Deck 12: Establishing a Code of Ethics and Ethical Guidelines

Question 1

Deloitte recommends a standard format for a code of ethics. What is the first part of the code?

A) An ethical decision framework to assists employees
B) A listing of available resources for obtaining guidance
C) The company's mission statement, vision, and values
D) A letter from the senior leadership team that sets the tone of the code

Answer 1

D

Question 2

During the _____________, a firm identifies the establishment of its ethical leadership commitment as well as establishes the vision-setting process.

A) Inspiration process
B) Integration process
C) Commercialization process
D) Innovation and improvement process

Answer 2

A

Question 3

Presenting the firm's commitment to unbiased and good-faith interactions with its stakeholders is called ____________.

A) Integrity
B) Justice
C) Reciprocity
D) Utility

Answer 3

B

Question 4

All of the following are mentioned in the text as types of statements that a corporation may adopt to communicate the corporation's view of the subject of ethics except

A) A values statement
B) A corporate credo
C) A corporate contingency plan
D) An Internet privacy policy

Question 5

When considering the organizational components of the Living Code of Ethics, ______ must integrate with living code of ethics in the day-to-day operations of the firm.

A) The socialization process
B) The decision-making process
C) Reward systems
D) Organizational learning

Question 6

The _____________ involves top management integrating the ethical vision, value, and leadership into the strategic decision-making process.

A) Inspiration process
B) Integration process
C) Commercialization process
D) Innovation and improvement process

Question 7

All of the following are ethical values a firm should consider when developing and/or modifying a code of ethics except

A) Integrity
B) Justice
C) Reciprocity
D) Utility Ans. c

Question 8

Which of the following is NOT mentioned in the text as a reason a code of ethics might be adopted?

A) Peer pressure within the same industry
B) Government failure
C) Improve customer relationships
D) Improve profitability

Question 9

In the opening case "How We're Fixing Up Tyco," which of the following individuals was the senior vice president of corporate governance at Tyco who had the responsibility of repairing the tarnished image of the diversified conglomerate?

A) Jack Welch
B) Ken Lay
C) Charles Prince
D) Eric Pillmore

Question 10

Which of the following is a statement that sets forth a company's beliefs and responsibilities to stakeholders?

A) A values statement
B) A corporate credo
C) A corporate contingency plan
D) An Internet privacy policy

Question 11

A(n) _____________ can be defined as a written document that explicitly states what acceptable and unacceptable behaviors are for all of the employees in an organization.

A) Code of values
B) Code of culture
C) Code of ethics
D) Code expectations

Question 12

W. Edwards Deming set out 14 points in his definition of quality in the firm. Many of these points are related to ethical concepts. All of the following form part of the definition except ______.

A) Drive out fear
B) Eliminate quotas
C) Maintain staff barriers
D) Institute training

Question 13

All of the following are considered critical elements of a good ethics program except

A) An introduction from the CEO
B) The assignment of functional responsibility
C) Proper employee training
D) An ethics hotline

Question 14

Which element is not included in a "Living Code of Ethics"?

A) Authentic leadership
B) Organizational culture
C) The decision-making process
D) The price of goods and services

Question 15

When was the date of the original corporate code of ethics introduced by J. C. Penney

A) 1903
B) 1913
C) 1933
D) 1943

Question 16

In the opening case "How We're Fixing Up Tyco," what did Tyco do to re-create its image?

A) Changed its corporate logo
B) Changed the board members
C) Sold off the business
D) Merged with another company

Question 17

General Electric in 2010 published its Citizenship Report titled ______.

A) Financial Growth
B) Sustainable Growth
C) Sustainable Development
D) Financial Development

Question 18

Waddock and Bodwell developed the Total Responsibility Management concept based on Deming's TQM. Which of the following is not one of the elements?

A) Inspiration process
B) Integration process
C) Involvement process
D) Innovation and improvement process

Question 19

Why should a code of ethics be put into writing regardless of the size of the business?:

A) It adds value to the share price
B) It helps stakeholders know which behaviors are acceptable and which are not
C) It satisfies the needs of the board
D) It helps profits

Question 20

A (n) ______________ is a succinct document that is intended to set out the guiding principles of a company.

A) A values statement
B) A corporate credo
C) A corporate contingency plan
D) An Internet privacy policy

Question 21

A corporate credo is a statement that sets forth the company's beliefs and responsibilities to stakeholders.

Question 22

The four ethical values that firms should consider when developing and/or modifying a code of ethics are integrity, justice, competence, and utility.

Question 23

Which of the following organizations is not involved in developing a Global Code of Ethics?

A) Caux Round Table
B) Organization of Economic Co-operation and Development Guidelines
C) World Economic Forum
D) United Nations Global Impact

Question 24

Which of the following is an example of POOR practice in making a code of conduct effective?

