Chapter 12: Corporate Governance and Business Ethics

Which of the following are important components of fostering ethical behavior in employees? -A value system that prioritizes profits above all else -Executive behavior that is in sync with the organization's vision and values -Board members setting clear ethical expectations -Strategic goals that are achievable with legal means

-Executive behavior that is in sync with the organization's vision and values -Board members setting clear ethical expectations -Strategic goals that are achievable with legal means

True or false: Any action taken by a manager that is within the bounds of the law is, by definition, an ethical action. -True -False

-False

Pavel works for a successful pharmaceutical company. Despite several years of unprecedented growth, the company wants to boost profits even more. It has taken steps to drastically raise the prices of its most widely distributed medications, which are difficult to imitate. Research into employee ethical decision-making capacity indicates that Pavel will ______. -speak out against his company's unethical activities -act in a manner that reflects his company's organizational culture -report his discomfort about drastically raising prices to his manager -immediately quit his job and file for unemployment

-act in a manner that reflects his company's organizational culture

The code of professional conduct based on societal norms and expectations is known as ______. -stakeholder impact analysis -business ethics -societal reconciliation -industry oaths

-business ethics

When facing an ethical dilemma, a manager should ______. (Check all that apply.) -keep his or her actions hidden under the cover of inside information -consider whether the action in question conforms to the firm's code of conduct and industry practices -consult local laws and municipal codes -determine whether he or she could comfortably defend the action to the public

-consider whether the action in question conforms to the firm's code of conduct and industry practices -determine whether he or she could comfortably defend the action to the public

Employees who work in organizations that emphasize ethical behavior are ______. -less likely to act ethically. -no more or less likely to act ethically. -more likely to engage in moral hazard. -more likely to act ethically.

-more likely to act ethically.

Which of the following have been found to be ethical norms in business? (Check all that apply.) -reciprocity -self-interest -fairness -deception -honesty

-reciprocity -fairness -honesty

Who sets the tone for the ethical climate within an organization? -low-level employees -customers -strategic leaders -external shareholders

-strategic leaders