Business Ethics Ch 7-12

Which leadership type values people, their emotions, and their needs and relies on friendship and trust to promote flexibility, innovation, and risk taking?

Affiliative leadership

Which of the following is not a main goal of successful ethics training programs?

Allow employees to solve ethical issues using their best judgment.

When considering centralized and decentralized structures, which one tends to be more ethical and why?

Centralized because of the strict formalization and implementation of ethics policies and procedures

Which two developing countries are expected to generate some of the largest increases in consumption in the future?

China and India

What are the three Triple Bottom Line factors incorporated into the Global Reporting Initiative framework?

Economic, social, and environmental indicators

Which of the following provides international guidelines for compliance management?

ISO 19600

How can ethical leaders mitigate power differences with workers?

Through frequent communication

Europe has stricter Internet privacy controls than in the United States. ​

True

One common problem found with corporate codes of ethics is that the codes were written too legalistically. ​

True

While social reports often discuss issues related to a firm's performance in the four dimensions of social responsibility, as well as to specific social responsibility and ethical issues, ethics audits have a narrower focus on assessing and reporting on a firm's performance in terms of

ethical and legal conduct.

An advantage of the decentralized organization is that

it is adaptable and can quickly respond to external change.

Who argued during the 1930s that the state could stimulate economic growth and improve stability in the private sector?

John Maynard Keynes

_____ is a term used by Adam Smith to explain the inherent mechanisms at work in free market systems that keep commerce in equilibrium. It is also known as the "invisible hand."

Laissez-fair

_____ assume(s) that a the market, through its own inherent mechanisms, will keep commerce in equilibrium.

Laissez-faire economics

This occurs when leaders and followers share the same vision, ethical expectations, and objectives for the company.

Leader-follower congruence

_____ are a primary influence on employee's ethical behavior because they are role models for the organizations' values.

Leaders

_____ is the ability or authority to guide and direct others toward a goal.

Leadership

_____ claims that leaders form unique relationships with followers through social interactions.

Leadership-exchange theory

Which of the following statements about multinational corporations (MNCs) is true?

MNCs are characterized by a global strategy of focusing on opportunities throughout the world.

_____ products encourage consumers to return and buy more. This approach is also known as planned obsolescence.

Made-to-break

____ serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most appropriate for handling a specific case.

Hotlines

_____ has been codified in a United Nations document and is defined as an inherent dignity with equal and inalienable rights as the foundation of freedom, justice, and peace in the world.

Human Rights

Which of the following is a measure taken by governments to curtail MNC practices that create ethical issues?

Imposing export taxes to force MNCs to share more of their profits

Which of the following organizations emerged from the Bretton Woods agreement of 1944, where a group of international leaders decided that the primary responsibility for the regulation of monetary relationships among national economies should rest in an extra-national body?

International Monetary Fund

Which of the following is true about the U.K. Bribery Act?

It classifies bribes among businesspeople to be illegal.

What is a risk of ethics auditing?

It could uncover a serious ethical problem.

Which of the following is true about ethical leadership?

It is a foundational requirement for impacting the long-term valuation of the firm.

What is a major role of the International Monetary Fund (IMF)?

It makes short-term loans to member countries that have deficits and provides foreign currencies for its members.

What is one of the responsibilities of an ethics officer?

Monitoring and auditing ethical conduct

All of these are true about feedback except

Most companies recognize the need for organizational leaders to get feedback from their employees.

When developing an ethical culture, there has to be a(n) _____ element because every organization has employees that will try to take advantage if there is an opportunity for misconduct.

compliance

A _____ generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes.

compliance orientation

A(n) _____ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) _____ orientation strives to develop shared standards.

compliance; values

For an ethics and compliance program to properly function,

consistent enforcement and disciplinary action are essential.

Independent verification of the ethics audit is important because it lends the report

credibility and objectivity.

_____ may be more inclined to engage in unethical organizational conduct because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making.

Top managers

What is a major problem organizations tend to have when implementing organizational ethics program?

Top managers don't integrate codes, values, and standards into their firms' corporate cultures.

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 types has a strong influence on coworker support and building an ethical culture through increasing employee commitment and fostering motivation?

Transformational leaders

Which of the following attributes are necessary for ethical communication?

Transparency and reporting

Which of the following is a statement that attests that the financial statements made in an audit are fairly stated, without limitations?

