Business Ethics MIDTERM

Social responsibility is described as _____.

(AKA corporate social responsibility (CSR), pertains to people and organizations behaving and conducting business ethically and with sensitivity towards social, cultural, economic, and environmental issues.

Do you care about business ethics? If so, does this mean you are willing to achieve profit in an ethical manner? Does this mean you will strive to use your money, talent, time, and job role to exercise your moral identity? Provide examples that substantiate your response.

(Personal)

What new goals have you set for yourself, since taking this class?

(Personal)

Which guest speakers have sparked your moral curiosity and interest in business ethics?

(Personal)

The Dodd-Frank Wall Street Reform and Consumer Protection Act were designed to address what ethical issues?

- To promote the financial stability of the United States by improving accountability and transparency in the financial system - to end "too big to fail," - to protect the American taxpayer by ending bailouts - to protect consumers from abusive financial services practices, and for other purposes.

1.Outline, describe, and explain at least four (4) elements of sliding down the "slippery slope" of unethical behavior.

-Group justifies actions: When managers in a workplace only care about hitting the quota and not really how the quota is achieved, employees may start cutting corners, especially when they are getting compensated to do so. -Rules are vague and/or changing: perhaps the performance policies or rules at your organization are amended without providing time to reflect and discuss the ramifications of the changes with coworkers and management. - Models comply with ideology: management may still engage in rule-bending, as they profess to having complied with the required regulatory demands. - Exiting is difficult: Leaving the job is simply out of the question. When we rely upon our organization to keep our household going, we cannot just quit.

What are common mistakes when designing and implementing an ethics program?

1. A firms failure to answer fundamental questions, understand, and appreciate the goals within their ethics program 2. Not setting realistic and measurable program objectives in creating an ethics program 3. Senior managements failure to take ownership of the ethics program 4. Developing materials that do not address the needs of the average employee 5. Transferring an "American" program to a firms international operations 6. Designing an ethics program that is little more than a series of lectures

What are the four levels of social responsibility?

1. Economic Responsibility. 2. Legal Responsibility. 3. Ethical Responsibility. 4. Philanthropic Responsibility.

A description of corporate social responsibility should include what elements?

1. Economic: corporate stakeholders expect companies to make a profit. 2. Ethical: companies must respect the society's values and norms and operate consistently with the society's expectations. 3. Legal: companies must work within the law and the government. 4. Philanthropic: companies must giving back to communities and causes.

Outline, describe, and apply the four (4) moral competencies. Explain how each element contributes to a moral action to a specific business ethics issue?

1. Emotional Signaling: emotional affect plays a critical role in motivating or hindering the choice to address an ethical challenge and to do so with rigor and durable commitment 2. Reflective Pause: an ability, regardless of time constraints, to purposively self-impose a time-out for reflection. 3. Self-Regulation: to habitually pursue right action and to manage and address tough moral decisions, individuals must balance their reactions, knowing how to manage responsibilities alongside of their personal desires 4. Moral preparation: a commitment to right action is developed through a deep understanding of self, fueled by an ongoing thought process concerning how one would or would not act when faced with an ethical challenge in the future.

What are the main goals of successful ethics programs?

1. Identify key risk areas employees will face 2. Provide experience in dealing with hypothetical ethical issues within the industry 3. Let employees know that wrongdoings will never be supported in the organization 4. Let employees know they are individually accountable for their actions 5. Align employee conduct with organizational reputation and branding 6. Providing ongoing feedback to employees about how they are handling ethical issues 7. Allow a way for employees to voice their concerns anonymously 8. Provide contacts to leadership for employees when they faced with an ethical dilemma they don't know how to solve

What are the habits of ethical leaders?

1. Justice. An ethical leader is always fair and just. 2. Respect others. One of the most important traits of ethical leadership is the respect that is given to followers. 3. Honesty. 4. Humane. 5. Focus on team building. 6. Value driven decision-making. 7. Encourages initiative. 8. Leadership by example. 9. No tolerance for ethical violations.

