Ethics

Laura Nash model for ethical analysis

-Are you confident that your position will be as valid over a long period of time as it seems now? -Whom could your decision or action injure? -How did this situation occur in the first place?

Which of the following correctly characterizes Dennis Kozlowski, the CEO of Tyco?

-he wa a profligate spender -he was known for philanthropic activities -he hired people who were smart, poor, and wanted to be rich

Employees who are considering expressing their dissent about improper conduct in the work environment must tackle, in part, whether they

-will stay at the company or leave the company -whether they will blow the whistle internally or externally -whether they will take an active stance or an inactive stance

Stakeholder theory is based on the work of:

Dr. Edward Freeman

Ashley is a student worker in the front office of the chemical engineering department. Ashley has been taking pens, pencils, and paper from the office for use in her studies. The department just hired a new student worker, and Ashley explains to the new hire, "It's okay to take supplies. We all do it. I didn't at first, but you just sort of get into it." How would you classify Ashley?

Ethical compartmentalizer or rationalizer, as well as ethically desensitized

How many jobs did Robert Gadams have as a vice principal before anyone took action to remove him from his contact with students because of behavior?

Five

What role did goodwill play in Tyco's accounting and financial reporting?

Tyco used goodwill valuations to load up its balance sheets with assets

The Chobani yogurt company awarded its employees 10% of the shares of the company after it went public. The CEO, Hamdi Ulukaya, said that he wanted to pass the wealth along to the employees. Which author would support Mr. Ulukaya's actions?

Marjorie Kelly

Which of the following is false about the fate of Malden Mills?

Mr. Feuerstein did not lead the company after the fire

Who was J. Clifford Baxter and what happened to him?

NONE OF THESE ARE CORRECT -He was the Andersen external audit partner, and he was removed from his assignment at Enron. -He was an analyst at Merrill Lynch who raised questions about Enron and was disciplined for doing so. -He was an Enron executive who was fired and committed suicide.

Arthur Anderson

NONE OF THESE ARE CORRECT -signed off on the accounting changes Scott Sullivan wanted made -was are of the accounting changes Scott Sullivan wanted was -was made aware and signed off on the accounting changes Scott Sullivan wanted made

The doctrine of inevitable disclosure:

NONE OF THESE ARE CORRECT a. entails that the requirements of a covenant not to compete must still be met to permit its use. b. is enforceable in all employment departure situations. c. is not a recognized judicial remedy.

Homex, a builder of single-family homes, represented in its financial statements that it had built out a subdivision and sold all of the homes in that subdivision. In reality, the subdivision had only a few half-built homes and raw land. Homex's financial statements showed the profits from the sale of the homes, and Homex's stock increased in value as more buyers purchased Homex stock. Which of the following ethical dilemmas applies?

hiding or divulging information

Which of the following accounting issues did Enron not have?

enron had all of these accounting issues -market to market accounting -SPEs -off the balance sheet transactions

Which of the following describes someone who simply does what he or she is told to do at work even if it is unethical?

ethical sycophant

The four voices an employee can use when an activity triggers a concern, according to Peter B. Jubb are:

external dissent internal dissent dissent in a form other than internal or external no expressed dissent

Which was not an example of a business ethical dilemma discussed by Albert Carr in his article on business bluffing?

failure to support climate change treaties

an employee facing a conflict at work which is not illegal or immoral may elect to express their dissent to someone who they know cannot take any action by staying and ____ or leaving the company and ______

filing an internal grievance explaining their decision to leave in an exit interview

What type of whistleblower was Clifford Baxter at Enron?

he left in silence

What was Madoff's sentence?

he received 150 years

Which of the following is true about Bernie Madoff?

he was once the chair man of NASDAQ he was on the board of NASD/FINRA the SEC investigated the company in 2005 and closed the investigation without finding any legal issues

