Question 1

In light of the fact that over 60% of all theft in retail stores is committed by employees, New Generations Clothier, Inc., requires that managers personally unlock fitting rooms for all sales associates and count the number of items associates take to the fitting rooms. This policy is written in the company manual. Breaking with the policy is grounds for dismissal. It is correct to say that this is part of New Generations' compliance-based ethics.

Accepted Answer

The policy of requiring managers to unlock fitting rooms and count items taken to fitting rooms is a compliance-based approach to ethics aimed at preventing employee theft. It is a specific policy written in the company manual that employees are expected to follow, with consequences for not complying.

Question 2

People who report illegal or unethical behavior are called whistleblowers.

Accepted Answer

Whistleblowers are individuals who report illegal, unethical, or fraudulent behavior within an organization.

Question 3

Enforcement is perhaps the most important step in an effective code of ethics.

Accepted Answer

Without enforcement, a code of ethics is simply a set of guidelines that are not being followed or taken seriously. Enforcement ensures that individuals and organizations are held accountable for their actions and adhere to the standards set forth in the code of ethics.

Question 4

At Fast-Track Financial Services, it is not unusual for a financial consultant to lose a client to another consultant working out of the same office. Clients have a right to do business with whomever they choose. If it is a high-net worth client, with the potential for high commissions on sales, the incentive to steal a fellow worker's client exists because the firm's culture has not established integrity-based ethics to deter this activity.

Accepted Answer

The passage states that it is not unusual for a financial consultant to lose a client to another consultant in the same office, and that the incentive to steal clients exists due to a lack of integrity-based ethics in the firm's culture. Therefore, it is likely true that high-net worth clients may be taken away by other consultants in the firm.

Question 5

Compliance-based ethics codes focus on preventing unlawful behavior by increasing control and by penalizing wrongdoers.

Accepted Answer

Compliance-based ethics codes are designed to increase control and prevent unlawful behavior by penalizing wrongdoers. These codes often emphasize following legal regulations and are particularly common in industries heavily regulated by government agencies, such as finance and healthcare.

Question 6

A code of ethics designed to avoid criminal misconduct is an example of a compliance-based ethics code.

Accepted Answer

A compliance-based ethics code focuses on preventing misconduct through rules and regulations, often in response to legal requirements. A code of ethics designed to avoid criminal misconduct falls under this category.

Question 7

The brewers of Budweiser beer encourage their customers to drink responsibly. This reflects a compliance-based approach to ethics.

Accepted Answer

The answer of The brewers of Budweiser beer encourage their...

Question 8

Compliance-based ethics codes are based on preventing unlawful behavior.

Accepted Answer

Compliance-based ethics codes are designed to prevent unlawful behavior by setting clear rules and regulations that employees must follow in order to avoid legal violations. These types of codes are often mandatory and may include strict consequences for noncompliance.

Question 9

Dewy Cheatum encourages his employees to create and use legal loopholes to gain a competitive advantage. In keeping within the legal limits of the law, the employees are within their compliance-based ethics rights.

Accepted Answer

If the employees are staying within the legal limits, then they are not breaking any laws and are therefore acting in compliance with the law. However, whether or not this approach aligns with ethical standards or values is a separate issue.

Question 10

An integrity-based ethics code moves beyond legal compliance in order to create a "do-the-right-thing" climate.

Accepted Answer

An integrity-based ethics code sets a standard for behavior that goes beyond simply following the law. It aims to create a culture where employees are encouraged to make ethical decisions based on values and principles, and not solely on legal requirements. The code sets expectations for conduct, and employees are expected to demonstrate ethical behavior even when it is not required by law. This creates a climate where doing the right thing is the norm, and not just a legal obligation.

Question 11

As a result of pressure from business lobbyists, Congress failed to pass legislation protecting whistleblowers.

Accepted Answer

The answer of As a result of pressure from business...

Question 12

America's business ethics can improve simply by requiring written contracts with employees, customers, and owners. This alone will do the job!

Accepted Answer

While written contracts can provide clarity and ensure accountability, there are many other factors that contribute to business ethics such as leadership, culture, and values. Simply requiring written contracts is not enough to improve overall ethics in a business.

Question 13

Since most ethics violations are small and rather insignificant in nature, employees need to understand that addressing these issues is secondary to making profits. CEOs may be justified in putting these on the back-burner, waiting for more convenient moments to address them.

Accepted Answer

This statement is incorrect and promotes unethical behavior. Ethics violations should never be put on the back-burner or ignored, regardless of their size or perceived significance. Prioritizing profits over ethical behavior can result in long-term harm for both the company and its stakeholders. Ethical conduct should always be a top priority for all employees and leaders within an organization.

Question 14

The job of an ethics officer is to serve as a counselor for employees and as an investigator for the company.

Accepted Answer

An ethics officer serves both as a counselor for employees seeking guidance on ethical issues and as an investigator for the company when ethical violations occur.

Question 15

To be effective, an organization's code of ethics needs to be communicated to outsiders such as suppliers, subcontractors, and customers.

Accepted Answer

It is important for an organization's code of ethics to be communicated to all stakeholders, including suppliers, subcontractors, and customers, to ensure that everyone understands the expectations and values of the organization. This helps to build trust and strengthen relationships with these stakeholders.

Question 16

Cigarette producers label their products with warnings of potential health hazards. Due to the fact that this is a government-mandated disclosure, it is part of the industry's compliance-based ethics.

Accepted Answer

Compliance-based ethics focuses on following laws and regulations set by the government or other governing bodies. In this case, the warning labels on cigarette products are mandated by the government, and cigarette producers must comply with this regulation in order to ethically conduct their business.

Question 17

In order to be successful, efforts to improve the ethical behavior of businesses must begin with top management's support of a corporate code of conduct.

Accepted Answer

Top management's support and commitment to a corporate code of conduct is crucial for promoting ethical behavior throughout the organization. Without this support, lower-level employees may not take the code seriously or may perceive it as optional. Therefore, their commitment to ethics may be weakened, compromising the success of efforts to improve the ethical behavior of businesses.

Question 18

Businesses with a formal code of ethics are less common now than in the past.

Accepted Answer

Businesses are placing a greater emphasis on ethics and social responsibility now than in the past, and many have created formal codes of ethics to guide their behavior.

Question 19

An important step in improving U.S. business ethics is for companies to hire whistleblowers.

Accepted Answer

The answer of An important step in improving U.S. business...

Question 20

Corporate social responsibility refers to the concern businesses have for the welfare of society.

Accepted Answer

Corporate social responsibility (CSR) is the way that businesses contribute to society beyond their financial bottom line. It involves taking responsibility for the impact of their activities on customers, employees, shareholders, communities, and the environment.

Quiz 4: Demanding Ethical and Socially Responsible Behavior