Fostering ethical decision making within an organization requires improving the firm’s ethical standards and |
terminating the "bad apples" in the organization |
Which of the following statements about codes of conduct is false? |
They guarantee an ethical business climate |
A strong ethics program includes all of the following elements except |
a clause promising good stock market performance |
In the absence of ethics programs, employees are likely to make decisions based on |
their observations of how their coworkers and superiors behave |
Codes of conduct |
formal statements that describe what an organization expects of its employees in terms of ethical behavior. |
What is not a common mistake when designing and implementing an ethics program? |
Having top management take ownership of the ethics program |
For an ethical compliance program to properly function |
consistent enforcement and disciplinary action are essential |
Which of the following is the most comprehensive? |
Code of ethics |
At the heart of the Federal Sentencing Guidelines for Organizations is a |
carrot-and-stick philosophy that rewards efforts to improve ethics. |
The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually |
tolerate misconduct. |
Sarbanes-Oxley Act |
increased the responsibilities on ethics officers and boards of directors to monitor financial reporting? |
________________may be more inclined to engage in unethical organizational conduct because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making. |
Top managers |
Which of the following is the most comprehensive? |
Code of ethics |
All of the following are useful in monitoring ethical conduct and measuring the effectiveness of the ethical program |
firing |
A code of ethics that does not address specific high-risk activities within the scope of daily activities is |
inadequate. |
Organizational Misconduct |
can contribute to diminished employee trust and increased employee turnover |
Most executives feel that which of the following is the primary reason for much of the unchecked misconduct in business? |
Inadequate ethics and compliance programs |
Which of the following is an advantage of a values-based ethics program over a compliance-based one? |
Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency |
Which of the following is a common mistake made in implementing an ethics program? |
Developing materials that do not address the needs of the average employee |
Aurico is a company that offers ethics hotline maintenance and monitoring services for organizations. Which component of the Federal Sentencing Guidelines for Organizations compliance program does this service help organizations to satisfy? |
Systems for monitoring, auditing, and reporting misconduct |
Organizations can become "bad barrels" not because of unethical individuals but because |
the pressure to succeed creates opportunities that reward unethical decisions |
Which of the following statements about training is false? |
It can dictate personal ethics on the job |
Which of the following is not an advantage of having a comprehensive code of conduct? |
To help employees fight for satisfactory levels of compensation and benefits. |
A_________________generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes. |
compliance orientation |
In the long run, a(n)___________orientation may be better for companies, perhaps because it increases employees’ awareness of ethics issues at work. |
values |
Which of the following is not a main goal of successful ethics programs? |
Allow employees to solve ethical issues themselves using their best judgment |
The individual responsible for implementing disciplinary action for violation of a firm’s ethics standards is usually the |
ethics officer. |
To ensure that an ethics program addresses the needs of the average employee, it should include all of the following |
lengthy legal documents |
______________serve as a central contact point where critical comments, dilemmas, and advice can be assigned to the person most appropriate for handling a specific case. |
Hotlines |
One of the main reasons employees do not report observed misconduct is |
fear of retaliation |
Effective Ethics Program |
Ensures employees understand ethical values and comply with the policies and codes of conduct Helps avoid legal problems Developed as an organizational control system to help predict employee behavior |
Ethics Audit |
Systematic evaluation of an organization’s ethics program and performance to determine effectiveness EX: is a tool that companies can employ to identify and measure their ethical commitment to stakeholders. |
Social Audit |
Assessing and reporting on a business’s performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders |
Types of Controls |
Formal, Output, Process |
Formal Control |
Include input controls such as proper selection of employees, effective ethics training, and strong structural systems |
Output Control |
Comparing standards with actual behavior |
Process Controls |
Management’s commitment to the ethics program and the methods or system for ethics evaluation |
Measuring non-Financial Performance—Balanced Scorecard |
… |
Measuring non-Financial Performance——Triple Bottom Line |
Economic, social, and environmental indicators |
Risks in Ethics Auditing |
Auditing does not assure that ethical risks and challenges can be avoided Assessing risk and identifying standards of comparison can be challenging |
Audit Process |
… |
Benefits of Ethics Auditing |
Detects misconduct before it becomes a major problem Helps understand the ethical culture in an organization Highlights trends, improves organizational learning, and facilitates communication and working relationships Improves relationships with stakeholders |
Global Reporting Initiative (GRI) |
Framework that companies have adopted to report their social and sustainability progress Goal – Mainstreaming of disclosure on environmental, social, and governance performance Used by businesses to develop a standardized method of reporting nonfinancial results Provides users a point of comparison with other companies’ sustainability initiatives |
Ethics Exam 2 Chapter 8 & 9
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