Janice has developed a program that permits Uber drivers to evade detection that they are providing rides in areas where they are prohibited. Thus Uber drivers can continue to operate illegally. Janice's probable rationalization would be:

if i don't do it, somebody else will develop the program

What does Peter Drucker believe is needed to correct unethical behavior in business?

imposing stiffer punishments on business executives

Geoff is a consultant at a company that provides software solutions for business call centers, and he is now working with a senior consultant on a call center upgrade at an auto insurance company. Geoff's company's proposal for the project allows for 10,000 man hours for completion of the upgrade. As Geoff and his senior consultant/supervisor are working on the project, they realize that the project will be completed in about 7500 hours. The senior consultant tells Geoff, "Just work more slowly, stay longer at the call center, and write more reports. The company has this set up as being our project. If we cut it short, what will happen to us? The client accepted the total number of hours. We just have to make sure we put in the hours." What layer of ethical issue is involved in this situation?

individual

What layer of ethical issue applied to the conduct of former Hewlett Packard CEO Mark Hurd?

individual

Jack Barnes is the CEO of Graphics Prints and Art, Inc. Jack was scheduled to take an important customer on a hunting trip for the weekend, and the company made and prepaid for the arrangements at an exclusive hunting lodge. At the last minute, the client canceled the weekend. Jack took his wife and went anyway, at company expense. Jack's administrative assistant is concerned about the trip and the cost to the company. When she raises the issue with Jack, he responds, "There is nothing wrong with what I did. For all I do for this company, all the time I spend away from my family, don't you think I deserved that weekend?" Which of the following applies to this situation?

jack has slipped into the leadership syndrome of having great discretion and few checks and balances on his activites

Jane Grayson was late for an important client meeting. The freeway was jammed, so Jane slipped into the carpool lane and made it to her client meeting on time. Jane explains her actions by saying, "Look, I know it's wrong when you're alone to drive in the carpool lane, but I had no choice. Too much was hanging in the balance." Which of the following describes Jane's thought processes on this issue?

jane was using moral relativism to process her decision

The Bathsheba Syndrome refers to:

leaders such as King David making ethical missteps because of their power

At WorldCom, Betty Vinson

made the fraudulent accounting entries

What tool applies to addressing ethical lapses at the societal level?

philanthropy

What did Mr. Madoff blame for his actions that cost investors billions?

pride

employees who are faced with a conflict in the work environment but who feel unable to express their dissent may _____ or ______

remain inactive and observe confront the wrongdoer

You provide good, positive feedback on a fellow team member who actually did not pull his weight on your team project. He missed team meetings, did not provide the research he was assigned for the project, and did not contribute to the final written product that your team produced. Your professor uses the evaluations of fellow team members to determine 25% of all students' grades on the team project. You simply feel that you do not want to harm someone's grade. Which of the following categories of ethical dilemma apply to this situation?

saying things you know are not true

What tool is effective for stopping individual ethical lapses?

screening employees and internal controls and audits

The Hallmark/Westland case focused on federal regulations on:

slaughtering cattle

what did volkswagen's internal investigation reveal about the falsified emissions?

that employees just followed orders

Why was the fluid line of employees between Andersen and Enron a problem?

this created conflicts of interest

An employee's personal value system will factor into whether she chooses to blow the whistle on illegal or immoral conduct.

true

if you resolve your ethical dilemmas by a reference to a certain standards and values that you have pre-established, you are following which ethical philosophy?

virtue ethics

When did Wells Fargo senior management first become aware of issues related to the creation of accounts?

2005

What was the KELP program at Tyco?

A loan program for officers

Which of the following is an accurate description of WorldCom's board?

ALL OF THESE ARE CORRECT -it was known as Bernies Board -it was not an active or curious board -some of the board members had conflicts of interest

Which case did not involve a conflict of interest issue?

