Question 1

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.

Accepted Answer

A values-based ethics program promotes a deeper understanding of ethical principles and encourages employees to make decisions based on values such as fairness, compassion, respect, and transparency. This approach is more likely to result in ethical behavior than a compliance-based program, which relies on rules and penalties for noncompliance.

Question 2

For an ethics and compliance program to properly function,
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.

Accepted Answer

Consistent enforcement and disciplinary action create a culture of accountability and deter misconduct.

Answer: C
 Setting measurable program objectives allows for tracking progress and identifying areas for improvement within the ethics and compliance program.

Answer: D
 Cultural differences must be taken into account when developing an ethics and compliance program for different countries of operation.

E and B are incorrect as monitoring employees through any means necessary and waiting till after misconduct to develop a means of preventing it are not ethical or effective approaches in promoting an ethical culture.

Question 3

What is one of the responsibilities 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

Accepted Answer

One of the main responsibilities of an ethics officer is to monitor and audit ethical conduct within the organization. This includes developing and implementing policies and procedures related to ethics, providing training on ethical behavior, and investigating any violations or complaints. While an ethics officer may work with legal counsel, they are not responsible for prosecuting illegal activities themselves. They may be involved in the financial decision-making process, but signing off on financial documents is typically the responsibility of financial or accounting professionals. Conducting employee performance evaluations and answering the ethics hotline may be additional duties, but they are not the primary responsibility of an ethics officer.

Question 4

At the heart of the Federal Sentencing Guidelines for Organizations is a
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.

Accepted Answer

The Federal Sentencing Guidelines for Organizations incorporate a "carrot-and-stick" philosophy, which means they reward organizations for taking proactive steps to promote ethical behavior and compliance with the law (the "carrot") while also punishing wrongdoing (the "stick"). This approach encourages companies to implement effective compliance and ethics programs.

Question 5

When measuring the effectiveness of an ethics program, it is important to
A)hire an ethics officer.
B)perform a financial audit.
C)adopt a compliance orientation.
D)establish rules for compliance.
E)get input from employees.

Accepted Answer

Getting input from employees is important when measuring the effectiveness of an ethics program as they are the ones who are directly affected by the program and can provide valuable feedback on its impact. Hiring an ethics officer, performing a financial audit, adopting a compliance orientation, and establishing rules for compliance are all important components of an ethics program, but they may not provide a complete picture of its effectiveness without input from employees.

Question 6

Which of the following is the most comprehensive?
A)Code of values
B)Code of conduct
C)Code of ethics
D)Statement of values
E)Statement of principles

Accepted Answer

A code of ethics encompasses a broader range of principles and values that guide ethical decision-making and behavior, whereas a code of conduct primarily outlines specific rules and regulations for behavior within a particular organization or profession. A code of ethics typically includes principles such as honesty, integrity, fairness, and respect for others, while a code of conduct may focus more on issues such as conflicts of interest, confidentiality, and proper use of company resources.

Question 7

What is a major problem organizations tend to have when implementing organizational ethics program?
A)They fail to adopt formal corporate codes of ethics.
B)The government's requirements for ethics programs are too ambiguous.
C)Wall Street investors demand that 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.

Accepted Answer

The major problem organizations tend to have when implementing organizational ethics program is that top managers don't integrate codes, values, and standards into their firms' corporate cultures. While having a formal code of ethics is important, it alone cannot ensure ethical conduct. For an ethics program to be effective, it must be integrated into the organization's culture, which requires the commitment and support of top management. Without leadership support, codes and policies may be ignored, and employees may not take ethical culture seriously.

Question 8

_____ are formal statements that describe what an organization expects of its employees in terms of ethical behavior.
A)Mission statements
B)Codes of conduct
C)Policies on confidentiality
D)Environmental policies
E)The Federal Sentencing Guidelines for Organizations

Accepted Answer

Codes of conduct are specifically designed to outline an organization's expectations of ethical behavior from its employees. Mission statements and environmental policies may touch on ethical behavior, but they are not specifically focused on it. Policies on confidentiality may be part of a code of conduct, but on their own, they do not encompass an organization's full expectations for ethical behavior. Finally, the Federal Sentencing Guidelines for Organizations are not internal policies, but rather a set of external regulations and guidelines enforced by the government.

Question 9

In the "bad apple-bad barrel" analogy, the bad barrel refers to
A)unethical employees.
B)a corrupt society.
C)a criminal organization.
D)indifferent management.
E)an unethical corporate culture.

Accepted Answer

The bad barrel in this analogy refers to the overall environment and culture within an organization or society that may contribute to unethical or criminal behavior. An unethical corporate culture, as described in choice E, is the best option that aligns with this analogy. It suggests that the organizational culture fosters and enables unethical behavior among employees.

Question 10

In the absence of ethics programs, employees are likely to make decisions based on
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.

Accepted Answer

In the absence of formal ethics programs, employees often look to the behavior of their coworkers and superiors as a guide for making decisions, as these behaviors set informal norms and expectations within the organization.

Question 11

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)willing to act ethically.