Unqualified opinion

When in Rome, do as the Romans do, or you must adapt to the cultural practices of the country in which you are operating are rationalizations businesspeople sometimes offer for straying from their own ethical values when doing business abroad. This practice is called

cultural relativism

An organization that delegates decision-making authority as far down the chain of command as possible and has relatively few formal rules is

decentralized

Many managers are reluctant to engage in this step of the RADAR model because they fear doing so will uncover questionable conduct that could put the firm in an unfavorable light.

detect

A coaching leader builds a positive climate by

developing skills for success, delegating responsibility, and issuing challenging assignments.

Associating with others who are unethical and who have the opportunity to act unethically can lead to a learning process known as

differential association.

The idea that people learn ethical or unethical behavior while interacting with others who are a part of their role-sets is referred to as

differential association.

The practice of charging high prices for products sold in home markets while selling the same products in foreign markets at low prices, which do not cover the costs of exporting, is known as

dumping.

Both individual ethics and organizational ethics have an impact on an employee's

ethical intention.

A(n) _____ is a tool that companies can employ to identify and measure their ethical commitment to stakeholders.

ethics audit

The individual responsible for implementing disciplinary action for violation of a firm's ethics standards is usually the

ethics officer.

Marcus is the best performing development director his non-profit organization has ever had. He possesses countless tricks and tips to continue to bring in donations, positive publicity, and supporters. Marcus would likely have _____ over new development department staff.

expert power

A values-based ethics approach to ethical corporate cultures relies on a(n) _____ that defines the firm as well as how customers and employees should be treated

explicit mission statement

At the heart of the Federal Sentencing Guidelines for Organizations is a

carrot-and-stick philosophy that rewards efforts to improve ethics.

Which of the following is the most comprehensive?

code of ethics

The _____ leader demands instantaneous obedience and focuses on achievement, initiative, and self-control.

coercive

The _____ leader demands instantaneous obedience and focuses on punishing wrong behavior, achievement, initiative, and self-control.

coercive

One of the main reasons employees do not report observed misconduct is

fear of retaliation.

Top managers tend to focus on _____ because their jobs and personal identity are often connected to quarterly returns.

financial performance

During the data-collection phase of the audit, the primary objective is to generate a variety of opinions about how the company is perceived and whether it is

fulfilling stakeholders' expecations

When measuring the effectiveness of an ethics program, it is important to

get input from employees

The Sarbanes-Oxley Act

has institutionalized internal whistle-blowing.

Ethical leadership should be based on

holistic thinking that embraces the complex issues facing firms every day.

To motivate employees, an organization offers _____ to _____ employees to work toward organizational objectives.

incentives; encourage

Individuals, often from the same department, who have a common interest but not an explicit organizational structure are known as

informal groups.

The ultimate "stick" associated with the FSGO is fines or probation, which involves on-site observation by consultants, monitoring of the company's ethical compliance efforts, and

reporting to the U.S. Sentencing Commission on the company's progress in avoiding misconduct.

Because a corporation can be considered a moral agent, it is therefore

responsible to society for its actions.

The ability to influence the behavior of others by offering them something desirable is best described as

reward power.

Ethical concerns in centralized structures can occur because of very little

upward communication.

Which of the following is a possible unintended consequence of an organization focusing more on ethics planning than on implementation?

Employees may come to view unethical conduct as acceptable behavior.

This occurs when there are two or more positions on an ethical decision.

Ethical conflicts

A disclaimer of opinion for an audit states that the financial statements are clearly stated. ​

False

Behavioral economics assumes that humans act independently on the basis of full and relevant information. ​

False

The best way to develop an ethical corporate culture is to provide character education to existing employees or hire employees with good character and sensitize them to ethical issues.​

False

_____ identified four cultural dimensions that can have a profound impact on the business environment: individualism/collectivism, power distance, uncertainty avoidance, and masculinity/femininity.

Geert Hofstede

_____ involves transactions across national boundaries. It is a practice that brings together people who have different cultures, values, laws, and ethical standards.

Global business

Which of the following statements about group norms is false?

Group norms never conflict with the overall organization's culture.

_____ occurs when one or more group members feel pressured to conform to the group's decision even if they personally disagree.

Groupthink

What activity has become a major global business ethics issue only recently?

Hacking

Leaders having an accommodating conflict management style are

Highly cooperative but non-assertive

Which of the following cultures combines high levels of concern for people and performance?

Integrative culture

The _____ was a result of a meeting in which international leaders decided that primary responsibility for the regulation of monetary relationships among nations should rest in an external body.

International Monetary Fund

Which of the following statements about training is false?

It can dictate personal ethics on the job so employees no longer have differences in beliefs.

_____ can be used to promote organizational goals and help rather than hinder other employees.

Political skills

Which of the following is not a step in the ethics auditing process?