Aaron Feuerstein and Malden Mills

Rob Ballard has been a loyal contractor for Ames, Inc. for 13 years. Rob has never raised his prices because of his dedication to Ames's work in training leaders for the electric power industry. Sheila Reta, the director of training programs for Ames, has decided to revamp the training programs Ames offers in areas that Rob has worked in, and she believes that it is too expensive to have Rob come and do the training. Sheila tells Rob at the end of 2017 that she can no longer justify bringing him in for the programs and that his contract will not be renewed. Allison Jenson, who reports to Sheila, is worried and explains to Sheila, "Rob has been loyal to us and has given up other opportunities to work with us. By ending his contract we probably take away 75% of his income." Sheila responds, "But, this is business. We have to watch costs and provide good programs." Whose approach to ethics is Sheila following in her decision to terminate Rob?

Albert Carr and his theory of ethics

In 2017, several meat producers in Brazil were charged with bribing meat inspectors in order to pass inspections. One industry analyst commented, "This is just the way things are done in Brazil. You can't do business in this industry unless you are paying the inspectors." At the time the bribery charges were revealed, the government also revealed contamination of the meat production lines and possible bacteria in several types of meats. Which view on ethics would agree with the analyst?

Albert Carr's

Ebony Prudhomme works as an assistant for novelist Allison Thurber. Emily has struggled to do her job correctly, and Allison is frustrated with her performance. There was no employment contract. Emily is able to find another job with a publishing house that does not publish Allison's work. Before she leaves her job with Allison, Ebony goes into the Microsoft Word file containing Allison's next novel, and she jumbles the chapters and deletes large segments of text. Ebony then discloses to her new publisher the basics of the plot of Allison's book. During the delay Allison experiences because of Ebony's sabotage, Ebony's publisher is able to develop and publish a book with a similar plot line. Which of the following statements is correct?

Allison has the right to stop publication of the book by the publisher and to recover damages for the problems with her manuscript.

Jones Landscaping works in an area of vacation homes. About 90% of the homes in this area are second homes for people who only visit during the summer months. Jones Landscaping is licensed with the State Registrar of Contractors and has a bond. Its bond only covers Residential 3 housing, or homes that are primary residences; the bond does not cover Residential 4 housing, i.e., homes that are rental properties or used as secondary or vacation homes. Jones' business cards, stationery, and trucks all say "Licensed and Bonded." A homeowner whose work was not done correctly tries to get Jones to finish the work, but Jones refuses. The homeowner goes to the bonding company; the bonding company says, "You are not covered because you are Residential 4." The homeowner responds, "But you let Jones lead us to believe he was appropriately bonded." The bonding company says, "That's really not our problem." Into which category of ethical development would you put the bonding company?

Amoral technician

Which of the following is an example of an amoral technician?

Andrew Fastow

Who said the following, "Within the culture of corruption that Enron had, that valued financial reporting rather than economic value, I believed I was being a hero"?

Andrew Fastow

Why can advertisers no longer use college athletes' images in television ads?

Because a court determined that their images could not be used without compensation, and athletes cannot accept compensation

Ikea manufactured a dresser that was easily tipped over by children, leading to injury and, in seven cases, death. Ikea recalled 36 million of the dressers. Why did Ikea issue the recall?

Because the product was defective by design

Which of the following people raised a red flag about Enron before its collapse?

Bethany McLean and John Olson

Which of the following did not happen at Adelphia?

Board members competing with Adelphia for the purchase of cable companies b. Adelphia financing the motion picture career of John Rigas's daughter c. $1 billion in off-the-books debt

Who believed that the accounting practices at WorldCom had no basis in accounting principles?

Both David Myers and Buford Yates

Who said "Everything I'd done in some way contributed to the outcome"?

Chesley Sullenberger

What was the defect in the Tide pods?

Children assumed the pods were treats.

What alternatives did Costco propose to Kimberly Cloutier to accommodate her piercings?

Covering the piercings with a bandage b. Substituting clear plastic rings c. Removing the ring

What ethical category applies to the problems T-Mobile experienced with regulators over its advertising?

