Business Ethics Exam 1

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.

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

Assessing the corporate culture

What is a 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

. _____ tie(s) an organization's product(s) directly to a social concern through a marketing program.

Cause-related marketing

What type of fraudulent activity involves an employee who assists a consumer in fraud?

Collusion

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 _____ is an independent agency within the Federal Reserve System that "regulate[s] 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

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

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

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

Environmental groups

____ 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

The _____ focus(es) on firms taking action to prevent and detect business misconduct in cooperation with government regulation

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?

Food and Drug Administration and the Sarbanes-Oxley Act

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

Integrity

The term business ethics is best described by the following statement

It comprises the principles, values, and standards that guide behavior in the world of business.

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.

. Which economist espoused a kind of Darwinian or "wild west" version of capitalism?

Milton Friedman

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

Misuse of company resources

_____ 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

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

Organizational culture

The Sarbanes-Oxley Act created the _____ to oversee the 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

The _____ was/were enacted to restore confidence in financial reporting and business ethics after the accounting scandals of the early 2000s

SOX

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

Secondary stakeholders

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

Sherman Antitrust Act of 1890

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

The Food and Drug Administration

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

The competitive dimension

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

The highly educated

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 types has a strong influence on coworker support and building an ethical culture through increasing employee commitment and fostering motivation?

Transformational leaders

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

Trust

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)

More than a compliance program, business ethics is becoming

a management issue to achieve competitive advantage.

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

a stakeholder orientation.

Optimization is defined as

a trade-off between equity and efficiency.

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 choose whether to

advance their own personal interests, those of the organization, or those of some other group.`

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

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

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

bribery

.The Foreign Corrupt Practices Act outlawed

bribery of officials in other countries.

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 pattern

_____ 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.

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

coercive

Public health and safety and support of local organizations are issues most relevant to which stakeholder group?

community

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

conflict of interest

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

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

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

control

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 of the following are not typically secondary stakeholders?

customer

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

democratic

The first step toward understanding business ethics is to

develop ethical-issue awareness

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

enhanced performance.

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

ethical issue intensity.

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

external locus of control

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

fraud

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

governance

_____ 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.

Ethical leadership should be based on

holistic thinking that embraces the complex issues facing firms every day

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

increased sales

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

informal relationship

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

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

War metaphors are common in business. This kind of mindset can be dangerous for business leaders because

it may foster the idea that honesty is unnecessary in business

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

leaders

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

leadership style

In ascending order, Caroll's four levels of social responsibility are

legal, ethical, economic, philanthropic.

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.

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

According to the ethical decision-making framework, the absence of punishment provides a(n) _____ for unethical behavior

opportunity

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

opportunity

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

organizational or social forces

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 discrimination on the basis of race, color, sex, religion, or national origin

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

The _____ model is founded in classic economic precepts.

shareholder

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

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

spouses

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

stakeholders

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

that the firm's values are trivial or irrelevant.

Ethical culture is defined as

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

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

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

the sox

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.

A company can be sued for discrimination if it

uses age as a hiring or firing criterion

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.

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

voluntary

_____ responsibilities relate to a business's contributions to stakeholders.

voluntary

The ethical decision-making process begins

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

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

who are between 49-69