MGMT 5073 - Management and Ethical Leadership Exam 1

John and Jessica recently went to a local bank for borrowing money to purchase a home. If the bank offers them a 100-percent financing and are not required to provide proof of employment or income, it would classify as the _____ from the 2000s era in the United States.

Liar Loan

Informal Role Model

What employees observe of people in positions of authority

Hypocritical Leadership

When a person in a position of power talks about the importance of ethics, but then acts in an unethical manner

Alignment

When formal and informal systems are "pushing" employees in the same direction

TRUE/FALSE: Because mission statements always reflect the core values of an organization, it is safe to assume that because they are codified in writing, policies, and procedures, the organization will always behave ethically.

FALSE

TRUE/FALSE: Being accepting of failure shows weakness and invites incompetence. Ethical Role Models should never be accepting of failure.

FALSE

TRUE/FALSE: Climate and Culture are completely interchangeable in the context of organizational behavior

FALSE

TRUE/FALSE: Cost-benefit analysis is the best way to determine the right course of action, when ethical questions arise.

FALSE

TRUE/FALSE: Culture change occurs rapidly.

FALSE

TRUE/FALSE: Cultures where employees are free to question orders, or leaders, are toxic and should be avoided at all cost.

FALSE

TRUE/FALSE: Equal outcome for all is the true measure of whether an action is fair.

FALSE

TRUE/FALSE: Ethical organizational behavior starts at the bottom of an organization and works its way up to senior leadership.

FALSE

TRUE/FALSE: Internal audits (i.e. culture surveys) are ineffective ways to measure an organization's culture

FALSE

TRUE/FALSE: Reward systems for reporting problems are ineffective.

FALSE

TRUE/FALSE: Reward systems have little to no impact on the ethicality of organizational behavior.

FALSE

The type of language used when describing a situation does not affect moral awareness.

FALSE

There are major differences in levels of moral reasoning between men and women.

FALSE

Training, whether in groups, peer to peer, or using DVD to deliver the content, has been shown to be ineffective in helping employees become ethically aware.

FALSE

What two things should effective performance management systems do?

Focus on the mechanics, Marry the what with the how

The tendency to overemphasize personality‐based explanations for behaviors observed in others while under‐emphasizing the role and power of situational influences on the same behavior.

Fundamental Attribution Error

What is the first step in the sound ethical decision making in business?

Gather the Facts

____________ is a type of sexual harassment wherein a worker is made to feel uncomfortable because of unwelcome actions relating to sexuality.

Hostile Work Environment

Tendency to underestimate risks because of the belief that we are in charge of what happens.

Illusion of Control

Tendency to overestimate the likelihood of good future events.

Illusion of Optimism

Unconscious distortion of information in order to maintain a positive self-image.

Illusion of Superiority

Which of the following is true?

a. ***Cognitive biases are the result of trying to reduce uncertainty and simplify the world.*** b. Cognitive biases are an individual difference and do not affect all human beings in the same way. c. Business executives and students are generally reserved about their knowledge of the facts. d. People are generally good at thinking of the consequences of their decisions outside of their immediate family and friends.

Which of the following is true?

a. ***People's locus of control is relatively stable, but can change over time. *** b. People are born with a particular locus of control. c. People are either internal or external. Locus of control is not a continuum. d. People with high external locus of control believe their life is a product of their own efforts.

Which of the following is false?

a. Moral reasoning can be increased through training. b. A more-principled individual is less likely to cheat. c. When an organization's leader is characterized by high moral development, the entire ethical climate of the organization is stronger. d. ***Employee satisfaction and commitment are not related to the leader's moral development.***

The following helped lead to Jack Abramhoff's downfall:

a. Rationalization b. Overconfidence bias c. Framing d. Self-serving bias e. **All of the above**

Ethical behavior can be influenced by:

a. an individual's religion b. an organization's culture c. ethical training d. an individual's personality e. **all of the above**

Strong Organizational Culture

assumptions, values, beliefs widely shared

Sensemaking

creating awareness and understanding in situations that are complex or uncertain

47. Those with higher __________ are more likely to avoid pressure to violate social norms because _____________.

internal locus of control; they believe they are in charge of their own fate

TRUE/FALSE: A robust decision-making process is unneeded in the workplace, because the right and ethical answer should be simple common sense.

FALSE

TRUE/FALSE: Aligned systems are always ethical.

FALSE

TRUE/FALSE: An ethical manager never discusses the results of internal culture audits with their subordinates

FALSE

What is the title of Adam Smith's first book?

The Theory of Moral Sentiments

What was the name of the legislation that was passed by the U.S. Congress to rein in the most egregious practices in the financial industry?

Dodd-Frank

If you are asked to make hastily a decision that you believe raises potential ethical issues you should be a good team player and proceed with the decision.

FALSE

In Kohlberg's theory, adherence to any principle qualifies as "principled" thinking.

FALSE

It is good advice to always just go with your gut when faced with an ethical dilemma.

FALSE

It is unethical for managers to "control" employees' ethical behavior through direct management and the organization's formal and informal cultural systems.

FALSE

TRUE/FALSE: A fair role model should only listen to a select few of their most trusted advisers - the rank and file don't know what the company's needs really are.

FALSE

The 6 most common categories of rationalizations:

1. Denial of responsibility 2. Denial of injury 3. Denial of victim 4. Social Weighting 5. Appeal to higher loyalties 6. Metaphor of the ledger

What are the 4 perspectives for Ethical Role Models?

