Chapters 3-4: Test #2

According to the US Sentencing Commission Guidelines for Organizations, which of the following steps should be followed immediately after the standards and procedures for an effective compliance program have been established?

Upper-level managers should take charge of the program.

Stakeholders

persons or groups with a stake, or legitimate interest, in a company's actions

True or False: Enviornmental uncertainty is most likely to be low when environmental complexity is at a low level

true

Property deviance

unethical behavior aimed at the organization's property or products

Production deviance

unethical behavior that hurts the quality and quantity of work produced

Workplace deviance

unethical behavior that violates organizational norms about right and wrong

Political deviance

using one's influence to harm others in the company

_____ refers to a transaction in which one party in the relationship benefits at the expense of the other.

Opportunistic behavior

Regulations concerning the disposal of biological wastes in a hospital would be what type of general environment trend?

Political/Legal

Emerald Inc. is a manufacturer of cosmetics that focuses on delivering high-quality products to its customers. As Emerald is aware of the side effects of parabens on skin and hair, it uses organic preservatives in its cosmetic products. All the cosmetic products that it manufactures are free of parabens. In this way, the company ensures that the usage of its products does not cause allergy to any of its customers. What social responsiveness strategy is Emerald using in this scenario?

Proactive strategy

Which of the following is an advocacy group tactic that involves persuading consumers not to purchase a company's merchandise or service?

Product boycott

Which of the following is the least aggressive tactic used by advocacy groups: Cognitive mapping, Public communications, Class action lawsuits or Media advocacy?

Public communications

Redd Publications Inc. has been buying ink cartridges and printing papers from Haven Corp. for several years. Both companies make an effort to keep their transactions fair and transparent. This has helped them maintain mutually beneficial business ties. It can be said that Redd Publications and Haven exhibit _____ behavior toward each other.

Relationship

Citrine Inc. is a manufacturer of electrical home appliances. The company is facing a serious shortage of copper scrap that is used in its manufacturing process. Hence, the manufacturing process has come to a halt. What characteristic of the external environment is illustrated in this scenario?

Resource scarcity

Managers can use overt integrity tests to _____.

Select and hire ethical employees

According to the _____, the only social responsibility that businesses have is to maximize profits

Shareholder Model

Ethical behavior

behavior that conforms to a society's accepted principles of right and wrong

7 Compliance Program Steps from the US Sentencing Commission Guidelines for Organizations

1. Establish standards and procedures 2. Assign upper-level managers to be in charge 3. Delegate decision making authority to only ethical employees 4. Encourage employees to report violations 5. Train employees on standards and procedures 6. Enforce standards consistently and fairly 7. Improve program after violations

Basic Model of Ethical Decision Making

1. Identify the Problem 2. Identify the constituents 3. Diagnose the situation 4. Analyze your options 5. Make your choice 6. Act

6 Factors that Contribute to Ethical Intensity

1. Magnitude of consequences 2. Social consensus 3. Probability of effect 4. Temporal immediacy 5. Proximity of effect 6. Concentration of effect

What are the factors that influence successful cultures in an organization?

Adaptability, involvement, clear mission, consistency

Herald Inc. has recently adopted the access card system to monitor employee movement within the company. This requires the employees to hold their identity cards against a RFID (radio-frequency identification) reader at each of the entry and exit doors for access. This process notes the time and date of entry and exit of a particular individual. The managers of the company have started enforcing the use of access cards among the employees. What concept is illustrated in the scenario?

Behavioral Substitution

Zimway Inc. is a small-scale manufacturer of linen. Couture Corp., a big apparel brand, buys linen from Zimway in large quantities. Zimway, otherwise, has very few clients, and most of them buy linen occasionally and in minimal quantities. Therefore, business ties with Couture is crucial for Zimway's survival and success. In the context of the specific environment, what concept is illustrated in the scenario?

Buyer dependence

Opulent Inc., a furniture design company based in Winona, designs a wide range of office and household furniture. Umber Corp. has recently started offering custom-made furniture in the same city. The managers at Opulent are conducting a research to find out the strengths and weaknesses of Umber. The managers are also trying to figure out the strategies used by Umber. What is a component of the specific environment that is illustrated in the scenario?

Competitive analysis

Which of the following is a component of the specific environment of an organization: Technological changes, Politics, Customers or Knowledge?

Customers

The managers at Alpha Corp. are closely observing trends in the industry. They are trying to identify the factors that might have a significant influence on Alpha's business operations. What concept is illustrated in the scenario?

