BUSI 4601 Chapter 7

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1. Expert power usually stems from
a. a superior’s credibility with his or her subordinates.
b. the belief that a certain person has the right to exert influence and that certain others have an obligation to accept it.
c. a person’s ability to influence the behavior of others by offering them something desirable.
d. a person’s ability to penalize the actions or behavior of another.
e. a person’s perceptions that his or her goals or objectives are similar to another’s.

a

2. Which of the following statements about power is true?
a. The five bases of power are mutually exclusive.
b. People generally use only one base of power to effect change in others.
c. Expert power exists when one person takes actions that will lead that person and others to achieve their mutual objectives.
d. Power can be used to motivate individuals ethically or unethically.
e. The use of power is unethical.

d

3. An organization that delegates decision-making authority as far down the chain of command as possible and has relatively few formal rules is
a. centralized.
b. decentralized.
c. unethical.
d. tall.
e. ethical.

b

4. _______ includes a requirement that management assess the effectiveness of an organization’s internal controls and commission an audit of these controls by an external auditor in conjunction with the audit of its financial statements.
a. An ethics audit
b. The Dodd-Frank Act
c. Sarbanes-Oxley 404
d. Title VII of the Civil Rights Act
e. The Whistle-blower Protection Act

c

5. When considering centralized and decentralized structures, which one tends to be more ethical and why?
a. Decentralized because of the clear rules that dictate appropriate behavior in business
b. Centralized because it is easier to uproot unethical activities
c. Centralized because of the strict formalization and implementation of ethics policies and procedures
d. Decentralized because they give employees more decision making authority
e. Both types of organizational structure are equally ethical

c

6. The ability to influence the behavior of others by offering them something desirable is best described as
a. coercive power.
b. reward power.
c. expert power.
d. legitimate power.
e. referent power.

b

7. An advantage of the decentralized organization is that
a. the focus is on formal rules, policies, and procedures backed up with elaborate control systems.
b. there is a high level of bureaucracy.
c. each worker knows his or her job and what is specifically expected as well as how to carry out designated tasks.
d. it is adaptable and can quickly respond to external change.
e. there is minimal upward communication.

d

8. When developing an ethical culture, there has to be a(n) _____ element because every organization has employees that will try to take advantage if there is an opportunity for misconduct.
a. values-based
b. statement of mission
c. ethical
d. compliance
e. punitive

d

9. The apathetic organizational culture exhibits
a. high concern for people but minimal concern for performance.
b. little concern for people but a high concern for performance.
c. minimal concern for people and performance.
d. high concern for people and performance.
e. no concern for maintaining a cohesive organizational culture.

c

10. The exacting organizational culture is interested in
a. performance but has little concern for employees.
b. investors’ impressions of profitability.
c. maintaining a strong corporate culture.
d. employees and performance.
e. employees’ impressions.

a

11. Associating with others who are unethical and who have the opportunity to act unethically can lead to a learning process known as
a. compliance.
b. misconduct.
c. opportunity.
d. differential equations.
e. differential association.

e

12. Which of the following statements about corporate culture is false?
a. Corporate culture refers to the patterns and rules that govern the behavior of an organization and its employees, particularly the shared values, beliefs, and customs.
b. The values and ethical beliefs that actually guide the firm’s employees tend not to be the same ones that management states as defining the firm’s culture.
c. Corporate culture includes the behavioral patterns, concepts, values, ceremonies, and rituals that take place in an organization.
d. The culture of an organization may be explicitly stated or unspoken.
e. Failure to monitor or manage an organization’s culture may foster unethical behavior.

b

13. No formal dress codes, working late, participation in extracurricular activities, gestures, and legends represent
a. a complacent workplace.
b. codes of ethics.
c. a firm’s organizational chart.
d. formal expressions of an organization’s culture.
e. informal expressions of an organization’s culture.