Report the results to the U.S. Sentencing Commission.

The four categories of communication include all of the following except

Reporting

_____ is a two-way process in which the communicator communicates with superiors and subordinates.

Reporting

Under the _____, CEOs and CFOs may be criminally prosecuted if they knowingly certify misleading financial statements.

Sarbanes-Oxley Act

Which of the following legislation has increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?

Sarbanes-Oxley Act

What should be the first step in the auditing process?

Secure the commitment of top executives and directors

__________ is a management system that focuses on all of the elements that contribute to organizational performance and success.

The Balanced Scorecard

These values were developed by a reverend and the UN Secretary General. They express support for universal human rights.

The Global Sullivan Principles

Ideally, which of the following should oversee the ethics audit?

The board's financial audit committee

Which of the following is not a phase of escalation during an ethical disaster?

The firm's decision to conduct an ethics audit

Which of the following is an informal channel of communication?

The grapevine

What is a living wage?

The minimum wage that a worker requires to meet basic needs.

Which of the following has a significant impact on the success of an ethics program?

The quality of communication

Which of the following is not an article in the UN Human Rights Declaration?

The right to electricity and running water

Which of the following statements about ethics audits is false?

The terms ethics audits and social audits can be used interchangeably.

Which of the following statements about corporate culture is false?

The values and ethical beliefs that actually guide the firm's employees tend not to be the same ones that management states as defining the firm's culture.

Which of the following statements about codes of conduct is false?

They address every ethical issue that an employee may face.

Why might vertical systems be a business ethics issue? ​

They can result in a channel member having too much control.

Which of the following is not a characteristic of authentic leaders?

They negotiate for desired levels of performance.

Which of the following is not a criticism of or charge against multinational corporations (MNCs)?

They usually avoid paying any taxes

What is one of the goals of ethics training?

To identify key risk areas employees will face.

What is the purpose of the UN Global Compact?

To promote human rights, sustainability, and eradicate corruption

_____ leaders communicate a sense of mission, stimulate new ways of thinking, and enhance as well as generate new learning experiences.

Transformational

Shared values among employees are the glue of successful management. ​

True

Six Sigma is a methodology designed to manage process variations that cause defects and to systematically work toward managing variation to eliminate those defects. ​

True

​The support of top management is essential to the successful effectiveness of an ethics and compliance program.

True

_____ refers to how members of a society respond to ambiguity. A high score means that a culture tends to minimize risk-taking.

Uncertainty avoidance

A _____-based culture encourages employees to express concerns, bring up ethical issues, and take a proactive approach toward resolving conflicts.

Values

_____ is an independent assessment of the quality, accuracy, and completeness of a company's social or ethics report.

Verification

_____ are used to subdivide duties within functional areas of a company.

Work groups

A strong ethics program includes all of the following elements except

a clause promising good stock market performance.

Expert power usually stems from

a superior's credibility with his or her subordinates.

A cultural audit may be used to assess

an organization's values.

In the "bad apple-bad barrel" analogy, the bad barrel refers to

an unethical corporate culture.

This step of the RADAR model involves responding to the discovery of an ethical dilemma through communication both internally and externally.

answer

Any attempt to verify outcomes and to compare them with standards can be considered a(n) _____ activity, although many smaller firms do not use this word.

auditing

Which of the following is a common mistake made in implementing an ethics program?

Developing materials that are not understandable by the average employee

Aurico is a company that offers ethics hotline maintenance for organizations. Which component of the Federal Sentencing Guidelines for Organizations compliance program does this service help organizations to satisfy?

Systems for monitoring, auditing, and reporting misconduct

The benefit of healthcare is being debated as to whether it is a right or privilege. Which of the following countries does not consider health care to be a right?

The United States

What is not a necessity for strong ethical leaders to make good decisions?

The ability to coerce subordinates

The growth of the Internet and differing security laws between countries has led to an increase in concern for the human right of

privacy.

The process of verifying the results of an audit should involve standard procedures that control the _____ of the information.

reliability and validity

Ethics audits can help companies identify potential _____ so they can implement plans to eliminate or reduce them before they reach crisis dimensions.

risks and liabilities

Strong ethical leaders have a passion for all of the following except to

satisfy shareholders before other stakeholder groups.

An unconscious reference to one's own cultural values, experiences, and knowledge is referred to as the

self-reference criterion.

Two useful indicators for assessing employee issues are

staff turnover and employee satisfaction.

_____ bring together the functional expertise of employees from several different areas of the organization on a single project.

teams

Which of the following is one of the seven habits of strong ethical leaders?

the passion to do right

Organizations can become "bad barrels" because

the pressure to succeed creates opportunities that reward unethical decisions.