Environmental Scanning

_____ is the degree of concern people have about an ethical issue.

Ethical intensity

Environmental uncertainty is highest when environmental change is ______

Extensive

Which of the following statements best explains the carrot-and-stick approach of the US Sentencing Commission Guidelines for Organizations? a. Organizations accused of unethical behavior are excused if the management was unaware of such behavior. b. Smaller fines are imposed on companies that take proactive steps to encourage ethical behavior. c. Nonprofit organizations are exempted from fines. d. Unincorporated organizations and associations are exempted from penalties.

Smaller fines are imposed on companies that take proactive steps to encourage ethical behavior.

Which of the following stakeholder groups does not engage in regular transactions with a company? a. Customers b. Local communities c. Special interest groups d. Governments

Special interest groups

What do the letters stand for in SWOT Analysis?

Strengths, Weaknesses, opportunities, threats

_____ is the degree to which a company relies on a provider because of the importance of the provider's product to the company and the difficulty of finding other sources of that product.

Supplier dependence

Identify a component of the general environment of an organization: Suppliers, Competitors, Industry regulation or Technology?

Technology

Which of the following factors should be taken into account when determining the ethical intensity of an action? a. Intent of a manager b. Temporal immediacy c. Peer acceptance d. Conflict of interest

Temporal immediacy

Which of the following is an objective of ethics training? a. To achieve credibility with employees b. To discourage employees from reporting violations c. To enforce flexible ethical standards d. To delegate decision-making authorities to all employees

To achieve credibility with employees

Social responsibility

a business's obligation to pursue policies, make decisions, and take actions that benefit society

Ethical responsibility

a company's social responsibility not to violate accepted principles of right and wrong when conducting its business

Economic responsibility

a company's social responsibility to make a profit by producing a valued product or service

Legal responsibility

a company's social responsibility to obey society's laws and regulations

Social responsiveness

a company's strategy to respond to stakeholders' economic, legal, ethical, or discretionary expectations concerning social responsibility

Proactive strategy

a social respon-siveness strategy in which a company anticipates a problem before it occurs and does more than socrety expects to take responsibility for and address the problem

Accommodative strategy

a social responsiveness strategy in which a company accepts responsibility for a problem and does all that society expects to solve that problem

Defensive strategy

a social responsiveness strategy in which a company admits responsibility for a problem but does the least required to meet societal expectations

Reactive strategy

a social responsiveness strategy in which a company does less than society expects

Stakeholder model

a theory of corporate responsibility that holds that management's most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders

Shareholder model

a view of social responsibility that holds that an organization's overriding goal should be profit maximization for the benefit of shareholders

Overt integrity test

a written test that estimates Job applicants' honesty by directly asking them what they think or feel about theft or about punishment of unethical behaviors

Personality—based integrity test

a written test that indirectly estimates job applicants' honesty by measuring psychological traits such as dependability and conscientiousness

A(n) _____ is a social responsiveness strategy in which a company accepts responsibility for a problem and does all that society expects to solve that problem.

accommodative strategy

The last step in a basic model of ethical decision making is to _____.

act on the situation

Social consensus

agreement on whether behavior is bad or good

External Environments

all events outside a company that have the potential to influence or affect it

Principle of personal virtue

an ethical principle that holds that you should never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV

Principle of utilitarian benefits

an ethical principle that holds that you should never take any action that does not result in greater good for society

Principle of distributive justice

an ethical principle that holds that you should never take any action that harms the least fortunate among us: the poor, the uneducated, the unemployed

Principle of individual rights

an ethical principle that holds that you should never take any action that infringes on others' agreed-upon rights

Principle of long-term self- interest

an ethical principle that holds that you should never take any action that is not in your or your organization's longterm self-interest

Principle of religious injunctions

an ethical principle that holds that you should never take any action that is not kind and that does not build a sense of community

Principle of government requirements

an ethical principle that holds that you should never take any action that violates teh law, for the law represents the minimal moral standard

Primary stakeholder

any group on which an organization relies for it's longterm survival

secondary stakeholder

any group that can influence or be influenced by a company and can affect public perceptions about the company's socially responsible behavior

What is the tool that shows how sure actual managers are about future business growth?

business confidence indices

A(n) _____ is a written test that estimates job applicants' honesty by directly asking them what they think or feel about theft or about punishment of unethical behaviors.

overt integrity test

Goals of Ethics Training

develop employees' awareness of ethics, achieve credibility with employees, and teach employees a practical model of ethical decision making

Teeny Toys Inc., a chain of toy stores, has decided to donate free toys to orphanages across the United States. This scenario illustrates that the company is aiming at fulfilling its _____.

