Deck 6: Managing Ethics and Legal Compliance

Question 1

Command-and-control is a term frequently used to describe ethics initiatives that begin at the top of the organization and work their way down, level by level.

Answer 1

False

Question 2

In any organization, it is safe to assume that most employees fit into the grenades category.

Answer 2

False

Question 3

The job of ethics officer has been called "the newest profession in American business."

Answer 3

True

Question 4

As an ethics officer at WeCare International, when Brian is designing ethics communication for the company's employee population, he needs to consider three kinds of people: employee, managers, and customers.

Question 5

Ethics officers seem to agree that, whatever other reporting relationships exist, the ethics officer should never have a direct reporting relationship to the CEO.

Question 6

According to ethics and compliance officers, a respected and trusted insider who knows the company's culture and people is a preferable choice for a firm's ethics or compliance officer.

Question 7

The corporate ethics and compliance office concept can be traced to 1965 and General Motors, then the largest U.S. automaker.

Question 8

According to United States v. Booker, judges are no longer required to follow strictly the U. S. Sentencing Guidelines.

Question 9

In 2004 Congress created the U.S. Sentencing Commission in response to criticism of judicial discretion in sentencing and perceived disparities between sentences for "white-collar" and other types of crimes.

Question 10

Pursuant to the U. S. Sentencing Guidelines, an organization cannot be convicted of a crime until majority of the employees break the law.

Question 11

Centralized ethics offices are nearly always the best choice as these provide for greater consistency and commitment to the organization's key values.

Question 12

Pursuant to the U. S. Sentencing Guidelines, an organization can be convicted even if only one employee is caught breaking the law.

Question 13

The demand for qualified and knowledgeable compliance and ethics professionals is so high that more organizations are being created to help them share information and design more effective ethics and compliance programs such as the Society for Corporate Compliance and Ethics (SCCE), a nonprofit started in 2002.

Question 14

As a new ethics officer at ABC Trading, if Susan wants to assess the company's credibility on ethics, she should compare the messages on the formal and informal communications systems.

Question 15

According to Peters and Waterman, an effective leader must be the master of two ends of the spectrum: ideas at the highest level of abstraction and actions at the most mundane level of detail.

Question 16

Depending on the organization's culture, the word "ethics" may carry a negative connotation and need to be replaced with "business conduct."

Question 17

A values statement is a short description of the organization's reason for existence-a sort of "here's what we do."

Question 18

The very nature of policy-it's usually voluminous and written in legalese-makes it a poor way to communicate important rules.

Question 19

Research suggests that ethics only needs to be communicated in orientation materials for new employees.

Question 20

Seldom should ethics information be included in a company's external website.

Question 21

Under the U. S. Sentencing Guidelines, the same crime can be subject to a wide range of penalties. In determining the penalty, the following will be considered: a. Prior violations
B) Whether management reports itself
C) Whether management cooperates with authorities
D) Whether the firm has an effective program in place to prevent and detect illegal behavior
E) All of these

Question 22

The 1991 U.S. Federal Sentencing Guidelines called for the assignment of specific high‐level individuals with responsibility to oversee legal compliance standards. This requirement led to the development of a brand new role that of the _____.

A) chief executive officer
B) chief information officer
C) corporate ethics officer
D) corporate arbitrator

Question 23

According to research, what percent of the information that passes through the grapevine is accurate?

A) Between 10 to 30%
B) Between 30 to 50%
C) Between 50 to 70%
D) Between 70 to 90%

Question 24

At Toys for Toddlers (TFT), Bianca is interested in getting the continual stream of information among employees about "what's really going on." She should explore ______ at TFT.

A) grapevine
B) organizational policies
C) mission and vision
D) value statement

Question 25

___________ may have good ethical compasses, but they don't know their corporation's policies. Without guidance, ethics may not even be a consideration.

A) Loose ammo
B) Loose cannons
C) Misguided cannons
D) Grenades

Question 26

Organizational experience suggests that an "ethics action line" is unnecessary because it promotes "tattling" on people an employee doesn't like.

Question 27

All of the following about Ethics Officer is true EXCEPT:

A) The ethics officer is typically a first-line to middle-level manager.
B) The ethics officer typically reports directly to the CEO.
C) The ethics officer can be hired from inside or outside of the firm.
D) The ethics officer can also be called the "director of ethics" or "director of internal audit."

Question 28

An increase in the number of calls on the "ethics action line" is a sign that there are more reportable problems in the company now.

Question 29

At ABC Manufacturing, Samuel is reading a statement that describes sort of "here's what we do." Samuel is reading which of the following statement?

A) Mission statement
B) Vision statement
C) Values statement
D) Policies statement

Question 30

Under the 2004 sentencing guidelines, the __________ are expected to oversee the compliance and ethics program while __________ is/are charged with ensuring its effectiveness within the company.

A) board of directors; top management
B) board of directors; the CEO
C) CEO; general managers
D) company's ethics officer; board of directors

Question 31

Given the negative reaction to the word ethics at some organizations, companies have used other terms. Which of the following is not an alternate word suggested or used in place of ethics in organizations?

A) Values
B) Integrity
C) Business practices
D) Vision

Question 32

Which of the following is false?

