CHECK YOUR EQ

An ethics audit helps identify risks and rogue employees.

Yes. This is the main benefit of an ethics audit.

Only 10 percent of employees observe abusive behavior in the workplace.

No. According to Table 3-1, 18 percent of employees observe abusive behavior in the workplace.

Three primary stakeholders are customers, special interest groups, and the media.

No. Although customers are primary stakeholders, special interest groups and the media are usually considered secondary stakeholders.

A compliance program should be deemed effective if it addresses the seven minimum requirements for ethical compliance programs.

No. An effective compliance program has the seven elements of a compliance program in place and goes beyond those minimum requirements to determine what will work in a particular organization.

Business ethics focuses mostly on personal ethical issues.

No. Business ethics focuses on organizational concerns (legal and ethical—employees, customers, suppliers, society, and the like).

The primary method for resolving business ethics disputes is through the criminal court system.

No. Civil litigation is the primary way in which business ethics disputes are resolved.

Coercive power works in the same manner as reward power.

No. Coercive power is the opposite of reward power. One offers rewards and the other responds with punishment to encourage appropriate behavior.

Voluntary practices include documented best practices.

No. Core practices are documented best practices.

Investments in business ethics do not support the bottom line.

No. Ethics initiatives create consumer, employee, and shareholder loyalty and positive behavior that contribute to the bottom line.

Ethics audits are required by the Sarbanes-Oxley Act of 2002.

No. Financial audits are required, and these may address some ethical issues.

Ethanol, fracking, and hydropower are all forms of alternative energy.

No. Fracking is not a form of alternative energy.

Fraud occurs when a false impression exists, which conceals facts.

No. Fraud must be purposeful rather than accidental and exists when deception and manipulation of facts are concealed to create a false impression that causes harm.

Greenwashing is a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment.

No. Green marketing is a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment.

The key goal of ethics training is to help employees identify ethical issues.

No. It is much more than that—it involves not only recognition but also an understanding of the values, culture, and rules in an organization as well as the impact of ethical decisions on the company.

The trend is away from cultural or ethically based initiatives to legal initiatives in organizations.

No. Many businesses are communicating their core values to their employees by creating ethics programs and appointing ethics officers to oversee them.

Multinational corporations have identifiable home countries but operate globally.

No. Multinational corporations have no significant ties to any nation or region.

Obedience to authority relates to the influence of corporate culture.

No. Obedience to authority relates to the influence of significant others and supervisors.

The most significant influence on ethical behavior in an organization is the opportunity to engage in unethical behavior.

No. Other influences such as corporate culture have more impact on ethical decisions within an organization.

Business can be considered a game people play, like basketball or boxing.

No. People are not economically self-sufficient and cannot withdraw from the game of business.

The most significant influence on ethical behavior in an organization is the opportunity to engage in (un)ethical behavior

No. Significant others have more impact on ethical decisions within an organization.

Social responsibility in business refers to maximizing the visibility of social involvement.

No. Social responsibility refers to an organization's obligation to maximize its positive impact on society and minimize its negative impact.

Most countries have a strong orientation toward ethical and legal compliance.

No. That's an ethnocentric perspective; in other countries, laws may be viewed more situationally.

Teleology defines right or acceptable behavior in terms of its consequences for the individual.

No. That's egoism.

The Sarbanes-Oxley Act encourages CEOs and CFOs to report their financial statements accurately.

No. The Sarbanes-Oxley Act requires CEOs and CFOs to accurately report their financial statements to a federal oversight committee; they must sign the document and are held personally liable for any inaccuracies.

The first step in ethical decision making is to understand the individual factors that influence the process.

No. The first step is to become more aware that an ethical issue exists and to consider its relevance to the individual or work group.

An integrative culture shows high concern for performance and little concern for people.

No. This describes an exacting culture. An integrative culture combines a high concern for people with a high concern for production.

Decentralized organizations tend to put the blame for unethical behavior on lower-level personnel.

No. This is more likely to occur in centralized organizations.

Transactional leadership strives to raise employees' level of commitment and to foster trust and motivation.

No. Transformational leadership strives to raise employees' level of commitment and to foster trust and motivation. Transactional leaders attempt to create employee satisfaction through negotiating, or "bartering," for desired behaviors or levels of performance.

Smaller companies can skip the step of verifying the results of the ethics audit.

No. Verification is necessary to maintain integrity and accuracy.

Ethical leadership is solely the concern of top management.

No. While we often discuss ethical leadership in the context of top managers, all employees should be encouraged to practice ethical leadership.

Key ethical issues in an organization relate to fraud, discrimination, honesty and fairness, conflicts of interest, and privacy.

Yes

Certain facilitating payments are acceptable under the Foreign Corrupt Practices Act.