Creating a false impression

The problem with T-Mobile insurance was:

Customers were misled about the deductible on the insurance.

Who did not go to prison as a result of what happened at WorldCom?

Cynthia Cooper

Who went to prison after the Tyco trials?

Dennis Kozlowski

Jared, a business professor, has a speaker in class today who is a successful CEO. In front of the class, Jared asks the CEO if he has ever done anything that was unethical during the course of his career. The CEO responds, "Sure. I did lots of things that were bad on the way up. But now that I am successful, I am making up for all that. I give 25% of my income to charities. I also donate weekends to service projects. I knew that if I was successful, I could make up for anything I did during my early years." Into which of the following categories of ethical development would you place the CEO?

Ethical procrastinator/postponer

Luis Chavez runs a successful plumbing company, Chavez, LLC. One of Luis's competitors is bidding on the same job for which Luis is submitting a bid. Luis's competitor tells the owner of the property, "Look, if you are thinking about Luis, I know him and I know his work. All I can say is that you will have a lot of regrets if you use him." Luis has an AAA rating with the Better Business Bureau and five-star ratings on home services sites. Which of the following ethical categories apply to the competitor's statements?

Giving or allowing false impression

Susan Gregg works for Golden Globe Pretzels. Golden Globe has a recipe for butter-flavored pretzels that sell very well. The recipe is unique to Golden Globe and no other company has the recipe. However, Golden Globe does very little marketing and obtains its customers through word-of-mouth. Susan was recently approached by a competing snack company, Mr. Salty. Mr. Salty does not sell butter-flavored pretzels, but does sell pretzels. Susan does not have an employment agreement with Golden Globe. She takes the job with Mr. Salty, and she brings with her Golden Globe's customer list for Mr. Salty to use. Which of the following is correct?

Golden Globe cannot stop Susan from working for Mr. Salty.

Which of the following is not a question for reviewing an effective performance evaluation?

Have I told the employee the truth? b. Are the evaluation ratings consistent with what I told the employee? c. Did I give examples of meeting or not meeting standards of performance? d. All of these are questions that should be asked about giving an effective performance evaluation

What does Dr. Friedman believe about the doctrine of the social responsibilities of business?

He believes that it is vague, lacks rigor, and is analytically loose

What justification/rationalization did Bill Owens give to Diana Henze when she raised questions about the wide swings in HealthSouth's earnings?

He said that that HealthSouth had to make its numbers or the company would suffer and innocent people would lose their jobs.

What was Mr. Scrushy's eventual fate?

He was tried and acquitted of charges related to the HealthSouth fraud.

If an employee knows the product her company makes is defective, she will often consider which of the following:

Her concern for the customer b. Her loyalty to her company c. Her loyalty to fellow co-workers d. Her livelihood e. Her co-workers' livelihood the safety of others

What was the eventual resolution of the Starwood/Hilton legal battles?

Hilton was prohibited from using the Denizen design that developed after the Starwood executives brought "zen den" from Starwood.

Holly Grimes has been writing a blog on her own time at home. On the blog, Holly has been very critical about a competitor of her employer's, and some of the statements she has made about the competitor are false. Which of the following statements is correct about Holly's employer's rights?

Holly's employer could have liability for the false information Holly is posting.

which of the following is not a question that is part of the Laura Nash model for ethical analysis

How does it make me feel?

What type of proprietary information did the executives from Starwood take to Hilton when they began work there?

Information on Starwood's plan for a new hotel chain

Which of the following was true about HealthSouth in its initial years?

It experienced double-digit growth in income, and it had an innovative business model.

If employers and admissions officers use Google searches and Facebook to look up applicants, which practice could result in discrimination charges?

