MAN 3063 - Ethics Final Exam Chapter 7-10

________ undermines investor confidence in the fairness and integrity of the securities markets.

Insider trading Reason: Insider trading undermines investor confidence in the fairness and integrity of the securities markets. Hence, the Securities and Exchange Commission has treated the detection and prosecution of insider trading violations as one of its enforcement priorities.

What is insider trading?

Insider trading is the buying or selling of company stock or securities for a profit based upon information that is not readily available to the public.

Built on an ethical foundation of providing stylish eyewear at affordable prices and creating an organizational environment that supports ethical employee behavior, Warby Parker is demonstrating integrity-based behavior. Why is this a value for their organization and employees?

Warby Parker's commitment to providing stylish eyewear at affordable prices while fostering an organizational environment that supports ethical employee behavior reflects integrity-based behavior, a core value that is crucial for Warby Parker's organization and employees for several reasons: Trust and Credibility: Demonstrating integrity builds trust and credibility with customers, employees, and other stakeholders. Employee Engagement and Morale: A culture of integrity fosters employee engagement, satisfaction, and morale. Customer Loyalty and Reputation: Integrity-based behavior enhances customer loyalty and strengthens the company's reputation. Risk Management and Compliance: Operating with integrity helps mitigate risks associated with unethical behavior, such as legal liabilities, regulatory penalties, and reputational damage. Long-Term Sustainability and Growth: Integrity-based behavior contributes to the long-term sustainability and growth of Warby Parker's business. Integrity-based behavior is a foundational value for Warby Parker's organization and employees because it fosters trust, employee engagement, customer loyalty, risk management, and long-term sustainability.

Today, deception and unfairness and mostly loss of privacy are common when using marketing and advertising techniques. Are ethical principals still applicable when evaluating these techniques? Please provide a detail response.

Yes, ethical principles remain highly relevant and essential for evaluating marketing and advertising techniques, even in the face of modern challenges such as deception, unfairness, and loss of privacy. Several key ethical principles can guide the evaluation of marketing practices, including honesty, transparency, fairness, respect for privacy, and social responsibility. Honesty and Transparency: Ethical marketing requires honesty and transparency in all communications with consumers. Marketers should provide accurate and truthful information about products and services, avoiding misleading or deceptive tactics. Fairness and Non-Exploitation: Ethical marketers avoid exploiting vulnerabilities or manipulating consumer behavior for their gain. They ensure that marketing practices are fair, equitable, and respectful of consumer rights. Respect for Privacy: With the rise of digital marketing and data analytics, protecting consumer privacy is paramount. Ethical marketers obtain consent before collecting personal information, use data responsibly, and provide clear opt-out mechanisms for targeted advertising. Social Responsibility: Ethical marketing extends beyond profitability to consider its broader impact on society and the environment. Marketers should align their practices with social responsibility principles, addressing societal needs and promoting positive social change.

Identify a policy under which an employer refuses to hire or terminates a worker whose spouse works at a competing firm.

Conflict-of-interest policy Reason: Some companies might have a conflict-of-interest policy under which the employer refuses to hire or terminates a worker whose spouse works at a competing firm.

________ refers to cultural issues such as integrity, ethical values, competence, philosophy, and operating style.

Control environment

Which of the following is the role of attorneys as "gatekeepers?"

Ensuring that a company's decisions and transactions conform to the law. Reason: Attorneys ensure that decisions and transactions conform to the law.

A board member has the right to use information obtained through her or his position as a board member for personal gain.

False

According to the market approach to resolving environmental challenges, standards like corporate average fuel economy that address pollution and pollution-related disease are considered mainly because of people's reliance on market solutions to sustain the environment.

False

Which of the following is a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit an organization and its stakeholders?

Marketing Reason: The American Marketing Association defines marketing in a way that also suggests that it is at the heart of business activity, "an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders."

In the context of the Americans with Disabilities Act (ADA), ________ is the only U.S. state that has banned discrimination on the basis of weight.

Michigan Reason: Compared to smoking, employment decisions on the basis of one's size and weight is handled in an entirely different manner by the states. Only one state (Michigan) and six U.S. cities ban discrimination on the basis of weight. In all other U.S. regions, employers are permitted to make employment decisions on the basis of weight, as long as those decisions do not violate the Americans with Disabilities Act (ADA).

Which of the following is a disadvantage of monitoring?

Monitoring tends to constrain effective performance since it can cause increased stress and pressure. Reason: Monitoring may arguably constrain effective performance since it can cause increased stress and pressure, negatively impacting performance and having the potential to cause physical disorders such as carpal tunnel syndrome.

