CH 9

Question 1

1. In the “bad apple–bad barrel” analogy, the bad barrel refers to which of the following?
   a. Unethical employees
   b. A corrupt society
   c. A criminal organization
   d. Indifferent management
   e. An unethical corporate culture

Answer 1

e

Question 2

2. Which of the following statements about codes of conduct are true? (Select four)
   a. They show employees that the business is both responsible and ethical.
   b. They address every ethical issue that an employee may face.
   c. They help communicate expectations for employees.
   d. They provide rules and guidelines for employees to follow.
   e. They give the company culture an ethical foundation.

Answer 2

a, c, d, e

Question 3

3. A strong ethics program includes which of the following elements? (Select four)
   a. A clause promising good stock market performance
   b. A written code of conduct or ethics
   c. Formal ethics training
   d. Auditing, monitoring, enforcement, and revision of standards
   e. High-level personnel to oversee the program

Answer 3

b, c, d, e

Question 4

4. In the absence of ethics programs, employees are likely to make decisions based on which of the following?
   a. Their observations of how their coworkers and superiors behave
   b. How they and their family members behave at home
   c. Whatever they can get away with
   d. Their educational backgrounds
   e. What they did at their previous organizations

Answer 4

a

Question 5

5. Formal statements that describe what an organization expects of its employees in terms of ethical behavior are known as _______.
   a. mission statements
   b. codes of conduct
   c. policies on confidentiality
   d. environmental policies
   e. the Federal Sentencing Guidelines for Organizations

Answer 5

b

Question 6

6. Because a corporation can be considered a moral agent, it is therefore _______.
   a. obligated to perform philanthropic responsibilities
   b. required to have an ethics officer
   c. responsible to society for its actions
   d. required to adopt moral philosophies
   e. not accountable for the conduct of its employees

Answer 6

c

Question 7

7. Which type of orientation strives to develop shared standards?
   a. Obedience
   b. Values
   c. Legal
   d. Compliance
   e. Systematic

Answer 7

b

Question 8

8. For an ethics and compliance program to properly function, which of the following is true?
   a. Consistent enforcement and disciplinary action are essential.
   b. Employees must be monitored using any means necessary.
   c. It is not necessary to set measurable program objectives.
   d. The same program should be used in all countries of operation, regardless of cultural differences.
   e. The company must wait until after misconduct occurs to develop a means of preventing it.

Answer 8

a

Question 9

9. Which of the following is the most comprehensive?
   a. Code of values
   b. Mission statement
   c. Code of ethics
   d. Statement of values
   e. Statement of principles

Answer 9

c

Question 10

10. At the heart of the Federal Sentencing Guidelines for Organizations is a(n) _______.
    a. “tit-for-tat” philosophy that punishes wrongdoing
    b. foundation based on the Golden Rule philosophy
    c. Iron Fist philosophy that severely punishes wrongdoing
    d. carrot-and-stick philosophy that rewards efforts to improve ethics
    e. utilitarian philosophy of the greatest good for the greatest number

Answer 10

d

Question 11

11. Which of the following pieces of legislation has increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?
    a. Sarbanes-Oxley Act
    b. Robinson-Patman Act
    c. Ethics Officer Responsibility Act
    d. Sherman Antitrust Act
    e. Enron Financial Responsibility Act

Answer 11

a

Question 12

12. Because of social isolation that creates insensitivity and a lower level of motivation to regulate ethical decision making, which of the following may be more inclined to engage in unethical organizational conduct?
    a. Low-level employees
    b. International managers
    c. High-status officials
    d. Government officials
    e. Fortune 500 companies

Answer 12

c

Question 13

13. Because their jobs and personal identity are often intimately connected to quarterly returns, top managers tend to focus on which of the following?
    a. Financial performance
    b. Ethical performance
    c. Ethical performance
    d. Board of directors’ recommendations
    e. Adherence to the code of conduct

Answer 13

a

Question 14

14. Which of the following is one responsibility of an ethics officer?
    a. Prosecuting illegal activities
    b. Signing off on financial documents
    c. Monitoring and auditing ethical conduct
    d. Conducting employee performance evaluations
    e. Answering the ethics hotline

Answer 14

c

Question 15

15. Which of the following is one of the key goals of successful ethics training programs?
    a. To completely eliminate any chances of misconduct
    b. To identify key risk areas employees will face
    c. To make the company look good to stakeholders
    d. To comply with legal requirements
    e. To train employees on how to address every ethical situation they may encounter

Answer 15

b

Question 16

16. Which of the following is a major problem organizations tend to have when implementing an organizational ethics program?
    a. They fail to adopt formal corporate codes of ethics.
    b. Government requirements for ethics programs are too ambiguous.
    c. Wall Street investors demand companies take illegal action to increase profits.
    d. Financial problems make ethical conduct impossible to pursue.
    e. Top managers don’t integrate codes, values, and standards into their firms’ corporate cultures.