e

14. A cultural audit may be used to assess
a. how cultured a firm’s employees are.
b. unethical employees.
c. unethical organizations.
d. an organization’s values.
e. organizational structure.

d

15. The 2010 passage of the Dodd-Frank Act proposed additional monetary incentives for whistle-blowers. A primary concern about these new incentives is
a. they will encourage too many employees to attempt to blow the whistle on firms, even those that have done nothing wrong.
b. people do not generally respond very well to monetary incentives.
c. whistle-blowers might be tempted to report to the SEC and not report the misconduct to the company’s internal compliance program.
d. people may exaggerate their claims in order to get a reward.
e. the funds paid out to whistle-blowers might bankrupt companies in violation.

c

16. Marcus is the best performing development director his non-profit organization has ever had. He possesses countless tricks and tips to continue to bring in donations, positive publicity, and supporters. Marcus would likely have _____ over new development department staff.
a. coercive power
b. group power
c. referent power
d. expert power
e. democratic power

d

17. _____ bring together the functional expertise of employees from several different areas of the organization on a single project.
a. Quality circles
b. Informal groups
c. Teams
d. Work groups
e. Committees

c

18. Individuals, often from the same department, who have a common interest but not an explicit organizational structure are known as
a. quality circles.
b. informal groups.
c. teams.
d. work groups.
e. committees.

b

19. In order for whistle-blowing to be effective,
a. the individual must have indisputable proof of guilt.
b. employees must wish ill on the organization for which they work.
c. lawmakers must make an effort to force employees to discuss details about the misconduct.
d. it requires that the individual have adequate knowledge of wrongdoing that could damage society.
e. it must occur at a very large multinational corporation.

d

20. Which of the following statements about group norms is false?
a. Group norms define the limit on deviation from group expectations.
b. Group norms have the power to force a strong degree of conformity among group members.
c. Management must carefully monitor the norms of all the various groups within the organization, as well as the organization’s corporate culture.
d. Sanctions may be necessary to bring in line a group whose norms deviate sharply from the overall culture.
e. Group norms never conflict with the overall organization’s culture.

e

21. Management’s sense of the organization’s culture
a. is more accurate than employees’ perceptions.
b. is usually easily adopted by employees.
c. is readily evident to employees.
d. may be quite different from employees’ perceptions.
e. is always different from employees’ perceptions.

d

22. Motivation is defined as
a. the reason why high achieving employees strive for high job performance.
b. a force within the individual that focuses his or her behavior on achieving a goal.
c. personal ambition without regard to the impact on others.
d. a desire to be finished with a project.
e. individual goals.

b

23. When a foreman orders an assembly-line employee to carry out a task which the employee perceives as unethical, yet the employee feels compelled to do it because of the foreman’s position, the foreman is exercising
a. legitimate power.
b. expert power.
c. reward power.
d. coercive power.
e. referent power.

a

24. To motivate employees, an organization offers _____ to _____ employees to work toward organizational objectives.
a. punishment; force
b. peer pressure; guilt
c. incentives; encourage
d. rewards; bribe
e. threats; frighten

c

25. Which of the following cultures combines high levels of concern for people and performance?
a. Apathetic culture
b. Caring culture
c. Integrative culture
d. Exacting culture
e. Cooperative culture

c

26. Ethical concerns in centralized structures can occur because of very little
a. mobility.
b. upward communication.
c. scapegoating.
d. downward communication.
e. communication rigidity.

b

27. A high concern for people but minimal concern for performance can best describe the _____ culture.
a. caring
b. apathetic
c. exacting
d. shareholder
e. employee

a

28. The establishment of an ethics committee within an organization
a. has an informal organizational structure.
b. is usually organized around general business topics.
c. might raise ethical concerns or resolve ethical dilemmas.
d. occurs when formal work groups do not work.
e. usually increases ethical tension.

