Business ethics

Who provides information to managers, investors, tax authorities, and other stakeholders who make resource allocation decisions for corporations?

Accountants

Conflicts of interest exist when employees must chose whether to

Advance their own personal interests, those of the organization, or those of some other group

Which of the following statements is most correct?

Affirmative action programs involve efforts to recruit, hire, train, and promote qualified individuals from groups that have traditionally been discriminated against on the basis of race, gender, or other characteristics.

Laws and regulations change over time; however, in the US the thrust of most businesses can be summed up as

Any practice is permitted that does not substantially reduce competition and harm consumers or society

What is the first step of implementing a stakeholder perspective in an organization?

Assessing the corporate culture

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

Awareness level

War metaphors are common in business. This kind of mindset can be dangerous for business leaders because: a. it may lead executives to become violent. b. it may foster the idea that honesty is unnecessary in business. c. it may lead organizations to be excessively aggressive. d. business is not like warfare and the metaphors are not appropriate. e. business is more like a game than a war.

B. it may foster the idea that honesty is unnecessary in business.

What is the primary reason why some small businesses resist the opening of large chain retailers like Walmart or Home Depot ?

Because the large size creates economies of scale and they can charge lower prices

Foreign Corrupt Practices Act outlawed

Bribery of officials in other countries

______ ties an organization's products directly to a social concern through a marketing program

Cause-related marketing

informal relationships

Codes, rules, and compliance are essential in organizations. However, an organization built on _____ is more likely to develop high integrity corporate culture

The _______ leader demands instantaneous obedience sand focuses on achievement, initiative, and self-control?

Coersive

Business 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

Prior to the 2008 financial meltdown, bond ratings agencies were accused of having ______ because they were paid by the organizations that they rated. The organizations would shop around for the agency that gave them the best rating.

Conflicts of interest

The ______ is an independent agency within the Federal Reserve System that regulates the offering and provision of consumer financial products or services under the Federal consumer financial laws

Consumer Financial Protection Agency

The _______ was established after the latest financial crisis, in response to a situation that caused many consumers to lose their homes.

Consumer Financial Protection Agency

In corporate governance, ______ is the process of auditing and improving organizational decisions and actions

Control

___________ focus on developing Sound organizational practices and integrity for financial and non financial performance measures, rather than on an individual's morals

Core practices

Which of the following is not a provision of the Dodd-Frank Wall Street reform and consumer protection act?

Creates an organization to pay the bills of low-income consumers

Which of the following are not typically secondary stakeholders?

Customers

The first step toward understanding business ethics is to

Develop ethical-issue awareness

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

I ascending order, Carroll's four levels of social responsibility are

Economic, legal, ethical, philanthropic

Employees' perceptions of their firm as having ethical climate leads to

Enhanced performance

Preppie who believe in _______, go with the flow because they feel the events in their lives are uncontrollable

External locus of control

_____ are used to obtain or retain business and are not generally considered illegal in the U.S.

Facilitation payments

Passed by Congress in 1991, the _____ created incentives for organizations to develop and implement ethical compliance programs

Federal Sentencing Guidelines for Organizations

Which of the following provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance?

Federal Sentencing Guidelines for Organizations and the Sarbanes-Oxley Act

Sarbanes-Oxley Act

Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements.

The ______ regulates tobacco, dietary supplements, vaccines, veterinary drugs, medical devices, cosmetics, products that give off radiation, and biological products?

Food and Drug Administration

Accountability, oversight, and control all fall under the definition and implementation of corporate

Governance

Which of the following is not a consequence of ethical misconduct?

Increased sales

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

Internal pressures and ambiguity surrounding internal organizational rules

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.

_______ are a primary influence on employee's ethical behavior because they are role models for the organization's values

Leaders

One policy to address the issue of executive pay was implemented by J.P. Morgan, it stated that __________

Managers should earn no more than twenty times the pay of other employees

Which economist espoused a kind of Darwinism or "Wild West" version of capitalism?

Milton Friedman

According to the ethical decision-making framework, the absence of punishment provides an _________ for unethical behavior

Opportunity

An organizational factor that gives a company specific characteristics. Over time, stakeholders begin to see the company as like a living organism with a kind and will of its own.

Organizational culture

Multiple elements work on individuals to affect behavior. While an individual may intend to do the right thing, _______ can alter this intent

Organizational or social forces

The Sarbanes-Oxley Act created the ____ to oversee accounting firms that audit public corporations and to establish rules and standards for auditing

Public Company Accounting Oversight Board

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

Which of the following acts can be classified as procompetitive legislation?

