MGT 3110 Midterm
Which definition describes an ethical issue?
An identifiable problem, situation, or opportunity that requires a person or organization to choose among several actions that may be evaluated as ethical or unethical
What is cognitive bias
An involuntary pattern of thinking that produces distorted perceptions of people, surroundings, and situations
What is one way that ethical leaders can empower employees?
Creating an open communication environment
What is true about the influence of ethical decision making factors in an organization?
Employee decision making is often affected more by organizational relationships.
In this section, ___________ was identified as the best way to identify misconduct in an organization.
Employee reporting
Which statement is true about the ethical decision-making of leaders?
Ethical leaders must often make trade-offs regarding stakeholder demands.
While ________ cultures do not necessarily ignore employee well-being, they tend to emphasize company performance first.
Exacting
If Steve Jobs was admired for his knowledge of Apple products, he displayed _________.
Expert Power
What is Conscious Capitalism
Focuses on both primary and secondary stakeholders
What is a conflict of interest
The best interests of an individual are placed above the best interests of the company.
Those with an internal locus of control believe __________.
They are in control
Why would it be a mistake to ignore secondary stakeholders?
They can be an ally or a threat
Why might ethics mistakes actually improve an organization in the long-run?
They give the firm an opportunity to learn from its mistakes.
What is a groupthink
When people in a group go along with the group decision.
People hate ___ twice as much as they hate ___
losses, gain
What is a typical business structure
BOD → CEO → Research and Development, Marketing and Sales, Production, Finance, Administration
What are the benefits of ethical leadership?
Employees are more willing to work for ethical companies.
What likely contributed to the flawed corporate culture at Countrywide Financial?
Flawed incentive
Leaders who display good character
take responsibility for ethically meeting stakeholder needs.
Based on our definition, how should companies approach principles?
0 Tolerance
What is the Dodd Frank Act?
A law that addresses a broad range of issues that relate to financial and investment activities, including mortgage lending and investing. It also instituted the whistle-blower program
Based on observations of J. P. Morgan CEO James Dimon's reaction to a crisis, what is a good way to manage a crisis?
Act quickly and take responsibility for the issues.
What is the definition of an ethics audit?
An investigation into the ethical climate of the firm
Countrywide Financial did not appear to care for employees' well-being or the long-term well-being of the firm. It can best be described as having a(n) __________ culture.
Apathetic
Why are hotlines useful in a firm?
Because they allow the caller to remain anonymous
Which statement is true about a compliance orientation and a values-based orientation within a company?
Both increase ethical awareness
What is loss aversion?
CB Because we hate losses about twice as much as we enjoy gains, we are more likely to act unethically to avoid a "loss" than to secure a "gain."
What is self-serving bias?
CB People gather and process information in a self-serving way and fail to see and/or object to unethical behavior that serves their self-interest.
What is Tangible & Abstract?
CB People remember immediate and tangible factors at the expense of more removed and abstract factors.
What is ethical fading?
CB occurs when we are so focused on other aspects of a decision that its ethical dimensions fade from view.
What is incrementalism?
CB the slippery slope in which one gets used to minor infractions and does not notice when minor infractions give way to major ones.
As a company that places employee well-being over company performance, Zappos displays a _________ culture.
Caring
By being highly persuasive and skilled at getting employees to adhere to a common goal or mission, Zappos CEO Tony Hsieh displays what kind of leadership style?
Charismatic Leadership
An Enron, the lowest 20 percent of performers were systematically fired. This could be an example of __________.
Coercive Power
What is one of the biggest ethical risks that companies face?
Complacency
Which statement is true regarding the aftermath of the financial crisis
Consumer trust of business hit a low point
Which word best describes a compliance orientation?
Contractual
What is Research and Development
Discovering what people need, want, or could be encouraged to want
What is a secondary stakeholder
Do not engage directly, and not essential for survival e.g. media and trade associations
Employees disagreeing about the most ethical decision, for resolving an ethical dilemma, is an example of:
Ethical Diversity
What is true about ethical leaders?
Ethical leaders place company interests above their own.
What is true about how ethical leaders should perceive stakeholders?
Ethical leaders view stakeholders as important co-contributors of firm value.
Why is expert power one of the more effective forms of power a leader can demonstrate?
Followers are able to trust the leader's expertise and credibility.
Which statement best describes codes of ethics?
Formal statements describing what an organization expects of its employees
What is the first step organizations must take to meet the needs of their stakeholders?
Gather data on the company's stakeholders
What is the CEO
Highest-ranking person in a company, ultimately responsible for managerial decisions
What is the definition of ethical issue intensity?
How important an ethical issue is perceived to be by a company or individual
Which of the following differentiates ethical leaders from less ethical leaders?
How they respond to mistakes
What was the 2008 Mortgage Crisis?
In the 2000s people were refinancing and buying houses at super low rates despite bad credit. When prices fell, people were underwater
What is the BOD
Individuals who jointly oversee the activities of a company or organization
Which definition best describes organizational ethical leadership
Influencing others to ethically achieve company goals.
