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