Accepted Answer

A corporation, being a legal entity, has a certain degree of responsibility towards society for its actions, and it should conduct activities keeping in mind the ethical concerns of the society. Therefore, choice C is the best option. However, philanthropic responsibilities, having an ethics officer or adopting moral philosophies are not mandatory requirements for every corporation.

Question 12

A strong ethics program includes all of the following elements except
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.

Accepted Answer

Including a clause promising good stock market performance is not a necessary or relevant element of a strong ethics program. The other elements listed in the question are critical components of a comprehensive ethics program.

Question 13

Which of the following statements about codes of conduct is false?
A)They are formal statements of what an organization expects of its employees.
B)They address every ethical issue that an employee may face.
C)They help employees determine what behaviors are acceptable.
D)They provide rules and guidelines for employees to follow.
E)They should be specific enough to be reasonably capable of preventing misconduct.

Accepted Answer

Codes of conduct cannot possibly address every ethical issue that an employee may face, as ethical dilemmas are often complex and unique to a particular situation. Rather, a code of conduct provides a framework and guiding principles for employees to use when making ethical decisions.

Question 14

What is one of the goals of ethics training?
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 encounter.

Accepted Answer

One of the main goals of ethics training is to identify key risk areas employees may face in regards to ethical conduct. This allows for proactive measures to be taken to prevent misconduct before it occurs. While it is ideal to eliminate misconduct completely, this may not always be possible. Ethics training is also designed to comply with legal requirements, but this is not the primary goal. The goal is not to simply make the company look good to stakeholders, but rather to ensure ethical behavior and decision-making among employees. It is also not feasible to train employees on every ethical situation they may encounter, but rather to provide them with the tools and knowledge to handle ethical dilemmas in a thoughtful and responsible manner.

Question 15

The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually
A)hire employees later found to be unethical.
B)implement a compliance instead of a values orientation.
C)fail to install a Federal Sentencing Guidelines program.
D)fail to report ethics program activities.
E)tolerate misconduct.

Accepted Answer

The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that tolerate misconduct. This means that organizations that do not take action against employees who engage in unethical behavior or who do not have effective ethics programs in place will face increased penalties.

Question 16

_____ 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.
A)Low-level employees
B)International managers
C)Top managers
D)Government officials
E)Fortune 500 companies

Accepted Answer

Top managers may be more inclined to engage in unethical behavior due to social isolation. This is because top managers have fewer peers and are often physically isolated from lower-level employees. They may also have less support from their subordinates, which can lead to loneliness and a lower level of motivation to regulate ethical decision-making. This, in turn, can lead to a greater likelihood of unethical behavior.

Question 17

Which of the following is a common mistake made in 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

Accepted Answer

Developing materials that are not understandable by the average employee can lead to confusion and ineffective implementation of the ethics program. Clear and concise communication of ethical expectations is crucial for the success of the program.

Question 18

A(n) _____ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) _____ orientation strives to develop shared standards.
A)obedience; values
B)compliance; values
C)legal; values
D)values; compliance
E)values; obedience

Accepted Answer

A compliance orientation focuses on adherence to specific rules and conduct, while a values orientation aims to cultivate shared ethical standards and principles among employees.

Question 19

Top managers tend to focus on _____ because their jobs and personal identity are often connected to quarterly returns.
A)financial performance
B)employee satisfaction
C)ethical performance
D)the board of directors' recommendations
E)adherence to the code of conduct

Accepted Answer

Top managers, especially those at publicly traded companies, are often judged by their ability to meet or exceed quarterly financial targets. Their job security and reputation are tied to financial performance, making it a top priority.

Question 20

Which of the following 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

Accepted Answer

The Sarbanes-Oxley Act was passed in response to the accounting scandals of Enron, WorldCom, and other companies. This legislation increased the responsibilities of ethics officers and boards of directors to monitor financial reporting, including the establishment of an independent audit committee, CEO and CFO certification of financial statements, and enhanced financial disclosures.

Quiz 8: Developing an Effective Ethics Program

Which of the following is an advantage of a values-based ethics program over a compliance-based one?

For an ethics and compliance program to properly function,

What is one of the responsibilities of an ethics officer?

At the heart of the Federal Sentencing Guidelines for Organizations is a

When measuring the effectiveness of an ethics program, it is important to

Which of the following is the most comprehensive?

What is a major problem organizations tend to have when implementing organizational ethics program?

_____ are formal statements that describe what an organization expects of its employees in terms of ethical behavior.

In the "bad apple-bad barrel" analogy, the bad barrel refers to

In the absence of ethics programs, employees are likely to make decisions based on

Because a corporation can be considered a moral agent, it is therefore

A strong ethics program includes all of the following elements except

Which of the following statements about codes of conduct is false?

What is one of the goals of ethics training?

The Federal Sentencing Guidelines for Organizations require federal judges to increase fines for organizations that continually

_____ 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.

Which of the following is a common mistake made in implementing an ethics program?

A(n) _ orientation creates order by requiring that employees identify with and commit to specific required conduct, whereas a(n) _ orientation strives to develop shared standards.

Top managers tend to focus on _____ because their jobs and personal identity are often connected to quarterly returns.

Which of the following legislation has increased the responsibilities on ethics officers and boards of directors to monitor financial reporting?