The Sarbanes-Oxley Act includes these elements___

1. Public company accounting oversight board 2. Auditor and analyst independence 3. Whistle-Blower Protection 4. Cost of compliance

According to the standards of ethical culture in performance, what are the drivers of profit?

1. Trust. 2. Investor loyalty 3. Employee commitment 4. Customer satisfaction

Kohlberg's stages of cognitive moral development can be reduced to three levels of ethical concern. Persons at the second level are described as _____?

2) An individual equates right with conformity to the expectations of good behavior of the larger society.

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.

The ethical decision-making process might begin _____.

with being aware of ethical challenges.

The elements of _____ most important to business transactions have been defined as trust, self-regulation (or self-control), empathy, fairness, and truthfulness.

Virtue.

Ethical motivation is defined as _____.

An ethical need or desire that energizes and directs behavior.

What type of law defines the rights and duties of individuals and organizations (including businesses).

Civil Law.

Organizational _____ contributes to diminished employee trust and increased employee turnover.

Misconduct.

The first step toward understanding business ethics is to___

develop ethical-issue awareness.

____ focus(es) on developing sound organizational practices and integrity for financial and non-financial performance measures, rather than on an individual's morals.

Core/best practices

_____ is used to express how a firm meets its stakeholder expectations of its economic, legal, ethical, and philanthropic responsibilities.

Corporate Citizenship

When in Rome, do as the Romans do, is a statement used suggesting that a person must adapt to the practices of the country or culture in which you are operating. But it may provide the basis for rationalizations business people sometimes offer, to substantiate straying from their own ethical values. This practice is called

Cultural Relativism

What often contributes to our unethically?

A lack of ethical awareness and commitment to being morally sound.

Which of the following is not a side-effect of being the victim of workplace bullying?

Actual side-effects: Health risks: Stress, Anxiety, Panic attacks, Trouble sleeping, Higher blood pressure and Ulcers. Job Performance: Having trouble making decisions, An incapacity to work or concentrate, A loss of self-esteem and Lower productivity.

Which of the following is not considered an aspect of the institutionalization of social responsibility?

Familial responsibilities (or anything that's not 1. Voluntary practices. 2. Legal responsibilities. 3. Core practices. 4. Strategic philanthropy)

For an ethical compliance program to properly function, what best practices are used?

An ethical compliance program must have: 1. Standards and procedures, such as codes of ethics, that are reasonably capable of detecting and preventing misconduct 2. High-level personnel who are responsible for an ethics and compliance program 3. No substantial discretionary authority given to individuals with a propensity for misconduct 4. Standards and procedures communicated effectively via ethics training programs 5. Systems to monitor, audit, and report misconduct 6. Consistent enforcement of standards, codes, and punishment 7. Continuous improvement of the ethics and compliance program

The main reason(s) employees do not report observed misconduct is _____

Fear of retaliation.

___ assumes that economic decisions are influenced by human behavior.

Behavioral Economic

Outline the four (4) core elements of the ethical decision-making path according to Sekerka's model, and explain why each step is important toward encouraging moral strength in the workplace.

Being ethical means actually having a desire to seek out the ethical features of a situation, before you find yourself in a "must-act" moment: 1. Being aware of ethical challenges/opportunity: know where opportunities for moral strength lie dormant and 2. Desire to act: maintaining a desire to seek out where ethical risks might raise issues 3. Decision to act: maintaining the willingness to address the ethical challenges with moral courage 4. Ethical action. Finally, deliberately take the ethical action.

___ 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

The term business ethics is best described by the following statement:

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

Who do you want to be in the world? Write a personal vision statement, given your Character Strengths.

Character strengths: Honesty, Kindness, Love, Self-Regulation, Creativeness, etc.

Because of Sarbanes-Oxley Act, publicly traded companies must develop ____ to assist in maintaining transparency in financial reporting.

Code of ethics.

The _____ leader demands instantaneous obedience and focuses on achievement, initiative, and self-control.

Coercive.

A _____ generates an ethical program requiring that employees identify with and commit to specific required conduct using legal terms and statutes.