It is discriminatory if there is selective checking and all applicants are not searched for or examined in the same way

James Suffolk committed a felony robbery when he was 18 years old. He entered a guilty plea and was sentenced to five years' probation because he participated as the driver for his two friends who actually robbed the 7-Eleven store. James finished college and began law school during his five-year probation, and he successfully petitioned to have his record expunged of the felony conviction. By law, when your record is expunged, there is no record of that criminal conviction. He is applying to take the bar exam, and a question on the application asks, "Have you ever been convicted of a felony?" James answers, "No." He explains, "I have a clean record. No one can look that up." Which of the following views best applies to James's answer to the question and his explanation?

James was answering in a way that maximizes his chances for admission to the bar, just as when we embellish the types of magazines we read in an employment applicaiton

Who believes that most businesses are not created with the goal of maximizing profits?

John Mackey

A Wall Street Journal article explained that the country of Haiti has not been able to progress beyond tin-roof shacks as its primary form of housing. The article also noted that the international humanitarian community has given so much food that local Haitian food producers have been driven out of business; they cannot compete with food that is free. As a result, there is little food production in the country. Who of the following might have predicted this outcome?

Jon Entine and Marianne Jennings

Which of the following is a consequence of the failure to confront individuals about difficult issues?

Liability increases.

Which of the following is an accurate description of HealthSouth's officer team?

Many were young, and there was high turnover in the CFO position.

Which of the following people at Tyco pushed back against the accounting, spending, and loans at the company?

Patricia Pue

What event in the United States was responsible for the first major shift from caveat emptor on consumer products and liability?

Ralph Nader's Unsafe at Any Speed

What was the first crime Mr. Kozlowski was indicted for?

Sales tax evasion

What was the end result of the fire problem with Samsung phones?

Samsung had to issue the largest recall of cell phones in history.

What were the accounting issues at Adelphia

Self-dealing by the family

Which of the following would not be a stakeholder of a corporation?

Shareholders

What information did Margaret Ceconi have about Enron, and what did she do with it?

She had information about Enron Energy services accounting and reportited it to Mr.Lay

What did Frank DiPascali confess to regarding the time he worked at the Madoff firm?

That he knew there were no trades and that the firm was running a fraud

What did the law firm of Wilmer Cutler communicate to Tyco's general counsel?

That they found issues in Tyco's financials that indicated creativeness in hitting earnings forecasts that would likely interest the SEC

What point does Professor Lefcoe make about ethical lapses?

That we gradually ease into them

What happened when Diana Henze reported her concerns about HealthSouth's accounting to the Compliance Department?

The Compliance Department did not have access the information needed to investigate what Ms. Henze reported.

In 2016, the hoverboard was a fad that swept the United States. The self-balancing scooters were battery operated. By July 2016, there were 99 incidents involving the battery packs overheating, sparking, smoking, catching fire, or exploding. The incidents involved two manufacturers who used battery packs from a single supplier. One of the remaining manufacturers that had no such incidents ran an ad with the following language: "Make sure when you hover that the name on your board is ours. With us, safety comes first. Unlike our competitors, we make our own battery packs. We know they are safe." Which of the following is correct about the ad?

The ad, while harmful to competitors, is factual and not defamatory.

What is the difference between the caffeine in energy drinks vs. the caffeine in coffee?

The difference can be up to five times as much.

Which of the following is not a requirement for a valid non-compete agreement?

The need for protection b. Reasonable in geographic scope c. Reasonable in time

St. Jude Medical, Inc. produced and sold pacemakers and defibrillators, but problems developed with battery malfunctions. The FDA believed that St. Jude became aware of these problems but continued to sell the pacemakers and defibrillators without disclosing the problems. Two patients died because of the battery malfunctions. Which of the following is a correct product liability theory for the patients who experienced harm?

The product was defective by design and by inadequate warnings.