From a virtue ethics perspective, skyrocketing executive compensation packages best represent greed and avarice in the moral character of the people involved in the salary-making decisions.

True

The American Marketing Association defines marketing in a way that echoes the stakeholder model of corporate social responsibility (CSR).

True

A consumer's consent to purchase a product is not informed if that consumer is

being misled or deceived about the product.

The ethics implicit within the ________ approach assumes that when consumers adequately understand products well enough, they can reasonably be expected to protect themselves.

contract Reason: The ethics implicit within the contract approach assumes that when consumers adequately understand products well enough, they can reasonably be expected to protect themselves. But consumers don't always understand products fully and they are not always free to choose not to purchase some things.

The Committee of Sponsoring Organizations (COSO) describes ________ as encompassing "those elements of an organization that, taken together, support people in the achievement of the organization's objectives."

control

The triple bottom line approach involves measuring business success of sustainable businesses and sustainable economic development in terms of

economic, ethical, and environmental sustainability. Reason: Sustainable business and sustainable economic development seek to create new ways of doing business in which business success is measured in terms of economic, ethical, and environmental sustainability, often called the triple bottom line approach.

Manipulation focuses on ________.

guiding or directing the behavior of something Reason: To manipulate something is to guide or direct its behavior. Manipulation need not involve total control, and in fact it more likely suggests a process of subtle direction or management.

A major element of marketing is ________, the attempt to influence a buyer to complete a purchase.

sales promotion Reason: The goal of all marketing is the sale, the eventual exchange between seller and buyer. A major element of marketing is sales promotion, the attempt to influence the buyer to complete a purchase.

The concept of ________ can be traced to a 1987 report from the United Nations' World Commission on Environment and Development (WCED), more commonly known as the Brundtland Commission.

sustainable development Reason: The concept of sustainable development can be traced to a 1987 report from the United Nations' World Commission on Environment and Development (WCED), more commonly known as the Brundtland Commission, named for its chair, Gro Harlem Brundtland.

While approaching an ethical issue in marketing, the utilitarian tradition would want to know

the degree to which a transaction provided actual as opposed to merely apparent benefits.

Environmental challenges typically create a burden on business, and environmental and business interests are usually in conflict.

False

While the Sarbanes-Oxley Act is an internal mechanism to ensure ethical corporate governance, the Committee of Sponsoring Organizations (COSO) is an external mechanism.

False Reason: Sarbanes-Oxley and the European Union 8th Directive are external mechanisms that seek to ensure ethical corporate governance, but there are internal mechanisms as well. One way to ensure appropriate controls within the organization is to utilize a framework advocated by the Committee of Sponsoring Organizations (COSO).

What are the ethical responsibilities of board members?

Fiduciary Duty: Board members have a fiduciary duty to act in the best interests of the organization and its stakeholders. This duty requires them to exercise care, diligence, and prudence in decision-making processes, prioritizing the organization's long-term success over personal interests or agendas. Oversight and Governance: Board members are responsible for providing oversight and governance, ensuring that the organization operates ethically, legally, and in compliance with applicable laws, regulations, and ethical standards. They must establish and monitor policies, procedures, and controls to mitigate risks and promote ethical conduct throughout the organization. Strategic Planning and Risk Management: Board members play a crucial role in strategic planning and risk management, participating in the development and evaluation of the organization's mission, vision, goals, and strategies. They must assess and address potential risks and opportunities, considering the ethical implications of various decisions on stakeholders and society. Transparency and Accountability: Board members are accountable to stakeholders for their decisions and actions, requiring them to foster transparency and accountability within the organization. They should communicate openly and honestly with stakeholders, disclose relevant information, and address concerns or grievances in a timely and transparent manner. Stakeholder Engagement: Board members have an ethical responsibility to consider the interests and perspectives of all stakeholders, including employees, customers, shareholders, communities, and the environment. They should promote stakeholder engagement and dialogue, seeking to balance competing interests and values while maximizing overall societal welfare.

Briefly discuss the conflicts of interests involved in excessive executive compensation.

In the context of excessive executive compensation, conflicts of interest arise due to the divergence between the interests of executives and those of other stakeholders, such as: Alignment with Shareholders: Excessive executive compensation may lead to conflicts of interest concerning shareholders' interests. Agency Problem: Excessive executive compensation exacerbates the agency problem, where executives prioritize personal financial gains over the organization's long-term interests. Employee Morale and Equity: Excessive executive compensation can create conflicts of interest regarding employee morale and equity within the organization. Social Perception and Reputation: Conflicts of interest arise concerning social perception and reputation when excessive executive compensation is perceived as unjust or socially irresponsible. Regulatory and Legal Compliance: Conflicts of interest may arise concerning regulatory and legal compliance when executive compensation practices violate laws, regulations, or ethical standards.

