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BUSA 552 > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q

5 Items that have a significant impact on whether an ethics program is successful

A

1) the content of the company’s code of ethics
2) the frequency of communication regarding the ethical code and program
3) the quality of communication
4) senior management’s ability to successfully incorporate ethics into the organization
5) local management’s ability to do the same

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2
Q

If an organization has a culture more focused on planning than on implementation…

A

Employees may come to view unethical conduct as acceptable behavior

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3
Q

Some companies still do not understand that ethics is a critical aspect of business strategy in action

A

This misunderstanding stems from a belief that the ethics of employees is primarily an individual matter, and not the responsibility of managers

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4
Q

The nature of ethics programs in corporate America

A

1) Is to determine risks
2) Develop policies and codes of conduct
3) Require specific standards of conduct.

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5
Q

Shared Values among Employees

A

The glue of successful management as well as of business ethics programs

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6
Q

Johnson Controls’ Four Spheres of Ethical Behavior

A

1) Employees and other team members
2) Company and shareholders
3) Customers, competitors, and suppliers
4) Public and communities.

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7
Q

The Center of John Controls’ 4 Sphere Model

A

Integrity

Symbolizing that the company must operate with integrity in each of these “spheres”

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8
Q

Formal Controls

A

Include the following input controls:

1) proper selection of employees
2) effective ethics training
3) strong structural systems (including communication systems)

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9
Q

Ethics Help Desk

A

Is a point of contact within an organization where employees and managers can bring their concerns and receive assistance from the most appropriate person in the firm to handle the situation

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10
Q

How Ethics Help Desk can be successful

A

1) Must be supportive of employees
2) Be easily accessible
3) Have simple procedures for employees to follow

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11
Q

Process Controls

A

Include management’s commitment to the ethics program and the methods or system for ethics evaluation.

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12
Q

Output Controls

A

Involve comparing standards with actual behavior

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13
Q

The primary purpose of an ethics audit is to:

A
  • Identify the risks and problems in outgoing activities

- Plan the necessary steps to adjust, correct, or eliminate these ethical concerns

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14
Q

____ and ___ provided a guide that stressed the necessity for an ethical culture within the organization and the creation of an ethics and compliance program

A

U.S. Dep. of Justice and the SEC

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15
Q

Ethics Audit

A

A systematic evaluation of an organizations ethics program and performance to determine effectiveness

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16
Q

The recent addition of ISO 19600 lists global standards for compliance management systems (CMSs)

A

Companies that adopt this standard are expected to conduct periodic audits on their CMSs to identify weaknesses and ensure the ethics program is being implemented effectively

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17
Q

Social Audit

A

The process of assessing and reporting on a business’s performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders

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18
Q

Deferred Prosecution Agreements (DPAs)

A

When companies admit wrongdoing (but not guilt), pay a fine, cooperate with the Justice Department, and agree to meet certain terms within a certain time frame

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19
Q

Measures of Ethical Climate Include

A
  • Collective ethical sensitivity
  • Collective character
  • Collective judgment
  • Collective moral motivation
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20
Q

One of the greatest benefits of the auditing process

A

Improved relationships with stakeholders who desire greater transparency

21
Q

Top Challenges for CEO’s

A
  1.    Political uncertainty
  2.    Increased regulation
  3.    Technological change
  4.    Cybersecurity
  5.    Management diversity
22
Q

Ethical Disasters

A

Are the discovery of large-scale unethical activity and follow recognizable phases of escalation

23
Q

The process of Ethical Disaster-Recovery Planning

A
  • Assessing an organization’s values
  • Developing an ethics program
  • Performing an ethics audit
  • Developing contingency plans for potential ethical disasters
24
Q

1st Recommendation for Improving Risk Management

A

Review the nature and scope of the risk management function.

25
Q

2nd Recommendation for Improving Risk Management

A

Develop a risk and compliance plan at the beginning of major projects

26
Q

3rd Recommendation for Improving Risk Management

A

Improve performance by applying risk measures and dashboards

27
Q

4th Recommendation for Improving Risk Management

A

Maintain a recovery plan for an ethical or compliance crisis

28
Q

5th Recommendation for Improving Risk Management

A

Communicate risk frameworks and the effectiveness of internal and external controls

29
Q

Integrity

A

Refers to being whole, sound, and in unimpaired condition

30
Q

Six Sigma

A

a methodology designed to manage process variations that cause defects, and to systematically work toward managing variation to eliminate those defects

31
Q

Defects

A

Unacceptable deviations from the mean or target

32
Q

The objective of Six Sigma

A

Deliver world-class performance, reliability, and value to the end customer

33
Q

Balanced Scorecard

A

A management system that focuses on all the elements that contribute to organizational performance and success

34
Q

Goal of Balanced Scorecard

A

Is to develop a broader perspective on performance factors and to foster a culture of learning and growth that improves all organizational communication

35
Q

The Triple Bottom Line

A

A perspective that takes into account the social, environmental, and financial impacts of decisions made within an organization

36
Q

Global Reporting Initiative (GRI)

A

Advances sustainability reporting, which incorporates the triple bottom line factors of economic, social, and environmental indicators

37
Q

ISO 19600

A

Published to provide international guidelines for compliance management

38
Q

A key part of ISO 19600

A

The adoption of compliance objectives and the assignment of accountability throughout the entire organization

39
Q

Open Compliance Ethics Group (OCEG)

A

Helps create a universal framework for compliance and ethics management.

The OCEG focuses on non-financial compliance and the more qualitative elements of internal controls

40
Q

Risks of Ethics Audits

A
  • Uncover problems that you don’t wish to disclose yet
  • May find its stakeholders’ criticisms cannot be easily addressed
  • Imposes burdens and costs
41
Q

First step in conducting any audit

A

Secure Commitment of Top Managers and Board of Directors

42
Q

Ethics Resource Center

A

A nonprofit engaged in supporting ethical conduct in the public and private sector, assists companies with assessments and audits

43
Q

Framework for an Ethics Audit

A

1) Secure the commitment of top managers and the board
2) Establish an ethics oversight committee
3) Define the scope of the audit process
4) Review the organization’s mission, policies, goals, and objectives and define its ethical priorities.
5) Collect and analyze relevant info
6) Have results verified by an independent agent.
7) Report the findings to the audit committee

44
Q

Scope of an Audit

A

Depends on:

  • the type of business
  • the risks it faces
  • the opportunities it has to manage ethics
45
Q

Verification

A

An independent assessment of the quality, accuracy, and completeness of a company’s social report

46
Q

Unqualified Opinion

A

States that the financial statements are fairly stated

47
Q

Qualified Opinion

A

Auditor believes the financial statements are fairly stated, but an unqualified opinion is not possible either because of limitations placed on the auditor or because of minor issues involving disclosure or accounting principles

48
Q

Adverse Opinion

A

States that the financial statements are not fairly presented

49
Q

Disclaimer of Opinion

A

States that the auditor did not have full access to records or discovered a conflict of interest.

BUSA 552 (10 decks)

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