Business ethics
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 chose whether to
Advance their own personal interests, those of the organization, or those of some other group
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.
Laws and regulations change over time; however, in the US the thrust of most businesses can be summed up as
Any practice is permitted that does not substantially reduce competition and harm consumers or society
What is the first step of implementing a stakeholder perspective in an organization?
Assessing the corporate culture
If management fails to identify and educate employees about ethical problem areas, ethical issues may not reach the critical
Awareness level
War metaphors are common in business. This kind of mindset can be dangerous for business leaders because: a. it may lead executives to become violent. b. it may foster the idea that honesty is unnecessary in business. c. it may lead organizations to be excessively aggressive. d. business is not like warfare and the metaphors are not appropriate. e. business is more like a game than a war.
B. it may foster the idea that honesty is unnecessary in business.
What is the 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
Foreign Corrupt Practices Act outlawed
Bribery of officials in other countries
______ ties an organization's products directly to a social concern through a marketing program
Cause-related marketing
informal relationships
Codes, rules, and compliance are essential in organizations. However, an organization built on _____ is more likely to develop high integrity corporate culture
The _______ leader demands instantaneous obedience sand focuses on achievement, initiative, and self-control?
Coersive
Business Ethics
Comprises organizational principles, values, and norms that may originate from individuals, organizational statements, or from the legal system that primarily guide individual and group behavior in business
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
The ______ is an independent agency within the Federal Reserve System that regulates 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
In corporate governance, ______ is the process of auditing and improving organizational decisions and actions
Control
___________ focus on developing Sound organizational practices and integrity for financial and non financial performance measures, rather than on an individual's morals
Core practices
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
Which of the following are not typically secondary stakeholders?
Customers
The first step toward understanding business ethics is to
Develop ethical-issue awareness
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
I ascending order, Carroll's four levels of social responsibility are
Economic, legal, ethical, philanthropic
Employees' perceptions of their firm as having ethical climate leads to
Enhanced performance
Preppie who believe in _______, go with the flow because they feel the events in their lives are uncontrollable
External locus of control
_____ 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
Which of the following provide incentives for developing core practices within a firm that could help ensure ethical and legal compliance?
Federal Sentencing Guidelines for Organizations and the Sarbanes-Oxley Act
Sarbanes-Oxley Act
Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements.
The ______ regulates tobacco, dietary supplements, vaccines, veterinary drugs, medical devices, cosmetics, products that give off radiation, and biological products?
Food and Drug Administration
Accountability, oversight, and control all fall under the definition and implementation of corporate
Governance
Which of the following is not a consequence of ethical misconduct?
Increased sales
Studies have found that more than a third of unethical situations that lower and middle-level managers face come from...
Internal pressures and ambiguity surrounding internal organizational rules
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.
_______ are a primary influence on employee's ethical behavior because they are role models for the organization's values
Leaders
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
Which economist espoused a kind of Darwinism or "Wild West" version of capitalism?
Milton Friedman
According to the ethical decision-making framework, the absence of punishment provides an _________ for unethical behavior
Opportunity
An organizational factor that gives a company specific characteristics. Over time, stakeholders begin to see the company as like a living organism with a kind and will of its own.
Organizational culture
Multiple elements work on individuals to affect behavior. While an individual may intend to do the right thing, _______ can alter this intent
Organizational or social forces
The Sarbanes-Oxley Act created the ____ to oversee 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
Which of the following acts can be classified as procompetitive legislation?
Sherman Antitrust Act of 1890
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
The degree to which a firm understands and addresses stakeholder demands can be referred to as
Stakeholder orientation
Those who have a claim in some aspect of a firm's products, operations, markets, industry, and outcomes are known as
Stakeholders
Ethical culture is defined as
The character of the decision-making process that employs use to determine whether their responses to ethical issues are right or wrong based on values and norms.
Which of the forces of the business environment involves the rivalry among businesses for customers and profits?
The competitive dimension
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 styles has a strong influence on coworker support and building an ethical culture through increasing employee commitment and fostering motivation?
Transformational leaders
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)
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.
_________ responsibilities relate to a business' contributions to stakeholders?
Voluntary
The Age Discrimination Employment Act specifically outlaws hiring practices that discriminate against people
Who are between 49-69?
More than a compliance program, business ethics is becoming
a management issue to achieve competitive advantage.
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
________ is the offering of something of value in order to gain an illicit advantage
bribery
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 patterns
_____ 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.
What type of fraudulent activity involves an employee who assists a consumer in fraud?
collusion
Public health and safety and support of local organizations are issues most relevant to which stakeholder group?
community
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
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
conflicts of interest
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 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 type of leader relies on participation and teamwork to reach collaborative decisions?
democratic
What type of fraudulent activity could involve a consumer staging an accident to seek damages?
duplicity
Minimizing the use of energy and reducing emissions and waste are issues of importance to which stakeholder?
environmental groups
The perceived relevance or importance of an ethical issue to the individual, work group, or organization is
ethical issue intensity
Federal Sentencing Guidelines for Organizations
focuses on firms taking action to prevent and detect business misconduct in cooperation with government regulation
_________ is defined as any purposeful communication that deceives, manipulates, or conceals facts in order to create a false impression.
fraud
______ 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
Which of the following groups is not a group that receives special legal protections?
highly educated
Ethical leadership should be based on
holistic thinking that embraces the complex issues facing firms every day.
________ is an important element of virtue and means being whole, sound, and unimpaired condition.
integrity
Among retail stores, _____ is a larger problem than customer shoplifting.
internal employee theft
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.
The ______ of an organization can influence the acceptance of, adherence to, transmittal, and monitoring of organizational norms, values, and codes of ethics
leadership style
Which of the following has been identified by Ethics Resource Center as the leading form observed misconduct in organizations
misuse of company resources
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
External and internal rewards relate to which part of the ethical decision-making framework?
opportunity
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 employment agencies, employers, and unions from discriminating against applicants and employees on the basis of race, color, religion, national origin, or sex.
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.
Which of the following do not typically engage in transactions with a company and thus are not essential for its survival?
secondary stakeholders
collusion
secret agreement or cooperation
The _______ model is founded in classic economic precepts
shareholder
Which of the following is not considered a significant other group in the workplace?
spouses
Leaders whose decisions and actions are contrary to the firm's values send a signal
that the firm's values are trivial or irrelevant.
Defamation
the action of damaging the good reputation of someone; slander or libel.
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
Optimization is defined as
the trade-off between equity and efficiency
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
In marketing communications, lying causes predicaments for companies because it destroys
trust
A company can be sued for discrimination if it
uses age as a hiring or firing criterion.
Donation of computer equipment to schools by Toshiba would be associated with _____ responsibilities.
voluntary
The ethical decision-making process begins
when stakeholders trigger ethical issue awareness and individuals openly discuss it with others.