1. Interpersonal Behaviors 2. Fairness with Others 3. Ethical Action & Expectations for Self 4. Articulation of Ethical Standards

Ethically Neutral Leadership / "Silent" Leadership

A Leader Who Is Not A Strong Or Weak Ethical Leader, But Does Not Provide Clear Ethical Guidance People May Not Know The Leader's Ethical Beliefs Or Whether The Leader Cares

Culture

A body of learned beliefs, traditions, and guides for behavior shared among members of a society or group

Argument

A reason or set of reasons given with the aim of persuading others that an action or idea is right or wrong

Which is easier to change, climate or culture?

Climate

Tendency to search for and focus on information that endorses the decision we prefer.

Confirmation Bias

Ethical Climate - Fairness

Employees believe they are treated fairly in outcomes, processes, and interactions

Ethical Climate - Rule-Based

Employees follow both laws and organizational rules when making decisions.

Climate

Employees' shared perceptions of the organization in terms of policies, practices, expectations and outcomes

What has the single largest impact on the ethicality of organizational culture?

Executive Leadership

Formal Systems

Executive Leadership Selection System Policies/Codes Orientation/Training Performance Management Authority Structure Decision Processes

Organizational Culture

Expresses shared assumptions, values and beliefs, and is the social glue that holds the organization together. How we do things around here...

29. In business, concerning yourself with how your decision making affects stakeholders is useless given the number of stakeholders and their different interests.

FALSE

According to Lawrence Kohlberg, developer of a key theory of moral reasoning, role taking is useless as nothing is gained by putting yourself in the shoes of others.

FALSE

According to cognitive moral development theory, the actual moral decision is more important than the reasoning process used to arrive at it.

FALSE

According to research, one's ethics are fully formed and unchangeable by the time one is old enough to enter college or a job.

FALSE

According to the textbook, most people are guided by a strict internal moral compass and will not be swayed by organization factors.

FALSE

An employer cannot be held liable for an employee's sexual harassment activities.

FALSE

Despite the disclosure rule, making decisions in private to avoid negative reaction is generally best for a business as it safeguards your firm's reputation and keeps competitive information away from your competitors.

FALSE

Discarding the few "bad apples" will usually solve all of the ethical problems within an organization.

FALSE

Federal and state laws define what is ethical. Therefore, if it is not illegal, it is not unethical.

FALSE

Good character is the main factor determining whether an individual acts ethically within an organization.

FALSE

Formal Role Model

Mentoring socialization systmes

Ethical Climate - Self-Interest

People protect their own interest about all else.

_____________ is a type of sexual harassment wherein an individual believes that sexual favors are a requirement for advancement in the workplace.

Quid Pro Quo

Identify the three components that are used to define "fairness."

Reciprocity, Equity, and Impartiality

Unethical Leadership

Reputations as weak moral persons / weak moral managers

Informal Systems

Role Models/Heroes Norms Rituals Myths/Stories Language

Ethical Leadership

Strong moral person / strong moral manager

A challenge involved in using a strictly consequentialist approach is that it is often difficult to obtain the information required to evaluate all of the consequences for all stakeholders who may be directly or indirectly affected by an action or decision.

TRUE

A major challenge of taking a deontological approach to resolving an ethical dilemma is deciding which duty, obligation, right, or principle takes precedence because ethical dilemmas often pit these against each other.

TRUE

A virtue ethics approach is particularly useful for individuals who work within a professional community, such as the accounting profession, that has developed high standards of ethical conduct for community members.

TRUE

A virtue ethics perspective requires a moral actor to look to the community that will hold the moral actor to the highest ethical standard and support the moral actor's intention to be a virtuous person.

TRUE

An effective way to avoid decision-making weaknesses and biases is to become aware of them and to incorporate steps into decision-making that are explicitly aimed at reducing their impact.

TRUE

Business managers generally rely on the consequentialist approach.

TRUE

Ethical dilemmas represent conflicts in values.

TRUE

Managers must structure the work environment to support ethical conduct and this includes ensuring that reward systems are aligned with the ethics of the firm.

TRUE

One of the best things we can do to preserve our moral intent is to monitor our own rationalizations.

TRUE

Stage 1 of Kohlberg's Levels of Moral Reasoning is focused on avoiding punishment.

TRUE

TRUE/FALSE: A fair role model does not hesitate to explain decisions, especially when it is appropriate to do so.

TRUE

TRUE/FALSE: Accentuating the positive is a crucial interpersonal behavior for an ethical role model.

TRUE

TRUE/FALSE: Employees do not typically blow the whistle out of fear of retaliation, or being cast as a "rat" or "narc."

TRUE

TRUE/FALSE: Leaders who behave and exhibit ethical behavior are likely to have ethical followers, and vice-versa.

TRUE

TRUE/FALSE: Organizational culture can be strong or weak.

TRUE

TRUE/FALSE: Values Statements are more detailed/specific to certain tasks/behaviors than are Mission Statements.

TRUE

The human ability to rationalize is perhaps the single most important factor that enables good people to give themselves license to do bad things.

TRUE

The self-serving bias can cause us to selectively remember things that make us look good.

TRUE

You should guard your reputation as it is built slowly with countless actions, but it can be destroyed in an instant by one foolish mistake.

TRUE

Ethical Climate - Benevolence

The organization cares about multiple stakeholders

Culture (vs. Climate)

The underlying shared values and beliefs which lead to the experiences that influence the development of perceptions (climate)

In the textbook, the authors focus on _____________ factors because ____________:

organization; these factors can be directly controlled by managers

Weak Organizational Culture

subgroup norms more influential

Socialization

the process by which individuals internalize the values, beliefs, and norms of a given society and learn to function as members of that society (sensemaking and sensegiving)

Sensegiving

the process of influencing how others make sense of the organization, where they fit within it, and the larger purpose of their work