Describe the purpose of ethics training.
It allows employees to prepare themselves for issues they might encounter in the workplace.
Why is shared leadership important?
It establishes checks and balances on every member of the organization.
According to Howard Schultz, which of the following is true about ethical leadership?
It is about finding a way to balance between profitability and social consciousness.
What is the purpose of a code of ethics?
It provides guidelines to help employees recognize and resolve ethical issues.
Many individuals caught in misconduct claim that they were "just following orders" from their superiors. What type of power might this reflect on the part of the leader?
Legitimate Power
What is Finance
Manages money
Organizations that reward high performance without considering how the results were achieved are:
More likely to have employees engage in unethical behavior
What is a characteristic of an ethical leader?
Passion to do right thing
What is framing?
People make more or less ethical decisions depending on how an issue is framed.
What is Production
Producing the goods or services
What is Marketing and Sales
Promoting and selling the goods or services
Which of these is the least likely to influence an individual's personal ethics?
Regulatory Guidance
What is the fate of ethically-challenged CEOs?
Reputation Damage
What is organizational ethics?
Right or wrong, acceptable or unacceptable conduct in an organizational environment
A values orientation should possess _________________.
Strong communication systems
Leader-follower congruence
The ability to identify and work with the leader to achieve common ethical objectives
What is the Administration
The day-to-day stuff
What is overconfidence
The overconfidence bias is our tendency to be more confident in our ability to act ethically than is objectively justified by our abilities and moral character
What similarity do ethical leaders share that contributes to their firm's ethical cultures?
They have the ability to align employees behind a common vision.
Why are principles and values so important to companies?
They provide guidance for employees and leaders in making ethical decision
Which tends to be the most observed misconduct in the workplace?
Time Theft
Sam Walton, founder of Wal-Mart, would often travel to different stores across the nation to personally meet employees and praise them for their hard work. By actively promoting a shared vision among employees, Sam Walton was a _________________________.
Transformational leader
Which of the following statements is true about ethics?
Unethical conduct is not always black and white.
Behavioral Ethics
Why people make the ethical or unethical choices they do
An "ethical blind spot" refers to ___________________.
a person's underestimation of his or her own potential to commit misconduct Your
Unlike an ethical issue, in an ethical dilemma _____________.
all the decisions have negative consequences
What is a necessary component of an ethical corporate culture?
an ethics program
While these leaders do not necessarily commit misconduct, they care little for ethics in the company.
apathetic leaders
Authentic leadership is characterized by leaders who _______________________________.
are passionate about company goals, display corporate values in the workplace, and form long-term relationships with stakeholders
What 3 things unconsciously influence people that make unethical decisions
cognitive bias, social or organizational pressures, unnoticed situational factors
This approach emphasizes obedience to legal requirements.
compliance-based
What are 6 primary stakeholders
customers, employees, shareholders, government and regulatory agencies, community, suppliers
What are the responsibilities of a business
economic: profit, ethical: obey the law and avoid harming stakeholders
Which of the following information does an ethics audit try to collect?
employees' perception of the firm's ethical culture
People believe they are leading ___ lives while doing things ___ people would not do
ethical, ethical
What is Ethical Egoism Approach and what are pros and cons
humans should act the way they perceive to be their best interest long term or short. Bad because it says you could do harm to others if it is in your best interest
Ethical leaders must ____________ ethical issues and risks.
identify
5 Steps for ethical decision making
identify relevant issues, relevant facts, relevant stakeholders, evaluate with different ethical philosophies, ethical solutions
What are the 7 cognitive biases
incrementalism, self-serving bias, tangible & abstract, ethical fading, loss aversion, and framing, overconfidence
People make most decsions ___ rather than ___
instinctively, rationaly
We judge ourselves by our ___ and others by their ___
intentions, behavior
What are 4 secondary stakeholders
mass media, special interest groups, competitors, trade associations
Principles, values, _______, and ________ form an organizational culture.
norms; artifacts
An ethics officer can do little good without _____________________.
support form management and board
What is a primary stakeholder
they have a direct relationship with the company, necessary for survival e.g. employees, customers, shareholders
Why might a company not want to investigate reports of misconduct?
time consuming and expensive
A transactional leader____
tries to create employee satisfaction by negotiating for levels of performance
While principles are more _________ in nature, values are more __________ and tend to be enforced by society.
universal; subjective
Why would an organization not want to rely solely on an individual's personal ethics?
Individual personal values differ significantly and can result in unethical conduct.
What is Stakeholder Orientation
advocates maximizing positive outcomes to meet stakeholders needs by knowing who they are and whats important to them
Core practices are ____________________________________.
not legally mandated but are considered best practices of the industry.
8 Principles
trust, integrity, transparency, rule of law, accountability, viability, respect, fairness
What is moral muteness
when people witness unethical behavior and choose not to say anything