Identify a true statement about the environmental legislation enacted in the 1970s.

It shifted the burden from those threatened with harm to those who would cause the harm. Reason: The environmental regulation enacted during the 1970s established standards that effectively shifted the burden from those threatened with harm to those who would cause the harm.

Describe the challenges associated with the regulatory approach to environmental concerns.

One challenge is the complexity and inconsistency of environmental regulations across different jurisdictions. Businesses operating in multiple regions must navigate a patchwork of laws and standards, leading to compliance difficulties and regulatory uncertainty. Moreover, regulatory compliance often entails significant costs for businesses, including expenses related to monitoring, reporting, and implementing environmental controls. These financial burdens can strain the resources of small and medium-sized enterprises, potentially hindering their competitiveness and growth. Additionally, critics argue that regulatory approaches tend to focus on punitive measures and enforcement rather than proactive prevention and sustainability. This reactive stance may foster adversarial relationships between regulators and businesses, leading to compliance reluctance and resistance. Furthermore, regulatory frameworks may struggle to keep pace with rapidly evolving environmental challenges and technological advancements. Static regulations may become outdated or ineffective in addressing emerging environmental risks, such as climate change or pollution from new sources. While regulatory approaches play a crucial role in setting minimum environmental standards and deterring harmful practices, they encounter challenges related to complexity, cost, enforcement, and adaptability. To address these challenges effectively, stakeholders must collaborate to develop more transparent, flexible, and incentive-based regulatory strategies that balance environmental protection with economic viability and innovation.

According to the National Council on Alcoholism and Drug Dependence, which of the following is a warning sign of drug use pertaining to an individual's job performance?

Poor concentration and lack of focus Reason: An employer may believe there is "cause" to test for drug use if it observes various behaviors such as the ones listed by the National Council on Alcoholism and Drug Dependence as "warning signs of drug use." Poor concentration and lack of focus is a job performance related warning sign of possible drug use.

________ refers to the growing marketing practice of taking back one's products after their useful life.

Reverse channel

Why was the Brundtland Commission formed?

The Brundtland Commission, formally known as the World Commission on Environment and Development (WCED), was formed to address growing concerns about sustainable development and the environmental challenges facing the global community. The commission was established by the United Nations in 1983 in response to a resolution of the UN General Assembly. The primary goal of the Brundtland Commission was to examine the interconnected issues of economic development, social equity, and environmental protection, with a focus on promoting sustainable development. The commission sought to reconcile the often conflicting goals of economic growth and environmental conservation by advocating for policies and strategies that meet the needs of the present without compromising the ability of future generations to meet their own needs. The commission's landmark report, titled "Our Common Future," published in 1987, popularized the concept of sustainable development and provided a comprehensive framework for addressing environmental and developmental challenges. The report emphasized the importance of integrating environmental considerations into decision-making processes at all levels, from local to global, and called for international cooperation to address pressing environmental issues such as climate change, deforestation, and pollution.

Discuss the duties of care and good faith.

The duties of care and good faith are fundamental ethical principles that guide decision-making and behavior within organizations, as discussed in Hartman's "Business Ethics: Decision Making for Personal Integrity & Social Responsibility." The duty of care entails the obligation of individuals to exercise reasonable care, skill, and diligence in performing their responsibilities within an organization. This duty requires individuals to act prudently and responsibly, considering the potential risks and consequences of their actions on stakeholders, including employees, customers, shareholders, and the broader community. By adhering to the duty of care, individuals strive to prevent harm, minimize risks, and promote the well-being of all parties affected by their decisions and actions. On the other hand, the duty of good faith emphasizes the importance of honesty, fairness, and transparency in interpersonal and organizational relationships. Individuals are expected to act in good faith by dealing honestly and fairly with others, honoring their commitments, and avoiding deceptive or manipulative practices. This duty requires individuals to uphold the principles of integrity and trustworthiness in their interactions and transactions, fostering an environment of mutual respect and cooperation. Both the duty of care and the duty of good faith serve as ethical foundations for responsible decision-making and conduct in business contexts. By fulfilling these duties, individuals contribute to the creation of ethical organizational cultures characterized by accountability, integrity, and respect for stakeholders' rights and interests.

Identify a true statement about hypernorms.