Yes. A violation of the FCPA occurs when the payments are excessive or are used to persuade the recipients to perform other than normal duties.

Core values are enduring beliefs about appropriate conduct.

Yes. Core values are enduring beliefs about appropriate conduct.

Discovery in the RADAR model involves proactively trying to uncover ethical risk areas that could lead to misconduct.

Yes. Discovery involves proactively trying to uncover ethical risk areas that could lead to misconduct. Ethics audits are a good tool to use in the discovery process.

Ethical conflicts occur when there are two or more positions on a decision that conflict with organizational goals.

Yes. Ethical conflicts occur when there are two or more positions on a decision that conflict with organizational goals.

One of the critical ethical business issues linked to cultural differences is the question of whose values and ethical standards take precedence during international negotiations and business transactions.

Yes. Ethical standards and values differ from culture to culture, and this can be a critical point in effective business negotiations. Some people believe in cultural relativism, which means that the standards of the host country hold sway. However, many MNCs are legally bound to adhere to the standards of the host country.

The accountability and responsibility for appropriate business conduct rests with top management.

Yes. Executives in an organization determine the culture and initiatives that support ethical behavior.

An ethical compliance audit is designed to determine the effectiveness of ethics initiatives.

Yes. It helps in establishing the code and in making program improvements.

Time theft is a major type of misconduct.

Yes. It is estimated the average employee steals approximately 4.25 hours per week.

Business ethics contributes to investor loyalty.

Yes. Many studies have shown that trust and ethical conduct contribute to investor loyalty.

An ethical culture is based upon the norms and values of the company.

Yes. Norms and values help create an organizational culture and are key in supporting or not supporting ethical conduct.

"Opportunity" describes the conditions within an organization that limit or permit ethical or unethical behavior.

Yes. Opportunity results from conditions that provide rewards or fail to erect barriers against unethical behavior.

A relativist looks at an ethical situation and considers the individuals and groups involved.

Yes. Relativists look at themselves and those around them to determine ethical standards.

Ethical compliance can be measured by observing employees as well as through investigating and reporting mechanisms.

Yes. Sometimes external monitoring is necessary, but internal monitoring and evaluation are the norm.

Stakeholder assessment is an important part of a high-commitment approach to environmental issues.

Yes. Stakeholder assessment is an important part of a high-commitment approach to environmental issues.

Strategic philanthropy represents a new direction in corporate giving that maximizes the benefit to societal or community needs and relates to business objectives.

Yes. Strategic philanthropy helps both society and the organization.

Sustainability is the potential for the long-term well-being of the natural environment, including all biological entities, as well as the mutually beneficial interactions among nature and individuals, organizations, and business strategies.

Yes. Sustainability is the potential for the long-term well-being of the natural environment, including all biological entities, as well as the mutually beneficial interactions among nature and individuals, organizations, and business strategies.

Business ethics deals with right or wrong behavior within a particular organization.

Yes. That stems from the basic definition.

The Environmental Protection Agency (EPA) deals with environmental issues and enforces environmental legislation in the United States.

Yes. The Environmental Protection Agency deals with environmental issues and enforces environmental legislation in the United States.

The four types of communication are interpersonal, small group, nonverbal, and listening.

Yes. The four types of communication an ethical leader should master are interpersonal communication, small group communication, nonverbal communication, and listening.

Act deontology requires a person use equity, fairness, and impartiality in making decisions and evaluating actions.

Yes. The rules serve only as guidelines, and past experience weighs more heavily than the rules.

The scope of an ethics audit depends on the type of risks and the opportunities to manage them.

Yes. The scope determines the risks unique to the organization.

The stakeholder perspective is useful in managing social responsibility and business ethics.

Yes. The six steps to implement this approach were provided in this chapter.

Stakeholders provide resources that are more or less critical to a firm's long-term success.

Yes. These resources are both tangible and intangible.

In public corporations, the results of ethics audits should be reported to the board of directors. In public corporations, the results of ethics audits should be reported to the board of directors.

Yes. This is consistent with good corporate governance but not required.

Decentralized organizations give employees extensive decision making autonomy.

Yes. This is known as empowerment.

A utilitarian is most concerned with bottom-line benefits.

Yes. Utilitarians look for the greatest good for the greatest number of people and use a cost-benefit approach.

Corporate culture provides rules that govern behavior within the organization.

Yes. Values, beliefs, customs, and ceremonies represent what is acceptable and unacceptable in the organization.

The self-reference criterion is an unconscious reference to one's own cultural values, experience, and knowledge.

Yes. We react based on what we have experienced over our lifetimes.

The FSGO provides an incentive for organizations to conscientiously develop and implement ethics programs.

Yes. Well-designed ethics and compliance programs can minimize legal liability when organizational misconduct is detected.