Answer 16

e

Question 17

17. Which of the following is an advantage of a values-based ethics program over a compliance-based one?
    a. Employees learn to make decisions based on values such as fairness, compassion, respect, and transparency.
    b. Diverse employees no longer have differing values.
    c. It requires employees to identify with and commit to specific required conduct.
    d. A values orientation uses legal terms, statutes, and contracts that teach employees the rules and penalties for
    noncompliance.
    e. Unlike values-based programs, compliance-based programs cannot prevent misconduct.

Answer 17

a

Question 18

18. Which of the following is a common mistake made when implementing an ethics program?
    a. Setting specific program objectives
    b. Developing materials that are not understandable by the average employee
    c. Adapting a firm’s ethics program to its international operations
    d. Allowing lower-level employees to make ethical decisions
    e. Having one person take responsibility for implementing the ethics program

Answer 18

b

Question 19

19. Hotline 100 is a company that offers ethics hotline maintenance for organizations. The company accepts anonymous calls 24/7, 365 days a year. Which component of the Federal Sentencing Guidelines for Organizations compliance program does a company like Hotline 100 help organizations to satisfy?
    a. Code of conduct
    b. Enforcement of standards, codes, and rules
    c. Delegation of authority to ethical persons
    d. Systems for monitoring, auditing, and reporting misconduct
    e. Ethics training

Answer 19

d

Question 20

20. Which of the following statements about ethics training are true? (Select four)
    a. Ethics training can educate employees about the firm’s policies and expectations, as well as about relevant
    laws and regulations and general social standards.
    b. Ethics training can dictate personal ethics on the job so employees no longer have differences in beliefs.
    c. Ethics training can make employees aware of available resources, support systems, and designated personnel who can assist them with ethical and legal advice.
    d. Ethics training can empower employees to ask tough questions and make ethical decisions.
    e. Ethics training can affect the influence of organizational culture, coworkers and superiors, and opportunity.

Answer 20

a, c, d, e

Question 21

21. Which of the following generates an ethical program that creates order by requiring that employees identify with and commit to specific required conduct using legal terms and statutes?
    a. Values orientation
    b. Code of conduct
    c. Statement of values
    d. Code of ethics
    e. Compliance orientation

Answer 21

e

Question 22

22. Which of the following are key goals of successful ethics training programs? (Select four)
    a. Identify key risk areas employees will face.
    b. Align employee conduct with organizational reputation and branding.
    c. Provide a hierarchy of leadership for employees to contact when they are faced with an ethical dilemma they do not know how to resolve.
    d. Allow employees to solve ethical issues using their best judgment.
    e. Allow a mechanism for employees to voice their concerns that is anonymous but provides answers to key questions.

Answer 22

a, b, c, e

Question 23

23. Which individual is generally responsible for implementing disciplinary action for violation of a firm’s ethics standards?
    a. CEO
    b. President
    c. Immediate supervisors
    d. Ethics officer
    e. Chairman of the Board

Answer 23

d

Question 24

24. To ensure that an ethics program addresses the needs of the average employee, it should include which of the following? (Select four)
    a. Feedback from employees across the firm
    b. A question-and-answer section
    c. Additional resources for guidance
    d. Lengthy legal documents
    e. User-friendly checklists, illustrations, and cartoons

Answer 24

a, b, c, e

Question 25

25. Which of the following 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?
    a. Training programs
    b. Mission statements
    c. Codes of conduct
    d. Hotlines
    e. Boards of directors

Answer 25

d

Question 26

26. Which of the following is one of the main reasons employees do not report observed misconduct?
    a. Apathy
    b. Most employees do not observe any misconduct
    c. Fear of retaliation
    d. Laws and regulations do not protect employees
    e. Hotlines do not work well

Answer 26

c

Question 27

27. Because top managers may be more insensitive to ethical issues due to their focus on financial performance, the FSGO guidelines suggest that ethics officers instead report to which of the following?
    a. Stock market
    b. Board of directors
    c. Middle managers
    d. Customers
    e. Stakeholders

Answer 27

b

Question 28

33. Which document serves the general public and also addresses distinct groups such as stakeholders?
    a. Statement of values
    b. Code of conduct
    c. Code of ethics
    d. Federal Sentencing guidelines
    e. Ethics policies

Answer 28

a

Question 29

34. The only way to develop an ethical corporate culture is to provide character education to existing employees or hire employees with good character and sensitize them to ethical issues.
    a. True
    b. False

Answer 29

False

Question 30

35. In many cases, a coherent ethical corporate culture does not evolve through independent individual and interpersonal relationships.
    a. True
    b. False