c

29. New employees in bureaucratic organizations usually have ___________ into the basic operating rules and procedures for getting things done.
a. limited group consensus
b. much impact
c. consistent control
d. strong feedback
e. limited input

e

30. _____ are used to subdivide duties within functional areas of a company.
a. Work groups
b. Individuals
c. Experts
d. Consultants
e. Committees

a

31. The _____ leader demands instantaneous obedience and focuses on punishing wrong behavior, achievement, initiative, and self-control.
a. democratic
b. coaching
c. affiliative
d. coercive
e. pacesetting

d

32. Melinda is a very popular executive. She inspires her employees to follow a common vision, facilitates change, and creates a strongly positive climate, all while stressing performance. Melinda has helped to create a(n) _____ culture.
a. authoritative
b. caring
c. integrative
d. apathetic
e. affiliative

c

33. _____ are satisfied by social and interpersonal relationships, and _____ are satisfied by creative or productive activities.
a. Growth needs; relatedness needs
b. Personal needs; group needs
c. Coercive needs; ethical needs
d. Relatedness needs; growth needs
e. Group needs; personal needs

d

34. Over the years, scholars have developed more than 100 definitions of culture. According to the text, all have the following common elements:
a. Culture is shared, relatively stable, and is formed over a long period of time.
b. Culture is unique, stable, and is formed over a long period of time.
c. Culture is shared, fluctuating, and is formed over a long period of time.
d. Culture is shared, stable, and is formed over a short period of time.
e. Culture is man-made, stable, and is formed over a short period of time.

a

35. Because all organizations have some type of culture, _____ and _____ are often used interchangeably.
a. cultural values; corporate culture
b. cultural values; organizational culture
c. organizational culture; corporate culture
d. ethical culture; organizational culture
e. ethical culture; corporate culture

c

36. Both individual ethics and organizational ethics have an impact on an employee’s
a. productivity.
b. personal happiness.
c. compensation.
d. fitness level.
e. ethical intention.

e

37. A values-based ethics approach to ethical corporate cultures relies on a(n) _____ that defines the firm as well as how customers and employees should be treated
a. set of laws
b. explicit mission statement
c. strong CEO
d. ethical audit
e. relaxed corporate culture

b

38. The idea that people learn ethical or unethical behavior while interacting with others who are a part of their role-sets is referred to as
a. group norms.
b. cognitive memory dissonance.
c. cognitive association.
d. differential association.
e. casual interaction.

d

39. The Sarbanes-Oxley Act
a. only applies to firms with over 50 employees.
b. has institutionalized internal whistle-blowing.
c. was eventually replaced with the Dodd-Frank Act.
d. requires all organizations to make their financial information public.
e. involves too many complicated steps for it to be feasible for most organizations.

b

40. The ____ rule explains variation in employee conduct through generalizing on the percentage of employees in any given organization who will seek to do right versus how many will be indifferent.
a. 10-30-40-20
b. 20-30-30-20
c. 40-10-10-40
d. 10-40-40-10
e. 80-20

d

41. Why do centralized organizations tend to be more ethical than decentralized ones? Can you think of a situation or example in which a decentralized organization might be more ethical than a centralized one?

Because of the strict formalization and implementation of ethics policies and procedures in centralized organizations, they tend to be more ethical in their practices than decentralized organizations. Centralized organizations may also exert more influence on their employees because they have a central core of policies and codes of ethical conduct. However, it is also true that decentralized organizations may avoid ethical dilemmas through the use of effective codes of conduct and ethics. Students will come up with their own examples of ethical decentralized companies. One good example of a decentralized organization often perceived as ethical is Zappos. Zappos strives to be an ethical corporate citizen through its emphasis on a fun working environment, employee empowerment, and WOW customer service.

42. How do societal expectations affect corporations and their ethical initiatives? Give an example of a company that had to alter a product or service because of society’s concerns about its health, moral, or social impacts.

