Module 1

What likely contributed to the flawed corporate culture at Countrywide Financial? a. A flawed incentive system b. Overworked employees c. Failure to take risks d. A decrease in profitability e. Unscrupulous clients

a. A flawed incentive system

Which statement is true about the ethical decision-making of leaders? a. Skilled, ethical leaders find it easy to make ethical decisions b. Ethical leaders must often make trade-offs regarding stakeholder demands c. Ethical leaders balance their personal and organizational ethics to not maximize profitability d. Ethical leaders do not obtain employee input for major decisions e. Ethical decisions always result in favorable consequences for the firm

b. Ethical leaders must often make trade-offs regarding stakeholder demands

Which of these stakeholders is a secondary stakeholder? a. Employees b. Consumers c. Regulators d. Special-interest groups e. Suppliers

d. Special-interest groups

What is one of the biggest ethical risks that companies face? a. Complacency b. Unforgivable media c. Whistle-blowing d. Underachievement e. Government regulation

a. Complacency

Which statement is true regarding the aftermath of the financial crisis? a. Consumer trust of business hit a low point b. Consumers plan more trust in fast growing and profitable companies c. The stock of ethical firms decreased quicker than other companies' stock d. Voluntary turnover at companies increased e. Consumers place greater trust in legal and regulatory institutions

a. Consumer trust of business hit a low point

What is true about ethical leaders? a. Ethical leaders place company interests above their own b. Ethical leaders do not talk about misconduct in the workplace c. Ethical leaders avoid getting too friendly with other employees d. Ethical leaders are born, not made e. Ethical leaders often use autocratic management processes

a. Ethical leaders place company interests above their own

Which of the following differentiates ethical leaders from less ethical leaders? a. How they respond to mistakes b. How many employees report to them c. How many degrees they have obtained d. How much power they have e. How many mistakes they have made

a. How they respond to mistakes

Employees who display good character ____________________ a. Take responsibility for ethically meeting stakeholder needs b. Always achieve their goals and objectives c. Know how to perform most tasks within the organization d. Place individual values over organizational values e. Value character over competence

a. Take responsibility for ethically meeting stakeholder needs

What constitutes a conflict of interest? a. The firm ignores legitimate concerns of its secondary stakeholders b. The best interests of an individual are placed above the best interests of the company c. Rewards are provided for increased risk-taking that could damage the firm d. Employees are abused and become unmotivated to perform e. Regulators are paid to look the other way when a firm commits misconduct

b. The best interests of an individual are placed above the best interests of the company

What is one way that ethical leaders can empower employees? a. Setting challenging goals that are measurable b. Hiring employees with strong personal values c. Creating an open communication environment d. Eliminating manager and supervisor roles e. Developing a strict and intolerant culture

c. Creating an open communication environment

What is true about how ethical leaders should percieve stakeholders? a. Ethical leaders treat all stakeholders equally regardless of importance b. Ethical leaders view stockholders as the most important stakeholder c. Ethical leaders view stakeholders as important co-contributors of firm value d. Ethical leaders focus more in internal than external stakeholders e. Ethical leaders meet every stakeholder's demand

c. Ethical leaders view stakeholders as important co-contributors of firm value

What is the first step organizations must take to meet the needs of their stakeholders? a. Develop a high-quality product b. Determine whether primary stakeholders are important c. Gather data on the company's stockholders d. Respond to stakeholder demands e. Eliminate stakeholders not essential to the firm's survival

c. Gather data on the company's stockholders

Which definition best describes organizational ethical leadership? a. Forcing others to do what you want them to do b. Controlling decision making in the organization c. Delegating ethical responsibilities to lower level managers d. Establishing an exhaustive system of checks and balances e. Influencing others to ethically achieve company goals

e. Influencing others to ethically achieve company goals

Why would it be a mistake to ignore secondary stakeholders? a. They develop laws that could hinder business operations b. They are more important than primary stakeholders c. They directly impact the firm's daily survival d. They are always critical of large firms e. They can be an ally or a threat to the organization

