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Chapter 04 - Demanding Ethical and Socially Responsible Behavior
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Creating competition between employees within the corporation:
A. can encourage employees to deceive customers.
B. should focus on improving corporate profit.
C. must be ignored when corporate ethics are developed.
D. can bring out the best in employees.
Feedback: The text refers to cell phone representatives. Poorly designed incentive programs
led employees to deceive their customers.
182. Following an ethics-based approach to decision making will normally lead to higher:
A. profits.
B. trust and cooperation.
C. prices.
D. employee turnover.
Feedback: Trust and cooperation must be based on a foundation of fairness, honesty,
openness, and moral integrity. These are the characteristics of an ethics-based approach to
decision making.
183.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
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Following an ethics-based approach to decision making will normally lead to:
A. higher profits.
B. lower employee turnover.
C. lower prices.
D. more competition.
Feedback: Trust and cooperation must be based on a foundation of fairness, honesty,
openness, and moral integrity. A business should be managed ethically for many reasons: to
maintain a good reputation; to keep existing customers; to attract new customers; to avoid
lawsuits; to reduce employee turnover; to avoid government intervention; to please customers,
employees and society; and simply to do the right thing.
184. The Hum-dinger Corporation recently instituted a corporate ethics code. The president
of the company realizes that ethical relationships are based on:
A. fairness and honesty.
B. strict penalties for illegal activities.
C. a full-time compliance officer monitoring employee behavior.
D. watchdogs and whistleblowers.
Feedback: Ethical relationships with a spirit of trust and cooperation are based on fairness,
honesty, openness, and moral integrity.
185.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
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Which of the following would most likely involve ethical concerns?
A. Overstating an expense report.
B. Forecasting sales for the next year.
C. Developing the marketing plan for the next year.
D. Improving working conditions.
Feedback: Ethics reflects proper relations with one another. Overstating an expense report is
not honest.
186. With respect to business ethics, it can be said that "it takes two to tango." This
indicates that:
A. dancing around issues should be part of a firm's code of ethics.
B. an individual's behavior is influenced by the behavior of others.
C. teamwork eliminates a need for personal ethics.
D. management is insensitive to ethical issues.
Feedback: Individuals do not usually act alone. They need the implied, if not the direct,
cooperation of others to behave unethically in a corporation. In addition, the leadership and
example of strong top managers instill positive corporate values.
187.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
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Jake recently invested in a Hottie Potatee franchised business that serves potatoes with all
the trimmings. The business needs lots of employees in order to operate effectively. He
told you that if he calls the business once each day and tells the employees that he is on
his way there, they will be on their best behavior. As he tells it, "It's okay if I really don't
make it there, after all, I'm the owner and the business should be able to run without
micromanagement." As a recent student of business ethics, you remind Jake that:
A. he should post a code of ethics that stipulates how each employee should work and
how each employee should treat the customers.
B. he should create a survey for customers to respond to, and then he will always know if
his employees are productive.
C. employees usually take-on the behavior of their leaders. If integrity is not important to
the owner, it may not be important to employees.
D. "No good deed goes unpunished." Even though he may think he is doing a good thing,
his employees will not appreciate the fact that he is working very hard on his business,
off-site. Their expectations are that he should be there, working side by side with them.
Feedback: As reported in Chapter 4, a recent survey of company CEOs indicated that
unethical employee conduct is often the result of leadership's failure to establish ethical
standards and culture. Trust and cooperation between workers and managers must be based on
moral integrity. The manager should do what he says he is going to do.
188. Establishing a formal code of ethics is:
A. more common with small businesses than large businesses.
B. unnecessary given the level of government regulation.
C. growing in popularity.
D. mandated by the Corporate and Criminal Fraud Accountability Act.
189.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
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A(n) ________-based ethics code emphasizes the prevention of unlawful behavior by
increasing control and penalizing wrongdoers.
A. legal
B. corporate responsibility
C. compliance
D. integrity
190. Which of the following terms describes someone who reports illegal or unethical
behavior?
A. whistleblower
B. horn blower
C. watch tower sentinel
D. integrity watchdog
191. A(n) ________-based ethics code defines corporate values; creates a supportive
environment, and, stresses shared accountability among employees.
A. social
B. corporate responsibility
C. compliance
D. integrity
192.
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Compliance-based ethics codes:
A. conform to laws and regulations.
B. enable responsible employee conduct.
C. use education, leadership, and accountability to reinforce the code.
D. create a "do-it-right" climate that emphasizes core values.
193. To improve America's business ethics:
A. Congress must pass an ethics bill.
B. ethics must be taught in every business school around the globe.
C. a company's suppliers must be thoroughly investigated for ethical violations.
D. company leaders should adopt and support a corporate code of ethics.
194. After developing a code of ethics, it should be communicated to:
A. everyone with whom the business has dealings.
B. the Attorney General in jurisdictions where the business has operations.
C. all levels of management.
D. stockholders.
195.
