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52. How does the text define “business gratuity”?
a. “a present, gift, hospitality, or favor for which fair market value is not paid by the
recipient”
b. “a present, gift, hospitality, or favor specifically given by a non-employee for preferred
treatment from an employee”
c. “a non-contractual compensation by a nonemployee in expression of gratitude for
well-performed services or superior products”
d. “profits incurred by employees that are not a part of the regular commerce of an
organization”
53. Which of the following statements about business gratuities is accurate?
a. Rules involving business gratuities are rarely included in codes of conduct.
b. They are essentially the same thing as bribes.
c. They can only be received by customers from suppliers.
d. They can create moral confusion.
54. How do bribes differ from business gratuities?
a. In a bribe, the exchange is preceded by an articulation of a quid pro quo
arrangement.
b. In a bribe, the object of value unduly influences a buying decision.
c. In a bribe, the object of value has a high monetary value.
d. In a bribe, the object of value is material, not a hospitality.
55. Avani is participating in a code of conduct review team and has concerns about the
way company employees use business gratuities. Which of the following should the
review team consider when addressing Avani’s concerns?
a. Make it clear that it is never acceptable to provide or accept a gratuity.
b. Offer clear examples of when it is acceptable to provide or accept a gratuity.
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c. Make it clear that exchange of gratuities should remain confidential.
d. Make it clear that gratuities and bribes are synonymous.
56. You are a manager of a small lumber supply company. One of your employees
accepts a gratuity from a customer without being aware that it violates the company
code of conduct, but after a review by managerial staff and lawyers, it is determined to
have violated the code. What is the first step you should take?
a. Attempt to return the gratuity to the customer.
b. Fire the employee.
c. Ask for confidentiality from the customer.
d. Revise the code of conduct.
57. Which of the following guidelines is a common baseline across companies with
regard to email policy?
a. Email during work hours should be business-use only.
b. Email inside the workplace should remain confidential.
c. Managers should periodically review the content of employee email.
d. Use of your personal email address should be kept to a minimum during business
hours.
58. An employee sends a racist joke to a coworker via their company email account. A
manager discovers this, and the employee is fired. The employee sues the company for
violation of privacy for monitoring his email. What will a judge most likely rule?
a. The employee is entitled to damages but not to get his job back.
b. The company has the right to monitor employee email.
c. The employee has a right to private email communication.
d. The company was within its rights but must rehire the employee.
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59. How should a code of conduct characterize a company’s right to monitor employee
emails sent on company computers?
a. no right to monitor
b. limited to emergency or criminal situations
c. right to monitor if it does not violate privacy
d. total right to monitor
60. The Society for Human Resource Management lists which of the following as
inappropriate use of company email?
a. cross-department messages
b. expressing discontent of working conditions
c. Title VII violations
d. email from a work account to the employee’s personal email account
61. Why has there likely been so little evidence of a correlation between the presence of
a code of ethics and better ethical performance?
a. too many remaining opportunities for unethical behavior
b. a culture of corruption in U.S. business
c. few research studies have been conducted
d. failure to communicate the code to employees
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62. Which of the following is true of the impact of codes of ethics on employees?
a. Employees are far more worried about their legal implications than ethical
implications.
b. They are essentially useless without a high-integrity work culture.
c. They have the most impact on the behavior of employees with low moral identity.
d. They reinforce the moral behavior of employees with strong moral identity.
63. What point is the text making when it mentions Enron’s 60-page Code of Conduct?
a. Creating too long a code of conduct increases the chances it will be ignored by
employees.
b. Having a code of conduct is meaningless unless it is matched by action.
c. Failing to have a lawyer vet or contribute to the development of the code opens the
door to lax enforcement.
d. Implementing a solid code of conduct can reduce incidences of corporate
malfeasance.
64. A 2016 Gallup poll showed that how many employees believe in their company’s
stated values?
a. very few
b. about a third
c. roughly half
d. most
65. Which of the following accurately describes a trend related to codes of ethics in
business?
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a. A majority of employees now truly believe in the stated aspirations of their code of
ethics.
b. Regulatory pressure is less and less a primary motivation for adopting a code of
ethics.
c. There are fewer businesses with a written code of ethics, but those businesses that
do have such a code have improved performance.
d. Fewer companies are demonstrating ethical issues with employees whether they
have a code or not.
66. After much trial and error, Morgan’s financial services company finally has a written
code of ethics. What should be the first step in communicating the company code of
ethics to employees?
a. Have upper management memorize the code so they can serve as role models for
subordinates.
b. Develop a testing system by which each employee can be quizzed about the code
online.
c. Publish the code and have it distributed to every employee.
d. Choose an individual who is closely related to the code to take charge of the strategy
for communication.
67. Sharod witnesses a coworker accepting a particularly extravagant lunch at the
expense of a client, which is a code of conduct violation. Which of the following
conditions would make Sharod the most likely to report the violation to superiors?
a. Sharod knows this person has never been warned before for ethics violations.
b. Sharod knows that most of his coworkers are not aware of the specific provisions of
the code.
c. Sharod knows there will be no retaliation for reporting the violation.
d. Sharod knows most of his coworkers disapprove of this kind of violation.