Answer 30

True

Question 31

36. The FSGO encourages federal judges to reduce or eliminate fines for firms with extensive compliance programs that make due diligence attempts to abide by ethical and legal standards.
    a. True
    b. False

Answer 31

True

Question 32

37. Companies should model their ethics training and communication initiatives after those of their competitors’.
    a. True
    b. False

Answer 32

False

Question 33

38. The most effective hotlines operate on an anonymous basis and are supported 24 hours a day, 365 days a year.
    a. True
    b. False

Answer 33

True

Question 34

39. One common problem found with corporate codes of ethics is that the codes were written too legalistically.
    a. True
    b. False

Answer 34

True

Question 35

40. An ethics audit should be conducted regularly.
    a. True
    b. False

Answer 35

True

Question 36

41. Which of the following is important in defining the scope of the audit process?
    a. The types of teams involved in the process
    b. Available opportunities the business has to manage ethics
    c. Who has been assigned to oversee the audit
    d. Government regulations outlining the process
    e. Deciding on how to verify the results

Answer 36

b

Question 37

42. During which step of the ethics auditing process does an organization identify the tools or methods for measuring progress in improving employees’ ethical decisions and conduct?
    a. Secure commitment of top managers and directors
    b. Establish a committee to oversee the audit
    c. Define the scope of the audit
    d. Collect and analyze relevant information
    e. Verify the results

Answer 37

d

Question 38

43. During which step of the auditing process should a firm examine all documents that make explicit commitments to ethical, legal, or social responsibility?
    a. Gain support of top management and board of directors
    b. Establish a committee to oversee the audit
    c. Define the scope of the audit process
    d. Review the firm’s mission, goals, values, and policies
    e. Have the results verified by an independent party

Answer 38

d

Question 39

44. Ideally, which of the following should oversee an ethics audit?
    a. The board’s financial audit committee
    b. The CFO
    c. The CEO
    d. Outside consultants
    e. Secondary stakeholders

Answer 39

a

Question 40

45. What is the first step in the auditing process?
    a. Secure the commitment of top executives and directors
    b. Define the scope of the audit
    c. Establish a committee to oversee the audit
    d. Collect and analyze data
    e. Review organizational mission, goals, values, and policies

Answer 40

a

Question 41

46. An independent assessment of the quality, accuracy, and completeness of a company’s social or ethics report is known as _______.
    a. compliance
    b. verification
    c. auditing
    d. analysis
    e. validation

Answer 41

b

Question 42

47. Which of the following is the final step in the ethics-auditing process?
    a. Define the scope of the audit
    b. Secure the commitment of top managers and directors
    c. Collect and analyze data
    d. Report the findings
    e. Verify the results

Answer 42

d

Question 43

49. Which of the following statements about ethics audits are true? (Select four)
    a. They provide an opportunity to measure conformity to the firm’s desired ethical standards.
    b. They are a mandatory component of an ethics program.
    c. They provide an objective method for demonstrating a company’s commitment to improving strategic
    planning, including its compliance with legal and ethical standards and social responsibility.
    d. They are a major component of the ethics program.
    e. They are systematic evaluations of an organization’s ethics program and performance to determine whether it is effective.

Answer 43

a, c, d, e

Question 44

50. Which of the following is a tool that companies can employ to identify and measure their ethical commitment to stakeholders?
    a. Ethics audit
    b. Social audit
    c. Financial audit
    d. Performance audit
    e. Technology assessment

Answer 44

a

Question 45

53. A performance management tool that details a company’s performance through financial and nonfinancial perspectives, giving management a comprehensive view of the business, is called _______.
    a. Global Reporting Initiative
    b. ESG
    c. the ethics scoreboard
    d. the balanced scorecard
    e. the triple bottom line

Answer 45

d

Question 46

54. Which of the following provides international guidelines for compliance management?
    a. ESG
    b. Open Compliance Ethics Group
    c. Balanced Scorecard
    d. ISO 19600
    e. Global Reporting Initiative

Answer 46

d

Question 47

55. The measuring of social, financial, and environmental factors (or people, places, and planet) that recognizes business has a responsibility to positively influence a variety of stakeholders, including customers, employees, shareholders, community, and the natural environment is defined as the _______.
    a. Balanced Scorecard
    b. integrity management
    c. triple bottom line
    d. ESG
    e. Global Reporting Initiative

Answer 47

c

Question 48

57. Which of the following are responsibilities of an ethics officer? (Select four)
    a. Assessing the needs and risks an organization-wide ethics program must address
    b. Developing and distributing a code of conduct or ethics
    c. Reviewing and updating the code of conduct or ethics
    d. Conducting training programs for employees
    e. Operating the ethics hotline

Answer 48

a, b, c, d