Students can use the entire chapter to discuss this question. If society deems a certain action taken by a business as unethical, even if it’s legal, it is likely legislation will follow. Conversely, members of society are important stakeholders; therefore, companies know they must meet their expectations not only so they are viewed as ethical, but also as a way to attract stakeholders to their good or service. Students may come up with many examples of companies that have changed their goods, services, or business practices in light of societal expectations. One good example is the fast-food industry. Many restuarants are putting healthier items in kid’s meals or are getting rid of toys in kid’s meals due to concerns over the childhood obesity epidemic.

43. Describe the four organizational cultures and provide a company example of each organizational culture.

The four types of corporate cultures are apathetic, caring, exacting, and integrative and are based on how much concern they have for people and profits. An apathetic culture shows minimal concern for people or profits. Individuals in this culture focus mainly on their own self-interests. Countrywide might be an example of this before the recession. Employees were encouraged to sell to borrowers, even when they could not afford the loan, going so far as to create "liar loans" for them. This seriously jeopardized the long-term well-being of the organization. A caring culture exhibits high concern for people over profits. The Container Store might be a good example of this. The Container Store views employees as its most important stakeholder. An exacting culture shows more concern for profits over people. UPS has a an exacting culture and holds employees to high standards. However, even an exacting culture should show concern for people if it wants to be successful. An integrative culture shows high concern for both people and profits. Starbucks is an example of an integrative culture. This culture is characterized by the fact that employees see themselves as important to meeting the firm’s performance criteria.

44. Describe the different kinds of power. Are some types of power more likely to result in ethical behavior than others?

The five power bases include reward power, coercive power, legitimate power, expert power, and referent power. Reward power refers to a person’s ability to influence the behavior of others by offering them something desirable. Reward power can get people to change their behavior in the long-run but is not as effective in the short-run as coercive power. Coercive power penalizes actions or behaviors to induce change. It is highly effective in the short-run. However, followers get resentful in the long-run and coercive power tends to fall apart. Legitimate power stems from the belief that a person has the right to exert influence and certain others have an obligation to accept it. A boss often has legitimate power. Many people tend to acquiesce to individuals perceived to have legitimate power. Expert power is derived from a person’s knowledge (or a perception that a person possesses knowledge). Expert power has high credibility among followers. Referent power may exist when one person perceives that his or her goals or objectives are similar to another’s. Identification with others helps boost the decision maker’s confidence.

45. How do group norms influence the ethical behavior of an organization? What happens when the norms of a particular group conflict with the organization’s corporate culture or objectives?

Group norms are standards of behavior groups expect of their members. Just as corporate culture establishes behavior guidelines for an organization’s members, group norms help define acceptable and unacceptable behavior within a group. In particular, group norms define the limit allowed on deviations from group expectations. Norms also provide explicit ethical directions. They have the power to enforce a strong degree of conformity among group members. At the same time, they define the different roles for various positions within the organization. Sometimes group norms conflict with the values and rules prescribed by the organization’s culture. If this happens, it often results in a culture that is inconsistent with its purported rules and values. In this case, management should take corrective action and continually monitor not only the corporate culture but the norms of all the various groups in the organization.

46. Which of the following is an informal channel of communication?
a. Team communication
b. The grapevine
c. Performance evaluations
d. Reports
e. Presentations

b

47. Which power is likely to be effective in the short-run but not in the long-run?
a. Coercive power
b. Reward power
c. Referent power
d. Expert power
e. Legitimate power

a

48. Because company retaliation of whistle-blowers is illegal, incidents of retaliation taken against employees are rare today.
a. True
b. False

a

49. Non-profit organizations, corporations, and government agencies all have their own organizational cultures.
a. True
b. False

a

50. A cultural audit can be performed internally within the organization.
a. True
b. False

a

51. Approximately 40 percent of employees believe their own values are superior to the company’s and will always follow their own beliefs.
a. True
b. False

b

52. Committees, work groups, and teams are all types of formal groups.
a. True
b. False

a

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