A) A mission statement describes "how we do business."
B) Mission statements should be short and memorable.
C) Mission statements should be written by outsiders who are unbiased.
D) For some companies, mission statements are a mainstay of the corporate culture.

Question 33

The US Sentencing Guidelines use a "carrot and stick" approach to managing corporate crime. What is meant by the use of "carrot" and "stick"?

A) The carrot dangles at the end of the stick as an incentive for organizations to continue to behave ethically.
B) The carrot refers to the guidelines as "food for thought" and the stick refers to the punishment if the guidelines are not followed.
C) The carrot refers to incentives in the guidelines to behave ethically and the stick refers to the punishment if the guidelines are not followed.
D) None of these.

Question 34

At ABC Manufacturing, Ashker, Bianca, and Carolyn are employees who understand and follow the rules and policies of the organization, and they have good ethical compasses. They have the judgment or experience required to discern the difference between right and wrong, and they have the moral grounding to do the right thing. Ashker, Bianca, and Carolyn can be described as which of the following?

A) Generals
B) Loose cannons
C) Good soldiers
D) Grenades

Question 35

At ABC Manufacturing, Mike, Ryan, and Emily are employees who know the rules, but they do not care. They have their own agenda, and they lack any company or professional loyalty. Mike, Ryan, and Emily can be described as which of the following?

A) Generals
B) Loose cannons
C) Good soldiers
D) Grenades

Question 36

When designing ethics communication for a typical employee population, organizations need to consider all of the following kinds of people described using military jargon EXCEPT:

A) Generals
B) Loose cannons
C) Good soldiers
D) Grenades

Question 37

Which of the following is true?

A) Fines applied by the US Sentencing Commission have decreased on average since 1990.
B) Only the presence of a code of ethics in the organization is necessary to meet the US Sentencing Commission's idea of an effective compliance program.
C) The sentencing guidelines were designed to use a "carrot‐and‐stick" approach to managing corporate crime.
D) The 1987 sentencing guidelines mandated incarceration for only the worst felony offenders.

Question 38

Your roommate is interested in the history of corporate ethics and wants to know which organization it can be traced to. You should tell him that the corporate ethics and compliance office concept can be traced to 1985 and _______.

A) General Electric
B) General Dynamics
C) General Motors
D) IBM

Question 39

At ABC Manufacturing, Ellen, Tommy, and Zach are employees who may have good ethical compasses, but they do not know ABC's policies. They may not even be familiar with general ethical standards in business. These employees may be well meaning, but they are naive. Without guidance, they may not even consider ethics in the business environment. Ellen, Tommy, and Zach can be described as which of the following?

A) Generals
B) Loose cannons
C) Good soldiers
D) Grenades

Question 40

___________ have their own agenda and lack any company or professional loyalty.

A) Deserters
B) Misguided cannons
C) Grenades
D) Toxic ammo

Question 41

Your friend, Jamira, has been selected to create a new ethics training program at work. What advice should you give Jamira?

A) Ensure that all employees receive the same training content.
B) Focus on new employees only; the other employees already know this stuff.
C) Provide separate training depending on the needs of different groups of employees.
D) Bring in outside consultants to conduct the training.

Question 42

At XYZ International, Paige wants to develop a statement that describes sort of "here's how we do it"-a codification of essential corporate behavior. Paige is looking to develop which of the following statement?

A) Mission statement
B) Vision statement
C) Values statement
D) Policies statement

Question 43

______ is a term frequently used to describe ethics initiatives that begin at the top of the organization and work their way down, level by level.

A) Command-and-control
B) Cascading
C) Codes of conduct
D) Good soldiers

Question 44

When communicating policies:

A) It is important to use legalese to demonstrate the formality of the document.
B) Eliminate the legalese and tell employees what the policy meAnswer:
C) Policies should be alphabetized to communicate that all policies are important.
D) Include policies from all departments so the manual is standardized.

Question 45

The __________ approach to formal corporate ethics initiatives is proactive and aspirational.

A) rules
B) compliance
C) competitive
D) values

Question 46

You are a top executive charged with developing a plan for the company's formal communication of ethics. Briefly describe three communication channels and an example of how you would use each one.

Question 47

Which of the following describe the "rules of the organization"?

A) Mission
B) Vision
C) Values
D) Policy

Question 48

The _________ approach to formal corporate ethics initiatives focuses on meeting required behavior norms or obeying the letter of the law.

A) rules
B) compliance
C) principles
D) values

Question 49

Which of the following is false?

A) An effective approach to managing ethics has a compliance-only focus.
B) Abstract value statements can appear hypocritical to employees.
C) Strictly compliance-oriented programs are often viewed by employees with cynicism.
D) With a compliance-only focus, employees believe anything goes as long as there isn't a rule against it.

Question 50

You are a top executive charged with evaluating the state of ethics communications in your company. List four key questions you will need to ask as part of your evaluation. In addition, provide an example that clarifies the meaning of each question.

Question 51

When communicating a code of conduct:

A) Focus on values that should guide decision making.
B) Provide the same code of conduct to all departments regardless of its length.
C) Refrain from changing the code of conduct regularly.
D) Fewer employees will read the code if it is short.