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68. Which of the following is a situation or condition that would make codes of ethics
and conduct particularly important?
a. a market crash that sends the company into a rough patch
b. a prolonged period of financial success
c. the hiring of a new CEO with a strong reputation for ethical leadership
d. a period during which no ethical violations have been reported
69. What is the last phase of the implementation of a code of ethics?
a. Use the code as a periodic assessment tool.
b. Train new employees using the code.
c. Have the code disseminated to clients and customers.
d. Have a third party evaluate the company’s culture.
70. What is the best input for changing and improving a code of ethics over time?
a. industry standards
b. employee feedback
c. legal advice
d. CEO or president leadership style
71. “Employees will not accept business gratuities, meals, or gifts in excess of $15 from
any client, customer, or supplier.” This statement would most likely appear in a ______.
a. values statement
b. mission statement
c. code of ethics
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d. code of conduct
72. At what size should a company consider or begin to create a formal internal ethics
office, according to advice by the text?
a. at 200 employees
b. at 1,000 employees
c. at 5,000 employees
d. at 10,000 employees
73. An employee with strong moral character and behavior has worked at a small
company for many years. The company grows large enough to implement a formal code
of ethics. How is this employee likely to react to that new code?
a. with excitement
b. by embracing it
c. by rejecting it
d. with indifference
74. What can be surmised from the existence of the Sarbanes-Oxley Act?
a. There are sometimes legal requirements with respect to having a code of ethics.
b. Companies without codes of ethics are bound to violate the law.
c. Federal law requires that every company have a written code of ethics.
d. The federal government has dictated the content of codes of ethics for many
companies.
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75. Which of the following is true with respect to employees and ethical culture in
organizations?
a. Research has shown a net outflow of employees from organizations with a strong
ethical culture.
b. Employees prefer not to be a part of high-integrity organizations because of the
increased scrutiny involved.
c. Employees mostly show indifference to the ethical culture of their organization.
d. Employees prefer to be a part of high-integrity organizations.
76. What should an employee expect from their company’s code of ethics?
a. general guidance on behavior
b. instructions on how to react to specific scenarios
c. a list of sanctions for unethical behavior
d. a description of what constitutes unethical behavior
77. The word “integrity” is synonymous with which of the four core values common to all
three Abrahamic religions of the world?
a. justice
b. mutual respect
c. stewardship
d. honesty
78. Karen has decided to develop a code of ethics for the law firm by starting with the
text of the code of ethics of a highly respected law firm of roughly the same size, focus
area, and located in the same region. What is the biggest problem with this action?
a. the threat of plagiarism
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b. the missed opportunity to solicit employee input
c. the lack of management buy-in
d. the likelihood that the other law firm code is outdated
79. In the process of making a code of ethics, which of the following prompts is best for
employees to answer during the step “Gather a list of ethical behaviors from
participants”?
a. “Describe a situation when you behaved very ethical toward a customer.”
b. “Describe a situation when you observed someone in the organization behave
unethically toward a customer.”
c. “Describe a situation when you behaved unethically toward a customer.”
d. “Tell us what you think constitutes an ethical behavior.”
80. During the “code review” step in creating a code of ethics, the draft code should go
to which of the following (among others) for review?
a. legal counsel
b. customers
c. industry regulators
d. human resource consultants
True/False
1. A code of conduct could also be referred to as a values statement.
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2. A code of conduct could be characterized as an application of the code of ethics to
specific situations.
3. If a company doesn’t have a specific person in charge of managing ethics by the time
it has 50 employees, it has failed in a key measure of ethical behavior.
4. New employees should not be subjected to discussion of the code of ethics until they
have learned the flow and style of the organization.
5. A company’s vision statement may reference some of the aspirations inherent to its
code of ethics.
6. Taking an oath is a required part of implementation of a code of ethics.
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7. The New York Stock Exchange (NYSE) recommends that issues of confidentiality be
a part of every code of conduct.
8. The acceptance of business gratuities is typically just as illegal as bribing or
accepting bribes.
9. Ethical hypocrisy exists in many companies but is not something employees are
generally aware of.
10. Social pressure can be a major reason that code violations go unreported in
companies.
Short Answer
1. Give an example of a provision that might appear in a code of conduct.
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2. How does a code of ethics treat work and nonwork situations differently?
3. What are the three general code of ethics value categories?
4. How would an organization’s vision statement sync with its code of ethics?
5. What constitutes improper email use, according to the standards of most
businesses?
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Essay
1. Explain the differences between a code of ethics and a code of conduct.
2. Ali’s company has just grown large enough to implement a code of ethics for the first
time. What benefits can Ali expect his company and employees to see from having a
code of ethics as it grows?
3. You are the vice-president of a small business that has just reached 20 employees,
and you are preparing a code of ethics for the first time. Creating the code using a
team-building process, describe what steps you should take.
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4. When is a business gratuity not a bribe? How does a company deal with business
gratuities to make sure they do not become a problem?
5. You designed and implemented a code of ethics and code of conduct for your
business a year ago but haven’t seen an improvement in ethical behavior among your
employees. What might be the problem?
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