With regard to ethics, training and communication initiatives should reflect

the unique characteristics of an organizaiton.

In the absence of ethics programs, employees are likely to make decisions based on

their observations of how their coworkers and superiors behave.

A fundamental problem in traditional personal character development is that specific vales are used to teach about a philosophy, which may be inappropriate where cultural diversity and privacy must be respected. A solution is

to teach individuals intellectual skills that address the complexities of ethical issues in business.

The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually

tolerate misconduct.

These leaders produce employees who achieve a negotiated level of performance, including compliance with ethical and legal standards.

transactional

In the long run, a(n) ______ orientation may be better for companies, perhaps because it increases employees' awareness of ethics issues at work.

values

Risk compartmentalization occurs when

various profit centers within an organization become unaware of the consequences of their actions on the firm as a whole.

Because ethics and social audits are _____, there are few standards that a company can apply with regard to reporting frequency, disclosure requirements, and remedial actions that it should take in response to results.

voluntary

Retaliation against employees that report misconduct is a problem in _____ cultures.

weak ethical

The 2010 passage of the Dodd-Frank Act proposed additional monetary incentives for whistle-blowers. A primary concern about these new incentives is

whistle-blowers might be tempted to report to the SEC and not report the misconduct to the company's internal compliance program.

What is the difference between a code of ethics and a code of conduct? ​

​A code of ethics is more comprehensive than a code of conduct.

Why do certain countries view bribery as ethical? ​

​They see these bribes as "favors" of minimal value.

The ____ rule explains variation in employee conduct through generalizing on the percentage of employees in any given organization who will seek to do right versus how many will be indifferent.

10-40-40-10

Which of the following is important in defining the scope of the audit process?

??

Which of the following is true about a compliance orientation?

A compliance orientation can aid in organizational ethical decision-making.

What is the AACSB?

An international organization that promotes a set of principles promoting the teaching of responsible management in business schools

_____ leaders are passionate about the company, live out corporate values daily in their behavior in the workplace, and form long-term relationships with employees and other stakeholders.

Authentic

_____ assumes that economic decisions are influenced by human behavior.

Behavioral economics

_____ assumes that humans may not act rationally because of genetics, learned behavior, and rules of thumb.

Behavioral economics

_____ occurs when the middle class shrinks, resulting in highly concentrated wealth amongst the rich and a large number of poor people with very few resources.

Bimodal wealth distribution

Which of the following tracks emerging issues and trends, provides information on corporate leadership and best practices, conducts educational workshops and training, and assists organizations in developing practical business ethics tools?

Business for Social Responsibility

_____ are formal statements that describe what an organization expects of its employees in terms of ethical behavior.

Codes of conduct

_____ provide(s) important guidelines for employees on how to act in different situations.

Codes of ethics

​Which power is likely to be effective in the short-run but not in the long-run?

Coercive power

Leaders having a(n) _____ conflict management style are highly assertive and not very cooperative.

Collaborating

At which stage of the ethics auditing process would a hospital conduct focus groups with management, doctors, nurses, related health professionals, support staff, and patients?

Collect and analyze relevant information

During which of the following steps of the ethics auditing process does an organization identify the tools or methods for measuring progress in improving employees' ethical decisions and conduct?

Collect and analyze relevant information

Which of the following is not a measure of ethical climate?

Collective skill

Leaders with a(n) _____ conflict management style desire to meet the needs of stakeholders and strongly adhere to organizational values and principles.

Competing

Which of the following strives to create order by requiring that employees identify with and commit to specific required conduct?

Compliance Orientation

Over the years, scholars have developed more than 100 definitions of culture. According to the text, all have the following common elements:

Culture is shared, relatively stable, and is formed over a long period of time.

_____ are a primary stakeholder group and should be included in the ethics auditing process because their loyalty determines an organization's success.

Customers

Which type of leader relies on participation and teamwork to reach collaborative decisions?

Democratic

The most effective leaders possess the ability to manage themselves and their relationships with others effectively, a skill known as

Emotional intelligence

Which of the following is an advantage of a values-based ethics program over a compliance-based one?

Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency.

When managers overlook or stifle the importance of core values in their business decisions, this is known as

Normative myopia

Gossip, manipulation, playing favorites, and taking credit for another's work are all examples commonly associated with

Organizational politics

Which of the following compares standards with actual behavior?​

Output controls

Which of the following statements about power is true?

Power can be used to motivate individuals ethically or unethically.