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A whistleblower is a person who:
A. monitors employees who work overtime.
B. reports illegal or unethical behavior in the corporation.
C. reports health or other corporate emergencies to 911.
D. works in the human resource department.
196. Which of the following is a characteristic of an effective ethics officer?
A. (S)he has a background in human resource management.
B. (S)he is exceptionally organized.
C. (S)he has a capacity to serve as a counselor and an investigator.
D. (S)he communicates primarily via email.
197. Compliance based ethics codes typically:
A. rely on laws and regulations outside the firm for guidance.
B. have a strong affinity for shared accountability among employees.
C. promote a "do-it-right" climate.
D. enable responsible employee conduct.
Feedback: Compliance-based ethics codes prevent unlawful behavior by increasing control
and by penalizing wrongdoers.
198.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
A very critical last step in the process of establishing an ethics code is __________.
A. middle management support
B. training
C. enforcement
D. identification of the organizational ethics officer
Feedback: Enforcement of the ethics code is critical and timely. When management ignores a
written code of ethics, it becomes a worthless, shelf document.
199. Which of the following would be a unique focus of an integrity-based ethics code?
A. Increased control over employee actions.
B. Shared accountability among employees.
C. Increased penalties for code violators.
D. Improved awareness of the relevant laws.
Feedback: Integrity-based ethics codes define the organization's core values, create an
environment that supports ethical behavior, and stress a shared accountability among
employees.
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201. In the past, whistleblowers were known as persons with a universal moral calling.
However, seldom did these individuals receive tangible rewards for their efforts. When it
was all said and done, they often fell into hard times. Whistleblowers got a boost in 2010,
with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A
provision of this act permits whistleblowers to_____________________.
A. Remain at their jobs, after reporting a securities violation.
B. Receive up to 30% of the penalty funds that exceed $1 million that the courts recover
from companies proven to be in violation.
C. Represent securities violations only in the companies where they are employed.
D. Automatically receive up to a $1 million dollar reward for reporting a securities
violation, as well as retain his/her job.
Feedback: The Dodd-Frank Wall Street Reform and Consumer Protection Act resulted from
Wall Street bailouts and other questionable government bail-outs of large corporations, who
many claimed were too big to fail. In the past, employees of organizations who knew their
employers were committing illegal and unethical actions were afraid to speak out for fear of
reprisal. This legislation provides the potential for extrinsic rewards for employees who
report questionable actions committed by their employers. If the courts recover funds from
illegal transactions, the employee is promised a share these funds, 30% of any amount
recovered after $1 million
202.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
What is the benefit of employing an ethics officer?
A. This professional serves as a law-enforcement officer, with the authority to arrest
employees who do not abide by the ethics code.
B. This individual writes the ethics code and keeps this document current. He has sole
authority to change the document as he sees fit.
C. This professional has the responsibility to make certain that the ethics code remains a
private company document; however, since the position has very little authority, it
becomes a token job with high turnover.
D. This individual's job is dedicated to objectively investigating ethics breaches. If
necessary, employees feel comfortable with communicating confidentially to this
professional.
Feedback: An ethics officer is equally comfortable with serving as a counselor or an ethics
investigator for the firm. It requires a person who can maintain a high level of confidentiality
and carry-out an objective investigation.
203. While speaking with his sales force, the director of sales explains, "Anyone caught
violating a sales law will be fired." After studying business ethics, you recognize this
remark as a reference to the firm's __________ ethics.
A. technology-based
B. personal responsibility-based
C. compliance-based
D. integrity-based
Feedback: A compliance-based ethics code emphasizes the prevention of unlawful behavior
by penalizing wrongdoers.
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217. A payoff for socially conscious behavior is:
A. new and loyal customers.
B. a large pool of investors.
C. a large pool of talented employees.
D. longevity due to a stable external environment.
218. Which of the following statements best describes a firm's commitment to its
customers?
A. The firm is responsible for offering domestic products to foreign customer markets.
B. One's social responsibility to customers is clear-cut.
C. Customers will only support companies who make a visible effort to keep prices low.
D. Firms that offer real value will develop a competitive advantage and gain customer
trust.
219. Companies are using _____________ to communicate their corporate social
responsibility actions to their customers.
A. sales promotion
B. traditional advertising on television and radio
C. social media
D. their employees – word of mouth
220.
Chapter 04 - Demanding Ethical and Socially Responsible Behavior
Investors, today are realizing financial benefit by:
A. investing in companies who only operate in stable environments.
B. investing in firms that have abundant resources for social initiatives.
C. investing in companies who are committed to a better environment.
D. investing in companies who are leaving a sizeable carbon footprint.
221. Insider trading involves:
A. an Internet activity that establishes a barter exchange system between businesses.
B. investors using private company information to further their own fortunes.
C. the exchange of assets between companies in the same industry.
D. a payment or reward for socially conscious behavior.
222. If a business fails to meet its responsibilities to its employees, which of the following
is likely to occur?
A. There is reduced employee turnover.
B. Employees believe it is easier to get ahead.
C. More jobs are created.
D. Employees do the minimum needed to get by.
