must choose whether to
advance their own personal interests, those of the organization, or those of some other group.
A court found an oil company guilty of placing profits over the safety and well-being of its employees. This situation can be classified as
an ethical issue
Social responsibility is
an organization's obligation to maximize its positive effects and minimize its negative effects on stakeholders.
Laws and regulations change over time; however, in the United States the thrust of most business legislation can be summed up as
any practice is permitted that does not substantially reduce competition and harm consumers or society.
Ethics is a part of decision making
at all levels of work and management.
If management fails to identify and educate employees about ethical problem areas, ethical issues may not reach the critical
awareness level
Because top managers may be more insensitive to ethical issues due to their focus on financial performance, the FSGO guidelines suggest that ethics officers report to the _____ instead.
board of directoarsenal
Cause related marketing can affect consumer _____, if consumers are sympathetic to the cause and the brand and cause are seen as a good fit.
buying patterns
Although limiting urban sprawl creates disadvantages for ____________, many businesses can benefit from urban renewal movements that reduce sprawl.
car and oil companies
At the heart of the Federal Sentencing Guidelines for Organizations is a
carrot-and-stick philosophy that rewards efforts to improve ethics.
The Federal Sentencing Guidelines for Organizations set the tone for organizational ethics compliance programs by
codifying into law incentives for organizations to take action such as developing ethical compliance programs to prevent misconduct.
The _____ leader demands instantaneous obedience and focuses on punishing wrong behavior, achievement, initiative, and self-control.
coercive
A _____ generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes.
compliance orientation
Independent verification of the ethics audit is important because it lends the report
credibility and objectivity
When in Rome, do as the Romans do, or you must adapt to the cultural practices of the country in which you are operating are rationalizations businesspeople sometimes offer for straying from their own ethical values when doing business abroad. This practice is called
cultural relativism
The first step toward understanding business ethics is to
develop ethical-issue awareness.
The idea that people learn ethical or unethical behavior while interacting with others who are a part of their role-sets is referred to as
differential association
The primary objective of U.S. antitrust laws is to
distinguish competitive strategies that enhance consumer welfare from those that reduce it.
Companies that _____ will most likely be found in violation of procompetitive legislation.
establish monopolies
The perceived relevance or importance of an ethical issue to the individual, work group, or organization is
ethical issue intensity
The individual responsible for implementing disciplinary action for violation of a firm's ethics standards is usually the
ethics officer
One of the main reasons employees do not report observed misconduct is
fear of retaliation
Top managers tend to focus on _____ because their jobs and personal identity are often connected to quarterly returns.
financial performance
Issues related to fairness and honesty may arise because business is sometimes regarded as a
game governed by its own rules rather than those of society.
One of the major ethical issues President Obama's administration focused on was
health care and consumer protection
Ethical leadership should be based on
holistic thinking that embraces the complex issues facing firms every day.
A code of ethics that does not address specific high-risk activities within the scope of daily activities is
inadequate
The _____ of ethics involves embedding values, norms, and artifacts in organizations, industries, and society.
institutionalization
Among retail stores, _____ is a larger problem than customer shoplifting.
internal employee theft
Affirmative action programs
involve the recruitment, hiring, promotion, and training of qualified individuals.
An activity is probably ethical if it
is approved of by most individuals in the organization and is customary in the industry.
The relationship between business ethics and age
is complex, although experience helps older employees make ethical decisions.
Some, especially those in business, complain that the Sarbanes-Oxley Act and similar legislation
is excessively complex and financially burdensome
War metaphors are common in business. This kind of mindset can be dangerous for business leaders because
it may foster the idea that honesty is unnecessary in business.
What are the four levels of social responsibility?
legal, economic, ethical, philanthropic
Investors are concerned about business ethics because they know that misconduct can
lower stock value and prices
While ideally the board of directors financial audit committee conducts ethics audits, in most firms they are conducted by
managers or ethics officers
The establishment of an ethics committee within an organization
might raise ethical concerns or resolve ethical dilemmas.
Organizational _____ can contribute to diminished employee trust and increased employee turnover.
misconduct
Following the ethical directives of a superior relates to
obedience to authority.
The first of the three activities that are associated with the stakeholder orientation is the
organization-wide generation of data
Those who have influence in a work group are referred to as significant others and include
peers, managers, coworkers, and subordinates.
The exacting organizational culture is interested in
performance but has little concern for employees
The Clean Water Act makes it illegal for anyone to discharge any pollutant from a point source directly into navigable waters without a ___________.
permit
An individual who believes that an action is ethical because others within his or her company and industry regularly engage in the activity is probably a(n)
relativist
The process of verifying the results of an audit should involve standard procedures that control the _____ of the information.
reliability and validity
The protection of air, water, land, biodiversity, and _____ emerged as a major issue in the twentieth century.
renewable natural resources
Through _______________, it is possible to quantify the trade-offs to determine whether to accept or reject environmentally-related activities and programs.
risk management
Ethics audits can help companies identify potential _____ so they can implement plans to eliminate or reduce them before they reach crisis dimensions.
risks and liabilities
In the Reagan/Bush eras, the major focus of the business world was on
self-regulation rather than regulation by government.
Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as
stakeholders
Fostering ethical decision making within an organization requires improving the firm's ethical standards and
terminating the "bad apples" in the organization.
A central problem with relativism is
that it emphasizes people's differences, not similarities.
As one of the seven habits of strong ethical leaders, _____ is "the glue that holds ethical concepts together." This trait can be developed early in life or developed over time through experience.
the passion to do right
Organizations can become "bad barrels" not because of unethical individuals but because
the pressure to succeed creates opportunities that reward unethical decisions.
With regard to ethics, training and communication initiatives should reflect
the unique characteristics of an organization
When unethical acts are discovered in a firm, in most instances
there was knowing cooperation or complicity from within the company.
Employees feel less pressure to compromise ethically, observe less misconduct, are more satisfied with their organizations, and feel more valued when
they see honesty, respect, and trust applied in the workplace
Ethical issues in business typically arise because of conflicts between individuals' personal moral philosophies and values and the
values and attitudes of the organization in which they work and the society in which they live.
Because ethics and social audits are _____, there are few standards that a company can apply with regard to reporting frequency, disclosure requirements, and remedial actions that it should take in response to results.
voluntary
The Dodd-Frank Wall Street Reform and Consumer Protection Act
was designed to make the financial services industry more responsible
The ethical decision-making process begins
when stakeholders trigger ethical issue awareness and individuals openly discuss it with others.