_________ include management's commitment to the ethics program and the methods or system for ethics evaluation.

Process controls

These leaders are characterized as having superficial charm, no conscience, grandiose self-worth, little or no empathy, and enjoy flouting rules.

Psychopathic leaders

Which of the following is not a technique for collecting evidence during the ethics audit?

Publishing the results of the audit.

_____ is based upon the assumption that people are predictable and will maximize the utility of their choices relative to their needs and wants.

Rational economics

The acronym RADAR stands for

Recognize, Avoid, Detect, Answer, & Recover

​After massive recalls due to a floor mat problem, Toyota released feel-good commercials and developed better quality standards to regain its quality image. What stage in RADAR was Toyota engaging in?

Recover

From an ethical standpoint, leaders should take time during this step of the RADAR model to fix any weaknesses in the ethics program and develop improved ways of detecting misconduct.

Recovery

_____ are satisfied by social and interpersonal relationships, and _____ are satisfied by creative or productive activities.

Relatedness needs; growth needs

What should be the final step in the ethics auditing process?

Report the findings

When The Gap posts the results of its ethics audit on its website, it is engaged in which of the following steps of the ethics auditing process?

Report the results

During which step of the auditing process should a firm examine all documents that make explicit commitments to ethical, legal, or social responsibility?

Review organizational mission, goals, values, and policies.

_______ includes a requirement that management assess the effectiveness of an organization's internal controls and commission an audit of these controls by an external auditor in conjunction with the audit of its financial statements.

Sarbanes-Oxley 404

Power distance dimension refers to the "power inequality" between superiors and subordinates. Which of the following countries probably ranks high on the power distance scale?

Saudi Arabia

According to the World Trade Organization, which of the following products and services are most vulnerable to protectionism?

Shoes, cars, and steel

_____ allows for private ownership of property and features a large government equipped to offer such services as education and health care to its citizens

Social democracy

The concept of ethics auditing emerged from the movement to audit and report on companies' broader _____ initiatives.

Social responsibility

What concept refers to economic theories advocating the creation of a society where wealth and power are distributed evenly, relative to the amount of work expended in production?

Socialism

Which document serves the general public and also addresses distinct groups such as stakeholders?​

Statement of values

The _____ formed in 1995 and administers its own trade agreements, facilitates future trade negotiations, settles trade disputes, and monitors the trade policies of member nations

World Trade Organization

Which of the following has the power to enact legally binding ground rules for international commerce and trade policy?

World Trade Organization

Those who ascribe to consumerism

believe that consumers, not producers, should dictate the economic structure of a society.

Because top managers may be more insensitive to ethical issues due to their focus on financial performance, the FSGO guidelines suggest that ethics officers report to the _____ instead.

board of directors

A high concern for people but minimal concern for performance can best describe the _____ culture.

caring

No formal dress codes, working late, participation in extracurricular activities, gestures, and legends represent

informal expressions of an organization's culture.

Melinda is a very popular executive. She inspires her employees to follow a common vision, facilitates change, and creates a strongly positive climate, all while stressing performance. Melinda has helped to create a(n) _____ culture.

integrative

The word _____ implies a balanced organization that makes ethical financial decisions and also is ethical in more subjective matters of corporate culture.

integrity

Group polarization...

is when a group is more likely to move toward a more extreme position than members might have done individually.

In order for whistle-blowing to be effective,

it requires that the individual have adequate knowledge of wrongdoing that could damage society.

The _____ of an organization can influence the acceptance of and adherence to organizational norms and values.

leadership style

When a foreman orders an assembly-line employee to carry out a task which the employee perceives as unethical, yet the employee feels compelled to do it because of the foreman's position, the foreman is exercising

legitimate power.

To ensure that an ethics program addresses the needs of the average employee, it should include all of the following except

lengthy legal documents

Management's sense of the organization's culture

may be quite different from employees' perceptions.

The establishment of an ethics committee within an organization

might raise ethical concerns or resolve ethical dilemmas.

The apathetic organizational culture exhibits

minimal concern for people and performance.

Increasing the wealth gap between nations and misusing and misallocating scarce resources are ethical issue accusations related to

multinational corporations

Because all organizations have some type of culture, _____ and _____ are often used interchangeably.

organizational culture; corporate culture

Sherry's leadership style often creates a negative working climate because of the high standards she sets. Sherry is most likely a(n) _____ leader.

pacesetting

The _____ leader can create a negative climate because of the high standards that he or she sets. This style works best for attaining quick results from highly motivated individuals who value achievement and take initiative.

pacesetting

The exacting organizational culture is interested in

performance but has little concern for employees.