Sherman Antitrust Act of 1890

Studies have shown that ______ within the organization have more impact on a worker's decisions on a daily basis than any other factor

Significant others

_______ involves tricking individuals into revealing their passwords or other valuable corporate information

Social engineering

The degree to which a firm understands and addresses stakeholder demands can be referred to as

Stakeholder orientation

Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as

Stakeholders

Ethical culture is defined as

The character of the decision-making process that employs use to determine whether their responses to ethical issues are right or wrong based on values and norms.

Which of the forces of the business environment involves the rivalry among businesses for customers and profits?

The competitive dimension

Which of the following are not typically primary stakeholders?

Trade associations

Which of the following types of leaders attempts to create employee satisfaction through bartering or negotiating for desired behaviors or level of performance.

Transactional leaders

Which of the following leadership styles has a strong influence on coworker support and building an ethical culture through increasing employee commitment and fostering motivation?

Transformational leaders

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)

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.

_________ responsibilities relate to a business' contributions to stakeholders?

Voluntary

The Age Discrimination Employment Act specifically outlaws hiring practices that discriminate against people

Who are between 49-69?

More than a compliance program, business ethics is becoming

a management issue to achieve competitive advantage.

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

________ is the offering of something of value in order to gain an illicit advantage

bribery

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

_____ 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.

codes of 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.

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

Part of the reason why credit ratings firms did not catch major problems prior to the global financial meltdown of 2008 was because they were paid by the firms that they rank, which creates

conflict of interest

By prohibiting accounting firms from providing both auditing and consulting services to the same corporate clients without permission, the Sarbanes-Oxley Act is attempting to eliminate

conflicts of interest

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

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

corporate citizenship

The ______ can be defined as a set of values, norms, and artifacts, including ways of solving problems shared by members of an organization

corporate culture

______ 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

Which type of leader relies on participation and teamwork to reach collaborative decisions?

democratic

What type of fraudulent activity could involve a consumer staging an accident to seek damages?

duplicity

Minimizing the use of energy and reducing emissions and waste are issues of importance to which stakeholder?

environmental groups

The perceived relevance or importance of an ethical issue to the individual, work group, or organization is

ethical issue intensity

Federal Sentencing Guidelines for Organizations

focuses on firms taking action to prevent and detect business misconduct in cooperation with government regulation

_________ is defined as any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression.

fraud

______ is the first sign that an unethical decision has occurred

guilt

One of the major ethical issues President Obama's administration focused on was

health care and consumer protection

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

highly educated

Ethical leadership should be based on

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

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

integrity

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.

The relationship between business ethics and age

is complex, although experience helps older employees make ethical decisions.

Research concerning nationality and the ability to make ethical decisions

is hard to interpret in a business context because of cultural differences.

The ______ of an organization can influence the acceptance of, adherence to, transmittal, and monitoring of organizational norms, values, and codes of ethics

leadership style

Which of the following has been identified by Ethics Resource Center as the leading form observed misconduct in organizations

misuse of company resources

Mr. Smith told his client, Mr. Jabar, who was not an IT expert, that the new software systems were much better than his existing ones. To convince Mr. Jabar, Mr. Smith used a great deal of technical jargon that his client did not really understand. Mr. Smith did this intentionally to confuse Mr. Jabar. This is an example of

noise

External and internal rewards relate to which part of the ethical decision-making framework?

opportunity

Those who have influence in a work group are referred to as significant others and include

peers, managers, coworkers, and subordinates

A stakeholder group that is absolutely necessary for a firm's survival is defined as

primary

Title VII of the Civil Rights Act of 1964

prohibits employment agencies, employers, and unions from discriminating against applicants and employees on the basis of race, color, religion, national origin, or sex.

When a commercial states that a product is superior to any other on the market, the marketer risks Accusations of

puffery

An ethical issue is a problem, situation, or opportunity

requiring an individual, group, or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical.

Which of the following do not typically engage in transactions with a company and thus are not essential for its survival?

secondary stakeholders

collusion

secret agreement or cooperation

The _______ model is founded in classic economic precepts

shareholder

Which of the following is not considered a significant other group in the workplace?

spouses

Leaders whose decisions and actions are contrary to the firm's values send a signal

that the firm's values are trivial or irrelevant.

Defamation

the action of damaging the good reputation of someone; slander or libel.

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

Optimization is defined as

the trade-off between equity and efficiency

Accountants must abide by a strict code of ethics that defines their responsibilities to

their clients and the public interest.

When unethical acts are discovered in a firm, in most instances

there was knowing cooperation or complicity from within the company

In marketing communications, lying causes predicaments for companies because it destroys

trust

A company can be sued for discrimination if it

uses age as a hiring or firing criterion.

Donation of computer equipment to schools by Toshiba would be associated with _____ responsibilities.

voluntary

The ethical decision-making process begins

when stakeholders trigger ethical issue awareness and individuals openly discuss it with others.