Chapter 9 Assignment

Northern Airlines is widely considered to be one of the most ethical companies in the world. Its founders established a strong code of ethics early in the company's history that Northern Airlines continues to improve every year. Its ethics and compliance program includes a toll-free ethics hotline, a code of conduct, ethics training, a chief ethics officer, independent oversight, regular auditing, and more. Despite its strong ethics program, it is discovered that one of the company's top executives has been accepting bribes from various airports in exchange for establishing new routes. Which of the following does this scenario exemplify? a. Even effective ethics programs cannot act as deterrents to organizational misconduct. b. Northern Airlines did not have ethical guidelines in place. c. Companies should assume individuals know how to behave appropriately when they enter a new organization or job. d. Misconduct can still occur even if the company has ethical guidelines in place.

d. Misconduct can still occur even if the company has ethical guidelines in place.

Ji-hoon, an experienced ethics and compliance professional, is contacted by a corporate recruiter. The recruiter describes a job that would require Ji-hoon to assess the needs and risks an organization-wide ethics program must address, conduct training programs for employees, monitor and audit ethical conduct, and review and update a code of ethics. Based on this job description, which role is the recruiter hoping Ji-hoon can fill?

Ethics officer

Illuminate Motors, an electric vehicle company, expends many resources to support its corporate social responsibility efforts. For example, it is a carbon-neutral company and powers its buildings with solar power to protect the environment. To support social causes, the company provides educational programs for local students to learn more about electric vehicles and offers professional advancement opportunities to its employees. The company also focuses on corporate governance and transparency. Which integrity measurement framework would Illuminate Motors most likely use?

ESG

Melinda develops and distributes the code of ethics at her company. Twice a year she reviews the company's code and makes necessary changes. On an ongoing basis, she confidentially answers employees' questions about ethical issues. When she has evidence of possible ethics code violations, Melinda takes appropriate action. Which role does Melinda fulfill in this scenario?

Ethics Officer

Before setting up an ethics program, a company voluntarily calls for an evaluation that will identify the firm's ethical standards as well as its existing policies and risk areas. What is this evaluation called?

Ethics audit

When an employee was found guilty of insider trading, a hospitality company decided to conduct an ethics audit to improve its ethics program. First, the ethics officer gained support from the CEO and the board of directors. They all agreed an ethics audit was necessary. Next, the ethics officer and the CEO worked to create a committee to oversee the audit. After that, a review was conducted of the firm's mission, values, goals, and policies. Which step in the framework for an ethics audit should have occurred prior to the review that was conducted in this scenario? a. Define the scope of the audit process. b. Have the results verified by an independent party. c. Gain the support of top management and board of directors. d. Report the audit findings to the board of directors and top executives.

a. Define the scope of the audit process.

Eliana is the ethics officer for a major aluminum manufacturer, where she is responsible for managing the organization's ethics and legal compliance programs. After concerns surface that the firm is generating excess waste, several of its stakeholders push for an ethics audit. In order to comply with this request, which of the following should Eliana do first? a. Gain the support of top management and board of directors. b. Define the scope of the audit process. c. Identify the tools or methods used to measure the firm's progress and collect and analyze the relevant information. d. Establish a committee to oversee the ethics audit

a. Gain the support of top management and board of directors.

Toby manages the ethics training program for a technology company. The program identifies key risk areas employees of the company might face, such as insider trading, conflicts of interest, and issues relating to emerging technologies. Toby develops a series of role-play activities so employees can gain experience in handling ethical issues. Through the program, Toby communicates that wrongdoing is not supported by the organization and employees are individually accountable for their behavior. Which of the following are additional key goals Toby should focus on for the ethics training program in this scenario? (Select three) a. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve. b. Provide ongoing feedback to employees about how they are handling ethical issues. c. Allow a mechanism for employees to voice their concern that is anonymous but provides answers to key questions. d. Align employee conduct with individual preferences and past employee behavior.

a. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve. b. Provide ongoing feedback to employees about how they are handling ethical issues. c. Allow a mechanism for employees to voice their concern that is anonymous but provides answers to key questions.

Kilo Watt, an energy company, has an extensive ethics program. For example, during training, the company offers experiential learning opportunities. The program materials have been developed to address the needs of the average employee. Kilo Watt's ethics officer reviews employee feedback frequently from employees across the firm to improve the program. The CEO, however, pressures employees to bend the rules to meet performance goals. This behavior has permeated the company all the way to the lowest levels. Which of the following mistakes has been made in designing and implementing Kilo Watt's ethics program in this scenario? a. Senior management has failed to take ownership of the ethics program. b. The program materials do not address the needs of the average employee. c. The company does not have an ethics program. d. The ethics program is little more than a series of lectures.

a. Senior management has failed to take ownership of the ethics program.