Last year, Tanner Minkin was hired by Swift Consulting, Inc. When he was hired, Tanner was given a three-prong model for performance evaluations: revenue brought in, customer satisfaction, and productivity. When Tanner's supervisor gives him his one-year evaluation, he tells Tanner he will only be rated as "meets expectations." Tanner explains to his supervisor that he is the company's top revenue producer, that his jobs are all completed early, that his clients are all very happy. His supervisor explains, "But you are obnoxious. Dating the staff and dropping them is not a good idea." Which of the following is not correct regarding this evaluation?

There is no risk because the supervisor has taken the time for confrontation on a difficult issue. The risk would be in not giving the lesser evaluation.

At HealthSouth, what did the term "Monday morning beatings" mean?

These were meetings in which managers were questioned about their numbers, performance, and expenses.

What does Dr. Friedman think about business people who believe business has a social conscience?

They are unwitting puppets of intellectual forces that undermine the basis of a free society

What did the people of Coudersport think of the Rigas family?

They believed that Mr. Rigas was a generous "Greek god."

Why did Tyco employee the "dog" strategy with its acquisitions?

To take advantage of the bump to earnings that spring-loading provides

The Sopranos television show wishes to show a lawyer checking a book for an answer on a real estate question. The show will be using the textbook Real Estate Law by Marianne Jennings. Which of the following is true?

Using the book is using an image or likeness in a commercial venture and requires permission and/or compensation.

What are the royalties required for using the song "Happy Birthday to You"?

Zero royalties are required

saying that you were misremembering vs. lying is an example of

a comfort label

The either/or conundrum is:

a form of ethical analysis that creates a box with limited escapes

the special admits program at the university of north carolina was the beginning of

a slippery slope

which of the following is peter druckers test for ethical dilemmas

above all, do no harm primus non nocere just don't hurt anybody

What allowed WorldCom to hide its financial difficulties?

accounting for acquisitions

A reporter questioned a company official about the company's statement on the dangers of its recent problems with gas levels in one of its mines. Another report indicated that the gas levels were higher than the company had reported. The reporter wanted to know which was true. The company spokesperson said, "Well, we have alternative facts." What strategy is the company spokesperson employing in handling an ethical dilemma?

applying a soft label to allow comfort with the decision

If an employee has a concern over illegal activity at their company, they may elect to stay and _______ or leave and _______

blow the whistle exit with a protest

An employee who is determined to stay at the company rather than leaving and who wants to be actively engaged in solving the problem, may elect to voice their concerns about illegal or immoral activity by:

blowing the whistle with an external agency blowing the whistle with a higher level of management

Which of the following factors did Enron have in common with WorldCom?

both had weak boards

The head of the Port Authority for the New York/New Jersey area met with the chief operations manager of United Airlines and asked if United could restore a direct flight from Newark to an airport near his vacation home in South Carolina. In exchange, the head of the Port Authority increased the number of gates United had at the Newark airport. Which of the following categories of ethical dilemmas applies?

buying influence or engaging in conflict of interests

Which non-GAAP accounting process did WorldCom use?

capitalization of ordinary expenses

"Rain-forest chic" is:

capitalizing on consumers buying decisions based on environmental issues

Your friend has been drinking during a party that began at 8:00 PM. Your friend announces at midnight that she is leaving. She drove her car to the party. You ask her if she should be driving and she assures you that she will be fine. Your friend does not seem stable, and you believe she is drunk, but you feel it is none of your business. Which of the following categories does this ethical dilemma you are facing fit into?

condoning unethical actions

Which characteristic best describes the reason that the HealthSouth board was weak?

conflicts of interest

How did the WorldCom overstatement eventually become public?

cynthia cooper went to the audit committee and the external auditior

Margo took an Uber to the airport. She noticed that the car smelled of marijuana. Margo asked the Uber driver if she had been smoking marijuana. The driver said that she had, but added that she was a single mother trying to make ends meet and being an Uber driver was an extra job that she needed in order to support her family. Margo is debating whether she should report the driver. Margo concludes, "I won't report her. She didn't really hurt anyone." Margo's decision:

was made using rationalization