e. They can be an ally or a threat to the organization

Which of the following statements is true about ethics? a. Ethical gray areas are uncommon in decision making b. A rogue employee has more of an influence on a firm than its culture c. Ethical decisions are mostly intuitive d. Ethical leaders are limited to those in authority positions e. Unethical conduct is not always black and white

e. Unethical conduct is not always black and white

Which of these is the least likely to influence an individual's personal ethics? a. Cultures and sub-cultures b. Ethnic affiliations c. Regulatory guidance d. Friends and family e. Religious viewpoints

c. Regulatory guidance

Based on observations of J.P. Morgan CEO James Dimon's reaction to a crisis, what is a good way to manage a crisis? a. Avoid talking to the media until the crisis is past b. Allow other people in the company to address the issue c. Defend the company at all costs to avoid repetitional damage d. Try to downplay the issue and describe the company's strengths e. Act quickly and take responsibility for the issues

e. Act quickly and take responsibility for the issues

Why would an organization not want to rely on an individual's personal ethics? a. Ethical diversity contributes to a more ethical organizational culture b. Individual employees cannot handle complex ethical situations c. Individual personal values differ significantly and can result in unethical conduct d. Individuals seek to take advantage of the company e. Employees rarely use their personal values in making ethical decisions within the organization

c. Individual personal values differ significantly and can result in unethical conduct

What are the benefits of ethical leadership? a. Companies with ethical leadership do not make ethical mistakes b. Ethical companies often attract the most aggressive and high performing employees c. Turnover is likely to be higher in ethical organizations as scrutiny and expectations are higher d. Consumers are less attracted to products from companies with ethical leadership e. Employees are more willing to work for ethical companies

e. Employees are more willing to work for ethical companies

In this module, we described five examples of ethically-challenged CEOs. What is not one of the mistakes they made? a. Focusing on short-term profits rather than long-term sustainability b. Engaging in excessive risk-taking c. Manipulating accounting statements to make the firm look more profitable d. Placing their own interests over those of the company e. Giving employees more decision-making authority

e. Giving employees more decision-making authority

According to Howard Shultz, which of the following is true about ethical leadership? a. It takes 10 years or more to build an ethical culture b. It will make your business less profitable, which results in high employee turnover c. It is impossible to achieve because technology and social media consciousness d. It is about finding a way to balance between profitability and social consciousness e. It is more important for corporate office employees than store employees

d. It is about finding a way to balance between profitability and social consciousness

Why might ethics mistakes actually improve an organization in the long-run? a. They allow a firm to increase profits from misconduct b. They allow the firm to test how far it can go before getting into trouble c. They learn how to navigate "gray areas" in such a way as not to get penalties and security d. They enable the firm to get rid of its current management e. They give the firm an opportunity to learn from its mistakes

e. They give the firm an opportunity to learn from its mistakes

What is the fate of ethically-challenged CEOs? a. They are dismissed from their positions b. Recovery is nearly impossible c. They often face repetitional damage d. They usually end up in prison or facing significant fines e. Their organization go out of business or are acquired

c. They often face repetitional damage

What is organizational ethics? a. A moral code developed through interactions with family, friends, and society b. Gray areas within the workplace that do not have a right or wrong answer c. Corporate policies and procedures that are used to detect and analyze ethical risk d. Right or wrong, acceptable or unacceptable conduct in an organizational environment e. An understanding of whether a particular action in the workplace is legal or illegal

d. Right or wrong, acceptable or unacceptable conduct in an organizational environment

What similarity do they share that contributes to their firm's ethical culture? a. They pay their employees more than comparable companies b. Their main goal is to make as much money as possible c. They rarely make mistakes when it comes to running their companies d. They run companies that are never criticized by stakeholders e. They have the ability to align employees behind a common value

e. They have the ability to align employees behind a common value