Compliance orientation

A(n) _____ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) ___ orientation strives to develop shared standards.

Compliance; Value.

Which moral philosophy focuses on the rights of individuals and on the intentions associated with a particular behavior, rather than its consequences?

Deontology

Which moral philosophy is based on the premise that equal respect must be given to all persons?

Deontology

What are the three Triple Bottom Line factors incorporated into the Global Reporting Initiative framework?

Economic, social, and environmental indicators.

Which of the following is NOT one of the spheres of influence to which individuals are subject when confronted with an ethical issue?

Educational attainment

An ethical organizational culture creates an environment in which to structure behavior that is then evaluated by stakeholders. The key elements of an organizational culture include all of the following except __

Employee Compensation

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.

In a functional mature adult, _____ is the first sign that an unethical decision has occurred.

Guilt or uneasiness this is the first sign that in an unethical decision has occurred.

Describe and provide examples for three (3) different moral emotions, in terms how they might support ethical action or block unethical action.

Moral emotions provide the motivational force—the power and energy— to do good and avoid doing bad. Examples of moral emotions are: 1) pride- shows those around us that we have achieved valued outcomes and/or shared motives 2) Shame & guilt- punishes bad behaviors, so we don't do them again. 3) gratitude-motivates us to do admirable deeds.

Which of the following is not something a firm might do to encourage organizational ethics and compliance?

Ignoring potential ethical issues

The _____ of ethics involves embedding values, norms, and artifacts in organizations, industries, and society.

Institutionalization

_____ is an important element of virtue and means being whole, sound, and in unimpaired condition.

Integrity

Name and describe the key factors of Dr. Plante's model, applying them to a business ethics concern.

Integrity, Competence, Responsibility, Respect and Concern. Integrity: Following high standards of honesty, justice, and fairness and avoiding opportunities that would violate your completeness or wholeness. We are often tempted to behave in a dishonest or unethical manner to obtain short-term gains. For a business ethics concern this could be exploiting tax loopholes. Competence: Is related to integrity in that maintaining your roles in life assumes that you're competent in those roles. In business you would not be behaving with integrity if you said you were a competent programmer, but were unable to competently perform your duties. Responsibility: Politicians, corporate executives, professional sports figures, celebrities, and members of the general public who engage in unethical behavior and blame others or special circumstances for their actions. Respect: Means treating others with esteem, consideration, honor, attention and acknowledging that they have needs. Respect also involves how we treat animals, buildings, our environment and property in general. Example: Disrespecting employees, company rules and legislation. Concern: Means care for interest, and involvement in others. Neglect in organizations could be a business ethics concern.

is a term used by Adam Smith to explain the inherent mechanisms at work in free market systems that keep commerce in equilibrium.

Laissez-faire/Invisible hand.

Why is business ethics "a daily deal?"

Learning to be an ethical person is a process that is never finalized. Human beings are malleable and have an innate ability to evolve. As adults we can choose to continue to learn, grow, and change. But deliberately or by default, we may come to rely upon our automatic reactions to guide our daily lives.

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

Investors are concerned about business ethics because they know that corporate misconduct can do what?

Lower the stock value & prices.

._____ involves subordinates simply following the directives of a superior without question. It demonstrates the influence that significant others can exert in the workplace.

Obedience to authority

Describe corporate culture and why it is so important to business ethics_

Organizational culture includes shared values, norms, and artifacts that influence employees and determine behavior, as well as ways of solving problems. There are 4 types of corporate culture. 1) Apathetic culture: shows minimum concern for either people or performance. 2) Caring culture: shows high concern for people but low concern for performance issues. 3) Exacting culture: shows little concern for people but high concern for performance. 4) Integrative culture: shows high concern for people and high concern for performance

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.

Passion to do right.

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.

Which attribute of ethical leaders will not be effective unless the leader is personally involved in the organization's key ethical decisions?

Transparency.

What is the purpose of the UN Global Compact?

The UN Global Compact is a set of 10 principles that promote human rights, sustainability, and the eradication of corruption.