discretionary responsibility

Many people in Rhenasia are spending less as there are only few good-paying jobs in the country. Many businesses in the country are adversely affected as the purchasing power of consumers has drastically reduced. The environmental characteristic that is affecting businesses in Rhenasia is associated with the _____.

economy

Employee shrinkage

employee theft of company merchandise

When addressing an issue of _____, managers are more aware of the impact their decision will have on others.

high ethical intensity

Delayed product delivery is less of an issue when compared to delivering a faulty product, which can potentially cause harm. This is because delivering a faulty product has a _____.

high magnitude of consequences

Red Spark Inc., a multinational electronics manufacturer, recently came under close scrutiny after it was involved in a major money laundering scam. The scam had adversely affected the careers of more than two hundred employees of Red Spark despite the fact that they were not involved in the scam. This scenario illustrates that the scam had a:

high magnitude of consequences

Personal aggression

hostile or aggressive behavior toward others

In a basic model of ethical decision making, after a problem has been identified, the next step is to _____.

identify the constituents

While setting up his new office, an attorney ordered thick, frieze carpets for the floor. However, the building inspector had him remove the expensive carpeting. The building inspector stated that according to federal regulations, the office must be wheelchair accessible as it is a public area. He further explained that since wheelchairs do not maneuver well in thick, frieze carpeting, the carpets had to be removed and be replaced with smooth-textured carpets that do not restrict wheelchair maneuverability. This scenario illustrates how a company is influenced by the _____ component of its specific environment.

industry regulation

The employees at Titanium Inc. have the freedom to plan their own schedules and are empowered to make decisions. They also believe in sharing common goals. The managers have high levels of trust in their employees and foster team work. These beliefs and attitudes constitute Titanium's _____.

organizational culture

Organizational members use_____ to make sense of organizational events and changes and to emphasize culturally consistent assumptions, decisions, and actions.

organizational stories

Horizon Inc., a local electronics manufacturing company, produces a significant amount of electronic waste every day. The company disposes the waste in the ocean despite strict government regulations regarding waste disposal. This scenario illustrates that Horizon has failed to fulfill its _____.

legal responsibility

Managers feel confident that they can understand, predict, and react to the external forces affecting their businesses when resource scarcity is ___

low

An _____ refers to the values, beliefs, and attitudes shared by organizational members.

organizational structure

A court ruling against the wrongful dismissal of employees is a development in the _____ component of the general environment.

political/legal

Jason, a police officer, strongly believes in justice and does not accept bribes from others. According to Kohlberg's stages of moral development, Jason is operating at the _____ of moral development.

postconventional level

According to Kohlberg's stages of moral development, people at the _____ make decisions that are based on selfish reasons.

preconventional level

Under the _____, an individual should never take any action that harms the least fortunate people in some way.

principle of distributive justice

A(n) _____ is a social responsiveness strategy in which a company does less than society expects.

reactive strategy

Whistle-blowing

reporting others' ethics violations to management or legal authorities

A trend toward less leisure time is what kind of component in the general environment of a book publisher?

sociocultural

Increasing popularity of weight management programs is what kind of component in the general environment of a fast food chain?

sociocultural

Probability of effect

the chance that something will happen that results in harm to others

Ethical intensity

the degree of concern people have about an ethical issue

Preconventional level of moral development

the first level of moral development, in which people make decisions based on selfish reasons

For a code of ethics to encourage ethical decision making and behavior in a company, _____.

the management must develop practical ethical standards and procedures specific to the company's line of business

Conventional level of moral development

the second level of moral development, in which people make decisions that conform to societal expectation

Ethics

the set of moral principles or values thatdefinesright andwrong tor a person or group

Discretionary responsibilities

the social roles that a company fulfills beyond its economic, legal, and ethical responsibilities

Proximity of effect

the social, psychological, cultural, or physical distance between a decision maker and those affected by his or her decisions

Postconventional level of moral development

the third level of moral development, in which people make decisions based on internalized principles

Temporal immediacy

the time between an act and the consequences the act produces

Magnitude of consequences

the total harm or benefit derived from an ethical decision

Concentration of effect

the total harm or benefit that an act produces on the average person

Secondary stakeholders are important to a company because:

they can affect public perceptions about socially responsible behavior.

The US Sentencing Commission Guidelines for Organizations impose smaller fines on companies that: a. voluntarily disclose illegal activities to federal authorities. b. have no history of violation of ethics principles. c. are unaware of the unethical behavior of employees. d. are not concerned with the ethical behavior of employees.

voluntarily disclose illegal activities to federal authorities.