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Business Ethics > Exam 4 > Flashcards

Exam 4 Flashcards

1
Q

Why are ethical programs necessary?

A

To sensitize employees to the potential legal and ethical issues within their work environments

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2
Q

A strong ethics program includes?

A 
Written code of conduct
Ethics officer
Delegation of authority
Ethics training
Auditing
Monitoring
Enforcement
Revision
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3
Q

What can diminish a company’s ethical decision making?

A

A culture of short term performance

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4
Q

What did employees looking for a new job cite as a major reason for their departure from their previous job?

A 
Loss of workplace trust (48%)
Unethical treatment (40%)
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5
Q

What can an ethics program help to avoid?

A

Legal problems

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6
Q

What is a compliance orientation?

A

Creates order by requiring that employees identify with and commit to specific required conduct
Uses legal terms, statues and contracts

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7
Q

What are codes of conduct?

A

Formal statements that describe what an organization expects of its employees.

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8
Q

What are some of the key reasons that codes of ethics fail?

A 
Code is not promoted and employees don't read it
Code is not easily accessible
Code is not understandable
Code doesn't give direction
Top management doesn't refer to the code
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9
Q

What six core principles do codes of ethics contain?

A 
Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship
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10
Q

What is the task of ethics officers?

A 
Manage ethics and legal compliance programs
Assess the needs of an ethics program
Develop and distribute a code
Conduct training
Answer employees ethical questions
Make sure the company complies with govt rules
Monitore and audit ethical conduct
Take action on violations
Review and update code
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11
Q

What’s the ECOA?

A

Ethics and Compliance Officer Association

Over 1200 members in over 30 countries

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12
Q

What are systems to monitor and enforce ethical standards?

A

Observing employees
Conduct internal audits and investigations
Circulating surveys
Instituting a reporting system

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13
Q

A compliance program should be deemed effective if it addresses the seven minimum requirements for ethical compliance programs.

A

False. An effective compliance program has the seven elements of a compliance program in place and goes beyond those minimum requirements to determine what will work in a particular organization.

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14
Q

The accountability and responsibility for appropriate business conduct rests with top management.

A

True

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15
Q

Ethical compliance can be measured by observing employees as well as through investigating and reporting mechanisms.

A

True

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16
Q

The key goal of ethics training is to help employees identify ethical issues.

A

False. It is much more than that - it involves not only recognition but also an understanding of the values, culture, and rules an organization as well as the impact of ethical decisions on the company.

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17
Q

An ethical compliance audit is designed to determine the effectiveness of ethics initiatives.

A

True

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18
Q

What is ethics auditing?

A

A systematic evaluation of an organizations ethics program and performance to determine whether it is effective.

19
Q

What’s a 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 shareholders

20
Q

What are the benefits of ethics auditing?

A

Detect ethical issues before they become a major problem
Provide evidence of attempts to identify ethical issues
Continuos improvement
Prevent crises

21
Q

Framework for an ethics audit …

A

Commitment of top managers and board of directors
Committee to oversee ethics audit
Define the audit process
Review the organizations mission, policies, goals, …
Collect and analyze relevant information
Have the results verified
Report the findings

22
Q

What does the scope of an audit depend upon?

A

Type of business
Risks
Opportunities

23
Q

Ethics audits are required by the Sarbanes-Oxley Act of 2002.

A

False

24
Q

In public corporations, the results of ethics audits should be reported to the board of directors.

A

True

25
Q

An ethics audit helps identify risks and rogue employees.

A

True

26
Q

The scope of an ethics audit depends on the type of risks and the opportunities to manage them.

A

True

27
Q

Smaller companies can skip the step of verifying the results of an ethics audit.

A

False. Verification is necessary to maintain integrity and accuracy.

28
Q

What is global business?

A

Transactions across national boundaries

A practice that brings together people from different cultures, values, laws and ethical standards

29
Q

What is risk compartmentalization?

A

Various profit centers within corporations become unaware of the overall consequences of their actions on the firm as a whole.

30
Q

Who was John Maynard Keynes?

A

Argued that the state could stimulate economic growth and improve stability in the private sector through controlling interest rates, taxation and public projects.

31
Q

What is socialism?

A

Economic theories advocating the creation of a society in which wealth and power are shared and distributed evenly based on the amount of work expended in production.

32
Q

What is bimodal wealth distribution?

A

Occurs when the middle class shrinks resulting in highly concentrated wealth amongst the rich and large numbers of poor people with very few resources.

33
Q

What are rational economics?

A

Is based upon the assumption that people are predictable and will maximize utility of their choices relative to their needs and wants.

34
Q

What are behavioral economics?

A

Assumes that humans may not act rationally because of genetics, emotions, learned behavior and heuristics or rules of thumb.

35
Q

What are multinational companies?

A

Public companies that operate on a global scale without significant ties to any one nation or region.

36
Q

What is the international monetary fund?

A

Extranational body responsible for the regulation of monetary relationships among national economies
Makes short-term loans to member countries that have deficits and provides foreign currencies for its members.
Provides information about countries that may not be able to repay their debts

37
Q

What is dumping?

A

The practice of charging high prices for products in domestic markets while selling the same products in foreign markets at low prices often at below cost.

38
Q

What is consumerism?

A

The belief that the interests of consumers rather than those of producers should dictate the economic structure of a society.

39
Q

Most countries have a strong orientation toward ethical and legal compliance.

A

False

40
Q

The self-reference criterion is an unconscious reference to one’s own cultural values, experience and knowledge.

A

True

41
Q

One of the critical ethical business issues linked to cultural differences is the question of whose values and ethical standards take precedence during international negotiations and business transactions.

A

True

42
Q

Multinational corporations have identifiable home countries but operate globally.

A

False.

43
Q

Certain facilitating payments are acceptable under the Foreign Corrupt Practices Act.

A

True. A violation of the FCPA occurs when the payments are excessive or are used to persuade the recipients to perform other than moral duties.

Business Ethics (4 decks)

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