Which of the following groups is not a group that receives special legal protections?

The highly educated

What is a living wage?

The minimum wage workers require to meet basic needs.

Moral philosophy refers to _____.

The principles or rules that people use to decide what is right or wrong.

Which of the following statements about the Federal Sentencing Guidelines for Organizations is false?

True statement: the Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually tolerate misconduct.

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 behaviour

Which moral philosophy evaluates the morality of an action on the basis of its consequences for everyone affected?

Utilitarianism

Which of the following is not a characteristic of an ethical corporate culture?

Values and ethical beliefs aren't the same as Management has stated

____ 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

Which of the following is not an article in the UN Human Rights Declaration?

Whatever is not part of these four. 1. Health Care, 2. Labor and Right to Work, 3. Compensation, 4. Consumerism.

Fostering ethical decision making within an organization requires improving the firm's ethical standards and___

terminating the "bad apples" in the organization.

The study of business ethics is important to better understand all of the following except

that business ethics is entirely an extension of an individual's own personal ethics.

Effective capitalism is predicated on___

the concept of public good and public trust.

The Foreign Corrupt Practices Act outlawed

the practice of paying bribes to foreign government officials in order to gain business.

Which is not considered a white collar crime?

White collar crime generally refers to nonviolent financial offenses, such as identity theft, money laundering, embezzlement, tax evasion, securities fraud, insider trading, mail and wire fraud, other forms of fraud, and similar unethical behaviors.

_____ is associated with a hostile workplace where someone considered a target is threatened, harassed, belittled, or verbally abused.

Workplace bullying.

A strong ethics program includes all of the following elements except

a clause promising good stock market performance

More than a compliance program, business ethics is becoming___

a management issue to achieve competitive advantage.

Stakeholders' power over businesses stems from their___

ability to withdraw or withhold resources.

A stakeholder orientation is not complete unless it includes:

activities and processes within a system of social institutions that facilitate and maintain value through exchange relationships with multiple 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.

If management fails to identify and educate employees about ethical problem areas, ethical issues may NOT reach the critical___

awareness level.

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.

The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually___

tolerate misconduct.

In the long run, a(n) ______ orientation may best for companies, because it increases employees' awareness of ethics issues at work.

values

Employees' perceptions of their firm as having an ethical climate and culture leads to___

enhanced performance.

While social reports often discuss issues related to a firm's performance in the four dimensions of social responsibility, as well as to specific social responsibility and ethical issues, ethics audits have a narrower focus on assessing and reporting on a firm's performance in terms of _____.

ethical and legal conduct.

An ethical issue is a problem, situation, or opportunity that concerns _____ in business?

ethical and unethical actions

A values-based ethics approach to ethical corporate cultures relies on a(n)___ that defines the core value of the firm as well as how customers and employees should be treated.

explicit mission statement

Employees that see themselves as going with the flow because they have no influence, rely upon___

external control.

Ethical leadership should be based on _____.

holistic thinking that embraces the complex issues facing firms every day.

15.Among retail stores, _____ is a larger problem than customer shoplifting.

internal employee theft

Studies have found that more than a third of the unethical situations that lower and middle-level managers face come from _____.

internal pressures and ambiguity surrounding internal organizational rules.

People who value deregulation, especially those in business, complain that the Sarbanes-Oxley Act and similar legislation___

is excessively complex and financially burdensome.

Having acceptable personal ethics is probably not going to be sufficient to handle complex business ethical issues when an individual has___

limited business experience.

Investigations into the financial rating industry after the financial meltdown of 2008 found all of the following EXCEPT___

most analysts were completely untrained and unprepared to do their jobs.

Following the ethical directives of a superior relates to___

obedience to authority.

The growth of the Internet and differing security laws between countries has led to an increase in concern for the human rights of___

privacy.

Studies have shown that _____ have more impact on a worker's decisions on a daily basis than any other factor.

significant others

Principles, in the context of business ethics, are described as___

specific and pervasive boundaries for behavior that should not be violated; the basis for rules.