Go Athletics, a sportswear and athletic equipment retailer, has a detailed code of ethics in understandable language that is easily downloaded from the employee online portal or available in print, but the company repeatedly detects ethical misconduct. For example, the code of conduct explicitly states that employees must offer new gym equipment for sale to customers for at least one week before purchasing it for themselves. Yet employees often engage in this behavior. Go Athletics sends a survey to employees to understand why this is happening. They discover that frontline employees are unaware of the code of ethics. Which of the following explains why Go Athletics' code of ethics failed in this scenario? a. The code is not promoted and employees do not read it. b. The code is not easily accessible. c. The code is written too vaguely. d. The code is written too legalistically and therefore is not understandable by average employees.

a. The code is not promoted and employees do not read it.

Your Corp., a cosmetics company, has several policies and procedures in place to deter and detect misconduct. Its international code of conduct is designed to guide business at Your Corp.'s international hubs while its supplier code of conduct dictates how companies in its supply chain should behave. For example, ingredients sourced for Your Corp. products must come from suppliers who meet certain sustainability criteria. Your Corp.'s ethics officer oversees the ethics program and the toll-free ethics hotline. Which of the following statements is true in this scenario? a. Your Corp. has a strong ethics program. b. Your Corp. does not have an ethics program. c. Your Corp. does not promote legal and ethical conduct. d. Your Corp. has a weak ethics program.

a. Your Corp. has a strong ethics program.

Aero Corp., a multinational biotechnology corporation, made illicit payments to leaders at pharmaceutical companies in order to win their business. When the illicit payments were uncovered, Aero's reputation was tarnished and Aero's leaders were replaced as a result. The new management team established an ethics and compliance system designed to proactively prevent misconduct and to detect it when it occurs. Which of the following statements is true of Aero in this scenario? a. As a moral agent, Aero can make the decisions it needs to make to turn a profit, regardless of their legality. b. As a moral agent, Aero is required to obey the laws and regulations that define acceptable business conduct. c. Aero is merely a profit-making entity, and, therefore, is not required to obey the laws and regulations that define acceptable business conduct. d. Aero does not need laws and regulations to provide formal structural restraints.

b. As a moral agent, Aero is required to obey the laws and regulations that define acceptable business conduct.

A company wants to measure How do our customers see us?, What are we trying to do?, What do we need to improve?, and How do our shareholders view us?. To do this, the firm selects an integrity management framework that incorporates nonfinancial performance indicators into the evaluation system. The metrics to be measured are financial, customer/stakeholder, internal process, and organizational capacity. Which integrity management framework is described in this scenario? a. ESG b. Balanced scorecard c. Global Reporting Initiative (GRI) d. Triple bottom line

b. Balanced scorecard

A small manufacturer needs to develop and implement a code of ethics for its 200 employees. Previously, the company did not have a formal code of ethics, but after securing a lucrative government contract, the manufacturer decided it was time. First, the manufacturer considered areas of risk and stated the values and conduct necessary to comply with existing laws and regulations. Next, the company identified values that specifically addressed current ethical issues. Which of the following are additional factors the small manufacturer should consider when developing and implementing its code of ethics? a. Focus on values that address future ethical issues rather than current ethical issues. b. Communicate the code frequently and in language that employees can understand. c. Make the code understandable by providing examples that reflect values. d. Revise the code every year with input from organizational members and stakeholders.

b. Communicate the code frequently and in language that employees can understand. c. Make the code understandable by providing examples that reflect values. d. Revise the code every year with input from organizational members and stakeholders.

Hilary is tasked with improving the ethics and compliance program of an accounting firm. Before Hilary's review of the program began, the company had already established standards and procedures to prevent and detect criminal conduct and ensured the firm's board, top management, and high-level personnel exercised reasonable oversight of those standards and procedures. Which of the following are minimum requirements that Hilary should implement? a. Eliminate bad apples through screening techniques. b. Make reasonable efforts to keep individuals whom organizations knew or should have known to have engaged in illegal activities out of key positions. c. Communicate standards and procedures by training directors, employees, and appropriate agents. d. Establish a culture of trust amongst management and employees.

b. Make reasonable efforts to keep individuals whom organizations knew or should have known to have engaged in illegal activities out of key positions c. Communicate standards and procedures by training directors, employees, and appropriate agents.