A) Set up an ethics committee within the board of directors
B) Review and make adjustments to the code when necessary
C) Assign one unit within the company to be responsible for the effectiveness of the firm's ethical commitment
D) Make sure senior staff set the correct example by "walking the talk"

Question 25

______ is one of the most common mistakes that companies make when developing Global Ethics Programs.

A) Having consensus on objectives for globalization of ethics commitments
B) Committing resources that focus on ethics issues in other countries
C) Not offering training in languages other than English
D) Acknowledging cultural differences

Question 26

Which of the following is an example of GOOD practice in making a code of conduct effective?

A) Post the code on a notice board without any action
B) View the code as a confidential document
C) Review and make adjustments when necessary
D) Assign one unit within the company to be responsible for the effectiveness of the firm's ethical commitment

Question 27

Section 406 of the ______________ requires that companies that are publicly traded disclose whether or not they have a code of ethics.

A) Robinson-Patman
B) Sherman Antitrust Act
C) Foreign Corrupt Practices Act
D) Sarbanes-Oxley Act

Question 28

Which of the following is NOT one of the three major global codes of ethics as indicated in the text?

A) The Caux Round Table Principles
B) Kyoto Treaty
C) The Organization of Economic Co-operation and Development guidelines for multinational enterprises
D) The United Nations Global Impact

Question 29

The annual report of the firm is an element of the Living Code of Ethics.

Question 30

Which of the following organizations published a comprehensive code of ethics but did not carry them out?

A) Metlife
B) Enron
C) J. C. Penney
D) GE

Question 31

The _____________ is an international network of business leaders who are committed to promoting the concept of moral capitalism.

A) The Caux Round Table Principles
B) Kyoto Treaty
C) The Organization of Economic Co-operation and Development guidelines for multinational enterprises
D) The United Nations Global Impact

Question 32

A code of ethics is valuable to a firm only if the employees believe in the code and the code has a direct impact on their actions within the firm.

Question 33

MetLife has a comprehensive code of business conduct and ethics. ______ are responsible for "reading, understanding, and adhering" to the code.

A) The Board of Directors
B) Stakeholders
C) All employees
D) Suppliers

Question 34

Which of the following are recommendations made by governments for multinational enterprises to adopt into their own codes of ethics?

A) The Caux Round Table Principles
B) Kyoto Treaty
C) The Organization of Economic Co-operation and Development guidelines for multinational enterprises
D) The United Nations Global Impact

Question 35

The code of ethics of a firm represents the identification and interpretation of what the firm considers acceptable behavior.

Question 36

Organizational learning can increase the level of ethical awareness by employees and can create a positive climate pertaining to ethical values and beliefs.

Question 37

It is important to put a code of ethics into writing regardless of the size of the business because it helps stakeholders know which behaviors are acceptable and which are not.

Question 38

______________ is a key element of the United Nations Global Impact Principles.

A) Respect global rules
B) Multilateral trade
C) Human rights
D) Self-regulatory practices

Question 39

The ___________ was based on a challenge by former Secretary-General of the United Nations Kofi Annan for businesses to adopt universal environmental and social principles.

A) The Caux Round Table Principles
B) Kyoto Treaty
C) The Organization of Economic Co-operation and Development guidelines for multinational enterprises
D) The United Nations Global Impact

Question 40

Which of the following is not a component of the Caux Round Table Principles?

A) The responsibilities of business are beyond shareholders and are to all stakeholders
B) Businesses need to support multilateral trade
C) Businesses need to abolish all child labor
D) Businesses must avoid illicit operations

Question 41

An effective code of ethics is formed of a standard set of recommendations that includes both advice and internal structures to help employees implement the code of ethics.

Question 42

In a short essay, list and discuss the four types of statements that a corporation may adopt to communicate the corporation's view of the subject of ethics.

Question 43

In a short essay, list six components of a code of conduct for financial institutions according to the publication "Corporate Codes of Conduct: Guidance to Implementing an Effective Ethics Program."

Question 44

Stakeholder engagement processes ensure that the ethical vision the firm is developing coincides with the needs and expectations of all the stakeholders.

Question 45

The UN Global Impact was established in January 1999 based on a challenge by former Secretary-General of the United Nations Kofi Annan for businesses to adopt universal environmental and social principles.

Question 46

Total Responsibility Management starts with the premise that the vision of the firm drives the development of the code of ethics.

Question 47

Firms that implement a Total Responsibility Management system are not able to generate the relevant information of interest for internal and external stakeholders due to the complexity of the system.

Question 48

In a short essay, describe the main elements of a Living Code of Ethics.

Question 49

In a short essay, list and discuss common mistakes that companies make when developing global ethics programs.

Question 50

Kyosei is defined as the ability to live and work together for the common good that allows for mutual prosperity through cooperation.

Question 51

In a short essay, list and discuss the three major stages of the Total Responsibility Management system.

Question 52

Section 406 of the Sarbanes-Oxley Act of 2002 requires that companies that are publicly traded disclose whether or not they have a code of ethics.

Question 53

The three major stages of the TRM system are unfreezing, moving, and refreezing.