Bus Ethics Exam #1

DFEI Principles

ITATFRRV Integrity Trust Accountability Transparency Fairness Rule of Law Respect Viability

Business Responsibilities

To earn a profit, obey the law, avoid harming stakeholders

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

individual personal values differ significantly and can result in unethical conduct

Which definition best describes organizational ethical leadership A. Influencing others to ethically achieve company goals. B. Establishing an exhaustive system of checks and balances. C. Delegating ethical responsibilities to lower level managers. D. Controlling decision making in the organization. E. Forcing others to do what you want them to do.

influencing others to ethically achieve company goals

Business Structure

(top, down) Board of Directors CEO Research and Devel, Production, Mkt and Sales, Finance, and Admin

Describe different ethical philosophies

Utilitarian- most good for most people Deontology- rules focus Virtue- individual moral character Principle-based- time-tested set of ethical values and principles Ethical Egoism- own best interest

Conscious Capitalism

focuses on whole business ecosystem rather than just shareholders

Sarbanes-Oxley

2002 bipartisan act Public Company Accounting Oversight Board- heart of SOX and monitors accounting firms that audit public corporations requires co's to establish codes of ethics for financial reporting prohibits public acct firms from providing both non-audit and audit services to co's whistle blower protection

Dodd-Frank Act

2010 act increasing regulation on business financials criticized for being too heavy included whistle-blower bounty program (revised in 2018)

Primary and Secondary Stakeholders

Primary Stakeholders - employees - customers - gov't/regulators - community - suppliers - shareholders Secondary Stakeholders - special interest groups - mass media - competitors - trade associations

Which of these is the least likely to influence an individual's personal ethics? A. Cultures and sub-cultures B. Friends and family C. Ethnic affiliations D. Regulatory guidance E. Religious viewpoints

Regulatory guidance

Dan Ariely Duke research on dishonesty

committing a dishonest act in one area of your life leads to more dishonesty in that area as well as corrupts other areas of your life (*YOU CAN'T successfully compartmentalize your life)

Bounded Ethicality

idea that our ability to make ethical choices is restricted by internal and external pressures - cognitive biases - social/organizational pressures

Cognitive Biases

pattern of thinking that produces distorted perceptions of people, surroundings, and situations 1. Incrementalism (slippery slope) 2. Self-serving bias 3. Tangible and abstract (remember immediate and tangible factors over more removed/abstract factors) 4. Ethical fading (so focused on other aspects of decision that ethical aspects are forgotten) 5. Loss aversion 6. Framing (people make more or less ethical decisions depending on how issue is framed) 7. Overconfidence

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

right or wrong, acceptable or unacceptable conduct in an organizational environment

Behavioral Ethics (def + 3 primary messages)

study of why people make the ethical/unethical decisions that they do 3 Primary Messages: 1. people make decisions instinctively rather than rationally 2. people believe they are ethical 3. people who make unethical decisions are unconsciously influenced by A) cognitive biases, B) social and organizational pressures, and C) situational factors

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

unethical conduct is not always black and white