They are values that are fundamental across culture and theory. Reason: Ethicists Thomas Donaldson and Thomas Dunfee have developed an approach to ethical analysis that seeks to differentiate between those values that are fundamental across culture and theory hypernorms and those values that are determined within moral free space and that are not hypernorms.

Identify a true statement about strict product liability laws in the United States.

They hold a business responsible for any harm from product use, even if it is not the result of business negligence. Reason: Strict product liability laws in the United States hold a business responsible for any harm from product use, even if it is not the result of business negligence. It raises unique ethical questions. Within the United States, calls to reform product liability laws, and in particular to ease or eliminate the strict product liability standard, have been common.

Briefly discuss the circumstances which violate an employee's privacy rights.

Violations of employee privacy rights can occur in various circumstances. These violations often involve intrusions into employees' personal lives or confidential information without their consent or a legitimate business justification. Some common examples include: Monitoring and Surveillance: Employers may infringe on privacy rights by excessively monitoring or surveilling employees, such as through video cameras, computer tracking software, or GPS tracking devices on company-owned vehicles, without informing employees or obtaining their consent. Drug Testing and Medical Information: Requiring employees to undergo drug testing or disclosing their medical information without proper consent or a valid reason related to job performance or safety can constitute a violation of privacy rights. Background Checks: Conducting background checks on employees that delve into their personal history beyond what is necessary for job-related purposes, or sharing the results of these checks without authorization, may violate privacy rights. Accessing Personal Information: Unauthorized access to employees' personal information, such as social media profiles, financial records, or personal emails, without a legitimate business need or consent, can also breach privacy rights. Discriminatory Practices: Employers may violate privacy rights by using personal information, such as race, gender, religion, or sexual orientation, to make employment decisions or subjecting employees to unwarranted scrutiny based on protected characteristics. Overall, respecting employees' privacy rights involves balancing the legitimate needs of the business with the individual's right to privacy, ensuring transparency, consent, and relevance in the collection and use of personal information.

In the context of testing an employee for possible drug use, frequent financial problems is a warning sign that pertains to ______ as opposed to job performance.

cause Reason: An employer may believe there is "cause" to test for drug use if it observes various behaviors such as the ones listed by the National Council on Alcoholism and Drug Dependence as "warning signs of drug use." Frequent financial problems is a workplace behavior warning sign of possible drug use.

A simple situation in which two parties come together and freely agree to an exchange is only prima facie ethically legitimate because

certain conditions must be met before it can be concluded that autonomy has been respected and mutual benefit has been achieved. Reason: The simple situation in which two parties come together and freely agree to an exchange is prima facie ethically legitimate. This assessment is only prima facie because, like all agreements, certain conditions must be met before we can conclude that autonomy has in fact been respected and mutual benefit has been achieved.

A simple situation in which two parties come together and freely agree to an exchange is only prima facie ethically legitimate because (repeat?)

certain conditions must be met before it can be concluded that autonomy has been respected and mutual benefit has been achieved. (repeat?) Reason: The simple situation in which two parties come together and freely agree to an exchange is prima facie ethically legitimate. This assessment is only prima facie because, like all agreements, certain conditions must be met before we can conclude that autonomy has in fact been respected and mutual benefit has been achieved.

Tapas, an employee of Electronixx, adjusted credits and debits of the company's ledger to show high profits. They also created false documents, underreported the company's income, and evaded paying taxes for a year. Tapas can be convicted for ________.

conflicts of interest in accounting Reason: The ethical issues and potential for conflicts surrounding accounting practices go far beyond merely combining services. They may include underreporting income, falsifying documents, allowing or taking questionable deductions, illegally evading income taxes, and engaging in fraud.

According to ethicists Thomas Donaldson and Thomas Dunfee, the right to ________ is an example of a hypernorm.

physical movement Reason: Donaldson and Dunfee include as examples of hypernorms freedom of speech, the right to personal freedom, the right to physical movement, and informed consent.

For a business to have a prudent, long-term competitive advantage and risk management strategy, ________ is the solution.

sustainability Reason: First, sustainability is a prudent long-term strategy. As the Natural Step's funnel image suggests (see Figure 9.1), business will need to adopt sustainable practices to ensure long-term survival. Firms that fail to adapt to the converging lines of decreasing availability of resources and increasing demand risk their own survival. Second, the huge unmet market potential among the world's developing economies can only be met in sustainable ways. Third, significant cost savings can be achieved through sustainable practices. Fourth, competitive advantages exist for sustainable businesses. Finally, sustainability is a good risk management strategy.